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4 January 2023

The world of renewables this week

Colorado based Solid Power has signed a licensing deal with BMW Group with an up-front payment of $20 million for its solid state battery technology. BMW will build its own pilot plant in Germany and Solid Power will provide a sulfide-based electrolyte. It has been saying it will make batteries ahead of market leader QuantumScape, which will have a factory in 2024. But the Solid schedule has slipped twice. It has had a deal with both Ford and BMW since 2019, and has taken several rounds of funding from them both. To us this is not so much a sign of confidence as impatience that it the battery has not materialized, and BMW thinking it can do better. QuantumScape took SPAC funding in 2020 and has attracted $680 million in funds and is heavily backed by Volkswagen and banking partner Kensington Capital.

Just prior to the Christmas break Australia’s Labor Party said that it will change its position on woody biomass being classed as a renewable. In the EU renewables advocates are actively lobbying to class woody biomass as a fossil fuel but so far with little success. We hope that Australia starts a chain-reaction.

US utility Entergy in Louisiana has filed a 10-year resilience plan to bring power back online after a major storm which involves grid-hardening and better vegetation management, all of which will cost $9.6 billion over 10 years – naturally it wants to include some of these costs in its rate base. In total this involves 9,600 transmission projects taking in 269,000 structures and 11,000 miles of powerlines. Entergy provides power for over 1 million customers in Louisiana and 3 million overall and generates 20 GW of power, and says this work will reduce power interruptions by 34 billion minutes over the next 50 years. Entergy says that some of this should be funded by federal grants, and the rest go to its customers to pay.

A 200MW (400MWh) battery energy storage system (BESS) has gone live in Ningxia, China, built using Xiamen Hithium Energy Storage (Hithium) lithium iron phosphate (LFP) design. Hithium is only 3 years old but plans to ramp manufacturing to 135GWh of production by 2025 and this is its largest project so far. Hithium has just launched a new 300Ah prismatic cell which it claims can handle 12,000 cycles which will be on the US market by Q1 2023.

US solid state lithium ion battery designer QuantumScape says it has now shipped its first 24-Layer prototype hybrid prismatic-pouch battery cells to automotive OEMs the week before Christmas. This is a pilot version of its first ever product, a full year before it is meant to go into volume manufacture and means that it is on schedule with its landmark design. Each layer has a solid-state separator, a cathode, and a lithium-metal anode which is created inside, and they can operate in the multi amp per hour range. This cells will let partners and customers test their own facilities and provide feedback on performance.

US solar developer Origis Energy has signed with Mitsubishi Power Americas for three battery energy storage system (BESS) projects over the next two years, totaling 150 MW (600 MWh) at three Origis solar installations in the Southeast. The systems will reduce curtailment of solar using Mitsubishi’s Emerald storage system. Origis works with Southeast US utilities and electric cooperatives and will 1.5 GW of projects in the region and says it has 2.3 GWh of energy storage being developed.

Italian CO2 battery innovator Energy Dome has landed €17.5 million in funding from the European Innovation Council (EIC). The EIC is Europe’s flagship funding program owned by the European Commission.

The Sacramento Municipal Utility District (SMUD) has partnered with Swell Energy which will act as an aggregator for the new My Energy Optimizer Partner+ program, a residential virtual power plant initiative and will now recruit homes to house 10 MW (20 MWh) of battery energy storage systems inside the SMUD service area. This program has the potential to scale to 27 MW (54 MWh). The VPP customers get an upfront payment and ongoing GridRevenue, based on the capacity of their solar and energy storage systems.

In China SPIC Hydrogen Energy part of the SPIC Group, a state-owned power company said it has raised 4.5 bn yuan ($633 million) in a second fundraising round at the end of 2022. Spic designs fuel cells and was started in 2017 and has a hand in hydrogen transporting technologies too.

A $3.9 million fine issued this week is pretty cheap for FirstEnergy for failing to provide the Federal Energy Regulatory Commission’s enforcement office with accurate accounting information covering up over $80 million in bribes for the nuclear company by passing a piece of legislation two years ago that provided about $1 billion to bail out two FirstEnergy nuclear power plants. We said at the time surely those that offered the bribes were as guilty as those who accepted them – it appears not.

In the fourth quarter, Tesla produced 439,000 vehicles and delivered 405,000. Across the whole of 2022, vehicle deliveries grew 40% to 1.31 million and production grew 47% to 1.37 million. Natually the Model 3 predominated with 1,298,434 produced. Q3 falls in the value of Tesla shares based in it not being able to make full use of its Beijing factory were still there and shares fell, rather than rose on the news.

Canadian renewables company, Boralex, has announced an agreement with EDF to acquire all of its interests in a portfolio of five US wind farms totaling 894MW. EDF’s interest amounted to 447MW of installed capacity for which it received short of $250 million. Rethink believes this is the first move by Boralex as part of its strategy to become part of the US market and take advantage of the IRA through any subsequent US deals. Even though the Production Tax Credit (PTC) details for these projects have already been outlined before the IRA came into effect, Boralex will be able to benefit from Income Tax Credits for the next 10 years on every kWh of electricity sold from any other wind farms that it might acquire or develop by leveraging its position and experience in the US market.

