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9 August 2019

The world of renewables this week

Duke Energy has lost the first round in a legal battle to force Duke to excavate all 6 of its coal ash ponds in North Carolina. It just wants to line them with plastic, but they contain an exotic mix of toxic chemicals that will mix with the water supply. A preliminary ruling this week says Duke must excavate al the ponds and bury the ash in lined landfills.

It’s almost not worth looking at Duke’s results after that, as it says that the cost of lining and sealing its coal ash will knock $billions from its cash supply. But it had revenues of $5.4 bn for the quarter, up $250 million on this time last year, with net income of $820 million compared to just $500 million this time last year. Long terms debt jumped $3.2 bn to $54.3bn and it generated $3 billion in cashflow. Coal generation fell 16% to $13bn; nuclear went up 3% to $18.1bn; hydro fell over 20% to $780 million; gas was up 2% to $18.2bn and renewables went up 33% to $197 million only.

BP and Reliance Industries Limited in India have agreed a joint venture that will run a retail service station network and sell aviation fuels across India. This will build in Reliance’s existing Indian fuel retailing network and aviation fuel business and will target vehicle mobility. Regretably India is expected to be the fastest-growing fuels market in the world over the next 20 years and the 1,400 sites are expected to grow to 5,500 sites over the next five years.

Lithium prices are falling currently as there are six new lithium mines opening in Australia and output will go up over 20%. Chile, the second placed market for Lithium mining will also increase output. New markets are opening up for extracting Lithium from salt water, and more and more Lithium recycling services are coming into play.

Cobalt is going the other way, and mining giant Glencore said it will halt production as prices fall (it is used as a cathode material in Lithium Ion batteries). This is seen as wanting less and less to do with the dominant producers in the Democratic Republic of Congo, which is politically unstable, and as a result most battery teams are looking for alternative cathode materials.

France has awarded the winners in its sixth round of utility solar, listing 107 projects with a combined capacity of 858 MW. Projects exceeding 5 MW will get €59.50 per MWh and the round’s overall final average price was €64/MWh. This is the last of six rounds for the utility-scale segment, for a total of 4 GW of solar.

South Korea says that 1.64 GW of solar panels have been installed up to the end of July, raising its total solar capacity to 9.5 GW.

Dominion Energy in Virginia USA, has asked regulators for permission to build four battery storage facilities to test the technology over a five year period. It is responding to pressure from major industrials including  Apple, AWS and Microsoft to go after solar power and energy storage instead of natural gas. It will build two 2 MW/4MWh batteries at substations to study batteries as an alternative to expensive grid infrastructure upgrades and integrate renewables via two further 12 MW/48 MWh batteries front ending the Scott solar plant in Powhatan County.

Danish power company Orsted said it achieved a profit of 8.8 billion Danish Krone ($1.32 bn) for the half year, up 2% compared to 2018. Earnings from offshore wind were up 18%, with more new wind farms coming online, and onshore wind made some headway. Guidance for 2019 is 15.5-16.5 billion Danish Krone ($2.3 to $2.5 billion). Orsted was selected in New Jersey and New York offshore wind auctions recently and the company is known for its green transformation, due to its strong commitment to the Paris Agreement.

Exxon Mobil has threatened investors with excessive calls for documents in its year old case from the State of New York, that it kept two sets of books – one for investors and another to show what costs it would be exposed to if forced to cut emissions, effectively misleading investors. It has been accused of writing letters that say, if you are planning to give testimony, we will ask for millions of documents concerning all your oil and gas holdings, but if not, we will leave you alone. It looks like it wants to delay the case and frighten off investors from giving testimony.

Vivint Solar a US residential solar provider, says it has negotiated a $325 million revolving credit facility to reduce the cost of its debt from Bank of America Merrill Lynch, CitiBank, Credit Suisse, KeyBank, and Silicon Valley Bank.

The Solar Energy Corporation of India (SECI) latest tender has backfired with only 5 companies entering the auction, offering about half the required capacity. This was meant to break the mold on how solar auctions happened, issuing 2 GW of solar power which only Indian companies could apply for due to it being sourced for government departments. This scheme came about after the World Trade Organization issued a judgement against India’s Domestic Content Requirement.

Solar energy storage in the US jumped by 44.9% last year, according to trade body the Smart Electric Power Alliance (SEPA), reaching 760.3MWh of energy storage during 2018, making a cumulative market size of 1,966.6MWh. Utilities Southern California Edison, Kaui Island Cooperative and Pacific Gas & Electric boasted the most MWh storage capacity in the country at 153MWh, 102MWh and 73.2MWh.

SolarEdge shipped 1.3 GW of inverters for $325 million for Q2, up 20% from Q1. SolarEdge is forecasting revenues of between $395 million and $410 million for Q3. Its stock rose 16% on the news. SolarEdge is dominant in residential inverters in the US.