Monthly Non-Fossil Fuels News Commentary: September – October 2017
As world energy markets transform at an unprecedented rate, India is at the forefront of the shift towards profitable renewables given that the country’s solar belt has the potential of 749 GW for power generation say some experts. As shown by a new IEEFA (Institute for Energy Economics and Financial Analysis) analysis, accelerating this trend will allow India avoid the costly mistakes made by slow-moving, late-learning European utilities, which have wasted billions on stranded coal and other thermal power assets. Similar trends have been apparent now for some time in China and India, where drives to install both thermal and renewable capacity concurrently have seen coal-fired power station utilisation rates drop to record lows of 47 percent and 57 percent respectively in 2016. This is despite electricity demand growing in these countries. The government has set a target of 175 GW of renewable energy by 2022, including 100 GW of solar and 60 GW of wind. India’s draft Third National Electricity Plan (NEP3) for the next two five-year periods, to 2027, unambiguously concludes that beyond the half-built plants already under construction, India does not require any new coal-fired power stations. According to some experts this conclusion overlooks some key facts. The Draft National Electricity Policy of 2016 by CEA said that coal based power generation capacity of 44,085 MW was required to meet demand until 2027 but as 51,025 MW of coal based capacity was under construction in the period 2017-2022 additional coal based capacity would not be required. This was widely interpreted in the media, especially by agencies opposed to coal, as cancellation of coal based power plants on account of increase in renewable energy. Between 2010 and 2015 coal based power generation capacity doubled from about 85 GW to 165 GW largely driven by the private sector. It took only 5 years for the private sector to build the same generation capacity that took nearly 6 decades for the public sector to build. Electricity demand grew only by 5.2% in this period. This is the main reason why additional coal capacity is not required in the next ten years these experts say.
The government’s mega push for clean energy generation capacities, India is set to overtake the EU in expansion of new renewable energy generation capacity for the first time, according to the IEA. India’s move to address the financial health of its power utilities and tackle grid-integration issues drive a more optimistic forecast, the Paris-based agency said in its latest report Renewables 2017. The IEA said that solar PV and wind together represent 90 percent of India’s capacity growth as auctions yielded some of the world’s lowest prices for both technologies. The government is working on an ambitious plan to increase the installed base of domestic renewable energy capacity to 175 GW by 2022. The IEA’s latest report on renewables market analysis and forecast said new solar PV capacity grew by 50 percent globally last year, with China accounting for almost half of the global expansion. For the first time, solar PV additions rose faster than any other fuel, surpassing the net growth in coal. This year’s renewable forecast by IEA is 12 percent higher than last year, thanks mostly to solar PV upward revisions in China and India. Three countries – China, India and the United States – will account for two-thirds of global renewable expansion by 2022.
The wind power tariff which reached a record low of ₹2.64/kWh in the auction conducted by SECI is significantly lower than the approved feed-in tariffs for wind projects and signify increased competitiveness of wind, ratings agency ICRA said. The winning bidders for 1000 MW wind power capacity have quoted tariff in the range of ₹ 2.64/kWh to ₹ 2.65/kWh. The tariff discovered in the current scheme is lower by 24 percent against the previous bid tariff of ₹ 3.46/kWh as discovered in the reverse auction under the first scheme in February 2017.
Rejecting the requests of both wind developers and the MNRE, Karnataka’s power regulator has reiterated its earlier decision that PPAs, which had not been approved before it set a new wind power tariff, would be okayed only at the new rate. The KERC had passed an order on September 4, setting a fresh feed-in tariff for wind power at ₹ 3.74/kWh considerably lower than the tariff of ₹ 4.50/kWh, set by it in October 2015, which had prevailed till then. The order, however, put into jeopardy 599 MW of wind capacity whose developers had already signed PPAs with various discoms in Karnataka at the old rate of ₹4.50/kWh, but the PPAs had still to be ratified by KERC. Around 273 MW had already been commissioned and were supplying power to the state discoms at ₹ 4.50/kWh, but following the new order, would have to renegotiate their PPAs at ₹ 3.74/kWh. The remaining 326 MW are still under construction. Of the 273 MW of wind power in Karnataka, which have already been commissioned but have PPAs awaiting approval, PPAs for 242.50 MW were signed before March 31 this year.
