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28 November 2019

The world of renewables this week

The way electricity resource adequacy is managed in the US is leading to billions in wasted dollars, according to a study published by Grid Strategies last week. The report, commissioned by the Natural Resource Defense Council’s Sustainable FERC project, highlighted that PJM Interconnection, New York Independent System Operator and ISO-New England retain greater power than state legislators in their respective areas, resulting in higher margins and capacity market prices, which in turn favors assets owned by the independent state and regional transmission operators. It is estimated that the growing reserve margins are causing around $1.4 billion to be wasted per year by the Northeast operators by securing an excess capacity of 34.7 GW. Analysts blame this on the use of the minimum offer price rule causing “consumers to pay for redundant capacity,” which could cost up to $45 billion over the next decade.

US Democrats have announced legislation to adopt a net-zero economy on a nationwide scale by 2050. While several states including Hawaii, California and New York have already adopted statewide policy, the 100% Clean Economy Act of 2019 would be the first national net-zero commitment from the US. Amid a tumultuous impeachment enquiry, the bill, along with last week’s Green Act, are almost certain to not pass through the Republican-controlled Senate. However, this recent wave of environmental policy intentions is a clear mark of the Democrats opening up a discussion, and attracting environmentalist voters in the process, in the run-up to a Presidential election in November next year.

New York is remaining hesitant about shutting down its last coal-fired generator ahead of winter. The 685 MW Somerset plant is set to be decommissioned from February 15 next year and officials are starting to dismiss the idea of an earlier closure, in case of extreme temperatures and energy demand. Expecting a peak demand of 24,123 MW during the coldest period of the season, the state has 43,000 MW of system resources, which would surely leave a sufficient safety margin to close a relatively small asset.

The UK Conservative party has updated its offshore wind ambitions and will now support a 40 GW target for 2030, increasing the previous capacity goal by 10 GW, although still 12 GW off the Labour party’s ambition of 56 GW. The new manifesto claims that a Conservative-led government would “enable new floating wind farms” as part of this push, despite the UK’s vast technical potential for monopile wind farms. While floating wind may be competitive with monopile wind in the 2030s, current prices of energy mean that this proposal is more likely to include pilot projects as a method of researching the best cost-cutting mechanisms.

The newly formed Offshore Wind Growth Partnership in the UK has launched a £1.5 million program to develop the UK’s supply chain, with ambitions to make the country competitive on a global scale.

Southeast Asia’s largest bank, DBS, has signed up to the Equator Principles in a move towards more environmentally conscious practice. While full compliance with the principles would likely stop the bank investing in coal-fired power plants, DBS will continue to finance projects such as the controversial Vung Ang 2 project in Vietnam until existing deals are complete in 2021.

Poland’s push towards renewables will be further facilitated by European action, with Germany solar developer SUNfarming securing €17 million to expand its existing portfolio in the country.

Coal-based electricity production will have experienced its largest ever annual drop in 2019, according to the latest report from Carbon Tracker. A 3% drop will equate to around 300 TWh of electricity, which will be only the third ever year to see a reduction in the amount of production.

An international collaboration of scientists has created a perovskite solar cell with an efficiency of 21.6%, using concentrator photovoltaic technology. Described in the Royal Society of Chemistry’s Sustainable Energy and Fuels publication, 0.81 squared millimeter cells can be further boosted to an efficiency of 23.1%, but due to the strict requirement for cell alignment, worries remain over the stability of the method.

The Vermont Law School has released a new study identifying a range of methods to optimize grid security. In the report entitled: Improving the Cybersecurity of the Electric Distribution Grid: Pathways to Enhancing Grid Security, the school’s Energy arm suggest methods including: Boosting the capacity of regulators to help utilities; the use of alternative rate mechanisms to reduce “information asymmetry”; and improved resiliency metrics to assess preparedness.

China could feasibly reach net-zero emissions by 2050, according to a report released by the Energy Transitions Commission and the Rocky Mountain Institute. By making use of China’s high savings and investment rate, the report recommends that China focusses on electrifying transport and heating as well as expanding renewables capacity to 15,000 TWh in 2050, from todays level of 7,000 TWh.

