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May 2024 • Volume 17 • No 3 • 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

Flexing without breaking

Leveraging AI

The variability of renewables like

wind and solar demands a radical

enhancement in grid exibility. The key is

a system that exes, rather than breaks.

Page 12

Industrial AI will be a key enabler

for most companies to navigate

the decarbonisation journey, while

maintaining operational excellence

and business agility. Page 13

News In Brief

Record year for wind but

more needed to get on “3X

pathway”

The global wind industry installed

a record 117 GW of new capacity

in 2023, but must still roughly triple

its annual growth to at least 320 GW

by 2030 to meet the COP28 and

1.5°C pathway targets.

Page 2

Developers await starting

gun for offshore wind and

hydrogen bonanza

Debate in Congress is delaying Bra-

zil’s plan to be a green energy pow-

erhouse and investment hub, ac-

cording to Bloomberg.

Page 4

Cross-border energy

networks can cut ASEAN

decarbonisation costs

The cost of decarbonising energy

supply across ASEAN countries

could be cut by as much as $800

billion through regional collabora-

tion encompassing power intercon-

nectors, hydrogen networks, and

energy storage infrastructure, ac-

cording to DNV.

Page 5

Eskom explores funding for

major network expansion

South Africa’s state-owned power

utility Eskom is in discussions with

government ministries regarding

private and foreign funding options

for a signicant expansion of its

transmission network.

Page 8

Transition Investment

Series: Greece

Greece offers a variety of clean en-

ergy project opportunities for for-

eign investors and its investment

prole for foreign investors has

progressively been improving.

Page 14

Technology Focus:

Answering the call for

negative emissions

An electrochemical cell-based di-

rect air capture solution has been

developed that can cut energy usage

by 70 per cent for cost-effective

carbon removal at gigatonne scale.

Page 15

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Governments recognise the need to accelerate the move away from fossil fuels if it is to

avoid disastrous global warming. But there is a growing belief that economic and geopolitical

headwinds make rapid fossil fuel phase-out unrealistic. Junior Isles

Europe falling short in climate race as elections loom

THE ENERGY INDUSTRY

TIMES

Final Word

Chinese medicine can

be good and bad for your

health, says Junior Isles.

Page 16

There is growing sentiment that talk of

a rapid fossil fuel phase-out are unre-

alistic. In a global energy strategy re-

port sent out to clients last month, US

investment bank JPMorgan said efforts

to cut the use of coal, oil and gas had

been set back by higher interest rates,

ination and wars in Ukraine and the

Middle East.

The bank warned that the world

needs a “reality check” on its move

from fossil fuels to renewable energy,

saying it may take “generations” to hit

net zero targets.

“While the target to net zero is still

some time away, we have to face up to

the reality that the variables have

changed,” Christyan Malek, JPMor-

gan’s Head of Global Energy Strategy

and lead author of the report, told the

Financial Times. “Interest rates are

much higher. Government debt is sig-

nicantly greater and the geopolitical

landscape is structurally different. The

$3 trillion to $4 trillion it will cost

each year come in a different macro

environment.”

JPMorgan’s report said changing the

world’s energy system “is a process

that should be measured in decades, or

generations, not years”.

The report highlights a growing

movement that has seen both compa-

nies and governments rowing back on

emissions targets. Just last month the

Scottish government abandoned its

target of cutting carbon emissions by

75 per cent by 2030.

JPMorgan’s statement was largely

echoed by global energy consultant

Wood Mackenzie, which said in its

own report that transitioning to a net

zero global economy will be even

harder and more costly if high interest

rates persist.

“Interest rates, which have risen

sharply in the past two years, may not

come down as far or as quickly as

markets anticipate. This increased

cost of capital has profound implica-

tions for the energy and natural re-

source industries, particularly the cost

and pace of the transition to low-car-

bon technologies,” said Peter Martin,

Wood Mackenzie’s Head of Econom-

ics and lead author of the report ‘Con-

icts of interest: the cost of investing

in the energy transition in a high inter-

est-rate era’.

Higher interest rates disproportion-

ately affect renewables and nuclear

power. Their high capital intensity and

low returns mean future projects will

be at risk. In comparison, due to low

gearing, many companies in the met-

als and mining and oil and gas sectors

will be relatively unaffected by higher

interest rates, stated the report.

In the US, Wood Mackenzie analy-

sis shows that a 2-percentage point

increase in the risk-free interest rate

pushes up the levelised cost of elec-

tricity (LCOE) by as much as 20 per

cent for renewables. The compara-

tive increase in LCOE for a com-

bined cycle gas turbine power plant

is only 11 per cent.

In late March Saudi Aramco CEO

Amin H Nasser criticised the energy

transition strategy, saying that it is

“visibly failing” on a number of fronts

and called on countries to abandon the

Continued on Page 2

The European Union is behind target

on its climate ambition, with the dead-

line for delivering detailed roadmaps

ahead of parliamentary elections fast

approaching.

EU governments must submit their

plans on how to reduce their share of

emissions by June, having committed

to reducing carbon emissions by 55

per cent by 2030 compared with 1990

levels. At the end of March, however,

EU Climate Commissioner Wopke

Hoekstra said the bloc was currently

on track to achieve only a 51 per cent

reduction.

Although Hoekstra told ministers he

remains “condent” of hitting the 55

per cent target, even his calculations,

based on draft plans put forward by

member states, appear optimistic. The

European Environment Agency has

estimated that a 48 per cent reduction

is likely.

