THE ENERGY INDUSTRY February 2018 • Volume 10 • No 12 • Published monthly • ISSN 1757-7365 www.teitimes.com TIMES

Taking charge? SMRs can wear the nuclear crown Final Word Electricity infrastructure developments Flying too close to the sun are under way to accommodate electric Small modular reactors could has its hazards, says vehicles but a huge amount of work answer many of the problems Junior Isles. remains to be done. Page 13 facing the nuclear industry. Page 16 Page 14

News In Brief EU Parliament strengthens clean energy ambition Calls to step The European Parliament’s vote to strengthen its clean energy targets through 2030 has been largely welcomed but some believe more could be done. Page 2 up climate US solar import tariffs threaten market growth Tariffs on imports on solar components into the US could slow the growth of the solar market, action at according to industry experts. Page 4 Modi: climate Japan looks offshore to cut change is a major emissions threat right now Japan is looking to set rules to Davos promote wind power generation as it attempts to boost renewables targets and meet its Paris climate pledge on India and France call for greater action on climate change, as business leaders point out the carbon emissions. opportunities of greening the economy. Junior Isles Page 6 World leaders and heads of business- change is a major threat right now,” ‘sunshine countries’, which fall ei- grew in leaps and bounds. UK’s clean strategy is not es gathering at the 2018 World Eco- he stressed. ther completely or partly between the “The increase last year is a one-off enough nomic Forum in Davos, Switzerland, During his speech at the opening Tropic of Cancer and the Tropic of – it’s not likely to be sustained – but The UK’s Clean Growth Strategy called for increased effort in tackling session, Modi outlined his country’s Capricorn. The alliance’s aim is to Chinese emissions are not likely to must be urgently translated into climate change. The call came a week progress in meeting its green energy work for efficient exploitation of so- go down, either,” said Trevor Houser, action if the country is to meet after NASA declared 2017 the second targets. lar energy to cut dependence on fossil a partner at the Rhodium Group, a emissions targets, government warmest since 1880. “To save the environment and to fuels. New York consulting group special- climate change advisors have Last year, it was China’s President fight climate change, my government As one of the world’s highest carbon ising in China. warned. Xi Jinping who galvanized climate has planned a major campaign. By emitters, India’s action is important China has pressed ahead with lon- Page 7 change supporters. This time the lead 2022, we want to generate 175 GW but what happens in China is even ger-term efforts to clean up its econ- came from India, as Narendra Modi of renewable energy. In the last three more critical. China produces more omy. Last month it announced plans Turkey boosts wind capacity became the first Indian Prime Minister years, we have already achieved 60 than a quarter of the planet’s emis- to set up a national carbon trading Wind energy capacity is set to in two decades to join world business GW or around one-third of this tar- sions of global warming gases. Nota- market. It is also encouraging more grow rapidly in Turkey following leaders in the Swiss resort town. get,” he said. bly, the Davos meeting took place as use of natural gas. successful tenders in 2017. Modi said climate change was Modi also said India had taken the new figures showed that China’s emis- According to figures released by Page 8 among the gravest threats being faced lead in fighting climate change by sions might be rising again. Bloomberg New Energy Finance in by humanity. “Extreme weather con- setting up the International Solar Al- Yet experts noted that one annual January, Chinese investment in all the Brookfield secures ditions are rising by the day and the liance – a global group of more than increase does not indicate China is re- Westinghouse future world should come together. Climate 121 countries, most of them being turning to an era when its emissions Continued on Page 2 Brookfield Business Partners says it hopes to leverage Westinghouse’s strong global market position and diversified customer base after sealing a deal to buy the nuclear firm Regulators squash Trump’s plan to “bring back coal” from Toshiba. Page 9 US President Donald Trump’s plan to the reliability and resiliency of our President Trump’s attempts to “bring 2017 and 2022, resulting in a decade revive the flagging coal industry is in nation’s grid”. He argued that over- back coal” in the US. Coal fired pow- of stagnation for coal consumption. Technology: Transactive disarray following the Federal Energy reliance on gas fired plants, wind and er plants across the country are being Global coal consumption fell 1.9 per energy on trial Regulatory Commission’s (FERC) solar power could risk blackouts in shut down as a result of competition cent to 5357 million tonnes of coal A micro-grid project in Brooklyn, rejection of a proposal that would have extreme conditions. from lower-cost gas fired generation equivalent (Mtce) last year, the sec- New York, is trialling a peer-to-peer propped up nuclear and coal power Following FERC’s decision, Perry and renewable energy, and the subsi- ond year of decline, because of lower energy trading system. The first plants struggling in competitive elec- said in a statement: “As intended, my dy plan was seen as one of the few gas prices, a surge in renewables, and transactions were conducted in April tricity markets. proposal initiated a national debate on potentially viable ways to halt the in- improvements in energy efficiency. 2016 and today, some 50 solar sites At the same time, the commission the resiliency of our electric system.” dustry’s decline. FERC said last No- The Coal 2017 report noted, how- are participating in the project. said it shared US Energy Secretary But most analysts saw the decision vember that by the end of 2020 it ex- ever, that while coal demand fell in Page 15 Rick Perry’s stated goal of strengthen- as a setback for the administration. pected 74 more coal fired plants to China, the US, and the European ing the “resilience” of the electricity “This outright rejection of subsidies have shut down with a total genera- Union in 2016, it increased in India grid and directed regional transmis- for coal and nuclear shows that Com- tion capacity of 20.7 GW. and across many parts of Southeast sion operators to provide information missioners of both parties have little Coal continues to face strong head- Asia, and shows no signs of slowing Advertise to help the commission examine the interest in manipulating electricity winds, not just in the US but also in down. [email protected] matter “holistically.” markets in favour of any fuel source,” other countries where it has tradi- In the report, the IEA therefore In September, Perry sent a proposal said Paul Bledsoe, a former consul- tionally been the mainstay for power once again called for urgent action in to the commission, which has re- tant at the Obama-era Energy Depart- generation. support of Carbon Capture, Utilisa- Subscribe sponsibility for wholesale electricity ment, now a lecturer at American According to the International En- tion and Storage (CCUS), the tech- [email protected] markets, asking it to draw up new University’s Center for Environmen- ergy Agency’s recent annual coal nology that aids clean coal use. or call +44 208 523 2573 regulations to support power genera- tal Policy. market report, global demand for coal “Without CCUS, the climate chal- tors that were “necessary to maintain The decision is a significant blow to would remain nearly flat between lenge will be much bigger,” it said.

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: [email protected] THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 2 Headline News

Continued from Page 1 clean energy technologies in 2017 was $132.6 billion, up 24 per cent setting a new record. The next big- EU Parliament strengthens gest investing country was the US, at $56.9 billion, up 1 per cent on 2016. Europe as a whole invested $57.4 billion, down 26 per cent year-on-year. French President Emmanuel Ma- clean energy ambition cron urged Europe and the rest of the world to do more. In a spirited speech, Macron told WEF dele- The European Parliament’s vote to strengthen its clean energy targets through 2030 has been gates: “On climate change, we’re losing the battle.” He stressed that largely welcomed by the electricity industry but the heating sector believes more could be the world needed concrete action and results by 2020, and announced done. Junior Isles that France would shut down all coal fired power stations by 2021. The European Parliament’s (EP) deci- Last month MEPs called for a renew- levels in our energy system is key to high can only be considered back- He also called for the EU, which sion to strengthen its clean energy am- able energy target of 35 per cent for reducing our carbon footprint and en- wards orientated, as the conversion already has an emissions trading bition has been largely welcomed by 2030, rather than the 27 per cent that ergy bills,” said Hans Korteweg, Man- efficiency of Europe’s energy system scheme (ETS), to “go a little bit the sector. the European Commission proposed aging Director at Cogen Europe. “Co- was already 2.11 in 2015 (later num- further and create a floor price for In January the EP finally approved in 2016 – a decision welcomed by the gen Europe hopes that the Parliament bers are not yet available). Conse- CO2”. the revision of key legislation for the wind lobby. vote shows clear ambition towards quently, a value of 2.3 falls short of Carbon trading markets work by energy sector, namely the Governance Giles Dickson, WindEurope CEO, EU member states to make the ‘en- guiding society into a future where a providing a financial incentive to Regulation, the Renewable Energy said: “Good on the Parliament. Thirty ergy efficiency first’ principle a core much larger share of electricity comes pollute less, but the EU ETS has Directive (RED) and the Energy Ef- five per cent makes sense economi- pillar of the energy transition.” from renewable sources. had limited success in delivering a ficiency Directive (EED), to make cally... The difference between 27 per Not all, however, are convinced that It noted, however, that the introduc- meaningful price for carbon and them fit for the challenges and com- cent and 35 per cent in wind is €92 the Clean Energy Package is as clean tion of a new specific sectoral target many experts have called for a mitments of the next decade, up to billion in investments not made and as it could be. for renewable heating and cooling in minimum price on carbon to boost 2030. The EP also voted for Member 136 000 jobs not created. And other The European Heat Pump Associa- the Renewable Energy Directive was progress. States to submit their national energy sectors would miss out too with a tion (EHPA) said the vote represents a positive move. and climate action plans by June 1, lower target: every €1000 invested in a step back from the ambition shown Thomas Nowak, EHPA’s Secretary 2019. wind creates €250 value for the wider in November by EP’s ITRE Commit- General, commented: “The vote in the The ‘Clean Energy for All Europe- supply chain including chemicals, tee towards a more efficient and Parliament was rather hesitant than ans’ legislative package proposed by steel and construction.” greener energy system. ambitious. It strikes me, in particular, the European Commission in 2016 The new efficiency measures were It stressed that decisions on the lev- that despite the fact that the EU elec- includes initiatives on: (1) the Energy also greeted positively. Cogen Eu- els of the 2030 energy efficiency and tricity system is greening by the hour, Efficiency Directive; (2) the Energy rope, Europe’s umbrella organisation renewable energy targets failed to be the Parliament refused to recognise Performance of Buildings Directive; representing the interests of the com- backed by an ambitious necessary this and set an adequate primary en- (3) the Security of Electricity Supply bined heat and power industry, said underlying tool: the primary energy ergy factor. Directive; (4) the electricity market the vote sends a strong signal to EU factor. The EHPA said “this small “A default value of 2.0. is needed to design, consisting in a proposal re- member states to realise the important number with big implications” was accelerate the deployment of efficient vising the Electricity Directive and potential for energy savings at all lev- changed from 2.0 to 2.3 in the ple- and renewable technologies and fa- a proposal revising the Electricity els in the energy system. nary vote. cilitate the transition to a cleaner fu- Regulation. “Boosting energy efficiency at all It claimed that keeping the value so ture energy system.”

