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November 2023 • Volume 16 • No 9 • 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

Tuning Europe’s

electricity grids

Nuclear is not just

technology

Current plans for the grid do not reect

the speed at which the system is

decentralising. Page 13

Key things countries newly setting

out on the nuclear power pathway

should consider. Page 14

News In Brief

EU countries break deadlock

on power market reform

EU energy ministers have struck a

deal to reform power market sub-

sidies, ending a stand-off between

France and Germany over the fu-

ture competitiveness of industrial

sectors.

Page 2

California legislation to bring

forward offshore generation

California’s Governor Gavin New-

som has signed new State legisla-

tion that will speed up deployment

of offshore wind and begin feasibil-

ity work on wave and tidal energy.

Page 4

Singapore sees opportunity

to be energy trading hub

Singapore believes the long-

planned ASEAN power grid offers

a golden opportunity to become the

region’s trading hub for clean

energy.

Page 6

UK steps up use of exibility

services in grid balancing

The UK’s system operator Nation-

al Grid ESO (ESO) is using electric

vehicles for the rst time in its ‘Bal-

ancing Mechanism’ market that

matches energy supply and demand

at the point of dispatch.

Page 7

Clean energy growth keeps

climate window open

Driving greenhouse gas emissions

from the world’s energy sector to

net zero and limiting global warm-

ing to 1.5°C remains possible due

to the record growth of key clean

energy technologies.

Page 8

Cloud hangs over green

stocks as sector falls 20 per

cent

Renewable energy stocks have

seen a fall of over 20 per cent in

two months, as higher interest rates

continue to impact the sector.

Page 9

Technology Focus:

Unlocking the power of AI in

asset aggregation

The shift towards cleaner energy

calls for innovative solutions. One

promising avenue lies in the con-

vergence of articial intelligence

with distributed energy systems.

Page 15

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The world’s energy system will look very different from today in just seven years, according

to the International Energy Agency’s latest World Energy Outlook. Nevertheless, the ongoing

shift to clean energy is still not sufcient to cap the global temperature rise at 1.5°C under the

current governments policies scenario. Junior Isles

Renewables still not replacing fossil fuels, says DNV

THE ENERGY INDUSTRY

TIMES

Final Word

As COP28 approaches

we all need to be onside,

says Junior Isles.

Page 16

The energy world is set to change sig-

nicantly by 2030, based on today’s

policy settings alone, according to the

International Energy Agency’s ‘World

Energy Outlook (WEO) 2023’.

The latest edition of the Paris-based

agency’s agship publication de-

scribes an energy system in 2030 that

includes almost 10 times as many

electric cars on the road worldwide;

solar PV generating more electricity

than the entire US power system does

currently; renewables’ share of the

global electricity mix nearing 50 per

cent, up from around 30 per cent to-

day; heat pumps and other electric

heating systems outselling fossil fuel

boilers globally; and three times as

much investment going into new off-

shore wind projects than into new coal

and gas red power plants, says the

IEA.

During the report’s launch, Laura

Cozzi, the IEA’s Director of Sustain-

ability, Technology and Outlooks, and

one of the lead authors of the WEO,

said: “We identify some key structural

shifts that will make us live in 2030 in

a very different world than today…

importantly, up until now we have

been describing the clean energy tran-

sition as a type of transformation or

another addition. But this decade it

will shift from an addition to a substi-

tution. You will see more electric cars

and less conventional vehicles. This

will have huge implications for oil

markets. The shift from fossil fuels to

renewables will be a common thing

across many sectors.

“The power sector is the frontrunner.

We’ve seen solar breaking records

again and again and the turnaround is

happening this decade – clean energy

technologies will account for the larg-

est part of generation globally.”

All of the IEA’s increased clean

technology projections are based on

the current policy settings of govern-

ments around the world but if coun-

tries deliver on their national energy

and climate pledges on time and in

full, clean energy progress would

move even faster, says the report.

Renewables are set to contribute 80

per cent of new power generation ca-

pacity to 2030 under current policy

settings, with solar alone accounting

for more than half of this expansion.

However, this scenario takes into ac-

count only a fraction of solar’s poten-

tial, according to the WEO analysis.

By the end of the decade, the world is

set to have manufacturing capacity for

more than 1200 GW of solar panels

per year, but it is projected to actually

deploy only 500 GW in 2030. If the

world were to reach deployment of

800 GW of new solar PV capacity by

the end of the decade, it would lead to

a further 20 per cent reduction in coal

Continued on Page 2

Although global electric vehicles

sales, solar and battery installations

hit record highs in 2022, renewables

are only partly meeting growing en-

ergy demand rather than replacing

fossil fuels in the energy mix, accord-

ing to a new report by DNV.

Renewables are still just meeting

increased demand rather than replac-

ing fossil fuels and in absolute terms

fossil fuel supply is still growing.

In the seventh edition of its ‘Energy

Transition Outlook’, DNV says that

renewables are still just meeting in-

creased demand rather than replac-

ing fossil fuels and in absolute terms

fossil fuel supply is still growing.

The report nds that despite a rapid

build-out between 2017-2022, re-

newables met 51 per cent of new en-

ergy demand. It also said that limiting

global warming to 1.5°C warming is

less likely than ever, and in order to

reach the goals of the Paris Climate

Agreement, CO

emissions would

need to halve by 2030. DNV fore-

casts that this will not even happen

by 2050.

“Globally, the energy transition has

not started, if, by transition, we mean

that clean energy replaces fossil en-

ergy in absolute terms,” said Remi

Eriksen, Group President and CEO

of DNV. “Clearly, the energy transi-

tion has begun at a sector, national,

and community level, but globally,

record emissions from fossil energy

are on course to move even higher

next year.”

From now, says the report, most

energy additions are wind and solar,

which grow 9-fold and 13-fold,

respectively, between 2022 and

2050. Electricity production will

more than double between now and

2050, bringing efciencies to the en-

ergy system. The fossil to non-fossil

split of the energy mix is currently

80/20 but this will move to a 48/52

split by mid-century.

Solar installations reached a record

250 GW in 2022. Wind power will

deliver 7 per cent of global grid-con-

nected electricity and installed ca-

pacity will double by 2030, despite

inationary and supply chain head-

winds.

“There are short term set-backs due

to increasing interest rates, supply

chain challenges, and energy trade

shifts due to the war in Ukraine, but

the long-term trend for the energy

transition remains clear: the world

energy system will move from an en-

ergy mix that is 80 per cent fossil

based to one that is about 50 per cent

non-fossil based in the space of a

single generation,” said Eriksen.

According to a study published by

environmental think-tank Ember at

the start of last month, wind and solar

energy are the only sources experi-

encing growth globally, acquiring

more share of the energy infrastruc-

ture and helping power sector emis-

sions remain steady in the rst half of

2023.

In the EU in its report for the period

from July 1 to September 30 this

year, EnAppySys said renewable

power generation in the third quarter

increased by 12 per cent compared to

Q3 2022, marking the highest growth

rate for any third quarter so far.

Energy world to “change

signicantly” by 2030,

says IEA

Laura Cozzi, the IEA’s Director of Sustainability, identies “key structural shifts”

THE ENERGY INDUSTRY TIMES -NOVEMBER 2023

Junior Isles

Resistance from some of the leading

oil, gas and coal producers could un-

dermine chances of reaching a new

climate pact at the upcoming UN

COP28 climate summit in Dubai.

Already Russia has warned it will

oppose a global deal to reduce the use

of fossil fuels, as tensions rise with

western powers following Moscow’s

invasion of Ukraine.

In a submission to the UN’s climate

body last month, Russia said: “We op-

pose any provisions or outcomes that

somehow discriminate or call for

phase-out of any specic energy

source or fossil fuel type.”

Russia’s position is in clear contrast

to that of the US, which says unabat-

ed emissions from fossil fuels need to

be rapidly reduced to achieve a net

zero energy system by 2050.

More than 180 countries and other

global bodies are setting out their

views as they prepare to undertake

tough negotiations ahead of COP28,

with the submissions compiled by the

UN in a “blueprint” report published

in October. Already more than 80

countries backed a proposal at COP27

in Egypt last year to phase-out fossil

fuels.

