September 2022 • Volume 15 • No 7 • 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
Collaboration is key to unlocking clean
energy innovation Page 12
Special Technology
Working with startups
Rapid grid evolution is crucial
to carbon neutrality.
News In Brief
No clear sign of extreme
prices abating
With gas prices continuing to climb
and low nuclear and hydropower
output, there is no sign that
electricity prices will fall any time
Page 2
Offshore wind opens for
business in Colombia
Colombia has launched its rst
offshore wind leasing round and is
scheduled to award rst permits in
the second half of 2023.
Page 4
Australia looks offshore,
as government passes new
climate legislation
Australia’s government is taking
the next steps in creating a new
renewable energy industry following
its decision to pass the country’s rst
climate change legislation in more
than a decade.
Page 5
UK urged to speed up
hydrogen infrastructure
The UK government has been urged
to accelerate its plan for hydrogen
storage business models, soon after
it published a Hydrogen Sector
Development Action Plan.
Page 7
Russia-Ukraine fallout
impacts German companies
The ongoing war in Ukraine is
continuing to weigh heavy on
German companies that had ties
with Russia prior to its invasion of
its neighbour.
Page 9
New long-duration storage
technology is key to energy
Lithium-ion technology is currently
used for most energy storage
applications but as demand for
batteries grows, challenges to
adequate and reliable supply of this
technology are emerging.
Page 14
Power grids regain missing
Power grids are becoming more
decentralised while the penetration
of renewable resources is increasing.
These two factors are causing a
steady decrease in the level of
inertia essential to maintain stable
operation. Synchronous condensers
can restore this missing inertia in a
number of applications.
Page 15
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The US has passed a bill into law that will drive clean energy and help it meet its climate
change commitments but some experts caution that there are potential challenges.
Junior isles
Energy companies’ prots under re as energy crisis deepens
Final Word
There’s a glow at the
end of the tunnel,
says Junior Isles.
Page 16
The landmark Ination Reduction Act,
recently passed into law in the US will
pump a record $369 billion into clean
energy but experts caution that the
move to drive the country’s green en-
ergy transition will face obstacles.
Jos Shaver, Chief Investment Of-
cer at Electron Capital Partners, a re-
newables-focused asset manager said
the new law was “absolutely game
changing”, but warned: “It’s an ener-
gy transition, not an energy switch.
It’s not going to happen overnight and
there’s going to be a lot of bumps in
the road.”
The climate, tax and spending law
signed by President Joe Biden has the
potential to trigger a massive upsurge
of new renewable power that would,
according to the government, allow
the country to slash greenhouse gas
emissions by 40 per cent from 2005
levels by the end of the decade. This
would see it inch closer to its commit-
ment to cut emissions by 50-52 per
cent by 2030 under the Paris climate
Public investment in climate must be
paired with private investment to meet
ambition needed for Paris. The bill
therefore provides $27 billion in sup-
port for green banks in the US, which
will provide low-cost capital to accel-
erate private investment in climate
Heather Zichal, Chief Executive of
the American Clean Power Associa-
tion hailed the climate bill as a
“generational opportunity for clean
energy” after years of uncertainty and
delay. “This is the vote heard around
the world. It puts America on a path to
creating 550 000 new clean energy
jobs while reducing economy-wide
emissions 40 per cent by 2030.”
Tax credits to spur investment in and
production of renewable power form
the centrepiece of the new bill. Such
tax credits for wind and solar develop-
ments have been used for a number of
years to help drive renewable projects
but they have been short-term. This
has made planning difcult and devel-
opers have often struggled to attract
The new bill reinstates and expands
production and investment tax cred-
its for wind, solar and energy storage
but with a 10-year time timeframe,
which allows long-term planning.
The 10-year credits will also feature
a “transferability” mechanism that
allows the credits to be bought and
sold, thereby expanding options for
nancing projects.
In anticipation of the bill passing,
Hanwha Solutions said it is
considering expanding investment in
its US photovoltaic plant construc-
tion plan, which was announced in
May this year.
Some project developers, however,
have expressed concern over the bill’s
goal of also promoting a home-grown
green industry.
Continued on Page 2
Energy companies have come under
re as prots soar while businesses and
households struggle under the burden
of record high energy prices.
Last month Saudi Arabia’s state-
owned energy corporation, Saudi Ar-
amco, highlighted the huge earnings
made by gas and oil-rich nations dur-
ing the energy crisis after making rev-
enues of $48.4 billion in the third
quarter, up 90 per cent from $25.5
billion a year earlier.
Saudi Aramco is just the latest in a
long line of oil giants to announce
bumper prots this year. Exxon-
Mobil’s prot, for example, came to
$17.6 billion in the second quarter,
excluding special items. The compa-
ny nearly doubled what it made in its
very protable rst quarter as oil and
gas prices started to soar driven by
Russia’s invasion of Ukraine.
Tradingplatforms’ Edith Reads
commented: “It is clear that the ener-
gy crisis is beneting the oil-rich na-
tions and those companies involved in
extracting and selling fossil fuels. The
high prices may be a cause for con-
cern for consumers, but for now, it
seems that the energy producers are
reaping the rewards.”
Record oil and gas prices have also
contributed to a bumper year for oil
giant bp, with half-year underlying
prots almost tripling from $5.4 bil-
lion in 2021 to $14.6 billion in 2022.
The company plans to boost dividend
payments by 10 per cent and will also
initiate a new share buyback pro-
gramme, totalling $3.5 billion.
In response to bp reporting huge
prots while household energy bills
soar, Doug Parr, Chief Scientist for
Greenpeace UK, said: “While house-
holds are being plunged into poverty
with knock-on-impacts for the whole
economy, fossil fuel companies are
laughing all the way to the bank. The
government is failing the UK and the
climate in its hour of need.
“Government must bring in a proper
windfall tax on these monster prots
and stop giving companies massive
tax breaks on destructive new fossil
fuel investments.”
Following the UK’s windfall tax
already imposed on oil and gas com-
panies, Britain’s electricity genera-
tors are facing pressure from minis-
ters to invest their “extraordinary
prots” in new green energy proj-
ects, rather than paying out the wind-
fall to shareholders.
Although many UK energy suppliers
have gone bust since the energy crisis,
some electricity generators have made
huge prots from surging electricity
prices that have risen in line with the
soaring cost of gas. Both Shell and
Centrica smashed earning results, with
Shell’s prot reaching a record of
$11.5 billion in the second quarter.
Pressure is now likely to increase on
generators with the announcement
that the UK will again raise its energy
price cap for households by 80 per
cent from October. This will see the
average household energy bill jump to
over £3500. The price cap was raised
by 54 per cent in April pushing the
average bill to just over £1900. Ex-
perts are predicting a further increase
in January, which could see average
annual bills reach in the region £5000,
with another increase likely in April.
Earlier last month UK Chancellor
Nadhim Zahawi and Business Energy
and Industry Secretary Kwasi Kwart-
eng met generators including Centri-
ca, Drax and RWE to discuss the en-
ergy crisis, including the sharp jump
in household bills.
US landmark clean
US landmark clean
energy bill will face
energy bill will face
The American Clean Power Association’s
Heather Zichal hailed the climate bill as a
“generational opportunity”
Junior Isles
European power prices hit new highs
last month and show no signs of abat-
ing as natural gas extended gains, says
independent energy research consul-
tancy Rystad Energy AS.
According to the company, next-year
electricity rates in Germany advanced
as much as 3.7 per cent to €477.50/
MWh ($487/MWh) on the European
Energy Exchange AG. This was almost
six times as much as this time last year,
with the price doubling in the past two
months alone.
Commenting on the latest numbers
Rystad Energy analyst Fabian Ronnin-
gen said: “There’s no clear sign of the
extreme price rally abating soon. The
continent’s low nuclear, hydropower
and coal capacities aren’t enough to
help ease that pressure.”
The market price is being driven by
concerns over whether Europe’s tight
gas supplies will be able to generate
enough electricity this winter. France’s
nuclear capacity is extremely low,
denting the possibility of power ex-
ports in the months ahead.
According to the forecast, European
electricity prices are expected to peak
during the winter of 2022-2023.
Day-ahead prices in Germany and the
UK also set records last month, an in-
dicator of high demand for cooling,
with heat waves and drought on the
continent straining infrastructure in the
According to the International En-
ergy Agency (IEA), wholesale power
prices in the rst half of 2022 were
three to more than four times as high
as the average in the rst half of 2016
to 2021, primarily due to gas prices
climbing to more than ve times the
value of the reference period.
The IEA price index, representing the
moving average of weighted prices in
the main electricity markets for four
quarters, reached almost 300 points in
the second quarter of 2022, indicating
three times higher average wholesale
prices than in the reporting period of
2016, and 60 per cent higher prices than
over the same quarter of 2021. The IEA
also forecasts that European electricity
prices are expected to peak during the
coming winter.
With energy driving ination across
Europe, the deepening energy crunch
is threatening to plunge the region into
a recession.
In the UK, it was recently announced
that the household energy price cap
will increase by 80 per cent at the start
of October on the back of rising
wholesale costs. The wholesale price
of UK electricity for that month has
jumped about sevenfold in the past
year to roughly £591/MWh ($713/
MWh) on the Intercontinental Ex-
change AG.
