THE ENERGY INDUSTRY May 2014 • Volume 7 • No 3 • Published monthly • ISSN 1757-7365 www.teitimes.com TIMES

Balancing act Nice touch Final Word Europe’s energy transition Nice shows how smart cities We have to be quick off the mark is a careful balancing act for based on smart grids are moving in the race against climate change policymakers from concept to reality. but not too quick, says Page 13 Page 14 Junior Isles Page 16

News In Brief Politics could determine Alstom’s future The French Economy Minister Energy sector Arnaud Montebourg has made it clear that he would actively seek “other solutions” to a $13 billion bid by US company General Electric for Alstom. Page 2 must act Emissions fall thanks to natural gas switch Greenhouse gas emissions in the USA have fallen in spite of energy sector policy uncertainty and a drop in clean energy investment. quickly on Page 4

Asia maintains strong renewables focus Governments in Asia are increasing the use of renewable energy, while Morgan says “the at the same time working towards climate change challenge is great” achieving grid parity. Page 6 The latest Intergovernmental Panel on Climate Change says it is possible to avoid climate change Ukraine crisis puts security but the energy sector must take swift and aggressive action. in the spotlight Junior Isles Moscow has warned Europe that The Intergovernmental Panel on Cli- systems around the world. ing emissions.” report on mitigation makes it clear that disruption to natural gas supplies mate Change (IPCC) believes there is Commenting on the IPCC’s findings, World leaders also agreed on the the next 10-20 years are critical if we are likely unless Ukraine settles still time to avoid drastic climate Jennifer Morgan, Climate and Energy need to act quickly. EU commission- are to avoid the worst consequences $3.5 billion of debts. change if the energy sector takes swift Program Director at World Resources er Connie Hedegaard said: “The re- of climate change. The IPCC report Page 7 action in making the transition to low Institute and IPCC Review Editor for port is clear: the more you wait, the notes that it will be substantially more carbon energy production. the WGIII chapter on international co- more it will cost [and] the more dif- difficult to maintain low GHG concen- UNEP highlights positive Last month the IPCC released the operation said: “The challenge is great, ficult it will become.” US secretary of trations in the long term if we do not trends Working Group III (WGIII) portion of but we still have time to turn back this state, John Kerry, said: “This report is act aggressively now. The report also The installation of renewable energy its Fifth Assessment Report ‘Climate global threat. The IPCC offers cost- a wake-up call about global economic points out that there are many low- capacity continued to rise in 2013 in Change 2014: Mitigation of Climate effective options to change course and opportunity we can seize today as we carbon energy pathways to a prosper- spite of a fall in investments. Change’, which stated that energy con- avoid locking-in even more dangerous lead on climate change.” ous future while mitigating climate Page 8 tributed 78 per cent of the total green- levels of warming. As the world’s second highest GHG change risks to a significant degree.” house gas (GHG) emission increase “The urgency is clear. Global emis- emitter after China, the US’ reaction The report identified renewables and Renzi signals shake up for from 1970 to 2010. It therefore con- sions have to peak by the end of this is noteworthy. In a statement on the energy efficiency as key technologies Italian energy groups cluded that preventing catastrophic decade. Further delay will not only in- report, US Energy Secretary Ernest in reducing emissions. The IPCC says Italy’s new prime minister is climate change requires an urgent and crease the severity of climate impacts Moniz said: “The Intergovernmental changing the leadership of some of fundamental transformation of energy but it will drive up the costs of reduc- Panel on Climate Change’s latest Continued on Page 2 Italy’s top state-owned companies – including energy firms Enel and Eni – in a bid to drive through reforms and attract international capital to EU state aid rules could hamper small scale renewables the country’s industry. The European Commission’s move to undertakings by national public au- price for their power. systems and other small scale electric- Page 9 reduce renewables subsidies to help thorities. It is illegal in the EU, with These payments will gradually be ity generators. The 1 MW threshold lower electricity prices is more suited some exceptions. The details of these replaced over the next few years by a under which a different support re- Technology: New potential to large energy players, according to exceptions are defined in guidelines. more market-based model. In new gime is possible, is not enough. Coop- for coal gasification green energy proponents. All renewable energy support projects, renewable operators will eratives and community projects, for TEI Times hears about a new According to new Environmental schemes implemented by member have to enter into competitive tenders instance, will now be forced to place gasification technology that can and Energy Aid Guidelines (EEAG), states, which are state aid and do not to supply the grid. their bids in a scheme much more simultaneously capture multiple the European Commission recom- comply with the guidelines, are there- The guidelines are supposedly in- suited to the largest energy players,” pollutants, making it more mends removing support mechanisms fore illegal. The new guidelines, tended to integrate renewable elec- stated Alexandre Roesch, EPIA Head economically attractive for coal for renewable technologies that are which come into force on 1 July 2014, tricity in the market and state owners of Regulatory Affairs. fired plants. expected to become “grid competi- are valid for six years until 2020, re- of existing small scale renewable in- Greenpeace has complained that the Page 15 tive” between 2020 and 2030. The placing current existing guidelines. stallations – like solar panels on roofs Commission is acting under pressure term grid competitive, however, is The opening of national support – will be exempt from the curbs. from Europe’s big utility companies not defined in the guidelines. mechanisms is suggested rather than Not all, however, are convinced. “to stunt the growth of renewables”. Advertise The Commission says production imposed on member states. The European Photovoltaic Industry Joaquín Almunia, the EU’s competi- [email protected] costs for renewable energies have The new rules foresee gradually di- Association (EPIA) insists that the tion commissioner said: “Politically significantly fallen over the past years minishing subsidies to ensure “more new rules create new barriers to the it is the best balance possible. We and the generous subsidies for them cost-effective” renewable energy integration of small scale renewables were obliged to make trade-offs.” Subscribe “caused serious market distortions growth. The reforms will reduce the into the European power mix. The new rules also allow exemp- [email protected] and increasing costs to consumers”. number of renewable projects eligible “A tendering schemes inevitably tions for particularly energy-intensive or call +44 208 523 2573 State aid is defined as an advantage for “feed-in tariffs” that guarantee re- comes along with risks and transaction manufacturers to keep them interna- conferred on a selective basis to newable energy producers a selling costs, making it unfit for rooftop PV tionally competitive.

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 - MAY 2014 2 Headline News

Continued from Page 1 that although global emissions of GHG grew faster between 2000 and 2010 than in previous decades, re- newable energy has expanded sub- stantially and its costs have now fallen so dramatically that it is in- Politics could creasingly ready to displace old, polluting forms of energy. A global roadmap for a transition to a sustainable energy future, “RE- map 2030”, due to be published this month (May) by the International determine Alstom’s Renewable Energy Agency (IRE- NA), shows that quadrupling the share of modern renewable energy sources in the global energy mix by 2030 could reduce emissions by 8.6 Gt to an estimated 32.8 Gt. Based future on numbers from the International Energy Agency, energy efficiency could save an additional 7.3 Gt. The IPCC report includes nuclear The French government could once again decide the future of engineering giant Alstom, power as a mature low-carbon op- says Junior Isles tion, but cautions that it has declined globally since 1993 and faces safe- The French Economy Minister Arnaud champion. It employs 18 000 people also seen a slump in orders for coal plants, would generate more than €430 ty, financial and waste-manage- Montebourg has made it clear that he in France and was rescued in a state- and gas fired plants. With shares still million in revenue for the fiscal year ment concerns. Carbon capture and would actively seek “other solutions” backed bailout in 2004 when Siemens down 25 per cent since the start of ending on March 31. Alstom said that storage is also included, but the re- to a reported $13 billion bid by US was barred from acquiring it. 2011, the company has been taking its board of directors had approved the port notes it is untested on a large company General Electric for Alstom. French unions are urging the govern- steps to improve its balance sheet. sale on March 31 and expects to fina- scale and may be expensive. He told reporters at the end of April ment to step in again to save the com- Last November Alstom outlined lise the sale in the first half of its 2014- Talk of reducing fossil fuel depen- that the government “is expressing its pany. Former industry minister Jean- plans to sell as much as €2 billion in 15 fiscal year. dence has been met with mixed patriotic concern and vigilance”. Pierre Chevènement wrote to the non-core assets, including a minority Although a privately owned com- reactions. ExxonMobil said the Alstom’s board had been due to hold Prime Minister, Manuel Valls, to seek stake in its rail unit by the end of pany, Montebourg’s announcement is world’s climate policies are “highly a meeting at the end of April to discuss his “prompt intervention”. Chevène- 2014. a stark reminder of the influence the unlikely” to stop it from selling fos- the GE proposal before Siemens en- ment warned that allowing GE to take In January this year the company, government holds over a company sil fuels far into the future. tered the battle for the company with over Alstom’s energy branch would which supplies equipment for power that relies heavily on orders from state Friends of the Earth’s executive the announcement that it had written “deal a fatal blow” to France’s nucle- plants and trains, cut its operating mar- rail operator SNCF and partly state- director, Andy Atkins, however, a letter to “signal its willingness to ar energy sector. gin and cash flow forecasts for this owned utility EDF. said: “Rich nations must take the discuss future strategic opportunities” Siemens has promised not to cut jobs year, citing weakness in its thermal “GE and Alstom have their calendar, with the French group. in France for at least three years or power division. Last year the group which is that of shareholders, but the It emerged that Siemens chief ex- dispose of meaningful parts of the announced that it was cutting 1300 French government has its own, which ecutive Joe Kaeser, in a letter to Alstom businesses acquired from Alstom. It jobs, mainly at its coal-fired boiler is that of economic sovereignty,” CEO Patrick Kron, was offering to also proposed talks on Alstom’s nucle- business. Montebourg said in a statement. swap the German group’s high-speed ar power assets, including a possible At the beginning of April, the com- Montebourg said that an alternative trains and locomotives division plus separation if it is “deemed appropriate pany agreed to sell its steam auxiliary Siemens proposal was “about creating cash – believed to be up to €11 billion to secure the best interests of components business to private equity two European and global champions – in return for the French group’s France”. firm Triton for €730 million. Alstom in the energy and transport domains global power assets. Alstom has been affected by a weak said the unit, which manufactures a – one around Siemens, the other Alstom is seen as a French national European power market, which has range of heaters for thermal power around Alstom”. Figueres: three-quarters of fossil fuels needs to stay in the ground lead by rapidly weaning them- Project awards mark “new stage” selves off coal, gas and oil and funding low-carbon growth in poorer countries.” This was echoed by UN climate in green energy investment chief Christiana Figueres, who told oil and gas officials in London last Eight major renewable electricity government set up the FID-ER for Commenting on the awards, UK En- contract applications we submitted to month that three-quarters of the projects unveiled last month mark the some projects to ensure that invest- ergy and Climate Change Secretary the UK government,” said Henrik fossil fuel reserves still in the first investments under the UK’s elec- ment in renewable energy projects was Edward Davey said: “These contracts Poulsen, Chief Executive Officer of ground needs to stay there for the tricity market reforms, which are not slowed. It allowed developers to for major renewable electricity proj- Dong Energy. “It shows that the UK world to avoid a 2°C rise in global aimed at attracting investment in low reserve a CfD for when they were ects mark a new stage in Britain’s green is an attractive place to invest in off- temperature – the internationally carbon generation. ready to generate power, thus ensuring energy investment boom. shore wind; not only for its great agreed target needed to avoid The eight projects with a combined that they would definitely receive fi- By 2020, the projects will provide up natural resources, but also because of irreversible climate change. capacity of 4548 MW are: Beatrice (664 nancial support to pay back the invest- to £12 billion of private sector invest- the stable investment environment Others, meanwhile, believe that MW offshore wind); Burbo Bank ex- ment they have made in their projects. ment, supporting 8500 jobs, and they created by EMR.” renewables cannot be deployed fast tension (258 MW offshore wind); Drax The CfD regime, which also provides could add a further 4.5 GW of low- Energy UK also welcomed the an- enough to meet this target. Unit 1 (645 MW biomass conversion; financial support for carbon capture carbon electricity to Britain’s energy nouncement but urged the government Geoff Maitland – a professor of Dudgeon (402 MW offshore wind); and storage and nuclear projects, was mix (or around 4 per cent of capacity), to complete its reforms. “It is excellent energy engineering at Imperial Col- Hornsea 1 (1200 MW offshore wind); set up under the 2013 Energy Act. It generating enough clean electricity to news that these major green energy lege London and a Fellow of Lynemouth (420 MW biomass conver- provides a guaranteed price for power, power over three million homes.” projects have been given the go IChemE, Royal Society of Chemis- sion); Teesside (209 MW combined with the government providing a pre- Dong Energy, which secured con- ahead… However, we encourage gov- try, Energy Institute and the Royal heat and power); Walney Extension mium on top of the power price to tracts for its Burbo Bank and Walney ernment to complete its Electricity Academy of Engineering, said: (660 MW offshore wind). make low carbon projects economic. Extension projects and the first phase Market Reform package to provide “Waiting for renewable energies to The successful projects have been It replaces the Renewables Obligation of a project in the Hornsea zone, wel- certainty for investment in new elec- take over will not cut emissions awarded contracts under the Final (RO), which will cease in March 2017 comed the news. tricity generation and to build the back- quickly enough to meet the target Investment Decision (FID-ER) En- when the CfD will be the sole support “We are delighted that we have been up needed when the wind doesn’t blow of restricting the mean global tem- abling for Renewables process. The mechanism. successful with all three of our FID and the sun doesn’t shine.” perature rise to 2°C. There is good evidence to support a greater em- phasis towards using natural gas. In the US, the growth in shale gas has Temelin cancellation signals shift to coal reduced the rate of increase in CO2 emissions to around a third of their The cancellation of the tender process launched in 2009, while prices for car- new reactors would have doubled the thousands of workers from the Czech previous levels. for two new reactors at the Temelin bon emission permits in Europe have plant’s 2000 MW capacity. Republic.” “In the meantime, we have to abate nuclear power plant could signal a nearly collapsed, making coal a more Westinghouse, which was in the run- Rosatom spokesman Sergey No- greenhouse gases from existing fos- shift in the Czech Republic’s energy attractive fuel for power generators. ning with Russia’s Rosatom to build vikov said: “We do respect the decision sil fuel energy sources much more strategy. Czech Prime Minister Bohuslav the plant, expressed deep disappoint- of CEZ and we understand why they rapidly than we are at present. Car- Czech power company CEZ decided Sobotka and the country’s President ment at the news. are unable to continue at this time.” bon capture and storage is a solu- to cancel the $10 billion tender for Milos Zeman both described CEZ’s Westinghouse Nuclear Power Plants Following the cancellation of the tion, but will again need leadership the reactors one year ahead of the decision as logical. Sr. Vice President Jeff Benjamin said: tender, Areva said it was withdrawing and resources to help establish an planned 2015 deadline to pick the CEZ, which is 70 per cent state- “The local scope in the Westinghouse the appeal it lodged with the Regional estimated 3200 CCS facilities re- winner, saying that the plant no longer owned, said it still planned to have a proposal represents a significant per- Court of Brno on September 19, 2013. quired worldwide over the next 35 makes economic sense. new strategy for the expansion and centage of the total plant construction The group was challenging what it years to remove the necessary levels Wholesale electricity prices have modernisation of its nuclear power and would have resulted in billions of believed was its unfair exclusion from of CO2 from the atmosphere.” more than halved since the tender was facilities by the end of this year. The Czech crowns and sustained work for the process in 2012.

