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July 2019 • Volume 12 • No 5 • Published monthly • ISSN 1757-7365
THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com
Rethinking cyber Endless options
The energy sector needs to
understand how hacker attacks can
be so successful.
Page 12
There seems to be endless
options for integrating
renewables. Each has its pros
and cons. Page 14
News In Brief
Clean technology progress
not meeting long-term goals
The majority of technologies are
failing to keep pace with long-term
goals, says the IEA’s assessment of
clean energy transitions.
Page 2
USA rolls back Obama-era
climate rules
President Donald Trump is making
good on campaign pledges to
support the coal sector with plans
to replace legislation curtailing
emissions from power plants.
Page 4
Japan continues energy
sector transformation
Japan has taken several important
steps in advancing its transition to a
low carbon emissions energy sector.
Page 5
Challenging times for
Germany offshore wind
Germany’s offshore wind sector
offers signicant opportunities
but realising its full potential has
challenges, say industry experts.
Page 6
CDC targets African grid
investments
UK-based development nance
organisation CDC has pledged $300
million to support investment in
Africa’s grid infrastructure.
Page 7
Aggreko offers new Wärtsilä
modular block
Wärtsilä and Aggreko are joining
forces to bring medium speed
reciprocating engines to the
temporary power market.
Page 8
Cyber Perspective:
Best practices
As the energy sector matures,
operators of essential services must
demonstrate they have embraced
particular cyber security principles.
Page 12
Technology: Higher
efciency improves solar
economics
As solar modules move to higher
power outputs, 158 mm wafer sizes
could become the new standard.
Page 15
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The EU has stopped short of agreeing on more ambitious targets for carbon emissions despite the
UK taking the lead on signing a national net zero 2050 target into law. Junior Isles
Political inaction to blame for lack of progress on climate
THE ENERGY INDUSTRY
TIMES
Final Word
Some see zeros, some see
loopholes in the war on
climate change, says
Junior Isles. Page 16
Hopes that the EU would agree to a
net-zero carbon emissions target for
2050 were dashed at a recent climate
debate.
During talks in late June, Poland
and the Czech Republic refused to
sign up to a text that referred to a
climate-neutral EU by 2050. Hungar-
ian Prime Minister, Viktor Orbán,
also opposed the EU text, despite ear-
lier indicating that the country was
ready to compromise.
Hopes that the EU would be seen to
be moving towards more ambitious
carbon mission targets, ahead of a ma-
jor UN climate summit in September,
were buoyed by the UK’s announce-
ment that it has legally adopted a net
zero 2050 target.
Two weeks before the EU debate,
the UK became the rst major econ-
omy to pledge to cut CO
2
emissions
to close to zero. The target will re-
quire the UK to bring all greenhouse
gas emissions – excluding aviation
and international shipping – to virtu-
ally zero by 2050, compared with
the existing target of an 80 per cent
reduction.
UK Prime Minister Theresa May’s
parliament took the decision follow-
ing a report from the Committee on
Climate Change (CCC) published in
May. The report calls for extensive
electrication of the economy and a
quadrupling of low-carbon power
generation by 2050.
The move was broadly welcomed by
industry. Dr Nina Skorupska CBE
FEI, Chief Executive of the Renew-
able Energy Association (REA) com-
mented: “Being the rst G7 nation to
adopt a net zero greenhouse gases
emissions target by 2050 is a historic
step not only for our industry but for
the UK as a whole.
“This decision demonstrates that
government is listening to both the
scientic evidence regarding climate
change and to the tens of thousands of
school children and members of the
public who have taken to the streets in
recent months.
“In their net-zero recommendations,
the Committee on Climate Change
rightly identied that the variety and
sophistication of renewable technolo-
gies needed to reach net-zero already
exist. What is needed now is clear and
consistent policy that will allow for a
route to market for renewable and
clean technologies that will attract in-
vestors,” she added.
James Robottom, IET Energy and
Climate Change Lead, said: “Progress
has been made in transport and elec-
tricity but this needs to continue at a
great pace and signicant challenges
remain in decarbonising heat and in-
dustry. Eight per cent of the homes we
Continued on Page 2
Erratic policymaking is holding the
renewable energy sector back from its
potential contribution to cutting car-
bon pollution and meeting climate and
development targets, according to
REN21’s Renewables 2019 Global
Status Report (GSR).
Renewables now supply more than
a quarter (26 per cent) of global elec-
tricity production but current trends in
the sector show that bolder policy de-
cisions are needed across all end-use
sectors to make energy systems sus-
tainable, said the report.
“A key breakthrough could occur if
countries cut their fossil fuel subsidies
which are propping up dirty energy,”
said Rana Adib, Executive Secretary,
REN21. “Ambitious policy and regu-
latory frameworks are critical to cre-
ating favourable and competitive con-
ditions, allowing renewable energy to
grow and displace more expensive
and carbon-emitting fuels.
Forty countries have undertaken
some level of fossil fuel subsidy re-
form since 2015, but these subsidies
continued to exist in 112 countries in
2017, with at least 73 countries pro-
viding subsidies of over $100 million
each. Estimated total global subsi-
dies for fossil fuel consumption were
$300 billion in 2017, an 11 per cent
increase from 2016, REN21 said.
BP’s recent Statistical Review of
World Energy 2019 noted that al-
though renewables grew by 14.5 per
cent, nearing their record-breaking
increase in 2017, they still accounted
for only around a third of the increase
in total power generation.
A key nding from the Review is
that global energy demand grew by
2.9 per cent while carbon emissions
grew by 2.0 per cent in 2018, faster
than at any time since 2010/11.
Introducing the ndings, Spencer
Dale, BP Chief Economist, said:
“There is a growing mismatch be-
tween societal demands for action on
climate change and the actual pace of
progress, with energy demand and
carbon emissions growing at their
fastest rate for years. The world is on
an unsustainable path.”
Bob Dudley, BP Group Chief Ex-
ecutive, added: “The longer carbon
emissions continue to rise, the harder
and more costly will be the necessary
eventual adjustment to net zero car-
bon emissions.”
