August 28, 2017
Trump’s “grid study” is a dud
August 28, 2017
Last week the US Department of Energy (DOE) came out with its long-awaited “grid study” on “electricity markets and reliability”, which the Trump administration ordered to show that renewable energy threatens grid stability and nuclear and coal power must be supported to protect the grid.
The study did conclude, as Reuters put it, that “cheap natural gas and the growth in renewable energy are speeding up the closure of coal and nuclear plants, putting the resilience of the U.S. electric grid at risk”.
“It is apparent that in today’s competitive markets certain regulations and subsidies are having a large impact on the functioning of markets, and thereby challenging our power generation mix,” Secretary of Energy Rick Perry said in a letter introducing the study. “It is important for policy makers to consider their intended and unintended effects.”
The report, conducted by DOE staff, said that continued closure of baseload plants puts areas of the country at greater risk of power outages. It offered a list of policy recommendations to reverse the trend, including providing power pricing advantages for baseload plants to continue operating, and speeding up and reducing costs for permitting for baseload power and transmission projects.
Reuters notes that the newly appointed chairman of the Federal Energy Regulatory Commission, Neil Chatterjee, earlier said that coal plants need to be “properly compensated to recognize the value they provide to the system.”
Many experts in the energy industry have reacted critically to the report. Graham Richard, chief executive officer of clean energy advocacy business group Advanced Energy Economy, which represents companies ranging from Siemens to Veolia, Schneider Electric, Microsoft, WalMart and many more, said the report “seriously overstates the challenges associated with new energy resources.”
In fact, as Joshua Hill writes on Cleantechnica, even before the report came out, a wide variety of business groups – including many grid operators – had published studies concluding that there was no evidence that the changing mix will affect system reliability.
Hill notes that, although there is plenty to criticize about the report, it “is not as politically contrived and anti-renewable as some of us had feared.”
The report recommends that the US “should accelerate and reduce costs for the licensing, re-licensing, and permitting of grid infrastructure such as nuclear, hydro, coal, advanced generation technologies, and transmission” and encourage “coal-fired power plants to improve efficiency and reliability without triggering new regulatory approvals and associated costs”, but it does not have any specific recommendations to make against renewables.
In other words: it is not likely to affect policy all that much.
In fact, Joe Romm on Think Progress, who has gone to the trouble of reading the whole report, concludes that the “bulk of the 187-page report” contradicts the “findings” as these are summarized in the beginning of the report.
“The Perry study offers some high praise for renewable energy”, writes Romm. For example, “There is a growing understanding of the abilities of [variable renewable energy] to economically contribute to grid flexibility and reliability through operational changes and advanced power electronics,” the study says. “Recent technology advancements now enable wind plants to provide nearly the full spectrum of” reliability services.
The study further notes technology advancements can also enable solar photovoltaics to provide such services. DOE and California’s independent grid operator “recently demonstrated a First Solar 300 MW PV plant that provides active and reactive power controls, plant participation in automatic generation control, primary frequency control, ramp rate control, and voltage regulation.”
The bottom line: “No matter what massaging of the findings team Trump have done, the DOE grid study makes perfectly clear that we can keep increasing renewable energy penetration while increasing grid reliability and flexibility. And that will not only keep electricity bills manageable for Americans, it will cut carbon pollution.”
Solar eclipse spurs gas generation and imports
August 28, 2017
If nuclear and coal plants will hardly be needed in the long run to stabilise the grid, do they at least have to be at hand when there is a solar eclipse and solar power drops like a brick?
Unfortunately for them, the answer is no. As the U.S. Energy Information Administration reports, in California, the State with the largest solar power share, which saw solar power drop 60-70% during the solar eclipse on 21 August, the decline was made up by natural gas fired power plants as well as increased electricity imports.
This chart shows exactly what happened:
CAISO is the California Independent System Operator, which operates most of the grid in California. Note that “thermal” generation is almost all natural gas fired.
As to the “imports”, here is where they came from:
Total back in Iran – Shell and ENI may follow
August 28, 2017
On July 3, Iran concluded a $5.9 billion deal with a consortium led by French energy giant Total to develop and produce gas from phase 11 of the South Pars gas field, the largest gas field in the world.
According to Global Risk Insights, a leading publication on political risk analysis founded at the London School of Economics, “This deal is a major victory for Hassan Rouhani’s administration, and could pave the way for other foreign investors willing to enter the Iranian market.
