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Spain shows political will to hit 2020 target and acknowledge coal miners too

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Spain shows political will to hit 2020 target and acknowledge coal miners too

by Arasan Aruliah

January 24, 2019

Spain’s largest independent supplier of electricity is committing to delivering an extra 3,000 GWh of renewables in a deal with Norwegian renewables giant Stakraft. When Prime Minister Pedro Sanchez took over last June, he promised to reverse the policies of his predecessor and commit to EU targets on renewables. Substantial social measures and a €250m fund have been agreed to try and make it a just transition. By getting everyone to the table, Spain can now embark on an ambitious plan that may just mean they hit their 2020 target after all.

FORTIA ENERGIA, the Spanish energy sourcing platform for large industrial consumers, and Statkraft, the Norwegian producer of renewable energy, have signed the first long-term power purchase agreement (PPA) for large industrial customers in Spain.

For a period of ten years Statkraft will supply 3,000 GWh of electricity to FORTIA. That’s enough to manage the power supply of large industrial companies in the steel, cement, metallurgy, chemical, paper and industrial gases sectors in the Iberian market (Andorra, Portugal and Spain). The energy will be sourced from Statkraft’s Spanish portfolio and primarily consists of new wind and solar projects already under construction.

At the end of 2018, mainland Spain had 98.65 GW of power generation capacity with demand estimated at 254,074 GWh this year. The additional 3,000 GWh brings hope that the country will now meet the EU’s 20% target for renewable energy generation by 2020. It currently stands at 17%.

It’s not just about the gigawatts, it’s about transition

FORTIA has annual sales of 11 TWh and is the largest independent supplier in the Iberian Electricity Market. Their press release says this is part of FORTIA’s strategy to provide industry with “competitive, diversified and balanced access to energy markets through new contractual models such as PPAs which are an opportunity for producers and consumers in the context of the energy transition.” They expect to announce more such PPAs “in the coming months.”

“We very much look forward to taking that next step in the energy transition together with our customers.” – Juan Temboury, Managing Director at FORTIA

Hallvard Granheim, Executive Vice President Markets & IT at Statkraft said the contract underlines “our commitment to powering major industrial companies across Europe with renewable energy.” Statkraft, owned by the Norwegian Government, is one of the largest managers of renewable assets on behalf of third parties in Europe, with a portfolio of circa 16,000 MW.

Prime Minister Sanchez has said that legislation on climate change was often unpopular with the general public. In particular, the recession of the last ten years made the energy transition a luxury that was hard to afford. But, going forward, he said it must not only happen, it must be “socially just”. Transition must not leave anyone behind, including coal miners that lose their jobs in the shift from fossil fuels.

The 2008 recession hit Spain’s renewables installations

The government now plans to invest €235bn from 2021-2030 as part of its energy and climate initiative. A new climate change law will be submitted to parliament by the end of this month. Last November they published a draft bill which included targets to cut its greenhouse gas emissions by at least 90% below 1990 levels by 2050, and to produce all of its electricity from renewable sources by the same date.

Stark contrast with the last government

This amounts to a reversal of the attitude of the administration in Madrid. Former Prime Minster Mariano Rajoy created a “sun tax” that imposed hefty taxes on small-scale renewable producers while ending payments for pumping their excess electricity back into the national grid. Sanchez scrapped it.

Rajoy’s administration also experienced clashes between the environment and energy ministries. For example, the Energy Ministry was working to prevent coal mine closures. Now, environmental and energy issues come under one single ministry, and 26 coal mines are being shut down.

Big blow to mining communities

Under an EU directive, all coal deposits that no longer make money and receive public funds were ordered to stop production by January 1 2019. Those mines that do not meet the deadline to cease production are supposed to hand the money back. It makes good economic and climate sense but comes at a high price for thousands of miners and their families.

To soften the blow to workers and the communities dependent on coal, Sanchez’s socialist government agreed to a deal with unions last October to smooth coal workers’ access to benefits such as early retirement and earmarked a €250m fund for aiding business ventures and re-purposing disused mines. The industry employed around 100,000 people in the 1950s but this has  dwindled to around 2,000 today.

The continued decline of coal is also showing up in the annual statistics. In December, grid operator Red Electrica de Espana presented provisional data for 2018, saying that nuclear remained the number one source of electric power for Spain in 2018, with a share of 21.4%. Wind was again second at 19.8%. Hydro increased the most, going from 7.4% in 2017 to 13.7% in 2018. Coal’s share reduced by 2.6% to 14.5% of the total.

Spain is now clearly pointing in the right direction, with a particularly impressive performance from hydro. Given the country has only 12 months to get from 17% renewables to 20% by 2020, the new deal between Fortia and Statkraft is a welcome step forward.