GE Renewable Energy and Hyundai Electric announced they have signed a partnership agreement which will solidify their efforts to add to the South Korean offshore wind market. Hyundai will thus serve as a manufacturing associate to help localize assembly of the Haliade-X turbines and generators in South Korea.

Japan finds itself in murky waters as it strives for energy stability. They have made a U-turn on their nuclear policy which signaled a major reduction in nuclear plant operations after the 2011 Fukushima incident. Multiple plants are now set to rekindle their operation in order to help the country reach its decarbonization. Additionally, Japan’s first large-scale offshore wind farm has started operation. The 140MW Akita & Noshiro project is finally outputting clean energy after the Covid-19 pandemic slowed down its construction. The project is part of the country’s target of 10GW by 2030 and 45GW by 2040 which saw auctions take place in 2022 only to be placed on hold in order for its rules to be redrafted so foreign investors can stand more of a chance after Mitsubishi swept the board in the first rounds.

Copenhagen Infrastructure Partners, Skyborn Renewables and Northland Power won the first phase of Taiwan’s tender in which the island awarded 3GW of capacity to a number of international and domestic developers. The successful projects had issued zero-subsidy bids and will rely on corporate power purchase agreements. This was the first time that zero-subsidy bids won in an offshore wind auction outside Europe.

China has installed 65,571 MW of solar power in the first eleven months of the year. Last year 20 GW was installed in the month of December, and this year the December figure will be more like 30 GW, for a total of 95 GW in 2022.

SolarPower Europe’s EU Market Outlook for 2022 found that the 27 member states of the EU installed 41.4 GW last year, up 47% year-on-year.

China’s National Energy Administration (NEA) states that the country’s first batch of large-scale wind-solar bases, 97 GW in total, have all begun construction or been commissioned.

Meyer Burger manufactured 321.1 MW of its high-quality heterojunction cells and modules in 2022. The company is currently ramping up its second manufacturing line and will commission its third this year in Thalheim, Germany.

Parag Sharma, CEO of 02 Power has commented that current Indian solar project construction is entirely dependent on Chinese imports stockpiled prior to April 2022, and that 2023 will see a collapse in deployments unless the Approved List of Models and Manufacturers (ALMM), which will effectively limit Indian solar developers to domestically manufactured products, has its implementation delayed.

 

Germany has raised its maximum tender for rooftop solar systems to $120 per MWh in its upcoming renewables tender while wind will be raised to $77 per MWh onshore. Groundmount solar payment levels are under consideration.

Inseanergy has formed supply agreements with several aquaculture companies to supply floating solar units to offshore fish farms, with a popular combination being solar with battery and a reduced diesel generator presence. Inseanergy’s pilot project came in 2020 at a Hofseth International fish farm in Norway’s Stranda municipality.

 

Gaoce and Risen Energy have reached strategic co-operation on 100µm silicon wafers for heterojunction solar use, much lower than the current 150µm mainstream. We have previously seen a 120µm and a 130µm announcement from the industry.

Albemarle intends to invest $180 million into the Albemarle Technology Park (ATP) in North Carolina. The aim of the ATP is to be “a world class facility designed for novel materials research, advanced process development, and acceleration of next-generation lithium products”. Albemarle intends to convert an old IBM and Flextronics facility for the project and expects at least 200 jobs to be created at the site, with an average salary of $94,000. The current timeframe for the project will be to have the facility operational by early 2025 and to be completed by late 2026.

Brazil’s newly inaugurated president Luiz Inácio Lula da Silva – better known as Lula – has reinstated Marina Silva as his environment minister. Silva held the post for over half a decade during Lula’s first presidency in the mid to late 2000s, generating significant praise from international counterparts for her contribution to bringing Brazil onto the world environmental stage. Silva resigned in 2008 after antagonizing Brazil’s agribusiness sector, showing that Lula is willing to go against the country’s agribusiness sector in pursuit of reforestation of the Amazon.

Brazil’s new mines and energy minister – Alexandre Silveira – has said that the state-run oil company Petrobras will aim to expand the country’s refining sector to reduce reliance on oil and gas imports. He also announced the creation of a National Energy Transition Secretariat, which will exclusively design and implement policy to encourage Brazil towards greener energy sources. Lula’s first day in office also saw the revival of the Amazon fund, a $1.2 billion fund dedicated to protecting the Amazon rainforest. Contributors Norway and Germany withdrew support from the fund in 2019 during Bolsonaro’s premiership when he unilaterally suspended the board of directors and the fund’s technical committee. The UK has also considered joining this fund. These initial policy steps confirm our previous expectations that Lula would be a significant advocate for environmental reform within the country and would once again be a positive force for decarbonization globally.

Piedmont Lithium and Tesla have mutually agreed to amend their previous offtake agreement, which now becomes binding for a 3-year term and includes an option to renew for another 3 years. Piedmont Lithium will supply Tesla with spodumene concentrate (SC6) where the price will be determined by a formula-based mechanism linked to average market prices for lithium hydroxide monohydrate.