Macron urged Europe and the Off-grid generation to threaten rest of the world to do more Commenting on China, Macron said: “The new Silk Road has to be a green road. We cannot have a utility business as early as 2021 coal-based route.” Business leaders, meanwhile n Billions in traditional utility revenues at risk were keen to point out the oppor- tunities that greening the world’s n US will be impacted at slower pace economy presents. Anand Mahindra, chairman of It is estimated that it will cost the same toward the emergence of a radical new markets. This is due to the low cost of Across US markets, it is anticipated the Mahindra Group, a $19 billion to self-generate and store power as it energy system. While the trends and generation arising from an increase in that annually $49 billion will be at risk, conglomerate, said that climate will to buy from an energy provider by timelines vary between markets and utility-scale renewable generation, driven by the west coast ($26 billion) change represents a $6 trillion in- 2022 in Europe and as soon as 2021 in geographies, the research clearly sustained low cost of natural gas, low where state policy is stimulating in- vestment opportunity for busi- Oceania, according to new research shows that the countdown to a new levels of taxation in energy bills and vestment in distributed renewables. nesses over the next two decades. conducted by analyst EY. energy future is accelerating faster than less expensive grid maintenance. In Oceania countries, $11 billion an- “Climate change is the next cen- The data also indicates that electric most expected,” said Benoit Laclau, Many European countries have al- nually in revenues will be at risk. tury’s biggest financial and busi- vehicles (EVs) will reach cost and per- EY Global Power & Utilities Leader. ready begun to pivot their energy busi- Commenting on how utilities should ness opportunity,” he said. “The formance parity with traditional com- The findings point to a gap between ness models in response to regulatory respond, Laclau advised: “Instead of idea that companies face a trade-off bustion engine vehicles across all mar- Europe and Oceania’s journey toward pressure, a faster uptake of renewables trying to predict the future of energy between improving the climate and kets by 2025. energy transformation, and that of the and carbon-reduction targets. The find- innovation, utility companies should their growth or profits is a myth,” “Maturing renewable energy tech- US. The rise of more economical dis- ings indicate that $67 billion in tradi- focus on building an agile, collabora- he added. nologies, the falling cost of battery tributed energy resources (DERs) will tional utilities annual revenues will be tive business that is ready to quickly “Why on earth are we talking storage and more empowered con- impact US utilities and consumer pref- at risk by 2050 from distributed solar adapt to take advantage of new tech- about this as a compulsion or a sumer behaviour, have long pointed erences at a slower pace than other generation in the region. nology and trends.” burden? Everything our group of companies has done to try and im- prove energy (consumption) or to reduce greenhouse gas emissions has given us a return. We have to EVs and renewables will help emissions plateau by 2030 dispel the idea that there is a trade- A report by McKinsey Energy Insights almost all the growth in global power population and increasing wealth in see much broader, much more disrup- off (for business).” (MEI) finds that major shifts in the generation through to 2050. MEI ex- non-OECD countries will drive sig- tive change than what we’re seeing Insurance companies have a energy landscape, particularly related pects that in the next 5-10 years it will nificant energy demand growth, off- now.” vested interest in switching their to electric vehicles (EVs) and renew- become more economic to build re- setting CO2 emission reductions New cost analysis from the Interna- money away from fossil fuels, ac- able energy, mean global CO2 emis- newable capacity than operate exist- elsewhere. tional Renewable Energy Agency cording to Thomas Buberl, Chief sions will plateau by 2030. ing gas- or coal-fired power plants in Ole Rolser, Associate Partner and (IRENA) predicts that all renewable Executive of insurance company According to MEI’s Global Energy most markets. This will trigger further Solution Leader at MEI, commented: technologies will compete with fossils AXA SA. If global temperatures Perspective (GEP) on long-term glob- declines in the utilisation rates of “Despite the significant momentum on price by 2020. If these forecasts continue to rise, bringing more al energy demand, by 2030 every fifth fossil-fuelled plants, with solar and around EVs and renewable energy prove correct, the speed of energy sec- hazards like hurricanes, droughts car sold globally will be electric and wind growing 5-10 times faster than sources taking an increasing share of tor disruption is likely to accelerate. and wildfires, insurance compa- not just in early adopter markets. Sales gas. Overall, the additional global net the power market, energy-related “This new dynamic signals a signifi- nies may not be able to offer cover, of EVs will rise from three per cent in capacity of power generation to 2050 emissions remain flat from 2030 to cant shift in the energy paradigm,” said he said. 2020 to 20 per cent by 2030, however will be 80 per cent renewables, with 2050. As developing countries con- Adnan Z. Amin, IRENA Director- “In my case it’s pretty simple... the growth in light-duty electric trucks China and India contributing more tinue to rely heavily on cheap coal, General. “These cost declines across Investing less in coal pays out sig- is expected to be slower, growing from than 50 per cent. non-OECD energy demand will re- technologies are unprecedented and nificantly in cutting the number of one per cent to 12 per cent in the same However, despite major growth in place the efficiency gains made by representative of the degree to which claims and in being able to continue period. the EV market and the increasing OECD countries. To realise the 2 de- renewable energy is disrupting the providing insurance.” Renewables are expected to take dominance of renewables, a rising grees pathway scenario, we’d have to global energy system.” THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 3

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DMG192 CFP GPEX Energy Industry Times ad 160x249_V4.indd 1 22/01/2018 12:53 THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 4 Americas News US solar import tariffs threaten market growth n Thirty per cent tariff could cost 23 000 US jobs n Duty barrier will shock Asian suppliers in near term

Junior Isles Solar developers were also dis- China’s Head of Trade Remedy, the impact. Years ago to avoid the stock market, with some companies mayed at the decision. Tony Clifford, Wang Hejun, expressed “strong dis- anti-dumping duty, Mainland China saying the tariff was not as steep as Tariffs on imports on solar compo- Chief Development officer at Stan- satisfaction” with the move. He said and Taiwan solar panel manufacturers they had feared. Following the an- nents into the US could slow the dard Solar said: “It boggles my mind that “together with other World Trade set up plants in other Asian countries nouncement, shares in SunPower, a growth of the solar market, according that this President – any President, Organisation (WTO) members, China such as Malaysia and Vietnam. These US solar developer and manufacturer to industry experts. really – would voluntarily choose to will resolutely defend its legitimate countries have been exporting panels that said it expected to be hit by the In a move to protect domestic man- damage one of the fastest-growing interests”. to the US and direct export from tariffs, were down 6 per cent. ufacturers, the administration of US segments of our economy.” South Korea’s Trade Minister Kim China has been dropping. Tom Werner, chief executive of Sun- President Donald Trump has imposed The move has also drawn interna- Hyun-chong also said his government “With Trump’s duty barrier in place, Power, said he expected the company a tariff on solar cells and panels, start- tional criticism. Trina Solar Limited, would take the matter to the WTO, China won’t get hit as much, as its to “suffer collateral damage in a case ing at 30 per cent and slowly decreas- a global leader in photovoltaic (PV) adding: “The government will ac- domestic market is still growing that clearly was targeted at Chinese ing to 15 per cent over a four-year modules, solutions, and services, said tively respond to the spread of protec- strong. manufacturers”. He added: “This period. in a statement: “It is an abuse of trade tionist measures to defend national “In addition, emerging markets such remedy will impact SunPower more The solar industry predicts the im- remedies measures. The measures not interests.” as India are likely to draw more South- than any other solar cell manufac- port tax will lead to 23 000 job losses only give rise to concerns from vari- Commenting on the impact on Asia, east Asian production to feed its solar turer.” in the country. Abigail Ross Hopper, ous trade partners but are opposed by Dr Frank Yu, Asia-Pacific power and capacity growth. With oversupply Shares in Sunrun, the largest inde- President and CEO of the Solar En- many US local governments and renewables principal consultant, situation developing in the APAC pendent residential solar company in ergy Industries Association, said the downstream businesses. The US ac- Wood Mackenzie, said: “The duty region, Southeast Asian countries the US, were up 6.1 per cent. Shares move “will create a crisis” in a part of tion not only damages healthy and barrier will shock Asian suppliers in could also ramp up their new build in First Solar, another US integrated the economy that has been thriving, balanced development of the US PV the near term and they will likely projects and thus reduce reliance on group that uses a technology not cov- which will ultimately cost tens of industry, but also deteriorates the switch gears to penetrate more into the export market.” ered by the tariffs, were down by 0.6 thousands of Americans jobs. global trade of PV products.” the growing Asian markets to offset There was mixed reaction in the cent. Cuomo throws weight behind Maritime Link offshore wind supports Canada’s The state of New York aims to become a leader in America’s growing market for clean energy efforts offshore wind and energy storage. Canadian electric utility Emera is pre- to the North American grid for the first five years to grow its clean technology Siân Crampsie one of the most progressive in the USA paring to start commercial operations time. It will link Nova Scotia with the industry. The investment, to be made in terms of clean energy development. of the Maritime Link, a 500 MW elec- Muskrat Falls generating station in via Business Development Bank of The US state of New York has outlined Cuomo has also called for more ag- tricity link that includes North Ameri- Labrador, which is being developed by Canada (BDC), will see BDC take on plans to develop offshore wind energy, gressive caps under the Regional ca’s longest submarine cable. Nalcor Energy as part of the Lower more risk to help high-potential clean battery energy storage projects and Greenhouse Gas Initiative (RGGI), a The firm said in December 2017 that Churchill Project. tech firms expand by providing them reduce greenhouse gas emissions. regional emissions trading scheme, it had achieved the first energy ex- Nexans delivered the cables for the with the capital they need to hire new In his annual ‘State of the State’ ad- and wants the scheme to now be ap- change across the HVDC connector project, while ABB provided the staff, develop products, support sales, dress, NY governor Andrew M. Cuomo plied to small peaking plants. that links Newfoundland and Nova HVDC converter stations as well as and scale up and compete globally. said that his government would issue Currently the RGGI only applies to Scotia via a 170 km-long subsea cable AC substations. The C$700 million is part of the solicitations in 2018 and 2019 to pro- power plants with a capacity of across the Cabot Strait. Emera says the The project is a key part of Canada’s Canadian government’s largest-ever cure at least 800 MW of offshore wind 25 MW or more. Cuomo says, how- link would be ready for customers in target of achieving a 50 per cent reduc- public investment of C$2.3 billion in energy. ever, that this excludes many smaller, early 2018. tion in greenhouse emissions by 2030, clean technologies set aside in the The move is part of a broader plan to but highly polluting peaker units, often Maritime Link is part of a wider re- and has been backed by a federal loan 2017 budget. develop 2400 MW of offshore wind in located close to population centres. gional energy development plan and guarantee. The government also launched a call New York, and position the state as the Under his offshore wind energy plan, will enable Nova Scotia to import hy- In late January, the government of for expressions of interest for a C$200 leading offshore wind energy market Cuomo said the New York State En- dropower from Labrador, as well as Canada said it plans to invest C$700 million programme for emerging re- in the USA. ergy Research and Development Au- connect the island of Newfoundland million ($563 million) over the next newable tehnologies. Cuomo also launched an initiative thority (NYSERDA) will invest $15 to deploy 1500 MW of energy storage million (€12.5 million) in clean energy by 2025 and employ 30 000 New workforce development and infra- Yorkers to establish the state as a home structure advancement to train work- for this rapidly expanding clean tech ers for jobs in the offshore wind indus- industry. try. This includes offshore wind Brazil dominates Latin “New Yorkers know too well the construction, installation, operation, devastation caused by climate change, maintenance, design and associated and in order to slow the effects of ex- infrastructure. treme weather and build our communi- Other initiatives announced in Janu- America wind energy market ties to be stronger and more resilient, ary include proposing a commitment we must make significant investments of at least $200 million from NY Green Brazil is expected to continue its across Latin America. energy projects from 2022. in renewable energy,” Governor Cuo- Bank for storage-related investments dominance in Latin America’s wind Brazil’s installed wind capacity It has also attracted 620 solar proj- mo said. “With this proposal, New to help drive down costs and to strate- energy market, according to MAKE stands at around 12 GW, spread across ects with a total capacity of 20 GW, York is taking bold action to fight cli- gically deploy energy storage to where Consulting. some 470 wind farms. Last month the EPE said. mate change and protect our environ- the grid needs it most, and a commu- The firm says that Latin America’s country’s energy agency, Empresa de n Construction of a major new solar ment, while supporting and growing nity solar initiative for low-income wind energy market has expanded to Pesquisa Energetica (EPE), said that farm in Mexico will start early this year 21st century jobs in these cutting-edge households. almost 20 GW of installed capacity, around 931 wind farms totalling 26.1 after developer Fotowatio Renewable renewable industries.” Cuomo has also announced more with Mexico and Brazil together ac- GW of capacity had pre-qualified for Ventures reached financial close on the The plans add detail to previously funding for energy efficiency initia- counting for 80 per cent of this. the country’s next renewable energy project. The 342 MW Potosí solar farm announced initiatives, including New tives in NY state, which has set a target MAKE says that Brazil will dominate auction, scheduled for April. will play a key role in Mexico’s plans York’s Reforming the Energy Vision of sourcing 50 per cent of its electric- the market in 2018, when it expects a The auction will award 20-year to boost renewable energy capacity policy, and will help to make the state ity from renewables by 2030. total of 4 GW of capacity to be added power purchase agreements to wind and reduce carbon emissions. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 5