A US based renewable energy company has moved the Madras High Court challenging the recent wind auction held by Tamil Nadu government, claiming that its bid was unfairly rejected even though it had quoted a tariff lower than the winning bid. The Tamil Nadu Generation and Distribution Corp (TANGEDCO) held a 500 MW wind auction in end-August where the winning price was ₹ 3.42/kWh. Evergreen Renewables, a subsidiary of Evergreen Power Solutions Inc., has moved the court to stay the entire auction proceedings and set aside TANGEDCO’s letter rejecting its bid. The firm had quoted a tariff of ₹3.34/kWh, Evergreen said. Evergreen has developed over 3,000 MW of solar and wind power in the US, and is currently setting up around 550 MW of wind projects across Tamil Nadu, Gujarat, Karnataka and Madhya Pradesh, the company said. It commissioned its first and only solar project of 11.5 MW in Telangana in April 2016.
The €5 billion Finnish energy systems provider, Wartsila, is looking to develop India as its biggest Asian market for battery storage solutions, given the huge potential from the country’s solar power play. India’s solar-power capacity has grown exponentially to around 14 GW and the government has set an ambitious target of 100 GW by 2020, but storage has been a missing link thus far and the government is now acknowledging the need for it. Therefore, the government wants the industry to set up battery-manufacturing units in India as a sharp decline in prices of batteries between 2010 and 2017 has made battery-backed solar power more viable. While India has a huge solar-power potential, this source of energy is intermittent and subject to fluctuations. The world over, solar power is supplemented with gas-based or hydropower to ensure continuous power supply. India does not have much gas, and hydropower project development in the country has been slow, leaving battery storage as a backup option.
Solar power tariff ranged between ₹ 2.65-3.36/kWh in an auction conducted by Gujarat Urja Vikas Nigam (GUVNL) for 500 MW capacities. This was slightly up from all-time low rate of ₹ 2.44/kWh discovered earlier this year. The SECI is also conducting the second auction for another 1 GW capacities. The second auction assumes significance because India has set an ambitious target of having 60,000 MW of wind power capacity by 2022. India has installed wind power capacity of 32.5 GW as per latest report for the month of August by the CEA. The country needs to add 5-6 GW wind capacity every year to meet the target. Globally, India is at the fourth position after China, the US and Germany, in terms of wind capacity installation.
A JV of French energy firm Engie SA and Dubai-based private equity firm Abraaj Group may invest around $1 billion to build a 1,000 MW wind power platform in India. The strategy ahead for the JV announced involves bidding for new contracts and making acquisitions to reach the targeted capacity. The capital expenditure planned in equity and debt comes in the backdrop of India’s wind sector transitioning from a feed-in tariff regime to tariff-based competitive auctions. While feed-in tariffs ensure a fixed price for power producers, wind power tariffs in India followed the solar route and hit a record low of ₹ 3.46/kWh in a February auction conducted by Solar Energy Corp of India. Prior to this JV, both Abraaj and Engie have had a presence in the Indian solar space. While the Abraaj Group, with $11 billion under management, announced a partnership with the Aditya Birla Group in October 2015 to build a renewable energy platform focused on developing solar power plants, Engie, with €66.6 billion in revenue, has been trying to expand its presence in India’s clean energy space. Foreign investments are crucial for India’s renewable energy industry as the lower cost of foreign capital and the size of the market has helped bring down tariffs. Engie plans to set up 2 GW of capacity in India by 2019, with its subsidiary Solairedirect SA actively bidding for solar projects, and has an 810 MW portfolio. India’s low green energy tariffs have caused disruptions with some states looking to renege on their offtake commitments for projects awarded at comparatively higher tariffs.
