Renewable Energy Records being Set and Broken in Europe

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On April 30, 2017, Germany was able to produce 85% of its energy demand using renewable sources. Germany deploys a wide arsenal of Wind, Solar, and Hydropower facilities in its efforts to become a fully renewable energy nation by 2030. As time goes on, we are likely to see days such as this past April 30 with near 100% renewable energy generation become more frequent.

After the 2011 Fukushima nuclear crisis, Germany pledged to accelerate the phasing out of its nuclear generation. As these policies began to take shape, it was looking like coal was going to be the successor to nuclear power in Germany. An unwelcome side-effect of the nuclear phase-out has thus been an increase in carbon-heavy electricity generation when renewables have not able to keep pace due to their external limiting factors.

However, when the stars do align, and conditions are favourable, Germany’s green pedigree is commendable. Attributed to the “Energiewende” policies, Germany is on track to becoming the leader in Europe when it comes to renewable energy production and consumption. We must not neglect to mention other European countries such as Denmark and Spain. These countries are right up there with Germany in producing high levels of renewable energy and at times showing electricity generation surpluses thanks to their renewable energy capabilities.

Key in these developments is scale. Without interconnections to neighbouring countries, generators in Germany, Denmark, and Spain would be heavily penalised for producing electricity that outstrips domestic demand. We cannot control the weather upon which many renewable sources are reliant. Creating a super grid will allow system operators to better take advantage of these moments of high renewable production by allowing them to offload surplus energy to other regions with peaking demand.

The future is looking bright for renewable energy in Europe, and we can expect more records to be shattered as time goes on.

Examples of environmental degradation from Hydropower

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The most obvious impact of hydro-electric dams is the flooding of vast areas of land, much of it previously forested, inhabited or used for agriculture. The size of reservoirs created can be extremely large. For example, the La Grande project in the James Bay region of Quebec, in Canada, has already submerged over 10,000 km2 of land. If future plans are carried out, the eventual area of flooding in Northern Quebec will be larger than the country of Switzerland. Reservoirs can be used for ensuring adequate water supplies, providing irrigation, and recreation, but in several cases they have flooded the homelands of peoples, whose livelihood and way of life has been destroyed. Many rare ecosystems are also threatened by hydro-electric development.

The Mekong in Southeast Asia is an example of the reduction in silt, where China has built dams on the river up-stream, causing severe disruption to the water sheds downstream, notably to the Tonle Sap Lake in Cambodia. The Tonle Sap is one of the country’s major resources for food and water and has an importance to national economic life similar to the Nile in Egypt. There are about ten current major international disputes between countries at present and many smaller cases.

Another example of a hydroelectric power plant that had a negative effect on its environment is the ‘on-off’ Bakun Dam Project in Borneo, East Malaysia. The Malaysian government of Sarawak made plans to build a hydro-electric dam on the Rejang River. In the Bakun Dam Project, there were several key issues that were not addressed, namely the impact of the dam on downstream ecosystems and the lack of adequate data regarding the rate at which the reservoir would fill with sediment. With the trapping of river sediment, there would be a reduction in power production from the dam and the rate of erosion would increase, affecting the downstream riverbed, banks, and deltas. This disaster would harm the food chain of this environmental system. The indigenous Kenyah people, who have lived on the rivers and in the jungle for centuries, were economically impoverished and psychologically traumatised.

Energy Efficiency

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Energy Efficiency largely focuses on buildings since these consume approximately 40% of the world’s energy. To reach the European target of 20% energy use reduction by 2020, it is estimated that new buildings will need to consume 50% less energy compared to 1990. In addition, one tenth of existing buildings will need to lower their consumption by 30% every year.

A vast range of products are covered under the umbrella of energy efficiency. Manufacturers include a mix of start-up and small companies, large multinationals and a few companies somewhere in between.

It is expected that several start-ups will be acquired by larger companies to enter new markets or to complement their existing technologies to gain a larger market position. This trend has already begun; for example, Philips is a leader in the LED lighting market and has acquired several lighting start-ups over the years.

Not only do buildings contribute to the loss of energy, but at the point of generation, considerable work is also being undertaken on thermal efficiency. An example of this includes, among others, ultra-supercritical coal-fired power plants. New state-of-the-art pulverised coal combustion plants are 20% more efficient than the average coal plant in operation. Ultra-supercritical coal plants under development are around 50% more efficient. Research and development (R&D) into improving the thermal efficiency of coal plants is underway in Japan, Germany and Denmark.

Not only are there developments in the coal sector, however. For example, Siemens has produced a new generation of gas turbine which has enabled Florida Power & Light to reduce its fuel consumption at two of its power plants by one third and CO2 emissions by more than one half. It is also estimated that this turbine will save the utility around USD 1 billion in operation, maintenance and investment costs over the turbine’s life cycle.

Unbundling of the water markets, competition and carriage

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In the 19th century, water companies laid competing pipelines in towns in Canada, the United Kingdom and elsewhere. But it is usually efficient to have just one network of pipes and as a result of either free competition or municipal regulation, the competing networks of the 19th century soon turned into monopolies. Technically, the water supply system is a natural monopoly; the cheapest way to supply water involves just one firm owning a network of pipes. Water monopolies, of course, can and do exploit their privileged position. In the worst case, they may even be able to charge as much for water as the street vendors, in which case all the benefits of piped water accrue to the monopoly.

In some industries in which networks are important; gas, electricity, and telecommunications, governments have put limits on the natural monopoly by separating production from transmission through the network. Competing electricity generators, for example, can send power to consumers using one network.

In the water sector the problem is complicated by the absence of a national water grid. Nevertheless, the stages in delivery of water and sewage include a number which are contestable and where competition can be introduced, such as engineering services, metering, connecting new users and other activities.