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GTW full page.indd 1 17/11/16 12:22:16 THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 6 Asia News Myanmar eyes 3600 MW of additional Japan looks power in four years The Ministry of Electricity and En- clear when we will start selling elec- offshore to cut ergy (MOEE) has pledged to provide tricity under this programme and at an additional 3600 MW of electricity what price we will sell it.” within the next four years. Daovong said Laos would supply The announcement comes after an electricity to Myanmar through its MOEE study revealed that electricity northern power grids. demand is expected to reach 5774 To address the growing need for MW by 2021-22 from 3189 MW in power, the government has intensified emissions 2017-18. Between 2010 and 2017, a five-year project to provide electric- demand for electricity rose by 16 per ity to rural areas by using off-grid cent on average per year, the study solutions, including solar and wind n Bill would clarify offshore procedures also showed. energy. The target will be reached through Khant Zaw, Director General at the n Coal comes under fire several projects scheduled to be com- Department of Rural Development pleted in 2018-19. Another ten power (DRD), recently said $90 million projects will be completed at various would be spent to implement off-grid Syed Ali The government hopes to reduce the by attractive government subsidies stages during the period from 2019-20 projects between 2016 and 2021. The cost of offshore wind power genera- for these technologies. to 2021-22 to generate an additional project aims to implement solar home Japan is looking to set rules to promote tion, currently at some ¥36000/MWh Under the Paris climate change ac- 3117 MW. systems in 8400 villages and mini- wind power generation as it attempts ($330/MWh), which is about four cord, countries including Japan agreed Speaking in parliament, Deputy grid projects in 350 villages situated to boost renewables targets and meet times higher than in Europe. to aim for net zero greenhouse gas Minister Dr. Tun Naing said that, in at least 16 km from the national its Paris climate pledge on carbon A report, published by the Institute emissions by the end of the century. addition to implementing new power grid. emissions. for Energy Economics and Financial But sluggish progress on restarting projects over the next four years, the “Nearly 100 000 households will Japan has no unified rules for off- Analysis (IEEFA) in March last year, nuclear plants after the 2011 Fuku- MOEE has also been upgrading exist- benefit from the project that can also shore operations, making it difficult showed that Japanese offshore wind shima Daiichi disaster has spurred ing 20-year old plants to ensure they provide electricity to 16 000 public for entities hoping to start wind pow- resources have been largely over- power companies to build new plants are operating at full capacity. buildings and 40 000 streetlights. We er generation to settle negotiations looked but nevertheless have tremen- using cheaper fuels such as coal. Myanmar is aiming to have the will continue our efforts until we with stakeholders, including the ship- dous potential. Japan’s openness to coal, however, country fully electrified by 2030 un- reach the nationwide electrification ping and fisheries industries. The current aims of the government has met with criticism both at home der its National Electrification Plan. target by 2030,” said Zaw. The government was set to submit are to increase the share of renewable and abroad. To achieve that target, it will also be- He said more than 80 000 house- a bill to Parliament in late January that energy to 22-24 per cent of all electric- In January Japan’s environment gin purchasing power from its neigh- holds in 1300 villages would have would clarify the required procedures. ity sources by 2030. minister said Chugoku Electric Pow- bours. In January the MOEE said it access to electricity via solar home The government would first draw up Renewable growth is a key part of er will need to offset emissions from would sign an MoU to procure elec- systems and mini-grid projects to be a basic policy, and the industry and the government’s efforts to meet a planned 1000 MW coal-fired power tricity from Laos. implemented in 34 villages in the transport ministries would then des- emission targets, which have come plant through such steps as shutting Assistant secretariat U Min Min Oo 2017-18 fiscal year. ignate areas to be promoted for wind under threat following the plan to re- down old fossil fuel capacity. Masa- said there was an agreement in prin- The World Bank reently approved power operations, while taking into duce dependence on nuclear post- haru Nakagawa said the plant in the ciple and that the two countries would $400 million in funding for Myan- consideration opinions from local Fukushima. western prefecture of Shimane could meet soon to iron out the details before mar’s national electrification project, residents. Currently, renewable power ac- go ahead but said the utility would signing. $310 million of which will go to the After those steps are taken, the gov- counts for approximately 15 per cent have to take steps to mitigate its im- Office Head of the Lao Ministry of expansion of the national grid with ernment will invite and select candi- of total electricity generation in Japan, pact, such as scrapping or suspending Energy and Mines, Daovong the remaining $90 million to be spent date operators that will use the areas while hydro and solar power occupy old, inefficient fossil fuel facilities or Phonekeo, added: “At present it’s not on off-grid projects. for a long period. a combined 12 per cent share, aided limiting the new plant’s use. Chinese companies Lack of explore Australia regulatory renewable opportunities action stalls

Chinese power equipment giant Dong- financing for the development of the however, that the ongoing uncertainty fang Electric Corp (DEC) is planning 530 MW Stockyard Hill onshore wind around long-term energy policy means Philippines a move into Australia’s renewable en- farm in Western Victoria, Australia. that the continuation of renewables ergy sector. Renewables have been making no- growth into 2018 and beyond is far Last month, DEC executive Wu table progress in the country. The sec- from assured. Zhang Wei said Australia was one of tor enjoyed a record year in 2017, with Chief Executive Kane Thornton said power contracts the few countries where the company 50 large-scale renewable energy proj- in a statement: “If the government’s did not have a presence and it was keen ects committed. This resulted in more National Energy Guarantee (NEG) is to explore opportunities there. than $9.3 billion in investment, 4670 to be successful, it will need strong Nearly 5500 MW of contracts need Producers Association Inc. (PIPPA) “We are contacting the developers of MW of new capacity and created more support from the major state and fed- immediate regulatory action amid the said there is an urgent need to address hydro and solar projects in Australia to than 5400 new direct jobs in large- eral political parties as well as the elec- ongoing crisis in the Energy Regula- this issue on COCs, PSAs and connec- see if we can supply equipment,” Mr scale projects. tricity industry. But to gain this support, tory Commission (ERC), said ERC tion agreements. Wu said. The rooftop solar PV market expe- it must be developed to a point where chairperson Agnes Devanadera. The Philippines has been making a He said power plants using renew- rienced its best ever year, with more it can clearly show it is capable of de- During a Senate energy committee concerted effort to ramp up its gener- able sources were becoming a big part than 1000 MW installed in 2017. This livering new clean energy investment, hearing on January 15th, Devanadera ating capacity. In January power util- of the company’s business, which has pushed rooftop solar capacity pass as well as lowering both emissions and said the regulator was unable to decide ity Manila Electric Company (Mer- annual revenues in excess of $A6 bil- 6000 MW, making Australia one of power prices.” on contracts covering 5493.38 MW in alco) said that, together with its lion ($4.84 billion). A decade ago, coal the world leaders in rooftop solar n Australia is fast becoming a show- supply as the minimum number of as- partners, it is spending up to $800 mil- fired projects made up half of all the installations. case for clean energy projects. Solar sembly members needed to make the lion on two wind farms with a com- company’s sales. That is now only a Meanwhile, in January RES was Reserve said it has been granted ap- proceedings valid were not present. bined capacity of 300 MW in Luzon. third, with hydro and solar contribut- granted planning approval for the proval for the 150 MW Aurora Solar The pending contracts include 43 In late December, SN Aboitiz Pow- Manilla cityscape ing sizeable revenue. Murra Warra wind farm, in the State Energy Project in Port Augusta. Lo- new certificates of commerciality er Group (SNAP), the joint venture of DEC is the latest of a growing num- of Victoria. When completed it will be cated about 300 km north of the South (COC) equivalent to 2977.89 MW, SN Power of Norway and Aboitiz ber of Chinese companies looking to one of the largest wind farms in the Australian capital Adelaide, the proj- renewal of 47 expired COCs worth Power Corp., announced that is set to invest in Australia. At the start of the southern hemisphere, with 116 state- ect will incorporate eight hours of 1971.49 MW, and 29 expired power spend roughly $1.75 billion to add year Goldwind Australia, an offshoot of-the-art wind turbines providing up storage or 1100 MWh. The A$650 supply agreements (PSAs) which another 500 MW capacity of renew- of Chinese wind turbine producer to 420 MW of generation capacity. million project is claimed to be the cover 544 MW in supply. able energy projects over the next Goldwind, said that it had obtained The Clean Energy Council warned, largest of it kind in the world. The Philippine Independent Power decade. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Europe News 7 UK’s clean strategy is not enough

n UK pledges coal shutdown n 2017 marks record year for renewables

Siân Crampsie the government confirming plans to However the CCC says that “sig- Environmental group WWF said successfully decarbonising, more phase-out the use of unabated coal for nificant gaps” remain in policy and that 2017 was the greenest year ever needs to be done to ensure that invest- The UK’s Clean Growth Strategy electricity generation by 2025. that even if the Clean Growth Strat- in the UK, with 13 clean energy re- ment into clean energy continues. must be urgently translated into action The CCC says that the UK has made egy is delivered in full, the UK will cords broken. These include the coun- The CCC said in a statement that the if the country is to meet emissions good progress in reducing its green- miss the fourth and fifth carbon bud- try’s first full day since the Industrial government should “urgently” firm up targets, government climate change house gas emissions since the Climate gets by around 10-65 MtCO2e. Revolution with no coal power, record policies and proposals in the Clean advisors have warned. Change Act was passed in 2008, near- CCC Chairman, Lord Deben, said: spikes in solar and offshore wind gen- Growth Strategy, and develop and The Committee on Climate Change ly ten years ago. Emissions fell by 42 “The Clean Growth Strategy is ambi- eration, and record low prices for off- implement new policies to close the (CCC) says that the Clean Growth per cent from 1990 to 2016 – faster tious in its aims to build a thriving shore wind. “emissions gap”. It should also ad- Strategy – launched in October 2017 than the average rate of reduction in low-carbon Britain but ambitions In the summer of 2017, almost 52 dress the risks of under-delivery. – needs more detail and does not go the G7. alone are not enough. The govern- per cent of UK electricity was pro- In January, the UK government un- far enough for the UK to meet targets The Clean Growth Strategy com- ment’s policies and proposals will vided by nuclear or renewables. On veiled a phase-out plan for the coun- to cut greenhouse gas emissions by mits to delivering further action to- need to be firmed up as a matter of one day in June 2017, wind, nuclear try’s eight remaining coal fired power the 2020s and 2030s. wards meeting the fourth (2023-27) urgency – and supplemented with ad- and solar power produced more pow- plants. It will also set an emission The warning came as environmental and fifth (2028-32) carbon budgets, ditional measures – if the UK is to er than gas and coal combined, the limit of up to 450 g/kWh for domestic groups in the UK celebrated 2017 as on the path to reducing UK emissions deliver on its legal commitments and first time this has ever happened on coal fired power generation facilities a record-setting year for clean energy by at least 80 per cent in 2050 com- secure its position as an international the UK grid. from October 2025 onwards, effec- production, and an announcement by pared to 1990 levels. climate change leader.” WWF says that although the UK is tively forcing them to close. Offshore wind set for key role in Poland Poland could build up to 8 GW of off- entities from the maritime industry, In 2013 FNEZ estimated that Poland tribution that offshore wind could incentivise investments.” shore wind energy capacity by 2035, offshore energy, wind energy, steel could accommodate up to 6 GW of make to the economy. “After 2020 off- Baltic Środkowy III will comprise according to new analysis. industry and manufacturers of offshore offshore wind capacity. However it shore energy may become one of the 120 wind turbines, located 23 km north The analysis is significant for a coun- constructions, ships, and cables to un- has revised this estimate following the key pillars of the Polish economy,” said of the coast. The capacity of each try that is heavily dependent on coal. derpin the development of the nascent development of new spatial develop- Maciej Stryjecki, the President of the single turbine will be in the range of According to the Polish Foundation offshore wind market in the country. ment plans for the Polish sector of the Management Board in FNEZ. “Polish 5-8 MW, with a turbine height of for Sustainable Energy (FNEZ), the In August 2017, Polenergia became Baltic Sea. maritime industry could provide up to around 275 m. country has “a unique opportunity” to the first operator in Poland to obtain It says that, developed in conjunction 60-70 per cent share of the supply chain Construction of the wind farm is due develop offshore wind and ensure Po- an environmental permit for the con- with natural gas capacity and transna- for OWF. to start in 2019 at the earliest, and it land’s energy security. It could deve- struction of an offshore wind. The tional offshore grid connections of 2-3 “However, in order to use the Baltic could start delivering electricity to the lop up to 4 GW by the end of 2030. project, Baltic Środkowy III, has a GW, offshore wind will help secure Sea energy potential and create a grid in 2021 or 2022. FNEZ recently established a Memo- planned capacity of 600 MW and will Poland’s energy supplies in the 2025- competitive offshore sector in Poland A second offshore wind farm, Baltic randum of the Polish Offshore Energy be one of the largest wind farms in the 2035 period. it is necessary to create a stable legal II, is also planned, with a capacity of Sector (PPPEM), bringing together Baltic Sea. FNEZ has also recognised the con- and market conditions that will be 600 MW. TenneT puts its Statkraft exits weight behind Dudgeon cyber security TenneT has become the first transmis- independent centre of knowledge to sion system operator to join the Euro- support us.” pean Network for Cyber Security ENCS already works with a wide Statkraft has divested all of its interests invest NOK8 billion (€858 million) in cooperation with renewable energy (ENCS). variety of utilities across Europe, shar- in offshore wind farms in line with its to 2023 in the upgrade and modernisa- company Masdar, which holds 35 per ENCS collaborates with its member- ing knowledge and expertise, collabo- new strategy of focusing on onshore tion of hydropower plants in Norway cent, and Norwegian oil and gas com- ship to promote and boost cyber secu- rating on research projects and con- wind, hydropower, solar energy and and Sweden. pany Statoil holding the rest. rity across the European energy sector. ducting training. The organisation district heating. The company owns more than 230 The new partner in the 402 MW It says that TenneT will be an important added in a statement that TenneT’s The Norwegian energy producer has hydro power plants in Norway alone, Dudgeon project is a state-owned Chi- contributor to its mission because of membership would enable it to build sold its 30 per cent stake in the Dud- and says that the investment will en- nese enterprise with businesses in its position in the European energy on its recent memorandum of under- geon offshore wind farm to China sure the plants’ competitiveness. power, consumer products, real es- market as a multinational operator of standing with ENTSO-E. Resources (Holdings) Company Lim- It is also investing in the digitalisa- tate, cement, gas, pharmaceuticals vital transmission infrastructure. “To keep European power grids – and ited for £555 million. tion of its power plant portfolio, ac- and finance. “TenneT is very aware of its critical consumers – safe from cyber threats, It has also agreed to sell its 40 per cording to CEO Christian Rynning- n The Norwegian government has role in [the] daily life of people and we have to collectively take security cent share in the Sheringham Shoal Tønnesen. reached an agreement with supporting businesses so we attach great impor- seriously at every level,” said Anjos offshore wind farm to the UK fund Statkraft has been operating in the parties KrF and Venstre about opening tance to attaining a very high level of Nijk, Managing Director, ENCS. “We manager Equitix. UK offshore wind energy sector since up one or two areas in Norwegian cyber resilience and security,” said have a history of strong collaboration Statkraft said that it would no longer 2009, when it acquired its stake in the waters for floating wind farms. The Siem Bruijns, Senior Manager Corpo- with distribution network operators invest in offshore wind due to a lim- 402 MW Sheringham Shoal project plan includes establishing a full-scale rate Safety & Security at TenneT. “Cy- already, but our work with TenneT ited financial capacity. The company off the coast of Norfolk. pilot plant with governmental grants ber threats develop rapidly, so it’s es- means we can help keep infrastructure announced in January that it would Dudgeon wind farm was developed through Enova. sential for TenneT to have an safe at every level of the grid.” THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 8 International News Turkey boosts wind capacity n 2017 auctions attract $5 billion in investment n EBRD backs energy efficiency plans

