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February 2023 • Volume 15 • No 12 • 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 Technology

Supplement

Corporate

Decarbonisation

Looking through the

industrial cyber security

portal.

Corporations in the Asia-Pacic region lag

behind their European counterparts when it

comes to sustainability and climate strategies.

But this is changing fast. Page 14

News In Brief

World “at the dawn” of new

industrial age, says IEA

The energy world is at the dawn of

a new industrial age – the age of

clean energy technology manufac-

turing – that is creating major new

markets and millions of jobs but is

also raising new risks.

Page 2

US turns to wind and solar

as gas and nuclear additions

barely balance retirements

New solar installations will account

for nearly two-thirds of ‘high prob-

ability’ additions to utility-scale

power generating capacity in the US

over the next three years, according

to the Federal Energy Regulatory

Commission.

Page 3

Philippines power

companies ramp up

renewables

The Philippines is ramping up its

renewable generating capacity as

several power companies announce

plans for major new additions this

year.

Page 4

France takes up challenge

to speed up renewables

deployment

The lower house of the French Par-

liament has approved a draft bill that

would speed up deployment of solar

PV and offshore wind, cutting red

tape and offering tax incentives.

Page 5

Businesses prioritising

commercial success over

sustainability

A survey has found that 8 in 10 or-

ganisations would accept regulatory

penalties to avoid taking on sustain-

ability initiatives.

Page 7

Technology Focus: Avoiding

stranded assets with thermal

energy storage

A new thermal energy storage tech-

nology is soon to be delivered to a

site in India. The system has the

potential to accelerate the move to

renewables, while addressing the

issue of stranded fossil fuel assets.

Page 15

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In an effort to tackle high electricity prices, the European Commission is under pressure to act

quickly on reforming the market. Junior Isles

Energy crisis must be addressed by long-term

transition goals, says WEF

THE ENERGY INDUSTRY

TIMES

Final Word

It’s time for the EU to

put its best foot forward,

says Junior Isles..

Page 16

European Commissioner for Energy,

Kadri Simson has said the European

Commission is under “very strong

political pressure” to redesign the

electricity market to cut bills for con-

sumers. As the EU faces an energy

crisis, largely brought on by a huge

rise in gas prices, the Commission is

looking to reform the market so that

electricity prices are no longer dic-

tated by gas prices.

Simson said the Commission was

looking at how to bring the “benets

of a larger share of renewables” to

consumers. She told the Financial

Times: “We will also need gas red

power plants, but we don’t want to

create a system where they will be in

operation 24/7.”

With the low cost of renewables

and their increasingly signicant

share in electricity production, the

Commission suggests making re-

newable power more reective of its

“true production costs”. Renewables

accounted for about 40 per cent of

European electricity production in

2020, according to European Com-

mission data, and once the infrastruc-

ture is built, power from wind and

solar is essentially free.

In a draft document outlining pos-

sible reforms, seen by the FT, the

Commission also proposes extending

a windfall tax on renewable power

companies, the proceeds of which are

passed to consumers and which is

due to expire in 2023.

Under the current market model,

renewable and nuclear power are dis-

patched rst, followed by gas and

coal, with prices being set by the last

generator called on to meet demand.

This means renewable power prices

are often tied to the cost of fossil fu-

els, mainly gas.

While this has promoted investment

in renewables, which have beneted

from the higher cost of gas, it means

consumers pay high prices for renew-

able electricity despite its lower pro-

duction costs.

As countries across the bloc strug-

gle with the high prices, Brussels has

come under pressure from, most no-

tably, Spain and France to rapidly

reform the market.

Renewables provides almost half of

Spain’s electricity but prices in the

wholesale market soared during 2022.

On average, prices were 88.3 per cent

more expensive than in 2021 –

€209.69/MWh compared to €111.93/

MWh the previous year, according to

OMIE data. However, a cap on gas

price has softened the impact of the

energy crisis in the country, as prices

remained well below the average of

the major European economies.

The government wants to protect it-

self against large increases in the price

of electricity for as long as the energy

crisis lasts. And it says the easiest way,

until the European Union agrees to

reform the current regulation of the

wholesale electricity market, is to

maintain the current gas cap mecha-

nism applied in the Spanish market for

the next few years.

The validity of the so-called ‘Iberian

exception’ – the limit on the price of

gas used to produce electricity that ap-

plies in Spain and Portugal – expires

on May 31, but the Spanish govern-

ment wants to extend it at least until

the end of 2024 and plans to ask the

European Commission for permission

to extend it.

Brussels has said it will launch a

consultation on the possible reforms,

and publish a full proposal by the end

of March.

In the meantime, the Spanish gov-

ernment has submitted a proposal to

the European Commission to serve as

Continued on Page 2

The current energy crisis is driving

ination and slowing economic

growth, yet short-term backward

steps like increasing electricity output

from coal and broad-based consump-

tion subsidies are risky, according to

a new report from the World Eco-

nomic Forum (WEF).

The report, titled ‘Securing the En-

ergy Transition’, proposes a strategic

plan to make energy security and re-

silience the backbone of a transition-

ing energy system. It suggests align-

ing current interventions to address

the energy crisis with long-term en-

ergy transition goals.

“The energy crisis has brought en-

ergy security to the forefront of po-

litical and corporate agendas and

prompted the need to develop re-

sponses that are adapted to how the

energy system has evolved and to

where it needs to transition,” said

Roberto Bocca, who heads a WEF

section on shaping the future of en-

ergy and infrastructure.

“What is now a global crisis is a

real opportunity to steer a more di-

rect course towards a secure, sustain-

able, and affordable energy future for

everyone,” he added.

The report proposes a broad frame-

work for a secure energy system to

guide countries and policymakers to

plan strategic actions, policies, and

regulations.

Solutions include prioritising re-

newable energy investments, plug-

ging methane leaks, maximising

electrication, driving consumption

efciencies, and taking advantage of

excess prots made by energy com-

panies in 2022.

One immediate action proposed is

to prioritise supply from renewable

energy and constrain fossil fuel rein-

forcements to committed emission

reduction targets.

The International Energy Agency

recommends $5 of investment in re-

newables for every $1 spent on new

fossil fuel production.

According to the WEF report, the

climate benets of natural gas are no

better than coal if more than 3.4 per

cent of it escapes before combustion,

but some gas elds have fugitive

emission rates of 6 per cent or more.

Through a separate report launched

at the WEF in Davos, Switzerland,

Spanish utility Iberdrola issued a call

to action for global policymakers,

companies in the energy and indus-

trial sectors and other stakeholders

on the steps that need to be taken in

2023 to break the cycle of crises

driven by oil and gas, and to shift the

balance to delivering green energy

security as quickly as possible. Iber-

drola is investing a total of €47 bil-

lion for the three years to 2025.

In a ve-point manifesto titled

‘Electric, Together’, Iberdrola un-

picks the key challenges that remain

unsolved in the energy transition,

setting out the best ways to move for-

ward at speed.

The ve points for action listed by

the company are: accelerating plan-

ning and ambition for electricity grid

infrastructure to deliver the transi-

tion to a green economy; turbocharg-

ing the deployment of renewable

generation projects; scaling up green

hydrogen; increasing ambition on in-

novation to drive climate solutions;

and “keeping our eyes on the long-

term prize” of decarbonisation.

Brussels under

“political pressure”

to redesign electricity market

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Junior Isles

The energy world is at the dawn of a

new industrial age – the age of clean

energy technology manufacturing –

that is creating major new markets and

millions of jobs but also raising new

risks, prompting countries across the

globe to devise industrial strategies to

secure their place in the new global

energy economy, according to a major

new report by the International Energy

Agency (IEA).

The Paris-based agency’s ‘Energy

Technology Perspectives 2023’ shows

that although the global market for key

mass-manufactured clean energy tech-

nologies will be worth around $650

billion a year by 2030 – more than three

times today’s level – current supply

chains of clean energy technologies

present risks in the form of high geo-

graphic concentrations of resource

mining and processing as well as tech-

nology manufacturing.

For technologies like solar panels,

wind, EV batteries, electrolysers and

heat pumps, the three largest producer

countries account for at least 70 per

cent of manufacturing capacity for

each technology – with China domi-

nant in all of them.

Commenting on whether Europe

and the US should be concerned about

the dominance of China, IEA Execu-

tive Director Fatih Birol, said: “Yes it

is true that today China has a dominant

role in both the manufacturing of clean

energy technologies and processing

critical minerals. But you can look at

this in two ways. On the one hand it

has a huge role and concentration but

on the other you can see that as a result

of China’s learning by doing, it was

able to bring the cost of these clean

energy technologies down to make

them more affordable.

“Now I see that countries like the US,

Europe, India and Japan are also com-

ing with their clean energy manufactur-

ing strategies. This will help with di-

versication, which is always good to

reduce risks. But we should not forget

that the efforts the Chinese are making

is having a positive global impact.”

The report notes that major econo-

mies are acting to combine their cli-

mate, energy security and industrial

policies into broader strategies for their

economies.

The Ination Reduction Act in the

United States is a clear example of

this, but there is also the Fit for 55

package and REPowerEU plan in the

European Union, Japan’s Green

Transformation programme, and the

Production Linked Incentive scheme

in India that encourages manufactur-

ing of solar PV and batteries – and

China is working to meet and even

exceed the goals of its latest Five-Year

Plan.

Meanwhile, clean energy project

developers and investors are watching

closely for the policies that can give

them a competitive edge. Relatively

short lead times of around 1-3 years

on average to bring manufacturing

facilities online mean that the project

pipeline can expand rapidly in an en-

vironment that is conducive to invest-

ment. Only 25 per cent of the an-

nounced manufacturing projects

globally for solar PV are under con-

struction or beginning construction

imminently, according to the report.

The number is around 35 per cent for

EV batteries and less than 10 per cent

for electrolysers. Government poli-

cies and market developments can

have a signicant effect on where the

rest of these projects end up.

Amid the regional ambitions for

scaling up manufacturing, ETP-2023

underscores the important role of in-

ternational trade in clean energy tech-

nology supply chains. It shows that

nearly 60 per cent of solar PV modules

produced worldwide are traded across

borders. Trade is also important for

EV batteries and wind turbine com-

ponents, despite their bulkiness, with

China being the main net exporter

today.

basis for reforming an European

electricity market that was designed

in 1998.

It is proposing a dual market with

a short-term market (daily and in-

traday) “that is very liquid and

transparent” like the current mar-

ginal market, that would be com-

bined with another long-term mar-

ket adapted to the particularities of

each national market. It would

separate the most expensive energy

source in Europe’s power mix –

natural gas – from clean electricity

producers, such as renewables,

hydro and nuclear energy, and pro-

mote forward contracts.