THE ENERGY INDUSTRY TIMES - MAY 2014 4 Americas News Emissions fall thanks to natural gas switch Greenhouse gas emissions are falling in the USA but uncertain energy policy continues to threaten long-term clean energy investment.

Siân Crampsie coal to natural gas in power generation, recorded in the wind sector. the small-distributed solar market very and gas sector. Experts are expected to and a decrease in energy consumption The PV sector has benefited from competitive, and the United States has make their recommendations to the Greenhouse gas (GHG) emissions in across all sectors of the US economy, falling technology prices and the suit- been a leader in developing innovative EPA on how to proceed with methane the USA have fallen in spite of energy says the EPA, which is attempting to ability of PV for microgeneration. Pew financing models that are spurring regulations by June 16. The EPA will sector policy uncertainty and a drop in limit GHG emissions as part of Presi- Charitable Trusts said that “although steadily increasing deployment,” said also solicit input from the public. clean energy investment. dent Barack Obama’s plan to tackle wind investment was relatively stable Phyllis Cuttino, director of Pew’s clean Industry groups have long resisted the Data from the US Environmental climate change. at $14 billion, US wind installations energy programme. “Wind, however, move for regulations on methane, saying Protection Agency (EPA) shows that The data raises concerns that as the in 2013 were down more than 90 per has been subject to the vagaries of US oil and gas companies are already taking GHG emissions fell by ten per cent US economy picks up, emissions could cent – from more than 13 GW in 2012 energy policy. As Congress debates steps to cut emissions. But environmen- between 2005 and 2012, and by 3.4 once again start rising. An increase in to less than 1 GW last year.” tax extenders, it should aim to level the talist are concerned about the impact of per cent from 2011 to 2012. natural gas prices could also lead to a This compares with 14 GW of wind playing field, accelerate clean energy methane emissions from unconven- In April the Pew Charitable Trusts rise in coal-fired power generation. capacity deployed in China in 2013. deployment, and provide long-term tional oil and gas exploration. released a report showing that invest- Pew Charitable Trusts says that the The fall in wind installations in the US certainty to investors.” The proposed regulations are part of ment in clean energy in the USA fell main factor affecting investment in the last year was mainly due to a slight New legislation is on the horizon to Obama’s Climate Action Plan, which by 9 per cent between 2012 and 2013, clean energy sector is policy uncer- change in the law when the production limit carbon dioxide (CO2) emissions is designed to address carbon pollution to $36.7 billion. tainty. While solar photovoltaic (PV) tax credit for wind was renewed at the from new coal-fired plants and the gov- from the power and transport sectors, The main causes of the decrease in deployment in the USA reached record start of 2013. ernment is also considering whether to and improve energy efficiency in GHG emissions are the switch from levels in 2013, steep declines were “Lower technology prices have made limit methane emissions from the oil homes, businesses and factories. Setbacks at Fundy set to gasification host floating projects tidal turbine Siemens is continuing its investment n n in marine energy with an agreement Kemper costs rise EPA seeks comment on FutureGen between its subsidiary, Marine Current A major coal gasification plant in the and $25 million in start-up costs. and a decision to move up the plant’s Turbines (MCT) and Bluewater Ener- USA has been hit by labour issues and Such added costs would push the spring maintenance. gy Services to jointly develop a 2 MW construction problems, according to estimated price tag for the delayed Power production in March reached floating tidal current turbine. owner Mississippi Power. Kemper plant to $5.22 billion, well 44 per cent of maximum capacity, ac- The SeaGen F turbine will be in- The Kemper County coal gasifica- above the $2.88 billion construction cording to local media. stalled in Canada’s Bay of Fundy and tion project remains on track to start cap approved by the Mississippi Public Edwardsport cost $3.5 billion to plans are also underway to build a operating at the end of 2015 but has Service Commission. The cap does not build, far more than the original $1.9 commercial scale multi-megawatt experienced productivity problems apply to the cost of the lignite mine, the billion cost estimate. array at the Fundy Ocean Research over the winter “due in large part to cost of the carbon dioxide pipeline The US Environmental Protection Centre for Energy (FORCE). adverse weather, unexpected exces- facilities associated with the carbon Agency (EPA) has championed clean The Bay of Fundy has a tidal range sive craft labour turnover and unan- capture and storage part of the project, coal plants such as Kemper as the of up to 15 m and current speeds of up ticipated installation inefficiencies”, and some other costs of the plant. future of coal plant in the USA. In April to 5.5 m/s. This, combined with Nova the utility said in a statement. Another gasification plant – Duke it gave draft approval to the permits Scotia’s feed-in tariff make this one of The 582 MW plant is needed to re- Energy’s Edwardsport generating sta- needed by the proposed FutureGen the most attractive and economic sites place Mississippi Power’s ageing plant tion in Indiana – has been hit by op- project to inject carbon dioxide deep in the world for marine energy, says fleet and meet future energy needs in erational problems. into sandstone formations below the Siemens. the region and will also serve as a bell- The 618 MW Edwardsport gasifica- ground. MCT has been operating its SeaGen wether of the economic and environ- tion plant began operating in June The EPA is seeking public comments tidal current turbine in Northern Ire- mental performance of coal gasifica- 2013 but in a regulatory filing the on the proposed carbon sequestration land since 2008. The turbine is an- tion technology. company said that the plant generated element of the multi-billion dollar chored to the seabed using a monopile The Bay of Fundy will be Mississippi Power has identified at less than one per cent of its power clean coal project. structure. It hopes to use Bluewater’s the site of a commercial least $177 million in likely cost in- capacity during February. The permits would be the first in the expertise in floating platforms and scale multi-megawatt creases at the Kemper project, includ- Duke blames February’s low power nation for injecting and storing the gas subsea moorings to develop a floating array ing $152 million in construction costs output on an “equipment challenge” underground. turbine. South America draws renewables investors European energy companies are suc- Power announced in March that it had Brazil, Mexico and Chile highlighted and Fazenda, comprising seven tur- MW in Mexico and is building two cessfully exploiting opportunities in successfully obtained a loan of €153 as target markets. bines of around 14.5 MW each, for an other wind farms. Latin America’s renewable energy million from Spanish banking giant GDF Suez is already a major player overall installed capacity of 102 MW. It also operates renewable energy markets. Banco Santander to develop wind in Brazil, operating around seven per The project is supported by a 30-year capacity in Costa Rica, Guatemala, Enel Green Power and GDF Suez are farms in Mexico. cent of the country’s installed generat- PPA, a contract to purchase the power Panama and Chile. among the firms aiming to ramp up It has also started construction works ing capacity. The firm is currently also generated by the complex, which will Research from GTM shows that business operations in the region as at the new Apiacás hydroelectric com- constructing Jirau, a major 3750 MW be delivered to the national grid. Chile installed 153 MW of utility scale opportunities in their home markets plex, in the state of Mato Grosso, hydropower plant located on the Ma- In Brazil, Enel Green Power cur- PV capacity in the first quarter of 2014, dry up. Brazil. deira river, in the state of Rondonia, rently has around 210 MW of installed more than three times the amount that GDF Suez recently announced that it Rising electricity demand and fa- Brazil. capacity, of which 93 MW is hydro- any Latin American country has ever had achieved full commercial opera- vourable energy policies are creating Apiacás will consist of a cascading power and the remainder wind. In before installed in a single quarter. A tion at the 115 MW Trairi wind farm in growth opportunities in South Ameri- sequence of three power plants, Mexico Enel Green Power has wind further 380 MW of PV capacity is Ceara, northeast Brazil. Enel Green ca’s renewable energy markets, with named Salto Apiacás, Cabeza de Boi farms with generating capacity of 144 under construction. THE ENERGY INDUSTRY TIMES - MAY 2014