Essel Infraprojects Ltd said it has commissioned 55 MW capacity solar projects in UP and Karnataka. The company is already managing 165 MW capacity solar projects in the country. It said as part of its commitment towards generating green energy, Essel Infra will commission an additional 60 MW capacity project in Karnataka in the next 45 days. The company is aiming to increase its share in green energy through construction of massive solar projects in UP, Odisha and Karnataka of 520 MW capacity in the near future. Essel Infra recently commissioned a 50 MW capacity solar project in Jalaun, UP and a 5 MW capacity project in Bijapur, Karnataka. The company’s effort in generating green power is in tune with the government’s target of generating 100 GW power through solar projects by 2022.
Adani Enterprises announced plans to demerge its renewable energy business into associate company Adani Green Energy Ltd as part of simplifying overall business structure. Post demerger scheme, which has been approved by the boards of the two companies, AGEL would be listed on the exchanges. AEL has a renewable energy portfolio of 2,148 MW in India. Announcing the scheme of arrangement for demerger of the renewable power undertaking into AGEL, Adani Enterprises said it would “simplify the business structure”. Under the proposed scheme, AGEL would issue 761 new equity shares for every 1,000 equity shares of AEL.
The MNRE has written to the Tamil Nadu government, urging it to prevent arbitrary curtailment, or back downs, of solar power in the state. Solar plants have been subject to repeated back downs in Tamil Nadu since last year, to the extent that the National Solar Energy Federation of India (NSEFI) has filed a petition before the Tamil Nadu Electricity Regulatory Commission, urging it to intervene. Separately, Adani Green Energy, which has a 216 MW solar plant in Ramanathapuram district, has also filed a similar petition. The Tamil Nadu government signed Memoranda of Understanding (MoU) with 16 solar power companies for 1500 MW of electricity. All the 16 companies will invest a total of ₹ 900 million in the coming year at the rate of ₹ 60 million/MW solar power. These companies had bid for various capacities of solar power for the year 2017-18 and won bids after they agreed to the lowest tariff of ₹ 3.47/kWh. The 16 companies led by Rasi Green, which won the bid at ₹ 3.47/kWh will set up solar plants in the state. NLC will provide 709 MW unit followed by six companies, 100 MW each. Other companies have been allocated 1 to 54 MW.
The Uttarakhand government and a charitable funding agency, Swan Cultural Center and Foundation, launched ‘Solar Briefcase’ in Kedarnath Dham. The initiative was taken to provide electricity to far flung areas in the hill state. There are more than 60 villages in the state where electrification has not yet been done due to the difficult geographical conditions.
A reverse auction of 500 MW of solar projects held by the Gujarat government saw the lowest winning bid at ₹ 2.65/kWh. This was the first solar auction held after the two conducted by Solar Energy Corp of India in May, when one of the winning bidders had promised to sell power at a record low of ₹ 2.44/kWh. The auctions in May were held for projects at the Bhadla Solar Park in Rajasthan’s Jodhpur district, where solar radiation is the highest in the country. It was expected that winning bids at the latest auction conducted by Gujarat Urja Vikas Nigam Ltd, as the state’s nodal power company is called, would be a shade higher. This is because Gujarat has less intense solar radiation than Rajasthan, and the developers will not be provided land in solar parks — they will have to acquire land on their own. Further, in the four months since the last auction, the cost of solar modules in China, from where 90% of Indian solar developers source their equipment, have begun rising, after having fallen steeply for two years before that. The lowest bid, seeking 90 MW at ₹ 2.65/kWh was made by GRT Jewellers India, a renowned name in the jewellery business. The company, headquartered in Chennai, is venturing into solar for the first time. The second and third lowest bidders were both state-owned power generation companies — Gujarat State Electricity Corp and Gujarat Industries Power Company — bidding for 75 MW each at ₹ 2.66 and ₹ 2.67/kWh respectively. The remaining 260 MW (out of 500 MW on offer) of projects were won by NYSE-listed Azure Power, one of the largest solar developers in the country, which also bid ₹ 2.67/kWh. There were 14 bidders in all in the auction. Among those who lost out were heavyweights such as Tata Power, ReNew Power, Finland-headquartered Fortum Solar, Lightsource Renewable Energy of the UK and Canadian Solar Energy.