In March the US Department of
Commerce agreed to investigate al-
leged circumvention of anti-dump-
ing and countervailing duties by
solar manufacturers in Southeast
Asia. The move has proven to be
damaging to the US solar sector as
it essentially froze the import of PV
cells and modules to the country.
The potential for retroactive tar-
iffs along with supply chain snags
drove down solar installations in
the last quarter to their lowest
level since the start of the corona-
virus pandemic, according to en-
ergy and commodities consultancy
Wood Mackenzie.
Speaking to the Financial Times,
Tom Buttgenbach, Chief Executive
at 8Minute Solar, one of the biggest
utility-scale developers, comment-
ed: “I need to know what my supply
chain looks like in four to ve
Meanwhile, offshore wind power
developers are anxiously eyeing a
separate piece of legislation that
would require them to use only
American vessels and crews when
installing turbines. Pedro Azagra,
Chief Executive of Avangrid,
which owns utilities and is one of
the biggest US wind developers,
said: “It’s something that is not
realistic. You do not have them and
it will take some time to build them,
some time to train the crews.”
The IRA makes hundreds of mil-
lions of US dollars available to gov-
ernmental bodies to optimise and
accelerate the processes behind
bringing projects onto the grid. It
calls for comprehensive permitting
reform legislation to be passed be-
fore the end of the scal year, to
unlock domestic energy and trans-
mission projects, which will lower
costs for consumers and help the US
meet its long-term emissions goals.
This includes offshore wind de-
velopment and transmission proj-
ects related to this energy infrastruc-
ture, including interconnections.
The Act puts $100 million on dis-
posal for the Secretary of Energy
until September 30, 2031 to carry
out activities related to the develop-
ment of interregional electricity
transmission and transmission of
electricity generated by offshore
Notably, the bill seeks to kick-start
hydrogen by also offering tax cred-
its for hydrogen production proj-
ects, with the of tax credit for proj-
ects based on the amount of carbon
equivalent emissions for each kilo-
gramme produced, starting at a ba-
sic rate of $0.60/kg of hydrogen
This scale means that clean hydro-
gen producers can receive tax cred-
its of up to $3/kg. Experts say the
measures will make the US one of
the lowest cost hydrogen producers
in the world.
Continued from Page 1
Renewable energy sources, which ac-
count for the bulk of annual invest-
ments in power generation, are set to
provide the majority of Europe’s
power by the end of the decade despite
global supply chain challenges.
According to a recent report by S&P
Global Ratings Renewables are fore-
cast to increase to 60 per cent of pow-
er generation in Europe by 2030, and
could approach 40 per cent in the US
and China, according to S&P Global
Commodity Insights (Platts).
BloombergNEF recently calculated
that global investment in renewable
energy totalled $226 billion in the rst
half of 2022, setting a new record for
the rst six months of a year. It said the
uptick in investment reects an accel-
eration in demand for clean energy
supplies to tackle the ongoing global
energy and climate crises.
Its Renewable Energy Investment
Tracker 2H 2022 report says invest-
ment in new large- and small-scale
solar projects rose to a record-breaking
$120 billion, up 33 per cent from the
rst half of 2021. Wind project nanc-
ing was up 16 per cent from 1H 2021,
at $84 billion.
“Both sectors have been challenged
recently by rising input costs for key
materials such as steel and polysilicon,
as well as supply chain disruptions and
rising nancing costs,” it said. “Yet,
today’s gures indicate that investor
appetite is stronger than ever, in part
due to the very high energy prices cur-
rently being seen in many markets
around the world.”
As well as seeing booming project
investments, the rst half also saw an
all-time record for venture capital and
private equity investments into renew-
ables and energy storage, with $9.6
billion raised up 63 per cent on the
previous year.
Albert Cheung, Head of Analysis at
BloombergNEF, said: “Policy makers
are increasingly recognising that renew-
able energy is the key to unlocking en-
ergy security goals and reducing depen-
dence on volatile energy commodities.
Despite the headwinds presented by
ongoing cost ination and supply chain
challenges, demand for clean energy
sources has never been higher, and we
expect that the global energy crisis will
continue to act as an accelerant for the
clean energy transition.”
Global cumulative energy storage de-
ployments are expected to reach 500
GW by 2031 but demand in Europe
lags behind China and the US despite
the region’s need for exible power
According to Wood Mackenzie’s
‘Global Energy Storage Outlook’ Eu-
rope’s demand lags behind as its grid-
scale market struggles to stabilise,
with only 159 GWh forecasted for the
region by 2031, compared to 422
GWh for China and 600 GWh for the
Commenting on the forecasts, Dan
Shreve, Global Head of Energy Stor-
age at Wood Mackenzie, said:
“Growth has stalled in Europe as
regulatory barriers fail to improve
storage project economics. In addi-
tion, limited access to power markets
and a lack of revenue stacking oppor-
tunities, combined with a lack of ca-
pacity market auctions, has lowered
investment for grid-scale storage as-
sets in Europe.”
Despite this, Germany’s energy stor-
age market continues to grow and is
set to become the third biggest energy
storage market by 2030, following the
US and China. With 32 GWh fore-
casted for the country, 61 per cent from
the residential segment.
The European Commission’s RE-
PowerEU plan, launched as a means
of the EU weaning itself off Russian
fossil fuels, will boost the EU energy
storage market further as it pushes for
a higher share of renewable supply in
EU Member States. Europe has al-
ready seen a 12 GWh increase since
the plan was launched in May 2022,
which set out a 600 GW target for the
solar PV market and pledged to ease
permitting processes for both storage
and PV systems.
“While REPowerEU does not set out
a specic target for energy storage,
higher renewable supply targets will
drive demand for exible power solu-
tions, including energy storage as-
sets,” Shreve said.
The report was followed shortly af-
ter by an announcement by the Euro-
pean Commission that it wants to
boost output of its own raw materials
needed for green energy. The plans,
still at an early stage, would lower
regulatory barriers to mining and pro-
duction of critical materials such as
lithium, cobalt and graphite, needed
for batteries, wind farms, solar panels
and electric vehicles.
“Demand is increasing dramatically
due to the digital and green transition
of our society [but] we are too often
almost entirely dependent on imports,
while the geopolitics of supply chains
are increasingly unstable,” said the
EU’s internal market Commissioner
Thierry Breton.
Europe produces less than 1 per cent
of the world’s lithium ion cells com-
pared with China’s 66 per cent, ac-
cording to a report issued by JRC last
year. Mining lithium, however, has
challenges as demonstrated by Portu-
gal’s efforts to unearth large reserves.
A potential cornerstone of Europe’s
green energy transition, the Barroso
mine in northeastern Portugal was
expected to start producing lithium for
electric vehicle batteries in 2020. But
the mine’s owner, Savannah Resourc-
es, has been forced to push the start
date back several times due to delays
in environmental approval. In July
Portugal’s regulator added a phase to
the process, causing Savannah to reset
its rst production date again to 2026.
Meanwhile, demand continues to
grow. The EU target is for renewables
to produce 32 per cent of the bloc’s
energy by 2030, potentially increas-
ing to 45 per cent.
Dries Acke, Policy Director at So-
larPower Europe, said the industry
body expected EU installations of
photovoltaic cells to reach an all-time
high of 34 GW this year, up from 28
GW in 2021. But he said supply of
raw and processed materials would
determine the availability of solar
Headline News
Renewable energy sector dees supply chain
Renewable energy sector dees supply chain
EU needs energy storage but market lags behind
EU needs energy storage but market lags behind
US and China
US and China
No clear sign of extreme
No clear sign of extreme
prices abating soon
prices abating soon
Buttgenbach called for
long-term policy certainty
With gas prices continuing to climb and low nuclear and hydropower output in Europe, there
is no sign that electricity prices will fall any time soon.
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Asia News
Japan has announced plans to return
to nuclear power in a move to halt
soaring energy costs and secure pow-
er supply. Late last month Prime min-
ister Fumio Kishida threw his support
behind accelerating the restart of reac-
tors which have been closed since the
Fukushima Daiichi nuclear plant di-
saster in 2011, and signalled the con-
struction of new plants.
“As a result of Russia’s invasion of
Ukraine, the global energy situation
has drastically changed,” Kishida said.
“Whatever happens globally, we need
to prepare every possible measure in
advance to minimise the impact on
people’s lives,” adding that the govern-
ment would aim to come up with con-
crete plans for the nuclear sector by
The plan to research the construction
of new nuclear reactors, which experts
say could be safer than those using
existing technologies, marks a U-turn
in government policy since the Fuku-
shima crisis.
Earlier in August, new Minister of
Economy, Trade and Industry, Yasu-
toshi Nishimura, had said he had no
intention or plan to allow power com-
panies to build new nuclear power
plants or replace existing ones. Never-
theless, Kishida had expressed hope
that his new industry minister would
nd a way to secure stable energy sup-
plies at reasonable prices.
Japan had already announced the
restart of some nuclear plants after
Tokyo came close to suffering a pow-
er blackout this year. With the accel-
eration, it will aim to bring back 17 out
of a total 33 operable reactors by sum-
mer next year and also to extend the
life of existing plants.
Asia is becoming the focus of oil and
gas majors looking for clean energy
Last month a unit of US oil super-
major Chevron Corporation said it
plans to explore hydrogen, carbon
capture and other more environmen-
tally friendly energy operations in
Central Asia with a local partner.
Chevron Munaigas and KazMunay-
Gas (KMG) said they would evaluate
the potential for carbon capture, utili-
sation, and storage as well as hydrogen
production and methane management.