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EuroNuclear Power Ad 123x162 SEB.indd 1 22/04/2014 12:10 THE ENERGY INDUSTRY TIMES - MAY 2014 6 Asia News Asia maintains strong renewables focus Generation from renewable sources continues to see strong growth in Asia even as subsidies are gradually reduced, says Syed Ali Governments in Asia are increasing the “Consequently, participants are at- Before the introduction of the FIT in in March 2011. 11.5 GW) of the nation’s total new and use of renewable energy, while at the tempting to achieve grid parity without July 2012, Japan’s PV capacity was At the end of March, Chuo Electric renewable energy capacity. same time working towards achieving government subsidies and grants and 5600 MW. The country has nearly Power Co. was set to open Japan’s first “Korea’s new and renewable energy grid parity. instead, are sourcing low-cost equip- doubled its PV capacity with 6028 new geothermal power project in 15 generation reached only 64.7 per cent of Analysis from Frost & Sullivan, ment and having leaner operations,” MW of new installations in 2013, start- years. The company also said it is plan- the government’s target in 2012, so we Southeast Asia Renewable Energy said Frost & Sullivan Energy & Envi- ing from 6417 MW of cumulative PV ning to open five new plants over the need to concentrate our efforts on mak- Market, finds that southeast Asia had ronmental Industry Analyst Vishal power as of December 31, 2012. next five years. ing it better,” said a Kepco official. an estimated annual capex addition of Narain. “The timing and methods of The country’s thriving solar sector is Like Japan, Korea is also looking to ■ Japan last month approved its ‘Basic $3.15 billion in 2013 and is expected phasing out subsidies are critical for now attracting large foreign investors. reduce its dependence on nuclear. In Energy Plan’, the first of its kind since to reach $3.31 billion in 2018. creating a vibrant, cost-competitive GE Energy Financial Services, the late March Korea Electric Power Cor- the Fukushima nuclear crisis. The plan However, the high installation cost market.” General Electric Co. arm that funds poration (Kepco) and six other power aims to boost renewable energy above of some renewable technologies has At the end of March, Japan an- energy infrastructure projects, said last generation companies said they would the level aimed at in the past. It also made it necessary for governments to nounced that it was reducing photo- month it was planning to enter the set up “new and renewable” energy states that nuclear power is an “impor- offer tax benefits, rebates, feed-in tariff voltaic (PV) FITs by 11 per cent. Ac- Japanese solar market by investing projects with a gross generating capac- tant” source of energy and that it will (FIT) schemes, and other funding pro- cording to a statement by the Ministry Yen10-20 billion ($100-200 million) ity equivalent to “11 and a half nucle- continue to uphold the country’s spent grammes. According to the report, 70 of Economy, Trade and Industry in a solar power project in Setouchi, ar plants”. fuel recycling policy. The plan also left per cent of the renewable energy mar- (METI), the new FIT will apply to all Japan. At 230 MW the project would In its mid-to long-term energy busi- open the possibility of allowing the ket growth is dependent on govern- PV projects that secured approval in be the largest in the country. ness plan, Kepco said it aims to invest construction of new reactors. The mental policies. It notes that any with- Japan’s fiscal year 2014. Japan has been taking steps to in- a Won42.5 trillion ($409 billion) by news came as the government an- drawal of such policies therefore The introduction of FITs has helped crease its renewables generation fol- 2020 to build new facilities capable of nounced that it will restart its idled significantly limits market expansion. boost solar installations significantly. lowing the Fukushima nuclear disaster generating 72 per cent (approximately nuclear power plants. Bangladesh’s Indonesia attracts power plans energy investment take shape Bangladesh’s plans to increase coal coal fired capacity. Sharp increases in electricity demand KBN president director Sattar Taba Nusantara (BTN) and Malaysia’s fired generating capacity are moving “Of this, about 6000 MW will come on the islands of Java and Sumatra is said that his firm would form a consor- BTN Power Sdn Berhad, has joined forward with news that state-owned within the next five years. To imple- attracting large amounts of capital to tium with PLN and a Chinese company forces with Chinese state firm China Power Development Board (PDB) is ment the mega plan, we need huge Indonesia. to build and operate the power plant. Machinery Engineering Corporation close to signing a deal with China investment and skilled manpower,” State-Owned Enterprises Minister State-run electricity firm PT PLN (CMEC) to build $675 million worth Huadian Hong Kong Limited to build said Hamid. He noted the power sector Dahlan Iskan recently said that indus- also said it is set to collaborate with of coal-fired power plants in Dumai in a new ultra supercritical plant. needs between $15-20 billion invest- trial bonded zone operator Kawasan 30 investors from Japan to construct Riau, Sumatra. The 1320 MW plant is to be con- ment in the next five years to imple- Berikat Nusantara (KBN) would be power plants that use ultra supercriti- The 3 x 150 MW coal-fired power structed on Maheshkhali Island in ment the mega projects. among several state companies that cal (USC) technology in a bid to help plants in the Pelintung Dumai Indus- Cox’s Bazar district. “If the planned In April, German development bank will enter the electricity business. reduce coal consumption. trial Area will start construction in deal is signed, the number of joint KfW looked set to emerge as a key He said that KBN, which operates “A plant with USC technology will July. Construction is expected to finish venture coal fired power plants will partner for the country by providing an industrial bonded zone in Jakarta, cost us $2 million per megawatt,” said by April 2018. reach three, raising the total capacity €60 million ($82.31 million) worth of would build a coal-fired power plant Nasri Sebayang, PLN’s construction Indonesia has been focusing on coal to 3960 MW,” said a PDB official. assistance for developing the power with a capacity of 2 x 1000 MW in director, adding that coal-fired plants and geothermal to provide the bulk of The plants are an important part of sector. North Jakarta, while other state firms, cost $1.5 million per megawatt of elec- its new capacity in the coming years. Bangladesh’s ongoing efforts to in- Government officials said KfW for including state electricity company tricity produced. Even though the tech- At the end of March the Asian Devel- crease generating capacity. State Min- the first time was providing a €45 mil- PLN, would build a power grid along nology was expensive, he said it would opment Bank (ADB) provided a loan ister for Power and Energy Nasrul lion loan and €15 million grant for the the eastern part of Sumatra. reduce coal consumption by up to 20 of $350 million for the construction of Hamid last month said the government country’s development. The power plant and the transmis- per cent. a 320 MW geothermal power plant in has drawn up a plan to generate 24 000 Officials said Bangladesh would re- sion network are estimated to cost Nasri said the firm expected to put North Sumatra. The project requires a MW of electricity from coal by quire $3.5 billion every year to de- around Rp 20 trillion ($1.7 billion) and construction of the plants out to tender total loan package of $1.17 billion. 2030. velop power generation, transmission $896 million, respectively. this year so that building could begin Six commercial banks will also co- He also told the UNB news agency and related facilities. “For the power plant project in in 2015. finance the loan package. The ADB the government plans to create a coal ■ Last month the government finally Jakarta, we will invite private compa- Meanwhile, PT BTN Energy Prima and the Japan Bank for International fired power plant hub in the south- approved the 365 MW Ghorasal gas nies to participate in funding and (BEP), a joint venture between Indo- Cooperation acted as lead structuring eastern coast of Maheshkhali and ad- fired power plant, which will be built technology,” Dahlan said. nesia’s PT Biidznillah Tambang banks. joining islands with 9000-12 000 MW using Chinese credit. China has to reduce reliance on coal China must reduce its reliance on and vehicle exhaust are both major that China will control total energy since the figure was only 9.8 per cent The agreement extends an existing coal in order to cut air pollution and causes of smog” and noted that China consumption through higher efficien- in 2013. cooperation between the groups into eliminate the smog that troubled should expand its use of nuclear to cy, implementing smart grids and There were moves to support the several new areas, including the de- Beijing and other parts of the country help tackle the problem. switching to clean energy sources such clean-up effort at the start of April velopment of “utility type services” in last year. He said: “I believe we still should as wind power, nuclear power, hydro- when Gerard Mestrallet, Chairman the new Technological Business Dis- During a keynote speech at the develop nuclear power appropriately power and photovoltaic. and CEO of GDF Suez, signed a coop- trict of Changping near Beijing and three-day China Development Forum, because it currently accounts for only China wants to raise the share of eration agreement with Wang Dong, the construction of a tri-generation Zhang Guobao, former chief of the 2 per cent of the nation’s total electric- non-fossil fuels in energy consump- Chairman and CEO of Beijing Enter- plant. It also covers natural gas storage National Energy Administration ity generation.” tion to 11.4 per cent by 2015, a goal prise Group to develop natural gas and to help Beijing make the shift from (NEA) recently said that “coal burning Chinese premier Li Keqiang said that Zhang described as “challenging” energy efficiency projects in China. coal to more natural gas. THE ENERGY INDUSTRY TIMES - MAY 2014 Europe News 7 Ukraine crisis UK backs puts security White Rose The UK is hoping to revive its carbon ment in demonstration projects has capture and storage (CCS) develop- stalled due to low carbon prices and ment industry after a pioneering the economic recession. project in North Yorkshire was White Rose would capture around placed in pole position to win Euro- 90 per cent of its carbon emissions pean funding. and store it beneath the North Sea. in the spotlight The White Rose CCS project is a The UK government attempted to proposed 450 MWe oxyfuel power kick-start CCS development seven and CCS demonstration project years ago through a £1 billion CCS backed by Alstom, Drax and BOC. competition but negotiations with Europe is under increasing pressure to diversify its energy sources as The British government last month the winner – and only participant in told the European Commission that it the process – broke down. the political standoff in Ukraine continues. would provide support for the White White Rose will learn if it has suc- Rose project, making it likely that the ceeded in winning EU backing in June Siân Crampsie cause of its pledge to abandon nuclear The Commission wants to gradually scheme will be awarded €300 million of this year. energy, and in countries such as the move renewables support mechanisms of funding from the NER300 Elsewhere in the UK SSE is propos- Moscow has warned Europe that dis- UK, where capacity is ageing. to competitive allocation mechanisms scheme. ing to retrofit a 385 MW slipstream ruption to natural gas supplies are Germany gets around a third of its such as auctions in order to reduce the The NER300 scheme will also back at its Peterhead power station in likely unless Ukraine settles $3.5 bil- natural gas and crude oil from Russia, financial burden of renewables and a number of renewable energy and Scotland with post-combustion CCS lion of debts. while RWE and E.On source most of make them more competitive. interconnection projects across Eu- technology. Russian gas giant Gazprom gave their gas from Gazprom. Natural gas is Although broadly welcomed, the new rope as part of the Commission’s The project would capture approxi- Kiev a deadline of May 7th to pay for expected to play a major role in the rules could have a negative impact on plans to increase investment in and mately 1 million t/annum of carbon fuel that it has used, heightening ten- country’s economy as it makes the tran- security of supply, according to the UK’s boost development of clean energy dioxide and transport it 100 km off- sions in the political standoff and rais- sition to renewable energy under the renewable Energy Association (REA). technologies. Schemes will only win shore for storage in a depleted natural ing concerns about Europe’s relation- Energiewende plan. “These new guidelines are based on European backing if this funding can gas field under the North Sea. ship with Russia. Germany is aiming for renewable economic modelling which suggests be matched by the relevant national The UK government is helping to Around 30 per cent of EU natural gas energy to account for 80 per cent of that competitive mechanisms will de- government. fund FEED studies at both Peterhead supplies are sourced from Russia, with all power generation by 2050. Contin- liver equally good results at lower cost The Commission sees CCS as an and White Rose, and is investing a half of it transiting through Ukraine. ued unrest in Ukraine is likely to boost to the consumer,” said REA Chief Ex- important technology in the fight total of around £100 million in the Gazprom says it will cease supplying demand for coal, but even some of that ecutive Dr Nina Skorupska. “... but against climate change but invest- projects. Ukraine with natural gas if the debt is is imported from Russia. putting so much faith in untested the- not paid, making it likely that Ukraine Unlike Germany, the UK is pushing ory is a big risk.” will siphon off gas destined for Europe forward with plans to build new nucle- In total, Gazprom exported about for its own use. ar capacity, but it is also relying on 155 billion cubic metres (bcm) of gas Gazprom in early April raised the natural gas to fill the gap before new to Europe in 2013. There is potential price of natural gas supplied to its capacity is commissioned. It is also to diversify sources with imports of Ukrainian counterpart. Moscow’s abil- looking to natural gas to provide flex- liquefied natural gas (LNG), but in- ity to use energy supplies to exert influ- ible back-up generation to renewable creasing demand for the fuel in Asia ence over other countries is a major resources. will mean prices are likely to rise. Cur- cause for concern, and US Secretary of The concerns over energy security rent LNG prices in Europe are $11/ State John Kerry last month called for could provide a boost to the renewables million Btu, compared with $15/mil- Europe to wean itself off Russian gas. sector, which has suffered in recent lion Btu in Asia. “It really boils down to this: no nation years because of policy uncertainty in Another alternative is for Europe to should use energy to stymie a people’s the EU, the economic crisis and the im- exploit shale gas resources, but even aspirations,” Kerry said in Brussels, pact of subsidies on consumers’ bills. countries that are moving forward with just as Russia’s Gazprom raised the Last month the European Commis- exploration, such as the UK, are sev- price it charges Ukraine for gas. sion adopted new rules on the use of eral years away from producing com- Concerns about energy security are subsidy mechanisms to support re- mercial quantities of gas from such particularly strong in Germany be- newable energy. sources. Marine energy plans stream forward n 300 MW array planned for Channel Islands n Ocean Energy Forum takes shape

A spate of deals in the marine renew- develop the 300 MW project. The part- able energy field indicate that efforts ners will spend the next three years to develop Europe’s potential for ma- completing the required surveys and rine energy are being stepped up. environmental impact assessments Last month at the Thetis Marine prior to making an application for full Renewable Energy conference in consent. Cherbourg, France, an agreement was In April the Channel Islands Marine signed between OpenHydro and Renewable Energy Group (CIMREG) Alderney Renewable Energy (ARE) signed an agreement with West Nor- to develop a 150-turbine tidal array in mandy Marine Energy (WNME) to well as foster the promotion of the Dr Sian George, CEO of Ocean Energy energy sector.” the Channel Islands. cooperate in the development of ma- Basse-Normandie and Channel Is- Europe, said that EU member states In the UK, the government said it had The announcement followed the re- rine energy. WNME has also inked a lands marine energy industries. and industry should act together to completed the Inshore and Offshore cent completion of more than 1500 deal with the Regional Mission for In February France ramped up its ef- remove barriers and reduce risk. East Marine Plans, the first two of 11 hours of testing of OpenHydro’s un- Innovation and Economic Develop- forts to be a major player in the marine “This is the kind of coordinated ap- marine plans it intends to complete by derwater turbine. ment Action (MIRIADE) to create of energy market when it authorised the proach which is needed to turn renew- 2021. The plans designate specific ar- The developers of the £500 million Research and Innovation Network in extension of the port of Cherbourg. able ocean energy into a European eas of high tidal stream resource off ($800 million) project are aiming to Basse-Normandie, France. The extension will also enable the port industrial success story and make a the East Yorkshire, Suffolk, especially complete the project by 2020 to coin- WNME and CIMREG have pledged to increase activities in the offshore significant contribution to European Norfolk coastlines, where tidal energy cide with the commissioning of a pro- to address common issues and to en- wind turbine sector. energy security – which is precisely development will be prioritised. posed new power interconnector link- courage business and research col- April also saw the official launch of what we hope the Ocean Energy Fo- Carnegie Wave Energy also signed ing Alderney with France and laboration in marine renewable ener- the Ocean Energy Forum, an initiative rum will do,” said George. “Europe a commitment agreement to secure the Britain. gy. Their agreement will also provide announced earlier this year by EU En- currently has the best ocean energy final berth at Wave Hub, the offshore OpenHydro, a DCNS company, and a means to exchange knowledge and ergy Commissioner Günther Oettinger technologies, research centres and re- renewable energy test facility in Corn- ARE have created a joint venture best practice to ensure the develop- to help accelerate the development of sources in the world and is leading the wall, to demonstrate its next genera- company known as Race Tidal Ltd. to ment of marine energy activities, as the ocean energy sector. At the launch race to industrialise this exciting new tion wave technology. THE ENERGY INDUSTRY TIMES - MAY 2014 8 International News Investors boost Nigerian power capacity

Nigeria’s recent efforts to attract investment to its crumbling electricity sector appear to be paying off.