As I reported earlier this week, the economics and technology already stack up in most cases. But when the established method of power generation, in this case coal, gets displaced by renewables it is always an extremely difficult decision for responsible governments. Having the political will to manage the transition in a way that considers everyone is what’s required to keep voters onside. Spain’s new government seems to have found it.

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Alstom and Eversholt Rail breeze in on hydrogen trains

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Alstom and Eversholt Rail breeze in on hydrogen trains

by Arasan Aruliah

January 18, 2019

Alstom and Eversholt's Breeze hydrogen train

French rail multinational Alstom and UK rolling-stock operating company Eversholt Rail Group have unveiled the design for a new hydrogen fuel-cell locomotive for the UK. The fuel-cell trains – called ‘Breeze’ – will bring zero-emission rail transport to parts of the UK that, at the moment, still run on diesel. The first trains are scheduled to run in 2022.

The UK has rural and inter-urban routes where diesel trains must be used because the rails have not been electrified. The UK government has set out an ambition to eliminate diesel powered trains from the network by 2040. So, having ditched plans to electrify a number of sections of the network over cost concerns, hydrogen and battery technologies are thought to be critical to ensuring the 2040 target is met.

“Hydrogen train technology is an exciting innovation which has the potential to transform our railway, making journeys cleaner and greener by cutting CO2 emissions even further,” said Andrew Jones MP, UK Rail Minister.

The first trains are expected to run as early as 2022.

For trains, hydrogen beats diesel and batteries

Diesel’s carbon emissions mean they must be made redundant. Hydrogen trains are equipped with fuel cells that produce electricity through a combination of hydrogen and oxygen, a process that leaves steam and water as the only emissions. Excess energy is stored in ion lithium batteries on board the train. One big advantage over pure battery-electric trains is the rapidity with which a hydrogen fuel cell vehicle can be ‘recharged’ – a couple of minutes (roughly the same as a petrol car) in comparison to several hours for a BEV.

The new train’s green credentials depend in part on the UK boosting its capacity to produce hydrogen from low emission, renewable energy, or potentially natural gas paired with carbon capture and storage. But the politicians are saying the right things. “The railways need to decarbonise and the government has rightly set out a goal to eliminate diesel rolling stock by 2040,” said Nick Crossfield, Alstom UK & Ireland managing director.

The world’s first hydrogen trains are already running in Germany

In September 2018 the world’s first hydrogen trains – Alstom’s Coradia iLint – went into service in Germany, where they now operate a regular passenger service on a daily basis. They have a range of 1,000km and are able to run for the whole day and charge up overnight. Alstom is set to deliver 14 more hydrogen trains and a refuelling depot in Lower Saxony by 2021.

There is growing interest in Alstom’s hydrogen technology worldwide, including in France where the President of the Occitane region, Carole Delga, recently announced a proposal to introduce the technology on trains there.

Alstom’s hydrogen trains have been running in Germany since September 2018

Not wanting to be left behind, the UK is talking up its own hydrogen energy future. “The UK is on track when it comes to growing a world-leading hydrogen economy, and through our modern Industrial Strategy we are providing £23 million to power our ambition to be the ‘go-to’ place for first-class hydrogen transport,” said Claire Perry MP, UK Minister for Energy and Clean Growth.

From horses to hydrogen

The UK is home to the first railway in the world to operate a freight and passenger service with steam traction. In 1821 George Stephenson, who had built several steam engines to work in the Killingworth coal mine, heard of Edward Pease’s intention of building a 13km line from Stockton on the coast to Darlington to exploit a rich vein of coal. Pease intended to use horse traction; Stephenson told Pease that a steam engine could pull 50 times the load that horses could on iron rails. Impressed, Pease agreed to let Stephenson equip his line.

On September 27, 1825, the first engine ran from Darlington to Stockton, preceded by a man on horse carrying a flag reading Periculum privatum utilitas publica (“The private danger is the public good”). When the horseman was out of the way, Stephenson opened the throttle and pulled his train of wagons carrying 450 persons at a speed of 24 km per hour.

From horses, to coal-fired steam, to diesel and overhead-electric…and now BEVs and Hydrogen. What a history we have in our European railways.

Stockton & Darlington Railway, picture taken to celebrate its centenary in 1925

 

Off-grid solutions being pioneered in developing countries

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Off-grid solutions being pioneered in developing countries

by Arasan Aruliah

January 15, 2019

The Alliance for Rural Electrification is a group of innovative companies operating in Asia, Africa and Latin America. They are already providing the essential customer and distribution analytics that all energy providers need to deliver their product to their customers cost-effectively. Given access to data is extremely limited in developing countries, that’s already a big step forward. Yet progress there will determine the future of energy efficiency and climate change for all of us. The energy innovation company Enrupt, has summarised their activities.