The news came as French energy gi-
ant TotalEnergies and Eneos received
clearance to form a joint venture (JV)
for developing 2 GW of business-to-
business solar projects in Asia over the
next ve years.
The deal to create the TotalEnergies
ENEOS Renewables Distributed
Generation Asia JV was rst an-
nounced in April this year.
TotalEnergies Renewables Distrib-
uted Generation Asia Head, Gavin
Adda, said: “Together with our partner,
we will mobilise our know-how and
expertise for more projects in the com-
ing months which puts us rmly on
track to achieve the goal of 2 GW
within the next ve years.”
TotalEnergies also said it plans to
produce and commercialise green hy-
drogen across India and beyond with
its purchase of a 25 per cent stake in
Adani New Industries Ltd. (ANIL)
from its parent, Adani Enterprises Ltd.
Japan accelerates nuclear to
secure energy supply
Oil majors target Asian clean
energy opportunities
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Syed Ali
Australia’s recently elected govern-
ment is taking the next steps in creat-
ing a new renewable energy industry
following its decision to pass the
country’s rst climate change legisla-
tion in more than a decade.
In early August the Albanese gov-
ernment announced six proposed re-
gions for offshore wind development.
It also began consultation on one of
the regions – an area in the Bass Strait
off Gippsland.
The government has invited the pub-
lic to comment on the notice for the
proposed Gippsland zone, with sub-
missions to be received by October 7,
2022 in order to be considered.
The other regions for offshore wind
energy projects include: the Pacic
Ocean region off the Hunter in New
South Wales (NSW); the Pacic
Ocean region off the Illawarra in
NSW; the Southern Ocean region off
Portland in Victoria; the Bass Strait
region off Northern Tasmania; and the
Indian Ocean region off Perth/Bun-
bury, WA.
The Department of Climate Change,
Energy, the Environment and Water
will facilitate the consultation process
in the proposed regions.
Unlocking the offshore wind indus-
try is seen as “an exciting new chapter
for Australia”. Climate Change and
Energy Minister Chris Bowen has
been ghting to unlock Australia’s
offshore wind capacity for years.
He said many other countries have
been successfully harvesting offshore
wind energy for years, and “now is the
time for Australia to start the journey
to rmly establish this reliable and
signicant form of renewable energy”.
“We have some of the best wind re-
sources in the world,” said Bowen.
“The world’s climate emergency is
Australia’s regional jobs opportunity
and offshore wind is just one example.
Australia’s stance on tackling cli-
mate change has been a political
touchpaper for some time but in early
August the House of Representatives
passed a new climate bill that is ex-
pected to become law. The main part
of the previous bill – an emissions
trading scheme, introduced by the Gil-
lard government with the support of
Greens and independents – was re-
pealed by the Coalition under Tony
Abbott in 2014.
The new bill sets two national green-
house gas emissions targets: a 43 per
cent cut below 2005 levels by 2030,
and a reduction to “net zero” by 2050.
The bill emphasises that the 2030
target is a oor not a ceiling, which
means it is the minimum cut that can
happen but there is nothing to legally
prevent deeper cuts. The legislation
requires several government agencies
to consider the targets – that is, factor
in climate change – when making in-
vestment decisions.
The legislation strengthens the role
of the Climate Change Authority, a
decade-old agency responsible for
giving policy advice. The authority
was cut back and largely ignored un-
der the previous Coalition but will
now be expected to give annual advice
on progress towards meeting Austra-
lia’s climate targets and to advise
later this parliamentary term on a new
target for 2035.
The government will have to release
the advice and publicly explain why
if it does not follow it.
The climate change minister is re-
quired to give an annual statement to
parliament on progress towards the
targets. Bowen has likened it to the
annual Closing the Gap statement.
The new legislation, however, does
not include a mechanism or funding
to cut emissions from electricity, in-
dustry, transport, agriculture or other
parts of the economy.
There are still several details to be
eshed out and the bill still has to clear
the Senate when parliament next sits
in September, but this is now seen as
a formality.
n Copenhagen Energy has led a pro-
posal with the Federal Department of
Water and the Environment for initial
review of a 3 GW offshore wind farm
off the coast of the state of Western
Australia looks offshore, as
Australia looks offshore, as
government passes new climate
government passes new climate
n Six offshore wind zones proposed n New climate legislation sets tougher emissions targets
Asia News
China’s worst heat wave since records
began 60 years ago has caused drought
in the parts of the country, forcing a
switch from hydropower to coal in an
effort to keep the lights on.
Extreme temperature, which has
lasted more than two months, and a lack
of rain have starved dams of water in
Sichuan Province forcing authorities
there and in the neighbouring munici-
pality of Chongqing to ask companies
to temporarily shut factories.
In an effort to secure electricity sup-
plies, Vice-Premier, Han Zheng said
Beijing would provide support for the
coal sector.
“[We need to] guarantee safe elec-
tricity supply for the people… and
key sectors,” he said during a visit to
the State Grid Corporation of China.
The government will “enhance poli-
cy support [and] take multiple mea-
sures to help coal plants ease actual
David Fishman, an analyst who cov-
ers Chinese energy at The Lantau
Group, told the Financial Times that
the province would inevitably turn to
coal, which has become more expen-
sive due to high demand. Government
support could include a price cap, he
“[Provinces where] coal capacity [is]
deployed to support hydropower in the
dry season will be looking to maximise
usage of their coal capacity as hydro
production drops,” said Fishman. “Un-
der these conditions, there’s no choice
but to run the coal plants at maximum
Although necessary, the move will
slow China’s effort to combat climate
change. Nevertheless, the country’s
clean energy sector will continue to see
expansion this year, according to ex-
perts. The clean energy sector will con-
tinue fast expansion in the second half,
said Su Xinyi, an analyst with China
Electric Power Planning & Engineer-
ing Institute.
China’s installed capacity of wind
and solar PV added 12.94 GW and
30.88 GW, accounting for 18.7 per cent
and 44.7 per cent of total new capacity,
respectively, in the rst half of 2022,
according to data from the National
Energy Administration.
China’s newly installed capacity of
wind and solar PV for the entire year
is expected to exceed 100 GW, while
the consumption of power produced by
the two energy sources is estimated to
reach over 12.2 per cent of total power
consumption, Su said.
The Malaysian government will stop
building coal power plants starting in
2040, and shift its focus toward clean
and renewable energy, according to
Mustapa Mohamed, the minister in
charge of economy in the Prime Min-
isters department.
Speaking at a question and answer
session of the Malaysian Parliament’s
second meeting, Mustapa said the on-
going global energy crisis will acceler-
ate the transition to cleaner energy,
adding that Malaysia will improve its
renewable energy capacity to fulll the
set targets.
A number of renewable energy sourc-
es identied for development include
hydroelectricity, solar energy, biogas
and biomass, he said, noting that bat-
tery energy storage technology will
also be introduced to ensure quality and
guaranteed power supply.
The government will also expand the
use of hydrogen, and develop technol-
ogy related to carbon capture and stor-
age, he went on.
According to Mustapa, the Econom-
ic Planning Unit is nalising a nation-
al energy policy, which is in line with
Malaysia’s commitment to Sustain-
able Development Goal 7 (SDG7) of
the UN to ensure access to affordable,
reliable, sustainable and modern en-
ergy for all. The policy is expected to
be released this year.
State-owned utility Tenaga Nasional
Bhd (TNB) via its New Energy Divi-
sion (NED) is focused on exploring
new markets to grow its renewable
energy (RE) portfolio in Southeast
Asia, as well as Europe.
TNB President and CEO Datuk Ba-
harin Din said its NED aims to in-
crease participation in solar, offshore
and onshore wind to potentially cap-
ture 14 GW of RE capacity by 2050.
TNB Renewables Sdn Bhd will focus
on Southeast Asia – exploring new
markets that include Thailand, the Phil-
ippines, Vietnam, Taiwan, South Ko-
rea and Australia.
In a separate development TNB also
said it plans to begin the process next
year for a potential listing of its power
generation business. In what would be
the country’s largest initial public of-
fering (IPO) in a decade, TNB Power
Generation Sdn Bhd, known as TNB
Genco, could be valued at about $4
Sources close to the matter told Re-
uters Proceeds from the offering will
be used to grow TNB Genco’s renew-
able energy portfolio.
The clean energy market is estimat-
ed to be worth MYR65-80 billion
($14.54-17.9 billion) in Malaysia by
2050, and Tenaga aims to have TNB
Genco take MYR40 billion of it.
Cost of renewables
rise but still gains on
fossil fuelled power
Malaysia speeds up shift
to clean energy
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An enhanced, resilient, electricity network is the key to delivering the massive amounts of renewables planned
around the world. Hitachi Energy’s Niklas Persson discusses the key power grid technologies and project
development strategies that are urgently needed to accelerate the transition to a carbon-neutral energy system.
Junior Isles
same concept to connect the Nordic
and British power markets. Commis-
sioned in October last year, the 1400
MW capacity NSL (North Sea Link),
720 km interconnector, built for
Statnett and National Grid, is the
longest subsea link in the world. It is
also the rst interconnection between
the UK and Norway.
The link will help evacuate power
from the UK when, for instance,
wind power generation is high there
and electricity demand low, thereby
conserving water in Norway’s hydro-
power reservoirs. When demand is
high in the UK and wind power gen-
eration is low, low-carbon energy can
ow from Norway, helping to secure
the UK’s electricity supply. The link
will also facilitate power trading and
electricity price arbitrage between
the countries.
