Global Insights: 13th November 2018

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Global Insights: 13th November 2018


Renewables increasing output and reducing gas generation in the NEM

The Australian Energy Market Operator (AEMO) has released the Quarterly Energy Dynamics for Q2 2018.  Statistics for the quarter show an increase in renewable generation, both small and large scale; a marked reduction over the same period for gas generation and price reductions throughout the market.  Drivers for the price reductions were: reduced volatility in Victoria and South Australia; increased renewable output (including hydro) and reduced demand associated with seasonal temperature decreases and a reduction in gas powered generation (GPG).  Compared to the same quarter in 2017 hydro increased by 663MW, wind by 546MW, small and large scale solar by 157MW while black coal and gas generation decreased by 53MW and 697MW respectively.  The drivers for this marked reduction in GPG are given as: reduced availability due to outages; lower wholesale electricity prices and increased hydro output. Compared to Q2 2017 there was a 587 MW reduction in GPG capacity offered below $100/MWh.

More strategic planning need for DER from distribution networks

Renew (formally the Alternative Technology Association) has been undertaking research into the response by distribution companies to the growth of household PV generation.  The findings show that there is little consistency across or within distribution companies into the management of distributed PV.  Approaches from the DNO’s to new household installation applications include: refusal of connection, prohibiting export, limiting exports and limiting invertor size.  Renew is planning a research project to cover these issues so that the current and expected boom in household solar can deliver benefits for all while minimizing network impacts.


New Stage in Storage Displacement of Fossil Fuels in CA

CPUC in storage has just approved 4 energy storage projects (567.5 MW in total) for PG and E to replace retiring gas generators. This is the first time that storage has replaced fossil fuel generation.

US Election

Last Tuesday’s US elections delivered mixed results. Arizona rejected a proposition to have 50% of electricity from renewables (with 70% of the vote);  Nevada voters have early approval for 50% renewables but rejected any break up on Nevada’s monopoly power company. House wins for democrats who ran on 50% RE standards include Illinois, Colorado, Nevada and New Mexico and Maine.


Hamburg battery storage project will test system integration of renewables 

A 12MW wind farm near Hamburg has recently commissioned battery storage with a 720kW output and 792kWh storage capacity to test the system integration of renewables. The storage will allow the optimisation of electricity supply and reduce the likelihood of curtailment. The project involves the city’s University of Applied Sciences (who own the wind farm), Vattenfall and a range of other partners who are part of the NEW 4.0 energy transformation coalition. The group consists of companies, scientists and politicians aiming to create a blueprint of how to supply the Hamburg and Schleswig-Holstein region in northern Germany with 100% renewable energy by 2035. NEW stands for Norddeutsche EnergieWende, the northern Germany energy transition, and ‘4.0’ for the fourth industrial revolution, which involves the digitalisation of industry and the use of intelligent networks in the energy transition.

Assessed: The climate and energy views of candidates to follow Merkel as CDU leader 

Following Angela Merkel’s recent announcement that she will not run for re-election at the CDU party conference in December and will step down in 2021, Clean Energy Wire reviews the climate and energy views of the most likely candidates. Official candidates will have the opportunity to introduce themselves to CDU members at eight regional conferences from mid to end of November.  The review suggests (from polling indications) that Annegret Kramp-Karrenbauer or Friedrich Merz are the most favoured future leaders, with Jens Spahn as a distant third.  Kramp-Karrenbauer is an ally of Merkel and is seen as a talented all-rounder, although energy and climate policy has not been a focus of her policy priorities to date. She has previously warned of overambitious climate targets and the regressive nature of renewable subsidies to date. In constrast Merz is a long-time rival of Merkel. Socially conservative and with strong business links he has never focussed on climate and energy policy. In the past he has criticised the speed of the energiewende and promoted the role of nuclear power and ‘state of the art’ coal power. However in a press conference announcing his leadership candidacy on 31 October he said that ‘migration, globalisation, climate change, digitalisation – these are the greatest challenges of our time’.

Big growth in European battery manufacturing capacity anticipated

Manufacturing capacity for batteries in Europe is set to increase 20-fold in the next seven years, according to new analysis, as the region seeks to catch up with Asia. Investments are being made in Sweden, Poland, Finland, Hungary and Germany, by both European and Asian firms. Much of the new production will be battery will be for automotive uses. Swedish firm Northvolt is partnering with BNW Group and a recycling specialist to establish a closed life-cycle loop for batteries. Many of the new production facilities will be powered by renewable energy sources.

Seasonal heat storage solution from Swedish University

An alternative to using gases for inter-seasonal heat storage has been identified by a team at Chalmers University in Sweden. A molecule capable of storing solar energy in chemical form has been developed, which can then be released with the use of catalyst at a later point. The chemical stability of the stored energy means that it can be used for up to 18 years.


China Solar PV Target to be raised 

It is expected that the Chinese target for the deployment of solar PV, originally set for 105 GW by 2020, which has already been exceeded, will be revised to 210-270 GW.  As of the end of September it was reported that PV capacity had reached 165 GW, made up of 117.9 GW worth of utility-scale solar and another 46.8 GW of distributed solar.

It is also reported that in the first nine months of 2018 at total of 34.5 GW of solar capacity had been installed, with an expectation that over 40 GW will be deployed throughout the year.  This would be a significant fall from the record 53 GW installed in 2017, but higher than many analysists were suggesting.  The expected decline was due to the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration issuing a “2018 Solar PV Power Generation Notice” imposing caps and reducing the feed-in tariffs (FiT) mechanism. The ‘notice’ issued by the agencies put a cap of 10GW on the distributed generation market and 13.9GW of utility-scale projects in 2018, and then instructing all regional provinces to impose bans on all entities seeking FiT’s under any 2018 mechanism.

Therefore, it now seems likely that considerable capacity, up to 10 GW of utility scale solar, is being built without the support of FiTs.  If this turns out to be the case this will be a landmark in solar development in China and globally.

Lazard’s Levelised Cost of Energy Analysis shows increasing costs advantage of Renewable Energy 

Lazard, one of the world’s largest financial advisors, publishes an annual review of the economics of different electricity generators in the United States.   The latest edition shows that the Levelised Cost of Energy for wind and utility scale solar is comparable to the marginal cost of selected conventional generation technologies (the fuel and operation and maintenance costs).   This is a remarkable development and may well facilitate the early closure of fossil capacity if costs for renewables continue to fall.  The study suggests that the costs of unsubsidised wind is now in the range of $29-56/MWh and utility scale solar $36-46/MWh, while the marginal costs of coal were $36/MWh and nuclear $28/MWh.   The costs of wind power has fallen by 69% since 2009 and solar PV crystalline by 88%, while nuclear has risen by 23% and coal by 9% over the same time period.

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