The UN’s report also exposed an

emerging clash between wealthy and

developing countries. Many devel-

oped countries, where greenhouse gas

emissions peaked decades ago, have

set a target to reach net zero emissions

by 2050. This is the same timeframe

as many developing countries, where

funding to nance the green transition

is more difcult to access.

Simon Stiell, UN climate chief, said

there was “divergence” among coun-

tries over “who should carry the

weightier burden in terms of action”

to limit warming. But Stiell said the

report was clear that the world was

“off-track to achieving the goals of

the Paris Agreement”.

The so-called stock-take, which will

be agreed at COP28, will look at ac-

tions countries have taken since the

2015 Paris Agreement and what still

needs to be done in order to tackle

global warming.

The blueprint report said some coun-

tries wanted the COP28 stock-take to

acknowledge that the rich nations’

commitments were “grossly lacking

in ambition”.

Dan Jørgensen, Denmark’s Minister

for global climate policy, who is one

of two politicians leading discussions

with other countries on the stock-take,

said countries would have to agree a

“broad compromise” on a host of top-

ics at COP28, including how to miti-

gate climate change, how to adapt

economies for the impact of global

warming and how to nance the green

transition.

“There’s a momentum that this will

be the most important COP since

Paris,” he said. “Not only is this where

we take stock and look each other in

the eyes and say, ‘OK, so where are

we and where are the gaps between

action and ambition?’. Also, we need

to look forward. What are we to do

now to close these gaps?”

Oil and gas companies have a key

role to play in closing that gap. Sultan

al-Jaber, President-designate of this

year’s UN climate summit, said he is

in talks with fossil fuel producers

about an initiative focused on cutting

greenhouse gas emissions. This is due

to be launched at COP28.

More than 20 fossil fuel-intensive

companies, encompassing up to a

quarter of all oil and gas production,

are in active talks to sign up to the

initiative already, he said.

Jaber – who is also head of the Abu

Dhabi National Oil Company, one of

the world’s biggest oil and gas groups

– said: “I don’t want this industry to

be seen in any way, form or shape that

they are going against the phase-down

[of fossil fuels]. This [phase-down] is

happening. “And what they need to

do is start investing in the decarboni-

sation of the current energy system.”

Jaber also recently hit out at rich

countries for failing to support the

UN’s Green Climate Fund (GCF), the

world’s largest fund dedicated to tack-

ling climate change in developing

countries. The fund pulled in a total

of $9.3 billion from 25 countries by

the close of its one-day pledging con-

ference held in Bonn, Germany, last

month. Notably, the US failed to

pledge money.

He said the GCF’s “current level of

replenishment” was “neither ambi-

tious nor adequate to meet the chal-

lenge the world faces”.

red power generation in China in

2030 compared with a scenario

based on today’s policy settings.

Electricity generation from coal and

natural gas across Latin America,

Africa, Southeast Asia and the

Middle East would be a quarter

lower.

The WEO also shows that the

share of fossil fuels in global energy

supply, which has been stuck for

decades at around 80 per cent, de-

clines to 73 per cent by 2030, with

global energy-related carbon diox-

ide (CO

) emissions peaking by

2025.

However, even stronger measures

would still be needed to keep alive

the goal of limiting global warming

to 1.5 °C. A separate report from the

US Energy Information Adminis-

tration (EIA) noted that non-fossil

fuel-based resources, including

nuclear and renewable energy, will

produce more energy through 2050,

but that growth will likely not be

sufcient to reduce global energy-

related CO

emissions under current

laws and regulations.

“Every country needs to nd its

own pathway, but international co-

operation is crucial for accelerating

clean energy transitions,” said IEA

Executive Director Fatih Birol. “In

particular, the speed at which emis-

sions decline will hinge in large part

on our ability to nance sustainable

solutions to meet rising energy de-

mand from the world’s fast growing

economies. This all points to the

vital importance of redoubling col-

laboration and cooperation, not re-

treating from them.”

WEO 2023 proposes a global

strategy for getting the world on

track by 2030 that consists of ve

key pillars, which can also provide

the basis for a successful COP28

climate change conference. They

are: tripling global renewable ca-

pacity; doubling the rate of energy

efciency improvements; slashing

methane emissions from fossil fuel

operations by 75 per cent; innova-

tive, large-scale nancing mecha-

nisms to triple clean energy invest-

ments in emerging and developing

economies; and measures to ensure

an orderly decline in the use of fos-

sil fuels, including an end to new

approvals of unabated coal red

power plants.

The WEO 2023 considers in detail

a major variable for energy markets

in the coming years. China, which

has an outsize inuence on global

energy trends, is undergoing a major

shift as its economy slows and un-

dergoes structural changes.

Notably, China’s total energy de-

mand is set to peak around the

middle of this decade, the report

projects, with continued dynamic

growth in clean energy putting the

country’s fossil fuel demand and

emissions into decline. As the larg-

est energy consumer in the world,

the country’s transformation will

“ripple through the entire energy

system”, according to the IEA.

Continued from Page 1

EU energy ministers have struck a

deal to reform power market subsi-

dies, ending a stand-off between

France and Germany over the future

competitiveness of industrial sectors.

The deal focused on a section of the

law spelling out how state aid can be

used to support power projects. Talks

had stalled for months because of con-

cerns, especially from Germany, that

the scheme could distort competition

and favour France, which has the

world’s second biggest nuclear eet

after the US.

Last month Germany gave way,

agreeing to a deal that allows France

to use government support to nance

its largely state-owned nuclear plants,

which generate about 70 per cent of

its electricity.

The proposal had also been strongly

opposed by Austria and Luxembourg,

which have both been historically op-

posed to nuclear power but also feared

that allowing Paris to subsidise its

nuclear plants would provide French

industry with structurally lower en-

ergy prices, giving it a competitive

advantage.

As part of the new EU rules for the

bloc’s electricity market, France will

be allowed to use contracts-for-differ-

ence (CfDs) to nance new nuclear

build. These CfDs set a minimum

price guarantee for power providers,

as well as a ceiling above which the

state can recover any revenue.

Paris, however, did not obtain a fur-

ther concession, for the EU to allow

revenues from those schemes applied

to existing power plants to be refunded

to industrial consumers. The agree-

ment also gives greater power to the

European Commission to assess state

aid benets.

Agnès Pannier-Runacher, the

French Energy Minister, said that the

agreement was “a compromise which

sets out a balance” that “allows mem-

ber states to have room for manoeuvre

and take action on the basis of their

own energy mix”.

The reform aims to steady long-term

electricity markets by boosting the

market for power purchase agree-

ments (PPAs) generalising two-way

CfDs and improving the liquidity of

the forward market.

Two-way CfDs would apply to in-

vestments in new power generating

facilities based on wind energy, solar

energy, geothermal energy, hydro-

power without reservoir and nuclear

energy. This would provide predict-

ability and certainty.

Germany’s Environment and Econ-

omy Minister Robert Habeck said in

a statement: “Despite great stress, we

managed to do it together. With the

new electricity market design... con-

sumers in particular will benet from

the cheap production costs of non-

fossil fuel energies. This is also im-

portant to ensure the transition to

competitive prices in Europe.”

Germany, Europe’s biggest econo-

my, is on the edge of a recession after

losing access to the ample supply of

cheap Russian gas it received before

Moscow invaded Ukraine last year.

Europe will rely on US gas for decades

as it winds down its dependence on

Russian gas and accelerates the shift

to renewables in an effort to improve

energy security.

Ditte Juul Jørgensen, Director-Gen-

eral for energy in the European Com-

mission told the Financial Times that

the EU “has the instruments” it needs

to endure another winter energy crisis

in the aftermath of the Russia-Ukraine

war. These included conservation and

more renewable energy.

She said, however, that the bloc’s

reliance on exports of US liqueed

natural gas would persist. “We will

need some fossil molecules in the sys-

tem over the coming couple of de-

cades. And in that context, there will

be a need for American energy,” said

Jørgensen.

After Russia’s of Ukraine, the EU

struck a pact with the Biden adminis-

tration to work towards securing an

additional 50 million m

a year of US

LNG until at least 2030. The agree-

ment was made on the basis that it was

consistent with EU and US climate

goals and both parties would work

towards reducing gas demand.