“The EU has a clear vision that in-
terconnection is the key to make use
of the new energy system,” noted
Persson, adding that HVDC is mov-
ing from what used to be a technol-
ogy for very specic applications to
one that will be the basis of a future
meshed DC grid.
“Our rst HVDC technology,
HVDC Classic, was seen as a very
niche solution used for point-to-
point bulk power transmission to
load centres over very long distances,
because it has lower losses and a
much smaller footprint [than AC
link that will transmit up to 2 GW of
wind power from the north to the
industrial south, or alternatively solar
power from the south to the north
when needed.
At the same time, the EU has made
great strides in expanding its inter-
connected electricity system. Pers-
son cited examples such as the Nord-
Link interconnector linking the
power grids of Norway and Ger-
many. Commissioned in 2020, it
enables the integration and exchange
of wind, solar and hydro power be-
tween the two countries. NordLink
was not only the world’s longest
voltage source converter (VSC) cable
connector at 623 km, but was also
Europe’s longest HVDC power grid
interconnection, and the rst inter-
connection to link the Norwegian
and German power grids.
Hitachi Energy’s delivery included
the design, engineering, supply and
commissioning of two 1400 MW
±525 kV converter stations, using
Hitachi Energy’s VSC technology,
known as HVDC Light
. The project
is signicant since it is the world’s
rst HVDC Light
bipole installa-
tion to perform at 525 kV and 1400
MW, nearly doubling the power
transmission capacity compared
with earlier systems, while improv-
ing overall reliability and availability
in the grid.
Hitachi Energy has since used the
Wilster HVDC converter station. SuedLink DC4 will transmit electricity between Wilster in the
north and Bergrheinfeld in the south
Persson says the industry is “coming together and pushing the
transition” forward
Rapid grid evolution is
crucial to carbon neutrality
Special Technology Supplement
ince setting global ambitions for
climate change through the Paris
Agreement in 2015, many would
argue that the speed and level of
action needed to combat global
warming has been insufcient. But in
the last couple of years, there has been
a real feeling that the pace of change
is gathering momentum. The EU has
been at the vanguard of accelerating
that change with its European Green
Deal, which encompasses the ‘Fit for
55’ proposals, as well as the more
recent REPowerEU plan aimed at
reducing dependence on Russian
fossil fuels.
Much of those plans are under-
pinned by a massive rollout of wind
– offshore wind in particular – and
solar, as well as energy efciency
and green hydrogen. But the key fa-
cilitator will be the power grid and
how it will evolve to enable the en-
ergy transition.
Niklas Persson is Managing Direc-
tor of Hitachi Energy’s Grid Integra-
tion business. Having worked in the
sector for the best part of 25 years,
he has no doubt that the grid is central
to accelerating the energy transition.
“Until fairly recently, the pace of
change has not been what we hoped
for and expected. But now we see the
industry is coming together and
pushing the transition forward – even
if political decisions are lagging in
some areas such as a regulatory
framework for a future offshore grid,
for example.” he said. “Certainly,
in the last two or three years, inde-
pendent of the Ukraine situation,
there has been increased awareness
and momentum. This was clear
at COP26.
“As a technology leader, we are
seeing much more demand from
customers looking at how to manage
the network through digitalisation,
greater efciency, more sustainable
and even more innovative technolo-
gies and solutions. They have to
manage a network that is much more
complex in terms of both consump-
tion and generation. On the genera-
tion side, new capacity is being
added but without inertia when that
capacity is wind or solar.”
He noted that in the past, grids have
been “very rigid and stable”, existing
as islands within each country, un-
connected to neighbouring countries,
or sometimes as regions within a
country. With the inux of renew-
ables, however, grid operators now
have to mitigate load ows through
enhanced grid performance, and in
many areas start to use power elec-
tronics that provide more dynamic
solutions for a more complex grid.
Just last month, Hitachi Energy
secured the contract for SuedLink
DC4 in Germany, a ±525 kV HVDC
link completes the rst multi-termi-
nal HVDC system in Europe.
The Shetland interconnector will
connect to the existing 320 kV/1200
MW Caithness-Moray Link to form
a three-terminal HVDC network.
Caithness-Moray is a subsea link
connecting the electricity grid on ei-
ther side of the Moray Firth in
Northern Scotland. This link has two
land-based 320 kV HVDC Light
converter stations, one rated 1200
MW at Blackhillock in Moray and
another rated 800 MW at Spittal in
Persson noted: “This is a signicant
step in showing you can connect
several converters instead of just
having point-to-point. This could be
developed into a multi-purpose con-
nector scheme, where the energy
systems of one, two, three, or four
countries are connected. This would
form a ring and suddenly you have a
DC grid.”
From a technology aspect, Persson
says there is no issue in implement-
ing DC grids, noting that the key
component – the HVDC breaker –
has been type-tested. He says Hitachi
Energy has also engineered a control
function that can handle inputs from
various OEM systems.
“This has all been proven as part of
a European programme,” he said. “It
has not been proven at a large scale
yet, so some project development is
still needed. But we are very con-
dent that technically, it is not a big
The main challenge, says Persson,
is the regulatory framework. “If, for
example, you look at this cluster be-
tween the Netherlands and the UK,
where there are three wind farms, if
the wind is blowing who will get
what energy and why? And at what
price? And if all the wind farms are
generating, will the price be zero
because there is an over-capacity?
The regulatory framework is not yet
in place.”
It is a challenge, however, that will
no doubt be overcome as transmis-
sion system operators (TSOs) start to
collaborate and set up pilot projects
such as the energy island being built
off the coast of Denmark, which is
being designed to transmit wind
power to various countries, as well
as hydrogen produced by electrolys-
ers powered by wind.
“Denmark will build it and then
make the energy available to maybe
Germany, Norway, the UK, etc., since
they won’t use all the energy them-
selves. This is how I see it. So we will
go from radial interconnectors, to
multi-purpose interconnectors, and
Special Technology Supplement
Kriegers Flak Combined Grid
Solution in Denmark. The
multi-purpose connection
demonstrates how new
HVDC hybrid solutions can
optimise power grids
transmission]. This made it suitable
for transporting power over thou-
sands of kilometres in countries like
China, India and Brazil. We later
developed HVDC Light
based on
VSC [Voltage Sourced Converter]
technology to transmit power under-
ground and underwater, as well as
over long distances. We now have
more than 25 years of development of
HVDC Light
, and stepwise devel-
opment has seen the transmission
levels go from 80 kV and about 50
MW, to 640 kV and 3 GW, with the
proven capabilities for managing fre-
quency uctuations, voltage dips, and
transients. But now there is a need for
multi-purpose and multi-terminal
He used Kriegers Flak Combined
Grid Solution (KF CGS) as an ex-
ample of what he describes as “a
kind of rst multi-purpose” connec-
tion that demonstrates how new
HVDC hybrid solutions can optimise
power grids and make new and
larger applications of offshore wind
possible to further support EU targets
for achieving climate neutrality
by 2050.
Commissioned in 2019, the HVDC
system helps secure the energy sup-
ply in both countries and supports
cross-border energy trading while
reliably integrating the Baltic 1,
Baltic 2 and Kriegers Flak offshore
wind farms.
The innovative hybrid HVDC
system digital master control-
ler manages the complex task of
controlling the entire KF CGS. By
adjusting power ows in real-time,
the system integrates and supports
the wind farms and the two asyn-
chronous AC power grids in Den-
mark and Germany, ensuring sus-
tainable and reliable energy to
The 410 MW/150 kV converter
station is located in Bentwisch,
northern Germany where it connects
the Kriegers Flak offshore grid, part
of the Danish electricity network,
to the German network. The eco-
nomic back-to-back set-up minimis-
es the environmental footprint of the
More recently, in 2020 Hitachi
Energy won an order from Scottish
and Southern Networks Transmis-
sion (SSEN) for the Shetland link,
which is seen as signicant for the
industry. The link will allow SSEN
to efciently combine wind and
hydro power to meet user needs
while also increasing the reliability
and capacity of the power grids in
Scotland and on Shetland. Accord-
ing to Hitachi Energy, the 600 MW
Erstmyra converter station in Norway: the NordLink
interconnector links the power grids of Norway and Germany
then eventually it will be a grid,” said
Persson. “This type of scheme will
harvest all the energy that is the vi-
sion for Europe’s offshore wind
sector. Many have learned that for
this to happen, you need a DC grid
While Persson believes this will
happen, he acknowledges that it will
take some time. “Permitting and -
nancing, etc., has to be in place, but
10 years is a short time in this indus-
try. Multi-terminal is already here
and we are starting to see multi-pur-
pose projects such as in Denmark but
you are looking at about 10+ years
before we really see the DC grid.”
Other countries outside of Europe
are also embracing HVDC technol-
ogy to help integrate renewables. In
December last year Hitachi Energy
secured a contract for what it says is
the world’s most powerful ‘power
from shore’ solution. Here, Hitachi
Energy will supply the enabling
technology – its HVDC Light
verter stations and MACH digital
control platform – to connect two
large offshore oil and gas production
hubs to the mainland grid for the Abu
Dhabi Oil Company (ADNOC). The
project will reduce CO
from ADNOC’s production opera-
tions by up to 30 per cent by replac-
ing gas turbines at the hubs with
electricity generated onshore by
emission-free solar and nuclear
The contract follows an earlier
contract in October last year that will
see Hitachi Energy lead a consortium
that will deliver the rst HVDC link
between the Middle East and Africa.
