Global Insight 2: 02-05-2017
Our weekly round up of stories that caught our eye from around the world on energy system change.
ENA and CSIRO release final report of the Energy Networks Transformation Roadmap
ENA (Energy Networks Australia – the peak national body representing gas distribution and electricity transmission and distribution businesses) and CSIRO (The Commonwealth Scientific and Industrial Research Organisation – the federal government agency for scientific research) released their Energy Networks Transformation Roadmap on Friday. They recognize the disruption that distributed energy will cause in the future and have spent 2 years researching how the networks will need to adapt to incorporate this into their business model. At the same time the AEMC (Australian Energy Market Commission – the rule-making body for the National Energy Market (NEM)) have closed the call for evidence for the Electricity Network Economic Regulatory Framework Review which will be released on the 11th July. This will be prepared with the evidence from the ENA roadmap as well as from the AEMC’s technology work program which includes a Distribution Market Model project.
Gas will not necessarily be the transition fuel from coal
AGL, one of Australia’s biggest generators and retailers both in traditional fuels but also in renewable generation, has stated that the switch from coal baseload power will bypass the need for gas due to the competitiveness of solar, wind and storage. A sentiment agreed on by Victoria’s state government who this week have announced a tender for two 20MW storage plants rather than building the more expensive gas peaking plants.
Denmark contemplates subsidy-free renewables
Danish energy minister Lars Christian Lilleholt says that the country’s renewable energy industry is performing so well that it will soon be competitive without any form of support. Danfoss CEO Niels Christiansen agrees, saying this will happen at some point between 2020 and 2030. Meanwhile, the Danish energy company that is a leader in offshore wind, DONG, has recently said that offshore wind energy will soon be so cheap that developers will pay governments for the right to build wind farms.
Malta plays catch up on solar PV
Countries like Spain and Italy have historically led the way in exploiting the huge potential of solar PV in Southern Europe, but Mediterranean island Malta has been a laggard. It is now catching up, with 1 in 5 residential buildings getting PV installed in the last 7 years. However, solar still plays a very minor role in the country’s electricity system, and due to dense settlement and a small land area, there are major challenges in expanding this. Ways forward are likely to include more businesses installing solar panels, but also more R&D on space-saving solutions for PV.
Incumbents resist change?
Eurelectric, the European electricity producers association dominated by large incumbent companies, has brought out a series of responses to the European Commission’s ‘Winter Package’ proposals for changes to the internal energy market and support for renewables. With proposals for compensation to utilities for revenue lost from demand side response, treating community owned renewables projects on the same terms as large utilities, and capacity payments with no strings attached, this looks very much like the ancien regime trying to protect its interests.
US Value of Solar and Solar Review
The District of Columbia has published a report (written by Synapse Energy Economics) giving the policy options, potential, barriers and value of solar. The report sets out the avoided costs with a levelised utility system value of solar by component at 132.66 $/MWh and a levelised societal value of solar by component of 194.40 $/MWh (2015 $). This is a particularly detailed study of many being undertaken at the moment in the US. They feed into the important discussions about how to regulate energy systems (including paying for networks going forward) with increasing amounts of on-site generation. The cost of networks going forward depends to a large degree on what DER resource is expected, and that will depend on DERs (various) values to the system. The importance of this issue can be seen from the 50 States of Solar Report by North Carolina State University, which has just been published. This shows that there are currently 134 actions concerning solar energy in 40 States, 46 of those actions concern a potential increase to a residential fixed charge for solar or minimum bill increase for residential customers.
US Federal Energy Regulatory Commission Technical Conference
FERC held a technical conference on 1-2 May to look at the issues raised between linking State and Federal policies. Given increasing amounts of variable power renewables and a wish by the States to the increase the flexibility of their energy systems, one obvious answer is to link up markets between States. This however reaches a contested area of responsibility. A review of the issues is given here.
US District of Columbia Circuit halts Clean Power Plan
Although there are many such decisions to go, this is the first State decision and a win for President Trump. A discussion here.
Another Record Year for Solar PV
The latest report from the International Energy Agency’s Photovoltaic Power Systems Programme, shows a 50% increase in the deployment of solar PV in 2016, with a record 75GW of new capacity. The key countries for new capacity in 2016 were, China (34.5 GW), US (14.7 GW), Japan (8.6 GW) and India (4 GW). Globally it is now estimated that there are over 300 GW of PV installed. While European countries no longer head the annual deployment figures, they dominated the figures for the percentage of demand met by solar. According to the PPSP statistics, it is estimated that in 2016, Greece, Italy and Germany solar produced electricity provided 7% or more of their domestic demand, topped only by Honduras (12.5%).
New low for Solar PV tenders in India
In April, 2015 a record new low power purchase agreement was signed in India for 250 MW of solar pv, at $4.9c/kWh for the Kadapa Solar Park in Andhra Pradesh. While this is far from a global record, which currently stands in the United Arab Emirates at $2.4c/kWh, it is a really significant development given India’s proposal for the deployment of 100 GW of solar by 2022. In 2016 India deployed 4 GW of PV, the fourth largest in the world, taking it to a total installed capacity of 10 GW, including 1 GW of rooftop solar, providing 1% of the country’s electricity.