Several EU governments came un-

der re for what many saw as it sleep-

walking into an over-reliance on Rus-

sian pipeline gas.

Last month Angela Merkel’s former

chief economic adviser acknowl-

edged that her policies left Germany

overly dependent on Russian gas, and

in hindsight the country should have

done much more to diversify its en-

ergy supply.

“If we’d known then what we know

now, we would of course have acted

differently,” Lars-Hendrik Röller told

the FT.

But he insisted that cheap, abundant

Russian energy exports had delivered

a huge boost to Germany’s economy,

helping to ensure 10 consecutive

years of growth.

“It helped to deliver us strong

growth rates that paid for things we

otherwise wouldn’t have had, for a

period of 10-15 years, things which

would otherwise not have been pos-

sible,” he said.

Röller also insisted that Merkel, who

served as Chancellor from 2005 to

2021, had little choice but to bet big

on Russian gas after deciding to

phase-out nuclear energy. “You can

argue whether that was the right thing

to do, but it was the consensus in so-

ciety at the time,” he said.

Headline News

EU countries break deadlock on power market reform

Europe will rely on US gas for decades

Fossil fuel phase-out will

be major stumbling block

at COP28

Birol says the world must not

“retreat” from collaboration

and cooperation

n Russia says it will oppose calls for fossil fuel phase-out

n Oil and gas companies urged to invest in decarbonisation

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

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THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Asia News

The Asia Pacic region is forecast to

invest $3.3 trillion in power generation

over the next 10 years, with 49 per cent

earmarked for wind and solar, and 12

per cent for energy storage, according

to recent Wood Mackenzie analysis.

The region, however, is still leading

the world in building coal red plants.

“The Asia Pacic region is critical to

the power sector’s energy transition as

it grows to over half of global electric-

ity demand this year. The two largest

markets in the region, India and China,

are at the forefront of renewables

growth, but are also leading the world

in coal power deployments,” said Alex

Whitworth, Head of Asia Pacic Pow-

er & Renewables Research at Wood

Mackenzie, during his keynote speech

at Renewable Energy India Expo 2023.

India has some of the lowest cost

renewables in the world, which has

driven rapid deployment of large-scale

wind and solar. This has pushed up the

country’s renewables share of power

generation to 22 per cent in 2022, with

wind and solar making up nearly half

of the total.

But despite a 2070 carbon neutral

target, India is still investing heavily

in new coal power to support growth,

with a pipeline of over 50 GW of proj-

ects planned and under construction.

India’s power demand is expected to

rank third globally by 2050, after Chi-

na and the US, and the future of its coal

eet will have a major impact on

global carbon emissions.

In a report issued in early October,

the United Nations Economic and

Social Commission for Asia and the

Pacic (UNESCAP) said that more

than 180 GW of capacity are under

construction in Asia-Pacic “despite

the UN calling urgently for an end to

coal red generation”.

The report noted that the region “is

by far the largest user of coal,” account-

ing for about 80 per cent of the world’s

consumption in 2021.

ESCAP said that successful energy

transition will depend on “nding

ways to manage the phase-out of exist-

ing coal red power”.

“Transforming the energy system to

meet sustainability goals involves

reducing reliance on fossil fuels – no-

tably coal – in addition to scaling up

clean energy in an inclusive manner,”

ESCAP said.

India’s ongoing effort to scale up

renewables received a boost in late

September as the Ministry of New and

Renewable Energy (MNRE) issued a

public notice for the tender for the al-

location of offshore wind development

areas off the coast of the Tamil Nadu

region, with 7215 MW of capacity.

The country issued the call for seven

locations off the Tamil Nadu region in

the south of the country, with the pro-

posed zones covering an area of 1443

, capable of supporting more than

7 GW of capacity.

The notice outlines four areas, name-

ly 2, 3, 4, and 7, set to be opened for

bids early next year, with a total capac-

ity of 4140 MW to be offered to the

developers.

An additional 3075 MW of capacity

spread across three sites is planned to

be put on offer in 2025.

APAC to invest

$3.3 trillion in power

generation but continues

to build coal plants

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Syed Ali

State electricity company PT PLN

(Persero) will need $155 billion in in-

vestment to implement the green ener-

gy-based national electricity develop-

ment programme in 2023– 2040, as the

country works towards its 2060 net

zero target.

Speaking at a press brieng on the

78th National Electricity Day Enlit

Asia 2023 in Jakarta last month, PLN’s

Director of Risk Management, Suroso

Isnandar, said it was a “fairly realistic

investment value” that would be used

to build new power plants, increase

transmission and distribution capacity,

and develop smart grids.

According to Isnandar, PLN will tap

various funding sources to nance this

investment, including the state budget,

loans from international nancial insti-

tutions, and private sector investment.

The company recently established

new and renewable energy develop-

ment cooperation with nine Chinese

companies during the Indonesia-China

Business Forum (ICBF) in Beijing,

China.

According to a press release, Presi-

dent Joko Widodo (Jokowi) witnessed

the signing of two cooperation agree-

ments between PLN and two Chinese

clean energy companies during his

visit to meet Chinese President Xi Jin-

ping in October. In addition to the ink-

ing of two memoranda of understand-

ing (MoUs) witnessed by President

Jokowi, PLN signed several MoUs,

with a total value of $54 billion, which

include cooperation with the Export-

Import Bank of China, Sinosure, and

the Bank of China. Further agreements

were reached with the Industrial and

Commercial Bank of China, State De-

velopment & Investment Corp. Ltd.,

Huawei Tech Investment, and China

Energy International Group.

PLN also signed an MoU with the

State Grid Corporation of China

(SGCC) and Trina Solar China on

smart grid development. Smart grid

development is considered the back-

bone of clean electricity in Indonesia

and its climate change commitments.

Under its pledge to reach net zero

emissions by 2060 or sooner, the

southeast Asian nation has committed

to a 29 per cent reduction in green-

house gas (GHG) emissions by 2030,

or a 41 per cent reduction with inter-

national support.

Ahead of COP28 to be hosted in the

UAE in a few weeks, PLN signed an

agreement with Abu Dhabi Future En-

ergy Company PJSC – Masdar to de-

velop Phase II of the Cirata oating

photovoltaic (FPV) power plant. The

agreement will expand the project by

up to 500 MW. The initial 145 MW

phase of the oating PV project, lo-

cated in the Cirata reservoir in West

Java, Indonesia, is expected to come

online later this year.

Such projects are part of the govern-

ment’s drive to develop projects based

on new energy sources such as nuclear,

hydrogen and ammonia.

In October PLN also announced that

it has begun to produce green hydro-

gen, or hydrogen produced using re-

newable energy, at the rst green hy-

drogen plant in the country.

According to a press release issued

by the Ministry of Energy and Mineral

Resources (ESDM), the facility is set

to produce about 51 tons of hydrogen

per year using 2795 MWh of electric-

ity generated using solar panels.

Currently, Indonesia’s annual hy-

drogen production is 1.75 million

tonnes. However, green hydrogen is

still relatively expensive due to factors

including high costs in electrolysis and

renewable electricity production, and

low renewable energy capacity.

Last month Yudo Dwinanda Priaadi,

the Director General of New and Re-

newable Energy and Energy Conser-

vation of ESDM said that Indonesia

needs affordable new energy sources

that are accessible to everyone.

He anticipated that by 2060, most of

the energy used in the country will be

solar energy but it will need batteries

to store the energy.

Scaling up renewables could save

Indonesia, the largest energy user in

the Association of Southeast Asian

Nations (ASEAN) region, as much as

$ 51.7 billion per year when the im-

pacts on air pollution and climate

change are included, according to the

International Renewable Energy

Agency (IRENA).

PLN will need $155 billion under

government green energy plans

State electricity company PT PLN (Persero) will need massive investment to nance its green energy programme.

Singapore believes the long-planned

ASEAN power grid offers a golden

opportunity to become the region’s

trading hub for clean energy.

In September, Singapore’s energy

market regulator granted conditional

approvals to ve projects to import a

total of 2 GW of low-carbon electric-

ity from Indonesia into Singapore.