Another option in the proposed

reform includes segregating power

generators by technology. Renew-

ables, nuclear and hydro would be

on one side, paid based on forward

contracts for producing electricity.

Combined cycle gas plants, energy

storage and demand-side manage-

ment would form the capacity mar-

ket and be paid for rm capacity and

availability, according to the Span-

ish proposal.

In this scenario, contracts for dif-

ference (CFDs) for renewables

would incorporate a xed price for

the lifetime of the power plant,

while prices for nuclear and hydro-

power would be regulated under

their CFDs.

The upside of this design is that

power generators would not be able

to earn windfall prots, while the

capacity market would facilitate

investments in energy storage, the

government said.

Spain believes the new regulation

will give states room to adapt their

energy mix and that, in the case of

Spain, it may allow the remunera-

tion of hydro and nuclear energy to

be removed from the daily mar-

ginal market in order to reduce the

weight of the daily price inuenced

by volatility and give more room

for long-term contracts.

France, meanwhile, is committed

to maintaining the existing mar-

ginal pricing system and rules out

any type of market price interven-

tion, as proposed by the Spanish

government for nuclear and hydro-

electric energy.

Instead the French government

advocates the creation of a fund to

serve as a counterpart mechanism.

This vehicle could be managed by

the system operators to guarantee

neutrality in its application.

Eurelectric, the organisation rep-

resenting Europe’s electricity com-

panies has already tabled a pro-

posal that will focus on the

implementation of a capacity mech-

anism. This would allow the devel-

opment of back-up technologies,

with CFDs and long-term PPAs to

guarantee the protability of infra-

marginal technologies (renewables

and nuclear).

Meanwhile, the EU faces continu-

ing difculties in 2023. The Inter-

national Energy Agency has warned

that the reduction in pipeline gas

from Russia risks leaving the bloc

with a shortfall of 30 billion m

Continued from Page 1

Offshore wind installations are up,

inspite of challenges such as a lack of

trained personnel and supply chain

issues.

According to WindEurope, the EU

installed 15 GW of new wind farms in

2022 – one third more than 2021. The

organisation noted that this increase in

new installations “is an encouraging

result” given the overlapping chal-

lenges the industry faced in 2022.

Although it hailed the progress, the

organisation noted that the 15 GW still

falls signicantly short of what Eu-

rope needs to build to deliver on its

climate and energy security targets.

The shortfall is largely due to permit-

ting bottlenecks, it said, noting that 80

GW of wind energy projects across

Europe are currently stuck in permit-

ting procedures.

WindEurope CEO Giles Dickson

said: “15 GW of new wind in 2022 is

not too bad given the challenges faced

last year by Europe’s wind industry.

It’s not enough for the EU’s energy

targets, but governments know the

latter can only be achieved if they

simplify the permitting rules and pro-

cedures – and there are now signs of

progress on this. Less encouraging is

the slowdown in investments in new

wind farms. Confusion about electric-

ity market rules is turning investors

away. The EU must make Europe an

attractive place for renewables invest-

ments again.”

A combination of ination and un-

helpful government interventions in

electricity markets is undermining in-

vestments in new wind farms, said

WindEurope. In the rst 11 months of

2022 the total new investments in wind

farms in the EU covered only 12 GW

of new capacity. This is signicantly

less than the rate of new investments

needed to deliver the EU’s 2030 cli-

mate and energy targets.

The organisation also said the forth-

coming reform of electricity markets

must give investors greater clarity

about what rules apply. “The freedom

given to Member States in last year’s

emergency measures to set their own

national rules is turning investors

away. They’re investing instead in the

US, Australia and elsewhere. The EU

is not attractive for major renewables

investors right now,” it said.

Meanwhile, the International Energy

Agency said in a report that the lack of

trained personnel in the offshore wind

energy sector could delay installation

in the coming years.

“Installing a wind turbine requires

fewer workers per unit of capacity than

solar PV, but more material inputs,

notably cement and cabling, as well as

specialised machinery to transport and

position the turbine. In the case of off-

shore wind farms, specialised vessels

are required, which increasingly need

to be capable of handling taller and

larger wind turbines,” the agency said.

At the same time, offshore wind en-

ergy projects require more trained

workers and more labour per megawatt

than land-based projects throughout

their life cycle.

“For instance, installing an offshore

wind farm takes six or more years. For

large-scale solar PV farms, installers

can spend 8-14 months on a project,

while distributed rooftop PV systems

can typically be installed in just a few

days,” said the report.

n The UK government has signed an

agreement with a group of European

partners to develop offshore renewable

projects in the North Sea. The projects

will link electricity interconnectors

and wind farms. Players include Bel-

gium, Denmark, France, Germany,

Ireland, Luxembourg, Netherlands,

Sweden, Norway and the European

Commission.

The UK needs a ve-fold increase in

solar power, an earlier ban on new gas

boilers by 2033 and curbs on the export

of plastic waste by 2027, according to

a recent report.

In the 340-page ‘Net Zero Review’,

Chris Skidmore, the Tory MP and for-

mer science and universities minister,

commissioned to conduct the review,

said the transition to a low-carbon

economy is “the industrial revolution

of our time” with opportunities for

companies. He stressed, however, that

opportunities are being missed today

because of weaknesses in the UK’s

investment environment.

Grant Shapps, Business and Energy

Secretary, commented: “The UK is

well placed to ensure that tackling cli-

mate change also brings new jobs and

investment for businesses and com-

munities. I am grateful to Chris Skid-

more for his detailed report, which

offers a range of ideas and innovations

for us to consider as we work to grasp

the opportunities from green growth.”

Energy UK welcomed the indepen-

dent review. Deputy Director of Policy,

Charles Wood said: “We welcome the

ndings of the Net Zero Review which

underline in comprehensive fashion,

the economic benets, in addition to

the environmental ones, that meeting

net zero will bring – as well as making

it clear quite how far we have to go.”

He called the review a “wide-ranging

assessment”, noting there are 129 spe-

cic recommendations and actions that

the government should adopt in full.

The report recommends reforms to

local and national planning systems to

“unleash” cheaper forms of electricity

generation – onshore wind and solar

– albeit with the caveat “where [such

technologies are] locally supported”.

The review called for the government

to set an ofcial target for solar power

for the rst time – proposing that the

UK develops 70 GW of solar genera-

tion by 2035 compared to the current

gure of 14 GW.

It also urged the Treasury to give

greater “longer-term certainty” to nu-

clear power stations, hydrogen tech-

nology and carbon capture and storage

projects.

Headline News

Wind installations advance despite challenges

UK is missing net zero opportunities

World “at the dawn” of new

industrial age, says IEA

The Spanish government

has submitted a proposal to

the European Commission

n Clean-tech manufacturing market worth $650 billion per year

n Geographic concentration presents supply chain risks

Syed Ali

Australia’s energy transition effort is

continuing to make progress, with the

announcement that Azuli Internation-

al (Azuli) has signed an extension to

its Memorandum of Understanding

with Australian Gas Infrastructure

Group (AGIG), under which the two

companies will work together to iden-

tify, evaluate and progress carbon

capture and storage (CCS) project op-

portunities in the country. CCS is a

core strand of the energy transition to

net zero targets, with onshore pipe-

lines being a key component of any

project.

Azuli is an independent CCS special-

ist company based in the UK, with a

portfolio of global CCS opportunities,

while AGIG is one of Australia’s larg-

est gas infrastructure businesses with

operations across every mainland state

and the Northern Territory.

CEO of Azuli, Hamish Wilson, ex-

plained: “This move allows us to put

real impetus into a new phase of

growth, looking to leverage the range

of opportunities on offer in Australia,

where the government has set emis-

sions targets and regulations for carbon

sequestration either in place or being

rapidly developed.”

The move will be an important piece

of Australia’s plan to achieve net zero

by 2050. To reach its goal, the Austra-

lian government will invest A$20 bil-

lion ($14.4 billion) in low emissions

technologies over the next decade (un-

der the Technology Investment Road-

map), hoping to unlock A$80 billion

of private and public investment on

green technologies.

Notably, the state of New South

Wales (NSW) is well on the way to

the 2050 target, having said in Decem-

ber that it will slash greenhouse emis-

sions by 70 per cent by 2035. It is

already on track to meet its current

target of halving emissions by 2030,

based on 2005 levels. NSW Treasurer

Matt Kean said the new 2035 target

would also attract more than $39 bil-

lion in private investment.

In January Italy’s Enel Green Power

secured grid-connection approval for

a project that is planned to incorporate

96 MW of solar and 20 MW battery

storage capacity. It will be the com-

pany’s “very rst” hybrid solar-plus-

storage project in the country.

The complex will be installed in the

state’s Central West and Orana Re-

gion, with its construction set to begin

in the middle of this year. Enel said

the point of connection to the electric-

ity grid will be shared under single

Generator Performance Standards

(GPS), instead of two separate con-

nection points in close proximity.

South Korea will raise its dependence

on nuclear power generating sources

to over 30 per cent, while sharply re-

ducing its reliance on coal by 2036,

as it accelerates its push to reach car-

bon neutrality.

Last month the Ministry of Trade,

Industry and Energy said it will raise

the share of nuclear energy in the gen-

erating mix to 34.6 per cent by 2036

from 23.4 per cent in 2018, while re-

newable sources will be responsible

for 30.6 per cent, up from 6.2 per cent

in 2018. At the same time, South Ko-

rea will cut its reliance on coal red

power generation to 14.4 per cent by

2036 from 41.9 per cent in 2018.

South Korea’s President Yoon Suk

Yeol has pledged to reverse the nucle-

ar phase-out policy of the previous

administration.

The move comes as South Korea has

been pushing to reduce its greenhouse

gas emissions by 40 per cent from the

2018 levels by 2030 and reach carbon

neutrality by 2050.

“South Korea will actively use re-

newable energy sources and nuclear

power plants and come up with a fea-

sible and balanced energy mix amid

the country’s efforts to reach carbon

neutrality,” the ministry said.

South Korea will also reduce the

proportion of power generation from

liqueed natural gas to 9.3 per cent in

2036 from 26.8 per cent in 2018, the

ministry said. A total of 28 aging coal

power plants will be converted to

LNG power plants by 2036.

In terms of renewable energy, the

ministry plans to add more wind gen-

erators by 2036 to reduce its heavy

reliance on solar power generators.

The statement was followed by news

that Danish wind turbine manufac-

turer Vestas Wind Systems will invest

$300 million in South Korea and

move its Asia-Pacic headquarters to

the country.