CDP, formerly known as the Carbon
Disclosure Project, recently noted
that many of the world’s biggest com-
panies, from Silicon Valley tech rms
to large European banks, are bracing
for the prospect that climate change
could substantially affect their bottom
lines within the next ve years.
Under pressure from shareholders
and regulators, companies are in-
creasingly disclosing the specic -
nancial impacts they could face as the
planet warms, such as extreme weath-
er that could disrupt their supply
chains or stricter climate regulations
that could hurt the value of coal, oil
and gas investments.
In 2018, more than 7000 compa-
nies submitted such reports to CDP
and, for the rst time, CDP explicitly
asked rms to try to calculate how
global warming might affect them
nancially.
After analysing submissions from
215 of the world’s 500 biggest corpo-
rations, CDP found that these com-
panies potentially faced approxim-
tely $1 trillion in costs related to
climate change in the decades ahead
unless they took proactive steps to
prepare.
EU bloc not yet
swayed by UK net
zero emissions
ambition
Hungarian Prime Minister, Viktor Orbán also
opposed the EU text
Junior Isles
Although Germany’s offshore wind
sector offers signicant opportunities,
realising its full potential is not with-
out challenges, according to industry
experts.
WindEurope CEO, Giles Dickson
recently noted that although Germany
could “comfortably deliver 20 GW and
a higher volume by 2035”, its Nation-
al Energy & Climate Plan for 2030
currently envisages only 15 GW total
installations by 2030.
“As things stand they are being less
ambitious in relative terms on their
offshore wind build-out than the UK,
Netherlands, Belgium, Denmark and
Poland,” said WindEurope.
The organisation says that a lack of
auctions – the last one being in April
2018 and no more scheduled until
2021 – and a disappointing outlook
for future auction volumes to 2030,
means order books are drying up.
This, it says, is putting the supply
chain under real pressure.
WindEurope also said there were
concerns over whether Germany
would have sufcient power genera-
tion capacity if it did not accelerate
build-out of offshore wind at a time
when nuclear and coal red plants are
closing.
While other experts note that wind
is not the sole answer to Germany’s
looming generation problems, they
point out that offshore wind poses
challenges for the grid.
Commenting on whether wind will
be able to compensate for the loss of
nuclear and coal from the grid, Mirko
Düsel, CEO of Siemens Distribution,
said: “If you take a global view of gen-
eration today, in general there’s always
a mix. There is no one country that
relies on a single generating source due
to [grid] stability reasons as well as
availability.”
Ludger Meier, Vice President Engi-
neering & Operations, EHV grid at
Amprion GmbH, operator of the west-
ern part of the transmission grid in
Germany, said: “The increase in wind
generation and its volatility calls for
extension of the grid to keep the sys-
tem running.”
Meier noted that a signicant amount
of generating capacity in the North Sea
and Baltic Sea will lead to large trans-
mission distances in order to feed
power to the industrial middle and
south of the country. “This can cause
challenges with voltage uctuations in
the grid, so we have to invest in reactive
power compensation in the grid.”
The growth in offshore wind requires
the creation of north to south HVDC
corridors in Germany but being a
point-to-point solution, there is also a
requirement for static VAR compensa-
tion (STATCOM) technology. The
increasing volatile load in the AC-grid
also calls for STATCOM technology,
Meier and Düsel explained.
Meier and Düsel were speaking just
ahead of an event celebrating the de-
livery of Siemens’ 100th STATCOM
(static VAR compensator) from the
SVC PLUS series. The turnkey instal-
lation for Amprion will be deployed in
the important Kusenhorst node in
North Rhine Westphalia, Germany.
“HVDC usually has a starting point
and an end point, with overhead lines
or cables in between. But as a densely
populated country, with electricity de-
mand in more than one location, we
needed a multi-terminal solution for
Amprion,” noted Düsel.
AC electricity transmission requires
reactive power, which has traditionally
been provided primarily by large pow-
er plants. Due to the energy transition,
many of these plants in Germany will
be shut down – which is why grid op-
erators like Amprion are responding by
installing reactive power compensa-
tion systems.
Siân Crampsie
Plans by Italy to introduce new renew-
able energy support measures have
won the backing of the European
Commission.
The Commission has approved the
proposed scheme under state aid rules,
noting that it will contribute to Euro-
pean Union environmental goals with-
out distorting the energy market.
“More renewable energy in power
generation is essential for the future
of our planet and environment,” said
Commissioner Margrethe Vestager, in
charge of competition policy.
“The €5.4 billion scheme will in-
crease the level of Italy’s electricity
production from renewable sources.
This is in line with the EU environ-
mental objectives and our common
state aid rules,” he added.
Approval of the Italian scheme came
as the Commission published an as-
sessment of EU nations’ National
Energy and Climate Plans (NECPs),
which aim to drive investments in
clean energy technologies and ensure
that the 28-nation bloc reaches its
2030 climate goals.
According to the Commission, the
NECPs will not enable Europe to meet
its 32 per cent renewable energy target
because they lack ambition and be-
cause they do not contain sufcient
detail on the mechanisms that will de-
liver renewable investment.
WindEurope CEO Giles Dickson
said: “The message from the Euro-
pean Commission is clear: failing to
plan is planning to fail. The draft Plans
don’t get Europe to 32 per cent renew-
ables by 2030. And they’re badly lack-
ing when it comes to specic policy
measures.”
Dickson added: “The Commission’s
recommendations highlight the areas
where countries need to step up their
game, e.g. permitting, electrication,
corporate PPAs, and the repowering
of existing wind farms. Member
States now know what they’ve to do
– ramp up the ambition and ll in all
the policy gaps.”
The Italian scheme will run until
2021 and will support renewable en-
ergy generation schemes with a pre-
mium on top of the market price.
Competitive auctions will determine
which projects qualify for support.
