Copy

Welcome to the weekly roundup from the Oxford Martin Programme on Integrating Renewable Energy.
View this email in your browser

Clean energy around the globe

The IEA has downgraded its medium-term coal market forecast for the fifth year in a row, following falls in demand in 2015 and 2016. This shift away from coal, especially in China and the US, has been a key factor in curbing global greenhouse gas emissions, which fell for the first time in 2015 (by 0.1%). The transition away from coal and other fossil based resources is receiving further support from the commercial sector, as the value of investment funds selling off fossil fuel assets jumps to $5.2 trillion, doubling in just over a year.

2016 has seen a rise in demand for renewable power from large corporations, with 215 of Fortune 500 companies having renewable energy, emissions, or efficiency goals. Growing corporate demand has resulted in utilities across the US doubling the number of renewable tariff programs offered, with large corporate customers contracting for 3.2GW of renewables - over 21% of the total amount added to the grid in the past year. 

And over a dozen of the world’s wealthiest individuals, including Bill Gates, Jeff Bezos, Richard Branson, Jack Ma, John Arnold, and Prince Alwaleed Bin Talal, are backing a $1 billion investment fund aiming to pump money into risky, long-term energy technology in the electricity generation, storage, agriculture and transportation sectors that could help reduce greenhouse gas emissions. 

Low oil prices are having a negative impact on many economies, particularly in the Middle East where counties have lost $390 billion in revenues. This could make renewable energy and energy efficiency technologies more attractive solutions to meeting the rising energy demand there.

East Africa’s largest solar plant, developed under the Global Energy Transfer feed-in tariff, is now online. The 10MW facility will provide power to 40,000 homes, schools and businesses in the Soroti District in Uganda. Access Uganda Solar Ltd - a partnership between Access Power and EREN Renewable Energy - who own and operate the plant say it has potential to expand a further 20MW is needed. 

And the declining costs of solar could make this ever more viable. For the first time solar power is becoming the cheapest form of electricity. While this has happened in isolated projects before, unsubsidised solar is now starting to outcompete coal, natural gas, and even wind projects on larger scales.

Disclosed capex for onshore wind and PV projects in 58 non-OECD countries
Source: Bloomberg New Energy Finance


These price declines are starting to drive utility scale solar growth in both developing and OECD nations. Alongside this, a new breed of entrepreneurs and their innovative business models are revolutionising how energy access issues are addressed in least developed nations. And an acceleration of funding from developed economies to support clean energy in emerging markets is also supporting the growth of renewables. 

Renewable challenges

The rise in renewables isn’t without challenges. In the UK a senior Ofgem executive warns of the potential supply crisis due to the increasing reliance on variable renewable resources. According to Andrew Wright (speaking in a personal capacity rather than on behalf of the electricity regulator), said that this could lead to customers paying extra for higher levels of reliability, seeing those who can afford it having access to power at all times, while those who can’t or chose not to going without. Avoidance of these scenarios requires additional investment (potentially up to £100 billion in the next 20 years) in generation and other balancing resources, such as storage, interconnects, and demand side measures. 

Many nations are turning to capacity markets to support investment in generation to meet peak demands. The UK’s capacity market, which cleared last Friday, saw more than 52GW of contracts awarded, with over 1.4GW going to demand side response providers including Kiwi Power, Flexitricity, SmartestEnergy, EnerNOC, E.ON and Scottish Power.  4.4GW was awarded to combined heat and power plants, 3.8GW to open cycle gas turbines, 3.2GW to storage projects, 2.3GW to interconnectors and 0.7GW to hydro. But the biggest winners were combined cycle gas turbines (22.6MW), nuclear (7.9GW), and coal (6.1GW), with over 46GW of the 52GW awarded going to existing generators.

An alternative proposal in Arizona could enhance the state’s renewables mandate by adding a further stipulation requiring wind and solar to deliver power at peak times, supporting grid capacity needs with clean energy. This could be met by designing facilities to deliver power at certain times, or pairing renewable generation with storage. 

Storage

Storage can help support the integration of renewable energy, and for remote off-grid communities, can help them reduce reliance on diesel generators to support electricity needs at night (and any other times solar or wind outputs are low), as well as providing control of ramp rates, power smoothing, power shaping, peak shaving and frequency regulation. In a typical remote site, the integration of PV using standard power electronics can generally deliver 20-30% of the power that would be generated by diesel units during daytime hours. In the best case this might rise to 50%, but the integration of storage can maximise contributions to deliver fuel savings of 50-75%.

Battery technology is likely to be an essential part of a renewable future, and vanadium flow batteries, now emerging on the commercial market, offer an alternative to lithium ion, which has been dominating the industry recently. According to Forbes, vanadium flow batteries outcompete lithium ion and other solid technologies for utility scale applications, being safer, more scalable, longer-lasting and cheaper. Currently, the largest installed model in the US is a UET 2MW/8MWh system in Washington State, though a system planned for Dalian China will soon be the largest battery in the world at 200MW/800MWh. 

Another emerging technology in the storage space is a silicon based thermal energy system, which is finally ready for commercialisation at industry and generation scales of 10MWh and 200MWh respectively. The technology works by heating and melting containers full of silicon, with excess heat used for space and other industrial heating processes. 

These technologies join the myriad of other technologies on the market or in development, each of which have different technical specifications, such as cycle capacities, required capital investment per kilowatt-hour, and depth of discharge capabilities, making them appropriate for different applications.  According to Robert Schultz, during a panel on bringing energy storage to the market at the recent POWER-GEN International event, storage needs to have its own regulatory category that recognises the multiple roles it serves;  “Traditional regulation is trying to drive a round peg into a square hole,” resulting in installations not being properly compensated. This will need to change to help storage realise its potential in supporting a clean energy transition.

Consumer centric grids

In recent years the UK’s National Grid have turned to demand side response to help keep the lights on when demands are high and supply low. During an event, commercial and industrial customers are paid to turn down operations in order to relieve stress on the grid. While in the UK, this has been used only as an emergency measure to date, we may see more (and more varied) demand side response in years to come. Currently only 9% of manufacturers are involved in the scheme, but the lobby group EEF argues that there is a clear business case for more to participate in demand response measures and says the government should encourage more businesses to sign up.

The future could also be bright for local authority ESCO’s too. They have been increasingly effective at supporting communities to manage their energy costs, but the next few years could see them go beyond advice and education to provide generation capacity in renewable energy projects, maintenance and support of renewable facilities, provision of district heat networks, support for efficiency construction, supply of local electricity and heat, and development of a local energy hub. Such a holistic approach could support renewables and deliver wider social benefits into local communities. 

Microgrids are also being increasingly considered as solutions to provide additional local benefits, especially around increased resilience in areas with high quantities of distributed energy resources. Navigant have identified 1681 microgrid projects globally, with 126 new projects in 2016 Q4 alone, dominated by the North American and Asia Pacific markets (together accounting for 95% of new project capacity). 

In the US, the city of Boston is looking to microgrids to help counter natural disasters that might impact the region, increasing reliability and decreasing greenhouse gas emissions. And Consolidated Edison in New York are looking to install a microgrid as part of the Brooklyn-Queens Neighbourhood Program, using a combined battery, fuel cell and solar PV facility to reduce grid stress and defer grid investments in the area. The continued development of microgrids will be an interesting area to watch into 2017.

Happy holidays!

I hope you’ve enjoyed reading our weekly updates on integrating renewable energy. We’ll be taking a few weeks off over Christmas, but will be back in early 2017 with more updates from around the world. Until then, happy holidays!

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

Email Marketing Powered by Mailchimp