Green, ethical, energy issues in the news

Martyn1981

QrizB said:

Thanks for sharing the CfD article, I've been following the Levy Dashboard at https://www.lowcarboncontracts.uk/dashboards/cfd/levy-dashboards for a few months now.

It's fascinating to see how high wholesale FF prices mean the CfD-funded renewables are currently not "expensive" and may act as a (small) stabilising factor on energy bills.

Yeah I've been following it too since you mentioned it back in Q4, many thanks. [Q4 2021 payments went negative at ~£123m.]

What I find most amazing is that there is a net refund today, despite the existing schemes having the highest (earliest) CfD's, and the later/cheaper ones aren't on line yet. So hopefully the expansion of RE generation will have a double impact, both by reducing the amount of gas, and the effect that gas price spikes have, and also the newer RE that comes on line will have lower CfD strike prices. The example that still blows my mind is the early offshore wind CfD's at ~£175/MWh, and the latest (for delievery around 2024/25) of ~£46/MWh.

[Edit - Should also point out, that when those earliest schemes reach the end of their 15yr subsidy, they will still be operational, and generating subsidy free for perhaps 5-10yrs+  for wind, and 15-20yrs+ for PV. So that will help to push prices down too. M.]

Perhaps it's also a nice reminder that whilst some RE is intermittent and variable and gets criticised and knocked for that, we are also at the mercy of variable FF prices/spikes too.

Martyn1981

Yippee, the Carbon Commentary newsletter from Chris Goodall is back:

Industry news

Things I noticed and thought were interesting

Week ending 16th January 2022
 
1, Green ammonia. Fertiliser giant Yara announced a partnership with a Swedish agricultural cooperative to sell the first low carbon products coming out of the Porsgrunn plant in southern Norway. I think this may be the first such marketing deal in the world. Next year Porsgrunn will produce about 20,000 tonnes of ammonia made from green hydrogen (a tiny fraction of the world’s 200 million tonnes total production). Yara asks for carbon taxes to make green fertilisers competitive but at current natural gas prices I suspect that the Swedish buyers will find that low carbon alternatives are already cheaper.

2, Hydrogen buses. Interesting data from Montpellier in southern France on the costs of operating hydrogen fuel cell buses compared to pure battery vehicles. The city cancelled its current order of 51 hydrogen buses because of what it said were the high operating costs. It projects €0.95 per km for hydrogen compared to €0.15 per km for pure battery buses. If an urban bus travels 200 km a day, the cost difference might be almost €60,000 a year. (The proposed price of the hydrogen buses was about €600,000 each). A separate study from Italian utility ENEL suggests that in 2021 a hydrogen bus had a total cost of ownership, including both capital and operating costs, of about 3 times the level of a pure electric version.
 
3, Power-to-hydrogen-to-power. We are told that renewables are intermittent and therefore the world will need gas power stations to provide electricity at times when the wind and sun aren’t available. The world has been slow to test this pessimistic conclusion even though there is little doubt that we can use hydrogen as an effective complement for renewables. When electricity is abundant, we will turn surpluses into hydrogen and when deficits loom we will use the H2 to make electricity. I wrote about the world’s first commercial scale ‘P2H2P’ plant in the French department of Guiana on the northern coast of South America. When completed, it won’t be large – offering 10 MW during the day and 3 MW at night – but it will be the first project in the world to offer 100% dispatchable power from renewables. In an indication of the maturity of the technology, the developers have raised some its $170m funding in non-recourse bank debt, usually only available to low risk projects. We urgently need every country in the world to build larger projects similar to this to demonstrate the feasibility of basing electricity grids entirely on wind or solar.

4, Green aviation fuels. European Energy, a large Danish renewables company pushing fast into low carbon liquid fuels, gave us the outlines of a venture with California’s Vertimass to turn e-methanol (or other alcohols) into aviation fuel and other hydrocarbons. European Energy is planning several e-methanol plants linked to solar or wind parks and nearby sources of carbon dioxide, such as biogas from aerobic digesters. Vertimass’ relatively simple and cheap technology arises from the US Oak Ridge National Laboratory, another example of successful, but highly speculative, state-backed research.
 