Wind energy capacity is set to grow improve energy security. located in western Turkey’s Canakkale – is under development. The consor- will require 1000 MW of geothermal rapidly in Turkey following successful Successful bids in the latest auction region. tium has signed contracts with the gov- energy capacity, 20 000 MW of wind tenders in 2017. ranged from $7.29/MWh to negative In total, 5000 MW of bids were sub- ernment and is in the process of design- and 5000 MW of solar. A December auction for wind energy bids of -$2.87/MWh. Companies sub- mitted in the auction. Winning bidders ing several large-scale wind farms in In January the European Bank for in the country resulted in transmission mitting negative bid prices are not eli- are awarded a pre-licence and secure three or more regions that together will Reconstruction and Development operator TEIAS issuing 2.11 GW in gible for Turkey’s current feed-in tariff network access, and have to apply for constitute the YEKA project. (EBRD) gave its backing to Turkey’s preliminary licences for 67 wind proj- system, and have to pay TEIAS the permitting. Another 1 GW YEKA contract – this National Energy Efficiency Action ects around the country. The auction amount of their negative bid for the Data published by TUREB in De- time for solar energy – was awarded to Plan (NEAP), which aims to reduce the followed one in July 2017, in which first ten years of operation. cember showed that the sector has a Hanwha-Kalyon consortium in country’s energy consumption by 14 preliminary licences for 710 MW were The negative bid prices submitted are garnered $12.3 billion in investment March 2017. per cent by 2023. issued, and the 1 GW so-called YEKA a sign of falling costs in Turkey’s on- over the past 11 years. Around eight That consortium said in January that The plan sets out energy efficiency auction in August 2017. shore wind energy sector, according to per cent of the country’s electricity now it had broken ground on a solar panel measures to set the country well on The auctions mean that almost 4 GW the Turkish Wind Energy Association comes from wind. manufacturing facility in Ankara, Tur- course to prepare for its increasing of onshore wind energy will be devel- (TUREB). TUREB also says that the 1 GW key, where panels for its YEKA project energy needs without raising its car- oped in Turkey, requiring around $5 Among the winning bidders was Ger- YEKA contract – awarded to a consor- will be made. bon emissions. It was developed with billion in investments. Development of man firm PNE Wind, which submitted tium of Siemens Gamesa Renewable Turkey’s government has set a target the help of the bank, and will manage the onshore wind energy sector is a key a bid of -$2.87/MWh for its proposed Energy (SGRE) and Turkish partners of increasing the share of renewable $11 billion of funds provided by the pillar of the government’s strategy to Koseler wind farm, a 71 MW project Kalyon Enerji and Turkerler Holding energy resources to 30 per cent. This European Union. Oman issues solar IPP ADFD and IRENA tender boost energy access n Projects will benefit 2.5 million people n AfDB partners on off-grid energy access

The Abu Dhabi Fund for Development trouble accessing financing for renew- rural electrification strategy and is one (ADFD) and International Renewable able energy investment. of the most affordable payment Energy Agency (IRENA) have given “We are delighted that our continued schemes in Africa. their backing to an off-grid solar en- partnership with ADFD will provide a The loans cover up to 50 per cent of ergy programme that will benefit over stable, low-cost source of financing to project costs, leveraging additional 2.5 million people. help Mauritius and Rwanda achieve a funding from other sources. Since The two organisations say that $25 sustainable energy future.” 2014, ADFD has allocated $214 mil- million in concessional loans from In Mauritius, the ADFD loan of $10 lion to 21 projects, attracting over n $20-25 billion annual investments ADFD have been awarded to two million will help the Central Electric- $420 million in additional co-financ- required projects – one in Mauritius and an- ity Board install solar PV systems on ing from governments and develop- other in Rwanda. The funds are being rooftops of 10 000 households. The ment funds. n Annual demand for hydrogen could sourced from the IRENA/ADFD Proj- project will not only help to alleviate Separately, the African Development ect Facility, which aims to help devel- poverty, but also whilst contributing to Bank (AfDB) has formed partnerships increase ten-fold by 2050 oping countries access low-cost capi- the national target of achieving 35 per with Calvert Impact Capital (CIC), tal for renewable energy projects. cent of renewable electricity in the en- Global Environment Facility (GEF) Renewable energy is set to play a grow- Land for future solar projects has “For developing countries, renew- ergy mix by 2025. and the Nordic Development Fund ing role in Oman’s energy system, the been allocated in the wilayats of Ibri, able energy is a triple win: it provides In Rwanda, the ADFD loan of $15 (NDF) to drive investments in off-grid government has said. Manah and Adam. However, the wind a cost-effective means of providing million will contribute to the installa- energy across Africa. The country has issued a request for energy projects are expected to come electricity to families, fuels economic tion of 500 000 off-grid solar PV home Through the partnership, the AfDB qualifications for its first utility-scale up largely in the Dhofar and Wusta growth, and supports energy indepen- systems across the country, providing approved a $30 million investment in solar independent power project governorates, where wind resources dence and security,” said IRENA Di- clean electricity for lighting, mobile the Facility for Energy Inclusion Off- (IPP), which will add 500 MW of ca- are optimal. rector-General Adnan Z. Amin. “How- phone and radio charging. The project Grid Energy Access Fund (FEI pacity to the grid. “I am proud to announce that our first ever, many developing countries have is a major part of the government’s OGEF). The landmark project, located in utility scale solar project will offer 500 Wilayat of Ibri in Al Dhahirah Gov- MW of capacity, which will be one of ernorate, marks the start of an aggres- the biggest in the region,” said Eng sive and accelerated adoption of re- Yaqoob Saif Hamood al Kiyumi, CEO newable energy technology, according OPWP. “This decision to start big un- to the Oman Power and Water Pro- derscores confidence in renewable Russia commissions curement Company (OPWP). energy development as well as the ap- Oman’s government has tasked petite for investment in such ventures OPWP with ensuring that a minimum in Oman.” of ten per cent of energy production The Ibri IPP will cover an 1800 MW first wind farm comes from renewable resources by site and will feed energy into the Oman 2025. OPWP says that it aims to exceed Electricity Transmission Company’s Russia has commissioned its first 1 GW of capacity that Fortum will payments. that target with commitments for at main grid. Tender documents will be commercial scale wind farm, accord- build in the country with its partner, Under the CSA, Fortum receives least two projects by 2019. issued to prequalified bidders before ing to developer Fortum. Rusnano. payments of €180-200/MWh for a The ten per cent target translates into the end of the first quarter 2018. A for- The 35 MW Ulyanovsk wind farm Ulyanovsk is included in the renew- guaranteed period of 15 years. 2500-3000 MW of capacity. OPWP is mal contract award is expected to be is located almost 700 km southeast of able projects competitive selection Fortum and Rusnano won 1 GW of aiming to develop mainly solar energy announced in the third quarter 2018 Moscow and is equipped with tur- administered by the government’s capacity at an auction held in Russia projects, but says that wind energy with the Commercial Operation Date bines supplied by China’s Dongfang. ministry of energy, and so is entitled in June. The two companies say they capacity will also be built. (COD) slated for early 2021. It is the first of 26 projects totalling to capacity supply agreement (CSA) will commission the sites by 2022. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Companies News 9 Brookfield secures Westinghouse future

Brookfield Business Partners says it long-term debt financing and the bal- management capabilities, to enhance leader of the global nuclear industry,” existing senior management, the firm hopes to leverage Westinghouse’s ance by the assumption of certain pen- the company’s position as a leading said Westinghouse President & CEO says. strong global market position and diver- sion, environmental and other operat- global infrastructure services provider José Emeterio Gutiérrez. “Our trans- In January, South Carolina-based sified customer base after sealing a deal ing obligations. to the power generation industry.” formation and strategic restructuring Scana, the company leading develop- to buy the nuclear firm from Toshiba. “Westinghouse is a high-quality Westinghouse’s bankruptcy was process is creating a stronger, stable, ment of the VC Summer nuclear pow- Brookfield, a business and industrial business that has established itself as caused by long delays and cost over- and more streamlined global Westing- er plant project, accepted a $14.6 bil- company, signed an agreement with a leader in its field, with a long-term runs at two US nuclear power plant house business, for the benefit of our lion takeover deal from Dominion Toshiba in early January to buy West- customer base and a reputation for in- projects. Its position as the largest ser- customers and employees.” Energy. inghouse for $4.6 billion. novation,” said Cyrus Madon, CEO of vice provider to the world’s nuclear Brookfield’s acquisition of Westing- Scana scrapped the VC Summer The deal should bring an end to the Brookfield Business Partners. “We power facilities, its expertise and abil- house is expected to close in the third nuclear project in July 2017 after West- financial woes that brought Westing- look forward to bringing our signifi- ity for technology innovation are quarter of 2018, subject to bankruptcy inghouse declared bankruptcy. house to bankruptcy in 2017. cant expertise and reputation as a among the company’s strengths, court approval and regulatory approv- A second Westinghouse nuclear proj- Brookfield says it will fund the ac- long-term owner and operator of Brookfield says. als. Throughout the process, Westing- ect in the USA – Vogtle Units 3 & 4 quisition with approximately $1 billion critical infrastructure in the US and “Brookfield’s acquisition of West- house will continue to operate in the – has been given regulatory approval of equity, approximately $3 billion of globally, as well as our deep facilities inghouse reaffirms our position as the ordinary course of business under its to go ahead. Shell buys UK utility firm Areva Shell has signed a deal to purchase UK Europe, including First Utility. energy provider First Utility in a move In 2015, a licensing agreement be- designed to boost the oil giant’s green tween Shell Brands International and credentials. First Utility enabled them to operate in The company will buy 100 per cent the German household energy sector resurrects of First Utility, which provides 825 000 under the Shell brand. homes in the UK with energy and “We believe that the time is right to broadband services, and says that the build upon our strong relationship with move will enable it to “enter a new part First Utility by investing to grow its of the energy market”. business,” said Mark Gainsborough, Framatome name Shell’s CEO Ben van Beurden an- Shell’s Executive Vice President of nounced in late 2017 that the company New Energies. intended to ramp up investment in new “The supply and demand of residen- energy businesses towards $2 billion tial energy is rapidly changing, driven annually. by new technologies that enable house- n The strategy is designed to reduce holders to better manage their energy EDF, MHI and Assystem complete share deals the company’s carbon emissions and use, and the need for a low-carbon en- n boost its presence in new and innova- ergy system,” said Gainsborough. Framatome expands I&C business tive energy markets. It says that its “This combination will enable Shell to Framatome on 44 reactors in 17 coun- ATMEA, with a special share held by European gas and power marketing enter a new part of the energy market Siân Crampsie tries across the world, and approxi- Framatome. and trading business will continue to in the UK and to improve choice for mately 250 automation systems have New NP was established under a re- supply wholesale gas and electricity customers by delivering innovative Framatome says that it will seek new been installed or are being installed by structuring of Areva NP and comprises to energy retailers in the UK and services at competitive prices.” opportunities in the global nuclear en- Schneider Electric. the French firm’s nuclear power plant ergy market as it embarks on a new “This is an exciting time of growth equipment and systems manufacturing phase in its history. for our company, and the acquisition business. EDF agreed to buy a major- Areva announced last month that it and partnership with Schneider Elec- ity stake in the company in 2015 as part had renamed its New NP subsidiary tric build on our long history of pro- of the restructuring and plans by the AES and Framatome and that it had completed viding nuclear operators with both French government to rescue Areva deals with EDF, Mitsubishi Heavy In- digital and analogue I&C solutions,” with a €4.5 billion injection. dustries (MHI) and Assystem to sell its said Gary Mignogna, President and Framatome has 14 000 employees shares in the company. CEO of Framatome Inc. “With this worldwide and holds around 3500 Siemens launch Framatome has also announced plans acquisition, we will provide long- patents covering some 680 inven- to expand its instrumentation and con- term support for our customers’ sys- tions. “Framatome possesses unique trol (I&C) business through the acqui- tems and serve as the original equip- know-how in an industry that today sition of Schneider Electric’s nuclear ment manufacturer for their I&C is and will remain key for a low-car- automation business. upgrades and modernisations.” bon energy mix,” said Bernard Fon- Fluence battery It has also signed a deal with China’s Under its deal with CNNC, the two tana, Chairman of the Managing CNNC for the development of a glob- companies will extend their coopera- Board and Chief Executive Officer of al strategic cooperation. tion in nuclear fuel design, engineering Framatome. “As we emerge from this Areva and EDF announced in De- and services; enhance their collabora- transition phase, I share their pride and business cember 2017 that they had signed a tion on digital instrumentation and I want to thank them for all the work definitive agreement for the sale of control for nuclear power plants; and they have accomplished." AES and Siemens have started their has also announced plans to supply New NP, with EDF acquiring 75.5 per increase their cooperation in mainte- He added: “Steeped in a rich heri- collaboration in the battery energy India’s first grid-scale storage system, cent of the company. Assystem has nance, safety and operation upgrades tage, Framatome is today one of the storage business by launching Flu- a 10 MW installation for Tata Power- purchased a five per cent stake, and for in-service nuclear power plants. reference players in the nuclear sector ence, their new joint venture. DDL. MHI 19.5 per cent. MHI said in a statement that its worldwide, benefiting from unparal- The two companies say that Fluence Fluence will combine the engineer- Framatome says that it will have an shareholding in Framatome would leled operating feedback. Our ambi- will now embark on an “aggressive” ing, product development, implemen- internationally focused strategy of de- establish a framework for cooperation tion is delivering a level of industrial expansion strategy in the global en- tation and services capabilities of AES velopment and industrial excellence, between MHI, Framatome and EDF, excellence that is recognised by our ergy storage market, backed by the Energy Storage with Siemens’ energy building on its existing global fleet of and also support the sale of the AT- customers.” financial support of the two parent storage team. 440 reactors in 31 countries, as well as MEA1 reactor. n New Areva has now become Orano. organisations. It will also use Siemens’ global sales new capacity under development. MHI’s investment will also result in Refocused on nuclear materials de- It will supply the hardware for the force to market and sell Fluence en- It also says that its recent asset sales the restructuring of ATMEA, which velopment and waste management, world’s largest lithium-ion battery- ergy storage systems, including agreement with Schneider Electric was formed as a joint venture between Orano’s activities encompass mining, based storage project, a 100 MW/400 Siestorage, Advancion, and the newest would support its business operations MHI and Areva NP. conversion-enrichment, used fuel re- MWh (4-hr duration) installation in Fluence platform, SunFlex Energy and future plans. More than 80 safety Under the new structure, MHI and cycling, nuclear logistics, disman- Long Beach, California, USA, and Storage for solar PV. I&C systems have been installed by EDF will own equal 50-50 shares in tling and engineering. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 10 Tenders, Bids & Contracts