Siân Crampsie distribution sector. Shell and Agip are already producing the power system. is focusing on the development of up- The country has one of the lowest 642 MW and 480 MW, respectively to Nigeria’s government has set a target stream reserves and resources and gas Investors are making plans to build per capita national power supplies in the National Grid, said NERC. of reaching an installed capacity of infrastructure to provide gas to the do- new electricity generating capacity in the world, with a viable installed ca- Charles Momoh, chairman of West 20 000 MW by 2020. mestic market for power generation Nigeria following recent energy sec- pacity of about 3200 MW. President Gas and Power, the new owner of Last year GE signed a memorandum and industrial consumption. tor reforms in the country. Goodluck Jonathan recently said that EKEDC, told a recent summit in of understanding with the Nigerian Angus Rollo of Addleshaw Goddard, The Nigerian Electricity Regulatory $10 billion would be needed in the Lagos that the firm was already trying government to work with private pow- advisors to Seven, said: “Historically, Commission (NERC) has granted an power sector in the next five years. to improve power provision in Lagos er generating companies to add 10 000 the relative lack of investment in gas operating license to Mobil Producing NERC said that the license to MPN state through deals on captive power MW to the grid. According to local development for the domestic econo- Nigeria Unlimited (MPN) to build and represented a “timely boost” to the generation and embedded power media, the firm is already working on my has resulted in heavy reliance by operate a 575 MW power plant in Eket, Nigerian power sector. Chairman and generation. the first 3000 MW of capacity. local industry on imported diesel and while the Eko Electricity Distribution Managing Director of Mobil Produc- “Right now, we are going into the In the gas sector, Seven Energy re- fuel oil, which are much more expen- Company (EKEDC) says it is negotiat- ing Nigeria Unlimited, Mark R. Ward, process of pre-qualification and this is cently said it had secured $255 million sive than locally sourced natural gas. ing with a number of companies on said that the project would provide “a just a short-term plan that we want to of new equity that would enable it to “The emergence of a domestic gas projects to add power to the grid. unique opportunity in the sense that use so that we can get power to the further develop gas supply opportuni- market in Nigeria, led by indigenous Nigeria last year began a widespread there is a ready fuel supply and con- people. But our long-term project is to ties in Nigeria. Temasek, the Interna- companies like Seven Energy, to pro- power sector restructuring and privati- nection to the grid’’. bring in about 500 MW into our own tional Finance Corporation and the IFC vide lower cost energy for electricity sation programme to attract investors The license makes Mobil the third local grid,” said Momoh, who also African, Latin American, and Carib- generation and industrial users is cre- and increase generating capacity as international oil company to play a ma- highlighted ageing infrastructure and a bean Fund (IFC ALAC Fund) all com- ating exciting opportunities for global well as improve the transmission and jor role in Nigeria’s electricity sector. shortage of gas as major constraints on mitted equity to Seven Energy, which investors.” Jordan awards solar contracts UNEP Jordan has completed the first phase of The Jordan Times has reported that a three-stage project to increase in- Jordan would soon sign an agreement stalled renewable energy capacity. with Spain’s Elecnor to build a $150 The government has signed deals million wind power plant, also in with two companies to build two solar Ma’an. The 75 MW power plant will highlights energy plants, each with a 10 MW ca- be funded by a grant from the Gulf pacity, in the south of the country. Cooperation Council (GCC) states and The agreements bring the number of is expected to be connected to the grid renewable energy deals sealed by the in the first quarter of 2015. government to 12. A further two Jordan is aiming for renewable en- rounds will be held, under which ergy to account for ten per cent of elec- positive trends around eight renewable energy proj- tricity generation by 2020 in order to ects will be built, according to Energy reduce imports of energy. Minister Mohammad Hamed. In 2011, Saudi Arabia, Qatar, the n Clean energy stocks gain The total cost of the 12 projects un- UAE and Kuwait pledged $5 billion in der the first round stands at $560 mil- assistance to Jordan over a period of n Renewables attract long term investors lion. Together they will generate five years. 470 GWh per year and are expected Jordan imports about 96 per cent of The installation of renewable energy renewable energy is gaining a bigger 39 GW. Large hydropower was an- to be completed in 2015. its energy needs annually. capacity continued to rise in 2013 in share of overall generation globally is other important area of investment One of the 10 MW solar projects will The Kingdom’s energy bill amount- spite of a fall in investments. encouraging. To support this further, with at least 20 GW of capacity esti- be developed by Scatec Solar, which ed to JD4.08 billion ($5.76 billion) in According to a report from Frankfurt we must re-evaluate investment pri- mated to have come on stream in signed a 20-year power purchase 2013 compared to JD4.63 billion in School-UNEP Collaborating Centre orities, shift incentives, build capacity 2013, equivalent to approximately agreement with Nepco. Its PV plant 2012, according to figures by the for Climate & Sustainable Energy Fi- and improve governance structures.” $35 billion of investment. will be built close to the city of Department of Statistics. nance, the United Nations Environ- “While some may point to the fact Last year was the first ever that Ma’an. ment Programme (UNEP) and that overall investment in renewables China invested more in renewable Bloomberg New Energy Finance, re- fell in 2013, the drop masks the many energy than Europe. China’s total was newable energy accounted for nearly positive signals of a dynamic market down by six per cent at $56 billion, Renewable energy to account half of new capacity additions in spite that is fast evolving and maturing,” while Europe’s dropped 44 per cent for ten per cent of electricity of a 14 per cent drop in investment. he added. to $48 billion. The US saw a fall of generation in Jordan by 2020 Globally, renewables – excluding The report points to the end of a four- 10 per cent to $36 billion. India moved large hydro – accounted for 43.6 per and-a-half year, 78 per cent decline in 15 per cent down to $6 billion and cent of newly installed generating ca- clean energy stocks, which bottomed Brazil 54 per cent down to $3 billion, pacity in 2013. The report, ‘Global out in July 2012 and then gained 54 the lowest since 2005. Trends in Renewable Energy Invest- per cent in 2013 – an improvement The Americas, excluding the US and ment’ said that the drop in investments that took place as many companies in Brazil, increased investment in re- was due to a combination of policy the solar and wind manufacturing newables by 26 per cent to $12 billion uncertainty and the falling cost of chains moved back towards profit- in 2013. Japan’s solar boom helped solar photovoltaic (PV) systems. ability after a painful period of over- to drive an 80 per cent increase in “A long-term shift in investment over capacity and corporate restructuring. renewable energy investment to $29 the next few decades towards a clean- The year was also marked by the billion in 2013. er energy portfolio is needed to avoid increasing involvement of long-term n The Global Wind Energy Council dangerous climate change, with the investors such as pension funds, insur- (GWEC) is expecting wind installa- energy sector accounting for around ance companies, wealth managers and tions in 2014 to reach at least 47 GW. two thirds of total greenhouse gas private individuals in the equity and The growth will be led by China but emissions,” said Achim Steiner, UN debt of wind and solar projects. also by strong recovery in the USA Under-Secretary-General and Execu- Installed PV capacity jumped by and record installations in Canada tive Director of UNEP. “The fact that 26 per cent in 2013, from 31 GW to and Brazil. THE ENERGY INDUSTRY TIMES - MAY 2014 Companies News 9 OPG, Westinghouse Renzi signals shake partnership eyes global projects up for Italian Lost in reforms: Eni Westinghouse Electric and Ontario perience of Westinghouse,” said Tom CEO Paolo Scaroni Power Generation (OPG) are to join Mitchell, OPG President and CEO. forces to exploit opportunities in the OPG is recognised around the world global nuclear power sector. as the leading operator of Candu reac- The two firms say that they have tors and has been encouraged by the energy groups complementary strengths and capa- Ontario government to explore oppor- bilities and will look at undertaking tunities outside the province. It has projects such as refurbishment, main- recently collaborated with Westing- tenance and outage services, decom- house on key nuclear projects. n Conti, Scaroni ousted in boardroom shake-ups missioning and remediation. Currently, Westinghouse is perform- n “We anticipate that OPG’s expertise ing work to design filtered containment Reforms aim to attract investment in plant maintenance, upgrades and vents at OPG’s Darlington Nuclear refurbishments will be well augmented Power Station as part of the site’s re- Siân Crampsie years and Renzi’s selection of estab- woman to chair Eni, Italy’s largest lished industry insiders as well as can- company, and is co-chief executive of by the service offerings and global ex- furbishment programme. Italy’s new prime minister is changing didates from successful private enter- family group Marcegaglia steel. the leadership of some of Italy’s top prises is being seen as a break from Paolo Scaroni served three terms at state-owned companies – including tradition and a means of improving the head of the oil company and there MHI Vestas confident energy firms Enel and Eni – in a bid transparency and corporate gover- have been calls for him to stay on at the to drive through reforms and attract nance in Italy’s key industrial giants. firm as a non-executive chairman. international capital to the country’s Renzi has also initiated reforms to Starace, 58, will replace Enel’s long- of success industry. Italy’s labour market and senate. His standing CEO and is a trained nuclear Matteo Renzi has proposed Claudio policies are designed to overcome the engineer whose career has taken him to Descalzi, a veteran of the Italian oil sec- bank lending freeze that has hit Italian GE, ABB and Alstom before joining tor, to replace Paolo Scaroni as chief businesses hard and to attract overseas Enel. Having spent time working in the executive of oil firm Eni, and Fran- investors to the country. US, Saudi Arabia, Egypt and Bulgaria, cesco Starace, currently head of Enel Eni, Enel and defence firm Finmec- he is one of a new guard of executives Green Power, to replace Enel chief ex- canica – which will also see manage- who have returned to Italy from abroad. ecutive Fulvio Conti. ment changes – together make up a third Grieco is currently president of 105 The prime minister, who was elected of the value of Italy’s stock exchange. year-old computer maker Olivetti. in February 2014, also named Emma Descalzi, 59, has worked at Eni since Changes are also being made at de- Marcegaglia and Patrizia Grieco, two 1981 and was appointed chief operating fence firm Finmeccanica and postal prominent businesswomen from the officer of the exploration and produc- company Poste Italiane, as well as doz- MHI and Vestas say that they are con- company towards becoming a global private sector, as chairwomen of Eni tion division in 2008. He has been cred- ens of other state-owned firms. fident of success in the growing but leader in offshore wind power.” and Enel, respectively. ited with steering Eni through a sev- All the candidates will have to be challenging offshore wind energy sec- The two firms announced the joint Executives at Italy’s state-owned eral lucrative resource discoveries. confirmed in their roles by shareholders tor through their new joint venture. venture in late 2013 and say that they companies are selected every three Marcegaglia, 49, will be the first at annual meetings due in May. The two companies have closed the will target opportunities in the North deal creating their joint venture firm, Sea region, which has robust growth MHI Vestas Offshore Wind, which potential. will be headquartered in Denmark Vestas said in 2013 that the joint ven- with 380 employees. ture would enable it to become a glob- The joint venture will design, devel- al leader in the offshore wind turbine op, manufacture, install and commis- sector, which is currently dominated sion the Vestas V164-8.0 MW offshore by Siemens. wind turbine as well as be responsible ■ Dong Energy is to sell 50 per cent for marketing, sales and after-sales ser- of the 210 MW Westermost Rough EDF seals exit vice in the offshore wind sector. offshore wind project in the UK to “The offshore wind power industry Marubeni Corporation and the UK’s is very challenging and it takes just the Green Investment Bank. Marubeni right combination of reliable and prov- and Green Investment Bank will each en technology, experience, knowledge acquire a 25 per cent ownership share and track record to succeed,” said An- in the project for a total cash consid- ders Runevad, CEO of Vestas Wind eration of around £240 million ($385 from US Systems A/S and Vice Chairman of million). Westermost Rough is the first MHI Vestas Offshore Wind. “I am con- large-scale commercial wind farm to fident that MHI Vestas Offshore Wind deploy the new Siemens 6.0 MW di- has exactly that right combination and rect drive turbine and is expected to nuclear I look forward to closely following the be commissioned in 2015. n NRC approves Exelon deal n Cornew calls for updated regulations Alpiq acquires EDF has reached agreement with Ex- joint venture in 2007 aimed at build- Kenneth W. Cornew highlighted the elon over the future of their joint ven- ing new nuclear plants in the USA, strong performance of the US nuclear ture company, Constellation Energy which at the time was undergoing a fleet and called for regulations to be decentralised Nuclear Group (CENG), sealing the “renaissance”. EDF later purchased a updated to reflect their reliability. French firm’s plans to exit the US share in Constellation, but its plans to He said that the US power landscape nuclear sector. build new reactors in the country had changed drastically because of the The US Nuclear Regulatory Com- were halted when Constellation influx of cheap natural gas and emer- expertise mission (NRC) has approved the deal, pulled out of the consortium in 2010. gence of renewables, and that the cur- which will see Exelon take over op- US nuclear regulations prohibit for- rent patchwork of market regulations Alpiq’s acquisition of UK demand system operators as reserves for ancil- erational management of the five nu- eign companies from obtaining nucle- had not kept pace with change. response firm Flexitricity will give it lary services. clear reactors owned by CENG. ar operating licenses. “Rules that are in place today were access to specialist knowledge and In Europe, Great Britain is the most CENG has paid a special dividend Plans by energy firms in the US to designed for a fundamentally differ- markets in the decentralised energy developed market for demand re- of $400 million to EDF, financed by build new nuclear reactors have also ent energy market,” Cornew said. field, says the Swiss firm. sponse services. Flexitricity pioneered Exelon. EDF has also been granted an been scuppered by the shale gas revo- “They need to be reformed to reflect Entering the decentralised energy this market sector and continues to option to sell its holding in CENG to lution and economic downturn, which our current environment and recent management market is part of Alpiq’s lead it in terms of volume and techni- Exelon – at market value – between have together caused a drop in energy changes in how we produce and use new strategy and the company says cal capability, says Alpiq. January 2016 and June 2022. prices and demand. energy.” that it will continue to develop Flex- Demand management is becoming EDF will continue to hold 49.99 per CENG currently operates five reac- Cornew believes that policies do not itricity’s innovative solutions as well more important in electricity markets cent of CENG, while Exelon will hold tors across the states of New York and currently compensate nuclear for its as expand its client base. due to fluctuating electricity produc- the remainder. Maryland: a single PWR unit at RE unrivalled reliability, and that cheap Flexitricity specialises in demand tion from wind farms and photovol- The Board of Directors will com- Ginna, two BWRs at Nine Mile Point natural gas and subsidised wind were response services, aggregating energy taic systems. Using demand response prise equal numbers of Exelon and and two PWRs at Calvert Cliffs. driving down energy prices, threaten- savings made by large commercial and can help to improve energy security, EDF board members. At a recent Platts global power con- ing the existence of nuclear power industrial firms and offering these reduce carbon emissions and stabilise EDF and Constellation created a ference, Exelon President and CEO plants electricity volumes to transmission the electricity grid. THE ENERGY INDUSTRY TIMES - MAY 2014 10 Tenders, Bids & Contracts