These ve conditional approvals fol-

low the earlier conditional approval to

Keppel Energy in March to import 1

GW of low carbon electricity from

Cambodia. The approvals are part of

Singapore’s plan to import up to 4 GW

of low carbon electricity by 2035.

Singapore’s Energy Market Author-

ity has issued a Request for Proposals

(RFP) to appoint licensed low-carbon

electricity importers. The RFP, which

closes at the end of 2023, has drawn

more than 20 proposals, including

from Indonesia, Laos, Malaysia and

Thailand.

Singapore is llooking to deepen its

interconnections with its neighbours

and this could be done more effec-

tively through an ASEAN grid that

allows power exchange between coun-

tries. It would also accelerate decar-

bonisation in the region.

“The uneven spread of renewable

energy resources from solar and hydro

to wind, and the associated intermit-

tencies, should compel ASEAN coun-

tries to connect their electricity grids

to optimise green power utilisation,

said Sharad Somani, Head of ESG at

Singapore-based KPMG. “A bi-direc-

tional power exchange infrastructure

will also provide for enhanced secu-

rity of supply, while also making more

affordable green power available

across countries.”

As Singapore works to soften the

potential impact on its booming petro-

chemical sector caused by a shift from

fossil fuels, industrialists see the op-

portunity offered by an ASEAN grid.

Tan Wooi Leong, Surbana Jurong’s

energy and industrial Managing Direc-

tor, said: “The ASEAN transmission

grid is very critical. Singapore under-

stands trade very well and we know

how it’s done. As long as we can bring

the molecules (hydrogen) and renew-

able electrons through a certain central

location, we could probably start trad-

ing them.”

But the ASEAN grid, which is hoped

will integrate the national power sys-

tems of its 10-member countries has

technical and nancial challenges.

Ambitions among the governments

will have to be managed too.

BMI’s power and renewables ana-

lyst David Thoo pointed to a setback

two years back when Malaysia’s pre-

vious government announced it

would ban the export of renewable

electricity in 2021. “While the current

government announced in May 2023

that the ban will be lifted, it has yet to

happen, which goes to show that

policy does take a while to move.”

Singapore sees

opportunity to be

energy trading hub

UK companies

target Australia’s

energy storage market

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Asia News

Australia’s energy storage market is

attracting UK battery project devel-

opers as the country accelerates its

shift to renewables.

Early last month Octopus Invest-

ments Australia, a unit of Britain’s

Octopus Group, acquired a 500

MW/1000 MWh battery energy stor-

age project under development in

Queensland by Sydney-based Flow

Power.

The Blackstone project will create

the largest battery in Queensland and

will be capable of discharging elec-

tricity to supply up to 70 000 homes

daily, Octopus said.

The proposed battery is planned to

be installed southwest of Brisbane,

adjacent to the existing 275 kV Black-

stone substation in Swanbank. It will

connect into the high-voltage trans-

mission network and store and dis-

patch electricity during high-demand

periods. The facility will help stabilise

the local grid by providing frequency

and voltage control services.

Octopus said it is currently working

with electricity transmission infra-

structure operator Powerlink, Ips-

wich City Council and Firm Power to

complete development activities and

expects to reach a nal investment

decision in the second half of 2025.

According to Flow Power’s website,

the project’s development application

is at an advanced stage of assessment

and grid connection studies have

commenced.

Octopus noted that the Blackstone

battery acquisition will enable it to

offer “market leading power purchase

agreements providing rmed blocks

of energy”.

Shortly after the news, British bat-

tery storage developer Pacic Green

Technologies Inc. announced that it

was in the process of acquiring land

in the state of Victoria, where it plans

to install battery storage facilities

with a combined capacity of 1 GW/2.5

GWh.

The company’s Australian unit has

entered into an exclusivity agreement

to secure sites in Portland, expecting

to be able to kick-off construction

works next year. The energy storage

systems are anticipated to go live two

years later, in 2026, Pacic Green

said.

Specic details about the proposed

deal being negotiated by Pacic

Green Technologies Australia Pty Ltd

were not available. According to the

parent company, the Australia expan-

sion will be possible thanks to the £74

million ($90.1million) divestment of

a 100 MW/100 MWh battery energy

storage system (BESS) in England

this summer.

“By acquiring this site and project

rights, we have now positioned Pa-

cic Green to become one of the larg-

est battery park developers in the

Southern Hemisphere,” said Joel Al-

exander, Pacic Green’s Managing

Director in Australia.

CONGRES

22 - 25 April 2024

ROT

TERDAM

WORLD ENERGY CONGRESS

Redesigning Energy

for People and Planet

The World Energy Congress is the most

prestigious and inﬂuential global energy

event of our time, convening a dynamic

community of over 7,000 international

energy leaders and stakeholders.

Join us in Rotterdam, The Netherlands, at

the 26

World Energy Congress as we make

energy transitions happen.

Organised by Hosted by

THE NETHERLANDS

@WECongress

/world-energy-congress-

@worldenergycongress

7,000+

INTERNATIONAL

ENERGY

STAKEHOLDERS

18,000+

TOTAL

ATTENDANCE

150+

COUNTRIES

60+

SESSIONS

Russia to boost gas supplies to China

with favourable prices in years ahead

US takes leap to low-carbon economy with

selection of nation-wide hydrogen hubs

Gary Lakes

Meeting in Beijing last month, Russian

and Chinese leaders agreed on increas-

es in the volume of natural gas that

Russia’s state-owned gas monopoly

Gazprom will send to China this year.

Having lost most of its gas market in

Europe due to international sanctions

brought about by Russia’s invasion of

Ukraine, Moscow has turned to China

as a new major market. Furthermore,

a new gas pipeline – the Power of Si-

beria 2 (or the Altai) pipeline – is on

the drawing board and work on it may

begin by mid-decade.

During a visit to China by Russian

President Vladimir Putin in mid-Oc-

tober, Gazprom signed a deal with the

China National Petroleum Corpora-

tion (CNPC) for the delivery of more

Russian gas this year through the

Power of Siberia gas pipeline. The

deal is an addendum to the sale and

purchase agreement covering gas

deliveries for 2023.

Russia and China signed the pre-

liminary Power of Siberia gas pipeline

deal in 2014 and the pipeline has been

in operation since 2019. It has a capac-

ity of 38 bcm/year and is expected to

be transporting full volume to China

by 2027.

Gazprom Chairman Alexey Miller

said the company would ship an ad-

ditional 600 million m

to China dur-

ing the remainder of 2023 in view of

anticipated requests during the com-

ing winter months.

“Daily requests are higher than the

volumes stipulated by our contract,”

Miller told Russian TV last month.

“We regularly deliver additional vol-

umes to the Chinese market, and this

is not the rst year that we do it. This

year I expect [additional volumes] at

600 million m

of gas,” he was quoted

as saying. He added that Russia could

soon supply China with volumes of

gas comparable to those that were

once sent to Europe.

Prior to the start of the Ukraine war

in February 2022, Russia provided

roughly 40 per cent of all imported

pipeline gas to the EU, amounting to

around 155 billion cubic metres (bcm)

in 2021, which accounted for about

45 per cent of Europe’s total gas im-

ports. However, Russia has since re-

duced its gas exports to the EU by

some 80 per cent. But to maintain gas

supply, the EU has been importing

record volumes of LNG from Russia,

with overall LNG imports up 40 per

cent between January and July this

year compared with the same period

in 2021.

Russia’s total gas exports to China

amounted to 12.145 million tonnes in

2021, an increase of 51 per cent over

the previous year. Of this, 7.54 million

tonnes was pipeline gas (up by 154

per cent), and 4.6 million tonnes

was LNG (down by 9.8 per cent), ac-

cording to recent data released by

S&P Global.

“We see that the Chinese gas market

is growing,” Miller said during an

interview last summer. “China’s gas

imports have increased over the eight

months of this year. And more than

half of the increase in these supplies

imported to the Chinese market was

provided by Gazprom.”

Gazprom delivered an estimated 15

bcm of pipeline gas to China in 2022

and 2023 volumes are expected to

reach 22 bcm.