5, Sailing ships for transport. Can ships powered exclusively - or almost exclusively - by wind ever successfully operate across long distances? Obviously they did in the past and some entrepreneurs are convinced it is possible today. French company NEOLINE is crowdfunding for the some of the costs of developing two boats that will sail between Brittany and Baltimore, carrying 5,300 tonnes of cargo. Perhaps the most encouraging part of this fundraising is that the company claims that the first ship’s operating costs are already covered by pre-booked shipping contracts from several leading French companies, including Renault and Hennessy. TOWT, another Brittany company, already operates transport sailing routes across the sea between France and England and elsewhere. The goods carried are often luxuries commanding premium prices, and the shippers want to improve the image of the products by using zero-carbon transport. A Dutch company EcoClipper is now raising funds to buy old vessels and re-equip then for modern transport needs around the North Sea. It seeks to grow by eventually adding new vessels to its fleet. It seems impossible to imagine that many of the 40 million containers used for international trade will be replaced by sailing ships but some goods shipped between, for example, western France and the south coast of England might rationally transfer to sail. And, eventually, Greta might be able to get to the US as one of the small numbers of planned passengers on these ships. Separately, wind-assisted ships are expected to double in number this year to 40 vessels. Sails can cut fuel costs substantially. (Thanks to Thad Curtz).
 
6, Growth in renewables. Belatedly, the IEA is now one of the strongest supporters of rapid renewables growth. This week it pointed out that the rapid increase in electricity demand in 2021 was largely met by coal and gas. Emissions from world power production rose by 7%, taking them to a new high. The planned growth in renewables between 2022 and 2024 will probably meet all additional electricity demand but total emissions are unlikely to fall by a large amount, even if wind speeds revert to the historic mean. Separately, another report from an IEA body said the solar PV now reduces emissions by 860 million tonnes a year below what they would be. That’s only 2% of the total, of course, but it is still a large number. (Thanks to Raymond Betz)
 
7, E-methanol. As Maersk increases its commitment to e-methanol as a fuel, the world’s largest proposed factory took a big step forward. Liquid Wind in Sweden signed up Ørsted as a 45% shareholder. Its proposed refinery will use hydrogen and exhaust CO2 from a combined heat and power plant run by a Swedish municipality that uses biomass for almost all its fuel. This plant will probably conform to Maersk’s requirements for genuinely zero-carbon methanol when completed in 2024. The output of 50,000 tonnes a year will meet the fuel needs of one or two of Maersk’s new vessels.

8, Floating wind. Utility EdF announced it was going ahead with a plan to put a 1 GW floating offshore wind farm in deeper waters between the coastlines of south west England and Wales. The largest floating offshore park at the moment is just 50 MW. Interestingly, none of the commentary noted that the scale of the project was twenty times the size of the nearest competitor, nor that EdF and its partner appear to have increased the proposed size of the wind farm by a factor of three since autumn 2021. After years in the shadow of fixed foundation offshore turbines, floating wind now appears to be rapidly gaining acceptance as a potentially cost-competitive technology.
 
9, Germany. Faced with a failure to meet climate targets, the new government announced the outline of plans for a more rapid decarbonisation. Some of the details seem important examples that the rest of the world might choose to follow. The government proposes to devote 2% of the country’s total land area to wind power (although I don’t think it can force the 16 Länder to obey this rule), will oblige all new commercial buildings to install solar PV, targets having 50% of all building heating carbon neutral 2030 partly by pushing heat pumps and biomass stoves, projects a 25%+ increase in electricity use by 2030 and looks to cover 80% of all power demand with renewables by that date, roughly double today’s level. It also said it would remove the weighty taxes imposed on electricity sales in order to reduce the disincentive to switch to electric power. (Germany probably has the highest consumer electricity prices in Europe).
 
