August 2021 • Volume 14 • No 6 • 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
Special Supplement
Time to lead
There is an urgent need to move to a
carbon-neutral energy future. TEI Times
discusses why this transition has to
be done sustainably, and in a way that
improves system resilience.
In the countdown to COP26, Asia
energy expert and author, Joseph
Jacobelli, argues that Australia
must be a decarbonisation leader,
not a laggard. Page 14
News In Brief
Continued fossil fuel
support will put Paris goal
beyond reach
Fossil fuel subsidies and continued
exploration by oil and gas majors are
at levels that put the Paris climate
goal beyond reach.
Page 2
US infrastructure operators
must update risk mitigation
US infrastructure operators are
being hit by changing risks that
require them to re-evaluate their risk
management and mitigation regimes.
Page 4
UK, France, Spain vie for
pole position in oating wind
The ‘Scotwind’ seabed auction has
included bids for oating offshore
wind but the UK’s leading position
in the technology is under pressure
from its European neighbours.
Page 7
Iraq needs electricity sector
overhaul, says IEA
Iraq’s electricity sector must bring in
long-term reforms and solutions to
x its power crisis, an International
Energy Agency ofcial has said.
Page 8
Oil and gas majors explore
hydrogen alliances
Both Chevron and Shell have
announced alliances that will see the
two oil and gas majors speed their
transition to cleaner energy.
Page 9
Industry Perspective: Digital
infrastructure is key to a
renewable future
Digital infrastructure will play a
vital part in helping renewables form
the backbone of the grid by reliably
transmitting the data renewable
providers need to keep the lights on.
Page 13
Energy Outlook: Biomass
use must be sustainable
While bio-resources are in principle
renewable, there is growing concern
over the sustainability of biomass
for applications such as power
Page 15
or call +44 208 523 2573
The EU’s ‘Fit for 55’ package revises more than 10 pieces of legislation to bring them in line
with the new ambitions of the European Union’s Green Deal, the increased targets for 2030,
and a climate-neutral Europe by 2050. But although broadly welcomed, some still have
concerns about the package. Junior Isles
Rapid scaling of clean energy investment needed
Final Word
Being t for 55 needs
holistic thinking,
says Junior Isles
Page 16
The European Union’s raft of propos-
als detailing how it will cut the bloc’s
emissions by 55 per cent compared to
1990 levels by 2030 has been broadly
welcomed but may still require further
policy and regulation changes.
In its ‘Fit for 55 package’, the Eu-
ropean Commission last month laid
out 13 legislative proposals aimed at
cutting carbon emissions across all
the major energy consuming sectors
on the road to reaching net zero by
2050. By targeting a 55 per cent
emissions reduction the EU could
save as much as 8 billion t CO
mulative emissions.
Notably, the proposals include a re-
vised Renewable Energy Directive
(RED III); an extended Emissions
Trading Scheme (ETS) that now also
covers aviation and maritime; a re-
vised Energy Taxation Directive; sup-
port for biofuels, hydrogen and carbon
capture and storage; as well as a Car-
bon Border Adjustment Mechanism
According to Wood Mackenzie data,
the EU would need 472 GW of addi-
tional wind and solar by 2030 to se-
cure its new renewables target. The
global energy and commodities con-
sultancy said, however, the task of
installing the required amounts of
wind and solar would be “unnecessar-
ily challenging” unless further policy
and regulation changes are made.
In a press statement, it said the plan-
ning, connection and permitting pro-
cess will need to be streamlined, dis-
tribution network investment will
need to be in place, and regulators will
need to adopt a new net zero mindset.
“On top of this, system exibility
build-out will need to be supported,
and market reforms will need to be in
place to ensure it is t for operating in
a zero marginal cost producers’ envi-
ronment,” it added.
The lack of adequate provision for
system exibility in an energy land-
scape that is being increasingly dom-
inated by intermittent renewables
was also a concern to energy storage
The European Association for Stor-
age of Energy (EASE) said that the
revised RED III does not offer suf-
cient support for the energy storage
that will be needed to integrate renew-
ables into the energy system.
EASE Secretary General Patrick
Clerens noted: “EASE supports that
the revised directive increases the
overall Union target for renewable en-
ergy in 2030 to 40 per cent, which is a
positive step. The RED III proposals,
however, fall short in terms of sup-
porting energy storage deployment to
facilitate renewable energy sources
(RES) integration. This is a mistake
because focusing only on deploying
more RES is insufcient… Energy
storage is a key enabler of a RES-
dominated system, as it can ensure
security of supply, efcient energy
system operation, and the competi-
tiveness of EU industries.”
The proposals to strengthen carbon
pricing have also been welcomed, as
Continued on Page 2
Achieving net zero carbon emissions
by 2050 will require as much as $173
trillion in investments in the energy
transition, according to Bloomberg-
NEF’s (BNEF) ‘New Energy Outlook
2021’ (NEO), the latest edition of its
annual long-term scenario analysis on
the future of the energy economy.
With the route to net zero being un-
certain, BNEF’s NEO outlines three
distinct scenarios (Green, Red and
Gray) that each achieve net zero
while relying on a different mix of
It notes that the energy transition
requires substantial investments in
infrastructure, with capital owing
away from fossil fuels and toward
clean power and other climate solu-
tions. Despite uncertainty around
the overall cost of each NEO sce-
nario set out, BNEF estimates in-
vestment in energy supply and infra-
structure amounts to between $92
trillion and $173 trillion over the
next 30 years. Annual investment
will need to more than double to
achieve this, rising from around $1.7
trillion per year today, to somewhere
between $3.1 trillion and $5.8 tril-
lion per year on average over the
next three decades.
A core part of the BNEF analysis is
constructing sector-by-sector emis-
sions budgets to achieve net zero in
2050 with an orderly transition. To-
gether these show that global energy-
related emissions need to drop 30 per
cent below 2019 levels by 2030, and
75 per cent by 2040, to reach net zero
in 2050. This is a 1.75°C equivalent
budget that implies a 3.2 per cent re-
duction each year to 2030 and a swift
reversal of recent trends: emissions
rose 0.9 per cent a year from 2015 to
The power sector needs to make the
greatest progress over the next de-
cade, reducing emissions by 57 per
cent from 2019 levels by 2030, and
then 89 per cent by 2040.
“There is no time to waste. If the
world is to achieve or get close to
meeting net zero by mid-century,
then we need to accelerate deploy-
ment of the low-carbon solutions we
have this decade – that means even
more wind, solar, batteries, and elec-
tric vehicles, as well as heat pumps
for buildings, recycling and greater
electricity use in industry, and redi-
recting biofuels to shipping and avia-
tion,” said BNEF Chief Economist
Seb Henbest.
Last month the International Energy
Agency also said the sums of money,
both public and private, being mobil-
ised worldwide by recovery plans fall
well short of what is needed to reach
international climate goals.
New analysis from the Paris-based
agency said that governments world-
wide are deploying an unprecedent-
ed amount of scal support aimed at
stabilising and rebuilding their econ-
omies, but only about 2 per cent of
this spending has been allocated to
clean energy measures. It noted that
shortfalls are particularly pro-
nounced in emerging and develop-
ing economies, many of which face
particular nancing challenges.
Under governments’ current recov-
ery spending plans, global carbon di-
oxide emissions are set to climb to
record levels in 2023 and continue
rising in the following years. This
would leave the world far from the
pathway to net zero emissions by
2050 that the IEA set out in its Global
Roadmap to Net Zero.
These ndings come from the new
Sustainable Recovery Tracker that
the IEA launched in July to help
policy makers assess how far recov-
ery plans are moving the needle on
“Since the Covid-19 crisis erupted,
many governments may have talked
about the importance of building back
better for a cleaner future, but many of
them are yet to put their money where
their mouth is. Despite increased cli-
mate ambitions, the amount of eco-
nomic recovery funds being spent on
clean energy is just a small sliver of
the total,” said Fatih Birol, the IEA
Executive Director.
EU moves to align legislation
EU moves to align legislation
with 2030 emissions target
with 2030 emissions target
Junior Isles
Fossil fuel subsidies and continued
exploration by oil and gas majors are
at levels that put the Paris climate goal
beyond reach.
In July a report by BloombergNEF
(BNEF) and Bloomberg Philanthro-
pies revealed that governments of all
19 individual country members of the
G20 have given more than $3.3 trillion
in subsidies for coal, oil, gas, and fos-
sil fuel production and consumption
from 2015-2019. At today’s prices,
that sum could fund 4232 GW in new
solar power plants – over 3.5 times the
size of the current US electricity grid,
said the report.
Phasing out support for fossil fuels,
particularly coal, and shifting funding
to renewables is a crucial step to ac-
celerating the clean energy transition
and is core to the upcoming Glasgow
COP26 climate conference goals.
The ‘Climate Policy Factbook’ high-
lights three concrete areas in which
immediate government action is need-
ed to limit global warming to 1.5 °C:
rst, phasing out support for fossil
fuels; second, putting a price on emis-
sions; and third, encouraging climate
risk disclosure. In each of these areas,
the report found that the policies of
many G20 countries were signicantly
off course.
G20 nations collectively cut fossil
fuel funding by 10 per cent from 2015
to 2019, with eight member nations
making notable progress in reducing
their fossil fuel subsidies by 10 per cent
or more (Argentina, Germany, Italy,
Saudi Arabia, South Africa, South Ko-
rea, Turkey, and the UK).
However, to remain in line with the
Paris Agreement goals in the lead-up
to COP26, the G20 cannot rely on the
actions of a few nations, said the report.
“Every G20 country must take imme-
diate action to end support of fossil fuel
projects and accelerate their coal
phase-outs,” it said.