According to a recent report in

Bloomberg, China is paying $297.30

per 1000 m

for Russian pipeline gas

this year, which is nearly half of what

Gazprom is charging Europe for 2023

gas at $500.60. For 2024, China is

expected to pay an average of

$271.60 per 1000 m

compared to

$481.70 for buyers in Europe and Tur-

key. That price is expected to remain

in place through 2026.

Gazprom is also working on an

additional gas pipeline to China that

will run through Mongolia, the Power

of Siberia 2. Known also as the Altai

pipeline, it is being designed with a

capacity to carry 30 bcm/year a dis-

tance of 2800 km from western Sibe-

ria to northeastern China.

The Altai project has been on the

table for a number of years but nanc-

ing and environmental concerns have

caused delays. There is also the fact

that the sales and purchase agreement

that would encourage construction of

the project has yet to be signed by

Russia and China.

When Putin was in Peking last

month, Chinese President Xi Jinping

told him that China is keen to work

with Moscow to ensure energy secu-

rity and would like to see substantial

progress on the Altai project as soon

as possible. The pipeline would take

years to build and no prospective date

for the start of operations has been

mentioned.

Gary Lakes

On October 13, the Biden Administra-

tion identied seven locations across

the US that will serve as the initial re-

gional hydrogen hubs (H2Hubs) that

are expected to encourage growth in

new clean energy technologies and

fuels. Funded with $7 billion from the

Bipartisan Infrastructure Law, the gov-

ernment expects the hubs to accelerate

the domestic market for low-cost, clean

hydrogen and create tens of thousands

of jobs. Total private investment in the

H2Hubs is expected to reach more than

$40 billion.

Roughly two-thirds of total project

investment are associated with green

(electrolysis based) production within

the hubs, a statement from the White

House said, adding that several of the

hubs were developed in close partner-

ships with unions, with three requiring

project labour agreements (PLAs).

In addition to job creation and creat-

ing healthier air for communities, the

selected hydrogen hubs are commit-

ted to robust Community Benet

Plans to ensure local priorities are at

the forefront and all communities share

in the benets of the clean energy tran-

sition, the statement added. The overall

investment of some $50 billion will be

one of the largest investments in clean

energy and jobs in history.

Taken together, the hubs will produce

more than 3 million metric tons of clean

hydrogen annually, thereby achieving

nearly one third of the 2030 US clean

hydrogen production goal. The seven

hubs will also eliminate 25 million

tonnes of carbon dioxide emissions

from end users every year, which is

roughly equivalent to the annual emis-

sions of more than 5.5 million gasoline-

powered cars.

According to analysts at energy con-

sultant Wood Mackenzie, the US move

makes a “signicant step towards creat-

ing a low-carbon hydrogen economy”.

“The H2Hubs, designed to accelerate

the shift to a cleaner energy landscape,

are poised to play a crucial role in

achieving President Biden’s ambitious

targets, including a 100 per cent clean

electrical grid by 2035 and net zero

carbon emissions by 2050,” Hector

Arreola, Principal Analyst at Wood

Mackenzie, said in a statement com-

menting on the US action.

“This initiative also focuses on re-

ducing the cost of clean hydrogen

production to $1 per kilogram by

2030, making it cost-competitive with

conventional hydrogen within the

next decade,” Senior Research Ana-

lyst Bridget van Dorsten added. “This

will help communities across the

country benet from clean energy in-

vestments and good-paying jobs.”

Funding for the H2Hubs will be

gradual. They have so far received $20

million to develop detailed project

plans over the next 12 to 18 months.

Funding will be provided incremen-

tally to each hub as it completes differ-

ent phases of development in the next

eight to 12 years.

“These hubs will pioneer the domes-

tic consumption of hydrogen for decar-

bonisation of industrial processes,

heavy-duty transport, power genera-

tion and long-term storage in the re-

gion,” van Dorsten said. “Each hub is

unique and will indicate how hydrogen

deployment and adoption will expand

throughout the rest of the US, along

major trade ways.”

But Wood Mackenzie said the real

momentum will come from private

investment. The consultancy stressed

the signicance of creating the hubs

but it pointed out that if the H2Hubs

are fully developed by 2030, their com-

bined production capacity will only

contribute 30 per cent to the 10 tonnes

per year (mtpa) hydrogen supply ca-

pacity objective, as outlined in the US

National Clean Hydrogen Strategy and

Roadmap.

“Yet due to the uncertainty of low-

carbon hydrogen project announce-

ments in the US, Wood Mackenzie only

estimates around 4 mtpa of supply by

2030,” the company said.

“Although Wood Mackenzie ana-

lysts expect low-carbon hydrogen sup-

ply to grow rapidly in the coming years,

we don’t anticipate all of the hydrogen

hubs’ capacity to have fully developed

by 2030,” Arreola added.

Furthermore, the consultancy’s anal-

ysis shows that the goal of $1/kg is

currently out of reach for green hydro-

gen. This is largely due to higher re-

newable power costs, a slower decline

in capital expenditures for electrolytic

hydrogen, and lower electrolyser load

factor assumptions, it said.

The H2Hubs are to be scattered

throughout the US in unique regions

where each hub will address particular

challenges. The regions are as follows:

n Mid-Atlantic Hydrogen Hub (Mid-

Atlantic Clean Hydrogen Hub

(MACH2); Pennsylvania, Delaware,

New Jersey).

n Appalachian Hydrogen Hub (Ap-

palachian Regional Clean Hydrogen

Hub (ARCH2); West Virginia, Ohio,

Pennsylvania).

n California Hydrogen Hub (Alliance

for Renewable Clean Hydrogen En-

ergy Systems (ARCHES); California).

n Gulf Coast Hydrogen Hub (HyVe-

locity Hydrogen Hub; Texas).

n Heartland Hydrogen Hub (Minne-

sota, North Dakota, South Dakota).

n The Midwest Hydrogen Hub

(Midwest Alliance for Clean Hydro-

gen (MachH2); Illinois, Indiana,

Michigan).

n The Pacic Northwest Hydrogen

Hub (PNW H2; Washington, Oregon,

Montana).

Hydrogen

Gas

Russia and China have been strengthening their natural gas relations over the years. Russia has become a major

natural gas supplier to China, including both pipeline gas and LNG. It is currently China’s largest crude supplier.

US President Joe Biden and Energy Secretary Jennifer Granholm last month announced the selection of seven

locations across the country where regional hydrogen hubs (H2Hubs) will be established. The H2Hubs will be funded

by the government with $7 billion over time with the intention of attracting billions more in private investment.

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Fuel Watch

f you came to Brussels 15-20

years ago you could meet elec-

tricity industry representatives

claiming that as little as three per

cent of variable renewables in power

generation would cause a breakdown

of the system and be a huge liability

for security of supply. Thankfully,

much has changed since. Today,

there is broad consensus that home-

grown renewable energy – with the

proper backing of rm and exible

solutions – are key to reduce fossil

fuel imports and secure a reliable

supply to power Europe’s economy.

At the same time, the backdrop of

the energy transition has radically

evolved. Last year, EU countries

were shaken by one of the hardest

energy and price crises to date.

While geopolitical tensions height-

ened, the continent moved from an

historically low to a high ination

environment. Meanwhile, more fre-

quent extreme weather events com-

bined with growing security and cy-

ber threats keep challenging our

efforts towards climate mitigation.

We now live in a less secure world

with a severe strain on our energy se-

curity, which calls for an even higher

commitment to the decarbonisation

of our continent. The EU has so far

led the way by adopting more ambi-

tious renewables and decarbonisation

targets. Doubling down on decarbon-

isation means doubling up on elec-

tricity. By 2030, we will need a tri-

pling of heat pumps to around 50

million units, a quadrupling of re-

newables adding over 600 GW of ca-

pacity across Europe, of which al-

most 70 per cent will be directly

connected to the low-voltage distri-

bution grid. And to serve the expect-

ed 50-60 million EVs, we will need

to increase public EV charging

points by a factor of seven. What

used to be a steady state system is

thus moving into a strong expansion

phase.

