September 9, 2016
EDF comes to town
September 9, 2016
Électricité de France is known mostly for its nuclear power prowess. And currently for its nuclear power problems, with three flagship projects, Olkiluoto-3, Flamanville and Hinkley Point C, all struggling for various reasons.
Less well known is that EDF has also embarked on a plan to become a leader in renewable and smart energy. Under the name of CAP2030, it is “reinventing” itself to be (in the words of Chairman and CEO Jean-Bernard Lévy) “a responsible electricity company that champions low-carbon growth” and “support our customers with their transition to consumption modes that are more respectful of our planet”.
EDF’s strategy resembles that of Eon and RWE, with one key difference. All three focus on renewable energy generations, grid operations and customer servives. But whereas Eon and RWE have separated their centralised power generation, EDF is maintaining it. The reason is simple: Eon’s and RWE’s power plants are fossil-based (their nuclear power plants are being phased out), whereas EDF relies on low-carbon nuclear power.
There is another difference: EDF is putting very big money into a tremendous R&D effort in renewable energy. With a budget of €650 million per year, 60% of which goes to renewables, storage, efficiency and smart grids (40% to nuclear), EDF has by far the largest R&D budget of any utility in Europe, perhaps even the world.
According to the ESMT Innovation Index of the Berlin-based European School of Management and Technology (ESMT), EDF accounts for 40% of all R&D spending of European utility companies:
Fossil fuel game is almost up
September 9, 2016
The famous British author and entrepreneur (founder-director of Solarcentury) Jeremy Leggett has made a catalogue of significant energy events of just the past two months:
- Presidents Obama and Xi announce ratification of the Paris Agreement.
- Renewable US electricity generation has increased from 13.7% in 2015 to 16.9% now.
- The conservative Telegraph newspaper pronounces the death of the old energy order: “This country can achieve total self-sufficiency in power at viable cost from our sun, wind and waters within a generation”.
- Nissan announced that charging points for EVs will outnumber petrol stations in the UK in 2020.
- Uber and Volvo announced they will start the first electric driverless taxi fleet in Pittsburg.
- National Grid in the UK slashed its forecast for big new UK power plants from 33 GW to 12 GW by 2021.
- RWE bought Belectric Solar and Battery.
- Landsowne Partners, one of the largest hedge funds in the UK, set up a dedicated fund for renewables.
- The £500 million Liontrust Macro Equity Income fund said it would quit fossil fuels.
- The combined debt of the major oil companies doubled from 2014 to reach $184 billion.
- New oil discoveries hit a 70-year low.
- It looks increasingly certain that the gas industry has a major problem with methane emissions.
- Hinkley Point C has run into major problems – but even in China three nuclear projects have been cancelled as a result of public opposition.
- Last but not least, the weather is breaking new records all the time: 2015 was the warmest year ever, and 2016 looks set to beat that.
What this all means, writes Leggett, is that the fossil fuel game is almost up.
The “incumbents” of the energy sector are warned: “The great global race against time has begun” – and there is no other way that it can end except by a total energy transformation.
You can read the full article here.
So get out of oil and into lithium?
September 9, 2016
If the fossil fuel game is almost up, the new game in town, writes James Stafford of Oilprice.com, is called lithium.
He points out that as electric storage is becoming the key to the future energy system, lithium will “power pretty much everything on which our energy economy depends”.
There are of course alternatives to lithium ion batteries, but for the time being they are far ahead of any of them. Stafford notes that Elon Musk is not the only one to be building a “gigafactory” – there are over 12 large manufacturing facilities for lithium ion batteries being built across the world. Demand for lithium is set to increase by 200% over the next four years.
However, like oil, lithium is a finite resource. This does not mean there is not enough in the world to meet demand in the long term – but there is a problem keeping up with demand in the short to medium term. “We’re looking at a period of shortage”, notes Stafford. “The lithium feeding frenzy has only just begun.”
If you are the type of person who likes to pursue investment opportunities, maybe this is something to look into.
And while you’re at it, you may want to take another good look at your oil portfolio. Big Oil is going through hard times, that everybody knows. But times are so hard, writes Nick Cunningham, also of Oilprice.com, that they may have to do something that they really hate: slash dividends.
One of the great attractions of oil companies has always been their reputation as cash generators. Dividends are more or less sacred. But Cunningham notes that the income of the oil companies has been hit so hard, and they have had to increase their debts to such an extent, that they may have no choice to cut down on their payout to shareholders.
The problem is, if they do this, they will become even less attractive to investors, which could lead them into a very negative spiral.
Shell sees 30% solar in 2100
September 9, 2016
While we are headed for a low-carbon world powered to a large extent by renewable energy, there are still serious questions about the extent to which renewables could supply our energy needs (not to mention the speed at which they can be ramped up).
Solar power enthusiasts like to point out that the amount of solar energy hitting the earth is more than enough to meet global energy demands many times over. But David Hone, Chief Climate Advisor with Shell, writes that it is too simplistic to conclude from this that we could base our energy system 100% on solar power.
First of all, there is the intermittency problem of course: with whole continents in complete darkness at night, it will be very hard and costly to make up for this with increased storage or distribution.
Secondly, solar supplies only electricity, which represents just 20% of our energy needs currently. Although electrification is expected to grow strongly, e.g. in passenger transport, there are still sectors like shipping, aviation, heavy road transport and heavy industry that probably require different forms of energy.
According to Hone, the beste candidate for an additional energy delivery mechanism, in addition to solar, is hydrogen. “Hydrogen can be transported by pipeline over long distances, stored for a period and combusted directly. Hydrogen could also feature within the domestic utility system, replacing natural gas in pipelines (where suitable) and being used for heating in particular. This may be a more cost effective route than building sufficient generating capacity to heat homes with electricity on the coldest winter days.”
Hone does concede that to build a global hydrogen industry at the scale needed “to support the solar world” would require a huge effort: “In a 1000 EJ world that we might see in 2100, a role for hydrogen as an energy carrier that reached 100 EJ would imply an industry that was seven times the size of the current LNG system.”
No doubt this is something that Shell would like to get their teeth into!
Shell, by the way, published a zero-carbon scenario earlier this year, “Better Life with a Healthy Planet: Pathways to Net Zero Emissions”, which, as Hone notes, expects that solar power could become a 300 EJ technology in a 1000 EJ world, i.e. deliver 30% of total energy demand. Currently solar stands at 2.5 EJ.
You can read David Hone’s full article here.