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27 July 2022

The world of renewables this week

Russia will cut gas supplies though Nord Stream 1, its largest pipeline to Germany, to just 20% of its capacity. This comes at the latest part of Russia’s weaponization of its gas supply to Europe, threatening to leave the continent critically short of supplies this winter. With the pipeline already operating at 40% of its capacity in recent weeks, tension is rising across the bloc, as countries start to weigh up the consequences of the sanctions placed upon Russia. Ultimately, the consequences of refusing to stand it solidarity with Ukraine will be greater.

In response to Russia cutting gas supplies to Europe, the EU has agreed to emergency regulations to curb their gas use this winter. The move will inevitably be used to burn more coal, extending the lifetime of facilities that were set to be retired. It is essential that the emergency also spurs renewables investment and measures – like insulation – to reduce consumption on broad level.

Lavo claims to have lined up a $700 million backlog of orders for a utility-scale version of its solid metal hydride system for storing hydrogen. Having previously pinned its hopes on the residential market, with a hybrid storage system to be paired with rooftop solar, this adds to the string of signals that hydrogen may not be set for decentralization to the same extent as batteries. Rethink wrote about Lavo’s shift to MW-scale just over one month ago.

Orsted has agreed to acquire French and German developer Ostwind for a total value of €689 million. Ostwind has a portfolio of 152 MW of onshore wind projects in operation and under construction, approximately 526 MW in advanced development, and about a further 1 GW in its development pipeline. The transaction is expected to close in the second half of 2022.

Clean Power Hydrogen (CPH2) has licensed a GHFG to construct 2 GW of its Membrane-Free Electrolysers (MFEs) per year over a 20-year period. CPH2 has previously outlined that it plans to have a production capacity of 4 GW by 2030 – 1 GW of in-house capacity, with another 3 GW manufactured by third-party companies.

California has upped its target for offshore wind capacity to 20 GW by 2045, having now outlined the proposed auction details for developments in the Morro Bay Wind Energy Area and Humboldt Wind Energy Area. The first five leases are expected to amount to 4.5 GW of capacity.

Total Energies has launched legal action against Trina Solar alleging breach of contract and fraud concerning a $300 million, 900 MW supply deal for solar modules. The modules were negotiated at a price of $320 per kW with an agreement signed in July 2021 for shipments to be made from February to September this year, but Trina – so Total alleges – repeatedly attempted to renegotiate prices and issued a force majeure notice on 30th September 2021, citing electricity use controls imposed by the Chinese government at the time (which lasted a matter of weeks). Total also alleges that Trina subsequently cited the looming AD-CVD investigation from August to October, and then the Withhold Release Order (WRO) that detained some Chinese module imports. Trina also stands accused of failing to abide by supply chain tracing protocols.

Recent winning bids for competitively-allocated offshore wind in China were as low as $30 per MWh for a 300 MW project at Matsu Island and a 700 MW project offshore from Lianjiang. These are half the benchmark coal power price in Fujian Province, and even managed to be lower than Xinjiang’s coal benchmark price of $37 per MWh., which is the lowest in China. However Qin Haiyan, Secretary General of the China Renewable Energy Society’s Wind Energy Professional Committee, estimates that these projects will have a rate of return on investment of only around 1.4%. He describes this as an irrational outcome of excessively vicious price competition, driven by political considerations, and which will result in losses for the state-owned enterprises that develop such projects.

Norwegian quality assurance company DNV has signed an MoU with South Korean equipment providers involved in floating solar – steelmaker POSCO, power and automation solutions provider LS Electric, floating, marina and offshore structure solution provider SCOTRA, module maker SolarPark, and PV structure provider DASCO. Meanwhile RWE has invested in Dutch-Norwegian company SolarDuck’s North Sea floating solar pilot project.

LONGi has raised its wafer prices by between 3% and 4% for all of its various sizes. The company, which is the largest solar manufacturer, expects its H1 operating income to grow 45% year-on-year to $7.5 billion, and its net profit to grow 29% to $970 million.

The US Midcontinent Independent System Operator (MISO) has approved a $10.3 billion swathe of 18 transmission line projects. It stats that this will serve 53 GW of renewable energy development and is the first of four such investments.

Octopus Energy has launched a $7 billion investment platform dedicated to Australian wind, solar and storage projects, and has acquired the 33 MW Darlington Point Solar Farm. The company says its secured portfolio amounts to $2.1 billion with most of the rest assigned to a pipeline of projects.