The premium will not be higher than
the difference between the average
production cost for each renewable
technology and the market price, and
will also include a clawback mecha-
nism in case the market price moves
above the average electricity produc-
tion cost for each renewable energy
technology.
6
THE ENERGY INDUSTRY TIMES - JULY 2019
Europe News
EC approves Italian
renewables support
Challenging times for
Germany offshore wind
n Offshore wind goal lacks ambition n Siemens and Amprion cooperate on grid stabilisation
France will add over 500 MW of on-
shore wind energy to its grid follow-
ing its latest tender round for the
technology.
Some 516 MW of capacity spread
across 21 wind farm sites won con-
tracts in the onshore wind tender. The
average bid price in the tender round
stood at €63 ($71.2) per MWh, which
represents a decrease from the €65.4/
MWh and €68.7/MWh in the rst and
second rounds, respectively.
Winners will be awarded 20-year
feed-in premium contracts. The tender
is one of six rounds that aims to procure
3000 MW of onshore wind capacity
over the next three years.
Proposals for the fourth round are due
by August 1st.
n The French Ministry of Ecology and
Energy Transition has selected a con-
sortium of EDF, Enbridge and Innogy
to design, build, operate and maintain
the nearly 600 MW Dunkerque off-
shore wind project in northern France.
The consortium offered a price below
50/MWh. The project will consist of
around 45 wind turbines and is ex-
pected to be commissioned in 2026.
Bill Gates’ Breakthrough Energy Ven-
tures has teamed up with the European
Investment Bank to launch a new €100
million fund to support investments in
clean energy.
EIB and Breakthrough Energy Ven-
tures are both contributing €50 million
to kick start the fund, known as Break-
through Energy Ventures Europe.
The fund will invest in rms innovat-
ing to cut emissions in ve energy sec-
tors: electricity; transportation; agri-
culture; manufacturing; and buildings.
Breakthrough Energy Investors have
called these the ‘Grand Challenges’ –
the largest contributors to greenhouse
gas emissions and the areas in which
ventures in innovation investment will
have the most impact towards a future
of zero emissions.
The initiative will boost public-pri-
vate investments in clean energy in-
novation, the partners said. Maroš
Šefčovič, Vice-President of the Com-
mission for the Energy Union, said:
“Business as usual is not an option. We
need to boost our investments with
more than €500 billion each year to
achieve a carbon neutral economy by
2050. I am pleased that our pilot coop-
eration with Breakthrough Energy has
taken off so fast.
“This is pioneering work: aligning
private and public investment in cut-
ting-edge innovation, to the benet of
the Energy Union and our climate.”
France boosts onshore
wind
Gates launches clean
energy fund
EDF Energy could put forward pro-
posals for a new nancing model for
the Sizewell C nuclear power plant
project in the UK.
The French energy giant has indi-
cated that a new funding model, based
on regulated asset base (RAB) fund-
ing, would mean that households
would pay a £6 annual levy on energy
bills to nance the project.
The RAB model – where consumers
pay upfront to fund large infrastruc-
ture projects – is expected to be more
palatable than the contracts for differ-
ence (CFD) system used for the under-
construction Hinkley Point C nuclear
power plant.
EDF Energy sealed a £92.50/MWh
CFD strike price for Hinkley Point C
– approximately double the current
wholesale electricity price – leading
to sharp criticism of the government
over the costs of the project.
The RAB model has been success-
fully used for the Thames Tideway
‘super sewer’ through London. EDF
believes that putting in place a guar-
anteed return via the RAB mechanism
would make the project more attrac-
tive to investors.
It also believes it can cut the cost of
the Sizewell C project by 20 per cent
compared with the £19.5 billion Hin-
kley project due to the replication of
the build.
n EDF is now reviewing the start-up
schedule and costs of its agship Fla-
manville nuclear project in France
after the regulator said it would have
to x faulty weldings that have already
delayed the project. Nuclear watch-
dog ASN says that EDF needs to repair
eight of the joins at Flamanville,
where nuclear fuel loading was sched-
uled for the end of 2019.
EDF considers new model for Sizewell C
n €5.4 billion scheme will increase production from
renewable sources
n Approval comes as Commission publishes National
Energy and Climate Plans
Source: World Energy Outlook 2018
Installed power generation capacity worldwide by source in the
New Policies Scenario
Fossil fuels in electricity generation (left) and CO
2
emissions from power
generation (right), 2000-2017
Share of 2015 power sector pollutant emissions (left) and SO
2
intensity by
region (right), 2010-2015
World Energy Outlook 2018, © IEA/OECD, Figure 8.15, page 346
World Energy Outlook 2018, © IEA/OECD, Figure 7.35, page 322
World Energy Outlook 2018, © IEA/OECD, Figure 7.34, page 321
For more information, please contact:
International Energy Agency
9, rue de la Fédération
75739 Paris Cedex 15
France.
Email: bookshop@iea.org
website: www.iea.org
THE ENERGY INDUSTRY TIMES - JULY 2019
10
Energy Industry Data
consumption of companies and
households. This valuable data is an
important, attractive asset, which
can be used by attackers to threaten
both security and privacy.
Being decentralised means the en-
ergy sector does not have one large
pool of resources to invest in cyber
security as larger organisation would.
However, even signicant investment
in cyber security is no longer effective
against new threats. The truth is that
there is currently a patchwork of dif-
ferent cyber security solutions de-
signed to target specic parts of the
organisation’s system.
For example, one programme for
email screening, another to block pop
up ads that may contain viruses, etc.
Further, these are all designed for a
different time in cyber criminality and
often do not address the more new,
devastating attacks sophisticated
hackers are undertaking.
The lack of an up-to-date, integrated
system means that if one aspect fails
to update with patches and bug xes
it becomes an entry point that leaves
the whole system unprotected on the
hardware and software levels
The mission is therefore to create a
paradigm shift. It is essential to create
a holistic security solution that covers
all modern IT components. By rede-
signing the hardware and the software,
starting at the most fundamental level,
it is possible to implement security by
design – a fortress that keeps all the
sensitive data safe from internal as
well as external threats.