As part of a mid-term review of cli-

mate progress published in March, the

European Commission said that the

speed of emissions cuts needed to

meet its climate goals must “almost

triple the average annual reduction

rate achieved over the past decade”.

The EU has the most advanced cli-

mate legislation in the world but as

the global race for clean technology

gathers pace, the bloc is struggling to

compete globally and sell its ambi-

tious climate agenda to an industrial

sector that has been suffering from

high ination, trade tensions and in-

creasing regulation.

Data from Bruegel, the Brussels-

based think-tank, shows that Europe

is falling behind some of its global

competitors in the rollout of the clean

technologies central to decarbonisa-

tion efforts.

In an interview with the FT last

month International Energy Agency

Executive Director Fatih Birol criti-

cised Europe for falling behind China

and the US. He accused the EU of

making “two historic monumental

mistakes” in energy policy, by relying

on Russian gas and turning away from

nuclear power, and that European

industry was now paying the price for

these errors. He told the FT that the

bloc would need “a new industrial

master plan” in order to recover.

The EU trails China and the US in

areas such as manufacturing clean

technologies thanks to a mix of bur-

densome regulations and higher en-

ergy prices. Electricity prices in the

EU are typically twice to three times

higher than in the US.

“The existing industries, especially

the heavy industries, are experienc-

ing, and going to experience, a sig-

nicant cost disadvantage compared

to other major economies such as

China and the United States,” Birol

said.

World needs

“reality

check” on

fossil fuel phase-out

JPMorgan’s Christyan Malek, says

net zero may take “generations”

THE ENERGY INDUSTRY TIMES - MAY 2024

Junior Isles

The global wind industry installed a

record 117 GW of new capacity in

2023, but must still roughly triple its

annual growth to at least 320 GW by

2030 to meet the COP28 and 1.5°C

pathway targets, says the Global Wind

Energy Council (GWEC).

According to its ‘Global Wind Report

2024’ published last month, the 117

GW in 2023 represents a 50 per cent

year-on-year increase from 2022.

In the report GWEC has revised its

2024-2030 growth forecast (1210

GW) upwards by 10 per cent, in re-

sponse to the establishment of nation-

al industrial policies in major econo-

mies, gathering momentum in offshore

wind and promising growth among

emerging markets and developing

economies.

But despite the impressive numbers,

annual growth must triple to meet the

targets recommended at the COP28

climate summit in Dubai in December.

“It’s great to see wind industry

growth picking up, and we are proud

of reaching a new annual record,” said

GWEC CEO Ben Backwell. “How-

ever much more needs to be done to

unlock growth by policymakers, in-

dustry and other stakeholders to get on

to the 3X pathway needed to reach net

zero. Growth is highly concentrated in

a few big countries like China, the US,

Brazil and Germany, and we need

many more countries to remove barri-

ers and improve market frameworks to

scale up wind installations.

“Geopolitical instability may con-

tinue for some time. But as a key en-

ergy transition technology, the wind

industry needs policymakers to be la-

ser-focused on addressing growth

challenges such as planning bottle-

necks, grid queues and poorly designed

auctions. These are the measures that

will signicantly ramp up project pipe-

lines and delivery, rather than reverting

to restrictive trade measures and hostile

forms of competition. Enhanced glob-

al collaboration is essential to fostering

the conducive business environments

and efcient supply chains required to

accelerate wind and renewable energy

growth in line with a 1.5°C pathway.”

In its annual outlook report, Paris-

based research group REN21 said

global renewable capacity additions

increased by 36 per cent in 2023 to

reach about 473 GW. This falls far short

of the almost 1100 GW per year re-

quired through 2030, stated in the In-

ternational Renewable Energy Agen-

cy’s (IRENA) latest report.

“The reality is that energy demand

has increased at the same time, espe-

cially in China, India and other devel-

oping economies,” said Rana Adib,

REN21’s Executive Secretary.

REN21 said the renewables sector

was being held back by a lack of invest-

ment in grid infrastructure, with an

estimated 3000 GW of projects still

awaiting grid connections last year.

More effort was also needed to boost

energy efciency and phase out fossil

fuel subsidies, which in G20 countries

alone stood at a record $1.3 trillion in

2022, it added.

Providing nancial support for de-

veloping countries to build renewable

capacity also remains a major chal-

lenge, with nancing costs sometimes

as high as 20 per cent, ve times high-

er than those in richer nations, Adib

said.

“The cost of capital has greatly in-

creased globally, but increased in a

disproportionately high way in devel-

oping economies,” she said, adding

that development nance was also fall-

ing short, accounting for only 1.4 per

cent of total global renewable invest-

ment last year.

“fantasy” of phasing out oil and gas.

Nasser also said that despite the

contribution of alternatives to re-

ducing greenhouse gas (GHG)

emissions, much better results

were achieved when the focus was

on reducing emissions from hydro-

carbons.

Speaking at CERAWeek in Hous-

ton, Texas, USA, in March, Nasser

pointed out that despite the world

investing more than $9.5 trillion on

the energy transition over the past

two decades, alternatives had been

unable to displace hydrocarbons at

scale.

He said that wind and solar com-

bined currently supply less than 4

per cent of the world’s energy while

the share of hydrocarbons in the

global energy mix had barely fall-

en from 83 per cent to 80 per cent.