During the same timeframe (2015-
19), eight members increased their
support – notably Australia, Canada,
and the US – encouraging the use and
production of fossil fuels, distorting
prices, and risking carbon ‘lock-in’
where assets funded today continue to
emit high levels of emissions for de-
cades ahead.
According to BNEF, to effectively
lead the phase-out of coal and other
fossil fuels ahead of COP26, G20
countries must also implement emis-
sion pricing mechanisms to hold pol-
luters accountable for the true social
cost of their actions.
In a separate study, the oil and gas
sectors came under scrutiny. A com-
prehensive benchmarking analysis of
the oil and gas industry’s performance
against the Paris climate goals today
shows that, without immediate and
decisive action, the sector would pre-
vent the world from meeting the
IPCC’s 1.5°C global warming sce-
nario by 2050.
The benchmark created by the
World Benchmarking Alliance
(WBA), alongside partners CDP and
ADEME, scores private, state-owned
and publicly listed companies using
CDP’s and ADEME’s Assessing low
Carbon Transmission (ACT) meth-
odology. This is the rst time the in-
dustry has been judged against a
1.5°C scenario – the most ambitious
emissions reduction plan proposed by
the Paris Agreement and the rst
study to assess oil and gas companies
using the International Energy Agen-
cy’s (IEA) ‘Net Zero Emissions by
2050’ scenario.
Assessing 100 of the world’s biggest
oil and gas rms against this scenario,
it shows that based on current rates of
production these companies are set to
consume the sectors allocated carbon
budget (from 2019 to 2050) by 2037
– 13 years too early. Despite this trajec-
tory, researchers found that none of the
100 companies have committed to
stopping exploration.
Other key ndings include: from
2014-2019 the majors and National
Oil Companies (NOCs) all increased
either their oil or gas production; only
13 companies have low carbon tran-
sition plans that extend at least 20
years into the future.
“Opaque, unambitious or non-exis-
tent targets and strategies from the
greatest contributors to climate change
show that the oil and gas sector is not
accepting its share of responsibility for
global emissions,” said the report.
they should begin to incentivise in-
dustrial decarbonisation through
the use of technologies like high
temperature heat pumps or carbon
“Reforming the carbon market
will be critical, especially for the
hard-to-decarbonise industrial sec-
tors, such as cement and steel,” said
the Wood Mackenzie statement.
“Though the EU ETS covers sectors
that generate half of the bloc’s emis-
sions – power, industry and aviation
– these sectors will only deliver a
third of the cuts needed by 2030.”
With the ETS, the EU has tried to
push companies to gradually reduce
their emissions to minimise their
cost of emissions allowances,
which have risen from €8/t of emis-
sions at the start of 2018 to over
€50/t in early May.
In the absence of any changes to
the proposed package, ICIS (Inde-
pendent Commodity Intelligence
Services) expects EU ETS prices to
reach around €90/tCO
by 2030,
with a price increase expected in
particular in the second half of the
decade when the proposed reforms
to free allocation would take effect.
The EU is also acting to ensure its
efforts to increase carbon prices do
not put its economy at a disadvan-
tage. The CBAM aims to prevent
carbon leakage and ultimately en-
courage the rest of the world to re-
duce emissions. The mechanism
will create a level playing eld on
emissions costs for companies ex-
porting goods to the EU and EU
producers already subject to the
The CBAM proposed in Fit for 55
will cover the steel, aluminium, ce-
ment, electricity, and fertilisers sec-
tors. ICIS estimates that around 200
million t of embedded emissions
would initially be covered by the
Commenting on the proposal, Se-
bastian Rilling, Analyst EU Power
& Carbon Markets, ICIS, said: “It
remains to be seen, however, to what
extent domestic carbon pricing
schemes in the countries of origin
as well as a potential resource shuf-
ing will limit the impact for im-
porters on the ground especially in
the rst years of operation.”
James Whiteside, Global Head of
multi-commodity research at
Wood Mackenzie, warned that
implementation “could prove to be
a logistical nightmare”. He said:
“There is little transparency around
carbon emissions associated with
products. Determining the country
of origin of products can also be
problematic. Robust certication
schemes must be adopted – and
adhered to – to effectively admin-
ister border taxes.”
Continued from Page 1
bp’s ‘Statistical Review of World En-
ergy 2021’ has captured the “dramatic
impact” the global pandemic had on
energy markets and how the “year of
Covid” may shape future global energy
The data collected in this years edi-
tion includes energy data for 2020 – one
of the most turbulent years the world
has ever seen. The report showed pri-
mary energy consumption fell by 4.5
per cent in 2020 – the largest annual
decline since 1945 – largely driven by
a 75 per cent decline in oil consump-
tion. Even electricity generation fell by
0.9 per cent – more than the decline in
2009 (-0.5 per cent), the only previous
year in bp’s data series (which starts in
1985) that had seen a decline in elec-
tricity demand.
Wind, solar and hydroelectricity
generation, however, all grew despite
the fall in overall energy demand.
Wind and solar capacity increased by
238 GW in 2020 – 50 per cent larger
than at any time in history.
US, India and Russia saw the largest
declines in energy consumption. China
saw the largest increase (2.1 per cent),
one of only a handful of countries
where energy demand grew last year.
Spencer Dale, bp’s Chief Economist,
said: “For the Review – as for so many
of us – 2020 will go down as one of
the most surprising and challenging
years in its life. The global lockdowns
had a dramatic impact on energy mar-
kets, particularly on oil, whose trans-
port-related demand was crushed.
“Encouragingly, 2020 was also the
year the share of renewables in global
power generation recorded its fastest
ever increase – a growth that came
largely at the expense of coal red gen-
eration. These trends are exactly what
the world needs to see as it transitions
to net zero – strong growth in renew-
ables crowding out coal.”
Additional highlights from the pub-
lication showed the share of gas in
primary energy continued to rise,
reaching a record high of 24.7 per cent,
as gas prices fell to multi-year lows.
Coal consumption fell by 6.2 EJ, or
4.2 per cent, led by declines in the US
(-2.1 EJ) and India (-1.1 EJ). OECD
coal consumption fell to its lowest
level in bp’s data series back to 1965.
China and Malaysia were notable ex-
ceptions, with consumption by 0.5 EJ
and 0.2 EJ, respectively.
Renewable energy (including biofu-
els but excluding hydro) rose by 9.7
per cent, slower than the 10-year aver-
age (13.4 per cent p.a.) but the absolute
increment in energy terms (2.9 EJ) was
similar to increases seen in 2017, 2018
and 2019.
Solar electricity rose by a record 1.3
EJ (20 per cent) but wind (1.5 EJ)
provided the largest contribution to
renewables growth. Solar capacity
expanded by 127 GW, while installed
wind capacity grew 111 GW – almost
double its previous highest annual
China was the largest contributor to
renewables growth (1.0 EJ), followed
by the US (0.4 EJ). Europe, as a region,
contributed 0.7 EJ to the rise.
The British government together with
energy regulator Ofgem, has published
its Smart Systems and Flexibility Plan
and Energy Digitalisation Strategy in
an effort to deliver on the commitments
made by the government in the Energy
White Paper. The plan updates the pre-
vious plan launched in 2017 and rep-
resents a signicant step forward on
the path to providing exibility for the
country’s energy network.
According to the government, full
deployment of smart systems and ex-
ibility in the energy sector could create
up to 24 000 UK jobs and boost exports
while enabling the UK to create a net
zero energy system by 2050.
Jonathan Brearley, Chief Executive
of Ofgem, commented: “This plan is
essential to hitting the UK’s net zero
climate goal while keeping energy bills
affordable for everyone. It requires a
revolution in how and when we use
electricity and will allow millions of
electric cars, smart appliances and
other new green technologies to digi-
tally connect to the energy system.”
The government also published a call
for evidence on the deployment of
technologies that allow electric vehi-
cles to export electricity from their
batteries back on to the grid or to homes
during times of higher demand. A
separate call for evidence will look at
enabling large-scale and long-duration
electricity storage so that availability
can be maintained during periods when
renewables generate less energy.
Two government consultations were
also launched on proposed reforms to
the energy system that will ensure
frameworks are in place to drive the
UK’s decarbonisation plans, while
minimising costs to consumers and
industry and maintaining resilience in
the system.
The Future System Operator consul-
tation is on proposals to create a new
energy system operator separate from
National Grid plc, with roles in both
the electricity and gas systems. Ac-
cording to the government, the chal-
lenges of meeting commitments to
tackle climate change are creating the
need for new technical roles and re-
sponsibilities in electricity and gas
The other consultation assesses pro-
posals to reform the codes that govern
gas and electricity markets. This con-
sultation will ensure that governance
of the energy system is t for purpose
in a low-carbon future and builds on a
previous consultation from 2019.
Headline News
bp Statistical Review highlights “dramatic
bp Statistical Review highlights “dramatic
impact” of pandemic on energy markets
impact” of pandemic on energy markets
UK gets smart on delivering a exible energy network
UK gets smart on delivering a exible energy network
Continued fossil fuel support
Continued fossil fuel support
will put Paris goal beyond reach
will put Paris goal beyond reach
Whiteside: implementation
of the CBAM could be a
“logistical nightmare”
n G20 gives more than $3.3 trillion to fossil sector over four-year period
n Oil and gas companies to consume sector’s carbon budget by 2037
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Companies News
Both Chevron and Shell have an-
nounced alliances that will see the two
oil and gas majors speed their transition
to cleaner energy.
In the most recent tie-up, Chevron
U.S.A. Inc. and global power equip-
ment company Cummins Inc., an-
nounced a memorandum of under-
standing to explore a strategic alliance
to develop commercially viable busi-
ness opportunities in hydrogen and
other alternative energy sources.