Americas\ given that petroleum coke is signifi- Foster Wheeler will design and sup- the construction and installation of cantly cheaper than fuel oil. This is ply two 300 MWe steam generators the BorWin3 offshore grid connection First Energy deploys the first project in the country where and auxiliary equipment for the boiler in the North Sea. smart meters such a fuel switch is being executed. islands. The boilers will be designed The 900 MW connection will use The project includes designing, en- to burn local Vietnamese anthracite HVDC technology and link several Accenture has been selected by First gineering, equipment manufacturing coal while meeting applicable envi- offshore wind farms to the mainland. Energy to manage the roll-out of and set-up, electromechanical and ronmental requirements. The contract is the fifth awarded by around two million smart meters to civil works, as well as rehabilitation Commercial operation of unit 1 is the German-Dutch TSO to Siemens its customers across its four Pennsyl- and modernisation of controls that scheduled for October 2017 and unit for offshore grid connections in the vania-based utilities. will extend operating life by 30 addi- 2 is scheduled for April 2018. North Sea. FirstEnergy will install more than tional years. Alstom will supply the The scope of supply includes the two million smart meters over the project’s major components, provid- Europe entire high-voltage equipment of the next several years, meeting all the ing two circulating fluidised bed grid access system as well as the functional and business requirements (CFB) boilers, while Isolux will have Energos appoints Mott complete on-land station. Petrofac outlined in Act 129 passed by the the role of the lead Engineering Pro- MacDonald will be responsible for the construc- Pennsylvania legislature in 2008. curement and Construction (EPC) Energos has appointed Mott MacDon- tion and installation of the offshore Under a multi-year contract, Accen- contractor. ald to provide engineering, procure- platform. Supply and laying of the ture Smart Grid Services will advise ment and construction management cables was tendered separately by FirstEnergy on managing its ad- Asia-Pacific services for a 90 000 t/annum waste- TenneT and is therefore not part of vanced metering infrastructure (AMI) to-energy plant in the UK. the consortium’s scope of supply. programme by providing services in KHNP awards stator The 7 MW plant will process non- The connection will be operational areas such as programme manage- replacement contract recyclable and non-hazardous house- in 2019. ment, business process design, hold waste using gasification technol- change impact and communications, Areva has been awarded a contract ogy. The plant will be located in International vendor management, solution archi- by Korea Hydro & Nuclear Power Milton Keynes and is being designed tecture, testing and smart metering (KHNP), a subsidiary of Korea Elec- and built by AmeyCespa on behalf of network operations. tric Power Corporation (Kepco) for the town’s council. DEWA tenders solar park The new AMI platform will deliver the supply and replacement of six The Dubai Electricity and Water Au- significant operational efficiencies, stators at units 3 and 4 of the Kori EWT orders towers thority (Dewa) has opened the tender support new and existing customer nuclear power plant. Dutch wind turbine manufacturer for phase II of the Mohammad Bin services programmes, and enable These components ensure the reli- EWT has awarded Mabey Bridge a Rashid Al Maktoum solar park. FirstEnergy to gain actionable busi- ability of the reactor coolant pump, a contract for the supply of 30 onshore The DH1 billion project will see the ness insights through better visibility fundamental element for the safe and wind turbine towers. construction of a 100 MW installa- into real-time data. efficient operation of the reactor’s The deal, which will also see Mabey tion by a public-private partnership primary circuit. Bridge supply 41 wind turbine foun- with Solar First. It will be operational Emerson updates Union Areva will design and manufacture dations, will be for EWT’s DW52 by 2017 and there are plans for fur- the six stators in the facility located at and DW54 500 kW wind turbines for ther expansion projects to increase Power Jeumont, northen France. The deliv- the community energy generation the capacity to 1000 MW by 2030. Union Power Partners, a subsidiary of ery and replacement operations are market. The wind turbines are 35, 40, Entegra Power Group, has awarded expected to begin in June 2015 and 50 and 75 m tall and as well as being Westinghouse extends Emerson Process Management a con- finish in 2018. installed in the UK will also be ex- tract to replace turbine controls at one This contract is part of the “Forward ported to mainland Europe. Ukraine contract of the largest combined cycle power Alliance” programme, which offers Westinghouse Electric Company and plants in the USA. products and solutions developed by the National Nuclear Energy Generat- Union Power Station has a generat- Areva to support utilities in the opti- Tauron signs project deal ing Company of Ukraine (NNEGC ing capacity of 2200 MW and com- misation of the long term safety of Poland’s Tauron has signed a contract Energoatom) have agreed to extend a prises four individual 2x1 combined their plants. with a consortium of engineering firm contract for fuel deliveries to Ukrai- cycle power blocks. Replacing the Rafako and construction firm Mostos- nian nuclear plants through 2020. plant’s controls – which are becom- Siemens wins third tal Warszawa for the construction of a The contract continues the long- ing obsolete and will soon no longer 910 MW power unit at the Jaworzno term partnership between the two be supported by the manufacturer – Bangladesh order power plant. firms and is instrumental in helping will help to enhance reliability and Siemens Energy received its third Tauron operates nine coal-fired to provide Ukraine with competitive operational efficiency. order within a year from Bangladesh units at the Jaworzno power plant and secure nuclear fuel supplies. Emerson will replace legacy con- for the delivery of power plant com- with a total output of 1535 MW. The trols on the GE Frame 7FA gas tur- ponents and spare parts. new power plant will replace some of Alstom supplies Iraq bines and GE D11 steam turbine with The German firm is to supply an this capacity and will take 59 months Ovation control technology, and the SGT5-4000F gas turbine, an SST- to build. turbines GE EX2000 systems with its Ovation 3000 steam turbine, and an SGen5- A consortium of Metka SA and Metka generator excitation technology. The 2000H generator, including the sup- Alstom and Unicorn win Overseas has awarded Alstom a con- new controls will seamlessly inte- ply of operational spare parts, for the tract to provide power generation grate with existing Ovation systems Ashuganj North power plant block in TenneT contract equipment for the Al-Anbar gas fired already controlling balance-of-plant eastern Bangladesh. Alstom and Unicorn Systems have combined cycle power plant in Anbar equipment, as well as Emerson’s The order was placed by a consor- been selected to provide a flexible en- province, Iraq. Ovation Security Center, which en- tium of two Spanish construction ergy market management solution for Under the €225 million contract, sures compliance with cyber-security companies – UTE TSK and Tecnicas TenneT, one of the top five Transmis- Alstom will supply four GT26 gas requirements. Reunidas – who are building the sion System Operators and the first turbines, four heat recovery steam power plant for the Ashuganj Power cross-border operator in Europe. generators, two steam turbines and Acciona signs Mexico wind Station Company Ltd. The new plant Alstom’s and Unicorn Systems’ so- six air-cooled turbogenerators. will have an installed capacity of lution will replace a legacy infra- The 1642 MW plant, due to be deal 400 MW and is scheduled for com- structure that currently supports all commissioned in 2016, will add Acciona Energy has signed a deal to missioning in mid-2006. of TenneT’s electricity market opera- much needed electricity to the Iraqi supply wind turbines as well as engi- tions. It will facilitate energy trade grid. neering, procurement and construc- PGCIL reinforces grid while ensuring network stability and Alstom is also constructing the Al- tion services to two wind farms in security. Mansuriya (728 MW) gas fired power Mexico. ABB has won an order worth around The two companies jointly devel- plant in the Diyala Governorate, The Ventika and Ventika II wind $18 million from Power Grid Corpo- oped the solution to manage the net- northeast of Baghdad, and has recently farms will be situated in the state of ration of India Limited (PGCIL), work and meet TenneT’s needs. They signed the 740 MW Zubair contract Nuevo Leon and feature a total of India’s central power transmission say that the system is modular and with ENI Iraq B.V. eighty-four 3 MW AW 116/3000 MW utility, to construct a 400 kV gas-in- flexible enough to adapt to future turbines. Construction is planned to sulated switchgear (GIS) substation technical and regulatory changes. Siemens wins Rabigh 2 start in the second quarter of this at Kolhapur in the western state of year, and commercial operation is Maharashtra. Areva Sellafield success order likely by the second quarter of 2016. The new substation will help Siemens Energy has received an order Acciona signed the contracts with a strengthen the inter-regional grid be- Sellafield Ltd has selected a joint ven- to supply six gas turbines, three steam company established by Fisterra En- tween the western and southern re- ture of Areva, Atkins and Mace as the turbines and nine generators for the ergy, which is majority owned by gions. The use of GIS technology preferred bidder for the construction Rabigh 2 IPP combined cycle power funds managed by Blackstone, Ce- will reduce the substation’s footprint. of a waste treatment facility at Sella- plant in Saudi Arabia. mex and private investors. ABB’s project scope includes de- field in the UK. Samsung C&T is constructing the sign, engineering, supply, installation Sellafield will now enter talks with 2060 MW power plant for Al-Mour- Alstom, Isolux convert and commissioning. Key products the joint venture, AMA, to finalise the jan Project Company in western plant to be supplied include the 400 kV contract for the construction of a cus- Saudi Arabia. It will consist of three GIS, shunt reactors, control and relay tomised waste treatment plant to pro- power plant units. Alstom and Isolux have signed a con- panels. cess legacy material from Magnox For each unit, Siemens will deliver tract with Mexico’s Federal Electric- fuel presently on site. two model SGT6-5000F gas tur- ity Commission (CFE) to convert Vietnam order for FW bines, one model SST6-5000 HI-L two 158 MW units at the Altamira Marubeni Corporation has awarded TenneT awards BorWin3 steam turbine, and three SGen6- thermoelectric power station in Foster Wheeler a contract for the de- 1000A-series electrical generators. Mexico from fuel oil to pet coke. sign and supply of two pulverised connection A long-term service agreement was The conversion will substantially coal arch fired steam generators for TenneT has placed an order with also concluded for maintenance of reduce the plant’s operating costs the Thai Binh thermal power plant. Siemens and its partner Petrofac for the gas turbines.. THE ENERGY INDUSTRY TIMES - MAY 2014 Fuel Watch 11

Oil

Crude Oil Prices - 2014 2013 Settlement Prices For Benchmark Crudes ($/B) Nymex WTI ICE Brent DME Oman ICE Dubai OPEC Basket US crude oil Price/Barrel $135.00

$130.00 sector continues to $125.00 $120.00

$115.00

$110.00 gain momentum $105.00 $100.00 n Spot prices rise despite Ukraine crisis $95.00 n $90.00 US petroleum product exports increasing $85.00