Solar developers and the Jharkhand government have resolved an 18-month long deadlock over the price of solar power, with the developers agreeing to a reduced tariff of ₹ 4.95/kWh. The problem arose after the Jharkhand Renewable Energy Development Agency (JREDA) held a mega auction of 1,200 MW in March 2016 to set up solar projects at 45 different areas across the state. Winning bids ranged from ₹ 5.08 to₹ 5.48/kWh for the larger projects of above 25 MW and ₹ 5.29 to ₹ 7.95/kWh for those below. The biggest winner was ReNew Power, which secured 522 MW. Meanwhile, solar tariffs kept falling in succeeding auctions, reaching a record low of ₹ 2.44/kWh in an auction conducted by Solar Corporation of India at the Bhadla Solar Park in Rajasthan in May this year. Last month, the developers finally agreed to a reduced tariff of ₹ 4.99 /kWh per kWh for projects above 25 MW, which the state government agreed to consider. Dubai-based emerging markets buyout fund Abraaj Group has joined hands with ENGIE, a multinational utility company and global independent power producer to set up a wind energy platform in India. The Indian renewable energy sector continues to grow rapidly, underpinned by an increasing demand for power. Power consumption in the country is expected to grow at 9% year-on-year until 2020. The Indian government’s target of 60 GW of wind power capacity by 2022 will require a near doubling of the current installed capacity of 32 GW over the next five years. In 2015, Abraaj Group tied up with Aditya Birla Group to create a large-scale renewable energy platform that will focus on developing utility-scale solar power plants in India.
Wary of being left behind in the race for renewables and electric vehicles, oil marketing companies are quietly drawing up plans to expand their modest presence in renewable energy space. IOC is exploring opportunities for setting up battery charging stations and battery replacement facilities for electric vehicles in its petrol pumps. The centre is pushing solar and wind energy as well as electric vehicles, to curb oil imports and pollution, and meet its commitments under the Paris accord on climate change. India pledged to reduce carbon emissions relative to its gross domestic product by 33-35% from 2005 levels by 2030, under the accord. India pledged that by 2030, 40% of the country’s electricity would come from non-fossil fuel-based sources such as wind and solar power. By 2021-22, BPCL sees 5% of its revenue coming from non-fossil fuel sources. BPCL has shortlisted 10 oil depots and liquefied petroleum gas bottling plants for installation of rooftop solar plants. By March 2017, rooftop solar units had been installed in 1,001 of its retail outlets. BPCL is carrying out a detailed feasibility and system design study at 19 company-owned and company-operated retail outlets in a pilot for solarizing (putting solar panels) large-format retail outlets. HPCL is strengthening its presence in natural gas and renewables to align its business to the changing patterns of demand and seeking to tap potential opportunities. HPCL operates wind farms of 100.9 MW capacity installed in Rajasthan and Maharashtra.
The CCEA is likely to approve revised cost of 412 MW Rampur hydro power project implemented by SJVN Ltd at ₹ 42.33 billion in its meeting scheduled. The CCEA will revise the cost of the project to ₹ 42.33 billion from ₹ 20.47 billion estimated on March, 2006 price level during detailed project report stage. Last year in October, the government dedicated 412 MW Rampur Hydro Station of SJVNL projects to the Nation in Mandi along with other two flagship projects– 800 MW Hydro Power Station of NTPC- Koldam and 520 MW Parvati Project of NHPC. The Rampur project in Kullu district is being operated in tandem with Nathpa Jhakri Hydro Power Station. This project provides 13 percent free power to Himachal Pradesh. Besides, the power from this plant is also distributed to Haryana, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.