The investment will be made toward

a large-scale turbine parts plant that

will produce key equipment for wind

turbines for export to the entire Asia-

Pacic region.

Vestas’ decision to move its Asia-

Pacic headquarters to South Korea

shows that multinational companies

are recognising the country as an in-

vestment hub, the presidential ofce

said.

Indonesia says it will stop importing

fossil fuels from 2045, under a pro-

gramme that aims to cut imports of

fossil fuels, increase the use of renew-

able energy, as well as minimise emis-

sions from the use of fossil fuels.

Coordinating Minister for Maritime

Affairs and Investment, Luhut Binsar

Pandjaitan, said the increased produc-

tion of palm oil will be central to the

abandonment of fossil fuel imports.

According to Pandjaitan, the transi-

tion from fossil fuelled energy to re-

newable energy would enable net zero

emissions by 2060.

Pandjaitan said the development of

alternative fuels is one of the ve

green economic pillars being imple-

mented, the other four being: decar-

bonisation of the electricity sector; the

utilisation of low-carbon transporta-

tion; the development of green indus-

try; and the strengthening of carbon

sinks.

Speaking at the World Energy Fo-

rum which took place in Davos, Swit-

zerland last month, Pandjaitan said:

“We are currently researching (the

potential of) palm oil because we be-

lieve that we will be able to produce

around 100 million tons of palm oil

by 2045.”

At least 30 percent of palm oil pro-

duction will be used for the food in-

dustry, while the remaining 70 per cent

will be used to manufacture ethanol,

the coordinating minister said.

The Indonesian government will

now allow productivity of the planta-

tions to be increased from 2.3 tons per

hectare to 8-10 tons per hectare in the

next 10-15 years.

The Philippines is ramping up its re-

newable generating capacity as sev-

eral power companies announce plans

for major new additions this year.

Meralco PowerGen Corp. (MGen),

the power generating arm of Manila

Electric Co., is targeting to commence

this year the construction of “hundreds

of megawatts” of new renewable en-

ergy projects, as two solar plants are

set for commissioning this quarter.

MGen President and CEO Jaime

Azurin said the company was looking

to commission projects this quarter

that would add around 150 MW to its

renewable energy capacity.

The two projects that will start com-

mercial operations shortly are the 75

MWac solar plant in Baras, Rizal and

a 68 MWac solar plant in Ilocos Norte.

The news came as Solar Philippines

New Energy Corp. announced its plan

to convert land located in Nueva Ecija

and Bulacan for solar energy projects

in its pipeline.

In a disclosure sent to the Philippine

Stock Exchange in early January, Solar

Philippines said that over 3000 ha (30

) will be prepped by the rst quar-

ter of this year. Conversion of these

lands will commence by the nal quar-

ter of 2023.

Meanwhile, Aboitiz Power Corp.

said it has secured a P20 billion ($1.65

billion) loan from state-run Land Bank

of the Philippines to fund the expansion

of its renewable energy projects.

The long-term debt nancing is set

to nance AboitizPower’s ongoing

expansion and development projects,

according to the company’s Chief Re-

newables Ofcer Jimmy Villaroman.

“This loan will allow us to continue

providing clean and sustainable energy

to help meet the growing demand in

the country,” he said.

Villaroman said the loan facility is

aligned with AboitizPower’s 10-year

strategy of growing its renewable en-

ergy portfolio to 4600 MW, or half of

the total 9200 MW capacity, alongside

its thermal assets, which the company

targets to generate by 2030.

AboitizPower is looking to spend

P190 billion this decade for an addi-

tional 3700 MW of clean energy. It has

over 1000 MW of disclosed and ongo-

ing renewable projects, which include

solar, oating solar, hydro, and onshore

wind, as of end November 2022.

S. Korea raises nuclear ambitions in net zero drive

Indonesia to halt fossil fuel imports by 2045

Philippines power companies ramp up renewables

Australia advances low carbon

projects

n Azuli and AGIG extend carbon capture agreement

n Enel Green Power secures solar-plus-storage grid connection

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Asia News

United Arab Emirates’ Masdar has

signed deals for renewable energy

projects with a combined generation

capacity of 6 GW in Central Asia and

5 GW in Africa.

Masdar agreed to jointly develop

with the State Oil Company of the

Republic of Azerbaijan (SOCAR) a

total capacity of 4 GW of onshore

wind and solar projects, and integrat-

ed offshore wind and green hydrogen

projects.

The UAE company has also signed

an agreement to develop a 1 GW pipe-

line of renewable projects in Kyrgyz-

stan, starting with a 200 MW solar

photovoltaic plant, and another deal

for an up to 1 GW wind power plant,

its rst investment in Kazakhstan.

Under the Etihad 7 initiative, a glob-

al development fund launched by the

UAE to provide 100 million people

across Africa with clean electricity by

2035, Masdar has agreed to develop

projects with a combined 5 GW of

capacity across Angola, Uganda and

Zambia.

Speaking at the Abu Dhabi Sustain-

ability Week (ADSW) 2023 in Janu-

ary, Sheikh Shakhboot Nahyan Al

Nahyan, Minister of State in the UAE

Ministry of Foreign Affairs and Inter-

national Cooperation, said that his

country and African nations share “a

rm belief in the tremendous potential

[of clean energy] to unlock economic

and climate action progress”.

Following a 2 GW agreement last

year for renewable energy projects in

Tanzania, this year’s 5 GW pledge

includes agreements with:

n Angola’s Ministry of Energy and

Water for the development of 2 GW

of renewable energy capacity;

n Uganda’s Ministry of Energy and

Mineral Development for the devel-

opment of 1 GW of greeneld renew-

able capacity;

n and Zambia’s Ministry of Energy

and Zambian national utility ZESCO

Limited for the joint development of

solar, wind and hydroelectricity proj-

ects with a total capacity of 2 GW.

Angola’s Minister of Energy and

Water, Joao Baptista Borges, said the

agreement would boost power gen-

eration capacity, create jobs and

improve access to electricity for the

Angolan people. Victor Benjamin

Mapani, ZESCO Managing Director,

said his company – and Zambia over-

all – viewed the development of clean

energy as complementary to hydro-

power and a matter of urgency for

energy security.

According to the International Re-

newable Energy Agency (IRENA),

less than half of the sub-Saharan

population has access to electricity.

Africa generates just 20 per cent of its

electricity from renewable sources but

has a theoretical potential capacity of

approximately 850 TW of solar and

wind.

Masdar has already established a con-

siderable presence in Africa, having

formed its Innity Power Holding joint

venture with Egypt’s Innity to target

opportunities on the continent. In No-

vember, Masdar, Innity Power and

Hassan Allam Utilities signed an

agreement with the government of

Egypt to develop a 10 GW onshore

wind project – one of the largest wind

farms in the world.

The three companies are also coop-

erating on the development of green

hydrogen projects in Egypt, targeting

a combined electrolyser capacity of

4 GW by 2030, and an output of up to

480 000 tonnes of green hydrogen per

year.

The deals are part of Masdar’s ef-

forts to deliver 100 GW of clean en-

ergy worldwide by 2030.

Lebanon’s caretaker government has

approved credit lines totalling $116

million to x the country’s electricity

transmission grid. Prime Minister Na-

jib Mikati said an advance of $62 mil-

lion had been approved, with $54

million being allocated to mainte-

nance works.

Energy Minister Walid Fayad has

announced a $600 million, ve-

month initiative to solve the country’s

chronic power outages and increase

electricity supplies to ten hours a day.

Since 2019, Lebanon has been

plagued by a crippling economic cri-

sis. The country’s two main power

plants have suffered outages and re-

quire heavy maintenance.

Nadia Weekes

Türkiye has revealed how it plans to

achieve 29.6 GW of installed wind

capacity by 2035, with 5 GW to be

deployed offshore. Under projections

included in the country’s latest Na-

tional Energy Plan, which is aligned

with Türkiye’s goal to achieve net zero

emissions in 2053, nearly 100 GW of

electricity capacity is to be commis-

sioned in the 2020-2035 period.

Speaking at the launch of the plan,

Energy and Natural Resources Min-

ister Fatih Donmez said it will both

support economic growth and take the

country’s green energy transforma-

tion to the next level.

The combined share of solar and

wind power will increase to 43.5 per

cent, while the share of all renewable

energy sources is expected to reach

64.7 per cent. To date, Türkiye has

installed 11 GW of onshore wind ca-

pacity and no offshore wind.

Veli Bilgihan Yaşacan, vice-chair of

the board of the Offshore Wind En-

ergy Association (DURED), said the

5 GW target was an important mile-

stone for the sector. Yaşacan also em-

phasised the role that offshore wind

power can play in the production of

green hydrogen.

Türkiye’s energy consumption was

147.2 million tons of oil equivalent in

2020. It is projected to increase 39.5

per cent to reach 205.3 million tons

of oil equivalent in 2035.

The country’s installed electricity

capacity will reach 190 GW by 2035,

up from 96 GW in 2020. Three-quar-

ters of the increase is expected to come

from renewable energy sources, pri-

marily solar and wind. In 2035, solar

capacity will reach 53 GW, followed

by hydro at 35 GW and wind at 30 GW,

well ahead of nuclear, geothermal and

biomass. Battery storage capacity is to

rise to 7.5 GW.

Türkiye’s new Hydrogen Technolo-

gies Strategy and Roadmap outlines

the important role that green hydrogen

can play in achieving the country’s

net zero emissions target. From 2030

to 2053, the share of hydrogen blend-

ed into natural gas will be 12 per cent,

and synthetic methane 30 per cent.

The expected cost of hydrogen pro-

duction is $2.4/kg in 2035, halving to

$1.2/kg by the 2050s.

Under the plan, installed electroly-

ser capacity will reach 2 GW in 2030,

5 GW in 2035 and 70 GW in 2053.

Africa can harness its strong solar en-

ergy resources to produce 50 million

tonnes of green hydrogen a year by

2035 to meet local demand and for

export, according to a study by the

European Investment Bank (EIB).

The study nds that producing green

hydrogen from solar power is eco-

nomically viable at a cost below €2/

kg ($2.1), equivalent to an oil price of

$60 a barrel.

Unlocking Africa’s green hydrogen

potential will help decarbonise local

heavy industry while creating jobs,

securing global energy supplies and

improving access to clean water and

sustainable energy.

The Africa’s Extraordinary Green

Hydrogen Potential report focuses on

three hubs: Egypt, southern Africa, and

Mauritania – Morocco. It estimates

that tapping the sun’s energy for hy-

drogen production would require 1230

GWp of new solar energy generation

and €1 trillion of investment in green

hydrogen production and transmis-

sion.

