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6 January 2022

The world of renewables this week

The Bureau of Ocean Energy Management (BOEM) in the USA has found no significant environmental concerns in the proposed buildout of offshore wind in the New York Bight. With the Environmental Assessment cleared, 800,000 acres of federal waters will be made available to developers, promising a potential capacity of over 7 GW.

The US offshore wind boom was also boosted this week by both Massachusetts and Maryland, with each dishing out support for 1.6 GW of offshore wind in their respective states, across four separate projects. Avangrid was the largest victor of the solicitation, securing backing for its 1,232 MW Commonwealth Wind project off Massachusetts where Mayflower Wind also secured backing for a 400 MW project. In Maryland, US Wind secured backing for its 808.5 MW Momentum Wind project at a levelized price of $54.17 per MWh for a term of 20 years. Orsted won with its 864 MW Skipjack 2 at $71.61/MWh. All projects are expected to come online before the end of 2026.

The French government has proposed a new 1,500MW offshore wind zone off the north coast of the country. The Centre Manche area off Normandy would be adjacent to a 1 GW project, which is expected to be tendered this year. If approved, a tender for the new area could follow in 2023, with resultant projects coming online in 2031. A preliminary consultation will open on 3 January with several meetings planned in Le Havre and Reville.

Besmirched truck-maker Nikola will pay $125 million to settle charges that it misled investors about its technology or commercial prospects, according to the SEC. This follows the indictment of former chairman Trevor Milton following a report from short-seller Hindenburg Research. Investors in the company will hope that the settlement clears the path to recovered orders and production plans. Skeptics will continue to doubt the company’s technology until such deliveries are realized.

TotalEnergies, Shell, Petronas, Petrobras and Qatar Petroleum ended 2021 in typical fashion – with belligerent investment in oil fields in the south Atlantic. The Sepia and Atapu projects are part of a group of four ‘pre-salt’ fields off the coast of Brazil, which are slated to contain as much as 15 billion barrels of oil, equating to half-a-years’ worth of global demand. The auction in Rio de Janeiro claimed almost $2 billion in total fees from the oil majors.

The UK’s government-backed pension company, Nest, has become the latest to dump its holdings in legacy companies that have failed to make advances on climate change risks. The $20 billion organization looks after the retirement savings of 10 million UK workers, and has jumped ship out of ExxonMobil, Imperial Oil, Korea Electric Power Corp (Kepco), Marathon Oil and Power Assets.

Iberdrola has agreed to extend the deadline of its plan to acquire PNM Resources in New Mexico, USA, after regulator NMRC rejected the $8 billion deal on the grounds that risks outweighed its promised benefits to state ratepayers.

Chinese offshore wind contractor Huadian Heavy Industries has signed a charter agreement for a jack-up vessel that will be able to install turbines with capacities of up to 20 MW. Construction of the 3060 Series Offshore Wind Power Installation Vessel (3060 WTIV) started in April by Yantai CIMC Raffles Offshore Engineering, with 120 meter long legs for water depths of up to 65 meters. It is slated to be delivered in the first quarter of 2023.

Belgium’s 2.3 GW offshore wind fleet produced a record amount of power in 2021. In total, projects produced 6.8 TWh of electricity, up from 6.7 TWh in 2020, accounting for 8% of the country’s total demand, despite reduced wind speeds throughout the year. The increase comes with the completion of several projects in the spring and autumn of 2020, which were able to operate for a full year. While no new projects will be installed in 2022, the federal government is working on an amendment to the legislative framework for the tender for up to 3.5 GW of additional offshore wind capacity in the new offshore wind zone, the Princess Elisabeth area, which could start coming online from 2026.

A large pumped hydro storage facility has been commissioned in China’s Hebei province called the Fengning Pumped Storage Power Station, offering 3.6 GW of storage and made up of 12 reversible pump generating sets each with 300MW of capacity. It cost of $1.87 billion and was built in two 1.8GW phases and built by the China Gezhouba Group and connected to the Zhangbei VSC-HVDC power grid and the North China 500kV power grid. The station aims to play a key role in the country’s pledge for a ‘green’ Winter Olympics later this year.

Preliminary statistics published by the national solar association indicate that Germany’s new annual solar installations rose 10% to 5.3 GW in 2021. However other European markets are accelerating much more proportionally, with a 34% increase to 25.9 GW last year.