As well as technical threats, it is
important to create a solution that
addresses the human factor. It needs
to be a security system that provides a
superior user experience. If the tech-
nology is too complex to use, em-
ployees will try to make their lives
easier by sidestepping it.
Therefore, the cyber security indus-
try needs to encourage legislators,
regulators, customers and organisa-
tions to be part of this paradigm shift
and to create a unique approach to
cyber security that will keep compa-
nies, their systems, data and ulti-
mately also people safe and secure.
This is clearly no small challenge, but
with the right approach and expertise,
we can prevent a hacker-initiated
blackout.
Unlike many action movies, we
don’t have to wait until it’s too late.
Companies can be one step ahead of
cyber criminals as long as they face
the new threats and take the respec-
tive measures by building not only
walls around the property but also
cyber walls around the data treasures.
Yuval Porat previously worked in in-
ternational cyber intelligence before
co-founding his own cyber security
company, Kazuar.
W
ith everything from trans-
portation and communica-
tion, through to manufactur-
ing and healthcare relying on energy
– and particularly electricity – it’s not
surprising that the whole industry is
one of the biggest targets for criminals
who want to harm organisations or
individuals.
You may recall the incident in 2015
when the Ukraine power grid suf-
fered a cyber attack. It all happened
very quickly. Workers at the Prykar-
pattyaoblenergo control centre were
about to nish their shift when one
employee realised that the curser on
his computer started to move on its
own. The hackers had managed to
take over control of the power grid.
Around 30 substations were switched
off and hundreds of thousands of citi-
zens were suddenly without electric-
ity for hours. This type of activity
marks a new era of threats to the en-
ergy sector through a new channel:
cyber crime.
Since this incident, there have been
several attacks on critical industry,
such as the recent inltration of an
electrical grid in the US. In this case,
the hackers gained access by using
seemingly simple methods such as
phishing emails and malware that was
planted on frequently used websites.
Often the victims don’t even realise
that they have been hacked until they
get the ransom demand or notice that
information has been leaked.
But instead of becoming a sitting
duck, waiting for an attack, what
companies need to do is to learn more
about their “new” enemies and pre-
pare themselves, because it is not a
question of “if” but rather “when” a
similar attack will be deployed with
more devastating effects.
In order to understand how hacker
attacks can be so successful, it is im-
portant to take a step back and look at
the current developments in the energy
eld and how they are exploited by
criminals, because it’s those new
trends that affect the evolving ap-
proach of cyber criminals.
In the context of the transformation
from nuclear and coal-based genera-
tion to renewables, digitisation plays
an important role. Smart grids that are
tipped as the future of the industry,
with many remote stations being in-
terconnected but not necessarily run-
ning the same operational protocols
due to them being managed by dispa-
rate organisations.
This move from typically one or a
few large, well-funded, nationalised
institutions to the new trend for poten-
tially numerous smaller, decentralised
organisations opens the door for a
new wave of threats. Only one weak
spot in the system can give cyber
criminals access to highly sensitive
data or worse, enable them to disrupt
or shut down a whole system. As an
increasing number of power plants
and grids are part of the digital net-
work, it is crucial for these institutions
to be aware of these new risks.
There are a few notable cyber crime
trends. Criminals have always been
early adopters of new technology and
the ongoing digitalisation in every
sector has provided them with many
new targets. It only takes one look in
the newspapers to see it’s not only an
ever-increasing number of these at-
tacks but also that the nature of cyber
attacks has changed drastically.
Today cyber crime is crippling the
operations of global organisations
and some of the trends we are seeing
are more than alarming. For example,
48 per cent of the businesses that were
a victim of a hacker attack in the past
12 months identify at least one attack
per month – an alarmingly large
number. Moreover, many studies
have shown that more than half of the
companies are not prepared to defend
a cyber attack.
While technology continues to
evolve, so do the strategies and skills
of the cyber criminals. When we talk
about hackers today it’s important to
keep in mind that these criminals are
far from being the hoody-wearing
stereotype of a hacker who works
from a dark basement as often shown
in movies. It is, in fact, a well-funded,
highly protable and innovative in-
dustry that is being inspired and fed
by governmental capabilities.
As a result, cyber attacks have
reached a new level of sophistica-
tion: not only do hackers bring a
wider and deeper research base than
ever before, they also plan attacks
precisely and over a long term period.
Thanks to the use of greater techno-
logical innovation, they are able to
exploit unprotected layers, including
the employees.
Additionally, they can orchestrate
multi-dimensional attacks, which
means the attack targets hardware,
software, end-points, servers and
human operators.
Moreover, the cyber crimes are no
longer just tactical approaches but
have, in fact, switched to strategic at-
tacks that are not purely focusing on
stealing money anymore. They are
often state-level attacks that aim to
disrupt processes and cause chaos.
These attacks range from malware
on websites or in email attachments
(phishing emails) to side channel at-
tacks (SCAs), which aim at extracting
secrets and information from a chip or
a system. For this attack, the hackers
use the analysis of physical parameters
such as electromagnetic emission or
execution time. This type of cyber
attack allows criminals to even break
robust encryption.
It’s fair to say that in our digital
world no organisation is immune
from becoming a victim of a cyber
attack but companies in the critical
infrastructure, such as the energy
sector, need to be especially aware
that their data and assets are an attrac-
tive prospect to cyber criminals.
If you bring the ongoing changes
and trends of these two sectors to-
gether and converge them, it becomes
clear that the threat level has never
been higher. Overall, here is a sector
with extremely sensitive data that is
unprotected – being decentralised
now, it has more weak spots than ever.
Further, the increasing skills of cyber
criminals who can exploit the digi-
tised and decentralised service provi-
sions, means the energy sector has to
look at both issues.