The link will allow Saudi Arabia and
Egypt to exchange up to 3 GW of
electricity – much of which is ex-
pected to be generated from renew-
able energy sources in the future.
More recently, in Mumbai, India, a
contract was awarded to Hitachi
Energy for what is called a “city
centre in-feed application” where an
HVDC Light
transmission system
will help bring 1000 MW of power
into the city.
“In mega cities like Mumbai, it’s
not easy to build new stations to get
power into the city. With this project
we are able to connect solar power
from outside Mumbai, with a very
small footprint inside the city. This is
the rst of its kind,” said Persson.
The massive worldwide deploy-
ment of renewables, however, comes
at a price in terms of grid stability,
since wind and solar are intermittent
and cause uctuations in terms of
voltage and frequency.
As the grid is forced to accommo-
date more distributed energy sources
and loads such as electric vehicles
(EVs), this also creates transients
and uctuations. According to Pers-
son this means that the grid will in-
creasingly need to be based on power
electronics and digitalisation.
“In the future, you will not only see
HVDC links and STATCOM devices
here and there; there will be power
electronics solutions in wind genera-
tion, with digitalisation for manag-
ing the load ows and stability,
which vary according to how the
wind is blowing or the sun is shining.
This will be the grid of the future.”
Power quality will also be an issue
in AC grids since there is less short-
circuit capability due to a lack of the
system inertia that comes from con-
ventional power plants.
Persson explained: “One of the
concerns we have is that there is a lot
of focus on wind generation, HVDC
and meshed grids, which is good, but
then you need to receive all of this
energy and transmit it to the load
centres. This means you also need to
invest in the AC grid. And this is
where many countries have been
taken by surprise on the needed in-
vestments to get an efcient grid in
place, in time.”
He says, there is therefore a grow-
ing need for what is known as ‘grid
forming’ capability, where the con-
trol function in a STATCOM is used
to rapidly control swings in the grid.
Like synchronous machine technolo-
gies, this enables the provision of
grid services such as inertia and grid
strength in the fastest timeframes.
An HVDC platform at the Dogger Bank wind farm. HVDC systems support cross-border energy
trading while reliably integrating offshore wind farms. (Photo courtesy of Aibel)
Special Technology Supplement
In January this year,
Hitachi Energy achieved the
rst-step target set out in
its Sustainability 2030 plan
way, you would build and assemble
the grid connection on-site. Our
concept is modularised, contain-
erised, pre-tested from a functional-
ity perspective in a controlled envi-
ronment and sent to the site, ready for
energisation. This allows us to reduce
both equipment size and commis-
sioning time.”
One recent example of the efcacy
of Grid-eXpand
is a 170 kV contai-
nerised gas-insulated (GIS) grid
connection for a combined sh farm
and 312 MW solar photovoltaic
power plant in South East Asia.
Owned by Sunny Rich Group, the
site uses solar power and advanced
technologies to farm sh sustainably.
According to Hitachi Energy, com-
pared to a conventional GIS grid
connection, the Grid-eXpand
tion has a 25 per cent smaller foot-
print, was delivered and energised 15
per cent faster, and reduced the cost
of civil works by 50 per cent.
Such developments are essential in
order for grid infrastructure to facili-
tate the energy transition. But tech-
nology will also have to be combined
with a more coordinated approach to
grid design and development, all
underpinned by the right regulatory
The UK is a good example of how
the grid of the future could be de-
signed and developed. In July the
National Grid ESO published its
Pathway to 2030 Holistic Network
Design (HND) to accelerate the con-
nection of 23 GW of wind to help
deliver the government’s ambition
for 50 GW of connected offshore
wind by 2030. The HND, which will
call for £54 billion ($65 billion) in-
vestment, is seen as a rst step to-
wards more centralised, strategic
network planning.
At the same time, regulation will
have to keep up with technology, if
the world is to realise the smart, re-
silient grids of the future that also
allow consumers to play their part in
the energy transition. Persson noted
that Hitachi Energy has the digital
technologies to provide smart grid
solutions but stresses that there is
still much to do for the industry and
government as a whole.
He said: “You can have houses
with solar panels, for example,
where households can buy and sell
energy, etc. I believe this will hap-
pen. But if a transmission system
operator has to respond to an issue, it
needs to know when and how energy
is available. There would need to be
a commercial agreement between
the TSO or DSO [distribution system
operator] and every household to
ensure energy is available when it’s
needed. There is still a lot of work to
be done from the regulatory and
policy perspective for this to happen,
so it will be quite a long time before
houses are really participating in
stabilising the grid.”
Such commercial and regulatory
issues, which include standardisa-
tion and grid compliance, calls for
collaboration in the market, Persson
“There is ongoing collaboration
between TSOs, DSOs, politicians,
OEMs, etc., to understand how we
can standardise and do this as a com-
munity,” he said, adding that there
will also need to be collaboration
in how projects are executed, as the
sector continues to inch closer to
its vision.
“This market is very interesting
and there is a huge demand. I really
see movement from the TSOs, DSOs
and the industry. Project developers
including oil giants like BP, Equinor
and Shell are investing, so money is
available,” said Persson. “But you
still have to look at the industry’s
capacity to respond to this demand.”
He believes the need to meet this
massive demand requires a shift
away from the traditional turnkey
EPC approach, where OEMs also
take on the civil work for a project.
“At Hitachi Energy we believe
each partner should do what it is
good at. So we work with our cus-
tomers to dene who should deliver
what in order to speed up the whole
process. We deliver what is in our
DNA, i.e. the technology – manu-
facturing, system engineering and
project execution. For project exe-
cution, we form partnerships and
get customers to be more involved
in dening the scope.”
Hitachi Energy is keen to lead the
transition by example. “Industry
and technology providers really
want to support the momentum.
This manifests itself in our Sustain-
ability 2030 strategic plan, where
we have committed to achieving
carbon neutrality in our own opera-
tions and only using fossil-free
electricity,” said Persson.
In January this year, the company
announced that it had achieved the
rst-step target set out in its Sus-
tainability 2030 plan – the use of
100 per cent fossil-free electricity in
its own operations.
Work in helping its customers re-
duce carbon emissions is also pro-
gressing well. Hitachi Energy has
launched the rst SF
-free high-
voltage products, under the name
, which will make a “sig-
nicant contribution” to its custom-
ers’ sustainability journey.
Persson summarised: “With proj-
ects all over the world – in Europe,
the Middle East, Asia and the US, I
really feel there is momentum in the
market to make this [energy transi-
tion] happen.
“Our vision 2030 is to signi-
cantly contribute to the green energy
transition. And we will be doing
that by being more sustainable our-
selves, providing technology solu-
tions and continuing to invest in
innovation and people, as well as
innovating together with customers
and partners. Given our global
footprint, we believe we are well
positioned to do this.”
The Grid-eXpand
range of modular and prefabricated grid connection solutions will make it
faster, simpler and more efcient to expand renewables power grid capacity
Though grid-forming control con-
cepts are not new to the industry,
they have received renewed attention
with the proliferation of inverter-
based resources such as wind and
solar in recent years. While the in-
dustry has made tremendous prog-
ress in the space and many vendors
are offering and have installed grid-
forming inverters, there is a lot more
work to be done around the develop-
ment of the technology, applications,
and the impact on operations and
transmission planning.
“A network with a high degree of
power electronics interfacing renew-
able generation will face problems
with low inertia. This requires a new
type of solution for stabilisation,”
said Persson. “We have SVC Light
which is an enhanced STATCOM
with built-in super-capacitors, that
has active power capability for syn-
thetic inertia, and fast frequency
regulation to support the grid in
terms of stability. This is the technol-
ogy of the future and we are now
offering this technology.”
He also said there is a need to de-
ploy more standard network solu-
tions on the AC side (the onshore
network) to upgrade old substations,
etc. Accordingly, the company has
introduced its Grid-eXpand
of modular and prefabricated grid
connection solutions that make it
faster, simpler and more efcient to
expand power grid capacity.
comprises a com-
prehensive range of air-insulated and
gas-insulated grid connections that
cover the most frequently used grid
voltages worldwide. Grid-eXpand
solutions are engineered, assembled
and factory-tested by Hitachi Energy
before delivery, ready for speedy and
easy energisation on-site while re-
ducing site-based construction risks.
The modules are available in con-
tainers, on skids or trailers for perma-
nent or mobile deployment, in kits for
gas-insulated solutions, and with
complete power collection and grid
connection packages for offshore
wind farms and solar parks. Site in-
stallation is up to 40 per cent faster,
the footprint up to 60 per cent smaller
and civil work up to 70 per cent lower
in costs than for conventionally built
grid connections, which require ex-
tensive construction work and equip-
ment assembly on-site.
Crucially for many of its custom-
ers, Hitachi Energy says the solutions
can be tailored to meet specic needs
and grid code requirements.