$80.00 David Gregory in its latest monthly report that Brent in 1970. will average $105/b in 2014 and The administration reported that US Date 17 Mar 19 Mar 24 Mar 28 Mar 1 Apr 3 Apr 8 Apr 14 Apr 17 Apr Crude oil prices have seen a near $101/b in 2015. liquid fuels consumption averaged 2014 2014 2014 2014 2014 2014 2014 2014 2014 steady daily gain during the last month. WTI averaged about $101/b in 18.89 million b/d in 2013 and forecast In mid-April West Texas Intermediate March. The EIA expects WTI to aver- demand at 18.90 million b/d in 2014 the US Gulf Coast (USGC) had reserves of oil exceeded 33.4 billion (WTI) was priced at around $104/b age $96/b in 2014 and $90/b in 2015. and 18.99 million b/d in 2015. It said reached a record high of 207.2 million barrels for the first time since 1976,” compared to under $100/b from a The discount of WTI to Brent aver- consumption grew by 400 000 b/d (2.1 barrels as a result of continuing strong the report said. month earlier, and Brent registered in aged $13/b from November 2013 to per cent) in 2013. production growth, seasonal mainte- US petroleum product exports are the $109/b range against $106/b in January 2014, but fell to $7/b in Total world consumption of liquid nance at refineries, and the opening of also on the rise, according to the ad- mid-March. March, the EIA said. The administra- fuels averaged 90.38 million b/d in the TransCanada Marketlink Pipeline, ministration. Product exports averaged The rise in daily spot prices can be tion forecast that the discount will av- 2013, the EIA monthly report said. It which runs from the Cushing, Okla- 3.5 million b/d in 2013, 10 per cent seen against the backdrop of the con- erage $9/b in 2014 and $11/b in 2015. forecast global consumption at 91.61 homa, storage hub, to the Houston more than in 2012, the EIA reported tinuing crisis in Ukraine and the future US crude oil production averaged million b/d in 2014 and at 92.97 mil- area. Shipments through the new pipe- on April 22. It said the increase was of Europe’s energy future with Russia, 7.44 million b/d in 2013 and is forecast lion b/d in 2015. line are expected to average 525 000 broad-based, affecting multiple prod- which is anything but clear. It can also to reach 8.37 million b/d in 2014 and Non-OECD countries account for b/d during 2014, the EIA reported. ucts going to multiple regions. During be viewed within the scope of an im- 9.13 million b/d, according to EIA all of the expected consumption Another report released by the EIA December of last year, US product proving US economy and speculation data. growth in 2014 and nearly all of the in April, US Crude Oil & Natural Gas exports such as distillate, propane and that demand for fuel there will continue “Aside from seasonal issues, EIA growth in 2015, the EIA said, identi- Reserves 2012, said that US proved gasoline averaged 4.3 million, the first to rise – but so too will production. expects strong crude oil production fying China as the leading global reserves of crude oil stood at 33.4 bil- time they exceeded 4 million b/d in a According to the US Energy Infor- growth, primarily concentrated in the consumption growth market. The re- lion barrels at the end of 2012, an in- single month. mation Administration (EIA), the Bakken, Eagle Ford, and Permian re- port said China’s oil consumption crease of 15.4 per cent over 2011, or a It said the US continues to import spot price for Brent averaged near gions, continuing through 2015,” the will grow by 400 000 b/d in 2014 and net increase of 4.5 billion barrels. significant amounts of products, the $107/b in March – the ninth consecu- EIA said in its report, noting that the by 430,000 b/d in 2015. “US proved reserves of crude oil and average of 2013 was 2.1 million b/d, tive month that Brent averaged be- highest historical annual average for Back in the US, the EIA reported on lease condensate have now risen for but the EIA said that in general these tween $107/b and $112/b. It forecast US crude output was 9.6 million b/d April 17 that crude oil inventories on four consecutive years. Also, proved imports are declining. Gas Leviathan partners see Cyprus as potential export option The partners in Israel’s giant offshore Leviathan gas field bid last month to supply natural gas to Cyprus. The bid opens the possibility of a new export destination for Israeli gas and revives speculation that Israeli gas might be included in a planned LNG export facility on the island.

Mark Goetz Exploration, both subsidiaries of the and the Cypriot government have been power station in the West Bank and to possibility of building a pipeline from Delek Group, and Ratio Oil Explora- negotiating a framework agreement two companies in Jordan. Reports say the field to northern Egypt, where Transporting gas from Leviathan to tion. Noble and Delek are partners in covering the creation of a LNG export that further discussions are underway two existing LNG plants are in need Cyprus by pipeline for the purpose of Cyprus’ offshore Block 12, where gas project at Vassilikos, based on the with Amman for more gas supplies. of natural gas supply. As demand for export in the form of liqefied natural was discovered in the Aphrodite field Aphrodite discovery. But appraisal The gas would be sourced from either gas in Egypt has grown, its gas pro- gas (LNG) is an idea that has been in December 2011. drilling there has shown that the re- the Leviathan or Tamar fields. duction has increasingly been directed envisaged before. In 2011-12, Israel Struggling with the high cost of liq- source is insufficient to supply a LNG Turkish companies have expressed towards domestic power generation, appeared keen on the idea, but the uid fuels for domestic power genera- train. More drilling – and discovery – their interest in purchasing Leviathan leaving the two LNG plants without country’s domestic politics did not tion (Cyprus has the highest electricity is needed offshore Cyprus. Italy’s Eni gas and earlier this year submitted feedstock. favour a plan to export its gas through prices in the European Union), the and Noble plan more wells during the proposals to the partners for an under- The partners are also considering a foreign country. Now it appears that Natural Gas Public Company (DEFA) second half of this year and France’s water pipeline project that would run floating LNG (FLNG) as another the idea may be coming back again. of Cyprus issued the tender in late Total plans two wells beginning mid- through the East Mediterranean from option for Leviathan development. The Leviathan partners announced January, requesting the delivery of 2015. the Leviathan field, were the resource According to the current schedule, on April 16 that they had bid to sup- natural gas and the installation of a Until more gas discoveries are made is estimated at 540 bcm, to mainland Leviathan is due to come on-stream ply 0.7-0.95 billion m3 (bcm) of gas delivery system at the island’s Vassil- offshore Cyprus, the LNG project will Turkey. in 2017. annually to Cyprus through a pipeline ikos Energy Center on the southern be forced to wait – unless sufficient While the $2.7 billion project is There is also a strong possibility that running from the Leviathan field to coast. volumes of Israeli natural gas are technically sound, the political issues Australia’s Woodside Petroleum will Cyprus’ main power generation facil- The cost of building a pipeline from committed to the Vassilikos project. between Turkey and Cyprus pose a join the Leviathan group if it comes to ity at Vassilikos. Regional analysts Aphrodite to Vassilikos is considered This can be made possible via a pipe- problem. Cypriot government officials an agreement with the Israeli authori- say this could prove cheaper than de- too expensive to be feasible for the line with enough throughput capacity. have stated that Nicosia would not be ties over tax regulations governing the liveries of LNG or CNG (compressed small Cypriot market, but apparently Gas supply to Cyprus is the latest willing to allow a Leviathan-Turkey project. Earlier this year Woodside natural gas). building one from Leviathan, which is export option that the Leviathan part- pipeline to pass through Cypriot wa- and the partners reached an agreement The Leviathan partners are com- a short distance from Aphrodite, has ners have examined. Earlier this year ters until the problems are solved. whereby the Perth-based firm would prised of Noble Energy of the US, Is- merit. Noble and Delek agreed to supply gas The Leviathan partners have also acquire 25 per cent of Leviathan for rael’s Delek Drilling and Avner Oil Since last summer, Noble Energy to the Palestinian Authority for a new been in discussion with BG over the $2.7 billion. THE ENERGY INDUSTRY TIMES - MAY 2014 12 Energy Industry Data

CO2 emissions intensity in the power sector and electricity generation by region in the New Policies Scenario For more information, please contact: (a) 2011 International Energy Agency 1 000 9, rue de la Fédération India 75739 Paris Cedex 15 0.9 Gt France. /kWh) 2 800 Email: [email protected] website: www.iea.org

600

400 China 3.6 Gt United Other Other States non-OECD emissions intensity (g CO OECD EU 2 200 2.2 Gt 2.6 Gt 1.4 Gt 1.1 Gt CO

0 0 3 6 9 12 15 18 21 24 27 30 33 36 Genera�on (thousand TWh)

(b) 2035 1 000 /kWh) 2 800

600

400 India China 1.9 Gt United Other emissions intensity (g CO 2 200 4.9 Gt States non-OECD Other

CO OECD 1.9 Gt 3.6 Gt EU 1.1 Gt 0.6 Gt 0 0 3 6 9 12 15 18 21 24 27 30 33 36 Genera�on (thousand TWh)

World Energy Outlook 2013 © IEA/OECD, P 191, Fig 5.15

Renewables-based power generation and share of total generation by region in the New Policies Scenario