China’s annual installations reached 34.83 GW by November, with a further 5 GW commissioned by the start of the last week of December and another 5 GW expected in that last week – for an overall total of 45 GW throughout 2021, slightly less than 2020. The cause is that the worst solar supply chain issues kicked in from H2 2021, too late to disrupt the rest of the world’s solar installations but in time to dent China’s Q4.

China’s Anhui Province has raised the energy storage requirement for renewable power plants much higher than the rest of the country, with a higher capacity of wind compared to solar being proposed under new planning to boot. In the rest of Chinese such requirements range from 5% to 30%, with 2-hour duration being the standard just as 4-hour is in the US. Anhui’s requirement is 40% for 1 hour or 20% for 2 hours, but to win tenders it has become necessary to go even high than that. There is no regulatory market basis for standalone energy storage projects in China yet.

Li Bin, a senior researcher at the North China University of Water Conservancy and Hydropower, has estimated that China’s Commercial and Industrial (C&I) sector will install 11.5 GWh of energy storage by 2025.

Meyer Burger, the world’s leader quality heterojunction solar manufacturer and former equipment manufacturer for the solar industry, has announced a 400 MW factory to be established in Arizona, with the possibility of scaling to 1.5 GW.

Q4 numbers are out for Tesla, and once again it has surprised most pundits, with 936,000 cars delivered for the year, and 305,000 vehicles built in the quarter and deliveries of 308,000. The split is heavily in favor of Model 3/Y with just 13,109 being Model S or X out of the 305,840 cars made. But while the tail end of the year brought bad news for Tesla with a recall issued for 475,318 vehicles to inspect rearview cable harnesses and trunk latch assemblies. However the recall notices never touched its share price which spiked over the New Year to a market capitalization above $1 trillion once again.

Sembcorp Industries in December announced that its UK subsidiary will build Europe’s largest battery energy storage system a 360MW battery at its site at Wilton International on Teesside. Sembcorp UK already operates 70MW of batteries, with 50MW in its pipeline to be operational in early 2022, so this will be a considerable step up.

In the last week of December before the Christmas break, Germany utility E.On said it had acquired a majority stake in envelio GmbH, a clean-tech software firm in Cologne. envelio specializes in grid management software and has been working with E.On’s DSOs Westnetz and E.DIS for the past three years. The company was a spin-off from RWTH Aachen and has 70 employees.

The US Environmental Protection Agency has finalized new vehicle emissions requirements just prior to Christmas which effectively reverse the changes from the Trump administration. The new rules will avoid emissions of 3.1bn tons of CO2 by 2050, the EPA says.

The Qatari Sovereign Wealth fund will invest £85 million for a 10% stake in a consortium which should build SMR nuclear reactors led by Rolls-Royce. This comes after the UK government gave it a £210 million grant. About £490 million of public and private funds have been raised by the consortium, and Rolls Royce says it is “fully funded.”

There is a new form of climate denial practiced by virtually every nationals journalist in the UK – such that whenever any material is published on the ability of Heat Pumps to warm UK homes, a series of stories about how they don’t work appear in national daily newspapers. So when the electrification of Heat demonstration project reported this week funded by the Department for Business, Energy and Industrial Strategy, and it concluded after installing 742 heat pumps through the pandemic into a broad spectrum of housing types, that every type of UK home had a heat pump that was right for it, it simply triggered more anecdotal stories of denial. Each article called on the government to change strategy as nobody wanted heat pumps. Anecdotally we asked a British Gas engineer if we could buy a heat pump and the engineer said simply that they could not get water hotter than 45°C, which was interesting as one of the categories of this report was Heat pumps operating above 65°C. Strange that.

British Lithium this week said that its lithium pilot in Roche showed that Lithium could be mined from the mica held in granite. The pilot included stages of crushing, grinding and beneficiating lithium carbonate ore, including a custom-built electric calcination process at low temperatures and acid-free leaching. The company said that Lithium has never been produced commercially from mica before and that it is on track to produce 5 kilograms of lithium carbonate a day – enough to demonstrate its commercial. Once the process is fully developed, work will begin on building a full-scale plant and it wants to go to 21,000 tons of battery-grade lithium carbonate a year.