The study outlines three prerequi-

sites to reach the contemplated scale

of hydrogen development:

n national planning, regulation and

incentive schemes;

n partnerships to cooperate on infra-

structure and enable mass-scale off-

take;

n and pilot projects.

Meanwhile, a report by the Interna-

tional Renewable Energy Agency

(IRENA) nds that nearly 60 per cent

of Nigeria’s energy demand in 2050

can be met with renewable energy

sources, saving 40 per cent of natural

gas and 65 per cent of oil use.

‘Renewable Energy Roadmap for

Nigeria’, developed in collaboration

with the Energy Commission of Ni-

geria, nds renewable energy tech-

nologies are key to achieving a sus-

tainable energy mix and meeting the

country’s growing needs. “By using

its abundant, untapped renewables,”

said IRENA’s Director-General Fran-

cesco La Camera, “Nigeria can pro-

vide sustainable energy for all its

citizens in a cost-effective manner.”

Coordinated policies will be essen-

tial for a successful energy transition,

said Dr. Adeleke Olorunimbe Ma-

mora, Nigeria’s Minister of Science,

Technology and Innovation. “A cross-

cutting agency or body tasked with

doing so would be helpful in building

consensus and developing a coherent

plan which in turn would allow for the

scaling up of renewable energy to

meet the needs across the Nigerian

energy sector,” he added.

The share of primary energy require-

ments met with renewable energy can

reach 47 per cent by 2030 and 57 per

cent by 2050, according to IRENA’s

report. Electrication will play a key

role in achieving higher renewable

energy shares with electricity in nal

energy use nearly doubling by 2050.

Türkiye unveils roadmap to 30 GW

of wind energy by 2035

Solar-powered hydrogen ‘viable’ in Africa

Lebanon opens credit

lines to x electricity

grid

Masdar signs multi-megawatt

clean power deals

Agreements in Central Asia and Africa pave the way for global rollout of 100 GW of renewable energy projects by

2030. Nadia Weekes reports

n First 5 GW of offshore wind “an important milestone”

n Renewables will be three-quarters of capacity growth

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

International News

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THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Companies News

Junior Isles

As businesses were called on during

the World Economic Forum in Davos,

Switzerland, to follow credible net

zero pledges or risk greenwashing, a

survey has found that 8 in 10 organisa-

tions would accept regulatory penal-

ties to avoid taking on sustainability

initiatives.

In a survey of 2000 senior IT deci-

sion-makers from the US, Canada,

UK, Germany and France, Germany-

based Software AG found that the

majority (84 per cent) of organisations

will prioritise commercial objectives

over sustainability in the face of eco-

nomic challenges. This is despite the

fact that almost all (95 per cent) lead-

ers agree sustainability is either a top

or high priority and a similar number

(97 per cent) agree that other rms’

sustainability credentials are either

essential or important in their own

buying decisions.

Despite the difculties of delivering

sustainability initiatives, 87 per cent of

companies believe that they will lose

investors if they do not have a clear

strategy and many lack the technology

to deliver one. In almost a third (32 per

cent) of cases the necessary technology

is simply not in place. And even when

it is available, it is poorly implemented

or used by almost half (47 per cent) of

companies. In particular, 36 per cent

say that they are unable to effectively

track the progress of sustainability ini-

tiatives to determine whether they are

effective.

The majority (87 per cent) of organ-

isations tackle sustainability and digi-

tal transformation separately. The Re-

ality Check report, which seeks to

investigate how technology initiatives

can benet both sustainability and

commercial objectives, shows how an

integrated approach can address mul-

tiple challenges at once.

Sanjay Brahmawar, CEO, Software

AG commented: “In the current cli-

mate, it’s no surprise that commercial

objectives are a top priority – they

have to be, otherwise organisations

cannot continue to operate. We are

keen to help organisations to nd so-

lutions using the ‘Genius of AND’,

where they don’t have to be torn be-

tween commercial and sustainability

objectives.”

Promisingly, a third (33 per cent) of

organisations have already integrated

sustainability plans into their technol-

ogy roadmap.

Earlier ENGIE Impact launched its

2023 Net Zero Report, titled ‘Six Ac-

tions to Accelerate Decarbonisation’.

It revealed that nearly two-thirds (62

per cent) of the 500 senior executives

surveyed said they have now made

some form of public commitment or

target to address carbon emissions

reduction but only 12 per cent rate

their sustainability efforts as “ex-

tremely successful”.

GE Gas Power has signed of a Mem-

orandum of Understanding (MoU)

with Japan’s IHI Corporation (IHI) to

jointly develop ammonia combustion

technologies for heavy duty gas tur-

bines to generate electricity with re-

duced or near zero CO

emissions.

The MoU marks a signicant mile-

stone following the announcement in

June 2021 of the rst MoU between

GE and IHI to carry out an economic

assessment for the use of ammonia as

a carbon-free fuel for both existing

and new gas turbines. As part of the

MoU, both parties will further dene

a technology roadmap to develop gas

turbine technologies by 2030 that will

enable GE’s 6F.03, 7F and 9F gas tur-

bines to re up to 100 per cent am-

monia in a safe and commercially

competitive manner, with potential

implementation across additional gas

turbines in the future.

The collaboration aligns with the

companies’ commitment to support

the global transition. GE will bring its

extensive experience and expertise in

engineering and manufacturing gas

turbine combustors and balance of

plant systems, while IHI Corporation

will bring its experience in developing

ammonia combustion technologies

and global value chain development.

Scott Strazik, CEO of GE Vernova,

said: “We hope that this collaboration

will pave the way for power plant op-

erators to pursue the adoption of

carbon-free fuels such as ammonia for

power generation in their GE gas tur-

bines and signicantly contribute to-

wards lowering carbon emissions in

the power sector globally.”

UK energy company Centrica has

forecast an almost eight-fold increase

in full-year earnings after it benetted

from soaring energy prices. The fore-

cast is in spite of the impact of the

windfall taxes on energy companies.

The energy group, which owns Brit-

ish Gas, said that it expected to report

adjusted earnings per share of more

than 30p when it publishes its 2022

results this month. The update repre-

sents a signicant upgrade on the com-

pany’s previous guidance in Novem-

ber when it said earnings would come

in at the top end of analysts’ expecta-

tions, which at the time ranged be-

tween 15.1p and 26p per share.

SSE also increased its full-year

prot forecast after higher than ex-

pected output from its gas red plants.

The company said that output from its

gas power plants was 27 per cent

higher in the nine months to the end

of December compared to the previ-

ous year.The power generator said last

month that adjusted earnings were

expected to rise to more than 150p a

share for the 12 months to the end of

March, up from its earlier forecast of

at least 120p. In November, SSE re-

ported a four-fold increase in prots

in the six months to September.

Power companies have benetted

from the high electricity and gas en-

ergy prices exacerbated by Russia’s

war on Ukraine, which has led the UK

government to impose windfall taxes

on power companies and oil and gas

majors.

Alistair Phillips-Davies, SSE’s

Chief Executive, had warned that the

tax could harm investment in the UK.

But the company says it remains on

track to deliver record investment of

more than £2.5 billion this year, “with

clear visibility” for further investment

opportunities that support the transi-

tion to net zero.

Phillips-Davies maintains, however,

that Britain is not moving fast enough

on green economy and says planning

and consent times for renewables de-

velopment must be improved.

n The UK government is set to recoup

hundreds of millions of pounds from

the sale of the collapsed power sup-

plier Bulb to Octopus Energy, as long

as wholesale gas prices do not rise

again in the coming months. The po-

tential payback from the Octopus deal

will raise hopes that the cost to taxpay-

ers and households of Bulb’s tempo-

rary nationalisation will be well below

expectations. The recent drop in en-

ergy prices – if it continues – would

shave up to £840 million from the

eventual losses, government ofcials

have estimated.

Wind turbine manufacturer Siemens

Gamesa Renewable Energy SA has

revealed a €472 million ($511.4 mil-

lion) charge to operating prot in the

rst quarter ended December, after

discovering faulty components in its

installed eet that increased its war-

ranty and maintenance costs.

The charge will lead to approximate-

ly a €760 million loss of EBIT before

purchase price allocation (PPA) and

integration and restructuring (I&R)

costs for the rst three months, the wind

turbine maker said in its preliminary

earnings report.

“These charges reect the outcome

of the evaluation of the installed eet,

during which the company detected a

negative development of failure rates

in specic components resulting in

expected higher warranty and service

maintenance costs than previously es-

timated,” the company stated.

The news comes as some developers

are predicting difcult times for the

wind industry.

In January, Denmark’s Orsted A/S,

one of the world’s largest renewable

energy developers, said it fears that the

energy transition will slow as increased

competition and interest rates reduce

protability and challenge the case for

investment.

Some argue that the sector is becom-

ing a victim of its own success. Until

recently, wind power was increas-

ingly affordable. As turbine sizes in-

creased, costs plummeted. This trajec-

tory was expected to continue and

tenders for new projects began to fa-

vour applicants who could promise

lower power prices. In recent years,

however, ination and rising interest

rates have put an end to the downward

trend in costs and now threaten con-

tinued growth.

Mads Nipper, CEO of Orsted, told

Bloomberg Green in a podcast: “If

states around the world say energy

prices can only go down, it will be a

race to the bottom. In the end, capital

will dry up.”

He added: “There’s not much room

to absorb higher costs. A typical off-

shore wind farm generates a return of

about 1 per cent above the cost of

capital. A really good project can get

as much as 3 per cent. Rising interest

rates are eroding that return, and if the

price of electricity from wind farms

doesn’t go up, companies won’t be able

to invest at the rate needed to meet cli-

mate targets.”

GE and IHI eye ammonia-red gas turbines by 2030

Energy company prots surge as prices soar

Siemens Gamesa takes hit on operating prot

Businesses prioritising commercial

success over sustainability

A corporate survey nds that although almost all IT decision makers rank sustainability as their top priority, 84 per cent

still prioritise commercial objectives over sustainability.

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Looking through the

industrial cyber portal

Every power project has different requirements and components

that change the prerequisites for cyber security. At the same time,

cyber security needs to change over the lifetime of a project, making

it tricky to maintain a holistic overview of projects around the world.

Siemens Energy has therefore developed an industrial cyber

security portal that simplies the integration of cyber security into

each of its projects, with the aim of delivering products and solutions

that are inherently cyber secure. Junior Isles

denition in alignment with business

units’ offerings and manufacturing, it

also enables understandable and opti-

mised implementation of cyber secu-

rity in processes, technology and

guidelines.