 

Siemens is weighing up buying out Iberdrola from Siemens Gamesa. In a week where Siemens Gamesa has released the concept of the world’s most powerful 11 MW offshore turbine, Bloomberg has reported that its parent company will consider buying the 8% share in the company owned by Iberdrola for around €720 million. This would see Siemens holdings rise to approximately 67%.

Poland will hold two solar and wind energy auctions in December, with a combined capacity of around 2.5 GW. Solar and wind projects of over 1 MW capacity will be considered on December 5, with a further auction for sub-1 MW projects held on the 10th. The inclusion of solar in the auctions follows last year’s tender where only 1 MW of capacity was secured by developers.

Orsted wants to develop an energy island, with a 5 GW offshore wind hub on the Baltic island of Bornholm. Supported by a large-scale production plant of green hydrogen, the worlds-first project would be connected to Denmark, Poland, Sweden and Germany. The initial 1 GW would be to support Denmark reach 2030 emission goals, before later expansion would help others in achieving the European target of 450 GW by 2050.

India’s EVs are receiving vast subsidies from the country’s government. As part of the National Electricity Mobility Mission plan around 285,000 electric vehicles have been issued a total of $50 million in subsidies as part of the countries plan to boost the adoption of the technology and reduce carbon emissions in the transport sector.

Irish electricity supplier ESB has joined with Equinor to develop wind farms off the Irish coast. This partnership will initially be focused on finding suitable sites for offshore windfarms to capitalize on the wealth of coastline and windspeeds in the country. Due to lack of policy, Ireland has struggled to capitalize on this so far, and the current grid system will need to be improved dramatically if a large addition in offshore wind is to allow the country to meet its electricity generation target of 70% renewables by 2030. This comes in the same week as a report from the Irish Academy of Engineering which highlighted that €9 billion must be invested by 2027 to sustain this growth alongside the increasing demand in power from the datacenter sector.

Convergent Energy and Power has beaten its own record and created the largest customer-sited energy storage system. The US-based developer and asset owner activated a 10 MW, 20 MWh battery system on Monday in Ontario, Canada, where it will provide storage for a Shell oil refinery and chemical plant. This will see the costs of Shell’s petrochemical operations slashed by reducing electricity costs during peak hours.

Enel has pledged half of its investment to renewables in the run up to 2022, intending to install 14 GW of capacity. This would add to the European giant’s existing fleet of 46 GW, improving its position as the world’s largest renewables company in terms of capacity. Between 2020 and 2022, Enel has committed to invest €11.5 billion to replace fossil fuels, detailing a breakdown of: 5.4 GW in Spain, Italy and Chile; 5.1 GW in Brazil and the US; as well as 3.6 GW in emerging markets.

Lightsource BP has ‘delivered nighttime electricity’, in a UK first. Using solar invertors at one of the companies UK plants, the National Grid ESO was provided with reactive power with an optimized voltage level. It is estimated that a concept such as this could provide up to 4 GW of capacity to the South East of England, saving energy customers over £400 million by 2050.

Iberdrola has said that it intends to merge three UK offshore wind farms in the mid 2020’s, with or without backing. The ‘East Anglia Hub’ would combine the EA1 North, EA2 and EA3 projects in a $8 billion plan estimated for completion in 2026.

Shell has released a carbon neutral gearbox oil for wind turbines. The Omala S5 Wind 320 oil was released at WindEurope’s Offshore 2019 conference in Copenhagen and will use the company’s “nature-based” carbon credits to compensate for the oil’s lifetime emissions.

Canada’s Boralex said this week it has refinanced almost all of its wind farm operations in France, for a total of $1.7 billion (€1.1 billion). It has spread the load across three credit agreements with debt maturing respectively in 2034, 2036 and 2040. Initially there $178 million (€123 million) has been laid out primarily by grouping together assets into one investment which were previously financed individually through 30 different credit agreements. This will cut interest on debt at Boralex from 2.70% to 1.75%.

Operational data from the world’s first floating offshore wind farm, Hywind Scotland, is now available to access on a free to use basis for supply chain businesses and academia through the Offshore Renewable Energy (ORE) Catapult’s Platform for Operational Data (POD) service. Under this agreement between Equinor, Masdar and ORE Catapult, subscribers can access a pre-defined set of full-scale measurements from one of Hywind Scotland’s five turbines. They also revealed that the 5 floating wind turbines demonstrated an average capacity factor of 56% over the first two years of operation.