10, Green steel. Top ten steelmaker Korea’s POSCO sharply upped its hydrogen ambitions. In late 2020 it said that it would open its first direct reduction plant by 2050. This year it moved the target two decades forward to 2028 for a 1 million tonne furnace. (POSCO makes about 35 million tonnes of steel a year). It increased its plans for hydrogen manufacture, aiming now for 7 million tonnes a year by mid-century, not the 5 million tonnes of 2020. It estimates that its hydrogen division will be valued as much as its steel business by that date. Having been focused on manufacturing steel in Korea, it is now planning to add large furnaces in places such as India with access to cheap hydrogen. In an important sign of how iron making may shift to low cost renewable locations POSCO has already announced a venture with Australian ore producer Roy Hill to explore direct reduction to iron briquettes in the Pilbara region.  

Swan_Valley

Leading UK fracking firm taken over by green energy group

Third Energy now has ‘absolutely no interest in fossil gas’ and is targeting renewable energy.

Martyn1981

These three articles from Renews are all about the same story, the recent ScotWind offshore wind lease auction, but it's such important news, and smallish articles that I couldn't choose between them. 17 projects have been awarded option agreements which total 25GW. For scale, that's 2.5x the whole current UK fleet.

UPDATE: Scots auction ‘will create offshore powerhouse'

“To put this landmark into context, the 25GW of new capacity announced today is two and a half times the UK’s entire current offshore wind capacity.

“It’s also equal to the entire current operational offshore wind capacity for the whole of Europe. It will scale up our ability to slash emissions exponentially.

“In the long term, it will also help to reduce the UK’s vulnerability to international gas prices which are hurting consumers.

SPR, Shell, BP and SSE win big in 25GW ScotWind bonanza

Crown Estate Scotland has awarded option agreements to 17 projects totalling almost 25GW in its ScotWind offshore wind lease auction.

The winning projects were selected out of a total of 74 applications, and have now been offered option agreements which reserve the rights to specific areas of seabed.

A total of just under £700m will be paid by the successful applicants in option fees and passed to the Scottish government for public spending. 

“The variety and scale of the projects that will progress onto the next stages shows both the remarkable progress of the offshore wind sector, and a clear sign that Scotland is set to be a major hub for the further development of this technology in the years to come.” 

Should any application not progress to signing a full agreement, the next highest scoring application will instead be offered an option. 

Once these agreements are officially signed, the details of the supply chain commitments made by the applicants as part of their Supply Chain Development Statements will be published.  

This is just the first stage of the long process these projects will have to go through before turbines go into the water, as the projects evolve through consenting, financing, and planning stages, Crown Estate Scotland said.

ScottishPower toasts 7GW offshore wind success

Iberdrola-owned ScottishPower has been awarded the seabed rights to develop three new offshore wind farms off the coast of Scotland totalling 7GW as part of Crown Estate Scotland’s ScotWind leasing round.

The trio of wind farms will more than treble ScottishPower’s existing offshore wind pipeline to 10.1GW from 3.1GW.

EVandPV

Martyn1981 said:

These three articles from Renews are all about the same story, the recent ScotWind offshore wind lease auction, but it's such important news, and smallish articles that I couldn't choose between them. 17 projects have been awarded option agreements which total 25GW. For scale, that's 2.5x the whole current UK fleet.

Wow !!! 😮 😮😮

QrizB

I was just going to post something about the ScotWind leases but I see Martyn has beaten me to it

A map of the leases can be found here:
https://www.crownestatescotland.com/resources/documents/scotwind-map-of-option-areas-170122

25GW is roughly equal to the total current operational UK wind generation portfolio, onshore and offshore. The current fleet produced almost 70TWh in 2020, 25% of the UK's electricity demand; adding 25GW of offshore wind should more than double this.

Now they just need to build them, and get the grid up to size

Martyn1981

And in the Spring we should get the results of the 2021 CfD auction, which could be very interesting.

