September 18, 2017
Germany short of climate targets – coal exit and petrol-diesel ban touted
September 18, 2017
Instead of reducing emissions by 40 percent by 2020 as planned, the homecountry of the energy transition currently heads for a cut of merely 30 percent, reports Clean Energy Wire on the basis of a new study from think tank Agora Energiewende. According to Agora, Germany risks “probably irreparable damage” to its international reputation as a climate protection frontrunner if it does not step up its climate efforts.
“Just 30 instead of 40 percent less CO2 is not just a bit off target – it’s a spectacular miss of the 2020 goal”, Agora Energiewende head Patrick Graichen said in a statement.
In 2016, emissions were 28 percent lower than 1990. “[Chancellor Angela] Merkel confirmed in July that ambitions remained unchanged, although the government’s latest emissions forecast already projected a likely reduction of just about 35 percent”, writes Clean Energy Wire. “But even this lower figure was ‘based on outdated assumptions,’ Agora Energiewende said. A more realistic “business-as-usual scenario” without any additional climate protection measures being taken put CO2 emissions reduction somewhere between 30 and 31 percent, the group argued.”
“A bigger population, higher economic growth and low fuel prices were probably causing emissions in the target year to stand about 50 million tonnes above current projections, and roughly 115 million tonnes above the actual reduction target of 750 million tonnes CO2 equivalent per year.”
Agora proposes an ad-hoc climate protection programme to be set up by the next government that has to take effect as early as the first half of 2018 in order to still produce results by 2020. “Otherwise Germany’s climate policy credibility will be gone completely,” Graichen warns. US President Donald Trump, a prominent sceptic of international climate protection efforts, “would be glad to rub this in our faces at the next G7 summit”, said Graichen.
Germany’s “vanguard reputation becomes increasingly uncertain, given the country’s climate protection achievements beyond the diplomatic stage: annual emissions reduction has gradually decreased over recent years, the Agora study explains. CO2 output fell by an average of 21 million tonnes per year between 1990 and 2000, but the figure came down to just 6 million tonnes between 2010 and 2016. To reach the 2020 goal, emissions would have to shrink by 39 million tonnes each year – “about as much as the entire transport sector emits”, the study says.
Rainer Baake, Germany’s energy state secretary in the economy ministry (BMWi), “this week singled out the transport sector as the greatest obstacle for the country to reach its climate targets. Focussing on the 2030 reduction target of 55 percent compared to 1990 levels, Baake urged the government to consider banning new cars with combustion engines by 2030. “What is the alternative?” he asked an audience in Munich.”
According to Jan Kowalzig, climate expert at Oxfam Germany, an ad-hoc climate protection programme had to be accompanied by a coal exit. “The dirtiest plants have to go off the grid quickly and Germany needs to get rid of coal within 15 to 20 years.”
Europe risks higher power prices due to nuclear outages and low gas storage levels
September 18, 2017
Europe might be facing high electricity prices again this winter, according to analysis from Bloomberg New Energy Finance. “Two factors point to that risk”, notes BNEF. “EDF’s French reactors are again under investigation, and gas storage levels are down.”
Nuclear outages in France last year “had a dramatic impact on power prices. EDF has assured the market its reactors will be back for the winter, but the market is less certain. If gas storage also doesn’t manage to refill in time, the compound effect on power prices could be greater than last year.”
2017 year-to-date gas storage levels and average gas storage levels
Source: Bloomberg Terminal, Bloomberg New Energy Finance
“Winter 2016/17 saw power prices across central-western Europe rise because of prolonged nuclear outages in France. Nuclear shutdowns, which lasted into January, got as high as 28GW (45%) on average in October. This was the result of the French nuclear energy regulator launching a widespread investigation into the safety of EDF’s reactors.”
Concerns about a possible repeat scenario have emerged after the regulator announced renewed investigations in mid-August, notes BNEF. “EDF assured the market that there is no risk of prolonged closures over the winter. Still, as Engie’s Belgian experience shows, these types of investigations don’t necessarily run to schedule. French power contracts for delivery over October-December 2017 rose by 13-17% since early August, yet remain well below last year’s highs.”
Power prices also face risk from lower-than-normal availability of seasonal gas capacity. “Firstly, the Netherlands is enforcing further production cuts at the Groningen gas field. This will reduce Dutch winter gas production. Secondly, the U.K.’s Rough storage facility is no longer – leaving a 33TWh hole in Europe’s storage potential (equivalent to 10% of U.K. winter demand).”
“Thirdly, even discounting Rough, European gas storage sites have struggled to refill after significant draw-downs last winter. This is due to poor economics at the start of the year, higher maintenance outages from Norwegian fields, and a summer heat wave that bolstered power demand.”
Gas storage levels are still expected to recover before winter approaches, but without Rough and with less production from the Groningen field the overall system will still be more susceptible to winter price spikes, according to BNEF.
“Coal gasification failure in the U.S.”