The path to renewables integration

is not short of obstacles. Each year,

system operators receive more and

more connection requests from de-

centralised assets, including rooftop

solar photovoltaics (PVs), EVs and

heat pumps. In 2022, these requests

increased by around 20 per cent from

the previous year and are set to sky-

rocket in future years, shows Eur-

electric’s ‘Power Barometer 2023’.

Some DSOs report an eight-fold in-

crease in the amount of received con-

nection requests.

Building more lines and substations

are a must to handle ows of the fu-

ture system, but it takes a long time

due to lengthy planning and permit-

ting, causing congestion in the grid

in the short term. As a result, installa-

tions costs for renewable systems are

going up. We need concrete action to

get our infrastructure ready to secure

energy supply in the age of net zero.

As the guiding documents to in-

form infrastructure investments and

orient renewables project developers,

network planning must become more

renewable-focused shows our recent

analysis ‘Solar Connection’.

Back in 2021, Eurelectric estimat-

ed that Europe’s electricity distribu-

tion network needed a signicant in-

vestment push to accommodate the

projected growth of renewables.

With today’s growth of more than 40

per cent year on year in new PV in-

stallations, grid investments need a

massive push and should increase up

to €65 billion per year until 2050 to

accommodate the accelerating elec-

trication rate. As a rule of thumb,

Europe should invest €0.65 in the

grid for every €1 invested in genera-

tion capacity. Today, that gure is

closer to €0.30.

Current plans are not sufciently

reecting the speed at which the sys-

tem is decentralising and are not ex-

plicit enough on the need to invest

more in the distribution grid. A for-

ward-looking mindset is crucial to

enable Europe’s infrastructure ex-

pansion and modernisation – for ex-

ample, via anticipatory investments –

while mapping and assessing the

exibility needed to optimise the grid

capacity already available.

Grid connection rules within and

across EU countries vary signicant-

ly, especially at the low-voltage lev-

el. Standardising these rules with au-

tomated, digitalised and harmonised

processes would simplify and speed

up connections. To this end, Member

States need to clearly dene proce-

dures, outline timetables and clarify

the roles of relevant stakeholders by

establishing national rulebooks, and

develop accountability for respecting

such timelines.

The possibility of energy consump-

tion or production to adapt to system

stress is another immediate solution

to balance variable generation con-

necting to the grid. Several enablers

of exibility already exist such as

smart inverters located in the PV sys-

tem that can modulate the electricity

sent to the grid, smart EV batteries

that can store and release power to

the grids at times of peak demand as

well as smart home management sys-

tems that interact bi-directionally

with the grid. Their contribution,

however, could be much improved.

Flexibility needs should be better

assessed by clearly mapping where

the different sources of exibility are

located, including prosumers. Once

mapped, exibility should be stream-

lined at all stages of grid operations.

During the connection phase, exi-

ble connection agreements should be

incentivised as possibilities to get a

faster plug-in to the grid in a con-

gested area by limiting an asset’s ca-

pacity in need of connection to an

agreed percentage based on the

grid’s needs. During operation, exi-

bility could also be fostered via mar-

ket-based price signals in local exi-

bility markets. Above all, regulators

must allow system operators to pro-

cure exibility services as one of the

possible options for managing the

grid, providing clear incentives and

key performance indicators (KPIs)

for exibility enhancement.

Although many of the challenges

discussed are local in nature, the Eu-

ropean Commission can also play a

role in enabling the electricity grid of

the future. EU institutions should

provide a governance framework, in-

centivise proactive investments and

identify best practices in their up-

coming European Grid Action Plan.

An electricity grid t for the future

speed is a critical requirement to

steer Europe through the increasingly

complex energy transition.

Kristian Ruby is Secretary General

at Eurelectric

The path to renewables integration is not short of obstacles. Yet current plans do not reect the speed at which the

system is decentralising and are not explicit enough on the need to invest more in the distribution grid. Eurelectric’s

Kristian Ruby says a forward-looking mindset is crucial to enable Europe’s grid infrastructure expansion and

modernisation.

Tuning Europe’s electricity grids

for a PV revolution

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Industry Perspective

Ruby: Doubling down on

decarbonisation means

doubling up on electricity

Grid investments need a massive push

“Building more lines and substations are a must to

handle ows of the future system, but it takes a long

time due to lengthy planning and permitting, causing

congestion in the grid in the short term”

What we recommend to nuclear

newcomer countries is to engage

with vendors after establishing that

national vision of what precisely the

country is trying to achieve. It is in

these conversations that keeping the

mindset focused on the larger goal,

rather than purely technology, is the

key to a successful nuclear power

project. These conversations should

focus on how that vendor can help

achieve the specic national objec-

tive, what can they offer in addition

to the specic technology and

whether they would be a good part-

ner to travel that long and challeng-

ing path of a new national power

programme. Approach to project

management, resolution of disputes

and capacity building to localise a

newcomer country’s ability to oper-

ate and maintain the nuclear power

plant are among the variables that

must be considered in determining

whether to form the partnership.

Second, in the industry vernacular,

contracts for large energy projects

are described in terms of the amounts,

i.e., a “$20 billion contract”. Fre-

quently, a country allocates a certain

amount to “pay for a contract”.

However, referring to the “cost of a

contract” is misleading. The “cost of

a contract” means very little without

the precise allocation of risks be-

tween the newcomer country/owner

of the new nuclear project and the

vendor/contractor. The contract is

like a roadmap that foresees various

eventualities and suggests ap-

proaches to deal with them, dividing

the responsibilities (and nancial li-

abilities). Without such allocation of

responsibilities and liabilities to

specic parties for eventualities –

like change in local laws, unexpected

site conditions, high-turnover of

personnel – the cost of the project for

the owner may increase drastically

and, indeed, the overall “cost of a

contract” may be unpredictable.

Engaging vendors/contractors in

advance of procurement can give

he direction of the conversation

about “nuclear” varies greatly

depending on the interlocutor.

If we are talking to the general popu-

lation, the discussion may range from

concern about nuclear accidents and

spent fuel management to optimism

about nuclear being the key to miti-

gating climate change. With nancial

institutions, the conversation about

investment into a new national nucle-

ar power programme or an innovative

technology evolves into evaluation of

potential reputational, construction,

project management and other risks.

At the various international confer-

ences, whether those hosted by the

International Atomic Energy Agency

(IAEA) or the World Nuclear Asso-

ciation (WNA), nuclear echoes from

the stage, corridors and coffee tables

as the policy solution to the climate

change and energy security chal-

lenges. The advanced reactor tech-

nology companies mention concerns

about both nancing and regulatory

approvals. When we sit across the

table – or now increasingly across the

screen and several time zones – from

so-called newcomer countries, the

conversation usually revolves around

technology choices.

Technology is the rst issue raised

by the decision makers that are con-

sidering introducing nuclear power

as part of their national energy mix.

As a starting point, technology selec-

tion can point out the path to meeting

a specic energy demand, estimating

associated costs and selecting a po-

tential vendor. Technology can be

analysed from the perspective of

safety features, built-in security

measures and safeguards against

proliferation. The operating experi-

ence of a reference plant can be ana-

lysed, learned from and, ultimately,

adapted to the local site and national

context. It may be possible, even, to

visit a reference plant. Technology is

tangible.

But the tangibility of technology

frequently obscures the other less

tangible variables essential for a

successful new nuclear power pro-

gramme. Whether the country is es-

tablishing a new nuclear power pro-

gramme utilising a conventional

nuclear power reactor or deploying

small modular reactor technology,

the IAEA advises a newcomer coun-

try to consider 19 infrastructure is-

sues as it moves across three devel-

opmental phases and crosses three

milestones. The IAEA Milestone

Approach is an invaluable tool,

which helps organise the many

complex national processes, activi-

ties and decisions. The IAEA Mile-

stone Approach expands the national

nuclear “to-do” list. Starting from

formulation of a national position to

development of a comprehensive

nuclear law, to stakeholder engage-

ment and coordination and human

resource development, the IAEA

Milestone Approach highlights the

less tangible considerations in a

comprehensive and sequential man-

ner; and goes beyond the selection of

technology. By following the IAEA

Milestone Approach a newcomer

country would establish a solid

foundation for a successful national

nuclear power programme.