“It’s an important innovation,” ex-
plained Persson. “In the traditional
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The startups from AWS’s inaugural
accelerator are already making an
impact in their respective elds. No-
tably, e-Zinc, which is advancing
long-duration battery storage by
storing electrical energy within zinc
metal, creating hundreds of hours of
energy capacity. Another startup,
Persefoni, is furthering intelligent
carbon footprint management and
sustainability reporting with their
dedicated reporting platform. The
second cohort of selected startups,
announced in May 2022, are well on
he greatest promise of startups
has conventionally been the
promise of innovation – the
capacity to invent and reinvent, chip-
ping away the status quo incremen-
tally or sometimes through sheer
disruption. However, there is a reali-
sation amongst the more traditional
energy players today that innovation
is only part of the equation and that
even greater collaboration with start-
ups may hold the key to bridging the
emission reductions gap to meet
global net zero 2050 targets.
According to the International En-
ergy Agency (IEA), to meet 2050
ambitions, a 40-50 per cent reduction
in carbon emissions will need to come
from technologies not yet commer-
cially deployed, especially in sectors
where emissions are particularly
challenging to reduce, such as ship-
ping, aviation, chemicals and heavy
industry. With the energy transition
advancing, the new landscape emerg-
ing is one where energy systems of
the future will be more decentralised,
more complex, and rely on greater
interactions with partners in the sys-
tem. Fresh thinking is a key output of
clean energy partnerships, in addition
to a freer ow of data.
Energy players are starting to look
to startups more than ever as one way
to overcome this challenge, realising
that co-innovation and collaboration
will be key. An example of this shift
in behaviour towards the impact of
clean energy startups is the signicant
increase in investment over the last
year alone. In Europe, more early and
mid-stage venture capital funding
owed to clean energy startups in the
rst half of 2021 than in 2019 and
2020 combined. Public spending also
ramped up, with markets for clean
technology innovation receiving a
global boost, triggered by t for 2050
ambitions, COP26 commitments, and
climate agenda of the US Ination
Reduction Act.
The digital tness of these startups
has also been a sought after core ca-
pability for energy companies. Most
clean energy startups are cloud-native
from inception, understanding the
benets from a cost perspective but
also how the cloud helps achieve
scalability, speed, agility, security and
automation. Fostering innovation
with startups that have digital hard-
wired into their DNA provides an
opportunity for bigger energy compa-
nies to make greater strides forward,
faster. As the landscape shifts, a new
ecosystem develops and an explosion
of data continues, the ability to re-
spond to this and be digitally smart is
more important than ever.
There is also a realisation of the
economic value these partnerships
can bring. It’s estimated that success-
ful partnerships in the pursuit of net
zero could create a market for clean
energy technologies worth over $1
trillion a year by 2050 with the devel-
opment of hydrogen electrolysers and
fuelling, wind turbines, solar panels,
long duration energy storage, carbon
tracking tech, and advanced materi-
als. Exposure to innovating startups
in these spaces is crucial to competi-
tively participating in this market.
Some startups already making an
impact include Ionomr and E-zinc
(Canada), Ethosgen, Persefoni, Utility
Global, Power to Hydrogen, Shifted
Energy, Urban Electric Power, Cem-
vita Factory, Uprise and WindESCO
(USA), SmartPulse (Turkey), Flexid-
ao, Barbara ioT and Rated Power
(Spain),SmartHelio (Switzerland),
Hybrid Greentech (Denmark) Sunai
(Chile), SwitchDin and UPowr (Aus-
tralia), and Hydro Wind Energy
(UAE), to name a few.
Advancing clean energy will also
require re-skilling along two dimen-
sions: what needs to be learned; and
who is learning. There is a skills gap
to sustain the rate of growth and in-
novation by 2030 and beyond – par-
ticularly when it comes to digital and
their way to leveraging the AWS
Clean Energy Accelerator for greater
collaboration and industry-shaping
The competitiveness of startups is
also a draw. This is not just down to
how they manage to creatively ad-
dress key industry topics and chal-
lenges, it’s also embedded in how
these young rms subvert traditional
organisational structures. Tackling a
problem with a willingness to experi-
ment and taking risks lies at the core
of innovation.
One example is Octopus Energy, a
‘digital-rst company’ that provides
millions of households in the UK with
clean, green energy. Octopus Energy
uses the breadth and depth of AWS
services, including data storage, to
build insights on its customer service
platform, Kraken. These insights are
helping the organisation to understand
energy consumption rates across the
business, down to individual house-
holds. To do this, Octopus Energy
trains neural networks on billions of
rows of smart meter data, looking at
energy consumption at different times
of the day. These insights can then be
used to predict energy use across
Octopus Energy’s network and in-
form when it buys energy from the
wholesale market.
Achieving net zero carbon goals is
simply not a journey that can be taken
alone. This journey will require work-
ing effectively with innovators from
outside bigger organisations to bring
both an unbiased perspective and
fresh ideas.
Another output of collaboration is
building strategic organisational ca-
pabilities. While mentoring and sup-
porting startups to scale their com-
mercial models, bigger organisations’
partnership with startups will require
working effectively with innovators
from within to bring the startups’ new
skills into the organisation. It’s crucial
to understand startups’ procurement
frameworks and their pace of work,
and to learn from them along the way.
No matter the framework, gaining
competitive advantage in this new era
of energy is unquestionably going to
be a tall order for organisations.
Strategically partnering with startups,
supporting their growth while learn-
ing how to work with them and from
them, will continue to be a promising
way of gaining access to, and expedit-
ing, the game-changing clean energy
solutions the world needs to achieve
net zero emissions.
Hassane Kassouf is Head of Innova-
tion Programs at AWS Energy.
Industry Perspective
Strategic collaboration and co-innovation between energy companies and emerging startups is key to the energy
sector’s future and achieving net zero goals. AWS Energy’s Hassane Kassouf explains why.
Startup support is key to
Startup support is key to
unlocking clean energy
unlocking clean energy
Kassouf: there is also a
realisation of the economic
value these partnerships can
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2.29x104 TWh. Meanwhile, deployed
energy storage in 2020 was 17 GWh
– or 0.074 per cent of energy con-
sumption – of which just 10 GWh, or
0.043 per cent, was for grid-level en-
ergy storage.
To meet the needs of a decarbonised
energy system, the LDES Council
and McKinsey have estimated that
the world’s electricity grids must
deploy between 85-140 TWh of long-
duration energy storage by 2040.
This is key to realising energy inde-
pendence. In 2021, the EU depended
on Russia for 40 per cent of its gas, 45
per cent of its coal and 25 per cent of
its oil. Simply replacing this supply
with fossil fuels from different coun-
tries will prove challenging, expen-
sive, will not mitigate nancial expo-
sure to global fossil energy markets,
and will require the continued burning
of fossil fuels despite the global cli-
mate emergency.
In March, Ursula von der Leyen, the
European Commission President
said: “We must become independent
from Russian oil, coal and gas... we
need to act now to mitigate the impact
of rising energy prices, diversify our
gas supply for next winter and accel-
erate the clean energy transition.”
The situation has since become
he transition to clean energy,
driven by the need to combat
climate change, has taken on a
renewed urgency in recent months
following the Russian invasion of
Ukraine and recognition, both in Eu-
rope and worldwide, that reliance on
supply chains dominated by chal-
lenging geopolitical partners carries
signicant economic and energy se-
curity risk.
A wholesale and rapid shift to re-
newable energy is complicated by the
need for energy storage to balance the
intermittent nature of wind and solar
generation. While some energy stor-
age already exists, current storage
deployment is just 2.9 per cent of that
which the world will require by 2030
to achieve existing clean energy and
decarbonisation targets.
Further exacerbating this challenge
are ongoing supply chain disruptions,
which are affecting many industries
and the lithium-ion battery industry in
particular. Lithium-ion technology is
currently used for most energy stor-
age applications – from mobile
phones to electric vehicles to grid-
scale storage – but as demand for
batteries grows, challenges to ade-
quate and reliable supply of this
technology are emerging.
But the technology brings potential
supply chain woes. Lithium-ion bat-
teries are dependent on materials such
as cobalt, nickel and lithium; supply
chains for these minerals run through
several challenging regions and are
dominated by China or Russia. Just as
Russia strategically locked the EU
into energy dependence for fossil fu-
els, China is a major supplier of
nickel, controlling most of the market
for processing and rening cobalt,
lithium and other critical battery
minerals. This raises concerns that a
political or security crisis could cause
China to cut off access to mineral
supplies as happened in 2010, when
China embargoed the export of rare
earth elements to Japan because of
tensions in the Senkaku islands.
Setting aside the energy security
risks, there are practical limitations to
meeting current demand for grid-
scale energy storage with lithium-ion
technology alone. An International
Energy Agency (IEA) report predicts
over 300 million EVs will be on the
road in 2050, compared to 10 million
in 2021, which will put a huge strain
on lithium-ion battery production.
Growing demand for EVs has already
started driving up costs; Tesla and
VW recently lowered delivery expec-
tations due in part to strains on battery
Given the world’s parallel ambi-
tions of electrifying transportation
and reaching grid net-zero, lithium-
ion batteries should be reserved for
EVs and applications where the posi-
tive attributes of that technology are
Fortunately, innovative energy stor-
age solutions are now commercially
available that avoid the challenges
associated with the lithium-ion sup-
ply chain and provide the opportunity
to build a sustainable, resilient energy
grid. New iron-ow long-duration
energy storage (LDES) technologies
employ earth-abundant materials
such as iron, salt and water and offer
an alternative for grid-scale LDES
applications and an opportunity to
achieve needed climate and clean
energy goals.