In a bid to seek more private sector participation in the hydropower sector, the power ministry has formed a committee under CEA to propose recommendations to the ministry. This also comes at a time when hydropower generation has seen a decline of 12 percent in the month of August compared with the corresponding month, last year, according to the power ministry. According to experts, private sector remains reluctant due to various issues pertaining to project execution. At present, as many as 20 under construction hydro power projects totalling 6,329 MW are either stalled or stressed in the country and ₹ 301.47 billion has been spent on them. According to Niti Aayog’s draft energy policy, the think-tank has proposed a bail out of stranded large hydropower projects of around 11,000 MW capacity. The government of India also aims to add 1,305 MW of additional hydropower generation capacity in the current financial year out of which 305 MW expected from the private sector while 266 MW has already been commissioned.
India is playing a substantive role in building a nuclear power plant on foreign soil for the first time ever with the proposed supply of equipment and material for the power station being built by Bangladesh with Russian assistance. Indian firms are working with Russian and Bangladeshi partners on establishing Rooppur Nuclear Power Plant in Bangladesh. India will supply and manufacture equipment, material for the plant near Dhaka. Besides Bangladeshi nuclear scientists are undergoing training at the Kudankulam Nuclear Power Plant, also built with Russian assistance and uses Russian technology.
Rest of the World
The US nuclear power industry is facing an uphill battle to hang onto its share of the country’s electricity production, with some projecting a worst-case scenario where half of the nation’s 99 nuclear reactors could shut over the next couple of decades. Nuclear power looked to be on the verge of a renaissance about a decade ago. But a surge in domestic natural gas production, billions of dollars in cost overruns on new projects, Japan’s Fukushima accident in 2011, and multiple plant closures have the industry on its heels again. The US Department of Energy expects nuclear energy’s share of the power mix to drop to 11 percent by 2050 from the current 20 percent, and many reactors to close. In the past five years, operators have shut six reactors amid stagnant electricity demand and low natural gas and power prices, and plan to shut another six reactors in deregulated states over the next five years, in part because they cannot compete with gas-fired plants. Most states in the US Northeast and Midwest are deregulated. Merchant plants receive the same money for energy they sell as gas-fired and renewable plants, which are less expensive to operate.
The US Department of Energy said it has offered an additional loan guarantee of up to $3.7 billion to companies building two nuclear reactors at the Vogtle plant in the state of Georgia. The conditional loan guarantees were in the amounts of $1.67 billion to Georgia Power Company, a subsidiary of Southern Co, $1.6 billion to Oglethorpe Power Corp and $415 million to three subsidiaries of the Municipal Electric Authority of Georgia. US Energy Secretary who has remarked he wants to make nuclear power “cool again,” said that the “future of nuclear energy in the US is bright” and that he looks forward to “expanding American leadership in innovative nuclear technologies.” US nuclear power has been struggling in the face of competing power plants that burn plentiful, low-cost natural gas and stagnant electricity demand. The 2011 Fukushima disaster in Japan has also dimmed interest in nuclear power. The Vogtle project is the first new US nuclear power plant to be built since the Three Mile Island accident in 1979. And billions of dollars in cost overruns at Vogtle helped push its main contractor, Westinghouse Electric Co LLC, a subsidiary of Toshiba Corp of Japan, into bankruptcy in March. The US Department of Energy has already guaranteed $8.3 billion in loans to the companies to support construction of Vogtle reactors. Vogtle had initially been expected to begin generating power in 2016, but now the reactors are expected to be completed around the end of 2022.