The memorandum provides the
framework for Chevron and Cummins
to initially collaborate on four main
objectives: advancing public policy
that promotes hydrogen as a decarbon-
ising solution for transportation and
industry; building market demand for
commercial vehicles and industrial ap-
plications powered by hydrogen; de-
veloping infrastructure to support the
use of hydrogen for industry and fuel
cell vehicles; and exploring opportuni-
ties to leverage Cummins’ electrolys-
ers and fuel cell technologies at one or
more of Chevron’s domestic reneries.
“Chevron is committed to develop-
ing and delivering affordable, reliable,
ever-cleaner energy, and collaborating
with Cummins is a positive step toward
our goal of building a large-scale busi-
ness in a lower-carbon area that is
complementary to our current offer-
ings,” said Andy Walz, President of
Chevron’s Americas Fuels & Lubri-
cants. “Hydrogen is just one lower-
carbon solution we are investing in that
will position our customers to reduce
the carbon intensity of their businesses
and everyday lives. We’ve also in-
vested in developing and supplying
renewable natural gas, blending re-
newables into our fuels, co-processing
biofeedstocks in our reneries, and
abatement projects that will reduce the
carbon intensity of our operations.”
Amy Davis, Vice President and Pres-
ident of New Power at Cummins,
added: “The energy transition is hap-
pening, and we recognise the critical
role hydrogen will play in our energy
mix. We’ve deployed more than 2000
fuel cells and 600 electrolysers around
the world and are exploring other hy-
drogen alternatives including a hydro-
gen-fuelled internal combustion engine
as we continue to accelerate and har-
ness hydrogen’s powerful potential.”
Earlier in July, Dutch energy giant
Shell also moved to increase hydrogen
use, when Shell Gas & Power Develop-
ments B.V. and Uniper Hydrogen
GmbH signed a memorandum of un-
derstanding to explore accelerating the
development of a hydrogen economy
in Europe.
Under the MoU, the companies in-
tend to nd joint opportunities to
couple industrial and mobility demand
with hydrogen supply, production, and
Shell and Uniper will begin by as-
sessing the opportunity to develop
potential synergies to accelerate exist-
ing projects in Germany, the Nether-
lands, and potentially other European
countries. Taking a full value chain
approach, Shell and Uniper will work
backwards from customer demand to
identify key opportunities to develop
the foundation of a new hydrogen
economy in Europe.
Exploring future options including
the necessary infrastructure for large-
scale transport of hydrogen and CO
from the ports of Rotterdam and Wil-
helmshaven to North Rhine Westpha-
lia (NRW) – the industrial heartland
of Germany – will be at the centre of
the collaboration.
Among the projects considered will
be Shell’s Rheinland transformation
where Shell recently opened a 10 MW
PEM electrolyser, the largest of its kind
in Europe, and is working with partners
to expand the capacity to 100 MW.
Uniper will further explore the sup-
ply of hydrogen from the existing
Uniper production sites at Rotterdam
and Wilhelmshaven to the Shell En-
ergy and Chemicals Park Rheinland
locations at Wesseling and Godorf. In
addition, Uniper intends to connect its
power plant in Gelsenkirchen Schol-
ven as well as some large-scale cus-
tomers with its coastal hydrogen pro-
duction plants.
”Our mission is to connect Unipers
large-scale hydrogen projects – e.g. in
the Netherlands and in Northern Ger-
many – with industrial customers to
enable a decarbonisation of our econ-
omy,” said Dr. Axel Wietfeld, CEO,
Uniper Hydrogen.
Recent agreements signed by Rolls-
Royce in the UK and Doosan Heavy
Industries & Construction in the US
are demonstrating the growing belief
that small modular reactors (SMRs)
will play a signicant role in the future
of nuclear power.
In July Rolls-Royce and Cavendish
Nuclear signed a Memorandum of Un-
derstanding (MoU) to explore oppor-
tunities to deepen the relationship be-
tween the parties through cooperation
on the Rolls-Royce SMR programme.
Rolls-Royce is leading a consortium
that has been working on the design of
a SMR power station for the last two
years with support from the UK gov-
ernment through UK Research and
Under this latest agreement Rolls-
Royce and Cavendish Nuclear commit
to working together to develop the
roles that Cavendish Nuclear can per-
form in the design, licensing, manu-
facturing and delivery aspects of the
Rolls-Royce factory-fabricated SMR
power plant.
Commenting on the agreement, Tom
Samson, CEO of the Rolls-Royce
SMR Consortium, said: “Our SMR
programme has been designed to de-
liver clean affordable energy for all
and does so with a revolutionary new
approach aimed at commoditising
the delivery of nuclear power through
a factory build modularisation
“Cavendish Nuclear, and its parent
Babcock International Group, have
unique capabilities within the UK in-
dustry with their world-class manufac-
turing and modularisation capabilities
at their facilities at Rosyth, as well as
their wider nuclear skill set delivering
engineering and manufacturing solu-
tions across the new-build and decom-
missioning landscape.”
SMR power plants are also being
developed in the US. In a more recent
move South Korea’s power plant
builder Doosan Heavy Industries &
Construction Co. said it will invest
$60 million to expand its stake in US-
based SMR developer NuScale Pow-
er LLC.
Doosan Heavy already invested $44
million in the unlisted SMR devel-
oper in 2019, along with other local
investors, and signed a deal to provide
core parts to be used for the construc-
tion of SMRs.
The two companies also agreed to
join forces for the hydrogen and fresh-
water production business using
NuScale Power plans to provide its
SMRs to Utah Associated Municipal
Power Systems (UAMPS), a US elec-
tricity provider that has been pushing
ahead with a project to build a power
plant in Idaho, with 2029 eyed for
commercial operation.
Finnish companies Valmet and Neles
are to merge in a move aimed at
strengthening their position in the pro-
cess and energy industries.
The proposed combination will be
implemented as a statutory absorption
merger whereby Neles will be merged
into Valmet.
The combined company, which will
have combined net sales for 2020 of
approximately €4.3 billion and about
17 000 employees, says it stands to
benet from megatrends such as the
energy transition and increasing de-
mand for renewables.
Valmet President and CEO Pasi
Laine will continue to act as the Pres-
ident and CEO of the combined com-
pany after the completion of the
merger. Completion is expected to
occur on or about January 1, 2022,
subject to all conditions for comple-
tion being fullled.
n Valmet also recently completed the
acquisition of EWK Umwelttechnik
GmbH and ECP Group Oy following
the agreements originally announced
on June 10. EWK Umwelttechnik is
a German company manufacturing
and supplying air emission control
systems and after-installation ser-
vices. ECP Group is a manufacturer
and maintainer of electrostatic pre-
cipitators (ESPs), focusing on power
plants and pulp and paper industry, in
Hitachi ABB Power Power Grids has
announced that it will be evolving to
become Hitachi Energy from October
2021, in a move that reects the rap-
idly evolving energy landscape.
The decision coincides with the busi-
ness’ rst-year anniversary since it
started operations on July 1, 2020. Hi-
tachi Ltd. has an 80.1 per-cent stake in
the joint venture and ABB Ltd. holds
the remainder.
Explaining the name change, Toshia-
ki Higashihara, Executive Chairman
and CEO of Hitachi, said: “With cli-
mate change and increasing natural
disasters, there is a need to solve three
social issues worldwide: environment,
resilience, and security and safety.” He
continued: “Hitachi ABB Power Grids
provides a variety of solutions that
solve these social issues, and by chang-
ing the company name to Hitachi En-
ergy, we are further strengthening our
commitment to the realisation of a
sustainable society.”
Claudio Facchin, CEO of Hitachi
ABB Power Grids, added: “The energy
landscape continues to evolve and so
do we.”
On changing its name, the company
says it will at the same time change its
corporate brand to the Hitachi brand.
The business formally registered Hita-
chi Energy Ltd. on June 30, 2021 and
is now undertaking the formal process
for the change of names globally.
The news came as the company an-
nounced that it was extending its
global base of engineering and service
centres through the opening of Col-
laborative Operations Centres (COC)
for grid automation solutions at key
regional centres around the world. In
addition, Hitachi ABB Power Grids
announced its new lifecycle manage-
ment programme, which enables cus-
tomers to map and track their installed
Hitachi ABB
Hitachi ABB
Power Grids is
Power Grids is
OEMs step-up
OEMs step-up
SMR involvement
SMR involvement
Valmet and Neles to merge
Oil and gas majors explore
hydrogen alliances
n Chevron signs MoU with Cummins n Shell and Uniper to grow hydrogen use across Europe
Special Technology Supplement
The need to speed
towards a resilient,
carbon-neutral future
The urgent need to make the transition towards a carbon-neutral energy future is becoming increasingly clear.
Hitachi ABB Power Grids’ Dr. Gerhard Salge, explains why this transition has to be done sustainably, and in a way that
improves system resilience. Junior Isles
storage, batteries and other energy
carriers for mid-term, and other carri-
ers like green hydrogen, for long-term
storage. Especially on long-term, or
so-called seasonal storage technolo-
gies, there is still a lot of research to
be done towards cost-effective and
energy efcient solutions.”
He stresses, however, that storage
and electrical interconnections need
to go hand-in-hand in order to opti-
mise system efciency with respect to
excess fuels and generation capacity,
while improving resilience. “We need
a different kind of thinking,” he said.
One element that needs to be re-in-
vented is how to drive energy system
resilience. And this is a key element
of the transition. The new power/en-
ergy landscape must not compromise
reliability and availability.
“We need to move towards a more
resilient power system,” said Dr. Sal-
ge. “There has to be a certain change
in philosophy in how to build and
operate a power system. In the past, a
power system was typically built to
be as robust as possible to avoid out-
ages by making things robust and in-
cluding safety buffers. But a resilient
system is one that is so exible it can
handle foreseen and unforeseen situa-
tions so that the impact on the end
customer is minimal.”