The market opportunity for off-grid innovation is not as small as you think. The size of the renewable energy market (including but not limited to off-grid systems) – in terms of investment is $300bn per year, $10bn per year is the approximate size of the microgrid market, and more than $50bn per year is the current market size for digitisation in energy. What is more, building innovations for off-grid users in remote areas today will create solutions that will serve the cities and infrastructures of tomorrow.

The importance of data to microgrids

Data is already a critical ingredient to scaling off-grid solutions today, and microgrids in particular bring access to rural populations in remote, hard to connect areas. Data helps to design the systems and size them in a way that is adapted to local communities. Data helps to run the equipment more efficiently by understanding operation and maintenance patterns. Data helps in understanding returns on investment. Data driven reports put things into perspective and allow investors to place more realistic expectations on off-grid energy entrepreneurs.

Minigrid developers and off-grid energy innovators have been challenged to build high quality 21st century electricity infrastructure for the poorest and most remote communities in the world with an expectation that commercial returns should be seen in as little as 5-7 years. Without good data this expectation is unrealistic and needs to change by providing data and more transparency to the off-grid energy industry. The industry cannot depend on expensive data centers and telco operations to build cheap off-grid solutions. It is therefore important to get access to the internet and underlying tech infrastructure at low cost.

The Alliance for Rural Electrification

Energy access companies are not waiting for others to act. Here are a selection of startups that are members of ‘The Alliance for Rural Electrification’ (ARE). The Alliance is an industry association, which brings the whole value chain of off-grid renewable energy together across 3 continents – Asia, Africa and Latin America. These startups are approaching the off-grid challenge with a nurturing of the ecosystem in mind:

SparkMeter provides smart metering solutions tailored to rural and central utilities in emerging markets. The simple plug-and-play solution enables utilities operating in remote locations to access a range of features – prepaid billing, customer communications, and remote monitoring and control – that improve their operations and help them achieve financial sustainability. In addition to recently closing a round a funding, SparkMeter was recently awarded grants by the Elemental Excelerator to support their expanded presence in Asia and by USAID to expand their work with central grid distribution utilities.

Infinite Fingers (what a great name!) works at the level of equipment. It monitors and controls off-grid power systems. They enable off-grid power systems to be low maintenance, reliable and scalable by applying monitoring and control technologies. Their customers can build and operate efficient off-grid systems with low maintenance and high returns.

FlexGrid proposes an innovative approach that combines the simplicity of a solar home system with the power of a mini-grid (supporting productive use). In comparison with the conventional mini-grids, a FlexGrid requires a substantially lower up-front investment to serve the same use-cases. A breakthrough in the fight against energy poverty is made possible through the use of Artificial (Swarm) Intelligence.

RVESol is the owner and operator of Kudura. KUDURA means “the power to change” in Swahili. Kudura is a green micro- or mini-grid-based solution (GMG – Green Mini-Grid) for sustainable rural development. It offers rural communities high-quality, sustainable and renewable energy and drinking water on an affordable pay-as-you-go (PAYG) basis. KUDURA is an integrated, containerised solution that is safe, reliable, weatherproof, designed and built to last over 20 years.

Odyssey is a digital platform for all players in the off-grid market – including project developers, vendors, financiers, donors, and governments. The broad-spectrum platform is built specifically to characterise, evaluate, aggregate, finance, develop, and monitor projects within the mini-grid sector in emerging markets.

Moreover, in a collaborative effort, Odyssey Energy and AMDA (Africa Minigrid Developers Association) are currently partnering to develop a standardised, streamlined data collection and analysis effort for the mini-grid sector which will be trialled initially with African minigrid developers. Then, through ARE’s members and others, it can be brought to the rest of the world’s minigrid developers and operators.

The goal of the partnership is to create an easy-to-use, secure platform for reporting and analysing key metrics related to mini-grid development and operations, as well as to provide a sectoral statistical benchmark and dataset for use in research, policy and financial instrument development for the sector.

The data gap

Data is critical for any sector of today’s economy, and the energy sector is no exception. But access to data is extremely limited in developing countries. Less than 20% of adults in India and Tanzania own a smartphone, in stark contrast to the 70% of people in Europe and US. These innovative companies are helping to bridge that gap.

Blockchain – makes transition more efficient for producers and fairer for consumers

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Blockchain

makes transition more efficient for producers and fairer for consumers
by Arasan Aruliah
January 15, 2019

Scientists from Heriot-Watt University in Scotland have done an in-depth study of blockchain solutions in the energy sector that can “further facilitate smart grid applications and decarbonisation”. Blockchain’s distributed monitoring of services and transactions could be a good match for a renewable energy world of multiple energy sources and customers who can sell their surplus energy back to the grid.

Blockchain is better known for being used to underpin cryptocurrencies like Bitcoin and Ethereum. In its simplest form, blockchain is a ledger that can securely store digital transactions without the need for a central point of authority and can be shared across a network of computers. Once a block is added to the chain, it is difficult to change, making the ledger secure without a central authority.

