Global Insights: 15th May 2018

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on May 15, 18 • posted by

Global Insights: 15th May 2018


Hornsdale Power Reserve already reducing prices

The Hornsdale Power Reserve (or Tesla Big Battery) in South Australia (SA)  released figures this week showing that it has managed to lower prices in the frequency and ancillary services (FCAS) market by 90%.   The battery which is responsible for 2% of the capacity in SA, captured 55% of the FCAS market which drove down prices by 90%.  It’s success in the market has been due to its speed and accuracy within the FCAS market.  This has led to the Australian Energy Market Operator (AEMO) and Tesla supporting the suggestion for new rules which would give value to speed and accuracy and encourage more batteries into the market.

Even without any extra encouragement SA is beginning to lead the world in storage projects.  An even bigger battery than the Hornsdale Power Reserve is under proposal.  The Twin Creek wind farm is planning to install a 215MW battery, more than double the size of the Hornsdale battery.  There are also plans in SA for co-location of batteries with other wind and solar projects and also a Concentrated Solar Power Tower.

Strategic priorities for the National Energy Market

John Pierce, chairman of the Australian Energy Market Commission (AEMC), laid out the AEMC strategic priorities at the Australian Energy Week Conference in Melbourne last week.  In particular he highlighted the changing role of governance in an energy world that is being shaped by disruption:

In order to manage we need effective institutional and governance arrangements – with regulatory and policy frameworks that put consumers first . . . deliver required protections . . . and then get out of the way of innovation and competition. Because that’s what delivers the services we want at lowest cost.

His speech included the drivers behind retail disruption, factfulness and wholesale market recovery and defining and understanding change.  He concluded by stating that the new National Energy Guarantee is about the putting the consumer first and how energy policy should be focussed on consumer needs, reliability and affordability and the continued support for DER.


German solar records

Early 2018 has seen multiple records set for solar power generation in Germany. Solar output was up 25% in the first four months of the year compared to 2016. By the end of a particularly sunny April, the country had generated 10.1 billion kilowatt hours (kWh) from solar, enough to cover the annual demand of more than four million households. In early May a windy and sunny bank holiday saw renewable power production briefly exceed the entire countries electricity demand on the 1st May, according to preliminary data provided by the Federal Network Agency. Central and Eastern Europe are forecast to be warmer than normal for much of May and further solar records could be set.

Engie partner with Germany’s Sonnen for French domestic storage offer

The large French utility Engie has entered into a partnership with Germany’s Sonnen to offer domestic customers in France battery storage under its residential ‘My Power’ solar programme. Engie is also offering domestic customers financing for solar and storage with both technologies available at €109 per month for ten years. The launch comes after European rivals E.On and EDF have both recently launched solar-plus-storage solutions for the domestic market. The product currently remains on offer solely in France. It remains to be seen whether Engie will expand this service into other markets such as the UK, where it has a significant supply presence.

Membership of German coal phase-out task force expected

Membership of Germany’s much awaited task force on phasing out coal power is due to be announced this week following intense fighting over its makeup. The coal commission – officially called the ‘Special Commission on Growth, Structural Economic Change and Employment’ – will be composed of 23 members and aims to bring policymakers, industry representatives, labour unions and possibly environmental NGOs together to decide this year on a roadmap and a clear end date for coal-fired power production. So far German media reports on the committee leadership suggests it will be headed by two former Eastern German state premiers Matthias Platzeck (SPD) and Stanislaw Tillich (CDU). The states of both politicians (Brandenburg and Saxony) are home to lignite mines and will be heavily affected by the coal exit. They will be joined by Ursula Heinen-Esser (CDU), a former state secretary in the environment ministry who is from the western German coal region North Rhine-Westphalia, to form a chairmanship trio. Media and environmental NGOs have suggested that the leadership choices do not bode well for a rapid coal exit path.

Report maps out expansion of EV charging across Europe

Platform Electromobility, an alliance of over 30 organisations and companies involved in electric vehicles and charging, has produced a briefing on the state of current and future roll-out of charging infrastructure across Europe. The report predicts that there will be enough charging points as the EV fleet grows, although there may be local areas of over- or under-supply. It also suggests that there will be several waves of electric vehicles and charging expansion, with Scandinavia and Western Europe leading the way already. In these countries, according to the analysis, it is the relatively small choice of EV models that is the constraint on growth rather than charging.

Sonnen powers forward (virtually)

One of the most interesting European companies in the new energy field is Sonnen, the German-based ‘storage community’ company that brings together solar PV, batteries and blockchain technologies to enable peer-to-peer trading and virtual power plants, with the ultimate promise of freedom from the grid. Sonnen has expanded into markets as far afield as Australia and the US (including a post-hurricane Puerto Rico). Clean Technica has a recent interview with Sonnen’s CEO and co-founder Christoph Ostermann which provides more insight into these issues. He is particularly interesting on how the response to Sonnen’s development in different parts of the world has varied according to the openness of regulators and how fast incumbent utilities are changing their own business models.


India – added more renewable capacity in 2017 than coal as electrification targets are met

Between April 2017 and March 2018, India added nearly 12 GW of new renewable energy capacity, more than double that of the fossil fuel (mainly coal) or hydro power sectors.   The majority of the new renewables was solar, which totalled 9 GW for ground mounted and 352 MW on rooftops,  followed by wind at 1.7 GW.  While impressive, the deployment of rooftop solar and wind was below the targets of 1 GW and 4GW respectively.  This failure to meet the wind targets and a belief that the low bids for solar and wind auctions in 2017 have led EY to lower India’s attractiveness for renewable investment,  putting only 4th in the world, behind China, US and Germany,  a fall from 2nd in the previous assessment.

At the end of April the Prime Minister of India, Narendra Modi, announced that India had achieved its target of 100% electrification of villages ahead of schedule.  However, while this is impressive and it has bought vital energy services to millions of people, it is not job done, as the definition of electrification of a village requires only 10% of houses to be connected to the grid.   Therefore, there is still some way to go before every citizen has access to electricity.

Greater effort needed to meet Sustainable Development Goal on energy.

The Sustainable Development Goal 7 (SDG7) calls for ensuring ‘access to affordable, reliable, sustainable and modern energy for all’ by 2030, but sufficient progress has not been made.   A report, published by the International Energy Agency, the International Renewable Energy Agency, the United Nations Statistic Division, the World Bank Group and the World Health Organisation, has concluded that improvements need to be made in four areas: universal access to electricity; clean fuels and technologies for cooking; acceleration of the improvement in energy efficiency; and progress in increasing the share of  renewables in the energy mix.

Approximately 13%, 1 billion people, live without electricity, despite since 2010 around 118 million people each year having access for the first time.  With almost 87% of those without electricity access living in rural areas, the development of off-grid solar and mini-grids are becoming increasingly important.

Globally, energy intensity – the ratio of energy used per unit of GDP – decreased by 2.8% in 2015, the fastest decline since 2010.  This improved the average annual decline in energy intensity to 2.2 % for the period 2010-2015. However, this still falls short of the 2.6% yearly decline needed to meet the SDG7 target of doubling the global rate of improvement in energy efficiency by 2030.

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