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12 December 2019

The world of renewables this week

Saudi Aramco has raised $25.6 billion in the world’s largest initial public offering, with stocks surging by 10% since to give the oil giant a record value of $1.88 trillion. The 1.5% share of Aramco was sold primarily to local investors, with analysts pointing out that “foreign investors (with the exception of UAE and Kuwait) have been almost completely absent.” Aramco is the largest single contributor towards global emissions, with 59.27 billion tons of CO2 equivalent released since 1965. Wary investors and fund managers will likely be deterred due to the social pressure around climate change, and the early excitement around its stock is unlikely to last. ExxonMobil’s court case for misleading investors is likely see stakeholders worried about Aramco’s intentions to address climate change and the reduced demand for oil, while others may see geopolitical risk after the September attack on the company’s Abquaiq oil stabilization plant and Khurais oilfield.

Dominion Energy will suspend proposals for 1.5 GW in peaking capacity, which would have most likely focused on natural gas additions. In November we reported that the company’s request for proposal (RFP) would be at odds with the state’s policy to go carbon free by 2050, as it would see retired fossil-fuel facilities replaced with gas-fired plants. With pressure from regulators, alongside an S&P Global report showing the company to be over-forecasting demand to justify gas spending, the RFP’s cancellation is likely to see Dominion turn its focus to solar-plus-storage and building on its plans for a 2.5 GW offshore wind farm.

The debate continues regarding FERC’s proposals for its Public Utilities Regulatory Policies Act (PURPA), after several stakeholders criticized a federal proposal to overhaul the idea. While the likes of the Federal Trade Commission and Electrical Power Supply Association have argued that the new regulations would see smaller renewables producers struggle to remain competitive in the market, larger utilities like PG&E and Duke Energy were among those to encourage the act, on the grounds that they wish to reduce electricity prices for consumers.

The American Bureau of Shipping has granted the first approval in principle to shipbuilders Vard for an operations vessel for work on offshore wind farms. This is another early indicator of the US supply chain development starting to gather pace and it’s likely that deals will soon be seen for the commissioning of larger installation vessels.

Germany utility EWE will sell 26% of its shares to private investors Ardian for an undisclosed fee. The move aims to accelerate the growth of the company as well as its presence within the renewables industry once the German cartel office approves this deal, expected early in 2020.

Denmark has committed to reducing carbon emissions by 70% from 1990 levels. The new climate law, signed on Friday, addresses a route to carbon neutrality by 2050, with legally binding targets set at five-year increments. The new law also commits the country to engage on an international level, including financing for developing countries. This is likely to also see Denmark develop renewable capacity for export to Baltic nations, with current projections expecting this to start from the mid-2030s, including infrastructure projects to facilitate high voltage transmission.

General Motors is partnering with LG Chem for a new electric vehicle battery venture, with a combined investment of $2.3 billion. The companies will attempt to establish a battery cell assembly plant in Ohio to mass produce cells for a portfolio of vehicles, including an electric truck coming to the market in late 2021. The 50:50 partnership follows over a decade of collaboration between the companies and will help GM’s aim of introducing 20 new EV’s to the market by 2023.

Following Repsol’s announcement last week to aim for carbon neutrality by 2050, competitor BP has upped its renewable ambitions. With a new joint venture structure with Lighthouse BP, the company will now aim for 10 GW of developed assets by the end of 2030.

Repsol has acquired a 50% stake in Ibil’s electric vehicle charging network in Spain, including all assets and commercialization services. This follows the company’s announcement to target climate neutrality by 2050. Repsol’s public charging network will consist of 230 locations across Spain, including 35 fast charging points.

Bifacial solar modules will retain their US tariff exemption, after the US Court of International Trade agreed that the 19-day notice period prior to the withdrawal was unlawful. Invenergy and the Solar Energy Industries Association were among those to appeal against the initial decision, although it seems likely that the exemption will be removed in the near future, with a longer period of notice given. With solar manufacturers like Jinko Solar ramping up bifacial production capacity, China’s manufacturers will likely turn focus to domestic demand. This will come at a benefit to manufacturers operating out of the US like Hanwha Q-Cells and First Solar, providing that the 30% tariff brings their price below that of Chinese competitors, who will be slashing costs through economies of scale. There is some uncertainty surrounding the tariffs amid the US Presidential election, and if the trade-war with China comes to an end, Hanwha and First Solar could well end up following the fate of SolarWorld in going bankrupt, if they can’t remain competitive.

The European Investment Bank (EIB) has extended a partnership with the Solar Impulse Foundation (SIF) to increase funding to solar energy startups. As the EIB’s funding usually starts upwards from €7.5 million, much of the SIF’s portfolio has been too small to apply for financing. The new deal should enable EIB to consider the requirements of start-up companies and diversify its portfolio to include solar innovation.

Hydroelectricity leader Freyr has announced plans for two huge Norwegian projects: A 32 GWh battery factory for completion in 2023; and a 600 MW wind farm. Key partnerships for the projects include those with Norsk Hydro and Siemens.

The Nevada Public Utilities Commission has approved NV Energy’s plan for 1,190 MW of solar projects with 590 MW of battery storage capacity. The projects should be completed by 2024 and located in southern Nevada as part of the state’s effort to double renewables capacity by 2023. The projects include Gemini Solar+Storage with 690 MW of solar and 380 MW of storage; Southern Bighorn Solar & Storage Centre with 30 MW of solar and 135 MW of storage; and the Arrow Canyon Solar Project with 200 MW of solar with 75 MW of storage.