While the infrastructure foundation

is an essential requirement for a na-

tional nuclear power programme, it

is not sufcient for the success of a

new nuclear power project. From a

commercial perspective, the success

of a new nuclear power project re-

quires a mindset shift. The ultimate

goal of the selection of technology,

the expenditure of certain funds and

of the overall improvement of the

national nuclear infrastructure in the

19 areas identied by the IAEA, is

electricity!

It seems obvious to state that the

ultimate goal of a national nuclear

power programme or new project is

electricity (or high-temperature

steam, hydrogen or whatever other

output may be desired from a nuclear

reactor). However, shifting perspec-

tive toward the ultimate goal of

electricity through powerlines, shifts

the approach to the commercial pro-

cess of obtaining it. Now, the conver-

sation is less about the specic and

tangible aspects of technology, but

rather about all these other factors

that successfully electrify the grid.

First, when a country is developing

a national nuclear power programme

and procuring its rst nuclear power

project, the consideration that is of-

ten overlooked is that of a relation-

ship with a vendor. Establishing a

new nuclear power programme and

commissioning a rst nuclear power

plant can take over a decade. Opera-

tion and maintenance, as well as

eventual decommissioning of the

plant, extend the timeline of the rela-

tionship to approximately 100 years.

The most successful nuclear power

project is built on a partnership be-

tween a newcomer country/owner

and a vendor that can endure for that

time period.

newcomer countries a glimpse into

what the “cost of a contract” actually

includes, and what the less tangible

benets of this long-term partnership

may be. Again, it is in these conver-

sations and cost negotiations that

focusing on the larger goal of the

entire nuclear power project, i.e.,

electricity to the grid (or high-tem-

perature steam, etc.) is necessary.

Keeping in mind that the goal of the

project is more than a power reactor

structure of a particular design for a

certain amount of money, can help

the newcomer country/owner trade

off various desired, intangible bene-

ts and necessary costs in a more

optimal manner.

The process of establishing a new

nuclear power programme ripples

through the economic and social

fabric of a country. A national nucle-

ar power programme and a new nu-

clear power project allow sustainable

and clean electricity to reach remote

communities and industrial facili-

ties, which may be key to economic

and social development. The im-

provement of physical infrastructure

around a country, strengthening of

legal and regulatory frameworks,

increasing education and capacity

building in the sciences, policy,

economics, administrative manage-

ment and law, are also outputs of a

national nuclear power programme.

Reducing a nuclear power pro-

gramme to a choice of technology

undermines the success of the pro-

curement process for the new nuclear

power project, just as reducing the

conversation about “nuclear” to a

specic set of issues obscures its

many benets. The beauty of a na-

tional nuclear power programme and

a rst nuclear power project is their

potential to transform an entire

country and society.

George Borovas is Head of Hunton

Andrew Kurth LLP Nuclear practice;

Inna Pletukhina is Associate on the

Energy and Infrastructure team.

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Energy Outlook

Both developed and

developing countries

have taken an

interest in expanding

their energy sources

to include nuclear

power. George

Borovas and Inna

Pletukhina of law

rm Hunton Andrews

Kurth LLP share

their insights on the

key things countries

newly setting out on

the nuclear power

pathway should

consider.

Nuclear is not just technology

Borovas: As a starting point, technology selection can point

out the path to meeting a specic energy demand, estimating

associated costs and selecting a potential vendor

Pletukhina: Engaging vendors/contractors in advance of

procurement can give newcomer countries a glimpse into what

the “cost of a contract” actually includes

rticial intelligence (AI) has

garnered signicant attention

across various industries. But

where it truly shines in terms of de-

livering value is in operation and op-

timisation of energy assets, particu-

larly distributed energy assets such

as battery storage, smaller-scale re-

newables, and industrial demand

management.

In the context of energy, AI-driven

optimisation algorithms already play

a pivotal role in balancing supply

and demand, ensuring the efcient

utilisation of energy assets. Take, for

instance, battery storage, AI algo-

rithms can precisely determine when

to charge and discharge batteries to

maximise their lifespan and mini-

mise energy costs. Similarly, AI can

support the optimisation of smaller-

scale renewables by predicting

weather patterns and adjusting trad-

ing strategies accordingly.

But AI’s potential extends well be-

yond individual energy assets. It is

a key catalyst behind the rapid ex-

pansion and effectiveness of mi-

crogrids and distributed energy re-

sources (DERs). AI empowers these

systems to implement demand re-

sponse programmes, enhances their

capacity to manage diverse energy

resources, and adapts to ever-evolv-

ing conditions.

The UK, known for its intermittent

weather patterns, stands to benet

signicantly from the integration of

AI with such systems. AI’s ability to

predict cloudy days or periods of

low wind enables it to pre-emptively

draw from energy storage systems

during such times, ensuring a consis-

tent energy supply even when re-

newable sources are temporarily un-

available. Conversely, microgrid

systems have the potential to take

advantage of downward market

movements when surplus renew-

ables are abundant.

The real benet comes when you

utilise AI to forecast data from mul-

tiple sources, including weather fore-

casts, electricity prices, and energy

consumption patterns, to make real-

time decisions. This capability be-

comes especially valuable when ap-

plied to issues that demand decisions

within milliseconds, such as the dy-

namic pricing of energy in traded

markets. The majority of energy

trading takes place in long-term mar-

kets (month-ahead, year-ahead) be-

tween suppliers and generators, re-

ning in spot or short-term markets

(day-ahead, intraday). Following

this, grid operators step in to balance

supply and demand in exibility and

reserve markets.

However, participating in grid ser-

vices and energy markets requires a

certain scale that many distributed

energy resources lack. In the UK,

aggregated units must be physically

located within the same grid supply

point (GSP) area, presenting market

access and locational challenges. As

microgrids continue to expand and

become integral components of

modern energy systems, AI’s role in

their success becomes even more

crucial for the management and ag-

gregation of these smaller units. In-

dividually, smaller sub-1MW units

may offer minimal frequency re-

sponse value, but when aggregated,

their potential can be signicant.

Yet, blending distributed resources

to meet scale requirements is not

without its challenges. One of the

primary adaptations in applying AI

and machine learning to microgrids

and distributed energy resources

(DERs) is the need to scale down

algorithms and models. A pivotal

aspect of this adaptation involves

the real-time monitoring of a net-

work of individual assets with dif-

ferent characteristics and operating

requirements.

Over ve years ago GridBeyond

launched its hybrid battery and de-

mand network, which to this day

provides a portfolio of battery and

demand assets working in harmony

to provide exibility to the grid,

whilst enabling inexible sites to

access the fastest responding (and

most nancially rewarding) balanc-

ing services.

In this type of network, a battery is

used not only as energy storage but

as a tool to unlock untapped exibil-

ity for demand side response (DSR)

participation on-site and within the

network. There are many demand

side assets suitable to creating this

kind of network. By adding a bat-

tery, the hybrid network becomes

more robust, making its overall level

of energy exibility and storage ca-

pacity greater than the sum of its

parts.

GridBeyond estimates that this hy-

brid technology has increased exi-

bility of its clients by over 65 per

cent. This means, with a relatively

small investment (when compared to

the prices of large batteries alone),

the value of the clients’ assets can be

signicantly increased by bringing

both the benets of optimised stor-

age and increased exibility.

On September 1, 2023, GridBe-

yond marked a further milestone in

asset aggregation behind the meter,

announcing that it is actively bidding

an aggregation of three behind-the-

meter battery systems into National

Grid ESO’s new dynamic services

(Dynamic Containment (DC), Dy-

namic Moderation (DM), Dynamic

Regulation (DR)). Using the struc-

tures and the rules in place, GridBe-

yond’s rst aggregated DC/DM/DR

unit aims to prove that behind-the-

meter distributed storage can be an

asset to the system while delivering

signicant value.

But tying together distributed re-

sources to meet these scale require-

ments is both a technical and a poli-

cy challenge. First, you have to

prove that lots of independently lo-

cated and controlled systems can re-

spond as a unit. Second, you have to

create the grid programmes and mar-

ket mechanisms that permit these ag-

gregated resources to play the roles

this capability opens up to them.