This section is supported by ABB

World Energy Outlook 2013 © IEA/OECD, Page 188, Fig 5.13

Source: World Energy Outlook 2013 THE ENERGY INDUSTRY TIMES - MAY 2014 Industry Perspective 13 Europe needs a balanced, more efficient energy policy The energy transition is necessary but should not be done in a way that places an unnecessary financial burden on customers or jeopardises security of supply, argues Eurelectric’s Hans ten Berge. risk of unanticipated interactions be- the same obligations. Support should Commission in January included a tween them. Renewables growth, be progressively phased out moving binding 2030 greenhouse gas reduc- which is today often driven by costly towards 2020 and beyond, respecting tion target of -40 per cent, with a re- and market distortive national sup- existing contracts. sulting renewables target of 27 per port schemes at the expense of the - Generation adequacy should be as- cent. Importantly, both proposed tar- more cost-efficient EU-wide Emis- sessed at least at regional level to gets were EU-wide rather than na- sions Trading Scheme (ETS), is a avoid major market distortions. Ca- tional, allowing them to be met case in point. The result is that tar- pacity remuneration mechanisms, through a stronger ETS rather than gets are met – Europe is broadly on where implemented, need above all through a continuation of costly na- track to meeting both its emissions meaningful regional/EU coordination tional subsidy schemes. reduction and its renewables targets and should be market-based, technol- It would therefore seem that the – but in a much more costly way ogy neutral and non-discriminatory. Commission has a) recognised the in- than necessary. - The process of market integration teractions between different targets Against this background of concern, needs a rebirth. Implementing the ex- and instruments and b) decided to re- European electricity industry associa- isting legislation and all related tech- duce complexity and ensure greater tion, Eurelectric, earlier this year re- nical rules is urgently needed. cost-effectiveness through more Eu- leased a ‘manifesto’ setting out the - Promoting competitive and flexible ropean and market-driven approach- major political issues on which the markets will allow CCGTs to act es, most notably the ETS. electricity industry would like to see more flexibly and help ensure the While heads of state and govern- progress within the next 12 months. smooth integration of renewable en- ment shied away from confirming Adopted by the Eurelectric Board ergy into the electricity system. any numbers at their European Coun- of Directors on behalf of the electric- - Enabling framework conditions cil meeting in March, the meeting ity industry in 31 European countries and adequate infrastructures need to conclusions affirmed that the EU tar- and presented to EU Energy Com- be put in place to safeguard security get for greenhouse gas emission re- missioner Günther Oettinger in Feb- of low-carbon supplies. Markets ductions would be fully in line with ruary, the manifesto draws on the les- might need some adjustments above the agreed EU objective for 2050. sons learnt from the current policy all with a focus on the longer term. Moreover, the target should “con- framework. It calls on national and It is necessary to promote cross-bor- firm the EU’s role globally” ahead of European policymakers to adopt a der trade, increasing interconnec- the international climate negotiations more coherent and European ap- tions where required. in Paris next year, and should be proach to energy and climate policies, ■ Thirdly, empower customers and agreed “no later than October 2014”. so as to reduce those policies’ costs keep bills in check: This process to agreement will in- while increasing their impact. - Customers’ bills should be kept in clude a stock-taking at the June meet- Titled ‘Manifesto for a balanced, check, through effective wholesale ing of the European Council, ahead more efficient European energy poli- competition, efficient and innovative of the UN Climate Summit in Sep- Action is needed and it is needed cy’, the document lists a series of ac- grid tariffs and appropriate taxation tember 2014. now says Hans ten Berge tions that policymakers should take rules. Bills should be transparent, As important as the timeline, the he transition to a decarbonised to deliver “power for a competitive with a breakdown of cost compo- conclusions also emphasised that the economy requires dramatic Europe”. Crucially, European and na- nents, including those derived from 2030 framework should be based on Tchanges to Europe’s electricity tional policymakers should take mea- renewables support schemes. key principles, including improved system – from a world of large-scale sures that would “re-orient energy - Customers deserve to reap the re- coherence between greenhouse gas generation to one in which power policy towards cost-efficiency and wards that come from taking an ac- emissions reduction, energy efficien- generation is becoming more decen- competitiveness”. tive part in the electricity market. cy and the use of renewables. More- tralised and greener but also more de- Suggested measures are grouped To this end, regulatory distortions over, they should deliver the objec- pendent on the availability of suffi- under three themes: delivering cost- such as regulated prices should be tives for 2030 in a cost-effective cient wind and sun. efficient, competitive energy for Eu- removed. manner, with a reformed ETS playing This change requires massive in- rope’s businesses and customers; se- - All new legislative initiatives should a central role. vestment – €1 trillion by 2020 ac- curing supply through competi- cording to the IEA. Yet the transition tiveness and innovation; and reducing is not happening smoothly. While environmental and climate impact. … having too many policy instruments in place wholesale prices have stabilised, In particular, the Manifesto calls on prices for households and for small policymakers to: greatly increases the risk of unanticipated and medium businesses are skyrock- ■ Firstly, pursue decarbonisation by interactions between them eting. The value of utility companies opting for a minimum 40 per cent is deteriorating, political and regula- GHG reduction target by 2030 and tory uncertainty is high and security reforming the ETS by increasing the be accompanied with a clear analysis Energy is a major EU economic of supply is at stake. Action is needed annual linear reduction factor in the of the cost impact for each category policy. It fuels growth in living stan- and it is needed now. region of 2.3 per cent before 2020. of electricity customers. dards and is the backbone of a The European power sector says Policymakers should: - Modernise Europe’s electricity net- healthy economy. If Europe does not yes to an intelligent transformation of - Adopt an economy-wide, binding works. They are the backbone of the get its energy policy right, ultimately the energy system, one that makes it 2030 greenhouse gas reduction target electricity system, playing a vital role the economy as a whole suffers. cleaner, smarter and more sustain- of at least 40 per cent compared to in delivering electricity to customers. Policymakers must therefore take able. But in the interest of customers 1990. The increasing share of variable re- particular care to avoid policy-in- and the European economy as a - Strengthen the EU Emissions Trad- newable energy sources requires tar- duced inefficiencies and market dis- whole, European energy supplies ing Scheme: increase the annual lin- iffs that are cost-reflective, essentially tortions that unnecessarily push up must also remain affordable, compet- ear reduction factor in the region of capacity-based and possibly peak- the costs of providing electricity and itive and secure. 2.3 per cent before 2020 and make time differentiated, to ensure the sys- raise the bills for Europe’s customers. The new energy system should be the EU-ETS auctioning more robust. tem’s continued stability, security and In doing so, they will allow custom- implemented at the lowest possible - Extend the ETS to other CO2 emit- reliability. ers to regain trust in the energy sector cost. New legislation should demon- ting sectors of the economy after In all three areas, coordinated Eu- and play their part in tomorrow’s new strate that it does not unnecessarily 2020. rope-wide effort is key. National reg- energy world. increase the financial burden for Eu- - Promote the use of electricity in ulatory initiatives without consider- How can we shape that world in ropean customers. It is thus vital that transport, heating and cooling, e.g. by ation for their impact on other EU customers’ favour? How can we en- all policy proposals are subject to a reviewing the conversion factor used Member States cannot remain the sure that the energy transition is a rigorous cost-impact analysis, includ- in the Energy Efficiency Directive, rule. Only a true European approach success? Crucially, how do we ensure ing how any impact flows through to which today penalises the use of low- can ensure renewed investment in the that it does not cost more than neces- the customer bill. carbon electricity compared to other future – to the benefit of European sary? Eurelectric’s Annual Conven- This is particularly important as the energy sources. businesses and households alike. tion & Conference in London on 2-3 EU prepares its energy and climate ■ Secondly, revisit the market envi- With this in mind, Eurelectric has June (http://www.eurelectric.org/lon- policy framework for 2030, which ronment by restricting market inter- been keenly following the debate on don2014) will address exactly this will replace the framework in place vention to limit uncontrolled costs the shape of the Europe’s future ener- topic. until 2020. If there is one lesson we and threats for security of supply: gy and climate policy. Luckily, the can draw from today’s framework, it - All generators, including low-car- proposals on the table today seem to Hans ten Berge is Secretary General is that having too many policy instru- bon generators, should sell their pro- be going in the right direction. First of Eurelectric, the association repre- ments in place greatly increases the duction to the market and carry out proposals published by the European senting Europe’s electric utilities. THE ENERGY INDUSTRY TIMES - MAY 2014 14 Energy Outlook From concept to reality ncreasing electricity demand cou- There are many smart city demon- distribution network to accommodate with solutions enabling voluntary load As the need to pled with the inexorable growth in stration projects currently under way a large contribution from decentra- shedding, these new prosumers can balance supply and Irenewables is placing new chal- around the world; Alstom alone, is lised, intermittent renewable energy achieve proactive savings during peri- lenges on power grids. Innovative solu- involved in 30 such projects. One of – in this case, PV – into the network. ods of peak demand by following the demand in real-time tions are required to ensure a stable, its more interesting projects is being The second is load shifting. Arnoult operator’s recommendations. reliable, power supply while enabling headed by France’s public electricity said: “We want to model how reactive Coffee production company Malon- increases while a cleaner, more sustainable energy mix distribution network management the average low voltage customer is go was the first industrial customer to at affordable prices. A growing number company ERDF (Electricité Réseau likely to be in signalling how he con- sign the Nice Grid agreement. Auto- optimising the use of utilities and grid operators are there- Distribution, France). sumes energy. We would like to move matic shutdown of various pieces of fore looking at smart grids as a way of Known as the Nice Grid Initiative, it the customer from a pure consumer equipment at specific times and shift- of clean energy linking resources and optimising the is the first smart solar district demon- attitude to a more prosumer attitude.” ing production to different times of performance of their networks. stration project in Europe. This €30 The third objective is testing island- day has helped the company reduce sources, smart cities Smart grids enhance transmission million project is the largest of six ing operation. “As we will have consumption by up to 60 per cent. In and distribution networks through in- demonstration projects under the Grid pockets of the network fully equipped addition to cutting the company’s en- based on smart grid formation technology. By coupling 4EU programme and aims to test in- with solar generation, fantastic IT, ergy costs, it also helps the network power infrastructure with digital solu- novative electricity management solu- and batteries, why not push the system operator to avoid the risk of blackout. technologies are tions, they can optimise the production tions over a four-year period. Accord- to the limit to see whether it is feasible In addition, the ‘islanding’ zone – and distribution of electricity in real- ing to Alstom, it represents the future to operate a small part of the local with its own photovoltaic generation moving from concept time based on consumption. As elec- shape of a new urban model based on network for a limited period of time as capacity and storage facilities – can to reality. tricity demand continues to grow, the more renewable energy and empow- an independent network, drawing its temporarily be disconnected from the resulting savings could be significant. ered consumers. power solely from renewable sourc- main grid. This microgrid can inde- Junior Isles Speaking at a press event in Febru- ERDF’s project director, Christophe es?” said Arnoult. pendently ensure continuity of service ary, Patrick Plas, Senior Vice Presi- Arnoult, commented: “We have a new The fourth and very important aspect for up to 4 hours while maintaining the dent, Alstom Grid, noted that the chairman who has set new targets for is to study the business model. required voltage and frequency along smart grid market will grow from the company. And one of these targets Nice Grid has two main features – power lines. €30 billion today, to €50 billion in is that ERDF is the model for smart the smart meter architecture, which is The solar district offers a total installed 2020. “Growth in electricity demand grids in France and internationally.” in the process of being rolled out, and capacity of 2-3 MWp. According to by 2023 will require investments of €6 From a technical standpoint, the the battery storage technology which Alstom, this is the first time that this trillion in generation and €6 trillion in project is being driven by the amount will be tested at all levels of the net- kind of model has been tested on such grid infrastructure. Smart grids can of new intermittent, decentralised re- work. The project will test several a scale anywhere in the world. The provide savings of 20 per cent on newable generation connected to the types of lithium-ion cells at three dis- system put in place by the Nice Grid capex. The overall market will grow network. “This will become a con- tribution network levels. A 1.1 MW consortium partners draws on three key significantly – by just over 75 per cent straint,” noted Arnoult. “However, we battery supplied by Saft at the Carros factors to successfully balance supply between 2020 and 2030 – but it is the would like to turn this constraint into primary substation supports load re- and demand in the district: grid part of the market that is at the an opportunity.” duction in peak demand periods, while ■ next-day forecasts to compare solar heart of the smart grid revolution. This The Alpes-Maritimes administra- 100 kW batteries at five medium- energy production with demand; will grow by over 90 per cent.” tive department in southeast France voltage (MV) and low-voltage (LV) ■ battery storage at key network While smart grids offer a pathway to lies on the periphery of the transmis- distribution substations help control nodes to offset any intermittency in integrating renewables and intelli- sion grid. It is fed by a single 400 kV peak PV generation and manage peak the supply of solar energy and absorb gently balancing supply and demand, line, which means it has a potentially demand periods. A 250 kW battery consumption peaks; they are also paving the way for a fresh vulnerable electricity supply. How- with an output of 620 kWh is being ■ incentivising residential and indus- approach to urban development, lead- ever, it also has an abundant supply used for island mode operation. trial consumers to better manage their ing to the emergence ‘smart cities’. of renewable energy, especially solar. Around 550 residential and business consumption. The smart city model is based on the “Between Nice and the Spanish bor- customers in Carros, representing a Alstom Grid will provide a smart concept of the digital, connected city. der there are 2000 MW of renewable load of 3.5 MW, will participate in the network management system that al- The interconnection between consum- energy connected to the distribution ERDF test project. Smart meters are lows the network manager to control ers, the city and the power grid under- network,” said Arnoult. being installed at both residential and and optimise a range of local energy pins new services that allow users to The town of Carros, on the outskirts business customer sites to control load resources available to solar districts in better manage their consumption. This of Nice, was chosen as the project’s devices. A customer in Nice Grid real-time. This will enable the energy also enables grid operators to manage test hub due to several key reasons: its could therefore potentially generate manager to monitor information on a full array of energy resources more location at the end of the grid in- electricity from PV panels, store conditions affecting network opera- effectively while helping to reduce creases the risk of outages; its large power in batteries and also turn off tions – such as sun forecasts, con- CO2 emissions. number of PV connections at domestic heating or other electrical devices in sumption patterns, and technical grid Cities – although occupying just and industrial premises; and its broad order to reduce demand. constraints – to ensure smooth overall two per cent of the planet’s surface range of consumption needs, with a With 30 per cent of customers in management by efficiently activating – are responsible for 80 per cent of major business park, residential France being equipped with electric these flexible solutions when and CO2 emissions.Many therefore see neighbourhoods and co-housing. water heaters, this represents quite a where needed. By minimising con- cities as the main battleground in the The Nice Grid Initiative has four significant opportunity for demand gestion in the local network during fight against global warming. objectives. The first is to optimise the reduction or load shifting. Equipped times of peak power demand, the overall carbon footprint of the district will be significantly reduced while improving energy self-sufficiency. Alstom also supplied its new Max- Sine eStorage conversion solution to meet energy storage needs. MaxSine provides the key to connecting batter- ies to the high/medium voltage net- work while controlling the amount of energy stored. In conjunction with the smart grid solution, it charges or drains these batteries based on electricity demand across the power grid, thereby reducing the amount of energy re- quired from the operator, RTE. The project, which was officially opened in November 2011, has just completed a two-year design phase and is now being implemented. It is expected to end around 2016. “We are currently actively recruiting customers and installing some of the equipment such as the 1 MW battery,” said Arnoult. Completion of the project will pro- vide a number of answers regarding what can be achieved in the field of smart grids and smart cities. Arnoult concluded: “We will operate the Nice grid during the two coming summers and collect the results so we can do a cost analysis of the benefits and determine the business case for Nice Grid is an islanding world premiere with a 430 kWc capacity doing all of this.”

