Global Insights: 11th September 2018

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Global Insights: 11th September 2018

AUSTRALIA

New national leadership for Australia

Following a vote of no confidence, with the final straw being the controversy over the National Energy Guarantee, Malcolm Turnbull has been replaced as the leader of the coalition government by the even more conservative Scott Morrison.  The new Prime Minister has dropped the National Energy Guarantee in its current form, removing the Emissions Guarantee and leaving  the Reliability Guarantee. He has suggested that new coal plants could be the way forward for Australia to provide reliability and cheaper energy bills.  The Department of the Environment and Energy has been split into two separate Departments with the new Energy Minister being Angus Taylor, a long time anti-wind lobbyist.

So Australia now has a head of state supporting the coal industry and an anti-renewable energy minister.  The states however have ambitious renewable energy targets.  With energy a hot topic on Australia’s political agenda how this then plays out in over the coming months will be interesting to see.

South Australia announces grants for storage

Whilst the National Government seems to be reducing their commitment to renewable energy, the South Australia state government has released their grants scheme for domestic battery storage.  The subsidies will be available from October and will be up to a value of $6000 dependent on the applicants income.  This offer coincides with the Clean Energy Finance Corporation offering cheap loans for solar and Sonnen announcing plans to build a factory which would manufacture 10,000 battery units per year on the old Holden (car manufacturing) site in Adelaide.

The scheme will only apply to certain batteries that are Virtual Power Plant (VPP) ready so that customers are able to connect to a VPP if they wish.  The VPP will be used to alleviate operating issues while allowing customers to gain extra value from their generation technologies.

USA

California Votes Through 100% renewable electricity by 2045

Today Governor Brown signed Senate Bill 100, which will raise California’s Renewable Portfolio Standard to 60 percent by 2030 (previously 45%) and transition the state to 100 percent carbon-free electricity by 2045. SB 100 is to be known as The 100 Percent Clean Energy Act of 2018, and sets out what percentages of RE are required by when and revokes any former laws which clash with this.  Not all utilities are entirely happy with this.

New RMI report showing benefits of combined energy efficiency with electric vehicle policy

A uncoordinated electric vehicles program or policy could lead to inefficient and expensive infrastructure requirements whilst a more coordinated one provides benefits of cost and environment. This report quantifies those benefits.

Rhode Island – Rate Base Settlements and Non-Wire Developments

Rhode Island becomes another US State which is trying to get the balance between BAU rate base settlements, and settlements which enable a regulated transformation. It also highlights, from the British point of view, just how hands on regulators are in the US and how difficult it is to allow ‘uncontrolled’ innovation to occur.

New Report Documents RE rise over last decade in the US

A new report from Environment America reviews RE rise by time and State over the last decade, and puts forward an argument of potential US markets going forward. One example of this is Solar Leasing and Third Party Access has arrived in Oklahoma. Many US States continue to be non-competitive with energy delivered via incumbent monopolies. The solar industry in particular (increasingly alongside the storage industry) have tried to break this and Oklahoma is the latest State to allow third party access.  Other States are undertaking other actions which together offer huge opportunities.

EUROPE

Boost for European solar PV as Commission drops Chinese anti-dumping tariffs

At the end of August the European Commission decided to let the anti-dumping tariffs on Chinese solar panels lapse. Anti-dumping and anti-subsidy measures, which have been in place since 2013, expired on September 3. The move follows coordinated lobbying from over 250 organisations and companies in the sector.  The move will withdraw protection from European solar panel manufacturers, but will cut prices and is estimated to lead to a 20-30% increase in the rooftop market. SolarPower Europe, which represents importers and installers, described the move as a “watershed moment” for Europe’s solar industry. However, it is reported that some European manufacturing companies are considering a legal challenge to the move.

