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3 June 2021

The world of renewables this week

Germany and Norway have officially commissioned the NordLink transmission project, completing a 623km HVDC link between the two countries. This will help Norway export surplus of renewable energy – mostly from hydropower – to Europe’s largest economies, which a huge effort to reach net-zero. The €1.8 billion project will be built by a consortium of Norwegian transmission system operator Statnett and DC Nordseekabel, with each holding a 50% stake. Transmission system operator TenneT and KfW each hold a 50% stake in DC Nordseekabel. At 623 kilometers in length, NordLink is claimed to be the world’s longest subsea electrical interconnector, with a capacity to transit 1,400 MW of electricity – enough to power 3.6 million households in Germany. The project adds to Norway’s existing connections to the Netherlands through the 700 MW NordNed subsea interconnector, and Denmark via the 1,700 MW Skagerrak connection.

BP is aiming to offload its Algerian oil and gas assets to Eni as both groups aim to tackle falling margins, rising debt, and a new surge of climate pressure from investors. This follows similar news last month that the pair would form a joint venture to run combined operations in Angola. They are exploring an outright sale option or a share swap in other Eni assets, including its LNG project in Mozambique. While Eni expects to turn Algeria into an African trading hub should the deal go ahead, the country still faces a huge crisis through its dependence on fossil fuels and lack of ability to diversify its energy portfolio.

Despite the recent climate pressure on oil majors, Equinor and ExxonMobil, along with Petrogal Brasil, are persisting with the $8 billion Bacalhau oil exploration project in Brazil. First oil from the field, which will be operated by Equinor, is expected in 2024, with output set to reach 220,000 barrels a day at a breakeven price of $35 per barrel.

The Arizona Corporation Commission has disappointed climate activists this week, having voted (3-2) to approve a 100% clean energy standard for the state with a deadline of 2070 – way behind previous proposals for a 2050 timeline. The proposed rules would also establish a 50% clean energy goal by 2032 and 80% by 2050, while a target to get at least 15% of electricity from clean emissions resources by 2025 remains in place. The Biden Administration may have something to say about this.

The Belgian government is eyeing a new target for 6 GW of offshore wind capacity by 2030, following a new study by Belgian Offshore Platform. The country is the fifth largest offshore wind market in the world with 2.2 GW of capacity installed and an existing target of 4.4 GW by 2030, having used much of its development zone at its border with the Netherlands. A new zone on the French border was allocated in the country’s 2020 marine spatial plan and is expected to be leased in the coming years and will deliver a further 2.2GW in three 700 MW slices due to come online in 2026, 2028 and 2029. Through this new 6 GW scenario, an extra 400 MW would be built each year between 2027 and 2029.

Cerulean Winds – a developer of green infrastructure – has revealed an ambitious $14 billion plan to decarbonize oil and gas assets in the North Sea through a 200-turbine floating wind project and hydrogen production site. The company has formally submitted a request for seabed leases to Marine Scotland for projects west of Shetland and in the central North Sea, claiming that the project would be able to electrify the majority of current and future UK Continental Shelf assets from as early as 2024. It also claims that no subsidies or CfD will be required – with Cerulean opting instead for an Infrastructure Project Finance model – with financial close set for Q1 2022.

TransGrid in Australia said this week it will build a critical electricity transmission project, EnergyConnect, having just solved its financing issues. The connection is set to save New South Wales customers about $139.5 million a year and create 1,500 new construction jobs. Clean Energy Finance Corporation helped the finance problems by offering $228.6 million in hybrid debt.

The Telegraph newspaper says that the UK government has plans for a carbon tax on imports from polluting industries. A government proposal has leaked which suggests taxing heavy industry such as steelmaking, but which could in future be expanded to include agriculture. Presumably if the steel maker in question did not use fossil fuels in its steel making, it would not pay such a tax. It looks like this is more about keeping UK farmers happy as the UK starts to explore deals for Australian sheep.

Indonesia has changed its stance on coal and says it will build no new coal-fired power plants. Indonesia is one of the most intensely coal based grids on the world and a major exporter of coal – see here. Existing coal plants already begun can be completed, but no news ones may be proposed. The country will also offer renewable energy incentives, impose carbon taxes, and develop a carbon trading system.

US President Joe Biden’s has put his American Jobs plan and other key climate based spending into his 2022 budget – which has set the scene for a showdown with Republicans which have offered fairly partly alternative spends in return. The budget sets aside $14 billion on climate-related spending, $2 billion in clean energy projects and $6.5 billion in lending capacity for projects.

The EU is planning to impose a carbon border tax on steel, aluminum and cement in a scheme linked EU ETS trading system, says Bloomberg this week citing an insider. The proposals will emerge in mid-July and the border scheme will have a three year adjustment period up to 2026, giving other trading partners time to adjust their carbon profiles.

More solar cell efficiency records have rolled in this week, with LONGi producing a 25.02%-efficient p-type monocrystalline bifacial TOPCon cell – a record for p-type. LONGi also announced a 25.26%-efficient heterojunction cell, which was likewise verified by Germany’s Institute for Solar Energy Research (ISFH). While LONGi improved its n-type TOPCON cell, JinkoSolar claimed top spot for that category at 25.25%. R&D company Suzhou Maxwell Technology has also produced a 25.05% heterojunction cell.

Sembcorp Industries, a Singaporean energy company, has developed a plan to quadruple its renewables capacity to 10 GW by 2025. Currently its portfolio is wind, but much of its pipeline is solar; besides 60 MW floating and another 300 MW besides in Singapore, its main activity is in India with some in Vietnam. Its 9.5 GW thermal power assets are distributed across China, India, Singapore, and the UK.

A draft law in Germany would increase that country’s renewable energy targets for 2030 dramatically, with new wind and solar targets of 95 GW and 150 GW, compared to old targets of 71 GW and 100 GW. For solar, this means 10 GW installed every year – double the current rate.

The third quarter is expected to see the most acute polysilicon shortages yet due to many factory overhauls, and prices have against risen by 5% on a weekly basis. Polysilicon has now reached over $32 per kilogram within China – for monocrystalline-grade – prompting LONGi and others to accelerate the introduction of thinner wafers in their manufacturing processes. Yet while other prices remain high, at least the glass shortage has already abated, with the solar-grade glass price falling by 50% in just three months.