Connecting the energy industry to
a digital network provides cyber
criminals with a huge amount of
targets. Innovations like smart grids
turn a whole power grid into a data
network that just needs to be ac-
cessed through one of the various
entries. Hackers could not only come
into possession of data about the
electricity, the machines or the energy
company itself but also of detailed
information regarding the energy
THE ENERGY INDUSTRY TIMES - JULY 2019
Cyber Perspective Part 1
12
The energy sector
is one of the biggest
targets for cyber
criminals who want to
harm organisations or
individuals. In order
to understand how
hacker attacks can
be so successful, it
is important to take
a step back and
look at the current
developments in
the energy eld and
how they are being
exploited.
Yuval Porat
Time to rethink
cyber security
Porat: Innovations like smart grids turn a whole power grid into
a data network that just needs to be accessed through one of
the various entries
years ago.
Though natural gas is likely to be a
critical piece to the energy matrix in
many countries for years to come, it’s
far from the only option that can
handle the intermittency of renew-
ables. Technologies continue to
emerge, and some utilities have
latched on to static VAR compensa-
tors (SVCs), static synchronous
compensators (STATCOMs), capaci-
tor/reactor banks, ywheels, and bat-
tery or pumped storage. But as newer
technologies, all offer pros and cons.
Synchronous condensers are another
possible avenue. Though not a new
technology, they represent a hybrid
solution for balancing the intermit-
tency of renewable sources by offer-
ing reactive power support, a role
previously played by large central-
station generators.
A synchronous condenser is a DC-
excited synchronous machine that
makes use of increasingly plentiful
renewable power to overcome me-
chanical losses, converting that en-
ergy into much needed reactive
power, inertia and system short-cir-
cuit current. These services are es-
sential for everything from charging
transmission lines to starting large
motors, riding through faults, and
enabling the proper operation of
critical protection devices on distri-
bution lines to consumers.
Both old and new technologies will
be needed as the world moves toward
higher and higher percentages of re-
newables as it is unlikely we can ever
build enough wind, solar and other
renewable energy sources to offset
the current fossil generation eet.
Right now, globally, we have 6.6 TW
of generating capacity. If the entire
globe were to transition to 100 per
cent renewable power, it’s projected
that we would need to quadruple our
capacity to 28.7 TW. And it’s not just
changing and building out renew-
ables, it is completely changing our
generation mix. For us to move to-
ward a renewable future, we will need
more exible generation.
Whether it’s a large wind farm or
solar panels on a residential roof, re-
newables are making a profound
mark on the energy landscape – al-
though no one knows yet what to do
with recycled batteries or scrap solar.
But what is known is that the range of
potential options associated with re-
newable energy is shaking up the en-
ergy market as it exists today.
If it is in the direction of signi-
cantly more renewables, it will be
best practice – and nancially worth-
while – to have a robust integrated
resource plan in place, one that pro-
vides utilities with a holistic view that
includes energy’s endless options.
Megan Parsons is Renewable Energy
Development Manager at Burns &
McDonnell
L
imited options make for easy
decisions. Back in the day, en-
ergy markets were one-size-
ts-all, with grids simply functioning
to deliver one-way power ows. Gen-
erating capacity was designed to
cover peak demand on that single hot-
test (or coldest) day. The entire indus-
try was slow to adapt and slow to
change because it didn’t need to.
Fast forward to today. A surge of
distributed, mostly renewable energy
resources, is disrupting the norm.
Before intermittent renewable re-
sources gained traction in the early
2000s, traditional energy resource
planning primarily focused on the
lowest cost of electricity. The for-
mula was fairly straightforward: de-
termine the cost to install a power
plant with a life expectancy of 30-40
years; the cost of fuel to operate it;
and how often it would be dispatched.
The biggest variable was guring out
how much fuel would cost over the
next 20-30 years. This was before
renewable energy resources emerged
on the scene.
Beginning in the early 2000s, the
cost for wind power started to drop
signicantly, thanks mostly to gov-
ernment backing in many countries.
With tax credits and other incentives
available, developers and utilities
began to jump onboard. Then, in
2010, solar photovoltaic costs began
a rapid descent – what was $4 per watt
in 2014 is now projected to be
$0.70/W by 2020. These cost declines
have been roughly parallel in both the
US and in Europe.
But wind and solar generation do
not always align with customer de-
mand, meaning renewable penetra-
tion will produce diminishing returns
if a viable storage market or other
source of backup power supply fails
to emerge.
Enter lithium-ion batteries (LIB).
Coincidental to the rise of renewables,
Tesla has helped propel the electric
vehicle (EV) market, driving innova-
tion and cost reductions in LIB tech-
nologies. Since 2012, the global LIB
manufacturing boom has reduced
prices by 70 per cent, according to
IHS Markit. As prices are projected to
continue to decline, the global de-
ployment of these batteries, as stated
in a recent report by GTM Research,
is anticipated to grow by 55 per cent
each year for the next ve years.
In California and Hawaii, utilities
have started to feel the heat from so-
lar’s rapid popularity increase and
strong renewable policy mandates.
Generation planners now have to ac-
count for abrupt power supply transi-
tions. This requires closer integration
with transmission planners, more
outreach with ratepayers, and more
focus on exibility rather than simply
determining the lowest-cost peaking
capacity.
In the US, integrated resource plan-
ning is being redened, with some
states requiring more engagement
with their customers during the inte-
grated resource plan development,
including a rigorous evaluation of
distributed generation resources.
There’s a real need to look holistically
at transmission and distribution plan-
ning when preparing for generation as
well, but there are few established
best practices in how to do that. With
unclear rules, the entire US utility in-
dustry is starting to look at the early
adopters. But even they don’t have all
the answers yet.
In July 2017, American Electric
Power (AEP), an Ohio-based electric
utility that plans to add more than 3
GW of solar and more than 5 GW of
wind power capacity to its portfolio
by 2030, announced a plan to build
the largest US wind farm in the west-
ern panhandle of Oklahoma. Dubbed
the Wind Catcher, this 2 GW project
was slated to provide 9 TWh of wind
energy annually to customers in Ar-
kansas, Louisiana, Oklahoma and
Texas.