He also noted that there is “sig-

nicant demand growth potential in

developing countries”, where oil

consumption currently ranges from

less than one to just below two bar-

rels per person per year, compared

with nine barrels for the EU and 22

barrels for the US; gures that see

some predicting growth through

2045. Likewise, he said gas re-

mained a “mainstay of global en-

ergy”, growing by about almost 70

per cent since the start of the cen-

tury. “Even coal is at record highs,”

he said.

“This is hardly the future picture

some have been painting; and even

they are starting to acknowledge the

importance of oil and gas security,”

said Nasser. “All this strengthens

the view that peak oil and gas is

unlikely for some time to come, let

alone 2030.”

Meanwhile, the US and EU are at

odds over ending subsidies for oil

and gas development.

A person familiar with closed-

door OECD talks in Paris in late

March told the FT that countries

discussed proposals by the EU and

UK to cut off most export credit

agency loans and guarantees for oil,

gas and coal mining projects, which

are the biggest source of interna-

tional public nance for the sector.

This would follow an agreement in

2021 to stop providing such support

for coal red power.

The US, Canada, France, Ger-

many and the UK were among

countries that agreed around the

UN COP26 climate summit in

Glasgow, UK, in 2021 to align their

public nance institutions with the

Paris Agreement goal to limit glob-

al warming to ideally 1.5°C above

pre-industrial levels.

But this could affect the role of

Exim Bank, the US’s credit export

agency, which will need to secure

fresh funding from the US Congress

in 2026. This would open it to po-

litical scrutiny from Republican

lawmakers who are resistant to cut-

ting off nance for oil and gas, and

progressive lawmakers critical of

the bank’s climate record.

Continued from Page 1

The World Energy Council’s annual

World Energy Issues Monitor has re-

vealed that the risk of disorderly en-

ergy transitions, fuelled by a fragment-

ed energy leadership landscape, is a

key perception of uncertainty among

business leaders.

Now in its 15th year, the 2024 edition

shows that: competing global and re-

gional geopolitical agendas; the evo-

lution of energy security concerns to

encompass critical minerals and de-

mand driven energy shocks and dis-

ruptions; and the varying regional

nature of climate action priorities have

all converged to shape a distinctly

uncertain path to achieving net zero

and beyond.

Dr Angela Wilkinson, Secretary

General & CEO of the World Energy

Council, said: “While the direction

towards zero emissions energy sys-

tems is clear, the journey to a sustain-

able future is fraught with challenges.

This year’s World Energy Issues Mon-

itor edition reects global uncertainty

about the collective ability to manage

clean and inclusive energy transitions

at speed and scale. The context of an

increasingly fragmented energy lead-

ership landscape and competitive geo-

politics is exacerbating uncertainties.”

Commodity prices were a key criti-

cal uncertainty across all regions of

the world, save for North America,

with 34 per cent of Europe respon-

dents describing it as an area of very

high uncertainty.

Stakeholder coordination, notably

around engaging diverse communi-

ties to form new energy ecosystems

and path nding, remains a priority,

with 50 per cent of the respondents

describing it as an area of high/very

high impact. A third of respondents

expressed that Risk to Peace is a very

high uncertainty, of which 41 per cent

were from Europe and 26 per cent

from Asia.

The report titled ‘Redesigning En-

ergy in 5D’ assesses the global energy

agenda based on the collective exper-

tise and views of nearly 1800 energy

leaders in over 100 countries. Leaders

were surveyed in early 2024, follow-

ing the conclusion of the COP 28

conference in Dubai.

Notably, the survey also included

two distinct groups: the World Energy

Council Future Energy Leaders, com-

prising energy professionals under 35

years of age, and innovative start-up

companies founded less than 10 years

ago.

The European Parliament has ap-

proved the reform of the EU electric-

ity market in a move to provide stable

and affordable bills for consumers fol-

lowing the energy price crisis.

The measures, composed of a regula-

tion and a directive already agreed

upon with the Council, were adopted

with 433 in favour, 140 against and 15

abstentions for the regulation, and 473

votes to 80, with 27 abstentions for the

directive.

Energy prices have been rising since

mid-2021, initially in the context of the

post-COVID-19 economic recovery.

However, energy prices rose steeply

due to gas supply problems following

Russia’s war against Ukraine in Febru-

ary 2022. High gas prices had an im-

mediate effect on electricity prices, as

they are linked together under the

merit order system, where the most

expensive (usually fossil fuel-based)

energy source sets the overall electric-

ity price.

The legislation provides for so-called

Contracts for Difference (CfDs), or

equivalent schemes with the same ef-

fects, to encourage energy investment.

In a CfD, a public authority compen-

sates the energy producer if market

prices fall too steeply, but it collects

payments from them if prices are too

high. The use of CfDs will be allowed

in all investments in new electricity

production, whether from renewable

or nuclear energy.

The text sets out a mechanism to de-

clare an electricity price crisis. In a

situation of very high prices and under

certain conditions, the EU may declare

a regional or EU-wide electricity price

crisis, allowing member states to take

temporary measures to set electricity

prices for small and medium enter-

prises (SMEs) and energy intensive

industrial consumers.

There is also a new directive and

regulation on the gas and hydrogen

markets that aims to decarbonise the

EU’s energy sector, enhancing the pro-

duction and integration of renewable

gases and hydrogen.