To address these issues, the company

recently launched what it calls its In-

dustrial Cybersecurity Portal (ICS

Portal).

The portal is designed to simplify

security by providing specic func-

tion modules within a central reposi-

tory. Tasks and outcomes are stored

centrally so they can be evaluated and

documented. This will help provide

transparency for the central ICS team

and the business units themselves.

Stensletten said: “It is designed to

serve as a ‘one-stop-shop’ for ad-

dressing all cyber security needs of

any given project. Helping all our

Siemens Energy business units work-

ing with our portfolio, the ICS portal

provides transparency, for example,

on relevant security requirements for

their assets as well as guidance on

related vulnerabilities and their miti-

gation. Featuring automation capa-

bilities, and the ability to contextual-

ise, visualise, and structure the

project data, it has never been easier

to integrate and maintain cyber secu-

rity in the design of our products and

solutions.”

The types of risks that a project

might face could range from a vul-

nerability in an individual compo-

nent delivered to a customer, to a

solution from a sub-supplier that

does not meet the security require-

ments of the customer.

“To remain a trusted partner for our

customers, our portfolio must become

secure by design to protect adequately

against cyber threats, meeting global

regulatory requirements and stan-

dards. To achieve this goal broadly

and holistically can be a huge chal-

lenge. It requires a simplication of

security and the ability to integrate

cyber security into existing business

hile digitalisation is seen as

a key pillar of the energy

transition, the growth of

devices connected to the industrial

internet poses a real threat. Certainly,

it is a major concern for executives.

According to PwC’s 25th Annual

Global CEO Survey, 44 per cent of

energy, utilities and resources CEOs

ranked cyber threats as a “top three”

concern. And of all sectors, energy is

among the most targeted.

According to the X-Force Threat

Intelligence Index 2022, the energy

sector ranked as the fourth most af-

fected sector in 2021, with 8.2 per

cent of all observed attacks, behind

the manufacturing industry, the nan-

cial sector, and the professional ser-

vices sector. The war in Ukraine has

no doubt heightened that threat. In

April, for instance, Ukraine’s Com-

puter Emergency Response Team

announced that it had successfully

repelled a series of cyber attacks on

the country’s power grid.

In the past, hacking energy infra-

structure would usually require cyber

criminals to have an on-site deploy-

ment to successfully hack the opera-

tional technology needed to run a

network or plant. With increasing

digitalisation, and as information

technology (IT) and operational

technology (OT) converge, this is no

longer the case.

Today, utilities, factories, etc., typi-

cally use IT systems connected to OT

networks to operate their digital

equipment. This makes it easier than

ever for cyber criminals – whether

nations (cyber warfare) or individuals

– to not only inltrate the IT of a

company, but also the attached OT

operated via those IT systems. To

keep the critical infrastructure secure,

providers of energy technology

equipment nowadays have to provide

state-of-the-art cybersecurity solu-

tions including secure products that

meet all legal requirements.

Commenting on the challenges its

customers are facing and what it can

do as a company, Bernhard Mehlig,

Industrial Cybersecurity Consultant,

Siemens Energy, said: “Companies

that provide us with electricity, natu-

ral gas for heating or oil for transport,

operate complex manufacturing and

production sites that use digital solu-

tions to make their operations more

efcient and protable. These are at

risk from various types of hackers.

The companies that we provide solu-

tions to are becoming more and more

aware of this. So it is important for us

to focus on what we can do to ensure

our customers achieve a secure opera-

tion of the products and solutions we

provide.”

Rune Stensletten, Head of Industrial

Cybersecurity Ofce (ICS Ofce),

Siemens Energy, added: “The indus-

trial products and solutions we pro-

vide to our customers cannot be pro-

tected in the same way as IT

infrastructure. Trying to secure these

systems is a highly complex task. So

what we are doing is trying to collect

and dene best practice and guidance

centrally and provide it to our internal

business partners. The purpose of our

industrial cyber security team is to

support our businesses involved in

the execution of customer projects

and product development.”

Although each business unit of Sie-

mens Energy has its own industrial

cyber security community, which

oversees cyber security for products

and solutions coming out of the spe-

cic business unit, the central ICS

Ofce coordinates all the various ef-

forts. This includes cyber resilience

of Siemens Energy’s various manu-

facturing and production sites as well

as the security of products and solu-

tions provided to its customers.

Such an approach enables each

business unit’s ICS community to

bring their expertise to customer

projects, answering all questions and

meeting the needs of the customer.

But in an environment that is changing

quickly there has to be a coordinated

way of managing this community of

ICS experts and bringing them up to

speed with the latest requirements for

each product and solution. This is

where the central ICS team comes in.

A good example is the differing and

evolving cyber legislation in the re-

gions Siemens Energy is operating in.

In the EU, the recently introduced

Cyber Resilience Act (CRA) requires

each project in the energy industry to

meet certain criteria. Cyber security

therefore is a business enabler and

market access requirement in many

countries, as technology providers are

not able in some parts of the world to

conduct business without complying

with existing legislation. Further,

customers themselves might have

specic requirements that can be a

deciding factor in selecting an equip-

ment supplier.

Executing projects worldwide is al-

ready a complex task; and cyber secu-

rity adds yet another layer of com-

plexity that has to be addressed. As

Mehlig put it: “There are already a lot

of moving parts and a lot of resources

and deliverables have to be aligned.

Cyber security adds to that. And if

you look at the specic cyber security

task there is a sequence that has to be

followed and tasks have to be execut-

ed iteratively. You have to have all

your ducks in a row.

“This presents challenges for tech-

nology companies, from both a cen-

tral point of view and in a customer

project context to keep track of risks

originating from cyber security is-

sues, e.g. non-compliance to cyber

requirements or security vulnerabili-

ties in products or solutions. Essen-

tially, one needs enough transparency

when it comes to cyber risk to act

appropriately.”

According to Siemens Energy, hav-

ing the tools to keep track throughout

its cyber community is therefore key.

Having this ability not only drives

horizontal cyber security portfolio

Mehlig: “Essentially, one needs enough transparency when it

comes to cyber risk to act appropriately.”

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Special Supplement: Cyber security

Stensletten says the portal is designed to serve as a ‘one-stop-

shop’ to address all cyber security needs of any given project

tasks and workow. The supplier

module says that when you are buying

things from 3rd parties, you want to

make sure that these vendors are se-

cure and know how to develop secure

products and solutions that meet our

customer requirements.”

“There are certain activities that

should be best practice, depending on

the state, or the time in the lifecycle of

the project,” added Mehlig. “So, we

want to create a module for every ac-

tivity; i.e. specic modules for certain

activities that occur during a particular

timeframe in the project lifecycle.

“This simplies security. A person

that is focused on a specic activity

can feed in the data to the portal,

which stores it in the context of the

project. This makes it easier for the

project team to assess certain out-

comes and react accordingly.”

Stensletten noted: “Bernhard and I

have worked in cyber security in the

business units for many years and

we’ve been talking about having this

tool for at least ve or six years. Now

as part of this central team, we nally

have the means to be able to do this.

By doing this we are not only helping

the business unit we came from but

the entire company, when it comes to

dealing with cyber security.”

In developing the portal, the central

ICS team has collaborated closely

with cyber security communities

working on projects. “This is impor-

tant to build the functionalities that

are relevant to them in their business

area,” said Stensletten. “But we are

also thinking long term because we

know that if we do all of our cyber

security due diligence as part of our

project execution, it also makes it

possible to use these services for our

end customers.

“By doing vulnerability manage-

ment in-house, we ensure the elimi-

nation of all vulnerabilities before

handing over to customers, and we

are also monitoring solutions during

the warranty phase. Further, we can

provide this as an end service to

customers after the warranty. ”

This, he says, not only provides

them with information on upcoming

vulnerabilities but also gives them

access to experts that actually devel-

oped the product or solution, who can

advise on how to address the issue.

Stensletten added: “Going into the

project phase, there are a number of

different roles. There are engineers,

technical project managers, etc., and

we are introducing a role that is re-

sponsible for cyber security in proj-

ects to ensure that the activities that

have been dened are actually being

followed – kind of like a quality

[control] function. There is also an

ICS expert, who will help with the

technical implementation and veri-

cation of requirements, etc.

“The idea is that the tool will guide

you through all the cyber security

activities, allow you to customise ac-

cording to the project’s cyber security

risks and introduce cyber security

activities for different roles in the

project.”

Siemens Energy also plans to create

a dashboard where it can collect key

performance indicators (KPIs), gen-

erate queries and create reports on, for

example, projects that have reached a

certain stage.

Mehlig explained: “This is impor-

tant for us centrally and for the port-

folio. We can, for example, look at all

projects in a certain area and see how

many components have been sold

there, what their current status or risk

assessment score is, etc. This would

allow us to make detailed evaluation

reports based on data entered, and try

to gure the risks or hotspots in terms

of cyber security risks.”

“It could also show where the or-

ganisation is lagging. For example,

we can nd out where, say, vulnerabil-

ity mitigation is taking very long. The

portal will allow the organisation to

monitor itself in order to learn and

improve.”

In addition to further developing

the tool, the ICS team’s next steps

will be to reap the rewards of its

work by raising awareness of the

portal internally and making its use

inside the company more wide-

spread. The overall goal is to sim-

plify the integration of projects, ulti-

mately beneting Siemens Energy

customers, who can rely on a unied

process that ensures implementation

of cyber security before the solution

is handed over.

Stensletten summed up: “We have

been a small group, currently working

on the development of the portal’s

functionality and verifying that the

technology is working. Now we will

introduce it to the whole company by

implementing the module for the ini-

tial risk assessment, and will build the

core functionality as we get more

people to start using this tool.”

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Special Supplement: Cyber security

processes. The ICS portal is a tool that

covers the whole lifecycle of cyber

security for our customers’ projects,”

said Mehlig.

The portal will have a number of

modules to support both Siemens

Energy and its customers. With the

rst release of the ICS Portal it is al-

ready possible to:

n Dene the ‘project context’ by add-

ing project information, (security)

zone hierarchy; asset denitions; soft-

ware/hardware components;

n Evaluate standards and require-

ments by the mapping of requirements

between different standards;

n Perform vulnerability monitoring.

In the next iteration, the ICS team

plans to introduce other functions like

risk assessment to give an indication

of the type of cyber security that

should be planned for project execu-

tion; vulnerability management in

assets and components; secure sup-

plier cyber security evaluation; and

project security activities guidance.