But its $4.5 billion price tag proved
to be too much and last year Texas
utility regulators rejected the project,
citing a lack of benets for ratepayers.
Obstacles included a lengthy 350
miles of transmission line needed for
delivery of electricity to end users.
One takeaway from the AEP experi-
ence is we can’t just be focused on
busbar cost anymore. We have to look
at delivery cost as well as the value of
location in this new power supply
equation. Economies of scale cap-
tured with large central stations have
made the most sense in the past, but in
the new utility model, there’s a lot of
locational value to be unlocked in
bringing more renewables and power
supply to a system.
No single technology, at this point
in time, does everything we need.
With all alternative generation sourc-
es, the economics are completely
different, and none provide the same
level of support to the grid.
Policymakers in both the UK and
US are encouraging utilities to evalu-
ate storage in their integrated resource
planning. But it is difcult to go all-in
without specic regulation around
how energy storage facilities will be
compensated. Planners can’t wait for
regulation to be nalised, energy stor-
age costs to further decline, or tech-
nology risks to be realised through
research and development or pilot
programmes. In the meantime, as ag-
ing fossil fuel plants are retired, elec-
tric utilities are turning to a more ef-
cient fossil fuel: natural gas.
Much like wind and solar, natural
gas is abundant and cost-effective
while also checking the boxes for grid
stability and reliability. In the US,
natural gas is expected to continue as
the primary electricity generation re-
source for at least the next decade.
Moreover, gas is expected to become
even more predominant as more and
more coal red capacity is retired.
One thing we’re doing during the
integrated resource planning process
is helping utilities realise the eco-
nomic benet of faster-response, gas
red generation technologies. In
some markets, smaller aeroderiva-
tive and reciprocating engine tech-
nologies are attractive because they
have a small footprint, can quickly
respond to load demand, and can be
placed near load pockets to offer
highly reliable capacity.
In Denton, Texas, a medium-sized
city located near Dallas-Fort Worth,
city leaders opted to build a 225 MW
gas red reciprocating engine plant as
a bridge to allow them to meet a goal
of grid stability while working toward
an eventual goal of 100 per cent re-
newable energy.
Low-cost, high-efciency gas is an
important component as the grid
transitions to renewable energy, keep-
ing reliable power owing to custom-
ers. There have been great strides
within the gas turbine market, in-
creasing efciency, reducing emis-
sions and lowering cost for reliable
gas generation. The already highly
efcient gas turbines can follow load
demand much more effectively and
efciently than they could just ten
THE ENERGY INDUSTRY TIMES - JULY 2019
Energy Outlook
14
As the grid transitions
to renewable energy,
technologies continue
to emerge to handle
its intermittency.
Although gas red
generation is likely
to be a critical part
of the energy matrix
in this respect, some
utilities have latched
on to other newer
technologies. But all
offer pros and cons.
Megan Parsons
Planning for renewables:
the endless options
Parsons: Both old and new technologies will be
needed as the world moves toward higher and
higher percentages of renewables
THE ENERGY INDUSTRY TIMES - JULY 2019
15
Technology
As solar modules
move to higher power
outputs, 158 mm
wafer sizes could
become the new
standard.
Junior Isles speaks
to JinkoSolar’s
Dr Alex Li about what
the company’s move
to a larger standard
wafer size means for
the industry.
M
uch has changed in the so-
lar industry in recent years
– advances that have seen
solar farm sizes increase and lev-
elised cost of energy (LCOE) from
those farms reach grid parity in
many countries.
With China being a global leader in
the sector, Chinese companies are
playing a key role in the progress of
solar panel technology.
Dr Alex Li, Ph.D in Photovoltaics
Engineering and Head of Technical
Service, Asia Pacic (APAC) at
JinkoSolar, commented: “About two
years ago in Australia, people were
typically only building 5 MW solar
farms; these days, 200 MW farms
are being discussed. There’s been re-
ally rapid change and rapid growth
in the industry.
“What we are trying to achieve is
how to ensure solar, as a relatively
new technology, reaches grid parity
and becomes competitive with tradi-
tional forms of generation such as
coal red plant or hydro.”
The price of solar power has fallen
by around 90 per cent over the last
10 years. This, says Dr Li is largely
down to two factors: “Number one is
the power output, driven by efcien-
cy. Higher power means you can re-
duce the balance-of-system (BOS),
such as trackers and other compo-
nents, not including the panels.
“But I would say the most impor-
tant thing is economy of scale. Ten
years ago manufacturers were only
producing 100 MW each year. To-
day, all the tier 1 manufacturers are
producing 10 GW/year but the prot
is the same. So the unit price has
been driven down.
“China has been the major contrib-
utor to the PV industry when it
comes to mass production, able to do
very high density mass production in
a single manufacturing facility. The
silicon maker, wafer maker and cell
maker are all next to each other so
that you an access those technolo-
gies and technology developments in
a relatively efcient way.”
JinkoSolar recently announced that
it was switching high volume pro-
duction capacity for its PV panels
from polycrystalline to premium
monocrystalline. It also said its new
Cheetah module is now combining a
bigger size wafer with half-cut cell
technology. In what it claimed to be
an industry’s rst, the new Cheetah
module will now use a 158 mm wa-
fer as its new standard size.
Dr Li says moving to the larger
wafer size is important for end users
– both residential and utilities – as it
allows higher power output in a
cost effective way. Having a higher
output panel, he stressed, is a way
of achieving a better return on in-
vestment for solar projects, thus
making them more attractive for -
nancial investors.
“When I rst joined Jinko two
years ago, people were talking about
a 320 W panel. This means you
would need ve panels to build a 1.6
kW system. Today, with a 400 W
panel, you only need four panels,”
he said. “This means you can reduce
the cost of the mounting system sig-
nicantly. You can also reduce in-
stallation cost, etc. When you are
talking about a 100 MW solar farm,
using a 400 W panel will reduce the
balance of system (BOS) cost signif-
icantly.”