Handling unforeseen circumstances
such as the outages caused by extreme
weather in Texas, USA, a few months
ago, is a case in point. Designing re-
silience concepts for such events
limate change is one of the
greatest challenges of our time.
The rise in extreme weather
conditions such as the recent oods in
Europe and China, the blizzards and
heatwaves in the US, and the growing
frequency of hurricanes around the
world are all signs that the climate
emergency is clear and present.
With the urgency now obvious,
country and company strategies to
drive the energy transition in order to
achieve a carbon-neutral economy
are a top priority.
Last years formation of Hitachi
ABB Power Grids was a highly pub-
licised example of how companies
are positioning themselves to help
address the challenges facing the en-
ergy sector. Carbon-neutral energy
and sustainability are at the core of the
new company’s strategy and will
continue to be so as it prepares to
change its name to Hitachi Energy
from this October. As part of its re-
cently released Sustainability 2030
Strategy, the company is pioneering
digital and energy platforms, which
help its customers to overcome com-
plexity, increase efciency and ac-
celerate the shift towards a carbon-
neutral energy future.
Commenting on how he sees the
evolving energy sector and the role
his company will play in its transfor-
mation, Dr. Gerhard Salge, Chief
Technology Ofcer, Hitachi ABB
Power Grids, said: “With all the com-
mitments and pledges made by
countries and regions within the last
12 months, it’s clear that the urgency
is becoming much more prominent.
This is highlighted in the Interna-
tional Energy Agency’s ‘Net Zero by
2050’ report; there really is a need for
speed. The rst key milestone on the
way to 2050, is 2030 and there are
only about 3000 days to reach this
target. This is not that far off for infra-
structure build-up, so all efforts are
needed from everyone to accelerate
– and starting today.”
Dr. Salge reinforces Hitachi ABB
Power Grids’ perspective, “that elec-
tricity will be the backbone of the
entire energy system”. He emphasizes
that three key building blocks are
stacking up to deliver this carbon-
neutral electric future: connecting
larger volumes of wind, solar and
hydro to the grids; electrifying the
world’s transportation, buildings and
industry sectors; and where direct
electrication is either not efcient or
impossible, introducing complemen-
tary and sustainable energy carriers,
such as green hydrogen.
Basing the entire energy system as
much as possible on electricity gener-
ated from renewables not only mini-
mises carbon emissions, it also im-
proves the total energy efciency of
the energy system. Dr. Salge ex-
plained: “For example, when you go
from a solar panel or a wind turbine to
an electric vehicle, you have average
losses across the chain of about 30 per
cent. By comparison, there are about
80 per cent losses in going from an oil
source to a combustion engine.”
Increased electrication, however,
not only means largely increasing
power system capacity. It will also
require greater power system com-
plexity due to more complex in-feeds
from uctuating renewable sources,
as well as more complex consump-
tion patterns.
Renewables should be installed in
the best locations. For wind, this
means installing in regions that have
the best wind conditions; this some-
times means offshore or on land far
away from load centres. These wind
farms then have to be connected to the
load centres and to the existing grids.
It is a similar story for solar. It is also
important that all of these distributed
energy resources are aligned and
work together.
“Harvesting these renewables
means that we have to exibly ex-
change energy across time zones and
different climates, achieved electri-
cally by interconnection and also
through storage, which is another key
element – batteries for short-term
Battery energy storage is a key element for integrating renewables
Carbon-neutral energy and sustainability are at the core of the
Sustainability 2030 Strategy
“When you dream what’s possible
in the future, it’s not the technology
that is the limitation but more your
imagination,” said Dr. Salge.
Technologies such as articial intel-
ligence could, for example, enable
systems to become more autonomous.
Today, it is needed to make sense of
the ood of information coming from
sensors in the eld, but Dr. Salge says
it will go way beyond that, again
pointing out the need to drive exibil-
ity and resilience.
“In the background you will have
algorithms that are always running
and learning in order to simulate
‘what if?’ scenarios for what could
happen in the power system. They
will also enable the system to under-
stand what is happening and react by
automatically changing some set-
tings, for example. We call it adaptive
protection. It learns from a particular
fault situation. It may have been that
the system protection logic reacted in
a certain way to a storm but the re-
sponse was not optimised. AI would
see that, simulate a better response
and automatically change the protec-
tion schemes of the protection devices.
“Further in the future, it may be that
the system gives the operator propos-
als on what devices to invest in next
in order to be more exible and resil-
ient in the future. It’s identifying the
next step for improvement.”
Dr. Salge, stressed that such a sce-
nario requires the buy-in of stake-
holders across different technical
disciplines to collaborate and co-cre-
ate. “You need the customer to pro-
vide all the data for the learning cycle
of the AI and machine learning tech-
nologies. This has to be done in dif-
ferent congurations; so you have to
look at various networks across the
world, under different boundary con-
ditions and translate that from one
region to the other.”
Looking at the main technologies
the company will be working on over
the next years, Dr. Salge summarises
the focus areas with three keywords:
sustainability, digitalisation and
power electronics.
“It’s about providing exibility by
means of products, systems and solu-
tions which are optimised to enable
sustainable systems,” said Dr. Salge.
“When looking at power electronics,
it’s about having exible, energy ef-
cient converters across all the power
ranges. You need them at small scale
to e.g. integrate battery storage. You
need lter functionality at low and
medium voltage to ensure power
quality. We need to be able to up-
grade the large, older HVDC con-
verters, which are typically based on
thyristor technology, with today’s
IGBTs [insulated-gate bipolar tran-
sistors] or our BIGTs [bi-mode insu-
lated-gate bipolar transistors]. Ex-
panding and upgrading these large
congurations and substations will
allow more power transmission and
greater exibility. And behind that
are the control systems, which would
then be based on the most modern
software architectures.”
He notes that there is already a
global move away from large, mono-
lithic software blocks to more exi-
ble software architectures based on
micro-services and related technolo-
gies. Explaining the trend Dr. Salge
noted: “Here you ‘exibilize’ and
standardise the interfaces in the
software modules, and then you
build large software solutions out of
many of those connected and inter-
acting modules. This can for example
bring technologies such as machine
learning and articial intelligence
into the system in a exible way; as
well as to ensure cyber-secure
might include connecting to more
systems so energy can be imported
from across longer distances and time
Dr. Salge adds that whatever equip-
ment is installed, it should be the most
modern and most exible. “You have
to think differently when creating a
new system or adding new equipment
to an existing one, so you get the ex-
ibility that creates resilience in the
total system.
“If for example, you install a num-
ber of houses with electrical heating
on a long unidirectional feeder, you
are creating a critical situation for this
feeder. Here the resilience strategy
would not just mean installing a
larger overhead line or cable into that
feeder, or even a second one into the
same route. It might be that you
change to e.g. exible ring structures
where you can alternatively feed
those houses from another geographi-
cal site. Another option is to insert
controllable DC connections in be-
tween AC-feeders or ring structures
to optimize the energy ows. This
means you can feed from another di-
rection if something happens to a
portion of that supply of the feed. This
creates more redundancy and back-up
Efcient load management should
also be part of the resilience equa-
tion, as there may be situations
where spare generating capacity is
not available.
Dr. Salge explained: “Here a utility
could switch specic loads on and off
exibly in a way that does not affect
the customers required functionality.
For example, if customers use elec-
tricity for heating water, they don’t
need permanent access to electricity
for that application; it’s good enough
if they do that every few hours. If
utilities have more information on
their loads, they can have a exible
demand response so the impact [on
their customers] is minimised and
you therefore have more degrees of
freedom for a very resilient system. In
the future it might be that a utility
could use the energy from a fully
charged EV in an extreme thunder-
storm, for example, and then charge
the EV the next day.”
This is all possible if a system is
resilient enough and smart enough to
consider and factor in these degrees
of freedom.
Notably, much can be done with
today’s infrastructure by, for exam-
ple, introducing intelligence, storage
and new types of upgraded network
Hitachi ABB Power Grids says it is
therefore building much more intelli-
gent, exible systems that are safer
and more secure also in terms of
cyber security. This is being achieved
through a combination of digitalisa-
tion and power electronics.
“With a lot of projects being brown-
eld, it’s often about embedding new
DC and HVDC technology into exist-
ing AC grids and controlling it digi-
tally,” said Dr. Salge. “For example
HVDC interconnectors can provide
really exible energy exchange across
short, mid and long distances – up to
a world record of more than 3000 km
and 12 GW.
“At the same time HVDC technol-
ogy can also improve power quality,
which is needed in grids that have less
inertia. Converters can provide syn-
thetic inertia. Or you can provide real
inertia when you connect, for exam-
ple, synchronous generators next to
the power electronic valves. You
could also put storage next to the
converters to inject energy into the
system. In our HVDC valve controls,
there’s also the option to have black-
start capabilities.”
While driving resilience is key, Dr.
Salge also stresses the importance of
making equipment sustainable with
low environmental impact. This is a
central part of the Sustainability 2030
strategy. “We have looked at the total
lifecycle, and re-use of materials,” he
Notably, in April Hitachi ABB
Power Grids launched EconiQ™ its
eco-efcient portfolio of products,
services and solutions which are sus-
tainability-oriented in design to de-
liver superior environmental perfor-
mance compared to conventional
It kicked off with a new range of
high voltage switchgear, which uses a
uoronitrile-based gas mixture in
place of sulphur hexauoride (SF
) –
state of the art today but with a very
high global warming potential if re-
leased – as insulation and current in-
terruption medium, optimising the
total switchgear on its total life-cycle
This focus on reducing environ-
mental impact while increasing sus-
tainability is now embedded in every-
thing the company does. “We have
also launched a range of semiconduc-
tors that are enabling signicantly
lower losses in HVDC valves,” said
Dr. Salge. “Together with the intro-
duction of renewables, this all con-
tributes to a system that is overall
more sustainable.”