The new regulation, adopted with

447 votes in favour, 90 against and 54

abstentions, will beef up mechanisms

for fair pricing and stable energy sup-

ply, and will allow member states to

limit gas imports from Russia and

Belarus. The legislation will intro-

duce a joint gas purchasing system to

avoid competition among member

states and a pilot project to bolster the

EU’s hydrogen market for ve years.

The regulation also focuses on in-

creasing investments in hydrogen in-

frastructure, especially in coal regions,

promoting a transition to sustainable

energy sources like biomethane and

low-carbon hydrogen.

Lead MEP on the regulation Jerzy

Buzek said: “The new regulation will

transform the current energy market

into one based primarily on two sourc-

es – green electricity and green gases.

This is a huge step towards meeting the

EU’s ambitious climate goals and mak-

ing the EU more competitive on glob-

al markets. We have introduced a legal

option for EU countries to stop import-

ing gas from Russia if there is a secu-

rity threat, which gives them a tool to

phase out our dependence on a danger-

ous monopolist.”

Headline News

EU Parliament adopts energy market reforms

Record year for wind but

more needed to get on

“3X pathway”

Saudi Aramco’s Amin H Nasser

said the energy transition is

“visibly failing”

n Sector installs 117 GW of new capacity in 2023, but must reach at least

320 GW annually by 2030

n GWEC revises 2024-2030 growth forecast upwards by 10 per cent

Risk of disorderly energy transition driving

uncertainty, says World Energy Council

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THE ENERGY INDUSTRY TIMES - MAY 2024

Nadia Weekes

South Africa’s state-owned power

utility Eskom is in discussions with

government ministries regarding pri-

vate and foreign funding options for

a signicant expansion of its transmis-

sion network.

The expansion, estimated to cost

R390 billion ($21 billion), is required

to accommodate the increasing

amount of renewable generation com-

ing online.

Eskom, which supplies 80 per cent

of the country’s electricity, has strug-

gled to meet demand, leading to black-

outs that have severely impacted the

national economy.

Up to 2033, the utility aims to con-

struct 14 218 km of power lines, more

than three times the amount installed

since 2015. The company is consider-

ing options including the use of funds

pledged by wealthy nations for the

energy transition and drawing on pri-

vate sources.

In 2021, $9 billion in climate nanc-

ing was pledged to South Africa by

France, Germany, the US, the UK and

the EU through the Just Energy Tran-

sition Partnership (JETP) to assist the

country’s shift away from coal.

Eskom has not indicated whether it

will seek approval to take on new debt.

It has stated that it “will update the

market as and when denitive deci-

sions are made” regarding its funding

options.

In his latest Energy Action Plan

brieng, Electricity Minister Kgo-

sientsho Ramokgopa pointed to fast

progress towards wider market re-

forms saying that electricity will now

be generated and sold on the open

market with supply and demand fac-

tors determining tariffs.

Announcing reforms including ac-

celerating water, procurement, grid

access, environmental, gas industry

and other approvals, Ramokgopa said

his department had set up a one-stop

shop for generation capacity.

“These are reforms of tectonic pro-

portions. We are within touching dis-

tance of reaching our goals. Of course

there will be moments of setbacks here

and there, but we have concrete ap-

provals from government,” he said.

An overhaul of the Electricity Regu-

lation Act (ERA), currently undergo-

ing parliamentary approvals, will en-

able sweeping changes that remove all

red tape from approval processes, ac-

cording to Ramokgopa.

The changes included the establish-

ment of a market platform that allows

the trade in electricity by multiple par-

ticipants, leading to an increase in elec-

tricity generation and innovation, re-

sulting in greater reliability of supply,

and enabling consumers to have more

choice on who supplies their power.

“The benets will be the lowering

of tariffs,” said Ramokgopa. “We are

moving away from the monopoly

situation, though Eskom will still be

the dominant player, but we want to

ensure the reliability of supply and

democratisation of producing and

selling of electricity.”

As part of the reform, South Africa

is setting up a transmission system op-

erator (TSO) managed by a newly

formed entity, the National Transmis-

sion Company of South Africa (NTC-

SA), Ramokgopa explained.

Meanwhile, UK company Glo-

beleq’s Red Sands project in the North-

ern Cape has been awarded preferred

bidder status in South Africa’s Energy

Storage Capacity Independent Power

Producer Procurement Programme

(ESIPPPP).

By storing energy at times of excess

generation and releasing it into the grid

when generation falls short of demand,

battery storage can be used to mitigate

the need for load-shedding, providing

stability to the grid.

Energy storage could expand the

reach of renewables and speed the tran-

sition to a carbon-free power grid, ul-

timately enabling South Africa’s tran-

sition away from fossil fuels. This R5.7

billion investment is part of the UK’s

commitment under the JETP. Financial

close is expected this year, with project

completion due in 2026.

Globeleq is owned by British Inter-

national Investment (70 per cent) and

Norway’s Development Finance Insti-

tution, Norfund (30 per cent). It is the

leading developer, owner and operator

of electricity generation in Africa.

In a separate development, Russia’s

state nuclear energy corporation Ro-

satom is developing a oating nuclear

power plant (NPP) project for South

Africa.

According to Rosatom CEO Alexei

Likhachev, the company has received

a number of applications from African

countries to consider projects to con-

struct new NPPs. Egypt is currently

building its rst NPP, El-Dabaa, with

Rosatom’s help. It will be the rst in

Africa to use Russian technology.