Stensletten explained: “The vulner-

ability management module, for ex-

ample, will contain a full list of all

assets and components involved in

the project and will allow tracking of

Cyber security in industrial

projects is a key concern

Siemens Energy’s industrial

cyber security experts came

together for an on-site event

in Berlin during September

last year

LET’S MAKE TOMORROW DIFFERENT TODAY

Transforming the entire energy system requires

all of us to change how we do business, invest,

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India launches $2.4 billion

programme to go big on hydrogen

Italy, Eni seek to boost Africa gas

exports to Europe with Mattei Plan

Gary Lakes

Coal and hydrocarbons provide India

with the energy it needs to keep its

industries and businesses growing and

its automobiles moving. But carbon

dioxide emissions must be drastically

curtailed if the country is serious about

reducing its contribution to the dam-

age being done to the global climate

as well as its own environment.

India’s air pollution problem alone

became starkly obvious when during

the early days of the Covid-19 global

lockdown, before and after photo-

graphs were published where the be-

fore photo showed the smog-lled

skies over New Delhi, while the after

photo taken from the same location

showed a clear view of the Himalaya

Mountains in the distance – the conse-

quence of reduced carbon emissions.

In early January, the Indian authori-

ties announced a $2.4 billion pack-

age designed to encourage its indus-

tries and businesses to produce, use,

and export green hydrogen, as many

governments in the developed world

are doing already.

An important factor weighing upon

India and encouraging an energy tran-

sition is the rising cost of hydrocarbon

imports.

Cutting the cost of energy will be

vital if India is to pull its masses out

of poverty. The country’s solar and

wind resources are sufcient enough

to enable India to reach its 2045 goal

of being energy independent and

reaching net zero emissions by 2070.

While the country has its own well-

developed coal, oil and gas industries,

it is highly dependent on imports of

gas and oil from the Middle East and

Russia. But as global energy prices

rise, the money owing out of India to

cover energy costs is a big incentive

to transition to renewables. India’s

reliance on hydrocarbon imports is

such that despite international sanc-

tions against Russia for invading

Ukraine, India has taken Moscow’s

offer to buy Russian oil at a discount.

Along with China, the two countries

are the best customers for discounted

Russian crude.

Funding under the programme is

meant to push India to building the

capacity to produce 5 million metric

tons of green hydrogen by the end of

this decade through the development

of electrolysers, which use water and

renewable energy to produce green

hydrogen. No greenhouse gas mole-

cules are emitted during this process.

What hydrogen there is in the world is

produced as blue, grey or even black,

which uses natural gas or even coal to

produce it.

Some major Indian heavy industrial

conglomerates are already making the

switch to hydrogen in the form of a

clean fuel. The Adani Group, part-

nered with France’s TotalEnergies, is

planning to invest $50 billion to create

what it describes as the “world’s larg-

est green hydrogen ecosystem” over

the next 10 years. And India’s multi-

industrial Reliance Industries is plan-

ning a $75 billion clean energy restruc-

turing that includes switching from

grey hydrogen to green by 2025.

In recent public remarks, Indian

Prime Minister Narendra Modi said

India would by 2030 develop a further

125 GW of renewable energy sources

to be used for green hydrogen produc-

tion. He said the new green hydrogen

programme would support research

and development as well as pilot proj-

ects that would increase decarbonisa-

tion in big energy users such as steel,

oil reneries and fertiliser companies.

He said regions of India capable of

large-scale production and utilisation

of green hydrogen would be identied

and developed as green hydrogen

hubs.

Under the recently-released Nation-

al Green Hydrogen Mission, India will

establish a green hydrogen ecosystem

in which these hubs will be located

near existing industrial centres where

oil rening and steel plants are located.

The hydrogen mission calls for at

least two large scale production and/

or utilisation hubs to be established

by 2025-26. It calls for pilot projects

in emerging applications such as steel

manufacture, mobility, port develop-

ment to be promoted in these hubs,

and that these hubs be connected by

mobility corridors that include suf-

cient refuelling infrastructure and

hydrogen supply arrangements along

the route.

India’s green hydrogen mission is,

according to the government docu-

ment, replacing fossil fuels and the

hydrogen that is produced by fossil

fuels with green hydrogen; produce

steel with green hydrogen and pro-

duce green hydrogen-derived syn-

thetic fuels such as green ammonia

and green methanol. Ultimately, the

aim is to make India a leader in tech-

nology and manufacturing of elec-

trolysers and other enabling technolo-

gies for green hydrogen, the mission

document says.

The subsidy funding that the govern-

ment is making available should kick-

start the process and provide further

encouragement and investment advan-

tage to the country’s entrepreneurs.

Gary Lakes

Italian Prime Minister Giorgia Melo-

ni visited Algeria in January to express

support for Eni’s energy plans in North

Africa and to promote the Mattei Plan,

named after Eni founder Enrico Mat-

tei, who established close relations

between the company and Algeria in

the 1950s and 60s. Key to the plan is

stemming the ow of illegal migrants

across North Africa to Italy and other

southern European countries. Meloni

identies the primary causes for the

ow of migrants as poverty and jihad-

ist unrest. The plan calls for Italy to

work together with other countries in

Africa and Europe in addressing these

problems.

At a news conference in Algiers with

Algerian President Abdelmadjid Teb-

boune, Meloni called the plan “a col-

laboration on an equal basis, to trans-

form the many crises that we are facing

into opportunities.”

Eni CEO Claudio Descalzi travelled

to Algeria with Meloni and met with

the head of Algeria’s state-owned oil

and gas company Sonatrach, Touk

Hakkar. Long-time partners in a num-

ber of hydrocarbon projects, the two

companies signed more agreements

during the January meetings for proj-

ects meant to increase Algeria’s pro-

duction and export capacity.

Algeria already exports gas to Italy

through gas pipelines across Tunisia

to Sicily and mainland Italy. New ef-

forts will be made to expand infra-

structure in order to reduce Italy’s

once close dependence on Russian

gas, and to strengthen Algerian gas

shipments into Europe, once reliant

on Russia for 40 per cent of its gas

supplies, but now keen to nd alterna-

tive sources in the wake of Russia’s

invasion of Ukraine.

In early January, Hakkar said

Sonatrach is looking to raise hydrocar-

bon output to 200 million tons of oil

equivalent (toe) during 2023. The latest

available gures show that production

stood at 185 million toe in 2021.

During her press conference with

Tebboune, Meloni announced that two

agreements had been signed by Eni and

Sonatrach, “one to identify activities

to reduce greenhouse gas emissions

and the other to achieve an increase in

energy exports from Algeria to Italy

and potentially from Algeria to Europe.

According to Eni, the two companies

“will perform research to determine

possible measures to improve [Alge-

ria’s] energy export capacity to Europe.

The purpose is to support energy secu-

rity and ensure a sustainable energy

transition”, the company said in a state-

ment. With the other agreement, the

two companies will explore opportuni-

ties to reduce greenhouse gas and meth-

ane emissions, and determine energy

efciency initiatives, renewable ener-

gy developments, green hydrogen

projects, and carbon capture and stor-

age projects, Eni said. The two coun-

tries are also discussing the transmis-

sion of Algeria’s surplus electricity to

Italy through a subsea cable.

Last November, Desclazi and Hakkar

inaugurated Solar Lab and laid the rst

stone for a 10 MW photovoltaic plant

in Bir Rebaa North production com-

plex in the Berkine Basin in southeast

Algeria. The solar plant is the second

such facility linked to BRN’s hydro-

carbon production. Another PV plant

is set to be constructed this year at

Menzel Ledjmet East, also in the Ber-

kin Basin.

Solar Lab is where different photo-

voltaic panels will be tested in the ex-

treme irradiation conditions of south-

ern Algeria. It will collect data and

provide analysis that will identify the

most efcient technologies.

In early January, Eni and its former

energy infrastructure company Snam

closed an agreement whereby Snam

acquired 49.9 per cent in a joint com-

pany called Sea Corridor that will oper-

ate two groups of international gas

pipelines connecting Algeria to Italy.

Eni will hold 50.1 per cent of the new

rm, which will also examine the pos-

sibility of hydrogen pipelines. Snam

paid Eni about €405 million for its

place in Sea Corridor.

Eni said in a statement “the scope of

the transaction includes the onshore

gas pipelines running from the Algeria

and Tunisia borders to the Tunisian

coast (TTPC), and the offshore gas

pipelines connecting the Tunisian coast

to Italy (TMPC).”

Meanwhile, the head of Libya’s Na-

tional Oil Company (NOC) Farhat

Bengdara has said that Eni and NOC

are preparing to agree a production

deal that will see Eni invest some $8

billion towards bringing two offshore

elds on-stream and produce some

850 million cubic feet of gas per day.

Eni already produces nearly 200 bil-

lion cubic feet (bcf), most it from the

offshore Wafa and Bahr Essalam elds

operated by a joint venture company

between Eni and NOC, Melittah Oil

and Gas.

Eni exports gas from Libya to Italy

through the 8 bcm/year capacity Green

Stream gas pipeline to Sicily.

Eni’s Descalzi has called for Europe

to look to Africa for its future gas sup-

plies, saying that ‘south-north’ energy

axis would bring gas from Africa to the

EU and enable Europe to halt its gas

imports from Russia. Italy has set a

target date of 2025 for ending its im-

ports of Russian gas.

Hydrogen

Gas

India’s economy and population are growing and the country is forecast to need as much new energy

over the next two decades equivalent to what the European Union uses now. Last month the authorities

in New Delhi announced the launch of a subsidy programme designed to provide funding for hydrogen

innovation and attract investment to the promising sector.

Italy’s energy giant Eni is looking to increase African gas exports to Europe through new energy projects in Algeria

and in Libya as a means to end the continent’s reliance on Russian gas imports and establish Italy as an energy hub.

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Fuel Watch

quarters. The International Sustain-

ability Standards Board – an entity

under the International Financial Re-

porting Standards (IFRS) that sets

global sustainability standards and

climate-related reporting – will issue

standards in June, its chair said in

Davos.

There are many other organisations

and institutions applying such pres-

sure on companies. The Task Force

on Climate-Related Financial Disclo-

sures (TCFD) is another initiative

with plenty of muscle. It was formed

after a recommendation by the G20

nance ministers and central banks to

the Financial Stability Board – an in-

ternational body that monitors and

makes recommendations about the

global nancial system.

The various pressures now require

businesses to set out concrete game

plans for their short- and long-term

net zero strategies. These comprise

commitments and roadmaps to realise

net zero emissions by 2050. So, what

are corporates supposed to do? One

recommendation comes from the

CEO of the We Mean Business Coali-

tion, Maria Mendiluce. Her organisa-

tion calls for a ‘4As’ approach: ambi-

tion, action, advocacy, and

accountability. Corporates must have

a science-led aim for net zero. They

must have an actionable plan embed-

ding climate in their business pro-

cesses – including tackling supply

chains and going beyond the value

chain. They must advocate or speak

up their science-based climate poli-

cies. Lastly, they must be accountable

through such actions as publicising

their plans, reporting progress, and

offering transparent governance.