In fact the move to a more sustain-
able, interconnected energy system,
where electricity will be the back-
bone, is seen as the reasoning behind
the adoption of the new company
Dr. Salge explained: “The power
system is expanding its role in the
total energy system. We also see new
digital capabilities, with improved
control through machine learning,
articial intelligence, prognostics and
predictive maintenance; sector cou-
pling with the gas networks; energy
trading and forecasting; etc. It’s about
taking a more holistic view of the
energy system. The logical conse-
quence of this is that we are no longer
just thinking ‘Power Grids’ but also
beyond; so we are now making it
clear in our name. That’s why we are
becoming Hitachi Energy.”
Becoming part of the Hitachi com-
pany brings signicant opportunities.
In January Hitachi ABB Power Grids
and Hitachi Vantara announced the
integration of Hitachi ABB Power
Grids’ Digital Enterprise solutions
within the Lumada portfolio of ad-
vanced digital solutions and services
for turning data into insights. This
saw the launch of the Lumada Asset
Performance Management, Lumada
Enterprise Asset Management and
Lumada Field Service Management
“We are already leveraging the one
year of experience, i.e. the excellent
know-how and competence of Hita-
chi, in the IT space,” said Dr. Salge.
“The Hitachi Lumada platform has,
for many years, been among the top
IoT platforms in the Gartner Magic
Quadrant. That complements our
competence when it comes to OT
[operational technology], compo-
nents, and our large installed base. We
are now able to combine our compe-
tence across all technologies within
the energy domain, from the physical
component via the OT to the world-
class IoT/IT competence of Hitachi in
order to offer something unique. Ap-
plying this competence scope in our
domain is really exciting.”
He notes that digitalisation is en-
abling companies to achieve much
more, providing deeper collaboration
with customers when planning, de-
signing, operating and maintaining
components and systems through the
use of technologies such as digital
twins and virtual reality. Such ad-
vances enable the evaluation of
equipment and systems that may not
even yet exist, for example; or for
personnel to be trained remotely
anywhere in the world.
Special Technology Supplement
The EconiQ 145 kV gas
insulated switchgear is
part of a new portfolio
designed to deliver superior
environmental performance
compared to conventional
Dr. Salge: a resilient system
is one that is so exible it
can handle foreseen and
unforeseen situations
through in power capacity and is seen
as a milestone in the potential capacity
of future grids to integrate massive
amounts of renewable power. “The
same technology will be extended to
offshore grids and possibly onshore
applications,” said Dr. Salge. “These
are the next steps that need to be done.
“There are also good discussions in
Europe for improving interoperability
between systems. It is not just about
achieving the highest power and volt-
ages, or the longest distances. It is
very important that we make short
connections between grids that are not
interconnected today.”
This is crucial for neighbouring
countries that might have grids operat-
ing at different frequencies or do not
want to fully synchronise their grids.
“Short back-to-back interconnections
could bring grid partners together to
start to develop their collaborations in
a step-wise approach,” said Dr. Salge.
“It is key that we start to do this as
much as possible and as quickly as
possible. Building such trustful col-
laborations is key for the energy tran-
sition to happen.”
Indeed, partnerships is one of the
four pillars of Hitachi ABB Power
Existing HVDC technologies are
also expected to become more wide-
spread. For example, point-to-point
HVDC connections will evolve to
multi-terminal connections. “We
have done this in India but it is not
state-of-the-art, in so far as it’s not
used frequently. We can do it but it’s
not used everywhere,” said Dr. Salge.
“It should be done in many more
Overlaying DC grids is another
technology that is expected to gain
prominence. It has already been dem-
onstrated in China at the Zhangbei
project. The Zhangbei DC-grid de-
signed by State Grid Corporation of
China (SGCC), is the world’s rst
four-station meshed HVDC voltage
sourced converter grid, operating at
500 kV and up to 4500 MW. Hitachi
ABB Power Grids has supplied sev-
eral critical elements including an
HVDC Light valve, wall bushings,
transformer components, high-voltage
capacitors and power semiconductor
The system, set up to meet higher
demand during the Beijing 2022
Winter Olympics, represents a break-
Grid’s Sustainability 2030 Strategy.
Dr. Salge stresses that the urgency
needed in addressing the energy
transition is something that requires
action from all stakeholders – govern-
ments, regulators, investors, opera-
tors, etc.
Governments need to create the
right framework and incentives,
which are needed to attract invest-
ment and promote collaboration.
“You can see in regions of the world
such as Europe, that there is a good
level of trust between partners across
countries. Our recently installed in-
terconnector between Norway and
Germany is a good example of how
much these TSOs trust each other; it
goes far beyond nancial incentives.
It’s about setting the rules and build-
ing the trust,” said Dr. Salge.
Regulators have to build the exibil-
ity into the grid code requirements to
enable TSOs to work together, while
setting the boundary conditions to
also enable investors and operators to
work together.
“All of this would stimulate electri-
cation of the applications in the
various sectors and accelerate the
transition,” noted Dr. Salge. “But the
industries need to re-invent them-
selves as leaders of the energy transi-
tion; they need to look at their pro-
cesses – especially when they are
energy intensive – and re-invent
them so they electrify and also
change processes to eliminate the
carbon emissions.
“Oil and gas companies are also key
players, and are already starting to
convert. One of our partners, Equinor,
for example, is using its competence,
know-how and nancial power to go
offshore. We are working with them
to help make their transition happen
in their specic way it’s not a one
size ts all approach. Each company,
country or region is different; indus-
tries are different.”
He summed up: “As the energy
system evolves, we are looking at
how we can contribute with our
scope, global reach and the value
proposition we can bring with our
technologies, to work with our part-
ners in building a sustainable, resilient
and affordable energy system. Being
able to anticipate future needs and
then contribute to social, environ-
mental and economic value creation
is something that makes me proud.”
HVDC Light valve of the type
for the world’s rst four-
station meshed HVDC voltage
sourced converter grid in
Case study of a 50 MW x 8
hour energy storage plant
showing levelised cost of
storage for liquid air versus
Note: Plants allowed to fully
discharge each day and capture
$50/MWh energy price differential
Special Technology Supplement
Together with customers and partners, we are co-creating pioneering technologies that are
making energy systems more sustainable, resilient, safe and secure. We contribute innovative
solutions that are advancing societal progress towards a carbon-neutral energy future for all.
From this October we are evolving to become Hitachi Energy!
Gas deal will help Iraq meet summer
power demand
US DOE funds Hydrogen Energy
Earthshot projects
Gary Lakes
Soaring summer temperatures in Mes-
opotamia are again forcing the Iraqi
government to confront its serious lack
of power generation capacity, the direct
result of its failure to capture its associ-
ated gas production, which it normally
ares at a rate of 18 billion cubic metres
(bcm) annually an amount second
only to Russia.
With work to harness ared gas ex-
pected to take years, for now the coun-
try is using what gas of its own that it
can direct to power stations and import-
ing gas from neighbouring Iran.
In its latest attempt to reduce aring,
the Iraqi government last month ap-
proved a deal with French company
Total, which has recently changed its
name to TotalEnergies, to capture and
process some 600 million cubic feet
per day from the Ratawi eld, which
would amount to around 7.7 bcm/year.
TotalEnergies will also begin work
on a seawater injection project de-
signed to pump water into the oil elds
of southern Iraq in order to boost pres-
sure and increase oil and gas produc-
tion. Iraq has a current capacity to
produce some 4.5 million b/d oil but
Baghdad is looking to increase this to
at least 6 million b/d in the coming
years. The French major will also pro-
ceed to build a 1000 MW solar power
plant. Details of the agreement were
not released.
Since the mid-2000s, following the
invasion of Iraq by US forces in 2003,
the Iraqi government and internation-
al partners have been planning to get
the country’s energy sector better or-
ganised and make it efcient. How-
ever, continual ghting with Al Qaeda
and Islamic State (ISIS), internal po-
litical disputes, differences over con-
tracts, money and budget problems
and a seemingly continuous state of
crisis has prevented Iraq from making
real advances in building energy
infrastructure that could make a dif-
ference. Flaring is a particular prob-
lem in that burning the gas contributes
to global warming and climate change,
it is also impacting the health of Iraq-
is living in the regions where gas is
The situation is further complicated
by acts of sabotage being carried out
by ISIS militants against power lines
and pylons.
Furthermore, Iraqis are forced to deal
with power shortages, leaving them to
cope with temperatures that can reach
50°C. Rioting in southern Iraq has
erupted in previous years when Iraqis
were left without power during sum-
mer temperature extremes.
In late June, the Basrah Gas Consor-
tium, comprised of Shell, Mitsubishi
and state-owned South Gas, announced
it would receive a loan of $360 million
from the World Bank’s International
Finance Corporation (IFC) that will be
used to harness gas that is normally
ared and channel it to a new gas-
processing station, the Basrah Natural
Gas Liquid Extraction Plant. BGC is
already gathering gas from the Ru-
maila, West Qurna1 and Zubair oil
elds and using it to produce some 3.4
GW of power. The rm also produces
about 80 per cent of the country’s liquid
petroleum gas (LPG).
The BGC project calls for gas pro-
cessing capacity to be increased by 40
per cent to 1.4 billion cubic feet per
day, around 14 bcm/year.
It is estimated that Iraq is consuming
around 12 bcm/year but supplies only
about 4.6 bcm/year of that. Real de-
mand is estimated at close to 16 bcm/
Iraq is planning to reach 90 per cent
self-sufciency in natural gas produc-
tion by 2025. Recently the government
called for investment of $3 billion over
the next ve years and as much as $15
billion in investment may be needed to
reach self-sufciency. It hopes to end
aring by 2025.