Rosatom is also considering the con-

struction of a small-scale hydroelectric

power station in an African country.

Thanks to the presence of large oil and

gas reserves, thermal power will con-

tinue to dominate the power generation

mix in the United Arab Emirates

(UAE) at least until 2035, according

to a report by data and analytics com-

pany GlobalData.

According to its latest report, ‘UAE

Power Market Size, Trends, Regula-

tions, Competitive Landscape and

Forecast, 2024–2035,’ the installed

capacity share of thermal power in the

UAE was around 80.4 per cent in

2023.

“With the discovery of new hydro-

carbon reserves, the UAE is planning

to invest heavily in hydrocarbon in-

frastructure and seek to develop new

production techniques,” explained

Sudeshna Sarmah, Power Analyst at

GlobalData.

By 2035, it is anticipated that the

cumulative thermal power capacity

will expand to 46.1 GW, up from 41.2

GW in 2023. “Most of the increase in

capacity is expected in gas-based ther-

mal power rather than oil,” Sarmah

added.

Rapid economic and demographic

growth over the past decade has

pushed the UAE’s electricity grid to

its limits. The UAE is planning to add

nuclear, renewable, and coal red

electricity generating capacity to ac-

commodate rising demand. Despite

its vast resource potential for renew-

ables, particularly solar, the country

has made “only small progress” to-

wards harnessing renewable energy

resources.

Ivory Coast ofcially opened a 37.5

MW solar power plant in April in what

the government said was the rst step

of a plan to integrate more renewable

energy into the power sector.

Ivory Coast, the world’s top cocoa

producer, is seeking to become a ma-

jor power supplier in West Africa. It

currently produces most of its rough-

ly 2250 MW of power from oil and

gas. By 2030, the country wants 45

per cent of its energy mix to consist

of renewable energy.

Minister for Mines, Power and Elec-

tricity Mamadou Sangafowa Cou-

libaly said that Ivory Coast will add

678 MW from solar power plants to

its power network by 2030.

The state-owned Boundiali Solar

Power Plant, located about 660 km

north of the commercial capital Abi-

djan, is to extend its capacity to 83 MW

next year. The expansion will be sup-

ported by nancing from Germany.

Kenya is reportedly contemplating

renegotiating a power purchase agree-

ment (PPA) it signed with Ethiopia in

2022, following a deepening electric-

ity crisis triggered by high rates from

Addis Ababa.

Ethiopia is a major hydroelectric

power supply in East Africa, with

Uganda and Kenya heavily relying on

the country.

The Energy and Petroleum Regula-

tory Authority (EPRA) has cited con-

cerns that the escalating energy situ-

ation in Addis Ababa poses a risk to

Nairobi’s power supply. If Ethiopia

fails to deliver the agreed-upon pow-

er, Kenya may need to renegotiate the

deal, despite the earliest possible re-

negotiation being in 2027.

The power deal aimed to provide

affordable electricity to meet Kenya’s

peak demand by reducing reliance on

expensive sources. However, Ethio-

pia is grappling with a signicant

electrication decit, causing wide-

spread outages and weak access in

rural areas.

Nadia Weekes

Azerbaijan, known for its rich oil and

gas reserves, is making strides in the

renewable energy sector, with a sig-

nicant increase in solar and wind

energy production observed at the

beginning of 2024.

In January and February, Azerbaijan

witnessed a remarkable increase in

solar energy production, with output

soaring to 50.7 million kWh, com-

pared with 8.4 million kWh in the

same period last year.

In the rst two months of this year,

wind farms contributed 9.5 million

kWh of electricity and solid waste

incineration plants generated 41.7

million kWh, against 9.1 million kWh

and 39 million kWh, respectively, in

January and February 2023.

The potential for renewable energy

in Azerbaijan is estimated at 27 GW

of capacity, predominantly in solar

(23 GW) and wind power (3 GW).

Economist and member of parlia-

ment Vyugar Bayramov has made the

case for boosting renewable energy

production, resulting in a more diver-

sied energy mix and cheaper elec-

tricity for consumers.

Meanwhile, Azerbaijan has indi-

cated a desire to invest in Croatia’s

renewable energy projects, according

to a source at the Croatian Ministry

of Economy and Sustainable Devel-

opment. The source believes there is

an opportunity for cooperation in the

geothermal sector especially, as Azer-

baijan has signicant know-how in

that technology.

Azerbaijan, Romania, Georgia and

Hungary signed an agreement in late

2022 to build a Black Sea submarine

electricity cable from the Black Sea

coast of Georgia to the Black Sea coast

of Romania. It is anticipated that the

project, with an initial budget of $2.3

billion, will be operational by 2029.

There is no indication that Croatia

may join it.

Fossil-fuel rich Azerbaijan eyes

renewable energy surge

Kenya to renegotiate power

agreement with Ethiopia

Thermal power to

dominate UAE power mix

up to 2035

Ivory Coast bets on solar

as part of renewables drive

South Africa’s Eskom explores

funding for major network expansion

n Transmission expansion planned amid wider market reform

n Red tape reduction to boost participation and innovation

n Solar power boost to deliver cheaper electricity

n Investment in Croatia renewables mooted

THE ENERGY INDUSTRY TIMES - MAY 2024

International News

supply-side exibility; demand-side

response; energy storage solutions;

and the advancement of active grids

including interconnectors. The opti-

mal balancing of these four levers

requires a cohesive strategy that in-

volves all sectors of the energy

industry, underpinned by a commit-

ment to innovation and infrastruc-

tural advancement.

