March 6, 2018
Beyond electricity: how the Scots tackle climate change
March 6, 2018
The Scottish government on 28 February released a new climate change plan, the third since Scotland’s Climate Change Act was passed in 2009.
Climate campaigners reacted with disappointment to the plan, since it involves some scaling back from previous plans, but it has plenty of interesting elements and is certainly not unambitious.
The website Carbon Brief has an extensive report on the new plan, from which we take some of the most striking highlights.
The plan “sets Scotland’s strategy for reducing its greenhouse gas emissions by 66% compared to 1990 levels by 2032… Scotland’s emissions were already 38% below 1990 emissions in 2015 compared with the UK’s reduction of 35%. Scotland is also on track to meet its 42% emissions reduction target by 2020.”
As the chart shows, the plan goes way beyond the electricity sector. In fact, particularly targets transport, industry and buildings.
“A major part of its plan to reduce transport emissions is Scotland’s planned phase-outof new petrol and diesel cars or vans by 2032, eight year earlier than the equivalent UK government target”, notes Carbon Brief. “The government also promises to introduce low-emissions zones in Scotland’s four biggest cities, electrify 35% of Scotland’s rail network, as well as ensure a third of the ferries owned by the Scottish government are low carbon by 2032.”
“Scotland’s industrial emissions should fall 21% by 2032 to around 8 MtCO2e, the plan says, beyond the 49% cut already seen between 1990 and 2015. This is broadly consistent with the existing EU and UK regulatory frameworks, the plan says, and will be driven by diversification of the fuel supply, increasing energy efficiency and fuel recovery, and participating in the EU Emissions Trading System (EU ETS).”
“On buildings, the plan promises a 33% reduction in emissions. Emissions in this sector largely come from energy used to heat and cool houses and businesses, and stood at 9.5MtCO2e in 2015, a fall of 14% since 1990. They account for around a fifth of Scotland’s emissions.”
The plan includes goals for 35% of homes to be heated by low-carbon technologies (including heat supplies by low-carbon electricity) and a 15% reduction in residential heat demand through energy efficiency measures. Emissions will fall 23% over the lifetime of the plan, it says. The plan also promises the government will publish a route map setting a long-term ambition for the development of “Scotland’s Energy Efficiency Programme” (SEEP) in 2018.
As regards the electricity sector, the plan contains bad news for the prospects of CCS (carbon capture and storage). The plan aims for Scotland’s electricity system to be “largely decarbonised”. It adds that “CCS is not required for reducing Scotland’s electricity emissions out to 2032, although it still emphasises its importance in the longer term for decarbonising industrial emissions.”
Emissions trading worldwide: China overtakes EU
March 6, 2018
Emissions trading has advanced both in established markets and in emerging economies, now covering 15% of global emissions, according to the latest edition of the annual Emissions Trading Worldwide Status Report from the International Carbon Action Partnership (ICAP), released on 28 February.
The ACAP’s report provides an exhaustive overview of the latest figures and trends in emission trading worldwide. It also contains articles on the various ETS markets. China first of all of course, since, as the Executive Summary notes, “One of the most exciting recent developments in emissions trading worldwide is the launch of the much-anticipated national ETS in China, which was announced in the last days of 2017. With more than three gigatons of CO2 covered in the power sector, it overtakes the EU ETS as the world’s largest carbon market.”
The report explains that “the launch comes at a significant moment in history when the overall political context in China more than ever favours green development. Continuing the tradition of learning-by-doing, China’s national ETS is set to eventually cover eight key sectors, starting with the power sector, then including the chemical, petrochemical, iron and steel, non-ferrous metal, building materials, paper making, and aviation sectors.”
With regard to the EU ETS, the ICAP optimistically observes that “the reform package [approved by the European Parliament] includes a broad set of measures that will strengthen the EU ETS and enable it to resume its place as the main driver of European decarbonization. The agreed reforms aim to strengthen the price signal, protect industry from carbon leakage, and establish solidarity mechanisms for poorer member states.”