Iraq is gradually turning to renew-
ables as a source of energy and re-
cently signed a deal with Abu Dhabi’s
state-owned Masdar for the develop-
ment of a solar generation facility that
will produce up to 2 GW of power from
locations in central and southern Iraq.
Currently Iraq depends on Iran to
supply it with the bulk of its gas re-
quirements, but in recent weeks Iran
has reduced the gas and electricity that
it is sending to Iraq because of a
drought and heightened demand from
Iranian consumers. Iraq continues to
be pressured by the US to reduce its
reliance on Iranian gas and power, as
Iran remains under strict sanctions
imposed by the US in late 2018. Iraq’s
nancial problems have stopped it
from paying Tehran billions of dollars
in areas for gas and electricity deliv-
ered over the last couple years. Still,
to maintain its inuence in Iraq, Iran
continues to supply.
Gary Lakes
The US Department of Energy last
month announced that it would pro-
vide $52.5 million in funding for 31
projects designed to advance next-
generation clean hydrogen technolo-
gies and support the DOE’s Hydrogen
Energy Earthshot initiative. The funds
are meant to reduce costs and acceler-
ate breakthroughs in the burgeoning
clean hydrogen sector.
“Part of our path to a net zero future
means investing in innovation to make
clean energy sources like hydrogen
more affordable and widely adopted so
we can reach our goal of net zero emis-
sions by 2050,” Secretary of Energy
Jennifer Granholm said in a statement.
“These projects will put us one step
closer to unlocking the scientic ad-
vancements needed to create a strong
domestic supply chain and good-pay-
ing jobs in the emerging clean hydro-
gen industry,” she said.
Several members of the Senate and
House of Representatives endorsed the
funding, $36 million of which will go
to the DOE’s Ofce of Energy Ef-
ciency and Renewable Energy (EERE)
and $16.5 million for the Ofce of Fos-
sil Energy and Carbon Management
(FECM). At EERE, 19 projects will
receive support, including those re-
searching electrolysis, clean hydrogen
production, fuel cell subsystems and
components, a domestic hydrogen sup-
ply chain, and analysis on cost and
performance of fuel cell systems, hy-
drogen production pathways, and hy-
drogen storage technologies. Funding
for FECM will test a number of techni-
cal systems and cover engineering
design for carbon capture, utilisation
and storage (CCUS) and the develop-
ment of a gas turbine combustion sys-
tem for 100 per cent hydrogen-red and
mixtures of hydrogen and natural gas.
But a much greater investment in
alternative energies is going to be
needed before the world will be able
to end its dependence on fossil fuels.
Up to $1 trillion will need to be in-
vested globally in renewable energy
systems if the world is to reach the
Paris Accord’s net zero targets by
2050, according to a Sustainable Re-
covery Plan proposed by the Interna-
tional Energy Agency (IEA).
Earlier this year, as the world health
and the global economy began to show
signs of improvement, the organisation
released its Global Roadmap to Net
Zero – its advisory on how the world
can reach net zero emissions by 2050.
That plan received criticism from those
immersed in the oil and gas industry,
due to its strident support for invest-
ment in renewables.
Economic improvement prompted
an increase in demand for oil and sub-
sequently a rise in oil prices, giving
Opec and its allies reason to believe
that the oil and gas industry will even-
tually return to its pre-Covid norm.
This they demonstrated with an agree-
ment to end production cuts beginning
in September 2022.
The economic pick-up has seen gov-
ernments boost spending to aid eco-
nomic recovery. But the IEA in late
July said not enough government
spending is going towards clean en-
ergy transitions.
Yet advances in the hydrogen sector
are reported every day and many pri-
vate companies clearly see it as a way
forward for sustainable energy.
For example, the global industrial gas
and engineering company Linde an-
nounced in mid-July that its fth liquid
hydrogen plant in the US had come into
operation in La Porte, Texas. It already
operates such facilities in California,
Indiana, Alabama and New York.
The liquefying plant will produce
more than 30 tons per day of hydrogen
to Linde’s customers. It receives hy-
drogen from Linde’s 600 km US Gulf
Coast pipeline, which has over 15 in-
dependent hydrogen production sourc-
es, giving it the most reliable feed sup-
ply of any hydrogen liqueer in the US
The plant will purify and liquefy the
hydrogen before supplying it to end
markets including material handling,
mobility, aerospace, manufacturing,
metals, energy and electronics.
“This plant will not only boost the
reliability of our existing network but
will also make the supply chain more
efcient and increase our ability to
serve the rising demand from existing
and new customers, for both conven-
tional and clean hydrogen,” Jeff Barn-
hard, Vice President South Region,
said in a statement.
Meanwhile, the New York Power
Authority announced last month that it
would introduce a green hydrogen
demonstration project at its Brentwood
power plant on Long Island. The proj-
ect will begin construction in the au-
tumn and cost $8.5 million. It will re-
place up to 30 per cent of the power
produced by the gas red turbine op-
erating there since 2001. The green
hydrogen will be produced from a
hydroelectric plant in Canada.
In line with global targets, the State
of New York is implementing plans to
decarbonise its power sector, aiming to
cut carbon emissions 85 per cent below
1990 levels by 2050.
Efforts to assist Iraq with harnessing its ared gas are being made by international companies and
institutions, but the job is expected to take several more years. With the summer peak power demand
looming, the country has therefore signed a deal with TotalEnergies to use gas from the Ratawi eld to
fuel its power stations.
Next-generation hydrogen projects to receive $52.5 million
n La Porte liquid hydrogen plant begins operation
Fuel Watch
owered by public demand and
government targets striving for
net zero, the rise of renewable
energy is irresistible. Nations around
the world are working towards ambi-
tious green energy targets and the
UK’s own objectives include gener-
ating enough wind energy to run ev-
ery home in the country by 2030,
just nine years away.
Of course, a driving factor behind
the rise of green energy is its rela-
tively new viability as the cost of
production steadily falls. As the sec-
tor grows, we must ensure the infra-
structure behind it not only keeps
pace, but also offers the support re-
quired while ensuring costs are kept
in check. In today’s interconnected
world, robust digital infrastructure is
Green energy providers obviously
need reliable network connections to
manage output and monitor demand.
But beyond this, the possibilities for
digital infrastructure and renewable
energy working together are huge.
For instance, sensors on wind tur-
bines and solar arrays can capture
performance data, informing energy
providers where best to position
them for the greatest returns. In the
future, 5G-connected drones and ro-
bots might be used not just to inspect
wind turbines, but also to repair
them. And the spread of internet of
things (IoT) technology will also
open up opportunities to conduct
more operations remotely.
As the renewables sector gains
more and more of the energy market
share, its reliance upon data centres
will also grow. Responsible for emit-
ting as much CO
as the commercial
airline industry, many data centres
are now making greater efforts to de-
carbonise. Therefore they’ll generate
a considerable amount of renewable
energy demand themselves, becom-
ing consumers as well as suppliers.
With the expansion of the sector,
intersections between digital infra-
structure and renewables will be-
come more common.
So what does the current landscape
look like? Right now, the energy sec-
tor is full of talk about the three Ds:
decarbonisation, digitisation and de-
There’s a very natural synergy be-
tween the digital infrastructure and
the renewable energy industries do-
ing the decarbonising. Both are reli-
ant upon emerging technologies be-
cause they’re both concerned with
improving upon the status quo and
shaping a different future.
Even so, some green energy com-
panies are more attuned to the im-
portance of sound digital infrastruc-
ture than others. In a 2019 ORE
Catapult survey, 94 per cent of re-
spondents (comprising wind farm
owners or operators, wind-related
consultancies and digital service pro-
viders) said the offshore wind indus-
try was not getting the most from
data and digital technologies.
By contrast, the Seagreen offshore
wind farm (due for completion in
2022/23) will be underpinned by an
advanced communications infrastruc-
ture and use data extensively. A wide
area network (WAN) will directly
connect engineers at its operations
centre with the supervisory control
and data acquisition (SCADA)
equipment required to manage the
distribution of power to the substa-
tion. The ow of data between sites
will maximise operational efciency
and provide vital insights into power,
temperature and energy patterns.
Once completed, Seagreen will be-
come Scotland’s largest offshore
wind farm, capable of producing
enough energy for 40 per cent of all
Scottish homes.
It’s just one example of the crucial
role now played by renewables in
the UK’s energy mix. The sector rep-
resented 45 per cent of power gener-
ation in the second quarter of 2020.
Remarkably, this gure stood at 35
per cent a year previously, meaning a
10 per cent gain of the energy mix in
just 12 months.
On mainland Europe too, there is
great emphasis on making the move
to renewables. Take the example of
the Clean Energy Transition sub-pro-
gramme, which has a budget of just
under €1 billion for the period 2021-
2027 and devotes signicant funds
to ‘accelerating technology roll-out
and digitalisation’.
But what more can be done to
help the growth of green energy?
And where are the opportunities to
enhance operations using digital
For one, with high-quality digital
infrastructure in place, green energy
companies can benet from greater
exibility. Demand and performance
can be tracked, with bre connec-
tions transmitting real-time data to
warn of impending power surges.
From operations centres, engineers
can then connect to IoT-enabled sub-
stations and adjust the energy ow.
They also have the ability to
analyse faults remotely. HD cameras
xed to wind turbines, solar arrays
and other sites can reveal issues in
ne detail – before an engineer visits
the site. Dark Fibre afxed to power
lines, meanwhile, can be used in a
condition-monitoring capacity, regis-
tering unusual changes in tempera-
ture and acoustics.
But deploying high-quality infra-
structure can do much more than just
chart demand, adjust energy ow
and identify faults.