All of these pressures are highly

taxing for corporates trying to run a

protable business. Unfortunately,

the train has already left the station.

Frameworks, rules, regulations, stan-

dards, and other guidance are evolv-

ing by the day. Ignoring these forces

will ultimately impede the business to

function. Plainly put, businesses

won’t be able to nance their opera-

tions, and shareholders as well as

stakeholders will ostracize the ser-

vices or products the business offers.

It is difcult for an energy company

in Asia-Pacic or in Europe to raise

the nance to build a coal red power

plant, for example. Conversely it is

easier for such a company to raise -

nance to build a large wind farm.

European corporations lead net zero

emissions disclosure. This can be

measured in a variety of ways. One is

looking at data from TCFD. It identi-

ed in its 2022 Status Report that

companies in the Asia-Pacic, Eu-

rope, and North America all had

sharply raised their levels of climate-

related nancial information disclo-

sure aligned with the TCFD recom-

mendations. Between 2019 and 2021,

the increase was 23 percentage points

for European corporates, 12 for North

America ones and 11 for Asia-Pacic

ones. The highest adoption was in

housands of people, including

hundreds of government and

business leaders, descended on

Davos, Switzerland, in January for the

annual general meeting of the World

Economic Forum (WEF). While sev-

eral hot topics were discussed in the

sub-zero temperatures of the alpine ski

resort, one of the hottest among them

was the climate – not only climate

change factors but also the role of busi-

nesses in the net zero transformation

to slow global warming.

Corporations now face multiple

pressures from governments, share-

holders, and other stakeholders to

adopt sustainability and net zero

strategies, particularly those in-

volved in energy. There are pressures

on their nancing, requirements for

nancial and other reporting, and

demands for short- and long-term

corporate strategies.

Typically, energy corporates in

Asia-Pacic have lagged behind their

European counterparts in terms of

sustainability and climate strategies.

But the lag can be seen as a positive.

It means energy companies in the re-

gion have the opportunity to learn

from their European and global peers.

Also, given the bulk are in growth

markets, they have the opportunity to

create and innovate and potentially

design new net zero strategies.

The capital markets increasingly

demand utilities and other corporates

address net zero emissions. Com-

mercial banks, multilateral banks, and

other nancial institutions themselves

are being asked by regulators and

shareholders to implement green -

nancing measures.

The industry-led Net-Zero Banking

Alliance is one example. It was formed

in April 2021 to get the member nan-

cial institutions to align “their lending

and investment portfolios with net

zero emissions by 2050”, states the

United Nations Environment Pro-

gramme - Finance Initiative. The Al-

liance has 126 member banks from 41

different countries, representing

41per cent of global banking assets. It

“reinforces, accelerates and supports

the implementation of decarbonisa-

tion strategies” within the institution,

which in turn means members must

encourage their clients to adopt net

zero emission strategies.

Another example is the massive rise

of thematic bonds such as green

bonds; their issuance proceeds are

limited to projects with clear environ-

mental benets. There are increas-

ingly other types of climate change

solutions-linked xed-income nan-

cial instruments; accumulated pro-

ceeds reached about $2 trillion in late

2022 in just ten years.

In addition, for those companies

listed on stock exchanges, regulators’

demands are multiplying. The US

Securities and Exchange Commis-

sion, for example, wants companies

to include climate-related risks and

other disclosures in their lings.

There are also increasing demands on

nancial institutions, which in turn

affect corporations. Hong Kong’s

Securities and Futures Commission is

now asking fund managers to disclose

climate-related risks with their invest-

ments, for example. These are some

of the developments forcing corporate

behaviour changes.

Businesses also have a greater -

nancial reporting burden. They must

address Environmental, Social and

Governance (ESG) factors as the

capital markets look at evaluating and

determining future nancial perfor-

mance based on ESG factors. Corpo-

rate sustainability reporting is now

commonplace. Financial reporting

will also be harsher in the coming

Europe with 60 per cent, followed by

Asia-Pacic at 36 per cent and North

America at 29 per cent. Capital mar-

kets practitioners would generally

agree that Europe is ahead, and Asia-

Pacic is lagging.

But although Asia-Pacic corpora-

tions are behind, this is changing fast

due to demands from global and re-

gional capital markets. Investors

themselves are setting net zero targets

for their portfolio but they will not be

able to do so if companies do not

embark on the energy transition path.

So, where do investors in Asia-Pacic

actually stand?

The Asia Investor Group on Climate

Change (AIGCC) offers some in-

sights. The group comprises asset

owners and managers from 11 mar-

kets around the region with over $39

trillion in assets under management in

public equities, private debt, private

equity, direct property, unlisted infra-

structure, and venture capital. In a

survey, AIGCC found that “29 per

cent of respondents had set a 2050 net

zero target for their whole portfolio,

and 18 per cent have net zero targets

on some asset classes”. Also, it estab-

lished that about 41 per cent who had

not yet set net zero interim targets to

be achieved by 2025 or 2030, were

actively considering doing so.

The net zero ambitions disclosures

by corporates in the Asia-Pacic re-

gion may lag European peers, but it

must not be looked at as a negative.

Firstly, disclosure is accelerating

and will speed up in the coming years

given pressures from governments,

shareholders, and stakeholders, espe-

cially the capital markets.

Secondly, the formulation of short-

and long-term net zero strategies is

still evolving for some of the more

advanced corporates because the

rules, regulations, and guidelines

themselves are evolving.

Finally, as detailed in the book

‘Asia’s Energy Revolution’, the ma-

jority of countries in the Asia-Pacic

region are developing economies,

with only about one-tenth of total

energy consumption coming from

developed Asia. So, while the fossil

fuel footprint of these countries is

high, given growing consumption

new energy supply is needed. Domes-

tic and global pressures in the major-

ity of these developing economies,

leads them to prioritise low- to zero-

carbon generation. The percentage of

fossil fuel generation, especially coal

red, will certainly steadily decline

over the next 27 years and creating

enormous new business and invest-

ments opportunities.

Joseph Jacobelli is Managing Part-

ner at direct investments advisor Asia

Clean Energy Investments, and at

single-family ofce Bougie Impact

Capital. He is a prominent Asia-

Pacic energy markets expert, author

of ‘Asia’s Energy Revolution’, and

host of ‘The Asia Climate Finance

Podcast’.

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Corporate Decarbonisation

Corporations in the Asia-Pacic region have lagged behind their European counterparts when it comes to sustainability

and climate strategies. But this is changing fast, as the future energy landscape brings new opportunities.

Joseph Jacobelli.

The business of climate strategy:

opportunities vs. risks

Percentage of companies

disclosing TCFD-aligned

information

Source: Task Force on Climate-

related Financial Disclosures (2022).

Task Force on Climate-related

Financial Disclosures 2022 Status

Report, Page 5. [online] https://

www.fsb-tcfd.org/. Available at:

https://assets.bbhub.io/company/

sites/60/2022/10/2022-TCFD-Sta-

tus-Report.pdf [Accessed Jan. 22,

2023].

Europe Asia Pacific North America

Percentage

2019 2021

he shift from fossil fuels to

renewables is a global trend

that is gathering momentum.

In Europe and the US combined,

over 160 GW of coal plant is sched-

uled to be retired by 2030. It is a

trend that is also taking hold in

Asian countries where coal usage is

still signicant. The government of

India, for example, is aiming to

reach 500 GW of renewable capaci-

ty by 2030. At the same time, about

50 GW of coal red capacity will

be decommissioned in the coming

years. But as coal use for power

generation declines, decisions will

need to be made very soon about

what to do about these potentially

stranded assets and how to address

security of energy supply.

To address the intermittency of re-

newable power and to maintain a

stable and reliable system, it will be

necessary to have a long duration

energy storage solution that can be

implemented in the near term.

Recognising the need to support

renewables such as wind and solar,

while at the same time tackling the

issue of stranded assets, E2S Power

has developed a technology that has

been demonstrated as a pilot that

will soon be delivered to a site in

India.

Under a recent agreement, E2S

Power will deliver a 250 kWh pilot

thermal energy storage, fully engi-

neered and developed by its team,

to India Power Corporation (IPC).

The pilot unit, which has been engi-

neered, built, and tested at E2S

Power’s facility in less than nine

months, has already successfully

passed Factory Acceptance Tests

and will be delivered during the

rst quarter of 2023. It is a collabo-

ration that will ultimately help to

transform the thermal power assets

at the site into clean energy storage

facilities, contributing signicantly

to India’s energy transition and re-

newable energy growth while re-

taining key jobs and providing a

pathway for the local economy to

clean power and carbon reduction.

E2S Power was formed four years

ago in Switzerland to grab the win-

dow of opportunity presented by the

imminent retirement of fossil fuel

power plants and the urgent need

for long duration energy storage. A

key priority was to develop a exible

“all-in” low-cost solution that would

simplify integration with existing

plants. E2S tested a demonstration

unit at its facility in Belgrade, for

over a year, gathering important

data used in the optimisation of the

design.

Subsequently, a larger, 250 kWh

pilot was built and tested, capable

of generating steam up to 540°C for

a period of over four hours, after

being charged the previous day. As

part of the collaboration to expand

in the Indian market, IPC decided to

acquire the pilot to be located in

Kolkata, West Bengal. This will

represent a showcase for key stake-

holders in the Indian market, in-

cluding government representatives

and power companies looking for a

long duration energy storage solu-

tion and a way to decarbonise exist-

ing assets. IPC and E2S Power are

already planning an additional unit

to be installed in the next year and a

utility scale plant in the next few

years.

E2S Power is also in advanced

discussions with power companies

and investors in the US and Europe

to scale-up the commercialisation of

the unit with power plant applica-

tions in the next two years.

So what makes E2S Power solu-

tion unique? In simple terms, the

technology converts electricity from

renewable sources during low de-

mand periods into heat, which is

stored using advanced storage mate-

rials, and then returns the stored en-

ergy in the form of superheated

steam to power existing steam tur-

bine generators to provide needed

capacity during peak periods when

the demand is high.

Known as TWEST (Travelling

Wave Energy Storage), it is a pro-

prietary technology to transfer the

heat from a higher temperature sec-

tion to a lower temperature section

of the unit, maintaining a constant

discharge temperature to the exist-

ing plant’s steam turbine.