Iron ow battery technology is ide-
ally suited to supporting the energy
grid, providing storage in durations
ranging from 4-12 hours. In addition
to energy storage, iron ow batteries
are capable of providing key ancillary
grid services such as frequency re-
sponse and voltage regulation, which
enables them to deliver clean energy
24/7 and support a stable, resilient
energy grid.
If we are to reach the clean energy
target of 66 per cent of total primary
energy supply (TPES) by 2050, suf-
cient long-duration energy storage
must be in place to balance intermit-
tent solar and wind and ensure grid
Currently, renewable intermittency
is balanced by fossil fuel generation,
often natural gas or in some cases,
diesel. As countries work to limit the
increase in global temperature to
1.5°C by 2050, it will be necessary to
retire gas peaker plants and diesel
backups and instead rely on long-du-
ration energy storage to balance en-
ergy supply with demand and provide
reliable, low-cost clean energy.
According to the IEA, world elec-
tricity consumption in 2021 was
more challenging, with Russia cutting
gas deliveries to Germany by 80 per
cent, forcing the government to re-
verse the planned shut-down of coal
generation. More recently, von der
Leyen acknowledged this dilemma:
“We have to make sure that we use
this crisis to move forward and not to
have a backsliding on the dirty fossil
fuels… It’s a ne line and it’s not de-
termined whether we are going to
take the right turn.”
The turn that is needed is towards an
energy system that relies on renew-
able energy and incorporates energy
storage systems that enable the use of
clean energy 24/7, creating a locally
powered, resilient and reliable grid.
While supply chain issues and elec-
tricity grids predominantly powered
by fossil fuels remain formidable ob-
stacles to the clean energy transition,
the availability of new long-duration
energy storage technologies, and iron
ow batteries specically, means that
a grid powered 100 per cent by re-
newable energy sources can become a
reality. A reality that can rely on earth-
abundant, non-conict materials and
one that we urgently need.
Alan Greenshields is Director of Eu-
rope ESS Inc.
Energy Outlook
Lithium-ion technology is currently used for most energy storage applications but as demand for batteries grows,
challenges to adequate and reliable supply of this technology are emerging. New iron-ow long-duration energy
storage technologies employing earth-abundant materials offer an alternative. ESS’s Alan Greenshields explains.
New long-duration storage
technology is key to energy
Greenshields: new long-
duration iron ow batteries
can make a grid powered 100
per cent by renewable energy
sources become a reality
Flow batteries explained
Flow batteries, like the iron-ow battery, store energy in tanks of
liquid electrolytes – chemically active solutions that are pumped
through the battery’s electrochemical cell to charge and discharge
electrons via a process called a redox reaction. The ow battery’s
storage capacity is increased by simply increasing the size of its
storage tank.
Inside the ow battery’s electrochemical cells, two electrolytes
are separated by a membrane. One electrolyte ows past a
positive electrode as it is pumped through the cell, and the other
electrolyte ows past a negative electrode. ESS’s iron-ow battery
uses the same electrolyte on both the negative and positive sides
– iron salts dissolved in water – eliminating cross-contamination
and degradation.
As the electrolytes ow through the cell, chemical reactions
take place on both sides of the membrane. When an electric
current is charging the battery, the electrolyte at the battery’s
negative electrode gains electrons, and dissolved iron salts are
deposited onto the electrode’s surface as solid iron.
When the battery discharges, the process is reversed: the
electrolyte loses electrons at its negative electrode, the plated iron
returns to its dissolved form, and the chemical energy in the elec-
trolyte is converted back to electricity. At the positive electrode,
the opposite process occurs: the electrolyte loses electrons and
“rusts” to a brownish uid while the battery is charging, and this
process reverses during discharge.
In a conventional lithium-ion battery the cell and electrolyte are
contained inside a single package and cannot change. But with
a ow battery, keeping the electrolyte in an external tank means
that the energy-storing part is separate from the power-producing
part. This decoupling of energy and power enables a utility to add
more energy storage without adding more electrochemical battery
pinning inertia, otherwise
known as kinetic reserve, is
vital for power grids. It helps
to resist sudden changes, such as
when a generator trips ofine, so
that the grid frequency remains
within tightly controlled limits. Its
role can be compared to the way a
cars shock absorbers smooth out a
sudden bump in the road to keep it
safely on course.
Historically, power grids have re-
lied on the inertia inherent in large,
centralised generation plant to keep
them in balance. However, as large
fossil-fuel plants are decommis-
sioned in favour of renewable ener-
gy, usually wind and solar power,
there is an ongoing, dramatic reduc-
tion in the amount of spinning iner-
tia available within the grid.
The loss of inertia presents a chal-
lenge for many types of public utili-
ty and private grids, including large
networks serving urban areas, is-
land networks and microgrids that
power remote mining facilities.
That is prompting operators to seek
ways to restore their reserves of in-
ertia. Many are nding the answer
in the well-proven technology of
synchronous condensers (SCs).
These are large rotating machines
that can restore physical inertia to
grids to deliver instantaneous sup-
port. This ensures that stable opera-
tion can be maintained, irrespective
of the upstream network voltage or
SCs appear similar to large motor
and generators in design. The dif-
ference is that they are not motors
since they do not drive anything.
Equally they are not generators as
they have no prime movers. The
historic application for SCs was to
produce reactive power to balance
out highly inductive loads on the
grid, like electric motors.
Fifty years or more ago, SCs
would have been found in almost
every power grid. But since then,
their reactive power role has been
replaced by power electronics
equipment. There is now new inter-
est in the capability of SCs to mim-
ic the operation of large generating
plant by providing an alternative
source of spinning inertia.
SCs are able to both supply and
absorb reactive power, delivering
voltage support and dynamic regu-
lation. This makes them a very cost-
effective and reliable way to main-
tain power quality. A critical added
advantage is that they also provide
the fault current essential for the
strengthening of a weak grid. This
makes SCs a key enabler for the in-
troduction of more renewables
within a grid.
Normally, SCs are based on small
or medium sized modules that can
be strategically sited for optimal re-
sults. SC systems are tailored for
specic locations, according to net-
work studies. This enables the cre-
ation of pre-designed SC packages
that are easy to transport, install,
commission and integrate for a
decentralised solution to increase
grid strength and stability.
A typical size for the new genera-
tion of SCs is in ratings up to 80
MVAr of reactive power and 3-15
kV system voltage. When higher
outputs are required then several
modules can be linked together.
This approach offers better redun-
dancy and availability compared to
deploying one large unit.
Some operators ask if it is possi-
ble to convert an old, unused gener-
ator they have into an SC? Techni-
cally, this is entirely possible and
there are a number of these projects
operating successfully. However,
this may not always be the optimal
solution. The reason is that the ex-
isting equipment will, by denition,
be old technology and its actual
condition unknown. Before starting
a project, it is advisable to have the
condition of the generator assessed
thoroughly, such as by ABB’s Life-
time Expectancy Analysis Program
(LEAP) service. In any case, mod-
ern SCs are smaller and simpler, en-
abling them to be installed in any
location. They also come with the
benets of modern control and
communication technology.
The Faroe Islands in the North At-
lantic will rely on SCs to reach an
ambitious 100 per cent renewable
energy target by 2030. They want to
become the world’s greenest group
of islands and power utility, SEV,
intends to use green electricity from
hydropower, solar, wind, and poten-
tially tidal streams. The initiative
also holds economic benets for the
Faroes since they will no longer be
dependent on expensive fossil-fuel
A signicant challenge for SEV is
that switching off its current diesel-
fuelled generating plant could im-
pact the stability of the grid. Any
grid instability could affect the sh
processing and aquaculture indus-
tries that are a major contributor to
the Faroese GDP. Furthermore,
there are no power cables connect-
ing the Faroe Islands to neighbour-
ing countries, so external grid sup-
port is not available.
ABB is working with SEV to de-
liver SCs to keep the grid in bal-
ance. The rst installation is at the 6
MW Porkeri Wind Farm on Suðu-
roy, the southernmost, electrically
isolated island of the archipelago.
This unit is currently undergoing
trial operations and is scheduled to
be fully up and running in 2022. To-
gether with battery energy storage,
the SC could enable 100 per cent of
the island’s demand to be met with
wind energy at times with good
wind conditions.
SEV has placed an order for a
similar unit at Sund, close to Tór-
shavn, the Faroese capital on the is-
land of Streymoy. The unit is sched-
uled to be online in 2023.
ABB is currently delivering a con-
tract for Europe’s largest renewable
energy producer, Statkraft, to de-
sign, manufacture and install two
high-inertia SC systems for the
Lister Drive Greener Grid project in
Liverpool, England. The innovative
project will play a key role in stabi-
lising the local grid to handle more
wind and solar power. This will
help National Grid meet its target of
operating a zero-carbon electricity
system by 2025.
This project is ABB’s rst any-
where in the world to feature a
high-inertia SC conguration. This
couples a 67 MVAr SC with a
40-tonne ywheel that increases the
instantaneously available inertia by
3.5 times. The advantage of com-
bining a mid-size SC with a y-
wheel is that it multiplies the inertia
several times, while the losses will
be much lower compared to install-
ing the whole inertia as SC. This is
also a cost-effective way of using
up to two mid-sized SCs coupled
together with the benets of a high
level of redundancy, increased iner-
tia and greater controllability.
