Global Insight 8 – 13th June 2016

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Global Insight 8 – 13th June 2016

Global Insight 8: 13-06-17


The Finkel Review: The independent review into the future security of the National Electricity Market

Friday saw the release of the highly anticipated Independent Review into the Future Security of the National Electricity Market authored the Chief Scientific Officer, Dr Alan Finkel. The review was initiated following a blackout in South Australia due to intense storms in September last year. The need for the review was again highlighted in February when heatwaves caused the market operator to agree to load shedding due to cover a capacity shortfall.

The review concentrates on the themes of (1) increased energy security within the NEM for increased penetration of variable renewable resources, including valuing frequency response, synthetic inertia, demand response and voltage control and also cyber security due to the increase of IT services within the system; (2) policy stability with recommendations for a long ranging Clean Energy Target (CET) which would see certificates issued for all types of generation with more certificates issued for the least polluting technologies; (3) efficiency within the gas markets to ensure that electricity generators are able to maintain reliability of supply (4) improved system planning to include a transmission and distribution plan to recognize areas of future economically viable VRE penetration also a review of regulation to remove the incentives for networks to prioritise over non-network solutions (5) rewarding consumers including the facilitation of a DER market and a change in role for the distribution networks to provide a platform for new technologies; (6) stronger governance to include the establishment of an Energy Security Board (ESB) to oversee the implementation of the plan and to be a single point of responsibility and accountability between market institutions and the Energy Council. This area will also review the rule-change process to accommodate the rapidly changing energy market.


Vattenfall and 22 other Trading Firms to Collaborate on Blockchain Pilot

Swedish utility is setting up an energy trading pilot using blockchain technology, in collaboration with a number of other trading firms across Europe. German software firm Ponton is providing the system that will allow the tracking o trades through a decentralised order book. Blockchain is one of a suite of new transactive technologies emerging from the internet, which are widely expected to help facilitate the emergence of decentralised energy systems. Lower transactions costs are part of the attraction, as well as security. Live trading in the pilot will start towards the end of 2017.

Dutch Government aims to move all Residential Buildings Off Natural Gas by 2050

The Netherlands, like the UK, is a heavy user of natural gas in water and space heating, as well as in cooking. However, while the UK has a heat strategy with a large element of waiting-and-seeing, the Dutch government is now forging ahead with a plan to phase out the use of gas in all residential buildings by 2050. Over 30 towns and cities, including Amsterdam, Utrecht and Rotterdam, have signed a Green Deal for ‘gas-less neighbourhoods’. The range of options for replacing gas are quite similar to those identified in the UK, including heat pumps, district heating using geothermal or waste heat, and bio-methane for a small minority of households, as well as a hefty dose of energy savings through efficiency measures.

Actioning Driving Down Cost of Wind in Europe

Costs of both onshore and offshore wind have seen remarkable falls over the last year as an analysis by the Institute for Energy Economics and Financial Analysis shows.  In April 2017, off-shore wind contracts were awarded in Germany at €4.4 per MWh on top of the wholesale price, implying an all-in price of around €50/MWh, this is 60% cheaper than comparable auctions in Denmark in 2010. Remarkably it is also 70% cheaper than the last offshore feed-in tariffs awarded in Germany at €190/MWh, for projects to be completed in 2018. Also in Germany, the latest actions for onshore wind, saw contracts agreed in a range of €42-57.7/MWh, 30% cheaper than the previous feed-in-tariff. While in Spain the most recent auction price for onshore wind is €43/MWh.


US – Building inter-State and International Climate Change Support

California – being developed behind the scenes for a long while – has just announced memorandum of understanding (MOUs) with Germany and China. In addition, New York Governor Cuomo, California Governor Brown, and Washington Governor Inslee Announce Formation of United States Climate Alliance.

Nevada making the news in the US

Nevada has had a busy couple of weeks in relation to energy regulation. The Nevada Assembly has just voted to reverse a recent decision to cut net energy metering rates. The measure now moves to the Senate, where it is expected to pass. This follows three energy bills being passed into law in the previous week. This includes measures to support storage and electric vehicles. Arguably, this latter set of bills causes Nevada to join the hitherto ‘top rank’ of States which support storage: Arizona, Hawaii, Massachusetts, New York, Washington and California.

Electric Vehicles and Democratisation

The US Institute for Local Self-Reliance (ILSR) has released a report evaluating the development of the US electric vehicle market. It is arguing that EVs can provide all sorts of services to the grid, but also that EV development is happening at a much faster rate than traditional utility resource plans have so far taken notice of. The report argues – along with a comprehensive set of up-to-date information – that policy and planning must start to take note now.

New York has ups and downs

New York State has just announced $1.5 bn funding for the Clean Climate Careers initiative: investing in clean tech and supercharging RE development; creating clean climate careers’ and advancing environmental justice. On the other, Politico has argued that half of the energy initiatives that are part of NYS’s Gov. Andrew Cuomo’s $5 billion commitment to clean energy are lagging or being significantly modified. Twenty-one of 44 initiatives to fund energy efficiency or renewable energy acquisition, jump-start new markets and drive innovation aren’t meeting initial goals, according to the New York State Energy Research and Development Authority’s most recent quarterly report through March 31. $3.4 bn of $5bn announced in early 2016.

Wider Globe

Globally Renewables Powering Along

In the Renewables 2017 Global Status Report, the Ren21 policy network details the annual changes in the world’s renewable industry.  2016 was a record year for renewables in the power sector, with 161GW of new capacity, 47% of which was solar and 34% wind power. As a consequence, by the end of 2016, renewables provided an estimated 30% of the world’s power generating capacity – enough to supply an estimated 24.5% of global electricity, with hydropower providing about 16.6%. While wind and solar are still, globally, relatively small contributors – 4% and 1.5% respectively – in some countries they have become significant producers. In 2016, wind power provided 37.6% of electricity demand in Denmark, 27% in Ireland, 24% in Portugal, 19.7% in Cyprus and 10.5% in Costa Rica; and solar PV accounted for 9.8% of electricity demand in Honduras, 7.3% in Italy, 7.2% in Greece and 6.4% in Germany.




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