Another decade of rolling out roughly 3.5% RE each year, would displace most of the gas generation (on a net basis) if we have enough interconnectors to handle excess/shortfalls.

Actually, I suppose it's more like 14yrs as nuclear (20% of gen) will be aging out and HPC will replace 7%. And then we have to account for space heating moving to leccy, and a bit for BEV's. It all looks so possible if we just ramp up deployments a bit, and this news shows that that is entirely doable, especially as RE generation costs fall.

shinytop

Martyn1981 said:

And in the Spring we should get the results of the 2021 CfD auction, which could be very interesting.

Another decade of rolling out roughly 3.5% RE each year, would displace most of the gas generation (on a net basis) if we have enough interconnectors to handle excess/shortfalls.

Actually, I suppose it's more like 14yrs as nuclear (20% of gen) will be aging out and HPC will replace 7%. And then we have to account for space heating moving to leccy, and a bit for BEV's. It all looks so possible if we just ramp up deployments a bit, and this news shows that that is entirely doable, especially as RE generation costs fall.

I could probably do this myself but what would, say, 2020 demand look like in terms of generation mix after 14 years if that happened and nothing else changed and we had the same RE performance as 2020?   

(I really hope someone somewhere has worked this out but part of me doubts it)

Martyn1981

shinytop said:

Martyn1981 said:

And in the Spring we should get the results of the 2021 CfD auction, which could be very interesting.

Another decade of rolling out roughly 3.5% RE each year, would displace most of the gas generation (on a net basis) if we have enough interconnectors to handle excess/shortfalls.

Actually, I suppose it's more like 14yrs as nuclear (20% of gen) will be aging out and HPC will replace 7%. And then we have to account for space heating moving to leccy, and a bit for BEV's. It all looks so possible if we just ramp up deployments a bit, and this news shows that that is entirely doable, especially as RE generation costs fall.

I could probably do this myself but what would, say, 2020 demand look like in terms of generation mix after 14 years if that happened and nothing else changed and we had the same RE performance as 2020?   

(I really hope someone somewhere has worked this out but part of me doubts it)

I'm not sure I understand the question, but I'll take a guess as you mentioned the 14yrs bit, so here's a 'back of the napkin' (I don't smoke) guess, but bear in mind interconnectors and storage will become ever more important, so it's extremely basic/simple.

So, going from a rough figure today (last few years*) we have a mix of about:
40% RE
40% FF (mostly nat-gas)
20% nuclear

assuming the rough average of a 3.5% shift continues for the next 14yrs, we get:
89% RE
4% FF (all nat-gas?)
7% nuclear

*Need to bear in mind that 40% RE may be a year or two old, but of course we also have Covid mucking up stats, and a poor wind year in 2021, so without meaning to appear like I'm fudging the numbers, that could lift RE in 14yrs and lower gas to ~zero.

But please note, whilst I'm very optimistic, I also appreciate that this is a big issue with many complications. We may see RE capacity deployed faster, but perhaps greater waste (spill/curtailment), or maybe we'll have excellent interconnectors and manage peaks and troughs perfectly (yeah bit of a tongue in cheek comment that). Then there's storage, and also BEV's (smallish Issue I believe), and space heating (huge issue I believe). So leccy demand may grow, making it harder to reach the very high percentages in 14yrs, but that's OK if it's displacing FF's in other areas such as transport and space heating.

[Please don't take this as a prediction, just a potential projection. M.]

Martyn1981

Just an addendum, because I mentioned interconnectors. Thought I'd repeat something I posted recently.

Last year UK interconnectors expanded from 5GW to 7.4GW, and planned additions take the total to ~17GW by 2025. This is really important because on average UK demand is ~40GW (varying from around 20GW in the early summer hours, to about 50GW in the winter between 5-7pm), so 17GW has the potential to make a massive difference to the UK's ability to hit a high RE average penetration, assuming that the rest of Europe has spare RE to export, when we need it, and vice versa.