“The journey to this point was not

without difculty” commented Sea-

mus King, GridBeyond’s Head of

Trading. “We have faced numerous

obstacles we have needed to tackle,

included but not limited to dealing

with different frequencies at differ-

ent sites, testing at a set time across

different sites, managing different

import/export agreements, varying

site loads, getting the correct re-

sponse from different assets within

one unit and aggregating different

types of batteries together (model,

capacity etc.). Had it not been for the

capability of our engineering depart-

ment, today’s market go-live would

not have been possible.”

The fusion of AI with DERs and

microgrids represents a leap in the

ability to efciently manage energy

resources, lower costs, and reduce

carbon footprint.

As the UK strives to meet its am-

bitious clean energy goals, AI’s role

in aggregating and optimising dis-

tributed energy assets will be instru-

mental in reshaping the energy

landscape and propelling us towards

a more sustainable and resilient en-

ergy future. It is the synergy of

technology and clean energy that

promises to shape the energy land-

scape for generations to come.

The global energy landscape is in the midst of a remarkable transformation, with a resolute focus on sustainability

and the integration of renewable energy sources. In the UK, this paradigm shift towards cleaner energy necessitates

innovative solutions. GridBeyond believes one promising avenue lies in the convergence of articial intelligence with

distributed energy systems, a synergy that has the potential to revolutionise the management and optimisation of our

energy resources.

Unlocking the power of AI in asset

aggregation

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Technology Focus

By adding a battery, the hybrid

network becomes more robust

AI algorithms can precisely determine when

to charge and discharge batteries

THE ENERGY INDUSTRY TIMES - NOVEMBER 2023

Final Word

he recent launch of the Interna-

tional Energy Agency’s ‘World

Energy Outlook’ (WEO) had

an audience of 70 000 viewers

worldwide – “maybe bigger than a

major Champions League match”,

according to IEA Executive Director,

Dr Fatih Birol. And with all eyes

focused on the COP28 climate sum-

mit, the turnout was hardly surprising.

The launch of the Paris-based

agency’s annual agship publication

was slightly earlier than usual – timed

to feed into the dicult negotiations

expected at the summit in Dubai in just

a few weeks.

Commenting on the timing and the

upcoming talks, Dr Birol said: “One

of the reasons we decided to publish

this World Energy Outlook earlier than

usual, is with the hope to provide a

basis for the decision makers going to

Dubai… this COP28 is as critical as

the COP21 in Paris.”

WEO 2023, like almost every report

since the 2015 Paris Agreement, again

notes that much stronger policies are

needed to limit global warming to the

1.5°C temperature rise agreed by

world leaders eight years ago.

For COP28 to be considered success-

ful, Dr Birol said the IEA has ve

criteria: it would like to see govern-

ments agree to triple renewable capac-

ity between now and 2030 and double

the improvement of energy eciency

globally by 2030; see oil and gas

companies commit to climate targets

by taking emissions reduction mea-

sures, including a major reduction in

methane emissions of 75 per cent by

2030; the advanced economies and

international nancial institutions

create the nancial mechanisms to

support clean energy development in

developing countries; and nally, that

governments agree to take measures

for an “orderly decline” of fossil fuel

use, including an end to the building

of new unabated coal red plants.

It is a long wish list; one that is not

without major underlying challenges.

Taking the rst point, agreeing to triple

renewable capacity is just the tip of the

iceberg. Connecting it all to the grid is

likely to be an even bigger obstacle.

Just a week before the launch of

WEO 2023, the IEA released a special

report, which stressed that eorts to

tackle climate change and ensure reli-

able supplies of electricity could be

put at risk unless policy makers and

companies quickly take action to im-

prove and expand the world’s electric-

ity grids.

Issues are already emerging. The

report identies a large and growing

queue of renewables projects waiting

for the green light to be connected to

the grid, pinpointing 1500 GW worth

of these projects that are in advanced

stages of development. This is ve

times the amount of solar PV and wind

capacity that was added worldwide

last year.

With regards to the phase-out of

fossil fuels, the problems are more

political than technical. Reacting to

tensions with the west following its

invasion of Ukraine, Russia recently

warned that it will oppose a deal to

reduce the use of fossil fuels at COP28.

In a submission to the UN’s climate

body, Russia said: “We oppose any

provisions or outcomes that somehow

discriminate or call for phase-out of

any specic energy source or fossil

fuel type.”

Despite more than 80 countries

supporting a proposal at COP27 in

Egypt last year to gradually eliminate

fossil fuels, Russia’s buy-in is crucial.

The country is the third-largest crude

producer.

As the heart of the oil and gas sector,

the Middle East must also get on board.

And here, Sultan al-Jaber, Head of the

Abu Dhabi National Oil Company, one

of the world’s biggest oil and gas

groups, has a pivotal role to play.

Crucially, Jaber is also President-des-

ignate of this year’s UN climate sum-

mit and his task will be to bring the

opposed sides together. He is perhaps

uniquely placed, at the perfect time, to

act as the much needed catalyst.

Speaking to the FT at the Abu Dhabi

International Petroleum Conference

last month, Jaber said: “We’ve had 27

COPs. Please let me deliver something

tangible this time.”

If ever there was a time to go for

goal, it is now. Laura Cozzi, the IEA’s

Director of Sustainability, Technol-

ogy and Outlooks, and who is one of

the lead authors of the WEO, noted

that the IEA’s projections imply that,

under current policies, global emis-

sions will peak in 2025. She stressed,

however, that this does not translate

to any cooling.

“2023 is set to be the hottest year

recorded in human history… it will be

the coolest of the years we will see

throughout [the rest of] this century.

Even if emissions peak and start de-

clining, without additional climate

policies we will break record tem-

peratures year after year, after year.

The only way to stop temperatures

from rising is to actually get to net zero

emissions,” she said.

Yet it seems that limiting global

warming to 1.5°C is less likely than

ever. According to DNV’s latest ‘En-

ergy Transition Outlook’, to reach the

goals of the Paris Agreement, CO

emissions would need to halve by

2030. It forecasts, however, that this

will not even happen by 2050. CO

emissions will be only 4 per cent

lower than today in 2030 and 46 per

cent lower by mid-century. Energy

related CO

emissions are still hitting

record highs and are only likely to

peak in 2024, which is eectively the

point at which the global energy

transition begins.

The IEA still believes that although

the path to limiting the global tem-

perature rise to 1.5 C has narrowed,

clean energy growth is keeping the

window open. An update of the Paris-

based agency’s landmark ‘Net Zero

Roadmap’ shows greater ambition and

implementation, supported by stron-

ger international cooperation, will be

critical to reach climate goals.

Commenting on the update to the

original report published in 2021,

Birol said: “Keeping alive the goal of

limiting global warming to 1.5C re-

quires the world to come together

quickly. The good news is we know

what we need to do – and how to do

it. Our 2023 ‘Net Zero Roadmap’,

based on the latest data and analysis,

shows a path forward. But we also have

a very clear message: strong interna-

tional cooperation is crucial to success.

Governments need to separate climate

from geopolitics, given the scale of the

challenge at hand.”

And so the stage is set for Dubai.

Although as critical as COP21, the

outcome of COP28 hangs in the bal-

ance – largely due to the current geo-

political environment and the increas-

ing global discord.

“When I compare the conditions at

COP21 compared with those of today,

there are denitely some advantages

and disadvantages of the current

context,” said Dr Birol. “In Paris in

2015, there was a mood of interna-

tional cooperation among the coun-

tries to nd a solution to the common

problem of the climate crisis. When

we look at today and COP28, the

single most important challenge is that

we see international fragmentation.

“But of course there are also advan-

tages today. We have readily available

clean energy technologies that are

cost-eective – solar, wind, electric

cars, nuclear power, energy eciency.

We just need to expand them as

strongly [as possible]. When we had

Paris, many of those technologies were

just at the beginning of being com-

petitive and had small shares in the

global energy mix. So there are pluses

and minuses. But at the IEA, we will

do everything we can in order to have

a good outcome from COP28.”

Certainly this is one Champions

League match where all players have

to get onside. The time for kicking the

ball into the long grass and hoping for

the best has long gone.

It’s time to get onside

Junior Isles

Cartoon: jemsoar.com