Americas Wind turbines ordered for with its 156.5 m tower is ideal for GE Hungary won the competitive the very specific wind conditions in bidding process for the $1 billion Vicente Guerrero project central Thailand and has the potential contract, Russian state-run news PSEG signs up for R-R to contribute to reaching grid parity agency Ria Novosti reported last services Vestas has secured an order from for onshore wind in the country,” month. Mexican firm Compania Eolica Vi- said Pete McCabe, President and Paks 2 nuclear power plant, located Rolls-Royce has signed a four-year cente Guerrero to deliver wind tur- CEO of GE Onshore Wind. 100 km south of Budapest, will be contract to provide US nuclear utility bines totalling 118 MW for the Vi- GE will supply the wind turbines’ powered by two VVER-1200 and operator, PSEG, with its innovative cente Guerrero wind park in electric drive train with generators have a capacity of 2400 MW. Con- digital analytics service to help drive Tamaulipas, Mexico. and pitch motors and will also supply struction works for the reactor will greater plant efficiency. Vestas will supply and erect 27 the collector and grid interconnection start in 2018 and the plant is expect- The four-year contract involves units of its V136-3.45 MW wind tur- substation packages, including high ed to be operational by 2026. the deployment of Rolls-Royce’s bines delivered in 3.6 MW Power voltage switchgears, transformers, T-104 service at PSEG’s two nuclear Optimised Mode and 6 units of SCADA controls, telecommunica- power plants in New Jersey, USA – V136-3.45 MW. The deal also in- tions and power systems studies for Falck buys Nordex Salem and Hope Creek. It follows a cludes a 20-year Active Output Man- the wind farm. The 270 MW of ca- hardware successful six-month pilot scheme agement service agreement (AOM pacity will be installed in three phas- which showed 40 per cent of 4000). es of 90 MW and is scheduled to be- Falck Renewables has awarded the planned maintenance activities that Turbine supply is anticipated to gin commercial operations in 2018. Nordex Group two contracts to supply were included in the trial, did not start in 3Q 2018 with commissioning a total of 31 of its N131/3900 wind need to be conducted as regularly as set in 1Q 2019. turbines and the associated civil and scheduled. China selects SGRE electrical infrastructure to two wind The T-104 service uses worldwide turbines farms in Sweden. nuclear power plant operating data to Preliminary works on the Aliden provide asset management services. Asia-Pacific Siemens Gamesa Renewable Energy and Brattmyrliden wind farms have Rolls-Royce converts that intelli- (SGRE) has signed two new agree- already started and construction is gence into insights to enable PSEG Siemens Gamesa boosts ments for the supply of 96 MW for due to intensify at the sites in 2018 to maximise plant availability and India business wind farms in China. and 2019, respectively. The turbines reliability by allowing it to focus on SGRE will supply 48 MW to Chi- have been specifically designed for the right equipment, at the right time, Siemens Gamesa Renewable Energy nese utility Datang and another 48 local site conditions, with a maxi- with the necessary parts at hand. (SGRE) has won a total of 326 MW MW to the Chinese General Nuclear mum rated capacity of 3.9 MW of orders for wind energy in India. Power Group. each, 134 m towers and NR65.5 The company says it has won mul- Under the terms of the contract blades. Vestas seals Aluar tiple orders from several independent with Datang, SGRE will supply and power producers and industrial cus- commission 24 of its G114-2.0 MW Enel deploys predictive expansion deal tomers for projects around the coun- turbines at the Yangshugou wind Vestas has signed a deal with Aluar try. Under the agreements, SGRE farm located in the province of Lia- maintenance Aluminio Argentino S.A.I.C to extend will handle the entire infrastructure oning, in northeastern China. GE is to provide the global thermal the Aluar wind park in Argentina. needed to operate the projects to- The agreement reached with CGN generation division of Enel with its Earlier this year, Aluar, the only al- gether with the supply, erection and encompasses the installation of 24 Predix predictive maintenance soft- uminium smelter in Argentina, commissioning of 135 units of G114- of the firm’s G97-2.0 MW turbines ware solution at 14 of its thermal placed a 50 MW order for the first 2.0 MW wind turbines and 28 units at the Wohushan wind farm located power plants in Europe and Latin phase of the El Llano wind park. The of its G97-2.0 MW. in the province of Shandong, eastern America. latest order will bring the capacity of The wind turbines will be used China. Enel will deploy the GE Asset Per- the wind farm to 100 MW. across 26 separate sites ranging from The turbines for both projects will formance Management (APM) soft- The contract to build the wind 2 MW to 60 MW in size. They will be delivered in 2018. ware at 13 gas-fired and one coal park’s second phase comprises sup- be commissioned by March 2018. fired power plant to monitor, predict ply and installation of 14 Vestas and enhance the facilities’ reliability. V126-3.45 MW turbines delivered Voith signs Henan Tianchi All the power plants use GE or Als- in 3.6 MW Power Optimised Mode, Vestas secures Ostro pumped storage contract tom technologies, and together have as well as a 15-year Active Output Kutch order a combined capacity of 7 GW. Management 5000 (AOM 5000) Henan Tianchi Pumped Storage Co. service agreement, ensuring optimal Vestas has secured a deal from Ostro Ltd. and Voith Hydro Shanghai Co. operation of the wind park. Kutch Power for turbines totalling Ltd. have signed a contract for the HOFOR selects enTrader 250 MW for a wind farm in Gujarat, supply of equipment for the Henan India. Tianchi pumped storage hydropower SGRE wins 330 MW of Vestas will deliver, install and com- plant in China. Danish utility HOFOR has selected wind orders in USA mission 125 of its V110-2.0MW tur- Under the agreement, Voith will Contigo’s enTrader to manage its Nor- bines, as well as carry out the proj- supply four 300 MW Francis revers- dic power trading activities. Siemens Gamesa Renewable Energy ect’s civil and electrical works. ible pump turbines and generators as Contigo’s enTrader product is a (SGRE) has signed two orders in the The project, sited in the Kutch dis- well as auxiliary equipment. The full end-to-end ETRM solution, de- USA for the supply of 95 of its G132- trict, would be commissioned by the power plant will have a total installed livering automated trade capture, 3.465 MW wind turbines. third quarter of 2018. capacity 1200 MW and a rated head position management, risk manage- SGRE will supply 47 turbines for Vestas will also service the hard- of 510 m. ment, credit management and regu- the Midway wind project, located in ware under a 10-year full-scope ac- Under the contract, the first unit latory reporting capabilities. San Patricio County, Texas. The tive output management 4000 deal will be put into operation by the end It will provide HOFOR with the project was awarded by Apex Clean and a Vestas Online Business SCA- of September 2021, and the last unit ability to seamlessly integrate be- Energy and recently acquired by DA solution. will commence commercial opera- tween its trading systems and other Sammons Renewable Energy. tion in June 2022. critical business systems, reducing The second project with an undis- operational risk and removing man- ual processes. closed customer will feature 48 ma- BHEL to expand 660 MW Pöyry is owner’s engineer chines and is scheduled for commis- Bhusawal project HOFOR identified a need to re- sioning in 2019. This project for Kedah PV contract place its existing in-house trading represents the first US order for this India’s BHEL has secured an order system because of growing complex- specific turbine. worth $438 million for the expansion Leader Solar Energy Sdn Bhd has ity and changing regulations within of the Bhusawal coal fired power sta- awarded Pöyry an owner’s engineer the Nordic energy market. tion in Maharashtra state, India. services assignment for a 29 MW GE lands Norte III BHEL’s scope of work includes the solar photovoltaic (PV) power plant O&M deal design, engineering, manufacture, project in Kedah, Malaysia. International supply, construction, erection, testing Pöyry has already completed con- GE’s Power Services business has and commissioning of a single 660 ceptual design, preparation of techni- BWSC wins turnkey signed long term agreements with a MW supercritical coal fired unit and cal specifications, assistance in se- consortium formed by Macquarie civil works. lecting the EPC contractor and contact for Benin Capital and Techint covering the 907 The existing 1420 MW Bhusawal assistance in EPC contract negotia- MW Norte III gas fired combined power plant, in Jalgaon, consists of tions for this project. It says it will The Danish power plant specialist cycle power plant in Mexico. four thermal units and is owned by continue to support the project by Burmeister & Wain Scandinavian The $330 million deal includes two Maharashtra State Power Generation providing assistance in project man- Contractor A/S (BWSC), in consor- fully integrated, multi-year contracts, Company. agement, design review, and site su- tium with MAN Diesel and Turbo including an Operation and Mainte- pervision services. (MDT), has been awarded a €125 mil- nance (O&M) agreement and a Con- GE wins Theparak deal The overall schedule for Pöyry’s lion contract to build a 120 MW tractual Service Agreement (CSA). services during the project execution power plant in Benin. Under the terms of the 25-year GE Renewable Energy has won an is eight months. The project is a complete turnkey agreement, GE will utilise its order to provide 270 MW of wind power plant project, which entails Fleet360 platform of total plant so- turbines to Wind Energy Holding for construction of a whole new power lutions for the Norte III plant, which the Theparak wind farm in central Europe house for seven MDT dual fuel en- operates on four of GE’s 7F.04 gas Thailand. gines and all corresponding infra- turbines as well as two Toshiba GE will provide 90 of its 3.0-137 GE wins Paks turbine deal structure. The dual fuel heavy fuel steam turbines. wind turbines with 156.5 m hybrid oil (HFO) and gas fired power plant The combined cycle power plant towers, making them the tallest tur- GE Hungary is to build the turbines will be located at the Maria Gléta is located south of Ciudad Juarez in bines it has ever installed outside of for Hungary’s Paks 2 nuclear power site, about 15 km from the city of the State of Chihuahua, Mexico. Europe. “Our 3.0-137 wind turbine plant. Cotonou. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Energy Industry Data 11

Share of renewables in total capacity additions by region in the New Policies Scenario, 2017-2040 For more information, please contact: International Energy Agency 9, rue de la Fédération 75739 Paris Cedex 15 France.