The scientists conclude that blockchain offers significant potential for developing the way electricity is traded and dispatched. They reviewed results from over 140 projects, start-ups and initiatives, covering all areas of blockchains in energy, from transactive community energy models to balancing and trading emission certificates.

The era of the centralised grid is coming to an end

For most of the grid’s existence, all energy companies needed to do was generate electricity at a central power station and pump it out to customers with as few interruptions as possible. But now the grid is under pressure to become more intelligent, because the situation is more complex.

It has to incorporate intermittent energy sources such as wind turbines, plus an increasing number of consumer-owned power generation and storage devices. It has to manage significant extra demand from electric cars. And it has to meet customer desires for real-time energy-use data. In short, the system is decentralising, and the number of transactions it will have to process quickly, cheaply and securely is increasing.

Dr Valentin Robu, associate professor at Heriot-Watt University, said: “Blockchains are often described as holding the promise of enabling a more decentralised, transactive energy system. If we can enable energy generation and use them at a local level, this could allow system operators to reduce expensive network reinforcements, as well as make local communities more energy self-sufficient and resilient to outside shocks in power supply.”

Detailed producer and customer data, available to all

In energy applications, blockchains are often deployed in combination with artificial intelligence techniques such as multi-agent systems and machine learning, which enable smart micro-contracts and local energy exchanges. This can potentially enable building systems and energy service providers to identify consumer energy patterns and develop energy products tailored to the needs of individual consumers. The paper cites a report by Deloitte which states that blockchain-enabled transactional digital platforms could offer operational cost reductions, increased efficiency, fast and automated processes, transparency and the possibility of reducing capital requirements for energy firms.

 

Governments can also benefit, and help win over the public during the energy transition. The paper states that potential gains in transparency and competition could benefit key policy targets related to energy affordability and fuel poverty.

The cost saving potential is not restricted to government and the utilities: it is “relevant to energy consumers and prosumers (someone who both consumes and produces a product) who are facing increasing energy prices and removal of renewables incentives, respectively. Solutions promised by blockchains, such as peer-to-peer trading in local or consumer-centric marketplaces could potentially lead to cost savings for energy consumers“.

Learn from Bitcoin’s growing pains

However, the paper cautions that blockchain technologies need to address several issues before achieving widespread adoption. These include legal and regulatory challenges, security and scalability of computation, as well as privacy concerns.

But as these hurdles are overcome, “Blockchain could potentially be used for automated and secure communication of such smart devices that would further facilitate smart grid applications and decarbonisation of the energy sector,” said Heriot-Watt research associate Merlinda Andoni.

The EU has set a target of replacing 80% of traditional electricity meters with smart meters by 2020 wherever it is cost effective to do so. As more and more homes install smart meters and smart devices, and system operators increasingly adopt information and communication technologies, the volume and quality data needed for blockchain to work is getting closer.

Heating and cooling: big opportunity to reduce energy demand

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EXPRESS #1 - December 7, 2018

Heating and cooling: big opportunity to reduce energy demand

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Heating and cooling (H&C) of buildings is responsible for 50% of final energy consumption in Europe. So, on 28 November 2018, policymakers and industry gathered at the Committee of the Regions for the High-Level Round Table on the Decarbonisation of the Heating Sector, a joint event organised by the European Commission and the Decarb Heat Initiative partners to discuss plans for reducing emissions.

At present, most of the heating is produced from fossil fuels, only 19% is supplied from renewable energy sources, and heating is used inefficiently in 75% of Europe’s buildings.

Dominique Ristori, Director-General for Energy at the European Commission, outlined the fact that “the heating and cooling sector represents the largest source of energy demand in Europe. Our present system is often inefficient, polluting and based on old technologies. Making it smart, modern, clean and performant is instrumental for global decarbonisation and will be beneficial for our economy and all Europeans.”

“For buildings, we have just one shot at getting things right before 2050” said Jan te Bos, Director General of Eurima. “Given their expected lifetime, buildings are only likely to be renovated once, between now and 2050”. To make these renovations count, we need to look at the whole of the building. This means an energy-efficient “envelope” (the roofs, walls, floors and windows making up buildings) with properly planned heating and cooling systems, and an effective integration of renewable-energy systems and technologies”.

“Getting out of fossil fuels is pure politics – we still have politicians asking for support for coal mines… in 2018!” Bendt Bendtsen, Danish MEP

While the rest of us insulate our walls against the cold, someone needs to insulate us against the politics. Bendt Bendtsen, Danish MEP for the EPP group and rapporteur for the European Performance of Buildings Directive, stated: “Unfortunately, most national ministries see energy efficiency as an expenditure, not an investment.” He added: “Getting out of fossil fuels is pure politics – we still have politicians asking for supporting coal mines… in 2018!”

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