The objective of TWEST is to

maximise the use of existing infra-

structure without additional equip-

ment. This results in less complexi-

ty, faster implementation, and

therefore lower capital and operat-

ing costs. For utility scale applica-

tions, the total installed cost is esti-

mated to be a quarter of lithium-ion

batteries energy storage plants.

In addition, the E2S Power system

has superior energy density with

signicantly less space requirement

than competing storage technolo-

gies, uses abundant and recyclable

material, and has long life and neg-

ligible performance degradation

during its lifecycle. Since the sys-

tem utilises existing synchronous

generators, it can also provide grid

stability support.

TWEST consists of three key

components in an insulated enclo-

sure – electric radiant heaters,

graphite storage blocks and steam

generators.

The electrical heaters are designed

for high temperatures and facilitate

the heat transfer to the storage

blocks during charging. The storage

blocks are made of high energy

density and thermal conductivity

materials, capable of fast charging,

and are arranged in blocks similar

to building blocks. When generat-

ing steam, the heat is transferred di-

rectly to pipes made of high temper-

ature alloys mounted in the storage

blocks. The storing efciency,

which is dened as conversion of

electrical energy into heat, is very

high, about 98-99 per cent, thanks

to efcient heat transfer and there-

fore experiences very low losses in

this process.

The system is packaged in a stan-

dard module that allows stacking,

as required to meet the storage re-

quirements and plant footprint for a

variety of power plant sizes and

congurations. The superior energy

density makes it a more compact

solution requiring less space.

The TWEST thermal energy stor-

age offers a “plug-in” compact so-

lution that allows easy integration

with existing plants with three main

interfaces: electric supply for charg-

ing the system, feedwater input and

steam supply into the existing steam

cycle.

The system has several unique as-

pects and key advantages:

n Compact design with high energy

density. This makes it the most

suitable utility scale storage with a

footprint 2-5 ve times smaller

compared to all other storage

systems;

n It has scalable modular design. It

has an all-in modular design

without the need for additional

external equipment such as heat

exchangers and enables easy

integration and minimum disruption

to existing plant. It can be easily

scaled up thanks to the

modularisation concept;

n Lower capital cost. The system

maximises the use of existing

equipment and infrastructure (all

but coal-related equipment and

mine);

n It is environmentally benign. It is

made of abundant, safe, and

recyclable materials;

n It is safe. The design is inherently

fail-safe and maximum temperature

is limited. The process is not

chemically active and poses no re

risk;

n It has long life. The system is

designed for 30 years. There are no

issues related to degradation or

depth of charge. Storage material is

safe and remains stable throughout

their life cycle;

n It supports grid stability. By using

synchronous generators, TWEST is

better able to provide voltage and

frequency support compared to

batteries;

n Has socio-economic benets. By

using existing, potentially stranded

assets and by retaining jobs, E2S

Power’s technology can help local

economies transition to clean

energy;

n Can be implemented fast. Due to

the simple, easy to integrate

technology, this solution allows

faster deployment. A typical time to

market (from order to commercial

operation) is estimated to be less

than 18 months.

The quest toward carbon reduc-

tion and the need for energy securi-

ty presents new challenges and op-

portunities in the near-term.

Solutions ready to be deployed im-

mediately, such as TWEST, are ur-

gently needed.

The TWEST system has generated

a huge amount of interest from the

world’s major energy companies

that are looking for long-duration

energy storage solutions that can be

implemented in the near term, while

repurposing their fossil fuel power

plants to clean energy. E2S Power

has identied a near-30 GWh global

project pipeline, equivalent to about

$3 billion in storage investment and

this is still growing. Over the next

two years, the plan is to deploy rst

commercial units in the US and Eu-

rope. This will be followed by full

global commercial expansion.

Fabrizio De Candia is Chief Operat-

ing Ofcer, E2S Power

A new thermal

energy storage

technology is soon

to be piloted at a site

in India. The system

has the potential to

accelerate the move

to renewables, while

addressing the issue

of stranded fossil

fuel assets, says

E2S Power’s

Fabrizio De Candia.

Avoiding stranded assets with

thermal energy storage

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Technology Focus

Energy from renewable

sources is stored using

advanced storage materials

and then returned in the form

of superheated steam to

power existing steam turbine

generators

De Candia: “The objective of TWEST is to maximise the use of

existing infrastructure without additional equipment”

THE ENERGY INDUSTRY TIMES - FEBRUARY 2023

Final Word

ome say a good way to get

through a crisis is to let your hair

down and dance your troubles

away. While the EU cannot be accused

of tackling the energy crisis with care-

less abandon, it has pulled a few

moves worthy of the dance oor.

As gas and electricity prices spi-

ralled last year, exacerbated by Russia

drastically cutting gas supplies to the

region in response to sanctions, it

looked like it might be the last Tango

in Paris for the bloc. Yet the Tango is

about partners moving in perfect

harmony with a level of intimacy. As

the EU’s member states moved to

secure alternative gas supplies from

global partners and took synchronised

steps to reduce gas demand, the har-

mony may not have been perfect but

has been effective nevertheless.

Speaking at a recent press Q&A,

Emmanuel Dubois-Pelerin, Senior

Director, EMEA Utilities, S&P

Global Ratings, noted: “We believe the

sector – in 2022 and we expect in 2023

– to be quite resilient, despite facing a

multiplicity of external challenges.

Despite the stormy waters of 2022...

We think the worst may be over be-

cause despite the continuation of some

headwinds, Europe has done a good

job since the rst quarter of 2022 to

redress its gas balance.”

Floating storage and regasication

units to bring natural gas into Europe

recently commissioned in Germany,

Finland and Greece, and more coming

in Italy, combined with an impressive

reduction in gas demand across the

continent since August, has allowed

the region to become much less depen-

dent on Russia. The EU has said it

expects to be completely independent

from Russian gas by 2027; it has al-

ready reduced gas demand by more

than 20 per cent since August.

“This is a great achievement,” said

Dubois-Pelerin, “one that we would

not have expected so condently a year

ago. The risk of physical gas cuts is

now really remote, at least for this

winter. The next two winters will be

tight but much more manageable –

much more than we would have

thought last August.”

And so as condence grows, the

Tango that has seen the EU navigate

the crisis now becomes a ballet. Late

last year saw the rst pirouette.

“We think December was a positive

turning point for European energy

utilities and actually in a way for

economies, as prices for gas and

power reduced signicantly,” said

Dubois-Pelerin.

The challenge is how to not only

make this price reduction long lasting

but also reduce price volatility going

forward.

While gas prices remain about four

or ve times higher in Europe than in

the US, S&P Global sees further re-

ductions in gas and electricity prices

this year. Gas price volatility is also

expected to remain and this will be

reected in an electricity market

where power prices are closely linked

to those of gas.

A wave of regulations has been

spreading across the continent and the

UK since the autumn to break this link

and deliver electricity prices that better

reect the growing amount of low cost

renewables in the system and therefore

reduce consumer prices. The next

wave of regulations will continue in

the EU in the form of market redesign.

The European Commission launched

a consultation last month, which

closes February 13, with the aim of

having proposals around late March.

Kadri Simson, European Commis-

sioner for Energy, said the Commis-

sion is under “very strong political

pressure” to redesign the market to cut

consumer bills, and is working under

“extraordinary circumstances” to de-

liver the reforms faster than usual.

Simson said the Commission was

looking at how to bring the “benets

of a larger share of renewables” to

consumers. She acknowledged that

gas red power plants will be needed,

but does not want to create a system

“where they will be in operation 24/7”.

The current market design has

functioned well for more than two

decades but arguably these are cir-

cumstances that call for intervention

at the EU or national level. A gas price

cap in Spain, for example, has reduced

electricity prices in the country but

has seen gas use increase at a time

when the continent is trying to reduce

consumption.

“Spain’s gas use actually increased

by 64 per cent… this aggravates po-

tential tensions in the European energy

market. So there is a risk that govern-

ment interventions, no matter how

well intended, will have unintended

consequences. Intervening in market

functioning is always a delicate bal-

ance,” said Dubois-Pelerin.

It is believed that one of the focuses

of the Commission will be to promote

Contracts-for-Difference (CFDs) and

Power Purchase Agreements (PPAs)

across as many technologies as pos-

sible. This, says Dubois-Pelerin, may

target those technologies, predomi-

nantly renewables and nuclear, which

are currently benetting from CFDs,

and anchor prices at levels that will

not discourage investment.

With PPAs worth millions of Euros

and typically lasting 10-15 years, this

is causing concern among investors.

“Talking about reworking the elec-

tricity market to sweat out any imag-

ined margins is the wrong thinking at

a very critical moment,” said Ulrik

Stridbæk, Head of Regulatory Affairs

at Ørsted, the Danish energy company.

Dubois-Pelerin commented: “What

we would wonder, looking at it from

the credit side of things, is will it [the

mechanism] be by encouragement or

mandate? For example, would it be a

legal obligation that capacities would

have to be under PPAs or CFDs, which

is a bit more of a heavy-handed inter-

vention, or an enticement to be on

CFDs or PPAs? Once you start regulat-

ing what are effectively market prices,

because you want them to be low for

consumers, the more you discourage

investment. It’s a ne balance.”

He added: “But what the govern-

ments can control is how permanent

interventions can be. They can exit

when they wish. For example, if you

say that from now on, all new renew-

ables [projects] should be CFDs or

PPAs, this is not something you would

do for two years and then interrupt.

You need to structure for the long term

but having an early exit is a bit more

difcult. Also, if any new mechanisms

apply to existing capacity, this would

be a further degree of intervention in

the market functioning.”

The next steps the Commission takes

will be critical for Europe’s economies

as well as its net zero ambitions. If any

lessons have been learnt over the last

18 months, it is that Gazprom can

longer be relied on as a European gas

supplier, and diversity of supply is

crucial. Diversity of technologies

should also remain at the forefront of

government thinking – renewables,

nuclear, hydrogen, and even gas will

all have a role to play – without forget-

ting the importance of the grid and

improvement in energy efciency.

Also, the EU’s success thus far in re-

ducing gas demand while securing

additional supplies has illustrated the

benet of cooperation and a unied

approach.

Risks may have receded for 2023

but challenges such as ination and

high opex and capex are still there.

And this will put pressure on renew-

able deployment and the pace of the

energy transition. In all of the market

chaos, the urgency of tackling climate

change must not be lost.

Moving through the plethora of de-

mands is no easy task for the EU and

the UK, and any missteps could be

costly. But step we must, and in good

time. So let’s all keep dancing; it’s also

a good way to keep warm.

Dancing through the crisis

Junior Isles

Cartoon: jemsoar.com