The EU reforms are summed up as follows: they “introduce a more stringent cap decline, whereby the linear reduction factor will increase from 1.74% to 2.2% in 2021 in order to comply with the EU target of reducing emissions from ETS sectors by 43% in 2030 compared to 2005. Free allocation will become better targeted, with updated benchmark values and production factors. Importantly, the design of the Market Stability Reserve (MSR) will be strengthened, with the intake rate doubling from 12% to 24% between 2019 and 2023, allowing the market to return to scarcity near the beginning of the next trading period. Provisions have also been made to permanently cancel allowances from the MSR from 2023, which would limit the size of the reserve to the number of allowances auctioned in the previous year. This could result in approximately two billion allowances being cancelled in 2023. Together, these measures send a strong signal that European policymakers take the goal of long-term decarbonization seriously.”
One of the trends in emissions trading is that jurisdictions are increasingly looking for linkages. This graph shows the current state of play in this respect:
Wind energy struggles in 2017
March 6, 2018
You might be forgiven for thinking that new onshore wind capacity goes up, up, up every year. Not so.
According to the latest figures from the Global Wind Energy Council, which released its annual market statistics in Brussels, “the 2017 market remained above 50 GW, with Europe, India and the offshore sector having record years.”
“Chinese installations were down slightly—‘only’ 19.5 GW—but the rest of the world made up for most of that”, notes the Council. “Total installations in 2017 were 52,573 MW, bringing the global total to 539,581 MW.”
To say that the market “remained above 50 GW”, does not mean that it grew. In fact, as the above chart shows, it declined for the second year in a row.
Nevertheless, the Global Wind Energy Council puts a positive gloss on the figures. “Beyond the statistics” it says, “is the fact that wind power is in a rapid transition to becoming a fully commercialized, unsubsidized technology; successfully competing against heavily subsidized fossil and nuclear incumbents. The transition to fully commercial market-based operation has left policy gaps in some countries, and the global 2017 numbers reflect that, as will installations in 2018.”
The report also notes that “cratering prices for both onshore and offshore wind continue to surprise. Markets in such diverse locations as Morocco, India, Mexico and Canada range in the area of US$0.03/kwh, with a recent Mexican tender coming in with prices below US$0.02. Meanwhile, offshore wind had its first ‘subsidy-free’ tender in Germany this year, with tenders for more than 1 GW of new offshore capacity receiving no more than the wholesale price of electricity.”
The Council notes that “Europe was the big story this year, with record installations both on and offshore, and records set in Germany, the UK, France, Belgium, Ireland and Croatia. However, 2018 totals in Germany and UK will inevitably be down, and unless the Spanish, Italian and and/or Eastern European markets show some signs of life, it will be hard to repeat 2017’s numbers.”
The latest figures from Bloomberg New Energy Finance confirm the market decline reported by the Wind Council. According to BNEF, “the global commissioning of onshore wind turbines fell 12% in 2017, partly due to a slowdown in China, but is expected to bounce back 17% to 55GW in 2018.”
In a press release, BNEF focuses mostly on the market shares of the main turbine builders: “Developers commissioned just under 47GW of onshore wind turbines globally in 2017, with four manufacturers accounting for 53% of the machines deployed”, notes BNEF. “The four were Denmark’s Vestas, Spain’s Siemens Gamesa, China’s Goldwind and General Electric of the U.S.”
Vestas “maintained the top spot, with 7.7GW of its onshore turbines commissioned, equivalent to a global market share of 16%. Siemens Gamesa, formed in 2016 from a merger of the wind business of German engineering giant Siemens and the Spanish turbine maker Gamesa, came second in onshore turbines, with 6.8GW commissioned. It lifted its market share from the 11% that its two predecessor companies held in 2016, to 15% last year. Goldwind saw 5.4GW commissioned and GE 4.9GW, equivalent to market shares of 11% and 10%, respectively.”
The fact that the capacity of onshore wind turbines commissioned in 2017 was 12% down from 2016’s total of 53.1GW, BNEF puts down to “a slowdown in China”. BNEF predicts “a rebound to 55GW in 2018, as the Chinese market returns to growth and Latin America continues its expansion.”
New Energy Finance founder Michael Liebreich also puts a positive spin on the figures: “We’re well on our way past the first tipping point (where wind is cheaper than incumbent for new-build), and we’re on the edge of the second, where new-build wind (and soon solar) will be cheaper than operating existing incumbent generation. We’re winning the war, although not yet fast enough to play our part in meeting the climate targets in the Paris Agreement. But we’ve laid the foundations, and now with decent frameworks and a little bit of policy support (price on carbon, anyone?) we’ll get there; hopefully in time.”