Spain changes gear on clean energy

Up until this summer, Spain has had a centre-right government that has taken a rather hostile approach to renewables – including a ‘sun-tax’ on solar energy – and instead backed the continuation of coal power. However, in June this year the government collapsed, and it has been replaced by a new minority coalition led by the Socialists, who have are reversing many of the previous policies. The new Energy Secretary comes from the renewables industry. The ‘sun tax’ has been abolished, while there are plans to resume the feed-in tariff which was curtailed in 2013. A clean energy bill is expected in Parliament by the end of the year, and there is renewed momentum to seek a phase-out of coal-fired power generation. However, the new government is still only a minority administration, and there will be general elections in two years’ time, so there still considerable uncertainty around the long term direction of Spanish energy policy.

New market for storage in Irish DS3 grid services auction

As part of the DS3 upgrade to the Single Energy Market in Ireland a new auction of 140MW capacity frequency response and balancing has been announced by TSO Eirgrid. Because of the fast minimum required speed of response, while Eirgrid has not specified eligible technologies, in practice this means only battery or hybrid storage systems will be accepted. While battery developers will not have much time to put together bids, storage projects have benefitted from recent moves to fast track 373MW of connections under a new policy.

German coal commission timescale looking increasingly challenging

After meeting for the first time in June 2018 commentators have suggested that the German coal commission may need to extend its negotiations well into 2019, significantly past its target to agree an end date for coal-fired power production by December 2019. The depth of the conflicting views the commission needs to mediate have also been laid bare by the ongoing anti-coal protests in the Hambach Forest. Several members of the coal commission, who are from environmental organisations, have stated support for the protestors while RWE remain unwilling to discuss the contested clearing of the forest to make room for expanding a nearby coal mine.

Construction of EnergieKontor ‘subsidy-free’ windfarm to begin in 2019

German developer EnergieKontor has announced that it plans to begin construction of the 48MW Pines Burn ‘subsidy-free’ windfarm in the Scottish Borders. In May the company claimed that its Withernwick II project, currently under construction in Yorkshire, would be the UK’s first subsidy-free windfarm.

Coal exit in major coal-using economies feasible within 20-30 years

A study of Germany, Australia, China, Poland, India and South Africa has concluded that implementing pathways away from coal-fired power production in line with the Paris Climate Agreement is feasible in the major coal-using economies within 20 to 30 years. The study suggest that the peak and decline of coal use is approaching faster than previously expected and that underlying economic and societal preferences are turning against coal.

WIDER GLOBE

Europe slows wind deployment and adds 4.4 GW in First Half of 2018

WindEurope released figures that show that Europe added more than 4.5 GW of new capacity – which included 3.3 GW of onshore wind (1.6 GW in Germany, 600 MW in France and 200 MW of Denmark) and 1.1 GW of offshore wind (including 910 MW in the UK and 175 MW in Belgium).  Deployment will have to accelerate in the 2nd half of 2018 if WindEurope’s expectation of 13.5 GW of new capacity during the year (3.3 GW of offshore and 10.2 GW onshore) is to be meet.  16.8 GW of new capacity was installed in 2016.

Government proposes to establish a National Energy Storage Mission in India.

A report by NITI Aayog and the Rocky Mountain Institute has highlighted the opportunities for the Indian economy of developing a domestic battery manufacturing sector.  The report suggestions that ambitious goals, concerted strategies, and a collaborative approach could help India meet its EV ambitions while avoiding import dependency for battery packs and cells. This could help establish India as a hub for cutting-edge research and innovation, boost its manufacturing capabilities, create new jobs, and foster economic growth.  The government believes that energy storage is ‘one of the most crucial and critical components of India’s infrastructure strategy and also for supporting India’s thrust to renewables’ and is proposing to set up a National Energy Storage Mission.

The Government is confident that it can meet its target that 175 GW of renewable energy will be in place by 2022. In the year 2017-18 an additional 11.8 GW of new renewable capacity was installed. As of March 2018, there were 69.7 GW of capacity of which 34 GW was wind, 22 GW was solar, 4 GW of small hydro and 9 GW of bio-power.

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