In 1998 the UK government addressed this with the Competition Act, which took effect on 1 March, 2000. This covered areas in which competition is enforced by the regulator, including pricing, common carriage, contestable services, access to water resources, connections to water mains, laying of mains and anti-competitive agreements. Customers can appeal to the regulator against infringements of competition in these areas.

The water industries around the world vary greatly in their degree of concentration. The United States has 55,000 water companies and in Europe the average numbers of companies per million inhabitants ranges from 0.13 in France to 88 in Germany.

Historical Polish Wind Energy Government policy and initiatives

wind_turbines_montfort_wisconsinThe following is a look back at the market for wind energy in 2010 and describes the outlooks and targets set at the time.

In 2000 the government introduced a power purchase obligation for renewable energy sources which has been revised twice since its implementation. Energy suppliers must source 10.4% of its power from renewables in 2010 and 12.9% in 2017. Penalties for non-compliance The Ministry for Economy introduced new regulations at the end of last year to grant public aid for the construction or conversion of power grids and terminals to connect renewable energy generating units to the national grid and transmit electricity produced. Co-financing for the regulations will come from the Cohesion Fund with a budget of EUR 37.59 million. It is hoped that this will help projects overcome one of the biggest barriers to renewable development, insufficient grid capacity.

From January 2011 a new ‘Transmission Grid Code – Conditions for use, traffic management, operation and development planning’ was in force. This includes the removal of a requirement for connected projects or projects with an interconnection agreement to adapt their infrastructure to new grid requirements. On the negative side, this code requires wind farm owners to disclose information including intellectual property and in depth data to transmission system operators (TSO). The TSOs development plans cannot be shorter than five years. Consequently, TSOs may not be able to respond to rapid growth in renewable capacity.

are often not enforced.

An amendment to the Polish Law on Energy in 2005 requires renewable energy producers to obtain a license from the Energy Regulation Authority. A further amendment to this law in January 2010 included provisions for electricity trading, grid connection agreements and related charges along with new tools and rules to enable the Transmission System Operator (TSO) to secure electricity supply.

However, advanced payments on grid connection fees are required. Developers requiring a grid connection must prove that they can develop new wind capacity.

A further amendment to the Polish Law on Energy was anticipated in 2010, but did not occur.

 

Indonesian Coal producers

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Coal mining has evolved on ‘greenfield’ sites and under the control of what used to be the Ministry of Mining and Energy or its Directorate General for Mining. By 1999, state-owned coal reserves had been offered in three tranches for inter-national development under a bidding procedure, the first tranche in 1981 with 11 ‘Coal Contracts of Work’ (CCOWs), the second in 1993 with 17, and the third in 1997 with 114. A fourth wave of contracts came after 1999 from the by-now autonomous provinces.

The ‘contractors’ undertake to prospect for and explore the coal deposits located in their concession area, possibly to engage in mining development and, in return, are granted exclusive rights for a term of 30 years subject to a royalty (free mine) of 13.5% of proceeds. The contractors are also obligated to offer Indonesian investors at least 51% of the mining stock after a ten year operating period. In 2001, this provision affected two foreign investors, Rio Tinto/BP and BHP Billiton.

While one of the deals went smoothly, the other was accompanied by conflicts as regards company value and the nomination of buyers. Besides foreign and local investors, the state-owned P.T. Tambang Batubara Bukit Asam has started production on Sumatra, mostly for domestic consumption. This company is to be privatised in a second attempt.

Most of the companies are based on generation-I CCOWs, representing over 80 Mt, generation-II CCOWs with about 40 Mt and generation-III CCOWs with a mere 10 M t.

Coal mining without official approval, too, has evolved in the meantime, with output at four Mt per annum. These are small local companies that operate with the tacit consent of officials.

Indonesia‘s coal policy, for the time being at least, prevents the international consolidation movement from spreading to Indonesia. To that extent, Indonesia‘s hard coal mining sector is an important element for healthy competition on the world market.

Historical experiences with wind energy – Western Denmark 2005

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In 2005, Eltra, transmission system operator for the western grid in Denmark (now merged in Energinet) reported that in 2003 a total of 11 primary power units supplied 3,516 MW of power, 558 district heating plants supplied 1,593 MW and 4,161 wind turbines supplied 2,379 MW. Western Denmark has wind conditions similar but not as good as those in Britain and in 2003 wind turbines achieved a capacity factor of 20-24%, compared with Britain’s 24.1% and Germany’s 15%. UCTE claims an average capacity factor of 20% for its European TSO members.

In 2003 in Denmark, although wind turbines accounted for 20% of total power production, most of it had to be exported to ensure stability in the domestic grid, since much of it was surplus to requirements at the time of production. In 2003, 84% was surplus and only 4% contributed to domestic Western Danish power consumption. In the next year, 2004, the total amounted to 85% of production but only 6% of electricity consumption. According to Eltra this surplus had to be disposed of at a price less than the company paid. Recent assessments have suggested that these exports cost Danish consumers up to EUR150 million a year. At that time the Danish government enforced obligatory purchase schemes for wind generated power on the network operators and although this has now been abandoned, subsidies continue.

Norway and Sweden have been able to absorb the surplus of power by reducing their output of hydro power, or using the power to pump water to elevated reservoirs for later conversion into electricity. On the one hand, this affects the reduction in carbon emissions from wind power since the electricity produced in these hydro plants does not produce emissions either and the main supply in Denmark was delivered by CHP fossil fuel fired plants during these periods. On the other hand, the export to Norway and Sweden enabled wind energy to be stored in hydro facilities when the electricity was produced in periods of low demand.