Launched about one year ago, the
Cheetah 410 W module set a new
standard for a commercially mass-
produced panel output. “It was the
rst time in history that a single PV
panel could reach 400 W. Now other
major suppliers are following the
trend of moving towards highly ef-
cient mono technology,” said Dr Li.
According to Jinko, it was able to
move to a 158 mm wafer, from the
traditional 156 mm size, without any
major upgrade of its existing manu-
facturing facilities. “This means we
were able to increase the power of
the modules without increasing man-
ufacturing cost signicantly. So this
was a cost-effective technology de-
velopment.”
The decision to base its modules
on what it calls “premium” mono-
crystalline instead of poly-crystalline
was also ultimately based on eco-
nomics. Dr Li says, these premium
mono-crystalline panels have a dif-
ferent cell structure to standard mo-
no-crystalline modules and have 2-3
per cent higher efciency.
Mono-crystalline solar panels have
the highest efciency rates, currently
in the 20 per cent region, since they
are made out of the highest-grade
silicon. They also have a long lifes-
pan, typically 25-30 years. Tradition-
ally, however, they are more expen-
sive. By contrast, poly-crystalline
panels are less efcient, around 13-
16 per cent and typically have a
slightly shorter lifespan of 23-27
years. However they are traditionally
cheaper.
But the economics of the two
technologies has been changing.
“About 30 years ago, in the early
days of the PV industry, the price
difference between poly and mono
was very big, almost 200 per cent,”
said Dr Li. “So back then, and even
just 10 years back, people favoured
poly because of cost. But both are
reliable technologies.”
As the industry has evolved, how-
ever, the price gap has become very
small and according to Dr Li, the
trend is towards mono crystalline
panels. “If you calculate the capex of
the entire system – including not just
the module but the inverter, tracker
DC cable and all the civil works – a
400 W mono now has a lower capex
than a 320 W poly. This is a mile-
stone and indicates that poly will
probably start to phase out for the
rst time in the history of PV.”
He believes that when looking at
the technology development road-
map, there will be “no way back” for
polycrystalline panels. “Poly does
not have too much room to improve.
If you spend $1 million in a poly de-
velopment, you would probably get
a 0.1 per cent increase in efciency
but if you spend that in a mono tech-
nology development, you would get
a 0.2 to 0.3 per cent increase in ef-
ciency, said Dr Li. “This is why
many investors now choose to invest
in mono technology development
rather than poly.”
For manufacturers, the change
from poly crystalline cell production
to mono will be painful but may be
inevitable. “It will be challenging
because manufacturers will want to
make use of existing facilities for as
long as possible. But at some point,
when they can no longer make a
prot, they will be forced to upgrade
their manufacturing facility to pro-
duce premium mono solar cells.”
Indeed, it will be an increasingly
likely shift judging by the falling
LCOE delivered by advancing tech-
nology. A nancial analysis by
JinkoSolar of a Cheetah 158 mm,
high performance mono cell versus
a standard poly-crystalline cell re-
veals an LCOE of 3.49 /kWh versus
3.55 c/kWh.
Meanwhile, Dr Li says JinkoSolar
will continue to upgrade its technol-
ogy in a cost-effective way. “Next
year or in the very near future, we
will be offering a major technology
development for the solar PV com-
munity. Already this year, we
launched a bifacial technology with
a transparent backsheet. Because it
allows electricity to be generated
from both sides, you can generate
more energy from the same area of
land.”
He forecasts that next year it will
have modules with power outputs in
the region of 450-460 W from a sin-
gle panel. These, he says, will have
an efciency above 20 per cent.
Looking forward, Dr Li adds that
new technology will have to be af-
fordable, reliable in the eld and du-
rable. He concluded: “From a nan-
cial point of view, if we want to
make sure that your nancial invest-
ment is secure. Together with power,
reliability and durability, we also
have to ensure that the solar panel
performs as predicted from day-one
– that is JinkoSolar’s mission for the
entire PV community.”
Higher efciency improves
solar economics
Dr Li says polycrystalline
technology will probably start
to phase out “for the rst time
in the history of PV”
How the economics stack up
Cell technology Industrial standard Jinko Cheetah
156 mm cell 158 mm cell
Module Type Industrial standard Cheetah high
performance poly series mono series
Module power(W) 330 400
Analysis results
LCOE (¢/kWh) 3.55 3.49
IRR (%) 9.35 9.56
Project overall cost ($/Wp) 0.7500 0.7438
BOS cost ($/Wp) 0.5000 0.4588
Inverter cost ($/Wp) 0.0793 0.0771
Mounting structure cost ($/Wp) 0.1024 0.0845
Other material and construction cost ($/Wp) 0.3183 0.2972
Increasing conversion efciency
In early June, JinkoSolar Holding Co Ltd said it achieved maximum conversion efciencies of 24.38
per cent and 24.58 per cent, respectively, for its Cheetah size cells and N-type photovoltaic (PV) cells.
The Chinese Academy of Sciences undertook the testing of the cells in March, JinkoSolar said in a
statement, claiming the efciencies are the highest in the world.
JinkoSolar also said its 72 version monocrystalline module has reached peak capacity of 469.3 W
during tests conducted by German safety standard authority TÜV Rheinland. The tests were carried
out in May.
The company has tied up with advanced R&D centres globally to create a joint research platform for
solar products. In January, it announced an efciency of 24.2 per cent for a large-area N-type TOPCon
monocrystalline silicon solar cell.
THE ENERGY INDUSTRY TIMES - JULY 2019
16
Final Word
S
ome would argue that setting
even more ambitious targets,
although you are failing to
achieve the current ones, smacks of
fantasy. Yet this is what the UK is look-
ing to do by legislating “net zero”
emissions by 2050. Likewise, the EU
is now discussing whether to follow
the UK’s example.
The story so far does not instil much
condence. Global emissions hit a
record high last year and most coun-
tries including Belgium, France,
Germany and the UK are set to miss
their 2020 carbon targets. A recent EU
assessment also found that the bloc is
not on track to meet its 2030 target to
draw 32 per cent of electricity from
renewable sources, because countries’
individual energy policies are insuf-
cient to meet the collective goal.
