Global Insight 13 – 18th July 2017

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on Jul 18, 17 • posted by

Global Insight 13 – 18th July 2017

Australia

COAG Energy Council meeting backs 49 out of the 50 Finkel review recommendations

The Coalition of Australian Governments (COAG) Energy Council met on Friday to discuss the findings of last month’s Finkel review on the future security of the National Electricity Market (NEM) with 49 out of the 50 recommendations getting the go ahead.  The Clean Energy Target (CET) was the only recommendation that the panel felt needed further research.  The recommendations included the introduction of an Energy Security Board (ESB) which includes both independent and industry representatives to oversee a whole system reform.

Previously in the week states had announced that could a consensus on the CET not be reached then they would be prepared to ‘go it alone’ to achieve their current state-based energy targets.  This also prompted one energy analyst to suggest that the NEM may have served its purpose and that, although it had served its initial purpose to ‘provide low prices, reliable and safe energy’, this was now failing and that, due to the amount of distributed generation on the system, the current top-down style of operation would be unworkable.

AEMC initiates Market Frameworks Review

The Australian Energy Market Commission (AEMC) has initiated a Markets Framework review to support the future reliability of the NEM due to the changing mix and new initiatives on the demand –side. The review will focus on the investment and retirement decisions for capacity on the NEM, including both generation and demand response initiatives, and the need for new market signals within the spot and contract markets.

Demand response initiatives could reduce the need for coal

The previous head of EnergyAustralia, Richard McIndoe, has suggested that the use of older, proven demand response technologies could result in saving the same amount of power as the Yallourn brown coal power plant generates.

McIndoe suggests that the use of voltage control and power factor correction on Australia’s grid could cut household consumption by 12% and peak power by 5%.

US

Climate Leadership

In response to the White House pulling out of the Paris Agreement earlier this year, a wide range of bodies in the US have been reaffirming their support for action on climate change. Many initially signed up to the Were Still In campaign, which continues to grow in numbers but includes around  nine states, 227 cities and counties, 315 institutions of higher education, and 1,641 businesses and investors. Last week also saw the launch of America’s Pledge, from Bloomberg Philanthropies and California Governor Jerry Brown, which seeks to bundle, quantify, and communicate the aggregate contribution that U.S. states, cities, businesses, and other sub-national actors are making to curb climate change.

Renewable Energy not at threat to US Grid

It was reported by Bloomberg last week that a draft report from staff within the US Energy Department contradicts recent statements from their new head, Rick Perry. The findings which are currently under review, say that wind and solar power do not pose a significant threat to the reliability of the U.S. power grid – in contrast to the recent Perry arguments that renewable energy is making the grid unreliable; specifically Perry was quoted as saying that “Over the last several years, grid experts have expressed concern about the erosion of critical baseload resources.”  This contrasts with the study seen by Bloomberg which say the power system is more reliable due to better planning, market discipline, and better operating rules and standards.

Distributed battery services company Sonnen expands onto Arizona

German battery company Sonnen is building a new business model for home storage systems that involves aggregating and selling ancillary services to utilities. Working in Germany since 2015 and Australia more recently, Sonnen creates ‘communities’ of households with storage, and once they reach around 100 households, the company can start offering 600 killwatt-hours of services from its distributed network. Sonnen has now formed a partnership with a housebuilder in Arizona to place its batteries in new build homes, as a toe-hold in the US market.

California’s sub-hourly electricity market expands

Seven electricity providers in the western portions of the United States and Canada have plans to join the California Independent System Operator’s (CAISO) western energy imbalance market (EIM) over the next several years. The EIM allows for more frequent dispatch of electricity-generating resources in the region. The market is unique in the West, where most generation is otherwise dispatched hourly. The EIM awards bids for 15-minute intervals and dispatches generating units every 5 minutes to correct supply and demand mismatches without using the generators held in reserve. This sub-hourly dispatch increases responsiveness to changes in the electric system, allowing for better integration of wind and solar resources, and avoiding the constraining off of these resources, as well as reducing costs. Balancing authorities from Arizona all the way up to Canada will join the scheme.

Wider Globe

Electric Vehicle Forecasts

Following on from the recent forecasts for possible EV growth in GB from National Grid, a useful report on global trends was released by Bloomberg New Energy Finance report – summarised by Greentech. This highlighted how dramatically estimates for EV penetration are changing, with major swings upwards in many of the forecasts for sales in different markets. This includes revisions by OPEC, The International Energy Agency, Exxon, BP and Statoil, to name a few. BNEFs own forecast now suggests that around 530 million cumulative electric cars will be sold by 2040 – representing about one-third of the market for automobiles. Reportedly, the main driver behind these upward forecasts are falling battery costs, with an expectation that recent developments in global battery giga-factory’s will see battery costs and prices outpacing current projections.

Mobility in India

In a blog on mobility in India, the Rocky Mountain Institute highlight that the minister of coal, mines, power, and new and renewable energy, set out an ambition for passenger mobility in India to be completely electrified by 2030. This and other conditions leads RMI to suggest that India could now “leapfrog” the personal vehicle ownership model of developed countries and move directly to a shared, connected, and electric passenger mobility system. This is based on 3 promising enabling conditions exist: 1) the high share of non-motorized & public transport which currently meets nearly 70% of mobility needs in India; 2) the low level of private vehicle ownership – despite growth, there are still only around 18 cars per 1,000 citizens (the US has nearly 800 cars per 1,000 people); and 3) the prevalence of mobility services e.g. bicycle and auto-rickshaws. These drivers, along with a shared vision among India’s leadership, a dynamic and thriving entrepreneurial culture, and the opportunity to avoid a private vehicle ownership model should help mitigate worsening traffic congestion and air quality, as well as reducing dependence on imported oil. In sum, this could see India position itself as a global leader in clean, shared, and connected passenger mobility.

IEA’s World Energy Investment report sees rise in efficiency and electricity networks

The IEA’s 2017 World Energy Investment report has just come out. Overall energy investment has fallen due to reduced spend on upstream oil and gas, but spending on energy efficiency and electricity networks is up, with spending on the electricity sector exceeding that on oil, gas and coal combined for the first time. Despite low energy prices, investment in energy efficiency has expanded again, to $231 billion in 2016, with the fastest growth in China. Spending on power networks and storage has been rising steadily for the last five years, and continued to do so in 2016.

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