Interconnectors play a pivotal role

in this transformation, enabling ener-

gy transfer across geographical and

political boundaries, thus enhancing

complementarity and consequently,

the overall resilience and stability of

the power systems. When wind is

blowing on the North Sea the sun may

not be shining on solar farms in Italy

or Spain. Or when the sun is at its

peak in California it could be power-

ing ofces and factories in New York,

three hours ahead. To get the most

from the potential of renewables, the

grid needs to be bigger than the

weather.

The European Network of Trans-

mission System Operators for Elec-

tricity (ENTSO-E)’s initiative to

double the capacity of cross-border

connections by 2030 is a testament to

the critical role these infrastructures

play. Such enhancements not only

improve the reliability of energy sup-

ply but also foster a more integrated

and sustainable European energy

market.

Digital technologies and power

electronics emerge as game-changers

in the quest for grid exibility. These

technologies allow for real-time grid

management and adaptability to uc-

tuating energy inputs from renewable

sources. By incorporating advanced

monitoring systems, predictive ana-

lytics, and automated control mecha-

nisms, grid operators can anticipate

and respond to changes in energy

production and consumption with

unprecedented precision.

Decarbonisation will transform our

energy system in the future, leading

to a ‘system of systems’, which must

be integrated and managed. The only

way to manage this is through digi-

talisation, while managing and opti-

mising today’s operations. Digitali-

sation in grid management involves

the deployment of smart sensors,

advanced metering infrastructure,

and IoT devices that provide data-

driven insights into grid operations.

This real-time data is crucial for

making informed decisions on ener-

gy distribution and for optimising

grid performance.

Power electronics play a critical role

in managing the quality and ow of

electricity through the grid. These

technologies facilitate the conversion

f all you read over the past year

were headlines, you’d think that

the place of wind in the energy

transition has been eclipsed by solar.

Solar has continued to out-pace ana-

lysts’ most optimistic scenarios for its

growth. And several factors have con-

tributed to headwinds that – in the

headlines, at least – threatened to slow

down offshore wind expansion in the

US and UK.

But at WindEurope’s annual confer-

ence this year in Bilbao, the industry

conversations reected the “can do”

optimism and condence that the

sector needs in order to play its part.

The reason being that behind the

headlines, there are three big factors

pushing in the opposite direction and

driving wind forward.

First, the COP28 global commit-

ment to 3x renewables by 2030 is a

boost across the board and gives

condence to investors, manufactur-

ers and developers about the direction

of travel.

Second, while solar will play a

much bigger role than even the most

optimistic forecasts believed possible

a few years ago, even its most-re-

spected analysts, like Jenny Chase

from Bloomberg NEF, stressed the

need for solar to be balanced with in-

vestment in wind across wide geogra-

phies to meet those climate-related

goals.

And third, the role of a exible grid

to integrating those renewables is

now clearer than ever before.

Electricity will be the backbone of

the entire energy system. In the global

power system of 2050, we need

around four times the power genera-

tion capacity and we will need to

transfer up to three times as much

electrical energy compared to 2020.

At the conference this year, together

with WindEurope we launched our

most recent report, ‘Maximising the

Power of Wind through Grid Flexibil-

ity’. The report provides a compre-

hensive analysis and strategic insights

into adapting our energy systems to

this new era. There were several key

points in the study, but in a nutshell

– the need for increased grid exibil-

ity has been facilitated by advance-

ments in digitalisation and power

electronics. With the right business

models and regulatory environments,

they can be deployed rapidly to help

meet our renewables goals.

As the penetration of renewable

power sources like wind and solar

intensies, the inherent variability of

these sources demands a radical en-

hancement in grid exibility. By

2050, it is projected that the exibility

requirements in the EU will need to

increase from 11 per cent to 30 per

cent of total electricity demand –

reaching 24 per cent by the crucial

2030 milestone. This substantial rise

underscores the critical importance of

evolving our grid systems to effec-

tively manage the variability associ-

ated with renewable power sources,

ensuring stability and continuity in

energy supply.

Despite decades of news around

the growth of renewables, however,

outside of expert circles the implica-

tions of moving from the old model

of centralised fossil-fuel power gen-

eration to more decentralised and

more variable renewables is not

widely understood. The hunks of

metal in turbines turning at a constant

speed driven by steam was a straight-

forward way to get a stable frequency

for power grids. But when sources of

power generation either have vari-

able speeds of turning metals (wind)

or basically no moving parts at all

(solar) – we need to have a system

that can accommodate all those dif-

ferent types of generation, and still

keep the lights on at any point in time

during normal operation as well as

during disturbances.

The key is a system that exes,

rather than breaks, to accommodate

different sources, each working at

different times, at different speeds.

Our research shows four key levers

to achieve the necessary exibility:

and control of electric power from

variable renewable sources, ensuring

that the energy supplied is stable and

reliable. Inverters, converters, and

controllers are examples of power

electronics that adjust the electrical

characteristics of the power generated

from renewable sources to match grid

specications, thereby mitigating is-

sues related to voltage uctuation and

phase alignment.