With the advent of smart grids and
the DNO-DSO transition, the decen-
tralisation of the grid is already un-
der way. Companies like software
and hardware makers SolarEdge are
an indicator of new directions being
taken. SolarEdge offers cloud-based
control over resources such as solar
PV, battery storage and electric vehi-
cles, making up ‘virtual power
There’s also the Manchester-based
UrbanChain, a peer-to-peer market-
place for locally generated, renew-
able energy. Their energy exchange
system uses AI to analyse consump-
tion patterns and nd the most ap-
propriate energy providers for users.
Thanks to advanced connectivity,
they can perform green energy trans-
actions almost in real-time.
Big energy rms and governments
are preparing for digitalisation. US
giant General Electric (GE) is setting
a high bar in its use of digital infra-
structure. They have three compa-
nies in the GE group (GE Renew-
able Energy, GE Power and GE
Digital) supporting the green energy
transition for customers, with digital
playing a key role.
Brian Case, Chief Digital Ofcer at
GE Renewable Energy, said recent-
ly: “GE Renewables is focusing on
bringing down the cost of wind, so-
lar and energy storage technologies
and then, in my portfolio specical-
ly, really helping those assets to be
optimised to their peak performance
throughout their lifecycles.
“We’re looking at articial intelli-
gence to process high-frequency
data and use images from different
inspection capability to really hone
in on specic anomalies that may
be occurring, several months in
advance. The more that you can do
that trouble-shooting from a remote
operating centre versus having to go
to sea (to wind turbines), the more
you benet from a reduced levelised
cost of electricity.”
The possibilities for maintaining
green energy facilities remotely are
impressive. However, this all re-
quires advanced, reliable networks,
once more reinforcing how central
digital infrastructure is to the green
energy sector’s future.
The UK, it would seem, is acutely
aware of the need to digitise and up-
grade systems in the renewables sec-
tor. In collaboration with Ofgem and
Innovate UK, the UK Department
for Business Energy and Industrial
Strategy (BEIS) has launched an
Energy Digitalisation Taskforce
(EDiT). As EDiT was announced,
Minister of State for Business, Ener-
gy and Clean Growth Anne-Marie
Trevelyan said: “Digitalisation is vi-
tal to reaching the UK’s ambitious,
world-leading climate change target.
“This means technologies from
solar panels and electric vehicles, to
heat pumps and batteries will need
to be smarter, sharing information
with one another.”
GE Renewables’ Case also touched
upon the out-dated infrastructure is-
sue facing energy providers as they
move into using more sophisticated
“This is a challenge for the energy
industry as a whole: a lot of the
large-scale generators have been
around for decades. Because of that
they likely have signicant legacy
systems or technical debt.”
With the rigorous demands placed
on infrastructure only set to increase,
one of the most obvious systems en-
ergy generators should look at will
be their network. They would be
wise to choose a communications
network ticking boxes for high ca-
pacity, low latency, reliability and
So what does the future hold? As
global supplies of fossil fuels dimin-
ish and the cost of generating green
energy plummets, growth in the sec-
tor is burgeoning. The Covid-19
pandemic and its associated lock-
downs have accelerated this trend,
highlighting the impact of humanity
on the natural environment, shifting
consumer appetites even further to-
ward renewables.
There are, of course, still sceptics
out there, still pushing back against
the expansion of renewables. Many
are convinced that greater use of re-
newables will lead to more black-
outs, like those seen in Texas in Feb-
ruary 2021. They cite the need for
substantial investment in battery
storage and more load-smoothing
tech before renewables can produce
sufcient baseload generation.
To convince these doubters, green
energy will need to prove it can form
the backbone of the grid. Digital in-
frastructure will play a silent, but vi-
tal part in this, reliably transmitting
the data renewable providers need to
keep the lights on.
And as hackers develop ever more
sophisticated methods, digital sys-
tems will also have to safeguard
green energy companies against cy-
ber attacks. This will be made easier
if energy rms move their data to the
cloud, which, contrary to much pop-
ular opinion, is more secure than tra-
ditional data storage.
Cloud computing may also require
upgrading of systems. Outdated net-
works won’t be able to handle the
constant data demands of an energy
company. High-performance, dedi-
cated connections to cloud service
providers are the order of the day.
Put simply, advanced digital infra-
structure is a prerequisite for contin-
ued growth in the renewable energy
Sarah Mills is Managing Director
for Wholesale and Smart Infrastruc-
ture at Neos Networks.
Many are convinced
that greater use of
renewables will lead
to more blackouts.
To convince these
doubters, green
energy will need to
prove it can form the
backbone of the grid.
Digital infrastructure
will play a vital
part in this, reliably
transmitting the data
renewable providers
need to keep the
lights on.
Sarah Mills
Digital infrastructure is
Digital infrastructure is
key to a renewable future
key to a renewable future
Industry Perspective
Mills: there’s a natural synergy
between the digital
infrastructure and the
renewable energy industries
doing the decarbonising
majority of the population according
to domestic polls. Local media did
report that the administration may
announce a target before the COP26
meeting in Glasgow in November
2021, but few are optimistic about the
level of the goals to be set.
As an initiative to drive economic
growth post-Covid pandemic and as
part of an energy transition plan, the
federal Coalition government pro-
posed to boost the gas and gas pro-
cessing sectors in 2020. The proposal
generated wide-ranging criticism do-
mestically and internationally. The
proposal made little sense given that
there is a high risk that gas consump-
tion in Australia will decline over the
next two to three decades and also
because its price will not be competi-
tive against VRE and other forms of
clean energy such as green hydrogen,
as the Australian Energy Market Op-
erator (AEMO) noted. In fact, glob-
ally many experts view natural gas
and LNG as a bridge fuel in the en-
ergy transition. Analysis by think-
tank the Australia Institute, issued a
little bit over a year after the policy
was publicised, unequivocally con-
cluded that the gas industry had actu-
ally made no contribution to the eco-
nomic recovery.
Despite the lack of federal policy
clarity and consistency, the tremen-
dous clean energy build-up is driven
by a vibrant and dynamic private
sector and by support from several
state governments, which were forced
to go it alone in terms of policy and
nancial support.
Clean energy accounted for 10.4 per
cent and 24.4 per cent of total primary
energy and of electricity generation,
respectively in calendar 2020, based
on the bp ‘Statistical Review of World
Energy 2021’. The growth rate has
also been outstanding. Solar capacity
reached 17.6 GW in 2020 from just
1.1 GW in 2010. The growth for wind
power was a little slower but still im-
pressive, reaching 9.5 GW from just
1.2 GW during the same period.
The latest electric power output
statistics show that in the 12 months
to 18 July 2021, fossil fuels were still
responsible for 70.6 per cent of total
generation but also underscored that
the VRE contribution is quite sig-
nicant too. Wind power was re-
sponsible for 11.2 per cent of the to-
tal, rooftop solar for 7.7 per cent and
utility scale solar for 3.7 per cent (see
chart). And a lot more is being con-
structed, including several gigawatt-
scale projects.
InterContinental Energy’s Asian
Renewable Energy Hub (AREH) will
take 10 years and approximately
A$36 billion ($25.2 billion) to devel-
op. It will involve building wind and
solar facilities of about 26 GW in
Western Australia. It has already re-
ceived permission for the rst 15 GW.
About 3 GW would go towards con-
sumption by industry in the region,
potentially including mining and
ustralia should be a leader in
clean, green and sustainable
energy, not just in Asia but
globally. Less fossil fuels and more
renewables should be a national prior-
ity. Instead, it is a laggard in decar-
bonisation thanks to hopeless federal
government policy.
As highlighted in a section of my
book: ‘Asia’s Energy Revolution’,
Australia is an extremely energy rich
nation but its energy mix shift has a
number of dimensions and complexi-
ties – something that various Austra-
lian governments have struggled with
in their policy setting for decades.
Factors include the massive amount
of fossil fuel resources, the role of
these commodities in domestic energy
production, and their role in the
economy, especially when it comes to
exports. In the past it was a blessing
but in today’s decarbonisation-driven
world, that blessing may have become
a curse.
There are many reasons as to why
Australia should be a decarbonisation
leader. The nation is colloquially
known as the “Land Down Under”,
but many also know it as the “Land of
Plenty” and the “Lucky Country”.
It has the sixth largest land mass
globally and given the small 24 mil-
lion population, it has plenty of re-
sources for variable renewable energy
(VRE) projects. Of course, relatively
speaking, the energy and carbon
footprints are relatively small. Just 1
per cent and 1.2 per cent of the world’s
total, respectively. Still its vast VRE
resources could comfortably provide
the nation with the bulk of its energy
For example, for solar PV, the
country has the best solar radiation
per square metre of any continent and
on average annually receives 58 mil-
lion petajoules (approximately 16
million TWh) of solar radiation ac-
cording to Geoscience Australia, a
public sector organisation.
There are also 600 000 km
of wind
resources with average speeds of 7
m/s. The potential for other clean en-
ergies, including geothermal and
ocean energy, is also massive.
Given all of these attributes why has
the Land of Plenty become a laggard
in the global race to net zero? It is
because the nation has greatly suf-
fered from a virtually complete cli-
mate change policy vacuum for almost
a decade. The current administration,
a coalition led by the liberal party, has
been at the helm since 2013 and has
not embraced climate change. In the
past the coalition repealed a carbon
price mechanism in 2014 – making
Australia the rst country to reverse
climate change policy action. Also, in
2015 it announced an emissions target
reduction of 26-28 per cent below
2005 levels by 2030, the cut included
a carbon accounting loophole, which
led to accusations it was “cheating”
on the Paris agreement. More recent
policies also make its road to decar-
bonisation much harder. Two exam-
ples are a lack of net zero 2050 targets
and a pro fossil fuels stance.
