Global Insights: 20th November 2018

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Global Insights: 20th November 2018


Network offers demand response incentives in NSW

Ausgrid, the distribution network serving Sydney, the Central Coast and Hunter Valley in New South Wales is to offer its customers incentives to reduce their electricity use.  The demand response project, part funded by the Australian Renewable Energy Agency (ARENA), will offer customers incentives to implement solar systems and efficient lighting in order to permanently reduce demand.  The aim of the project is to show, by reducing demand in this way, Ausgrid will be able to delay, or avoid, network augmentation so reducing costs for customers.

Consultation open for wholesale market demand response

The Australian Energy Market Commission (AEMC) is opening a consultation following three rule change requests for demand response in the National Electricity Market (NEM).  New technology and business models have now made customer demand response viable to assist with the peak demand in the NEM.  The three rule change requests received are:

  • The Public Interest Advocacy Centre, Total Environment Centre and the Australia Institute are proposing a mechanism that would allow third parties, such as demand response aggregators, to offer demand response into the wholesale market in a transparent, scheduled manner.
  • The Australian Energy Council is proposing a register for wholesale demand response. This would introduce an obligation for retailers to negotiate in good faith with third parties looking to provide wholesale demand response through a register.
  • The South Australian Government is also proposing a wholesale demand response mechanism, as well as a separate, transitory market for wholesale demand response as an interim step.

The range of issues brought by these rule change requests will be assessed in conjunction with current projects by AEMC, AEMO and ARENA (DEIP and demand response).  The request will affect many areas of the National Electricity Rules and as such the rule process time may need to be extended.


See DER access as part of the solution, not the problem: NYS.

The New York Public Service Commission (PSC) has made multiple updates this year to its Standardized Interconnection Requirements (SIR), aiming to make it easier for renewable distributed generators, including energy storage systems, to connect to the state’s electric grid. In April and October, the PSC made changes to the SIR that included: improved technical screens to identify projects that could be fast-tracked, enhanced metering and performance standards, new interconnection rules for larger projects up to 5 MW, including solar+storage, and other back-end enhancements.

PSC Chairman John Rhodes has argued that the PSC wants to encourage the deployment of good, clean energy projects. “Good” projects are those that provide the most value….. Sometimes the value depends on location, and we want those projects to happen. And sometimes the value is about the time of year or day. We want to encourage the projects that provide more value. Also, the PSC argued “If you want people to do something, make it easy.” A part of REV, he said, is “making it as easy as possible, from a project-mechanics perspective.”


Germany sets aside 1 billion euros to support battery production

The German economy minister has announced that the government has set aside around 1 billion euros to support battery cell production. The investment seeks to reduce the dependence of German carmakers on Asian electric vehicle battery suppliers and aims to for Germany and Europe to produce 30 percent of batteries by 2030. Economy Minister Peter Altmaier said Germany wants to work with other European countries and is exploring battery production consortia deals, with the aim of large-scale production commencing from 2021. European Commission Vice President Maros Sefcovic said the battery market could be worth 250 billion euros annually by 2025. The announcement comes in the same week as Germany’s biggest carmaker Volkswagen outlined its intention to drastically scale up EV production including plans for a major electric car factory in the eastern German city Zwickau. 

German coal commission draft report suggests compensation needed for coal exit

A leaked draft of a German coal exit commission report outlines how the country should start to phase-out coal over the coming years. It suggests that Germany’s hard coal and lignite plants should be retired in consensus with the industry and be coupled with possible compensation payments for retired coal capacity. Power customers and energy-intensive industries should be shielded from drastic price increases with the compensation being paid out of the federal budget rather than via power prices. The commissions suggest instead that Germany’s power tax should be reduced while sectors such as transport, heating and construction should be made subject to some form of carbon price scheme.

 Spain goes for 100% renewables, drops coal and nuclear by 2030

The Spanish government has published a new climate plan that aims for 70% of electricity to come from renewable sources by 2030, rising to 100% by 2050. Overall emissions reductions targets of 20% by 2030 from 1990 levels, and up to 90% by 2050, are also in the plan. The bold vision also includes proposals to stop exploration licences for oil and gas exploration, a ban of fracking and scrapping fossil fuel subsidies. Closing the last of its coal-fired plants by 2030 is also in the plan. Nine plants will close by 2020 under the Industrial Emissions Directive. The government has also said that it does not plan to extend the lifespan of any of its nuclear reactors beyond 2030, although this is not part of the official plan.

European Parliament confirms Energy Agreements

The European Parliament has confirmed by a large margin the provisional agreement reached with the Council in June on energy efficiency, renewables and governance of the Energy Union. Under the agreement, energy efficiency in the EU has to have improved by 32.5% by 2030, while the share of energy from renewables should be at least 32% of the EU’s gross final consumption. Both targets are to be reviewed by 2023. These targets can only be raised, not lowered. Each member state must present a ten-year “integrated national energy and climate plan” with national targets, contributions, policies and measures by 31 December 2019, and every ten years thereafter.


Key Insights from the International Energy Agency’s World Energy Outlook

The special focus in this year’s World Energy Outlook (WEO) is electricity, which the IEA state is ‘experiencing its most dramatic transformation since its creation more than a century ago’.   The report notes that:

  • Global consumer expenditure on electricity now stands at $2.5 trillion, almost double what it was in 2000. Consumers globally are spending almost 40% of their energy expenditures.
  • Electricity investment accounts for 49% to the total in the energy sector. Global power sector investment fell by 6% to $750 billion in 2017 compared with 2016.  Investment in the grids takes about 40% of the total ($300 million).
  • In 2017, spending on smart grid technologies, such as smart meters, advanced distribution equipment and electric vehicle charging, accounted for over 10% of network spending ($30 billion).
  • As the share of wind and solar increases, so does the need for flexibility to maintain reliability of power systems. Thermal power makes the biggest contribution to flexibility worldwide, as interconnections and pumped storage hydro each provide further flexibility of around 150 gigawatts (GW). Batteries are starting to contribute too, including behind-the-meter. Digitalization is unlocking new, smaller and more distributed sources of flexibility, especially demand-side response, which today accounts for around 40 GW.
  • New wind and solar PV generation capacity accounted for nearly half of the 310 gigawatts (GW) of capacity additions worldwide in 2017, while nuclear capacity additions fell to 3.3 GW in 2017, with only China and Pakistan bringing new reactors online, with coal 65 GW, gas 56 GW and oil 5 GW.

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