July 10 2017 express

July 10, 2017

Forget Tesla! Last week the world’s first solar-powered family car was introduced to the market: the Lightyear One. It costs €119,000, charges itself with sunlight, has a 500-mile driving range and could cover 10,000 km a year under West-European sunshine and 20,000 km in Hawaii or California.

“We love electric cars”, says ‘the team’ that built the Lightyear – it started as a group of students at the Technical University Eindhoven which participated in – and won – the Bridgestone World Solar Challenge in 2013 – “but only 3% of the world’s population has access to a public charging spot within 15 km and is therefore dependent on third parties to build the infrastructure for them to be able to use an electric car.”

Lightyear’s solution: “What if cars can be charged by what is already available almost everywhere in the world? Regular, household power plugs and the sun. Even in countries like India, over 80% of the people already have access to both these.”

The Lightyear One is fitted with integrated solar panels and a battery that stores the energy harvested, but can also be charged from a plug. CEO Lex Hoefsloot told PV Magazine that he believes the car can be operated completely independently of charging points.

Although the Lightyear One was introduced in the U.S., the car was assembled in the Netherlands at the Helmond Automotive Campus. The country does not have a large domestic car manufacturing industry – which is perhaps the reason why a lot of innovation in new car technologies takes place there. Tesla has its European headquarters in Amsterdam and a major distribution centre in Tilburg close to Helmond.

The new car has five orders and expects to sell 200 more by early next year. It will be introduced in Europe in 2019.

July 10, 2017

Both Germany and the UK are reporting strong growth from renewable electricity so far in 2017.

Germany raised the proportion of its power produced by renewable energy to 35% in the first half of 2017 from 33% the previous year, according to the BEE renewable energy association, reports Reuters.

The German government has set a target of obtaining 80% of its power consumption from renewables by 2050. On some sunny windy days it already reaches levels of 85%.

Although the BEE is positive about the growth of renewables in the power sector, it is much less enthusiastic about developments in the heating and transport sectors (see their report here in German). In the heat sector renewables grew only slightly – from 13.3% to 13.6% – and in transport their share even declined – from 5.5% to 5.1%. This is the second decline in a row.

In the electricity sector, wind onshore was the largest contributor (39.75 TWh), followed by bio-energy (26 TWh), solar PV (21.7 TWh), hydropower (9 TWh) and wind offshore (8.5 TWh). Total electricity usage in Germany in the first half of 2017 was 299 TWh.

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In the UK renewable electricity generation hit a record 24.8TWh in the first quarter of this year, up 5.1% from the same period a year earlier, reports Energy Live News, based on figures from the Department for Business, Energy and Industrial Strategy (BEIS) (this is the old Department of Energy and Climate Change, which has been given a new name).

The proportion of power produced by renewables increased from 25.6% in 2016’s first quarter to 26.6% last year. Output from wind, solar and natural flow hydro was 7.1% higher, boosted by increased wind and solar capacity.

Electricity generated from onshore wind rose a fifth to 7.7TWh as installed capacity grew. However, generation from offshore wind fell by 2.7% to 5TWh, due to low wind speeds. The amount of power from solar increased by 16% to 1.7TWh as a result of more panels being installed, while generation from bioenergy increased by 1.4% to 8.6TWh.

This is compared to 11.3% produced by coal, with gas accounting for 39.9%. Nuclear generation accounted for 18.9% of total electricity generated over the period.

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In the U.S. an interesting development has been taking place: the shares of solar companies have been going up sharply since Donald Trump announced his withdrawal from the Paris climate accord.

However, according to Bloomberg, the rally, which ironically comes as oil and energy stocks at large have dipped—appears to have nothing to do with Paris. Rather, analysts say it’s fueled by the dynamics that typically drive clean-energy installations: state policies and equipment prices.

In particular, the reinstatement of solar credits in the sunny state of Nevada has boosted stock prices of manufacturers like Sunrun and Vivint.

But a threat is looming on the horizon: “a pending federal trade case could lead to tariffs on imported equipment. The complaint, filed by bankrupt solar manufacturer Suniva, argues tariffs are necessary to compete with a surge of cheap panels from Southeast Asia.”

The U.S. International Trade Commission will conclude its investigation by September 22. “Lastly, Trump will have the ultimate say whether to impose tariffs on imported panels after the trade case investigation concludes”, notes Bloomberg. “If duties are high enough, analysts warn they could slow installations by as much as two-thirds.”