TEPCO received an initial safety approval from Japan’s NRA to restart two reactors at the world’s biggest nuclear power plant. The approval marks the first safety approval TEPCO has received in the first steps towards the possible restart of reactors since the 2011 meltdown of three reactors at TEPCO’s Fukushima plant following an earthquake and tsunami that led to the eventual closure of Japan’s nuclear power plants. TEPCO has said it needs to resume operations at the closed plants to pay for Fukushima’s restoration and other liabilities from the disaster. The NRA ruled that the No. 6 and No. 7 reactors, each with a capacity of 1,356 MW, at the Kashiwazaki-Kariwa nuclear plant has passed new safety standards enacted after the Fukushima accident.
Russian company Rosatom’s €12.5 billion (11.25 billion pounds) project to build two nuclear reactors in Hungary has been delayed by at least a year, Hungarian authorities said. Hungary said that the Paks nuclear project would be delayed by 22 months because of EU regulatory hurdles but the government was working to shorten the delay. The two Russian VVER 1200 reactors could come online in 2026 and 2027 respectively, a year later than outlined in a 2015 government presentation. Rosatom plans to start work on the site’s auxiliary buildings in early 2018 and that, once permits are secured, construction of the reactors could start in 2020. Suli said the application for the construction permit – originally scheduled for end-2017 – will be submitted mid-2018 and that approval could take up to 15 months. Greenpeace said that EU regulatory controls should have been anticipated and were not responsible for Rosatom’s delay in submitting the request for a construction permit. The Paks site already has four Russian-built reactors that account for about a third of Hungary’s power consumption and will be retired between 2023 and 2037.
Safety levels at nuclear power plants globally are worrying, and although there are no immediate dangers, there are systemic risks that should be dealt with urgently, the head of French nuclear watchdog ASN said. In the past few weeks, the regulator has ordered heightened supervision at EDF’s Belleville nuclear plant citing failures in safety standards. It also demanded a temporary halt in production at the Tricastin nuclear power plant due to flaws at a canal dike that could lead to flooding. Some cases warranted a serious probe, which was why they were classified as “Level 2” incidents on the international nuclear and radiological event scale, where Level 1 marks the lowest level of risk while Level 7 is the highest. The number of such incidents have been on the rise. This was happening while companies in the sector were facing financial difficulties. The regulator was still examining requests to extend the lifespan of the French nuclear fleet, and was particular looking at several key factors such as anomalies that have gone undetected over the years.
Iraq’s Foreign Minister is asking nuclear countries for help building an atomic reactor for peaceful purposes, saying the country has a right to use atomic power peacefully. He made the request in his speech to the UN General Assembly’s annual meeting of presidents, prime ministers and monarchs. He called for assistance “to build a nuclear reactor for peaceful purposes in Iraq, to acquire this nuclear technology.” Iraq’s earlier efforts to build a nuclear reactor were met with an Israeli airstrike in 1981 and years of suspicion about its nuclear intentions.
China plans to complete ahead of schedule a $2 billion hydropower project in Pakistan-occupied Kashmir (PoK) to ease an energy crisis in Pakistan. The Karot Hydropower Project is being built on Jhelum river on a “build-own-operate-transfer” basis for 30 years. It will be owned by a Chinese company for 30 years, after which ownership will be turned over to the government of Pakistan. Karot Power Company Ltd, a subsidiary of China Three Gorges South Asia Investment, owns the Karot Power Station. The company said that the project will help ease Pakistan’s power shortage and generate local employment. Karot Power Station has a capacity of 720 MW and China Three Gorges South Asia Investment also has other power projects in Pakistan, including hydro, wind and solar power, which would largely solve Pakistan’s problem.
BNP Paribas, France’s biggest listed bank, said it would no longer work with oil and natural gas companies that primarily do business in shale or oil sands as it plans to boost support for renewable energy projects. The bank also said that it would no longer finance new projects that are primarily involved in the transportation or export of oil and gas from shale or oil sands. The bank previously said it planned to spend €15 billion to finance renewable energy projects by 2020 and invest €100 million in start-ups specializing in energy storage and efficiency. The lender has already stopped financing coal mines and coal-fired power plants, and no longer supports coal companies that are not planning to diversify their energy sources. BNP Paribas’s smaller rival Societe Generale said in October last year that it would quit financing coal-powered electricity plants from January and increase its support for renewable energy projects.