PG&E has announced a third and final settlement of $13.5 billion with victims of wildfires between 2015 and 2018. This is a step towards the company exiting bankruptcy, although approval will be needed for its reorganization plan before July next year.

EDF announced this week that it has reached the 2 GW mark for wind and solar capacity in France. In 2019 the company, with an historic pedigree in nuclear, installed a record 200 MW of onshore wind capacity. Its shifted focus to renewables in also evident in the 480 MW offshore wind farm in Saint-Nazaire.

UK gas giant Drax has become the first company to target a ‘carbon negative future’ by 2030. The company has claimed that it will invest in a framework for new technologies including bioenergy with carbon capture and storage, despite the lack of success so far for such methods. Drax has claimed that 94% of its power produced was renewable, after converting two-thirds of its coal-fired capacity to biomass, although the company still plans to open four new gas turbines at the Drax power station.

JinkoSolar will start shipping its Tiger bifacial modules in Q1 of 2020. The 460 MW panels claim an increased efficiency gain of 20.78% and will be first used for a high-voltage demonstration project in the Qinghai Province of China.

OVO Energy has received approval to acquire SSE Energy Services, which will bring OVO into the ‘big six’ providers in the UK. Following the go-ahead from the UK’s Competition and Markets Authority, the acquisition was agreed for a fee of £500 million, which is now expected to close in January.

US Presidential candidate Michael Bloomberg led an attack on Donald Trump’s climate policies on Tuesday, assuring the world that the US is committed to reducing greenhouse gas emissions “even with a climate change denier in the White House.” This is an early sign of the Democratic candidate pushing climate change to the forefront of his campaign, promising to immediately rejoin the Paris climate accord if elected. Bloomberg also pledged to end US subsidies and tax breaks for fossil fuels, which amounted to $649 billion in 2015.

The UK has set a record for the amount of electricity generated by wind power as it reached a 43.7% share of the country’s production on Sunday. Surpassing the 16 GW mark, wind was accountable for more than double the generation of any other source, with nuclear providing the second largest share at 20.5%.

Denmark has announced more details of its ‘energy island’ concept, which it claims could support over 10 GW of offshore wind. €8.7 million has been allocated for preliminary studies, although full project costs could be upwards of €40 billion. Potential sites being considered for energy islands are being investigated in the Kettegat, Baltic and North Seas. This follows Orsted’s early-stage plans to establish the island of Bornholm as the country’s first offshore wind cluster, with a capacity of 5 GW.

Estonia and Latvia are in discussion over a possible collaboration for a 1 GW offshore wind complex in the Gulf of Riga or Livionia. Both countries have been highlighted as potential players in the industry in WindEurope’s latest report, where it also stressed the need for collaboration such as that proposed. The Liivi Bay project would be developed by Estonia’s Eesti Energia, although details of the project are still under wraps.

The UK government has delayed the permitting of Vattenfall’s Vanguard 1.8 GW offshore wind project of the coast of Norfolk, amid issues around ship traffic and the environment. A letter was sent requesting more information on key piling techniques used to build it. There are also concerns over noise and sea traffic, raised by locals.

Researchers from Universities in Sweden claim to have developed a new material for capturing CO2. Using a new bio-based hybrid foam infused with ‘zeolites’, the open structure of the material is said to “give it great ability to absorb carbon dioxide.” This is not the first time zeolites have been suggested for carbon capture, and while scientists claim that the new material has a low cost and weight, statements around the product’s applications are so far vague.

A group of global scientists have called for governments to “declare a timeframe for peak livestock” and “peak meat” production. In a letter to Lancet Planetary Heath journal, researchers highlight the vast greenhouse gas emissions which are currently attributed to rearing livestock and processing meat and dairy products. While questions remain over how much methane is actually emitted from livestock versus fracking for natural gas, it is undisputable that the use of land in countries like Brazil is hugely damaging to carbon sinks – with forests converted to grazing pasture. Due to the interest of political leaders, enforcing the peak meat in countries like Brazil is currently unrealistic. But by implementing this in more willing nations, the first thing to be seen would be a decrease in meat imported from countries of high production, with governments keen to protect domestic trade. This would put pressure on the global livestock industry to address climate change and reconsider the use of land.

A group of global scientists have called for governments to “declare a timeframe for peak livestock” and “peak meat” production. In a letter to Lancet Planetary Heath journal, researchers highlight the vast greenhouse gas emissions which are currently attributed to rearing livestock and processing meat and dairy products. While questions remain over how much methane is actually emitted from livestock versus fracking for natural gas, it is indisputable that the use of land in countries like Brazil is hugely damaging to carbon sinks – with forests converted to grazing pasture. Due to the interest of political leaders, enforcing the peak meat in countries like Brazil is currently unrealistic. But by implementing this in more willing nations, the first thing to be seen would be a decrease in meat imported from countries of high production, with governments keen to protect domestic trade. This would put pressure on the global livestock industry to address climate change and reconsider the use of land.

E.ON will install and operate one of the largest EV charging networks in Germany, with 4,100 new charging points for the BWM Group. These points will be located at the parking lots of production plants, development centers and office locations, with project completion expected by 2021.