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10 May 2019

The world of renewables this week

Scotland’s devolved parliament has decided not to go ahead with a tax cut for the aviation industry, because it has declared a climate emergency with Roseanna Cunningham, the SNP Scottish environment secretary, saying that to cut air passenger duty would be incompatible with its new pledge to cut Scotland’s carbon emissions to net zero by 2045.

The UK managed to go for 114 hours without using any coal during the bank holiday weekend. Coal is only 5% of electrical energy production in the UK, so it’s not such a stretch, but it is the longest period so far. Cumulatively the National Grid has not used any coal for a total of 1,000 hours in 2019 a fall of around 65% against last year with just six coal-fired power stations operational now.

The UK energy department BEIS published the final documents for its next round of Contracts for Difference funding for renewable energy. This replaced the Renewables Obligation and puts up £65 million of government money for energy generators to use to fund the difference between bought and sold prices for renewable energy. The timeframe for applying for it is from 29 May to 18 June and it is hoped to support a further 6GW of renewable energy, which now extends to wind power on islands, and offshore wind technologies, among others.

Danish Wind specialist Vestas Wind has just reduced its share capital by buying 6.8 million shares into treasury and cancelling them, leaving it with 198.9 million shares.

Canada’s Vanadium Flow battery specialist Cellcube, says it has conditional approval to proceed with its deal with Regency Gold whereby it acquires Vanadium North. The transaction spins out a number of Vanadium mines and rights to further Vanadium deposits. This approval clears the way for CellCube and Regency Gold to finalize the deal they agreed in February. This merged entity will then back into a third specialist Strategic Metals and involves funding to support further exploration and is all about securing Vanadium supply for grid scale batteries.

Researcher Global Info Research says that the PV Inverter industry is expected to grow at a CAGR of roughly 0.3% over the next five years, reaching $6.3 billion by in 2023, from $6.2 billion a year ago. Seems an unfeasibly low figure for growth unless inverters are on the brink of massive price falls.

SolarEdge Technologies which makes intelligent inverters, has Q1 results in with record revenues of $271.9 million up 30%, with a GAAP net income of $28 million (down 31%  from a year ago) and 1.1 GW of inverters shipped. It has $398.7 million of cash and liquid assets, despite having just paid $43 million in acquisition costs. Guidance for next quarter is $310 million to $320 million with slightly higher margins.

Peninsular Clean Energy says that Moody’s has given it a Baa2 Issuer Rating.  PCE is the second Community Choice Aggregation (CCA) program to obtain an investment-grade credit rating. PCE is based in San Mateo, California and has been serving customers for just two years. PCE says it has unrestricted cash of $108 million and this will help it negotiate better credit terms for future power purchasing deals.

AES Corporation has Q1 results out with revenues of $2.65 billion, off $110 million, but despite this mild drop in revenues, it confirms its guidance of between 7% to 9% growth through 2022. Highlights of the quarter include long-term contracts for 494 MW of renewable energy, a backlog that is now up to 6.2 GW, with 3,845 MW under construction. It signed a 12-year deal to sell 18 TBTU of LNG annually in the Caribbean, beginning in 2020. It has agreed to sell off interests in Jordan and Northern Ireland for $211 million. It has 219 MW of solar plus storage with US utilities.

Renewable Energy Group (REG) and Broco Oil said this week they would enter into a partnership to create cleaner fuel options to heating oil dealers in the Northeast US. REG is a bio fuels producer.

Shockingly GE has said that it will build a 500 MW coal power plant in Kosovo to replace what it describes as two older, inefficient coal plants. The release tried to sell this as a “cleaner” deal, but of course GE should be ashamed of itself, because either Kosovo will end up in sanctions at some point in the future for dirty electricity or it will have to close down this asset before its economic life. And anyway, wind would have been cheaper. The new plant is designed to meet 50% of the country’s power demand, and is valued at $1.3 billion, with financing coming from the Overseas Private Investment Corporation and export credit agencies. They too should be ashamed of themselves – this is bad business which will come back to bite.

LONGi at the end of April claimed a world record for the amount of energy from its 72-cell Bifacial half-cut module, which performed at over 450W, for this module type. This was tested and verified by certification agency TÜV-SÜD. A year ago it achieved 360W, on a 60-cell PERC half-cut module. In January LONGi claims to have exceeded 24% efficiency. For Q1 it reported R&D expenditure of $183.58 million for 2018 and employs 548 R&D staff.

LONGi says it has 526 patents and claims to lead the solar industry.

The shareholders of Duke Energy voted down a proposal from New York State retirement fund which owns around 2% of Duke, to make the company more transparent in disclosing its political spending and lobbying. Best to just sell those shares really, Duke wants to be one of the bad boys of global warming, and it is unlikely to change. If we were shareholders we would never touch Duke with a barge pole.

Tesla has raised around $2.3 billion, with $737 million of common stock shipped and $1.6 billion convertible notes with options for the underwriters to add 15% to each option. Elon Musk spent $10 million of his own cash buying into the offer. Net proceeds will be around $2.3 billion. We have said that we think Tesla is a badly run company before, but we are heartily behind what it is trying to do, tie home batteries, solar and EV cars into the same low carbon lifecycle. It just has too many missteps for our liking.

Amsterdam city council says that it will start banning petrol and diesel cars much earlier than other capitals, through its new Clean Air Action Plan (Actieplan Schone Lucht). It will slowly phase out older cars, then later ones each year going forwards until by 2030 the process is complete. The Act still has to be debated by the full city council, and then the public will get a view, but since many of them drive cycles and Amsterdam has highly polluted streets, it is likely to become law. Car companies were up in arms, but Amsterdam won’t care as much locals there travel on bicycles. Amsterdam says it will need around 23,000 car charging stations by 2025 and currently has just 3,000.

Sectigo, the trust authority which that first asked us if anyone could hack solar installations, has acquired another IoT security firm, Icon Labs, which specializes in embedded OEMs within the IoT. Sectigo says it will add to its IoT Security Platform, and is the first trusted third-party Certificate Authority to offer end-to-end security for every connected device.

Italy’s Enel had Q1 revenues up 10.3% to €20,891 million, which it says reflects growth in Enel Green Power sales plus those from electricity trading in Italy, Chile and Romania and fuel sales in Italy. Its EBITDA was €4.5 billion, up 12.7% due to better renewables margins. Net Income for the group was €1.3 billion up 7.4%. It has debt of €45 billion, up 9.7%. It says during 2019 it will accelerate its capex even further.

Now New Zealand has said that it will cut emissions to zero for all greenhouse gases except methane by 2050. The law is in its draft stage and will be passed shortly. It will set up a climate change commission for setting emissions budgets every five years. It also plans cuts for methane, but given how many sheep that are grazed in New Zealand this cannot be to zero. Next stop is a 24% to 47% cut from 2017 levels – a compromise for farmers. methane from large animals represents about 17% of the world’s methane, but in New Zealand this percentage is far higher, closer to 50%.

Norwegian hydrogen electrolysis specialist Nel has put an electrolyzer in a standard lorry container with the launch of its M-Series Proton PEM electrolyzer in 1 MW and 2 MW versions and allowing multiple units to be integrated in the field.

ExxonMobil said it will invest $100 million over 10 years to research lower-emissions technologies with the US National Renewable Energy Laboratory and National Energy Technology Laboratory. It wants to bring biofuels and carbon capture to commercial scale across the transportation, power generation and industrial sectors. This is a pitiful amount of money compared to its $280 billion revenues, around 0.004% a year, for technology which may, in the end, provide it with a future, in a post CO2 world.