Australia

The National Energy Guarantee

The big news story in Australia this week is the Turnbull Government’s announcement of the National Energy Guarantee (NEG).  The NEG will replace the Renewable Energy Target which is due to finish in 2020 and is in place of a Clean Energy Target which was recommended by the Finkel Review in June this year.

The NEG has been recommended by the newly appointed independent Energy Security Board to give investor certainty and to deliver affordable, reliable and to some extent, low-emission generation.  The NEG is made up of two parts (i) a reliability guarantee –a state-based guarantee for dispatchable generation (coal, gas, pumped hydro and batteries) set by the Australian Energy Market Commission (AEMC) and the Australian Energy Market Operator (AEMO), and (ii) an emissions guarantee – to be set by the Commonwealth, enforced by the Australia Energy Regulator and delivered by the energy retailers.

Full details of the NEG, and the emissions guarantee, have yet to be released but the reliability guarantee states that coal, gas, hydro and batteries will be rewarded for their dispatchability whilst subsidies will be removed for renewable generation – to give a ‘technology neutral’ market for all generators.  Reactions from the Australian press (examples here, here and here ) are mixed with some welcoming the policy announcement as a step in the right direction  whilst others noting that this puts too much power in the hands of retailers and is still favouring the use of coal.

Australia initiates Demand Side Response Initiative

Following their announcement of a Demand Side Response (DSR) initiative the Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO) have awarded funding to ten pilot projects in New South Wales, Victoria and South Australia.  The projects will deliver DSR from industrial, commercial and domestic customers.  The DSR pilots are expected to deliver 143MW of capacity for the coming summer and a total of 200MW by 2020.  This capacity saving will cost a total of Au$35.7m, releasing double the capacity of South Australia’s big battery at a fraction of the cost.

Europe

Europe’s first V2G pilot starts in the Netherlands

Mitsubishi, maker of the UK’s most popular plug-in hybrid vehicle, the Outlander SUV, has announced Europe’s first vehicle-to-grid (V2G) pilot in Amsterdam. Mitsubishi is partnering with Italy’s Enel, which is providing the charge points, charging technology firm, NewMotion, the Dutch TSO TenneT and V2G technology specialist Nuvve. The pilot will involve a small number of Outlander PHEVs providing balancing and reserve services via charge points at home or at work, via Nuvve’s Grid Integrated Vehicle Platform (GIVe). Ovo Energy in the UK recently announced future plans for V2G through its VNet technology.

Draft EU rules on self-generation may be incompatible with ‘virtual net metering’

Two innovative solar PV projects in Greece may fall foul of new draft EU rules on self-generation. One is a 10kW PV system on the roof of a school in Thessaloniki, where the power produced is accredited not to the school, but to a shelter for victims of domestic violence some distance away. According to Greenpeace Greece, this ‘virtual net metering’ arrangement would no longer be allowed under the new draft Renewable Energy Directive (RED) within the Clean Energy Package, which as it currently stands defines renewable self-consumption as: “electricity which is generated within the same site where it is consumed or sold.” The Commission, and behind it the German government is opposed to virtual net metering, partly because it would extend the exemptions from network charges that self-generators would receive even though virtual net metering relies on the presence of networks. Estonia, which currently holds the EU Presidency and has been leading a theme of digitisation of energy, argues that virtual net metering would still be allowed under the new RED.

U.S.

Fossil fuel reality in the US

Coal research gets a small extension. The recently awarded DOE funds are for projects that aim to improve the emission profile and efficiency of coal plants. The program calls for cost sharing so the $12 million in DOE funds will be supplemented with non-DOE funds. Nevertheless, the realities of electricity generation in the US, is not only the current dominance of gas, but also the dominance of gas in future plans.

DOE Rulemaking on Coal and Nuclear

On Friday 29 September 2017, the DOE  directed FERC to open a rulemaking proceeding to provide “full recovery of costs” for power plants that keep 90 days of fuel supplied onsite. DOE officials wrote that the Notice of Proposed Rulemaking (NOPR) would enhance the resilience of the nation’s electric system and “protect the American people from energy outages expected to result from the loss of this fuel-secure generation”. “This would blow the market up,” former FERC Chairman Jon Wellinghoff, a Democrat appointed to the commission by President Bush in 2006, told Utility Dive, “and you can quote me on that”. FERC has 60 days to respond.

New Ideas in California

California has signed into law the Buy Clean California Act. The act requires that the state set a maximum “acceptable lifecycle global warming potential” for different building materials, specifying that only materials with embodied emissions below that level can be purchased by the state. This represents the first time a US state is trying not only to reduce its own emissions, but to also reduce the emissions embodied in some of the goods that it imports. The new law applies to steel, glass and insulation purchased by the state of California. It requires that state agencies take climate change into account in their planning and investment decisions, and employ full lifecycle cost accounting to evaluate and compare infrastructure investments and alternatives. The law requires that the California Department of General Services set a maximum acceptable emissions intensity for each material. After 1 July, 2019, companies bidding for projects with the state of California will have to submit robust life-cycle assessments of the materials used in the projects and ensure that they meet the new standards.

Wider globe

500 million additional people have access to electricity in India since 2000

The International Energy Agency’s new report on energy access highlights the extent to which electrification is occurring globally.   Since 2000, 1.2 billion additional people have access to electricity which has resulted, taking into account rising populations, that in 2016 the number of people without access to electricity had fallen to 1.1 billion, down from 1.6 billion since the turn of the century.  Asia have been the most successful in driving electrification, with 500 million additional grid connects in India alone since 2000, where full access is expected in the early 2020’s.   Globally, the pace of electrification has accelerated, as more than 100 million people have gained electricity access per year since 2012, compared with 62 million people per year between 2000 and 2012.   From 2000 to 2012, 72% of those who gained access did so via fossil fuels, with coal accounting for 44%. Renewable sources, mainly hydropower, accounted for the remaining 28%. Since 2012, the share of renewable sources has edged up to 34%. This has been driven by sub-Saharan Africa, where hydropower, geothermal and solar PV accounted for 70% of new electricity access since 2012.

New business models are being deployed that combine off-grid solar, along with storage and telecommunications or appliances. Using more efficient appliances lowers the amount of electricity needed for the same bundle of energy services. In turn, this reduces the investment cost in the supply of electricity required to deliver universal energy access, making off-grid renewable solutions more affordable to households.

Saudi Arabia receives new global low for solar tender: $17.9/MWh

The Saudi firm Masdar and Electricité de France have submitted a bid of $1.79c/kWh for the construction of a 300 MW solar plant at Sakaka, a new global low.  This was the lowest of 8 bids received by the Saudi Arabia’s Renewable Energy Project Development Office (Repdo), with the highest only $3.37c/kWh.   This is the first project of the country’s National Renewable Energy Program, which was described as the new benchmark for the industry in Saudi Arabia and beyond.  Commissioning of the power plant is expected in 2019.   The Saudi government has a target of 9.5 GW of renewables by 2023, although it has said that it expects to exceed its objective.

Posted by: Iain Soutar

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