Oil refinery workers, executives and local politicians gathered near Philadelphia to urge the White House revamp the nation’s renewable fuels program, arguing the future of their plants are at stake. The US renewable fuel program requires higher levels of ethanol and other biofuels to be blended into the nation’s fuel pool, a requirement pitting the oil industry against the powerful farm lobby. President Donald Trump has promised corn growers he would protect the program, while also signalling that he sympathizes with US refiners who bear its costs. The speakers told a crowd of about 100 that the tradable credits at the centre of the renewable fuel program have been exploited by banks and trading firms, threatening the viability of merchant refiners like Monroe Energy and PBF Energy. The US RFS requires US refiners and importers blend ethanol into their fuels or purchase credits from companies that do. The credits fell to a year-to-date low of 34 cents in March amid optimism that Trump would revamp RFS and shift some costs to retailers and others, but it now appears he will not make that change. The US EPA has angered the biofuels industry by calling for less biofuel blending. It also wants to allow exported ethanol to earn credits, increasing the pool of credits and driving down prices.
The EPA is considering a change to US biofuels policy that would allow exports of ethanol to count toward the country’s annual biofuels volumes mandates. The proposal would represent a significant shift from the original mandate of the 2005 renewable fuel program, designed to increase the amount ethanol and biodiesel in the country’s fuel pool while boosting the US agricultural sector. The move would benefit US merchant refiners like Valero and PBF Energy, who are required under the US RFS to blend increasing volumes of ethanol and other biofuels into the country’s gasoline and diesel every year, at a cost of hundreds of millions of dollars. Currently, US biofuels policy only counts fuels blended in the US toward the annual volumes mandates and does not count ethanol that is produced in the US and exported for use abroad. By counting the exports, it would increase the amount of available credits by the equivalent of as much 1 billion gallons of biofuel and push down prices. The EPA proposed a requirement that refiners and importers blend in 15 billion gallons of corn-based ethanol and other conventional renewable fuels next year.
As the sun sets on Japan’s solar energy boom, companies and investors are rushing into wood-burning biomass projects to lock in still-high government subsidies. More than 800 projects have already won government approval, offering 12.4 GW of capacity — equal to 12 nuclear power stations and nearly double Japan’s 2030 target for biomass in its basic energy policy. The sheer number of projects has raised questions about how they will all find sufficient fuel, mostly shipped in from countries like Canada and Vietnam, while some experts question the environmental credentials of such large-scale plants. The projects approved to date that use general wood fuel would need the equivalent of up to 60 million tonnes of wood pellets, compared with global output of 24 million tonnes in 2014, Takanobu Aikawa, a senior researcher at Japan’s Renewable Energy Institute, said. Other fuels such as local forest thinned woods or palm kernel shells from Indonesia and Malaysia would not make up the shortfall, he said. Biomass plants generate energy by burning fuels, releasing carbon dioxide into the atmosphere. They qualify as renewable because plants absorb CO2 as they grow, with a lifespan of years rather than the millions of years needed to make fossil fuels such as coal. Japan Renewable Energy, in which Goldman Sachs has a stake, is building its first biomass power station north of Tokyo, adding to solar and wind power plants. Major utilities, such as Chubu Electric Power Co, are also looking to co-fire biomass in their coal power plants to help cut emissions. Japan wants renewables to account for 22-24 percent of its electricity mix by 2030.