Not really news, but if anyone needs a reminder that Big Oil are not on the side solving the climate crisis, then BBC2’s new series Big Oil v the World, is a worthy watch.

India’s Convergence Energy Services Limited (CESL), is clearly planning as many as 50,000 public electric buses, after it source 5,450 of them in April, and found they were cheaper to own (25%) than diesel or gas powered buses, without subsidy. Now CESL will play out the role of national program manager to get 50,000 electric vehicles in multiple Indian states. Tenders are due in the next few months and naturally must include all the charging infrastructure and will need to rely on existing 11kV areas of supply for bus depots, the provision of land from the States. Each bus must achieve a specified number of kWh per kilometer, depending on the type of bus and routes travelled.

David Ige, governor of Hawaii, signed an energy bill requiring utilities to generate 100% of electricity sales from renewable sources by 2045. Currently Hawaii is the most oil dependent state in America, spending around $5 billion per year on foreign oil to meet energy demands.

German energy firm Uniper has been given €2.3 million in funding to convert a natural gas storage facility into a hydrogen one. The facility will store up to 250,000 cubic meters of hydrogen and it will represent the first industrial scale hydrogen storage facility. The news came soon after the utility company received a staggering €14.7 billion bailout from the German government, in exchange for a 30% equity stake, as a result of the Russian Ukraine war.

Global crude steel production is down 5.9% compared to July 2021. This is largely due to the Russia-Ukraine conflict. Prices for steel in Europe have gone up and countries like Russia, Turkey and Japan have produced less steel than a year ago. India is the only big player to see increased year on year production this month.

The Space Development Agency, part of the US Department of Defence, has signed deals worth $1.3 billion with L3Harris and Northrop Grumman for a new constellation of missile tracking satellites. This comes as a response to China and Russia developing hypersonic missiles capable of low earth orbits.

Georgia Power in the US has had its latest IRP (Integrated Research Plan) finally agreed by the State utility Commission, and this time it will include a significant upgrade to renewables and large amounts of energy storage. The Southern Company subsidiary services 2.7 million people, and has previously been one of the slowest to shift away from fossil fuels. All but one coal plant will be closed now by 2028, but it will be allowed to purchase outputs from 2,000 MW of gas turbines. There will be an additional 2,300 MW of both wind and solar renewables over the next 3 years, and more than 6,000 by 2035. It will invest in smart grid and Demand side management and will build a 265 MW BESS and buy a further 500 MW of battery storage and will introduce a DER support program to harness rooftop solar.

Norway’s Ocean Sun has signed a license to its proprietary floating solar technology in China with developer Sunneng Technology. It will build a 500 KW offshore floating solar pilot connected to a wind turbine in Haiyang, off the coast of China’s Shandong Province. Børge Bjørneklett, Ocean Sun CEO said, “Shandong Province is projecting 42 GW of floating solar in the next and Ocean Sun will now be a contender for these deals.

Statkraft says that Q2 showed unprecedented market volatility, high power prices and concerns about energy supplies due to a shortage of gas supplies from Russia and this led to underlying EBIT (Earnings before Tax) of Norwegian Krone (NOK) of 3.8 billion. Dry weather, risk of gas rationing meant Statkraft had to keep its hydro resources topped up. Revenues were up NOK 10 billion, but profits were lower than last year. Cash flow was a solid NOK 16.6 billion, adding to an already strong financial platform.

The US and Canada have raised a trade dispute with Mexico over the country’s nationalistic energy policies which has meant Mexico failing to meet its obligations under the US-Mexico-Canada Agreement (USMCA). The administration favored state-run utility Federal Electricity Commission (CFE) and oil company Petróleos Mexicanos (Pemex) after US firms poured $billions into renewables in Mexico.

Tata Group ways that it cannot keep British Steel open unless the US government gives it £1.5 billion of subsidies to help it reduce carbon emissions. It wants a transition to green steel, but needs help it says.

Tata wants to close blast furnaces at Port Talbot, and build two electric arc furnaces at a cost of £3 billion.

The Technical University at Eindhoven has come up with a car it calls Zem which cleans the air as it drives using a form of direct air capture (DAC) using filters. The CO2 is captured and stored and the University wants to go into production with the system.