THE ENERGY INDUSTRY TIMES - MAY 2014 Technology 15 New potential for coal gasification mages of smog-filled cities with toxics were also captured in the slag built in 1965, but also to allow the use begin to be considered for a gasifica- Although developed mask-wearing pedestrians hit the during testing of the three-stage tech- of lower cost local coals that have a tion retrofit. ClearStack says this gas- many years ago, Inews last year as coal usage in nique on a 40 million Btu/h gasifier- higher sulphur content. This flexibility ifier system can be used to upgrade China increased during winter. Yet air combustor at the Lincoln Develop- in fuel source will allow the use of any size or type of boiler at a fraction gasification has seen pollution is a problem that is not only mental Center in 2003. lower cost fuels and enable the evalua- of the cost of other alternatives. being faced by China and developing One notable feature of this approach tion of other coals for other potential “The installed cost of a gasifier up- limited deployment in countries. Many Western countries to gasification is the ability to elimi- installations. The intent is to conduct grade is approximately €200/kWe also face issues in controlling the nate the majority of the equipment trials to document the thermal and pol- ($145/kWe) for a 200 MWe installa- the power sector. same pollutants as they attempt to that is typically required after a gas- lutant removal efficiencies along with tion. Additional costs will occur for comply with upcoming regulations. ifier to cool and clean the syngas. any adjustments needed for optimal some systems if coal pulverisers or TEI Times The challenge here is that controls Mark Becker, Senior Process Engi- operating conditions. over-fire air are not already in place,” for particulate matter (PM), nitrous neer at ClearStack explained: “By re- The retrofit project is expected to be said Becker. hears about a oxides (NOx), sulphur dioxide (SO2), moving most of the pollutants in the complete in 2015. Testing will start in The final development stage will be and mercury are often separate sys- gasifier and directly injecting the syn- 2016 and continue long term. to include gasifiers in the original de- new gasification tems, requiring large amounts of cap- gas into the boiler it is possible to “A smaller boiler is well suited for sign and installation of new boilers. ital, and difficulties with simultane- have a much simpler system thus fuel evaluations because it is less ex- ClearStack believes the installation technology that ously achieving optimal removal making retrofit projects less expen- pensive to conduct 4-8 hour trials on on new boilers is likely due to the efficiencies with all pollutants. sive and with minimal training for a boiler that uses 12 tons/hour instead lower overall capital cost and higher can simultaneously As worldwide coal usage is project- operations.” of 150 tons/hour,” noted Becker. overall efficiency when compared to ed to increase to record levels, there A key challenge facing the develop- The emissions expected for the No. post-combustion emissions controls. capture multiple is therefore a need to find pollution ment of gasification technology has 6 boiler after the retrofit are: “Many of the boilers that are less pollutants, thus controls that are both effective and been the complexity of many system ■ NOx emissions down to 0.095 than 200 MWe lack any sulphur economical. One breakthrough tech- designs, resulting in high capital and lb/106 Btu and less (~ 60 ppmv) emissions control, which provides an making it more nology, currently being developed by operating costs, along with long start- ■ SO2 reduction of near 100 per opportunity for a retrofit of existing US company, ClearStack Power up times. The use of air provides a cent (with a Ca/S ratio = 1 with fine boilers. Most of the newer and larger economically LLC, is a multi-pollutant reduction low cost source of oxygen both from limestone) boilers were installed with advanced Ashworth Gasifier-Combustor that the capital and operating perspective, ■ CO emissions 7-8 ppmvd (@ 3 per emission controls so retrofits may not attractive for coal fired reduces the major air pollutants asso- and provides a much higher overall cent O2) be as likely. The expected opportuni- ciated with coal combustion and en- efficiency due to the lower power de- ■ Mercury capture and other air met- ty for the largest boilers will come as plants. capsulates these pollutants into sale- mand of the auxiliary equipment. al toxics in slag/fly ash near 100 (wt) the mid-sized boilers are adequately able byproducts. ClearStack says its technology has per cent demonstrated leading to including The potential for a single system to a number of benefits. These include ■ Particulate matter capture of 80 per gasifiers in the original design of fu- remove multiple pollutants using a major reductions in traditional pollut- cent in the gasifier and over 98 per ture installations of new boilers,” simple gasifier design was identified ants (mercury, NOx, SO2, heavy met- cent removal efficiency in the elec- Becker commented. by Bob Ashworth in 1980. Ashworth als, and PM), co-firing with biomass, trostatic precipitator (ESP). According to ClearStack, the tech- was involved with the development along with reductions in landfill re- Based on guidelines from the Euro- nology could have several applica- of a two-stage gasifier-combustor at quirements of ash due to acceptable pean Commission, the technology tions. “The applications that have Florida Power Corporation (FPC) quality of ash for cement and slag for development has completed the 7th been identified have led to a focused that reduced both sulphur and nitro- asphalt use. Technology Readiness Level (TRL 7, effort to commercialise the technolo- gen oxide emissions. FPC demon- Having successfully demonstrated demonstration) and is ready for TRL gy,” said Becker. “This includes con- strated a two-stage 12 million Btu/h the technology at the Lincoln Devel- 8 (first commercial system). versations with key individuals in the gasifier-combustor in 1984 at the opment Center in Lincoln, Illinois, The next step of development will various coal using industries includ- Foster Wheeler Development Center ClearStack is now looking to conduct be for a larger boiler, likely to be in ing the electric utilities and the paper in Livingston, New Jersey. a rebuild on a 12.65 MWe coal stoker the 50-200 MWe range. Construction industry.” ClearStack Combustion Corpora- boiler owned by the Sterling Energy of these boilers is expected to start in The largest overall opportunity for tion (currently ClearStack Power Group in Crawfordsville, Indiana. 2017. This size range will not only implementing the gasifier technology, LLC) was formed to develop this Other than the gasifier and corre- document the operation of a larger however, is in the electrical utility in- technology further. A three-stage gas- sponding slag quench tank the main boiler, but also multiple gasifiers and dustry. The large quantity of coal us- For pulverised coal-fired units, ifier-combustor technology was de- equipment to be installed is a lime- another boiler type. The boiler types age and the wide range of boiler sizes other than the gasifier and veloped by ClearStack to achieve ul- stone storage and feed system, and are likely to be wall-fired, vertical- presnt a major opportunity. The utili- corresponding slag quench tra-low NOx emissions and to pulveriser. fired, or tangentially fired designs at ty industry also has additional oppor- tank the main equipment to improve sulphur capture. Both of The intent of the project is to not only sub-critical pressures. As the confi- tunities for innovative technologies be installed is a limestone these goals were achieved and as a to enable it to comply with upcoming dence grows in this range of boiler, beyond air emissions. One of these is storage and feed system bonus mercury and other air metal air emission regulations for this boiler larger and higher pressure boilers will addressing the high cost and risk of boiler ash disposal. Another application of the technol- ogy crosses various industries and fo- cuses on reducing mercury emissions from coal. The Minimata treaty was signed in January 2013 by 140 coun- tries to a set of newly established laws as part of an attempt to prevent the spread of mercury pollution. This treaty has been coordinated by the United Nations Environmental Pro- gramme (UNEP) and has said that one of the major sources of this pol- lution is the burning of coal. The In- ternational Energy Association’s (IEA) is conducting a technology re- view to recommend the best available technology to reduce mercury emis- sions from coal. “The IEA is searching for technolo- gies to recommend to the United Na- tions Environmental Programme (UNEP) for reaching the goals of the Minimata Convention and this could provide excellent worldwide expo- sure and funding,” noted Becker. With the worldwide plans to in- crease coal usage, and the potential impact on emissions, ClearStack is convinced there will be many oppor- tunities for this technology. Becker concluded: “We have docu- mented that the ClearStack technolo- gy allows major reductions in a wide range of pollutants at a much lower capital and operating cost, which pro- vides compliance with existing re- quirements and compliance with tighter restrictions that are likely to be implemented in the future.” THE ENERGY INDUSTRY TIMES - MAY 2014 Final Word 16 Don’t jump the gun

f the scientists are right, the race half of the world’s energy supply by annual global energy-related CO2 angered solar supporters. against climate change is more of 2050. He adds that it will take a further emissions will rise from 30 Gt in Leonie Green, Head of External Af- Ia sprint than a marathon. There’s 25 years before fossil fuels are fully 2010 to 41.4 Gt in 2030, according to fairs at the UK’s Solar Trade Associa- no time for lengthy solutions, drawn replaced by low carbon, renewable IRENA. The IPCC report said this tion (STA) commented: “The Com- out by long political process. energies. figure would reach 55-70 Gt by 2050 mission advocates technology-neutral Last month the Intergovernmental Maitland said: “Many governments in the absence of climate change auctioning and clearer moves towards Panel on Climate Change (IPCC) re- do have plans stretching decades mitigation policies. It also said that open competition so it makes no sense Junior Isles leased the Working Group III portion ahead for the reduction of carbon with a long term concentration goal at all that they themselves have dis- of its 5th Assessment Report ‘Climate emissions. These address both in- of 480 ppm, emissions need to fall by criminated against on-site solar power Change 2014: Mitigation of Climate creases in the contribution of renew- 50-70 by 2050 compared to the year by limiting feed-in tariffs for solar to Change’. able sources of energy and reductions 2010. 1 MW while wind can secure 6 MW. This latest IPCC report warns that in carbon emissions from the contin- A leaked draft of the report sent to “This is an illogical decision by the carbon emissions have soared in the ued use of fossil fuels. governments in December suggested Commission which shows unjustified last decade and are now growing at “However, it is the speed of imple- that in order to keep global tempera- technology bias, serves a big utility almost double the previous rate. But agenda and risks damaging one of the its analysis found rapid action can still most cost-effective and biggest mar- limit global warming to 2°C – the kets for solar across Europe. It could internationally agreed safe limit – if This is a huge leap into the unknown. Policies, leave a total policy void for 1-5 MW low-carbon energy triples or quadru- which pay developers a fixed price for their projects from 2017.” ples by 2050. With the dramatic fall in the levelised According to the IPCC WG3 report, power... deliver a major increase in renewables cost of solar power, subsidy removal CO2 emissions from fossil fuel com- measures in Europe and elsewhere are bustion and industrial processes con- mentation of these measures that is a ture increases below 2°C, emissions gaining widespread support in all tributed about 78 per cent of the total major cause for concern. The IPCC need to fall by 40-70 per cent by quarters. Yet for some, the question of greenhouse gas (GHG) emission in- is saying that it is essential for govern- 2050. timing remains – and not just because crease from 1970 to 2010, with a ments to accelerate these processes if Armed with this knowledge, one has of the urgent need to combat global similar percentage contribution for we are to combat effectively the hid- to question the European Commis- warming. the period 2000-2010. den enemy of climate change. sion’s recent decision to introduce Commenting on the Commission’s It therefore comes as no surprise that “Renewable energy currently pro- new rules on curbing renewable decision, Dr Nina Skorupska Chief the report calls for a major shift to- vides around 14 per cent of our needs. subsidies. Perhaps the Commission Executive of the UK’s Renewable wards renewable energy and an in- To move to 100 per cent by 2075 is not has jumped the gun in its own race to Energy Association said: “This is a crease in the use of natural gas to help going to be achieved without sus- have renewables compete on an even huge leap into the unknown. Policies, bridge the transition away from fossil tained political will and resources.” footing with fossil fuel generation. which pay developers a fixed price for fuels. Along with measures that cut This sentiment is echoed by UN If the timing is questionable, so too their power, have been shown to work energy waste, renewable energy – Secretary-General Ban Ki-moon, is the way in which subsidies are being and deliver a major increase in renew- such as wind, hydropower and solar who in response to the report urged curbed. The IPCC calculates that re- able electricity – up to 15 per cent last – is viewed most favourably as a all countries to “act swiftly and newables can meet world primary year. These new guidelines are based result of falling costs and large-scale boldly at every level”, to bring ambi- energy demand nearly three times on economic modelling which sug- deployment in recent years. tious announcements and actions to over. Notably, it says that of all the gests that competitive mechanisms With the current economic climate, the Climate Summit in September technologies, solar energy has the will deliver equally good results at however, there is considerable doubt this year. He added that countries largest technical potential – the “larg- lower cost to the consumer. as to whether these measures can be should “make every effort needed” to est by a large magnitude” – exceeding “We support measures to reduce deployed in time. reach a global legal climate agree- world energy demand on its own. policy costs as renewables continue Energy expert and deputy president ment by 2015. It says that global solar power capac- their journey towards price parity with of the Institution of Chemical Engi- Average concentration of CO2 in the ity grew 25 fold from 2005-2012, and fossil fuels. But putting so much faith neers (IChemE), professor Geoff atmosphere reached 398 ppm at the that levelised costs had fallen by in untested theory is a big risk, espe- Maitland recently estimated that – tak- beginning of 2014; 450 ppm is the 57 per cent since 2009. cially when the UK is in such desperate ing a realistic view of the rate at which widely accepted threshold to keep The Commission’s new guidelines, need of new capacity.” renewable energies can be developed global temperature rise to 2°C above limit feed-in-tariffs for solar to 1 MW, Joaquín Almunia, the EU’s competi- and implemented at large-scale – fossil pre-industrial levels by 2100. a decision that could be detrimental to tion commissioner, said renewable fuels will continue to provide around Based on the world’s current path, small scale PV solar. The move has energy projects had now reached a “scale and maturity” that meant they no longer needed such generous help from states. “Support mechanisms have led to significant cost increases for electricity users, both consumers and businesses. They have sheltered renewable producers from risk,” he said. This may or may not be true but what of the bigger risk? The IPCC report found that current emission cutting pledges by the world’s nations make it more likely than not that the 2°C limit will be broken. Although understand- able, Europe’s decision is unlikely to help the situation. Some also believe that the transition proposed by the IPCC can be achieved without breaking the bank. Professor Jim Skea, an energy expert at Imperial College London and co- chair of the IPCC report team was reported as saying: “It is actually af- fordable to do it and people are not going to have to sacrifice their aspira- tions about improved standards of living.” While the affordability argument will continue to rage, one thing is clear: if global emissions have to peak by the end of this decade, now is the time for action. Reducing renewables subsidies is necessary but perhaps there needs to be more discussion between govern- ments and organisations like the IPCC on the global impact, timing and method of phasing out those subsidies. After all, essentially everyone is in the same race and jumping the gun may get you nowhere fast.