French nuclear industry tries to get back on feet, Ukraine opts for small U.S. reactors
March 6, 2018
“With two Japanese companies each taking up a 5% share in the fuel cycle company resulting from Areva’s commercial distress, the restructuring of the French nuclear industry over three years is complete”, reported World Nuclear News recently.
The new company, Orano, is now owned by the French state (45.2%), the Commission of Atomic Energy and Alternative Energy (4.8%), Areva SA (40%), Mitsubishi Heavy Industries (5%) and Japan Nuclear Fuel Ltd (5%). Each 5% Japanese share involved a €250 million investment.
Orano, as WNN notes, “comprises the mining, conversion, enrichment, fuel fabrication, reprocessing and other back-end services of Areva. “
Orano intends to increase its Asian revenue from 20% to 30% of total by 2020 and achieve positive net cash flow this year. It plans to invest €1.8 billion in modernising its plants by 2025, the company has said.
The other major company formed in the French restructuring is Framatome, which is aking over most of Areva NP. Framatome is largely owned by Electricite de France (EDF). It comprises the reactor design and vendor side of Areva, with fuel design, supply and services to existing nuclear power plants. Mitsubishi Heavy Industries, with a similar industry profile, also invested about €483 million in this company to hold 19.5% of it. The hugely delayed and greatly over-budget Olkiluoto 3 project in Finland was excluded, and stays with Areva SA”, notes WNN.
Earlier, EDF, the owner of all of France’s nuclear power reactors, has said it “expects its profit to bounce back this year thanks to higher power prices and increased availability of its French nuclear units following prolonged stoppages for safety inspections in 2017.”
As WNN notes, EDF, which is majority-owned by the French government, “reported a 2.2% decrease in revenues last year to €69.6 billion, with profits down 16% to €13.7 billion.” The company “lost 960,000 customers, which took €341 million off its profit.”
Nevertheless, EDF’s CEO and chairman Jean-Bernard Lévy was not very bullish on the prospects of his nuclear power plants. “During a conference call … he said the predicted decline in nuclear generation in France next year meant the group would increase its target for cost savings to help offset the impact on revenue.”
EDF had extended unplanned outages as well as longer-than-expected maintenance outages last year at several of its 58 nuclear reactors in France, “while the country’s nuclear regulator ordered its four reactors in Tricastin to be shut down for months for safety reasons. The outages led to a 21% drop in income from French electricity generation, to €4.8 billion, as nuclear power output fell below the company’s initial target of 390-400 terawatt hours – by 1.3% to 379.1 TWh.”
This year, EDF forecasts output of at least 395 TWh, but Reuters quotes Lévy as saying that “nuclear output would be lower again in 2019, when its Fessenheim nuclear plant will be permanently closed and its new reactor in Flamanville will still be ramping up to full production. Next year will also see several large-scale maintenance outages.”
Meanwhile Ukraine seems to have definitely shelved its plan, dating from 2006, to build 11 new large nuclear reactors. As WNN reports, “Currently more than half of Ukraine’s electricity is from its 15 operating reactors at four sites. A nuclear power strategy involving building and commissioning 11 new reactors with total capacity of 16.5 GWe (and nine replacement units totaling 10.5 GWe) to more than double nuclear capacity by 2030 was approved by the government in 2006 to enhance Ukraine’s energy independence.”
But Ukraine does not have the money for this plan. Now, however, state-owned company Energoatom “has signed an agreement with US-based Holtec International to build a number of Holtec SMR-160 units “as a pilot project”, and to set up a manufacturing hub in Ukraine for these “small modular reactors” (SMRs), WNN reports.
Holtec welcomed Ukraine becoming “the first mover in Holtec’s small modular reactor program”, so that it could “become a world leader in the emerging small modular reactor industry”. The SMR-160 units (160 MW) are also envisaged as cogeneration industrial heat sources.
Holtec already has a well-established presence in Ukraine, notes WNN. “The national Central Spent Fuel Storage Facility (CSFSF) for VVER fuel is being built by Holtec International near Chernobyl under a $460 million contract, and is due to accept the first used fuel next year. Holtec is also building the $411 million Chernobyl Dry Storage (ISF-2) project, for RBMK fuel from Chernobyl, and due for completion this year. Ukraine’s Turboatom, a major source of steam turbines for nuclear and other plants, is building Holtec’s Hi-Storm 190 casks for the CSFSF, that agreement being celebrated as “the dawn of a new chapter in US-Ukraine cooperation.”