Microsoft has signed a 15-year wind energy agreement with GE in Ireland, becoming one of the first global technology firms to support a new wind project in the country. Microsoft will purchase 100 percent of the wind energy from its new, 37 MW Tullahennel wind farm in County Kerry, Ireland. The agreement will help support the growing demand for Microsoft Cloud services from Ireland, the company said. As part of the deal, Microsoft also signed an agreement with Dublin-based energy trading company ElectroRoute that will provide energy trading services to Microsoft. The wind farm will integrate GE’s ‘Digital Wind Farm’ technology, which makes renewable energy outputs even more reliable. Once operational, the new wind project will bring Microsoft’s total global direct procurement in renewable energy projects to almost 600 MW.
A trade dispute over solar imports has stalled clean-energy projects across the US. With the looming prospect of tariffs driving up the price of panels, utilities and businesses are holding off on signing deals to buy solar power. It may be months before they get more clarity. The trade case dates to an April complaint from Suniva Inc, a bankrupt solar manufacturer based in Georgia. The US International Trade Commission ruled that the US industry has been harmed by a flood of cheap imports, and President Donald Trump will get to decide whether to impose tariffs. With solar development slowing, some corporate buyers may turn instead to wind farms. Such contracts with businesses have been a significant driver of growth for both types of clean energy in the US.
Norway’s Statoil is taking its first step into the solar sector, partnering up with Oslo-listed renewable energy firm Scatec Solar in a JV aiming to build several large-scale solar plants in Brazil. Bruised by pressure on oil prices over the last two years, European oil companies have been intensifying their expansion into renewable energy to seek new sources of revenue. With a 40-percent share in Scatec’s construction-ready 162 MW Apodi farm and a 50 percent share in the project execution company, Statoil adds to a renewable energy portfolio that until now has consisted mainly of offshore wind projects. In September, Scatec Solar said the company was in talks to build its first solar power plants in Iran, joining a wave of foreign energy firms looking to invest in the country.
The IEA raised its forecasts for renewable energy over the next five years following a record 2016. In its medium-term renewables market report, the IEA expects global renewable electricity capacity to rise by more than 920 GW, or 43 percent, by 2022, due to supportive policies for low-carbon energy and cost reductions for solar PV and wind. The projected growth is 12 percent more bullish than the IEA’s forecast last year. In 2016, net additions to renewable energy capacity – including hydropower, solar, wind, bioenergy, wave and tidal – set another world record, growing by 165 GW, 6 percent more than in 2015, the report said. Solar PV capacity grew by 50 percent to reach more than 74 GW last year and it was the first time solar PV additions rose faster than any other fuel, surpassing the net growth in coal. The agency sees renewable power generation rising by more than a third to 8,169 TWh in 2022 – from around 6,012 TWh in 2016 – which is equivalent to the combined electricity consumption of China, India and Germany. China will be responsible for the largest amount of global renewable capacity growth, driven by strong government targets, economic incentives and air pollution concerns. India’s renewable electricity growth could surpass the EU’s by 2022 for it to become the joint second-largest growth market alongside the US as it is seen more than doubling its current capacity.
MW: megawatt, GW: gigawatt, CEA: Central Electricity Authority, kWh: kilowatt hour, PPAs: power purchase agreements, TWh: terawatt-hours, EU: European Union, IEA: International Energy Agency, PV: photovoltaic, SECI: Solar Energy Corp of India, MNRE: Ministry of New and Renewable Energy, KERC: Karnataka Electricity Regulatory Commission, TANGEDCO: Tamil Nadu Generation and Distribution Corp, JV: joint venture, UP: Uttar Pradesh, AGEL: Adani Green Energy Ltd, AEL: Adani Enterprises Ltd, UK: United Kingdom, IOC: Indian Oil Corp, BPCL: Bharat Petroleum Corp Ltd, HPCL: Hindustan Petroleum Corp Ltd, CCEA: Cabinet Committee on Economic Affairs, US: United States, TEPCO: Tokyo Electric Power Company, NRA: Nuclear Regulation Authority, UN: United Nations, RFS: Renewable Fuel Standard, EPA: Environmental Protection Agency
Courtesy: Energy News Monitor | Volume XIV; Issue 20