Email: [email protected] website: www.iea.org

World Energy Outlook 2017, © IEA/OECD, Figure 6.7 , page 245

Global average annual capacity additions and retirements by technology in the New Policies Scenario, 2017-2040

World Energy Outlook 2017, © IEA/OECD, Figure 6.8, page 246 Cumulative power plant capacity retirements by region and source in the New Policies Scenario, 2017-2040 (GW)

World Energy Outlook 2017, © IEA/OECD, Table 6.3, page 248

This section is supported by ABB

Source: World Energy Outlook 2017 THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 12 Fuel Watch

Oil Crude Oil Prices - 2018 Settlement Prices For Benchmark Crudes ($/B) Crude oil prices on Nymex WTI ICE Brent DME Oman ICE Dubai OPEC Basket Price/Barrel

$80.00 the rise, but US $75.00 $70.00

$65.00 production could $60.00 $55.00

$50.00 stem the trend $45.00 $40.00 n Non-Opec supply to increase by 1.7 million b/d $35.00 n Opec to maintain production cuts through 2018 $30.00 $25.00 David Gregory the oil industry has been struggling which is more than enough to cover Date 19 Dec 22 Dec 29 Dec 3 Jan 8 Jan 12 Jan 19 Jan with the consequences since. But over the increase in demand. US crude oil 2017 2017 2017 2018 2018 2018 2018 Oil market analysts in late January the last three years, the oil industry has production would rise above 10 mil- were questioning how much longer the adjusted itself to new circumstances, lion b/d it said, overtaking Saudi Ara- The oil market is tightening, the IEA would average a price of $56/b in 2018 bullish oil market would continue as cut a great many costs, trimmed itself bia and challenging Russia and the said, noting that during the second, and $57/b in 2019. prices neared the $70/b point, and down and now is beginning to talk world’s largest producer. For that rea- third and fourth quarters of 2017, It said Opec production declined by again, for the first time in a long time, about new projects and investments. son, Opec leader Saudi Arabia is not OECD crude stocks declined by an 0.2 million b/d during 2017 to average the role of speculators in the oil market As does everything, the market and ready to express confidence that the average of 630 000 b/d, which in pre- 32.5 million b/d as a result of the No- came into play. circumstances evolve. market is on its way to correction. vious such scenarios brought about a vember 2016 agreement amongst After a year of restricting oil produc- In its January Oil Market Report, the At the Opec Ministers’ Monitoring rise in prices. But the agency ques- most Opec producers and its non- tion, Opec and its non-Opec partners Paris-based International Energy Committee in Oman in late January, tioned whether Brent crude would Opec allies to limit production. It have managed to see some gain in oil Agency (IEA) said its demand esti- those participating in the production stick to a $60/b-$70/b range in 2018. forecast that Opec production would prices. But whether that is due to their mates for 2017 and 2018 remained cuts agreed to maintain them through- Citing the political and economic increase by 0.2 million b/d in 2018 efforts to eliminate excess supply of almost unchanged at 97.8 million b/d out 2018 and possibly continue them problems looming in Opec member and by 0.3 million b/d in 2019 “as crude or whether oil prices are being and 99.1 million b/d, respectively. It into 2019. Venezuela, other geopolitical uncer- crude oil production slowly returns to driven by an improving global econo- estimated demand growth in 2017 at “We need to see the confidence tainties and the dynamics of the US pre-agreement levels”. my or rising demand or a combination 1.6 million b/d compared to 1.3 million level of investors within the compa- oil shale industry, the IEA predicted Regarding US production, the EIA of many things, the real question is b/d and attributed the slowdown in nies and financial community improv- another volatile year. forecast an average of 10.3 million b/d whether the price increase is sustain- demand growth this year to the impact ing about the long-term prospects of For its part, the US Energy Informa- in 2018, an increase of 1 million b/d able. Analysts suggest that rising of higher prices, the changing patterns the market, and that is why my guid- tion Administration (EIA) in its latest over 2017. The administration said prices could encourage US shale oil to of oil use in China, weakness in de- ance to my colleagues is that we monthly report did not predict that the that if this level is achieved, it would rush the market – the factor that had mand in OECD countries, and the should not limit our efforts to 2018,” current high prices would continue be the highest annual average on re- convinced Saudi Arabia in 2014 to switch to natural gas. Saudi Energy Minister Khalid al-Fa- into next year. It put Brent at an aver- cord for the US, surpassing the previ- increase production in an attempt to But the IEA added that rapid growth lih said after the meeting. Russia has age of $54/b in 2017 and forecast ous record of 9.6 million b/d set in force high-cost producers like shale in US production and increased output voiced its support for continuing to prices of $60/b and $61/b, respec- 1970. US crude oil production in 2019 out of the market. in Canada and Brazil would increase monitor and manage the oil market tively, in 2018 and 2019. West Texas is forecast to rise to an average of 10.8 The Saudi strategy did not work and non-Opec supply by 1.7 million b/d, for the time being. Intermediate (WTI), the EIA said, million b/d. Gas Azerbaijan’s Socar to examine closer gas ties with Bulgaria Azerbaijan plans to examine a proposal that would help it find more markets and distribution routes in Europe for its natural gas. The proposal would also enable Bulgaria to create a natural gas hub in southeastern Europe.

Mark Goetz the Trans Anatolian Natural Gas Pipe- with the intention of supplying East Azerbaijani gas will be transported to holds a 20 per cent stake in the TAP line (TANAP). Bulgaria will receive 1 Europe. Bulgaria, today together with Mr. pipeline, 58 per cent of TANAP, and The State Oil Company of the Azer- billion cubic metres (bcm) annually of Last summer Bulgaria approached Prime Minister [Borissov] we in- 17.6 per cent in the SCP. In 2016 it baijan Republic (Socar) will examine Azeri gas through the Interconnector- Russia with the idea of assisting with structed the heads of relevant struc- negotiated for a major shareholding the possibilities of investing in Bul- Greece-Bulgaria (IGB), which will the construction and supply of its Bal- tures for Azerbaijan’s state oil com- in Greece’s gas transport company garia’s natural gas system, it was an- connect with TAP in northeastern kan Gas Hub, but there has been no pany Socar to rapidly study the options Defsa, but that deal fell through last nounced in Baku last month during a Greece. The IGB, with a 3-5 bcm/year commitment. Not everyone is con- of gas supply in Bulgaria and present year. meeting between Azeri President Il- transport capacity, is expected to begin vinced that Bulgaria’s Black Sea port the possible opportunities,” he said. The Greek gas company Depa and ham Aliyev and Bulgarian Prime Min- construction this year. of Varna is ideally suited for a hub. Stage 2 development of Azerbai- Italy’s Edison continue to pursue the ister Boyko Borrisov. Bulgaria’s current gas demand is Socar, however, is willing to look at jan’s offshore Shah Deniz gas field idea of an Interconnector-Greece-Italy Bulgaria is keen to move forward its some 3 bcm/year, practically all of the gas hub proposal. Last summer it will bring another 16 bcm/year into (IGI) pipeline. This Greek-Italian joint plans to create a natural gas hub in which is supplied by Russia, but Bul- signed a memorandum of understand- production on top of the 8 bcm/year venture is a 50 per cent partner in the southeastern Europe and expand its garia’s gas mix could change in com- ing with Bulgaria that called for study- capacity the field has now. Of the 16 IGB pipeline in the form of IGI Posei- domestic grid. Socar is keen to find ing years once the IGB comes into ing the options for additional routes to bcm/year, only 10 bcm/year will be don. Currently their focus is on com- more markets and distribution routes operation and the European Union’s supply and transport Azeri gas. The arriving at the Turkey-Greek border pleting the IGB, but they are also push- in Europe for its natural gas. Both plan to better interconnect the gas grids MOU said Socar was prepared to study and transported further into Europe. ing the EastMed Pipeline, which countries are involved in gas pipeline of all its members begins to solidify. the technical and the trade capabilities But Azerbaijan’s gas reserves are es- would carry gas produced in the East projects that comprise the Southern Gas will be arriving in Bulgaria of the gas network of Bulgartransgaz timated at 2.6 trillion cubic metres, a Mediterranean from Cyprus to Crete Gas Corridor, which is scheduled to from Azerbaijan, but possibly also (the Bulgarian state-owned gas trans- huge amount that could supply Euro- to Greece to Italy via a subsea pipeline begin transporting Azerbaijan’s Shah from Greece, which plans to install a port company) to transport additional pean markets for a very long time. – 2025 is the target date for start-up. Deniz Stage 2 (SD2) gas to Europe by floating storage and regasification volumes of natural gas through Bul- To this end, Socar has been keen to But IGI Poseidon is reported to re- 2020. unit (FSRU) at Alexandroupolis in garia to other European markets. widen its distribution in southeast Eu- main keen on the idea to transport The bulk of the Azeri gas will be piped the northern Aegean where natural In Baku, President Aliyev recently rope, where countries want to reduce Azeri gas across northern Greece to into Europe through the Trans Adriatic gas in the form of LNG might be de- said Socar would soon begin the stud- their dependence on Russian supplies southern Italy as it proposed a decade Pipeline (TAP) after it arrives through livered from the US and perhaps ies. “Taking into account that in a few even though Russia will be a top sup- ago when the Southern Gas Corridor the South Caucasus Pipeline (SCP) and eventually the East Mediterranean years one billion cubic metres of plier for many years to come. Socar concept was just taking shape. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Industry Perspective 13 Taking charge?

n a future where 50 per cent of all user charges once a week, then as Electricity cars, buses and motorcycles are shown in Figure 2 the best day to ‘all electric’ across the EU28, the charge in Germany during week 45 infrastructure I th annual electricity demand would be 2017 is November 11 . 330 TWh higher. The price of electrical energy on, developments are To some this may not seem much say, a 15-minute dynamic basis, can but it is equivalent to adding a coun- provide the right signal about when already being seen try the size of Italy to the electricity best to charge an EV. Consumers in some markets demand of the EU28. If the 330 TWh will, if so enabled by technology in was considered on a standalone ba- the future, set their preferences and to accommodate sis, it would require 45 GW of base- the EV will do the rest. Such pref- load plant which is equivalent to 14 erences may be that they never electric vehicles. Hinkley Point Cs. But what does it want less than 40 per cent charge in mean for investment needs when their EV and are willing to pay a However, a huge considered in the existing electricity maximum amount per day for their system and what impact will it have electricity. amount of work on the generation and distribution of The pricing of electricity will also electricity? need to be dynamic so that as de- remains to be done With spare capacity on the current mand increases, prices respond and system, additional energy demand additional demand sees its impact on to avoid making could in theory be accommodated price levels. For this to work, of generating capacity without the need for new capacity. course, consumers will need smart We use Great Britain (GB) to dem- meters that can record demand on Brown: The impact on the electricity system will depend on the onstrate this. In GB, peak demand this 15-minute basis and retail prices underlying characteristics of the system and grid investments currently occurs in the winter at that reflect the changing value of in the shorter around 18:00 (see Figure 1). Imagine electricity in each 15-minute period. duced. In systems built to cope with with EVs is their ability to inject en- all cars slow charge at the same time A key question is: can EVs solve mainly electric heating, home-based ergy back into the grid economically. term that become overnight in a seven-hour period the grid problems they cause? It is a slow-charging demand is proportion- With current technology, the received starting at 23:00. In this example, it matter of distribution and diversity. ally less important as the distribution wisdom is that cycling of the EV bat- unnecessary in the would be possible to accommodate In practice, our electricity systems system is already built for larger tery has too great a cost, but battery over 21 GW of charging demand be- rely on diversity of demand to hold loads (as long as one avoids having technology will no doubt improve long-term. fore a new peak demand period is down costs. The fact that people use the heating on at the same time as the over time and, if re-injecting from an created. However, if charging starts electricity at different times means EV is charging). EV creates a value that can be cap- Matt Brown when people return home from work, that the capacity of the system is One solution is a system of dynam- tured, then developments will likely at 18:00, then the impact is direct lower than it would need to be if they ic pricing that reflects the cost of lead to a lower cost. and new capacity is required imme- used it at the same time. electricity at a specific location. The The economics of EVs reinjecting diately. Assuming a 50 per cent pen- With non-smart systems it doesn’t pricing option could be a variation electricity into the system could end etration of EVs in GB, the demand matter to the residential consumer on nodal pricing, common in many up being based on the cost of storing from charging over these seven hours when their electricity demand occurs electricity markets, but which is ex- energy in, and re-injecting energy translates to 20 GW and so can in as settlements are based on half-hour- tended down to the local distribution from, an EV (or static) battery versus theory be accommodated within the ly or hourly profiles rather than on ac- level, even to a price at the top of a the cost of grid reinforcement. So existing generating capacity. tual demand. But in a world in which city street. Whatever the form, the when you want to charge your EV at However, the situation both today flexible demand is chasing low elec- key will be reflecting the cost of a specific time and there is local grid and in the future is not well repre- tricity prices, there is an incentive for electrical energy and the cost of dis- congestion, you will charge from sented by this characterisation for a consumers to charge their vehicles at tributing electricity to an appropriate other EVs that are discharging ener- number of reasons, not least: the same time. Natural diversity will degree of temporal and geographical gy in your local street or area. n the continuing increase in non- reduce and distribution systems will resolution. The available re-injection capacity dispatchable generation such as solar need even greater levels of invest- Unless customers see the cost of from EV batteries will be limited by and wind; and ment. The cost of distributing electric- their actions through locational dy- the connection to the grid and by the n the growing potential of flexible ity will be low most of the time and namic pricing of electricity, it is like- ability of the grid to distribute elec- demand from appliances and EVs, to then increase significantly when grid ly that very significant investments trical energy. An EV battery can de- balance supply and demand in a capacity grows scarce. There will ex- in electricity distribution infrastruc- liver a large amount of power to the smart, digitalised, decentralised ist at times a tension between the cost ture will be made unnecessarily. In motor by comparison to its grid con- energy system. of electrical energy and the cost of the interim, a system of pricing dis- nection. But even with this limit, the As the amount of wind and solar distribution. The cost of delivered tribution use on a kW capacity rather GW of capacity that could be deliv- grows in the electricity system, the electricity will vary significantly with than kWh energy basis to reduce in- ered by a 50 per cent penetration of shape of electricity demand will no time and location. dividual consumer peaks may allevi- docked EVs is large and this could longer be the main driver for when The impact that this has on the ate the issue. Some trials of com- lead the way to an electricity system to charge an EV, as low electricity electricity system will depend on the mand and control by distribution premised on renewables and EV bat- prices will not necessarily coincide underlying characteristics of the sys- companies, in which the distribution tery storage. with periods of low demand over- tem. In systems with high levels of company controls the charging time, So we may find that the problems night. Rather than charging over- hydro storage, the variation in elec- have taken place but it is difficult to that EVs cause in the future are actu- Filling the overnight trough: a night, it will make sense for EVs to tricity prices driven by wind and so- see how this is consistent with a ally solved by EVs themselves. winter day charge during a sunny or windy peri- lar will be low. The incentive to all smart energy future. This will be the case as long as the od. Assuming that the average EV charge at the same time will be re- Another key question that remains correct price signals are seen. And this may mean having a new electric- ity market design fit for the future that prices not only the electrical en- ergy dynamically during the day, but also the grid congestion on the same basis down to a local level. It is un- certain exactly how EVs may devel- op and given this uncertainty a flexi- ble pricing system may be the best solution to make the most of the flex- ibility they will bring. The truth is that EVs will funda- mentally challenge the whole of the electricity industry. Developments are already being seen in some mar- kets but a huge amount of work re- mains to be done. If we are too slow to bring about these changes, we risk making generating capacity and grid investments in the shorter term that become unnecessary in the long-term and that will burden consumers with higher costs for years to come. Matt Brown is Vice President, Energy Figure 2. Germany generation and prices for week 45, 2017. – Western Europe, Middle-East and Sources: 50 Hertz, Amprion, Tennet, TransnetBW, EEX, EPEX] Americas, Pöyry. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 14 Energy Outlook