The full potential of digitalisation

and power electronics can only be

realised through supportive policy

and regulatory environments. Innova-

tive policies are essential to encour-

age investment in these technologies

and to facilitate the integration of ad-

vanced grid management solutions.

Adaptive and forward-thinking regu-

latory frameworks will be capable of

anticipating future challenges and

fostering an environment conducive

to technological innovation.

Developers and investors need cer-

tainty that the technology they com-

mit to deploying today will be future

proof, since consumers won’t receive

the long-term benets of lower prices

and energy security without those in-

vestments. The exible grid enabling

the rapid incorporation of the renew-

ables necessary to meet our goals re-

quires an unprecedented level of in-

novation not just in technology but in

collaboration, education, research,

new business models, global stan-

dards, investments, political and regu-

latory framework.

As outlined in our report, the renew-

able-powered future we all need can

only be achieved when it is built on a

grid for this model of power genera-

tion. And that means exibility, which

can be substantially realised through

the strategic implementation of digital

technologies and power electronics.

The challenges are signicant, but

the technologies and strategies to ad-

dress them are available and advanc-

ing. It is imperative that all stakehold-

ers collaborate to drive the adoption

of these transformative solutions. By

doing so, we not only enhance the

resilience and efciency of our grids

but also make signicant strides to-

wards our global sustainability goals.

In this critical decade of action, let us

commit to a future where our energy

systems will become much more

sustainable, exible and secure.

The urgent energy transition is a

global challenge and together we can

make a difference. We need to act

now and deploy technology at scale

and with speed, so that we can con-

tinue to advance a sustainable energy

future for all.

Gerhard Salge is CTO, Hitachi Energy.

THE ENERGY INDUSTRY TIMES - MAY 2024

Industry Perspective

The inherent

variability of

renewable power

sources like wind

and solar demands a

radical enhancement

in grid exibility.

The key is a system

that exes, rather

than breaks, to

accommodate

different sources,

each working at

different times and

at different speeds.

Hitachi Energy’s

Gerhard Salge,

explains.

Winds of change:

how the grid can ex

without breaking

Salge: exibility can be substantially realised through strategic

implementation of digital technologies and power electronics

sset-intensive and industrial

companies such as rening,

petrochemicals, fertilisers, ce-

ment, mineral processing and power

generation have much in common.

They are all major energy users and

all face challenges in progressing to-

wards net zero. To reduce their car-

bon intensity, they can follow a

three-pronged strategy: electrify as

much as possible across the business;

strategically pursue energy efcien-

cy; capture the carbon they continue

to emit or identify new, reliable and

clean energy sources.

Each of these is challenging and in-

dustrial AI will be a key enabler for

most companies to navigate the de-

carbonisation journey while main-

taining operational excellence and

business agility.

Energy efciency is, for most com-

panies, the fastest route to early suc-

cess in reduced carbon intensity.

Strategically adopting energy-ef-

cient practices creates value not only

by ensuring compliance with envi-

ronmental mandates but also by the

economic and operational advantag-

es that such measures offer.

Many companies have set their

sights on enhancing energy efcien-

cy by 10-20 per cent. However, a

closer look will reveal the opportuni-

ty to achieve more – up to 20 per

cent and 50 per cent is possible. The

burning question is how will that be

accomplished in the next 10 years?

The integration of articial intelli-

gence (AI) into energy-efcient digi-

tal technologies holds the promise of

speeding up and reducing the cost of

achieving these gains, creating more

business value.

For sectors that are heavily de-

pendent on energy consumption,

such as oil, chemicals, steel, and

power generation, the push for en-

hanced energy efciency presents

unique challenges.

First, most assets and the process-

es in which they operate are com-

plex, both because of the mix of

products being made, but also due

to the living nature of the assets,

which have evolved, changed and

expanded over time, leaving a com-

plex interdependency between ener-

gy supply and use, and production.

Adding to that complexity, the in-

creasingly volatile economic and

business environment globally re-

quires higher levels of operational

agility and operational excellence.

And economics, technology and

sustainability are causing business

leaders to put this all in the context

of industry convergence, where busi-

ness threats and opportunities are

emerging in adjacent sectors.

Digital and AI will have a pro-

found impact on a business’s oppor-

tunity to make order out of that com-

plexity in improving operational

excellence.

Here are four ways to think about

this:

n Fact-based prioritisation of carbon

reduction programmes. In a typical

energy or chemical setting, there are

many plants, assets, and supply chain

routes. Most companies today are

ying blindfolded in terms of know-

ing which investments will have the

biggest impact on decarbonisation

and the least on prot (or even a cor-

responding positive on prot). Here

is where digital can have a surpris-

ingly fast and easy role. A systems-

wide risk and availability model can

rank the carbon emissions “bad ac-

tors” and quantitatively predict

which investments will have the big-

gest benet fastest. Industrial AI can

rapidly evaluate available options

and propose the best solutions (often

new ones). Our company, together

with Saudi Aramco, has introduced a

generative AI solution that can do

this strategic “optioneering” rapidly.

n Electrication of equipment, tied

closely to ensuring 100 per cent re-

liability through smart microgrids

and hardened power distribution.

Electrication should be a multi-

year programme that starts now.