With this deal, notes Global Risk Insights, “Total is the first Western company to resume its activities in Iran since the lifting of the nuclear sanctions in January 2016. Under the terms of the 20-year contract, the French multinational now holds 50.1% of the consortium, alongside state-owned oil and gas company China National Petroleum Corporation with 30%, and National Iranian Oil Co subsidiary Petropars with 19.9%.”
As a first step, Total will invest an initial $1 billion in the South Pars gas field, before eventually injecting $4.9 billion in the project.
Interestingly, Total CEO Patrick Pouyanné said after signing the deal in Tehran: “We aren’t a political organization, but I hope this agreement will encourage other companies to come to Iran because economic development is also a way of building peace.” Which seems a clear political statement. And why not?
Total was also “the last Western energy company to suspend its activity in Iran, after sanctions were imposed by the international community nine years ago.”
The full re-entry of Iran into the international oil and gas market is likely to have a big impact on markets. According to the BP Statistical Review of World Energy, Iran has the world’s largest natural gas reserves and the second-largest oil reserves in the Persian Gulf.
It also seems clear that Iran needs foreign investment and technology to revive its flagging oil and gas sector. “Iran has even struggled to meet its own energy needs”, notes Global Risk Insights, “and has long been a net importer of gas, largely from Turkmenistan. If it wants to increase its FDI inflows, Iran must attract foreign companies ready to invest and develop the energy industry. In this regard, the gas deal with Total is an important first step.”
Most importantly, “the announcement of a wide-ranging deal with one of the most important company of the energy sector will send positive signals to multinationals contemplating a return to Iran. For example, the deal could accelerate the implementation of a major project between the National Iranian Oil Co. and Royal Dutch Shell, regarding the development of three of Iran’s largest oil and gas fields. Italian oil major Eni has also signed a provisional agreement with the National Iranian Oil Company to develop the Kish gas field and the third phase of the Darkhovin oil field in southern Iran.”
Thus, thanks to the still-difficult political relations between the U.S. and Iran, European oil companies are likely to profit most from the ending of the sanctions, in addition to Chinese and other foreign players.
China puts brake on 150 GW of coal power
August 28, 2017
China’s state-run news agency Xinhua News Agency reported recently that China has halted construction on a total of 150 gigawatts (GW) of new coal-fired power generation capacity between 2016 and 2020 — the country’s 13th Five-Year Plan period.
Xinhua reported on a statement released by the country’s National Development and Reform Commission (NDRC), which stated that “New capacity will be strictly controlled” and that “All illegal coal-burning power projects will be halted”.
Further, not only is the Chinese government halting future development, the NDRC added that it will be eliminating 20 GW worth of outdated capacity, while nearly 1,000 GW of coal capacity will be upgraded to producer fewer emissions, use less energy, and better coordinate with future energy development, reports website Cleantechnica.
Overall, the Chinese government is aiming to keep the country’s total coal power capacity below 1,100 GW by 2020.
According to the Xinhua News Agency, the NDRC’s move “followed an ongoing campaign to downsize bloated heavy industries, especially coal mining and steel smelting” in which “solid progress has been made to shut down inefficient coal mines, and more measures are in the pipeline.”
Cleantechnica comments: “China’s coal capacity has long been under close scrutiny given the country’s significant greenhouse gas emissions. However, in recent years, China has also been the country making the biggest moves to curtail its reliance upon coal — though this is something of a false narrative, considering that China simply had the largest amount of coal, and any curtailment would be considered huge.”
“China reported towards the end of 2014 that its coal use had dropped by 1.28% — the first time coal use had declined in China this century. Not long after, China’s coal consumption and CO2 emissions were reported to both have dropped in 2014. This was the beginning of a trend which we have seen play out over the last few years. Figures over the first few months of 2015 showed that coal use only continued to fall, inevitably leading to a coal consumption decline in 2016 of 3.7%.”
This most recent announcement isn’t a new step for China, either, “having in the past 12 months made significant steps to halt construction on its future coal plans. Towards the end of 2016 and over the first few months of this year, China announced the cancellation of 30 large coal-fired power plants amounting to 17 gigawatts (GW), followed soon after by the cancellation of 104 more under-construction and planned coal projects amounting to 120 GW. Unsurprisingly, therefore, China’s coal use declined further in 2016, down by 4.7% over 2015 levels, while coal’s contribution to overall energy consumption declined by 2% to 62%.”
For an in-depth perspective on China’s electricity policies, see this article by John Mathews and Hao Tan, published in May on Energy Post.