A report by the International Energy
Agency last month served only to add
to the pessimism. Of the 45 energy
technologies and sectors assessed in
the IEA’s latest ‘Tracking Clean En-
ergy Progress’ report, only seven are
on track for reaching climate, energy
access and air pollution targets. These
latest ndings follow an IEA assess-
ment published in March showing that
energy-related CO
2
emissions world-
wide rose by 1.7 per cent in 2018 to a
historic high of 33 billion tonnes.
Based on progress so far it is under-
standable why many would see intro-
ducing “net zero” legislation as
nothing more than ight of fancy of
an outgoing Prime Minister under
public pressure from activists and
looking to leave a positive legacy.
Yet past failures should not neces-
sarily dictate future ambition. And the
global energy transition is indeed ac-
celerating as the economics of tech-
nologies such as wind, solar and
storage become more favourable.
A report last month by Bloomberg-
NEF (BNEF) gives reasons to be
cheerful, and perhaps some con-
dence that net zero emissions by 2050
might be more than a pipedream.
In its New Energy Outlook 2019
(NEO), BNEF forecasts that deep
declines in wind, solar and battery
technology costs will result in a grid
nearly half-powered by the two fast-
growing renewable energy sources
by 2050.
The report notes that Europe transi-
tions furthest and fastest. By 2040,
renewables make up 92 per cent of the
electricity mix, with wind and solar
accounting for 80 per cent. Cheap re-
newables, exible demand and batter-
ies shift the European power system
away from fossil fuels and nuclear to
one built around variable renewables
and emissions-free energy.
Notably, by 2050 renewables pro-
vide 96 per cent of generation and
Germany’s emissions are 97 per cent
below what they are today. The UK,
meanwhile, adds 228 GW of wind and
solar by 2050, as well as 27 GW of
batteries, and renewables provide 89
per cent of generation.
According to the Outlook, the US
electricity system continues to replace
aging coal and nuclear with cheaper
renewables and gas, which becomes
the country’s premier source of power
generation. Coal and nuclear are
pushed out by age and economics, such
that by 2050 both technologies have
almost disappeared from the electric-
ity mix. Utility-scale batteries for
peaking purposes grow in signi-
cance from around 2035, supporting
renewables penetration, which
reaches 43 per cent in 2050. In that
year, emissions are 54 per cent lower
than today.
China, the world’s largest carbon
emitter along with the US, sees peak
coal generation and emissions in 2027,
as the world’s biggest electricity sys-
tem reaches 37 per cent renewables
penetration. China continues to be the
largest market for wind and solar,
which together grow from 8 per cent
to 48 per cent of total generation by
2050. By that time, China has 1.3 TW
of solar PV and 1.2 TW of wind in-
stalled – equivalent to 17 per cent of
all PV and a third of all wind power
installed globally. Nuclear, the only
base load CO
2
-free technology re-
mains important for China and sees
four-fold growth to 182 GW by 2050.
Shortly after the UK announced it
would be the rst to make its net zero
commitment legally binding, there
was some good news on the country’s
direction of travel.
For the rst time since the Industrial
Revolution, Britain is obtaining more
power from zero-carbon sources than
fossil fuels. National Grid revealed
that clean energy (nuclear, renewable
and clean electricity imports) has
moved ahead with 48 per cent of
generation, against 47 per cent for coal
and gas. The rest comes from biomass
burning. It said that over the past de-
cade, coal generation has plummeted
from 30 per cent to 3 per cent.
While this and the new legislation
are welcome – as is so often the case
in government policy – the politicians
have given themselves a get out-of-
jail card, or two.
The net zero target comes with a
noteworthy proviso: it will depend on
whether other countries are following
suit. A review within ve years will
assess whether other countries have
adopted similar goals – and if they
have not, it would give the UK the
opportunity to lessen its ambition.
Environmental groups have under-
standably criticised this as a major
“loophole”. Also, the term “net zero”
clearly indicates the government ac-
knowledges it may not be able to
achieve the goal that environmental-
ists are really pushing for – ‘actual
zero’ carbon emissions. “Net zero”
means that any remaining emissions
could be balanced by schemes to offset
an equivalent amount of carbon from
the atmosphere, such as planting trees
or through purchasing international
carbon offsets.
“It is disappointing that the govern-
ment has ignored its climate advisers’
recommendation to exclude carbon
offsets – as well as caving into Trea-
sury pressure to review the target in
ve years’ time,” said Craig Bennett,
head of Friends of the Earth.
Perhaps it is disappointing, yet
wholly understandable. The UK is
willing to lead the battle on tackling
climate change but is not willing to be
that single drop in the ocean, legally
culpable for what is a global respon-
sibility. Further, with Brexit looming
and a weakening economy, its govern-
ment has to be mindful of spending
and how much it can burden taxpayers.
Chancellor Philip Hammond warned
Theresa May that her net zero by 2050
plan will cost the UK “well in excess”
of £1 trillion. This would currently
equate to over $1100/year for every
UK taxpayer for the next 30 years.
Arguably, it’s a small price to pay for
our planet – if you are not already on
the bread line.
But it is no small task. Bloomberg-
NEF says the power sector will, at least
until 2030, contribute its share toward
keeping global temperatures from
rising more than 2°C. However, there
is heating, transport and industry to
consider – decarbonising these will be
much more challenging.
“We should be honest that it is a huge
industrial undertaking, and it will have
signicant cost,” said Dieter Helm,
Professor of Energy and Economics at
Oxford, who welcomed the new plan.
“These are enormous industrial ac-
tivities, there is nothing in history that
looks like this outside of wartime.”
Perhaps that is how governments
need to look at the issue. The battle
against climate is a war and when
going to war, countries seem to have
few reservations on how many zeros
are attached to the price tag.
Differentiating between
zeros and loopholes
Junior Isles
Cartoon: jemsoar.com
