Global Insight 19 – 7th November 2017

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Global Insight 19 – 7th November 2017


Steel giant recognizes the value of DER

It is not just households that are recognizing the benefits of distributed energy (DER) in Australia.  This week one of GFG Alliance’s  Australia steel works has announced plans to use DER to reduce its energy expenditure and improve its sustainability.  GFG Alliance has invested in ZEN Energy and has announced plans to build 1GW of renewables to help power the companies Wyhalla plant.  The combination of 200MW solar PV, 100MW/100MWh battery storage, 100MW of demand response and a 120MW/160MWh pumped storage is expected to reduce the plants electricity costs by 40%.

There are also plans for GFG Alliance’s other Australian interests, in steel production and mining, to partner with ZEN Energy to deliver its goods using ‘cheaper, more reliable and environmentally friendly sustainable energy’.  Which begs the question that if domestic, commercial and industrial consumers recognize the benefits of DER why is the federal government, and some areas of the Australian press, finding it so hard?

Solar PV sets another record

Small-scale solar PV has set another record this week creating a new demand low of 554MW – with forecasters expecting that in the next ten years this could even reach zero.  This low was reached in what would have once been a high demand period.  The National Energy Market also saw negative prices during this time which has contributed to the current lower wholesale prices for South Australia than that of coal-dependant states such as Victoria and NSW.  A report from the Australian Energy Market Operator (AEMO) has  shown that 9.2% of South Australia’s generation last year came from >100kW PV installations.


Wind:  Record Levels in Europe

On Saturday 28th October, nearly a quarter (24.6%) of the EU’s energy came from wind power.  This included wind energy production representing more than 100% of Danish electricity demand and 61% in Germany.  The record production level comes as the European institutions continue their discussions on the setting of a renewable target for 2030.   The European Commission have proposed a target of at least 27% of the EU’s final energy coming from renewables, which would be a pan-European target, without binding targets for Member States.  However, in October, the Environment Committee of the Parliament adopted a report which called for the introduction of mandatory national targets that would require at least 35% of energy to be supplied by renewables by 2030.  The draft renewable legislation is still to be debated by the lead committee – the Industry Committee – in November, before being voted on in the Parliament as a whole.

Centrica buys Europe’s largest demand response aggregator

In yet another sign that incumbent utilities are trying to ensure they survive in the new energy economy, Centrica has just acquired Europe’s largest industrial demand response aggregator REstore. Based in Antwerp, Restore manages 1.7GW of DSR used in ancillary services across Belgium, the UK, France and Germany. It follows other similar purchases by Centrica, including Danish aggregator NEAS, signalling a diversification away from what was a gas company into distributed energy.

Carmakers to roll out European ultra-fast charging network

BMW, Daimler, Ford and VW are planning a network of 400 ultra-fast charging stations in competition with Tesla. The new joint venture, Ionity, will involve multi-vehicle stations set out at a distance of 75 miles from each other, initially across Germany, Norway and Austria. Each charging point will have a capacity of 350kW, compared with the current industry standard of 50kW, offering a halving of charging times.

SolarPower Europe claims 94,000 new jobs from solar in Europe by 2021

Analysis commissioned from EY by SolarPower Europe suggests that the expansion of solar power in Europe to 2021 will create 94,000 new jobs and €9.5 billion in value added. The launch of the report attracted MEPs and Dominique Ristori, DG Energy in the Commission. The biggest expansion of solar-related employment is expected in Spain, followed by Greece and then Poland. A higher target for renewables of 35% in the 2030 Clean Energy package, as called for recently by a grouping of energy utilities, would mean up to 120,000 new jobs. However SolarPower Europe also said that the potential of solar growth would depend on the ending of trade restrictions and a more stable regulatory environment.


Tax Overhaul – with implications for energy

Republican leaders in the House of Representatives last week have unveiled a bill that would overhaul U.S. tax policy, including cuts into several existing energy tax incentives, particularly for renewable energy. The tax reform proposal would reduce the wind energy production tax credit to 1.5¢/kWh from 2.3¢/kWh and firm up the expiration date for the incentive. The bill would also end federal tax credits for electric vehicles, but would extend credits for a variety of residential and commercial energy technologies to 2022. The bill would also extend an estimated $6 billion tax credit for nuclear power that otherwise would likely expire before the only under-construction nuclear power project would be able to claim it.


Mayor of New York City, Bill de Blasio, has mandated that existing buildings must make steep reductions in greenhouse gas emissions by 2030. This makes New York the first city to place an emissions cap on existing buildings. The rules will apply to all buildings sizing over 25,000 square feet and the city will provide financing support through low-interest loans. The Mayor announced that there would fines for buildings which failed to comply with the regulations which could total up to $2 million per year for owners.

FERC back to quorum,  finally.

The U.S. Senate on Thursday confirmed energy lawyer Kevin McIntyre and Senate committee staffer Richard Glick to the Federal Energy Regulatory Commission by voice vote, filling the agency’s five seats for the first time in over two years. McIntyre is expected to become chairman of the commission. The new regulators come to the commission just in time to tackle the Department of Energy’s controversial cost recovery proposal for coal and nuclear plants (NOPR); both pledged to keep the commission “fuel neutral” in their confirmation hearings. Rick Perry, Secretary of State, continues to give strong support for the NOPR.

Wider globe

Is the End in Sight for Wind Subsidies in China?

The Deputy Director of the New Energy and Renewable Energy department of the Chinese National Energy Agency, Liang Zhipeng, is expecting to see the wind sector ‘wean itself off government subsidies by 2022’.    Zhipeng, further said that the country had reduced the curtailment of wind power, due to lack of grid capacity, by 7% during 2017, and that the problem would be solved by 2020.   However, in China, Solar PV now dominates new electricity capacity, and in the January to July period in 2017, 6.7 GW of hydro and 7.3 GW of wind, while 34 GW of solar PV was deployed.  By comparison 18.8 GW of thermal and 1.1 GW of nuclear were put into operation.

International Energy Agency – Digitalization set to Transform the Global Energy Sector

The International Energy Agency have released their first report specifically on the digitalisation of the energy sector.  The IEA  state that the greatest transformational potential is to break down the boundaries between sectors – particularly the electrification of transport – and to increasing flexibility across the entire energy system.  The report recognises the importance that regulation will play and that  ‘digitalization can facilitate positive change, but only if policy makers undertake efforts to understand, channel and harness digitalization’s impacts and to minimise its risks’.

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