SMRs prepare to take the Gen 3 crown

lobally, nuclear power is enter- be the first in operation although all new nuclear technology and associ- In the wake of the NNL analysis, in Several third ing something of a renaissance the EPRs currently under construction ated capacity have caused multiple 2016 the UK government launched a as third generation (Gen 3) have been subject to delays. delays and cost overruns, a seemingly competition to consider SMR designs generation nuclear G perennial black mark against larger civil reactors establish a new breed of Indeed, mainland China already has of up to 300 MWe, and which are able plants are under safer, more responsive and ostensibly about 20 nuclear units of various de- reactor developments. For example, to achieve in-factory production of cheaper nuclear reactor designs. signs currently under construction. although China’s nuclear power goals modular components or systems construction around Based on the second generation With plans to increase nuclear capac- are ambitious and the country typi- amounting to a minimum of 40 per designs that form the bulk of the ity by about 70 per cent to reach some cally excels at executing large infra- cent of the total plant cost. That the world but the current global fleet of operating nu- 58 GW by 2020, China is further an- structure projects, both units at Taishan competition closed in December clear reactors, Gen 3 systems include ticipated to reach 150 GW of nuclear have reportedly been delayed – to 2017, with a list of more than 30 eli- challenges facing passive safety cooling to maintain capacity by 2030. For example, Unit 2018 and 2019, respectively – by the gible participants including compa- core temperatures in the event of a 3 of Tianwan reached first criticality need for further design verification. nies such as NuScale Power LLC, large nuclear new power failure and better protection in late December. Based on a Russian These challenges have in turn led Rolls-Royce, Westinghouse, Urenco against aircraft impacts. Passive VVER-1000 design, Rostaom’s At- to economic malaise for some nucle- and China National Nuclear Corpora- build projects are well safety features, for example, include omstroyexport or ASE Group con- ar technology firms. For example, in tion (CNNC). gravity-fed water supplies to flood ducted the construction of Tianwan January it was revealed that Canada’s For the next phase of the modular documented. Recent the reactor and which do not require together with Jiangsu Nuclear Power Brookfield Business Partners L.P. reactor programme organisations can either power or manual intervention Corporation (JNPC). Commencement and its institutional partners are to apply for a share of up to £4 million developments to activate. of commercial operations is planned acquire the bankrupt Westinghouse to develop feasibility projects. Up to Alongside improved safety charac- for 2018. Electric Company for approximately £40 million of further funding may be with small modular teristics, these later designs also nod Meanwhile, EPRs at the Taishan site $4.6 billion after reaching a deal available for development, subject to reactors (SMRs) to plant economics and the changing in China are nearing completion by a with previous owners Toshiba. The government approval. Further details dynamic of the energy markets these consortium of China General Nuclear acquisition is expected to close in the on the UK’s SMR support are ex- could provide the reactors are expected to operate Power Corporation (CGN) together third quarter of 2018, subject to regu- pected to emerge early this year. within. For instance, common fea- with EDF and Guangdong Yuedian latory approvals. As an eligible participant Rolls- answer the industry tures of these designs are a more Group. CGN and EDF are working Westinghouse had recently aban- Royce is leading a consortium of standardised approach to reduce closely to assess the design of the doned a two-reactor project by South companies including Amec Foster has been looking for. costs, together with higher efficiency China-developed third-generation Carolina Electric & Gas Company at Wheeler, Arup, Laing O’Rourke and operations and a longer operational Hualong One (HPR1000) nuclear the V.C. Summer Nuclear Station. Nuvia in designing a small modular David Appleyard life of 50-60 years. This compares technology as part of a plan to build The ongoing challenges of large reactor power station that aims to with the current second generation an export market with its domestic civil nuclear programmes has now produce electricity for as low as lifespan of 20-30 years, a figure nuclear technology such as the CAP prompted renewed interest in a gen- £60/MWh. which can be increased by another 20 1000 and the HPR 1000. eration of smaller, modular reactors The increased interest in SMR years or so if required. Russia is also pushing hard to export or SMRs. These emerging SMR de- technology has also prompted interest Modular construction methods are its nuclear technology with a raft of signs can potentially avoid the com- beyond the UK. also expected to curb costs by reduc- deals announced over recent months plexities, delays and overspends often Late last year, Rolls-Royce and ing construction times. Unlike previ- that look to put the Middle East at the associated with large infrastructure state-owned Jordan Atomic Energy ous generations of reactors, most of centre of new nuclear development. projects, like civil nuclear stations. Commission (JAEC) revealed plans the Gen 3 and 3+ designs also enable In December, for example, Egypt Indeed, one of the characteristics of for a feasibility study on the con- load-following, with the ability to inked a deal with Russia’s Rosatom to many new generation 3 reactor de- struction of an SMR in the Middle reduce output by as much as 75 per build the $21 billion Dabaa nuclear signs is their relatively small size. For Eastern nation. This followed a simi- cent and ramp-up and down relatively power plant in the Matrouh region on example, the Westinghouse Small lar agreement between Rosatom and quickly as required. the Mediterranean coast. With four Modular Reactor is a 225 MW inte- Jordan which is also exploring the The bulk of Gen 3 designs are cur- reactors and a capacity of 5 GW, the gral PWR based on AP1000 technol- feasibility of SMRs. Last November, rently undergoing regulatory approv- installation is due to be completed in ogy, including its passive safety sys- the JAEC and X Energy also an- als to be licensed for construction by 2029 with the first unit coming on line tems. As with their larger cousins, nounced an agreement for assessing authorities such as the US Nuclear in 2026. there is also a move to a more stan- X-energy’s SMR technology – the Regulatory Commission. In Decem- December also saw first criticality dardised approach. Xe-100 – and its potential for de- ber, for instance, Hitachi Nuclear procedures begin at Unit 1 of Lenin- SMRs could potentially be manu- ployment in Jordan. Energy Europe’s UK Advanced Boil- grad NPP-2, a generation 3+ plant factured in factories like the aviation Meanwhile, Rosatom and the King ing Water Reactor (ABWR) reactor that is the basis of the El Dabaa proj- industry, slashing costs and the de- of Saudi Arabia, Salman bin Abdu- design was granted design approval. ect. Russian loans are expected to cades-long production lead times laziz bin Abdul Rahman bin Saud, Horizon Nuclear Power plans to use deliver around 85 per cent of the more typically associated with nucle- also recently agreed a roadmap to the technology at its sites at Wylfa funding for the Egyptian nuclear ar power projects. cooperate in the field of small and Newydd on the Isle of Anglesey in project. The UK’s National Nuclear Labora- medium reactors that could be used Wales and its Oldbury site in Glouc- In Turkey, December saw the start tory (NNL) published a feasibility for both power generation and water estershire, UK. of construction at the Akkuyu nuclear study into the potential use of SMR desalination. However, a few of these designs power plant under a limited construc- technology in 2014, concluding that Regulatory design approval is still which have already received regula- tion licence issued by the Turkish there is a very significant market for some way off for SMR technology, tory go-ahead are under construction. Atomic Energy Agency (TAEK). Unit SMRs that cannot be met by large which is at an early stage of technical For example, EDF-Areva’s European 1 of the 4800 MWe will take place. nuclear plants. The size of the SMR development. However, the potential Pressurised Water Reactor (EPR) is On completion, the plant will feature market could reach approximately advantages of a broad SMR roll-out under construction at Olkiluoto in four VVER-1200 power units. A 65-85 GW by 2035, and at a value of are significant. The rise of the small Finland, Flamanville in France and Generation 3+ design, Akkuyu’s reac- £250-£400 billion. The UK market modular reactor could reinvigorate the design is also expected to feature tors are to be based on the Novov- for SMRs could be around 7 GW, the nuclear development across western in Hinkley Point C in the UK. Two oronezh-2 project in Russia which analysis concluded, noting that there Europe, the USA and elsewhere. This units are also under construction at was first commissioned in 2016. is an opportunity for the UK to regain could see SMRs ultimately dwarf the Taishan in China, which are likely to Yet the challenges in developing technology leadership. endeavours of their larger cousins. THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Technology 15 Transactive energy