The respected Climate Change
Performance Index ranked Australia
51 out of 57 jurisdictions. Australia
came last among 193 members of the
United Nations for climate action in
the Sustainable Development Solu-
tions Network report, which is sup-
ported the UN. The low rankings are
chiey due to Prime Minister Morri-
son’s consistent refusal to adopt a
2050 net zero target. Notwithstand-
ing pressure from industry, and the
mineral processing. The rest will be
for various uses including the produc-
tion of green hydrogen products,
which in turn could be exported to
Japan and other countries.
The AREH had received Major
Project Status from both the Austra-
lian federal government as well as
that of the Western Australia state
government, as of October 2020. If it
goes ahead, construction may start in
2026 with the rst exports of green
hydrogen ready by 2027 or 2028. In
June 2021, the federal Environment
Minister found some environmental
issues with the project and so the
promoters will have to spend some
time addressing these.
Surprisingly, InterContinental En-
ergy announced in July that it was
envisaging developing another proj-
ect, the Western Green Energy Hub
(WGEH), which would include 30
GW and 20 GW of wind and solar
power also in Western Australia. The
Sun Cable project, called the Austra-
lian-ASEAN Power Link, will take
about seven years and will also cost
about A$22 billion ($15.4 billion) to
develop. It aims at building a 10 GW
solar farm with energy storage in the
Northern Territories. The output
would be used domestically and sold
to Singapore via a 4500 km subsea
cable, and possibly also to Indonesia.
As of September 2020, the link had
received Major Project Status by the
Australian government.
Another notable example is by
Spark Infrastructure, which primarily
is an investor in electric power trans-
mission distribution infrastructure. In
July, it said that it intended to build
the Dinawan Energy Hub, a 2.5 GW
hybrid wind, solar and energy storage
hub in the southwest of the state of
New South Wales. It could begin
construction in stages in 2024 and
start operations in 2025.
Despite the massive clean energy
plants, it is difcult to see Australia
becoming one of Asia’s decarbonisa-
tion leaders without a strong federal
government policy in place. But there
is still hope. The nation will see many
federal elections in the coming de-
cades and policy may change. Many
high-prole organisations, such as
AEMO, have a vision of the Austra-
lian energy landscape becoming sig-
nicantly or totally renewable energy
driven. And clean energy will not
only create new jobs and revenue
streams but projects such as the
AREH could turn Australia into a
major direct and indirect clean energy
Giuseppe (Joseph) Jacobelli is a busi-
ness executive, analyst, and author
with over 30 years’ experience in en-
ergy and sustainability in Asia. He is
author of the recently published book
‘Asia’s Energy Revolution: China’s
Role and New Opportunities as Mar-
kets Transform and Digitalise’, De
Gruyter 2021.
Climate Countdown
Australia August 2020–July
2021 Power Output (TWh)
Source: Author, July 2021, based
on data from OpenNEM project
(opennem.org.au) which uses
information from Australian Energy
Market Operator (AEMO), Australian
PV Institute, and Australian
Government Bureau of Meteorology
With the COP26
climate change
conference just
over three months
away, TEI Times
continues its focus
on Asia’s plans for
decarbonisation. This
month, Asian energy
expert and author
Joseph Jacobelli
focuses on Australia,
arguing that the
country could, and
should, be doing far
Australia must be a
decarbonisation leader,
not a laggard
Final Word
he EU’s recently announced
‘Fit for 55’ package sounds a
lot like my regime for main-
taining peak health into middle age:
ambitious, comprehensive but still
with a few aws.
Last month the bloc of 27 countries
tabled a series of legislative proposals
to deliver the EU’s increased climate
target of 55 per cent emissions reduc-
tion by 2030.
The overall package looks wide-
ranging. It contains changes to more
than 10 pieces of legislation, includ-
ing the Energy Tax Directive, the
Alternative Fuels Infrastructure Di-
rective, the EU Emissions Trading
System (ETS) and the Renewable
Energy Directive.
Like any good tness programme,
rst and foremost the ‘Fit for 55’
package is holistic.
The Energy Tax Directive sets out
new rules for the taxation of electric-
ity and energy products used in
transport and heating. It removes
subsidies for fossil fuels and has help-
ful provisions to reduce the risk of
double taxation for electricity storage.
The Directive also proposes that na-
tional tax systems should rank fuels
according to their energy content and
environmental performance, so that
the most polluting fuels are taxed the
most. WindEurope noted, however,
that the new Energy Tax Directive will
need unanimous support from na-
tional governments.
The organisation called ‘Fit for 55’
“a good package,” noting that it sends
a clear message to consumers and in-
vestors. WindEurope’s CEO, Giles
Dickson, said: “The EU wants to ac-
celerate the electrication of those
sectors that have so far relied on fossil
fuels. This is good for the climate. And
good for the economy. The Fit for 55
package means major new invest-
ments. It’s a package for jobs and
The changes to the ETS and the Al-
ternative Fuels Infrastructure Direc-
tive show that the European Commis-
sion recognises the importance of
joining the dots when thinking about
decarbonisation, and is addressing all
sectors and the interplays between
The Fit for 55 package adjusts the
EU Emission Trading System (ETS)
to the new climate ambition by further
reducing the number of tradeable
allowances. It extends the scope of
the ETS by bringing in the shipping
and aviation sectors, while establish-
ing a separate ETS for emissions from
the buildings and road transport
sectors. This will increase the price
for carbon emissions and further in-
centivise investments in renewables-
based electrication.
In a press note, global energy and
commodities consultancy, Wood
Mackenzie stated: “The roadmap ac-
knowledges the critical role electricity
will play. Everything that can be
electried, should be electried. But
there are some sectors that don’t lend
themselves to electrication, and that
is why Brussels is choosing to promote
low-carbon hydrogen, carbon capture
and storage and biofuels, as well as
pushing for greater improvements in
energy efciency.”
Accelerating the use of hydrogen is
certainly seen as crucial. The Fit for
55 package gives a signicant boost
to the development of Europe’s hy-
drogen sector by setting a 50 per cent
target on the share of renewable hy-
drogen consumption in industry, as
well as concrete and ambitious targets
for hydrogen and its derivatives in the
Fuel EU maritime proposal.
Just ahead of the unveiling of the
package, François Paquet, Impact
Director of the Renewable Hydrogen
Coalition said: “Renewable Hydro-
gen is the missing link to fully decar-
bonise hard-to-electrify sectors. The
‘Fit for 55’ package must prioritise
the uptake of renewable hydrogen and
preserve renewable hydrogen pro-
ducers from disproportionate require-
ments in this early phase to ensure the
cost-competitiveness of renewable
hydrogen compared to fossil-based
hydrogen. Yet this can only work if
bold and concrete action is taken to
massively deploy new renewable
installations in the coming years by
improving the regulatory framework
and faster permitting.”
Electrication from green energy
sources obviously calls for a massive
boost in renewable generating capac-
ity. National energy and climate plans
currently target 53 per cent of electric-
ity supply coming from renewable
sources across Europe. The new target
will require 65 per cent of electricity
supply to come from renewables by
According to Wood Mackenzie data,
the EU would need 472 GW of addi-
tional wind and solar power across the
European power system by 2030 to
secure this new renewables target.
Spread over the nine years to 2030,
this amounts to 52 GW of wind and
solar additions per year. Over the last
decade Europe has averaged a build
rate of 20 GW per annum. This
equates to a 160 per cent ramp-up on
average wind and solar annual build
rates in order to hit the new target.
While this is achievable, it will re-
quire further changes.
“Is this achievable? Optimistically,
of course it is,” stated Wood Mack-
enzie. “But it’s going to be unneces-
sarily challenging unless further
policy and regulation changes are
made. The planning, connection and
permitting process will need to be
streamlined, distribution networks
investment will need to be in place
and regulators will need to adopt a
new net zero mindset. On top of this,
system exibility build out will need
to be supported, and market reforms
will need to be in place to ensure it is
t for operating in a zero marginal
cost producers’ environment.
The point on exibility is key. Al-
though often overlooked, exibility
should be central a part of any tness
The European Association for Stor-
age of Energy (EASE) welcomed the
publication of the package but said
“more ambitious policies” were
needed to put energy storage “front
and centre” in the EU’s decarbonisa-
tion strategy.
In particular, EASE views the re-
vised Renewable Energy Directive
(RED III), which increases the
overall Union target for renewable
energy in 2030 to 40 per cent, as a
positive step. It notes, however, that
the RED III proposals fall short in
terms of supporting energy storage
deployment to facilitate renewable
energy sources (RES) integration.
“This is a mistake because focusing
only on deploying more RES is insuf-
cient; RES need to be integrated ef-
fectively into the system and their use
in the heating and cooling, mobility,
and industry sectors must be maxi-
mised. Energy storage is a key enabler
of a RES-dominated system, as it can
ensure security of supply, efcient
energy system operation, and the
competitiveness of EU industries,”
said the organisation.
It therefore called on EU policymak-
ers to expand RED III to include “a
comprehensive methodology” to as-
sess exibility needs, which could be
used to dene an energy storage target
to support the cost-effective integra-
tion of RES. It also asked for RED III
to address barriers to deployment of
hybrid RES + storage projects, sim-
plify and speed up administrative
procedures and permitting for energy
storage facilities, and ramp up support
for thermal storage.
The EU is taking the right approach
to making its decarbonisation pro-
gramme being t for purpose – build-
ing the muscles for the task at hand.
But let’s hope the Commission does
not overlook the importance of also
making sure those muscles are exible.
It has to get the right combination of
strength and exibility. Think more
gymnast than bodybuilder.
Fit for 55 doesn’t come
with ease
Junior Isles
Cartoon: jemsoar.com