July 10, 2017

“China’s energy demand has reached peak levels and is set to fall in coming years, an influential government think tank said, in a study offering an optimistic view on Chinese efforts to combat climate change”, reports Reuters.

The study by the China Academy of Social Sciences (CASS) study said China’s total energy consumption is expected to fall to the equivalent of 4 billion tonnes of standard coal in 2020, which would represent a decline of 8 percent from last year. Consumption would then inch down to 3.74 billion tonnes in 2030 and 3 billion tonnes by 2050.

According to Reuters, “the CASS study suggests Beijing is cutting coal use far faster than expected.”

It “also indicates China could reach its pledge to bring climate-warming greenhouse gas emissions to a peak by ‘around 2030’ earlier than expected, given that the energy sector is estimated to account for 70-80 percent of its CO2 emissions.”

The CASS forecast contrasts with China’s 2016-2020 energy plan that said total energy use would grow around 2.5 percent a year until 2020 and a forecast by state-owned China National Petroleum Corp for energy consumption to peak by 2035, notes Reuters.

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However, the reality on the ground may not be as rosy as the CASS report suggests. The New York Times last week published an article claiming that “new data on the world’s biggest developers of coal-fired power plants [show that] China’s energy companies will make up nearly half of the new coal generation expected to go online in the next decade.”

Chinese corporations are building or planning to build more than 700 new coal plants at home and around the world, reports the NYT, some in countries that today burn little or no coal. The newspaper bases itself on new figures compiled by Urgewald, an environmental group based in Berlin.

NYT notes that “Shanghai Electric Group, one of the country’s largest electrical equipment makers, has announced plans to build coal power plants in Egypt, Pakistan and Iran with a total capacity of 6,285 megawatts — almost 10 times the 660 megawatts of coal power it has planned in China. The China Energy Engineering Corporation, which has no public plans to develop coal power in China, is building 2,200 megawatts’ worth of coal-fired power capacity in Vietnam and Malawi.”

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Indeed, the new report from Urgewald, published on 29 June and based on data from the Global Coal Plant Tracker, paints a gloomy picture of where the world is headed. Overall, 1,600 coal plants with a total capacity of 840 GW are planned or under construction in 62 countries. The new plants would expand the world’s coal-fired power capacity by 43 percent.

“It is especially worrying that many new coal plants are planned in ‘frontier’ countries, which have little or no coal-fired capacity, and will thus lock them into a coal-dependent future for decades to come”, notes Urgewald. “Egypt does not have a single coal-fired power station, but if companies like Shanghai Electric, ACWA Power and Orascom have their way, over 17,000 MW of coal-fired capacity will be installed in the country,” said Urgewald’s director Heffa Schuecking.

Pakistan’s coal capacity is slated to rise from 190 MW to 15,278 MW. In Bangladesh, coal-fired capacity will grow from 250 MW to 15,960 MW and in Myanmar from 160 MW to 5,130 MW.

In total, coal plant developers aim to build new plants in 14 countries, which presently have zero coal-fired capacity. And in 19 further countries increases of over 100% of coal-fired capacity are in the pipeline.

The world’s largest coal plant developer, India’s National Thermal Power Corporation (NTPC), is planning to build over 38,000 MW of new coal capacity in India and Bangladesh.

Next in line are the Chinese companies SPIC (31,587 MW), China Datang (28,945 MW), Shenhua (26,014 MW), China Huadian (25,810 MW), China Huaneng (20,750 MW) and China Guodian (17,250 MW). All in all, Chinese companies account for 45% of the projects in Urgewald’s database, but around 1/7 of these projects are located outside of China.

“If the Chinese government truly wants to position itself as a global climate leader, it needs to rein in its state-owned companies that are flooding the world with new coal power plants,” said Trusha Reddy, Coordinator of the International Coal Network.

Schuecking pointed out that “Although the majority of coal plant developers are from Asia, international banks and investors from Europe, North America and Australia all play an important role in financing their dirty business.”

“Bonds and shares of top coal developers such as NTPC, KEPCO, Marubeni, Adani or China Resources are routine positions in the portfolios of large international investors and banks”, writes Urgewald. “Even institutions that have already taken steps to divest from the coal industry such as AXA, Allianz or CalSTRS still hold investments in coal plant developers.”

“What we’ve learned from our research, is that coal-based revenue or power generation thresholds fail to capture many of the coal plant developers,” explained Schuecking.