September 18, 2017
The Institute for Energy Economics and Financial Analysis (IEEFA) published a report on 7 December describing how coal-to-gasification technology for electricity-generation purposes remains commercially unviable.
The report—“Using Coal Gasification to Generate Electricity: A Multibillion-Dollar Failure”—concludes that “two long-running marquee American Integrated Gasification Combined Cycle (IGCC), projects, Duke Energy’s Edwardsport plant in Indiana and Southern Company’s Kemper plant in Mississippi, prove the case against such investments.”
“Efforts to gasify coal for power generation have been major failures, technologically and financially,” writes David Schlissel, the author of the report and IEEFA’s director of Resource Planning Analysis. “Both Kemper and Edwardsport have been economic disasters for consumers and investors alike, and a number of important and painful lessons have emerged from Kemper and Edwardsport.”
The report concludes further that coal-gasification technology is an especially poor bet today given the declining costs of solar and wind resources and the expectation that natural gas prices will remain low for the foreseeable future.
Among the report’s findings:
- Modern IGCC plants are far more expensive to build than proponents have been willing to publicly acknowledge.
- Such plants take much longer to construct than proponents typically assert.
- The sheer expense of operating an IGCC plant prevents makes them wholly uncompetitive.
- IGCC plants have proven unreliable due to problems with modern coal-gasification technology.
- The technology is not an economically feasible option for capturing and sequestering carbon dioxide emissions.
- IGCC plants cannot compete with wholesale market power prices or with falling prices for wind- and solar-generated electricity.
Schlissel noted that only two of the 25 coal-gasification electricity generating plants proposed in the U.S. since 2000 have ever come on line (Kemper and Edwardsport), and that Kemper, under pressure from utility regulators in Mississippi has abandoned its original mission of burning coal for electrification and is now a natural-gas plant.
“That leaves Edwardsport as the sole remaining plant built in the U.S. in the last decade burning gasified coal to produce power.”
“It is the only modern plant built around ‘clean coal’ gasification technology that continues to be promoted as a viable way to generate electricity but in fact is not. Edwardsport has been plagued by technological problems, and four years after opening is still not running properly. Because of its operational problems and its huge construction cost overruns, Edwardsport’s electricity is wildly expensive. Power from the plant costs more than five times what electricity sells for in wholesale energy markets in Indiana.”
“Some in the electric utility and coal industries continue to push for new coal-gasification projects, even though natural gas plants are much less expensive to build and are more reliable, and wind- and solar-generated electricity is cheaper,” Schlissel said.
Rolls-Royce and NuScale: small nuclear reactors can compete with offshore wind in UK
September 18, 2017
Hinkley Point C may cost a lot more than the latest offshore wind projects (as we discuss in Energy Watch this week), nuclear power may have a plan-B. According to Rolls-Royce, small modular reactors (SMRs) could deliver electricity to Britain for a similar cost as offshore wind, the company declared on 12 September.
According to Reuters, Rolls-Royce, “known best for making plane engines, said the small modular nuclear reactor (SMR) being developed by its consortium could deliver power at 60 pounds/MWh.”
“SMRs use existing or new nuclear technology scaled down to a fraction of the size of larger plants and would be able to produce around a tenth of the electricity created by large-scale projects. The mini plants, still under development, would be made in factories, with parts small enough to be transported on trucks and barges where they could be assembled much more quickly than their large-scale counterparts. Rolls-Royce said the bulk of the components for its plants could be built in Britain and open up a potential 400 billion pound ($528 billion) global export market.”
The British government, which is looking to boost exports as it leaves the European Union, launched a 250 million pound nuclear research and development competition in 2016, with a chunk of the money going towards the winning SMR design – but has yet to announce the winner.
Rolls-Royce has launched a bid as part of a UK consortium with Amec Foster Wheeler, Nuvia, Arup and Laing O‘Rourke, with the Nuclear Advanced Manufacturing Research Centre.
Another group to express an interest in the competition is NuScale, majority owned by U.S. Fluor Corp, which has also said its projects could generate power at the 60 pound/MWh mark. According to nuclear power journalist Dan Yurman, NuScale last week “announced new progress in developing the market for its technology in the UK.”
Tom Mundy, NuScale’s chief commercial officer and managing director for the UK and Europe, said in a statement: “Our UK SMR Action Plan sets out a clear vision for NuScale’s technology to be rolling off production lines in UK factories, generating power for UK homes in the 2020s and transforming the UK into a hub for export into a lucrative global market.”
In the US NuScale Power announced that the company has successfully submitted Part II of its Title XVII loan guarantee application to the U.S. Department of Energy (USDOE) under the Department’s Advanced Nuclear Energy Project Solicitation.
A UK-US partnership offers the best option for near-term delivery of SMRs, NuScale said in a statement, and added that its action plan builds on collaboration it has been developing with UK organizations for the past few years. It already works in strategic partnership with Ultra Electronics, collaborates with Sheffield Forgemasters via a program supported by Innovate UK, and also partners with the Nuclear Advanced Manufacturing Research Centre.