Brooklyn: home to a microgrid paving a new route on trial to peer-to-peer energy trading

n the New York borough of gathered from smart devices such as Kessler explains: “Our mobile app from the US Energy Department pro- A micro-grid project Brooklyn a micro-grid project is meters, vehicle chargers, intelligent serves as the customer touch point, gramme to support micro-invest- Ipaving a new route to peer-to- fridges, light bulbs and the like to but really it’s just talking to the me- ments. “Those who invest will get a peer energy trading. Just a stone’s form a blockchain that enables se- ter and striking transactions. They monthly return and will be able to in Brooklyn, New throw from Manhattan and Wall cure communication. Although cur- call that a ‘smart contract’ – a little decide whether to reduce their own York, is trialling a Street, this new transactive energy rently LO3 also produces smart me- piece of software that I’ve told that bills or profit by selling the energy world is being powered by block- ters with the required functionality at 5 US cents/kWh I’m willing to do within the local community,” ex- peer-to-peer energy chain, the secure data transfer proto- and speedy data harvesting needed to something, at 25 cents/kWh do plained Orsini. col that powers the bitcoin virtual operate energy transactions, at the something else, whether that’s buy- In addition to the Brooklyn micro- trading system. The currency. heart of the company’s IP is the ing energy or discharging a battery grid and a project starting in Sacra- At the heart of the system is a high transactive software and the applica- for example.” mento in California, LO3 Energy is first transactions speed and secure mechanism to tions that facilitate its use. Using a tool to directly link prices also conducting trials in South Aus- transfer data and assign a monetary Scott Kessler, Business Develop- with energy choices, including local tralia and recently announced two were conducted in value. For energy transactions these ment Director at LO3 Energy, ex- neighbourhood-produced power, en- new trials that are set to take place in data represent, for example, power plains: “You don’t have to dictate genders an opportunity for novel fi- Germany. Partnering with the April 2016 and today, generated from a solar system, bat- what device the consumer is going to nancial models. Orsini said: “It’s Karlsruhe Institute of Technology tery charge state, and demand – buy. As long as they’re buying smart pairing traditional finance with com- (KIT) in cooperation with local ener- some 50 solar sites much of which is within the realm of devices that’s on one of these stan- munity investment.” gy provider, EnergieSudwest, a proj- the current generation of smart me- dard protocols – and the vast majori- Community engagement is a key ect will be set up in Lazarettgarten in are participating in ters. What’s different about this sys- ty of manufacturers these days are on part of the microgrid roll-out and Landau. The Lazarettgarten micro- tem is the speed of data transfer and one of the standard protocols – the transactional energy markets, given grid will be established in a 3.8 ha the project. the value function that enables users hardware backbone of the system is that such tools may be used to incen- community with 130 residences and to take part in an energy market pre- the meters talking to one another.” tivise certain energy choices. Kessler 19 businesses. As part of the project David Appleyard viously reserved for major players. He adds: “We are testing this with notes: “Depending on what the dif- they plan to install solar PV and bat- reports. LO3 Energy, founded in 2013 by all sorts of devices, we don’t want ferent users in the market want to tery storage in these properties. Lawrence Orsini and Bill Collins, is this to only be useful to a certain buy you could have brown [fossil] In the Allgau region of Southern the company behind the transactive type of building, we don’t want it to energy be the most expensive one in Germany a short-run proof of con- energy system. CEO Orsini outlines be only useful to a certain type of theory. The whole point of this is to cept project with Allgauer Uberland- the thinking behind the blockchain home.” give the community what they werk GmbH will see some prosum- model: “As we move towards this The ability to ascribe a value func- want.” ers selected to participate in a ‘virtual world where you have distributed tion allows participants to apply their Another concept that is easily en- microgrid’. energy it causes issues for existing personal values to energy trading. gendered through transactional peer- LO3 Energy has also been collabo- utility business models, existing re- For example, consumers may elect to to-peer energy trading is the ‘nega- rating with Siemens since November tailer business models and the physi- purchase renewable or green energy watt’, or demand response 2016 to jointly develop microgrid cal grid itself. The only way to effi- only. Applying this type of value approaches to consumption. Kessler technology that enables local energy ciently manage a grid with a high judgement is possible already as con- explains: “The grid doesn’t really trading. Backed by Siemens’ next47 proportion of distributed generation sumers may purchase green energy care if I’m generating new energy or business unit, the plan is to incorpo- is to allow devices on the grid edge from a utility company of their I’m reducing demand, it just wants rate the blockchain platform into the to transact between themselves. choosing. The blockchain-enabled to stay balanced. I can treat nega- Spectrum 7 microgrid PLC. Backed There is no command and control transactive energy market allows watts as a viable source just like so- by Siemens and with multiple tech- system that can manage a billion de- consumers to take a far more sophis- lar or wind as long as I know the nology trials under way, in a funding vices at the grid edge efficiently.” ticated approach to their energy amount of resource I have and as round announced last October, LO3 Blockchain is an efficient and se- choices though. It allows the sale and long as I can guarantee that I’m able Energy secured investments from cure communication platform for purchase of energy produced locally to deliver on my bid.” VC firms Braemar Energy Ventures value, but there are some significant and directly between participants, Although the price of a negawatt to and Centrica Innovations. Specific differences between the crypto-cur- without recourse to the utility. a domestic or small business con- terms were not disclosed. rency version and that for the energy Using an application developed by sumer is currently uncharted territo- As utilities are increasingly chal- market, where speeds of a second or LO3 Energy, participants in the ry, in theory it’s one of the most ef- lenged by the changing energy mar- less are required to operate effective- Brooklyn microgrid programme are fective ways to manage the grid. ketplace, peer-to-peer trading across ly. Nonetheless, just as blockchain able to input value limits that see the Another potential opportunity grid edge devices offers up opportu- offers an alternative approach to system apply those values to pur- stems from location-based pricing. nities not only to more effectively trading, buying and selling, so it en- chasing decisions. Currently, grid costs are socialised, manage grid stability issues using LO3 smart meters have the ables consumers to make more For example, a householder within that is each consumer pays an equal virtual inertia, demand side response required functionality and choices when it comes to their ener- the community may have a PV in- amount for transmission and distri- or other techniques, but a host of speedy data harvesting gy use. stallation and associated storage ca- bution infrastructure through regulat- other novel market mechanisms be- needed to operate energy Using current transformers to mea- pacity. They are able to offer those ed wires businesses. But, with suffi- come possible. transactions but at the heart sure energy data directly, as well as services to the market at a pre-deter- ciently detailed transactional data, it As Orsini observes: “For too long of the company’s IP is the wireless communications protocols mined price. A neighbour could de- is possible to determine how much it’s been easy for the electricity in- transactive software such as ZigBee and Z-Wave, data is cide that they want to buy not just infrastructure has actually been used dustry to say ‘people don’t care green energy – which may in fact be to facilitate that transaction. As Orsi- about energy, they just want cheap represented by a Renewable Energy ni notes: “If they are down the street power’. What we’re really finding Certificate (REC) associated with a from one another and they’re only here is that’s not the case at all – if project in a completely different state using a few strands of copper, that’s you give them a way to engage with – but the energy from a specific a pretty cheap transaction. If they’re something in a new way that makes neighbourhood renewable installa- going through the transformer and sense to them and their values they tion. They may instead choose to buy substation then they’re using more, will take to it. Exposing people to green energy up to a maximum daily they should pay more.” markets is what’s going to give these expenditure, they may choose to ex- Based in Brooklyn, LO3 Energy smart devices value.” clude nuclear power; a whole slew of chose the borough for this roll-out of The ability to cheaply, quickly and different approaches are possible. its microgrid and associated technol- securely manage grid edge devices The blockchain communication ogy as it is a diverse neighbourhood in response to signals from the grid – gathers energy production, consump- that spans a number of different en- prices to devices – suggests new rev- tion, battery charge state and pricing ergy distribution networks, some of enue streams and a new model for preferences then – under the right which are severely constrained, and the utility to manage the grid. And as circumstances – executes a trade. A numerous property types. The first Orsini says: “The march of technolo- final step will see the effects of that transactions were conducted in April gy will not be halted, it’s not going transaction replicated in the associat- 2016 and today, some 50 solar sites to stop, the genie is out of the bottle. ed smart device, say, noting that 5 are participating in the project. We position ourselves as the compa- kWh have been sold from a battery In May further expansion was slat- ny that’s showing what the market of system. ed having won a $5 million grant the future looks like.” THE ENERGY INDUSTRY TIMES - FEBRUARY 2018 Final Word 16 Flying ever closer to the sun

n recent years, renewable energy, mistic” solar PV forecast, revised up global investment in renewable en- per cent of sister yieldco TerraForm Junior Isles and particularly solar, has prob- by over one-third compared to the ergy and energy-smart technologies Global for a total net investment of Iably been the brightest story in previous year’s report. reached $333.5 billion last year, up 3 $750 million, adding a further 952 the power industry. Yet like any in- In 2016, new solar PV capacity per cent from a revised $324.6 billion MW of wind and solar. dustry, it will face challenges along around the world grew by 50 per cent, in 2016, and only 7 per cent short of While such deals are an indication its journey to maturity. reaching over 74 GW, with China the record figure of $360.3 billion, of a maturing sector, investors still According to the International En- accounting for almost half of this reached in 2015. need to be aware of the potential perils. ergy Agency’s (IEA) Renewables expansion. For the first time, solar PV Solar led the way in clean energy Firstly, investors have to be sure that 2017 report published in October, re- additions rose faster than any other investment, attracting 48 per cent of assets are valued appropriately and newables accounted for almost two- fuel, surpassing the net growth in the global total for all of clean energy capable, from a technical and financial thirds of net new power capacity coal. investment. Solar investment globally perspective, of performing in line with around the world in 2016. This was The IEA’s improved solar forecast is amounted to $160.8 billion in 2017, expectations. another record year, largely as a result driven by continuous technology cost up 18 per cent on the previous year RINA, a global corporation provid- of booming solar PV deployment in reductions and unprecedented market despite technology cost reductions. ing testing, inspection, certification China and around the world. dynamics in China as a consequence Just over half of that world total, and consulting engineering services, The report stated that solar PV is of policy changes. some $86.5 billion, was spent in acted on behalf of Brookfield as “entering a new era”. For the next five Bloomberg New Energy Finance China. This was 58 per cent higher technical advisers on the Terraform years, solar PV represents the largest (BNEF) reported similar findings in than in 2016, with an estimated 53 acquisitions, which it says represents annual capacity additions for renew- its more recent 2017 clean energy GW of PV capacity installed – up 1.4 GW of solar assets. ables, well above wind and hydro. investment trends. Annual figures from 30 GW in 2016. Sion Haswell, Business Develop- The agency said “this marks a turning based on its world-leading database Jon Moore, Chief Executive of ment and Operations Manager point” and underpins its “more opti- of projects and deals, show that BNEF, commented: “The 2017 total (Americas) at RINA said: “Large is all the more remarkable when you scale asset acquisitions are creating consider that capital costs for the significant momentum in the interna- leading technology – solar – continue tional solar market but bring unique to fall sharply. Typical utility-scale challenges.” PV systems were about 25 per cent Determining the yield from assets is cheaper per megawatt last year than a key area of risk. Ugo Salerno, Chair- they were two years earlier.” man and CEO, RINA, noted: “Making The ongoing success of solar has forecasts for 15-20 years is always seen more companies circling ever extremely difficult.” closer to the sun. In December, oil RINA notes, however, that yields on and gas major BP announced that it solar are easier to predict than in wind. will invest $200 million over three Simon Turner, Technical Director, years in Lightsource, the largest solar Power and Renewables, said: “There energy developer in Europe. is already a lot of equipment installed, The move marks a renewed focus on which has been measuring sunlight for a sector it abandoned several years 20-30 years. So the historical trends ago, and reflects the company’s own can be used to predict what the sunlight market predictions. According to BP’s will be for the next 15-20 years.” Statistical Review of World Energy, Panel deterioration is also a consid- global installed solar generating ca- eration. Turner says RINA builds-in pacity more than tripled in the last four degradation rates of 0.5-1 per cent a years and grew by over 30 per cent in year into the models it presents to 2016 alone. BP’s Energy Outlook banks. “Banks will also look at prob- analysis sees solar as likely to generate ability scenarios for varying amounts around a third of the world’s total re- of sunlight or particular yields. Prob- newable power and up to ten per cent abilities could vary from a ‘P99’ (a of total global power by 2035. probability of 99) for a worst-case Commenting on the move, Bob scenario. They then use these probabil- Dudley, BP group chief executive, ity scenarios to finance or size its debt,” said: “… we’re excited to be coming he said. back to solar, but in a new and very In new build projects, other ways of different way. While our history in the mitigating risks are through the solar industry was centred on manu- contracts, RINA noted. Funders rely facturing panels, Lightsource BP will heavily on construction and operation instead grow value through develop- and maintenance contracts, which ing and managing major solar projects include performance guarantees and around the world.” warranties. Another move in recent months that Yet no amount of preparation can demonstrates the growing interest in prepare for sudden changes in regula- solar, was Fortum’s agreement to tion and legislation. acquire three solar power companies In late January US President Donald from Hevel Group, Russia’s largest Trump announced 30 per cent tariffs integrated solar power company. on solar cells and panels imported into Fortum currently operates 85 MW of the US to protect domestic manufac- solar capacity in India and an addi- turers. The decision will no doubt tional 100 MW was estimated to be affect the competitiveness of solar in commissioned during 2017. Based on the US, the second biggest market Fortum’s strategy, the target is to after China. create a gigawatt-scale solar and wind “The industry will live but the de- portfolio. ployment boom in the US will slow,” One of the biggest acquisitions of said Varun Sivaram of the Council on solar assets in 2017 was made by Foreign Relations. Brookfield Renewable Partners L.P. The fall in deployment will likely In October, Brookfield, together with result in job losses, and companies that its institutional partners, closed the have acquired companies that have acquisition of a 51 per cent interest in portfolios with a significant project the purchase of ‘yieldco’ TerraForm pipeline in the US will probably see a Power (TERP). The deal saw Brook- hit on revenue and profit forecasts. field acquire a large scale, diversified These are the potential hazards of portfolio of solar and wind assets lo- investing in “new” technology. cated predominantly in the US, for a Still, the sun has far from set on the total commitment of $656 million. The industry. Solar, like any energy source acquisition will add 2600 MW of solar in its infancy, will face challenges but and wind to Brookfield’s portfolio. will keep on growing. And in the Shortly after, Brookfield, again with meantime, companies will continue to its institutional partners, acquired 100 fly closer to the sun.

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