“Only 1/3 of the top coal plant developers have a coal share of revenue that is higher than 30%, the divestment threshold applied by Allianz and the Norwegian Government Pension Fund. The remaining 2/3 are companies that are either very diversified like Marubeni or come from other sectors, such as the Vietnamese oil company PetroVietnam or the Malaysian company ToyoInk. ToyoInk is an especially bizarre case. The company currently manufactures printing inks for the Malaysian packaging industry, but has decided that its future lies in the coal plant market.”

The question of course is whether all these coal plants will actually get built. Urgewald notes that there is a lot of public protest against many of the plans.

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None of this has prevented Ernst & Young from putting China in the number one spot in its annual Renewable Energy Attractiveness index, published in May:

This is not so strange as China expects to invest $363 billion in renewables by 2020.

How China will resolve this dilemma between its “green” and “black” energy expansion plans is one of the most important factors determining where the world is headed in energy and CO2 emissions. For those who want to explore it further, I recommend the articles by Professor John Mathews on Energy Post on this topic.

July 10, 2017

EDF on 3 July announced that it had concluded a “review of the costs and timetable of the HPC project” (i.e. Hinkley Point C), “undertaken after EDF’s final investment decision in September 2016”. The outcome: the estimate of the “project completion costs” is raised by £1.5 billion to £19.6 billion.

Moreover, the project might be delayed for 15 months for unit 1 (which is now estimated to be completed at the end of 2025) and 9 months for unit 2. These delays could result in “an additional potential cost of around £700 million”.

Hinkley Point C – the 3.2 gigawatt (GW) new nuclear plant to be built near Bridgwater in Somerset, in southwest England, by a joint-venture of EDF (66.5%) and China’s CGN (33.5%) – already was a controversial project, because of its high cost. The new cost estimate and yet another delay (the power station was originally scheduled to be operational in 2017) have only made the project more controversial in the UK.

What is interesting is the reasons EDF advances for the higher costs: “a better understanding of the design adapted to the requirements of the British regulator, the volume and sequencing of work on site and the gradual implementation of supplier contracts.”

As commentator Nils Pratley observed in the Guardian, “these are planning areas in which EDF would surely have made allowances for uncertainties. That all that slack, and more, has been used up is puzzling.” Pratley calls the timing of the announcement, this early in the project, when so many real hurdles still lie ahead, “a shock”.

EDF has assured the British public, though, that they will not have to pay for the cost increase. The UK government has agreed a fixed “strike price” with EDF of £92.50 per megawatt hour (MWh) of electricity that it generates, for 35 years, indexed for inflation. (This means the government will pay the difference between the wholesale price – currently around £35 per MWh, although no one knows of course how this will develop – and the “strike price”. If the project is more profitable than expected, the additional profits must be shared via reductions in the £92.50/MWh strike price. The contract also says that the strike price will be adjusted if the project is refinanced with cheaper debt.)

EDF has said its rate of return on the project will fall from 9% to 8.5% as a result of the extra costs. If the anticipated delays emerge, the rate of return would fall to 8.2%. Note that EDF has to finance the project by itself, together with its Chinese partner.

However, as Pratley points out, “no contract of this size is ever so straightforward, as the National Audit Office (NAO) pointed out in its blistering report last week. If the HPC [Hinkley Point C] project or developer runs into difficulties, the UK government could come under pressure to provide more support or take on additional risk, particularly given HPC’s potential importance to ensuring energy security,” said the NAO.”

Pratley writes that the government should follow the NAO’s advice to draw up a “contingency plan” to ensure that the lights stay on in Britain.

The announcement won’t help EDF’s reputation as builder of nuclear power plants, already hurt by the huge cost overruns and delays in the two other “advanced” EPR reactors it is building, in Finland and at Flamanville in France.

The ceo of EDF Energy, the British subsidiary of the French state-owned (85%) company, Vincent de Rivaz, last year said that the company has ‘dramatically’ changed its approach for Hinkley, but some commentators say the latest news shows that lessons do not seem to have been learned.

For a useful independent overview of facts and figures around Hinkley Point C, see the website of Carbon Brief.

The new setback at Hinkley Point C brings to mind the advice nuclear advocate Michael Shellenberger gave to the nuclear industry earlier this year. According to Shellenberger, nuclear power will only have a future if the industry creates one or two major international companies that achieve a highly standardised design and manufacturing methods, similar to the way Boeing and Airbus operate in the aviation sector. A uniquely new design such as the EPR is not necessary for safety reasons, argues Shellenberger, and only drives up cost.