Decentralised solutions will be vi-
tal to help the networks of the fu-
ture maintain grid stability and re-
silience. SCs are a well-proven
solution that can be deployed to
strengthen weak networks in remote
areas. They offer a number of ad-
vantages such as inertia support for
frequency stability, fault level con-
tribution and voltage regulation.
These are all functions that can be
demanding to provide using power
electronic systems on their own.
The need for SCs is set to grow
signicantly as grid operators seek
new approaches to address their
network quality issues and ensure
reliability and continuity of supply.
It is possible that over the next de-
cade several hundreds of SCs might
be deployed worldwide, either as
stand-alone solutions or in combi-
nation with static power electronic
To gauge the potential for SCs, the
two Statkraft units in Liverpool will
provide a total of more than 900
MWs (megawatt-seconds) inertia.
For comparison, the UK has a cur-
rent total of around 220 GWs (giga-
watt-seconds). That means Lister
Drive will provide about 0.5 per
cent of the UK’s total inertia. That
contribution might seem relatively
small. But it is certain that the tradi-
tional source of inertia from large
generating plant will diminish, and
SCs will be needed to ll the gap.
It is anticipated that the same pat-
tern will be repeated globally. This is
because existing SC installations are
already playing a vital role in rein-
forcing networks in Australia, Cana-
da and Scotland, where they support
a wide variety of applications from
solar power farms to remote mining
The worldwide drive for decarbon-
isation will continue to gather mo-
mentum. That means synchronous
condensers will become an increas-
ingly important technology for main-
taining grid stability.
Kristina Carlquist is General Man-
ager, Synchronous Condensers, ABB.
Power grids are evolving to become more decentralised while the penetration of renewable resources is increasing.
These two factors are causing a steady decrease in the level of inertia essential to maintain stable operation. ABB’s
Kristina Carlquist explains how synchronous condensers can restore inertia in applications as diverse as urban
networks and remote islands.
Power grids regain missing inertia
with synchronous condensers
Technology Focus
The Faroe Islands in the
North Atlantic will rely on SCs
to reach an ambitious 100
per cent renewable energy
target by 2030 (inset: ABB
synchronous condensers)
Final Word
inding reasons to remain posi-
tive among the deluge of de-
pressing headlines about the
global energy crisis is not easy. Yet
news of the US passing the Ination
Reduction Act (IRA) into law and Ger-
many signing a deal on energy with
Canada, offers some light at the end
of what looks like a long, dark, tunnel.
Since autumn last year, the world
has been dogged by rising gas prices
sent into overdrive by Russia’s inva-
sion of Ukraine.
Tracking gas prices, electricity
prices have also been spiralling. Ac-
cording to the International Energy
Agency’s (IEA) Electricity Market
Report, the price index for major
global electricity wholesale markets
reached levels that were twice the
rst-half average of the 2016-2021
period. In Europe, during the rst half
of 2022, average natural gas prices
were four times as high as in the same
period in 2021, resulting in wholesale
electricity prices more than tripling
in many markets. And the outlook
continues to worsen, especially for
those countries highly dependent on
Russian gas.
At the time of writing, Gazprom was
planning maintenance on a gas tur-
bine at the Portovaya compressor
station from August 31-September 2,
which would halt gas ows along the
Nord Stream 1 pipeline linking Rus-
sia and Germany across the Baltic
Sea. Before the Ukraine War, Ger-
many imported over half of its gas
from Russia, and most of it came
through Nord Stream 1.
Berlin accused Moscow of using the
turbine as a pretext to restrict gas
ows and said it is using energy as a
political weapon in an attempt to
weaken the European Union’s resolve
over sanctions.
News of the pipeline’s closure,
which was operating at just 20 per cent
capacity, sent already high energy
prices soaring and prompted countries
across Europe to roll-out emergency
energy-saving plans. August saw the
EU put its emergency gas plan into
force with member states being asked
to reduce their gas use and work toward
lling gas storage ahead of winter.
With most industry experts and
analysts predicting that gas prices
will remain high and volatile through-
out 2023, citizens and businesses
will, unfortunately, have to get used
to high prices. At the same time,
governments will have to hope these
short-term emergency plans, com-
bined with various means of state
support, are sufcient to see us
through to better days.
And better days will come. Late last
month German Chancellor Olaf
Scholz and Canada’s Prime Minister
Justin Trudeau signed what they called
a “joint declaration of intent” that calls
on the two countries to invest in hy-
drogen, establish a “transatlantic
Canada-Germany supply corridor”
and start exporting hydrogen by 2025.
Commenting on what he called a
historic moment, Trudeau said: “We
must look to resources like hydrogen
which can and will be clean and re-
newable. We can be the reliable
supplier of clean energy a net zero
world needs.”
Scholz said the wind conditions on
the German coast could not match
those found in Newfoundland and
Labrador, where wind turbines will be
sited for hydrogen production. He said
hydrogen will play a major role in
Germany’s future energy supply, es-
pecially in industries that are hard to
decarbonise, noting that Germany
“expects a need of 90 to 110 TWh of
hydrogen in 2030”.
The ‘Hydrogen Alliance’ will build
on Canada’s Hydrogen Strategy and
mark a step toward Canada’s objec-
tive of becoming a top global sup-
plier of clean hydrogen. Natural Re-
sources Canada said in a statement:
“This Declaration sends a clear signal
to the private sector and to sub-na-
tional leaders in both countries that
Canada and Germany are committed
to a policy and regulatory environ-
ment that will facilitate and encour-
age investment in the hydrogen value
chain in both countries.”
It follows the signing in March last
year of an energy Memorandum of
Understanding to provide a general
framework for the two countries to
cooperate in the energy sector, using
synergies between existing bilateral
and multilateral dialogues on energy
and climate issues.
The hydrogen alliance was the sec-
ond major global development an-
nounced last month aimed at reducing
energy prices and volatility in the
longer term, while tackling the ever-
growing climate crisis.
Also in August the US, Canada’s
main energy trading partner, moved to
support its edgling hydrogen market
with the passage of the IRA. The Act
provides for $369 billion in energy
security and climate change invest-
ments and notably provides tax credits
for hydrogen production.
Håkon Volldal, CEO of Norwegian
pure-play hydrogen technology com-
pany, Nel ASA, said the IRA “com-
pletely transforms” the outlook for
green hydrogen in the USA. “We can
say that the USA is going to be one of
the cheapest places in the world to
produce clean hydrogen,” he said.
The much-anticipated passing of the
bill through the House of Representa-
tives follows signicant progress in
the North American market for Nel,
which in July secured its biggest
electrolyser order. The 200 MW stack,
worth €45 million ($46 million) and
potentially twice that amount with
additional hardware, will go live in
“What makes this record order par-
ticularly special is that it represents a
change in market dynamics. The
customer has secured power supply
over 20 years, and end-product de-
mand over the same time period.
Similar long-term prospects will only
inspire further investment in green
hydrogen and related infrastructure,”
Volldal said.
The US hydrogen initiative is seen
by some as a game-changer, being
more exible than the plan set out by
the EU. Under the EU’s Delegated
Acts, by 2026 the bloc will only be
permissible to use electricity from
new wind and solar plants to generate
green hydrogen.
The US rules are more exible, using
a scale to determine the level of tax
credit for hydrogen projects based on
the amount of carbon equivalent emis-
sions for each kilogramme produced,
starting at a basic rate of $0.60/kg.
This scale means that green hydro-
gen producers can receive tax credits
of up to $3/kg. Experts say the mea-
sures will kick-start the US nascent
green hydrogen industry by making it
one of the lowest cost producers in the
world. Last month the cost of produc-
ing hydrogen on the US Gulf coast was
$6.55/kg, according to S&P Global
Commodity Insights.
The bill will also make green hy-
drogen more competitive with grey
hydrogen, the most common form of
hydrogen production. This process
involves natural gas via steam meth-
ane reformation, without capturing
the emissions. S&P says the cost re-
duction makes the cheapest clean
hydrogen production “immediately
Environmentalist will no doubt
spell-out the dangers of subsidising
non-green hydrogen production but
the US’ approach will spur the global
market and make the country less of a
hostage to LNG price volatility.
Europe’s decision to drive green
hydrogen only is admirable from the
climate perspective. With the extreme
weather being experienced, many
would argue it is the right one. Some,
however, point out that the bloc could
be in danger of losing out to invest-
ments that could instead head to the
Fortescue Future Industries, a global
green energy company committed to
producing green hydrogen, struck a
non-binding agreement in March to
provide Germany with enough green
hydrogen to replace about a third of
its gas imports from Russia, or 5 mil-
lion tonnes a year by 2030.
Speaking to the Financial Times
Mark Hutchinson, the company’s re-
cently appointed head, said Europe
will struggle to meet its ambitious
targets for green hydrogen and reduce
its dependence on Russian gas unless
it can match the lead of the US. He
said: “The US has changed the game.
They have created an industry out of
nowhere.” Hutchinson warned that if
Brussels was serious about replacing
Russian gas it would need to improve
its incentives. “Otherwise, what’s
going to happen? All the green capital
is going to be owing into the US and
you’re just going to miss out,” he said.
No doubt as markets develop there
will be leaders and laggards and it will
not be a case of sitting back and enjoy-
ing the ride – for anyone. But we can
take some comfort in knowing that the
hydrogen train is gathering speed as
we enter the tunnel. Its arrival time
may be uncertain but the important
thing is, we are all on it and heading
in the same direction.
We are now entering the
Junior Isles
Cartoon: jemsoar.com