This should be coupled with an ear-

ly focus on a microgrid, to control

the reliability of your assets through

100 per cent power certainty and

working with electrical suppliers for

a “grid of grids” to improve the re-

siliency and intelligence of the sur-

rounding regional power grid. Ad-

vanced microgrids, that offer strong

cyber security and management, are

key here. Industrial AI plays an im-

portant role. AspenTech has intro-

duced the ability to forecast renew-

able power available to an asset

from hours to days in advance, tak-

ing advantage of the available

weather models, within distributed

energy resource management

(DERMS) and microgrid solutions.

n Applying industrial AI hybrid

models for operational excellence.

Highly-precise models can help

quantitatively prioritise and bench-

mark the highest emitting sites and

plants and provide optimisation strat-

egies. Industrial AI helps to acceler-

ate the deployment of these models

as digital twins to monitor the effec-

tiveness and conformance to the

agreed strategies – as advanced pro-

cess control, to automate operations

and push the limits and run more en-

ergy efciently, and as planning and

scheduling models to plan operations

not only for prot, but also for reduc-

tion in carbon intensity.

n Manage asset reliability to mini-

mise environmental releases. Indus-

trial AI powered predictive mainte-

nance solutions can provide 30 to 90

days advance notice of equipment

degradation. Taking action on this

advance notice can avoid the kind of

releases that can become major car-

bon emissions events for energy in-

tensive plants. AspenTech has intro-

duced workows that tie AI-based

predictive maintenance with opera-

tional scheduling systems, to turn the

AI provided information into action-

able guidance for plant schedulers,

supply chain planners, and mainte-

nance teams.

Industrial AI is creating value for

industrial companies today. Aspen-

Tech has already released over 25

different AI capabilities incorporated

in 18 different digital software solu-

tions, that span a company’s entire

value chain. The measurable value

that these AI capabilities provide fall

into three main areas: (1) agility – to

more quickly adapt to business con-

ditions and opportunities, (2) guid-

ance – providing guidance to opera-

tions and knowledge workers that

enables better decision-making in the

face of complex trade-offs and that

also enables the “next generation” of

workers to perform in an effective

way with less depth and length of ex-

perience, and (3) automation – per-

forming appropriate tasks without

human intervention (but with human

supervision).

Here are a few examples drawn

from companies that have imple-

mented and are using AspenTech in-

dustrial AI solutions.

Sardeolica, an operator of 171 MW

of wind turbine capacity, uses AI-

based predictive maintenance (Aspen

Mtell) to reduce maintenance costs

by 10 per cent, increase renewable

power production and availability by

a signicant amount, and extend ef-

fectively the lifetime of these zero

carbon assets.

Nissan Chemicals is using industri-

al AI hybrid models, to apply an As-

pen Plus digital twin to its steam

methane reforming ammonia pro-

cess, which previously was difcult

to operate consistently, and reduce

steam use by 2 per cent, with a corre-

sponding reduction in energy use.

Tupras is using industrial AI hy-

brid models, to employ a digital

twin model of its heat exchanger

networks, employing tens of thou-

sands of data points to monitor heat

exchanger fouling and more effec-

tively schedule heat exchanger

cleaning, saving over $1 million/

year in energy costs, and corre-

sponding energy use and carbon

emissions.

The journey to integrate AI into en-

ergy management practices is not

without its challenges. Concerns

over data privacy, the need for sub-

stantial initial investments, and the

requirement for specialised skills to

develop and manage AI systems are

among the hurdles to be overcome.

However, these challenges are sur-

mountable with the right strategies,

including fostering partnerships be-

tween tech companies and industry,

investing in new approaches to agile

workforce training, and adopting

best practices for data governance

and for cyber security.

The process and power industries

are in some ways a special case, be-

cause of the overriding need for safe-

ty, in the face of complex chemical

processes and the importance of 100

per cent availability for power and

electricity. A key element of “indus-

trial AI” that AspenTech uses as a

governing principle for the AI solu-

tions it develops, is the notion of

“guardrails” provided by the laws of

chemistry, physics, geosciences, and

electricity. These guardrails, when

implemented in software systems

such as hybrid models, ensure that

results provided by data science and

AI are evaluated to stay within the

boundaries of heat, material balance,

chemical equations, and electrical

ow principles and produce consis-

tent results time and time again.

For asset-intensive industries, the

message is clear: the time to harness

the power of AI in pursuit of energy

efciency is now. By leveraging AI’s

capabilities, companies can not only

meet their environmental commit-

ments but also unlock new avenues

for innovation and growth. It calls

for a collaborative approach, where

industry leaders, technology provid-

ers, and policymakers work together

to create an ecosystem that nurtures

and propels the adoption of AI-driv-

en energy efciency solutions.

As we stand at the cusp of a tech-

nological revolution in energy man-

agement, the role of AI in driving

energy efciency cannot be over-

stated. Its potential to transform op-

erations, reduce carbon footprints,

and pave the way for a more sus-

tainable future is immense. For as-

set-intensive industries, the integra-

tion of AI into their energy

efciency strategies represents not

just a step toward achieving envi-

ronmental goals but a leap into a fu-

ture where technology and sustain-

ability go hand-in-hand.

Dr. Rasha Hasaneen is Chief Prod-

uct and Sustainability Ofcer at

AspenTech.

Reducing carbon

intensity is a major

challenge for

industrial companies.

AspenTech’s

Dr. Rasha Hasaneen

believes industrial AI

will be a key enabler

for most companies

to navigate the

decarbonisation

journey, while

maintaining

operational excellence

and business agility.

Leveraging industrial AI for

enhanced energy efciency

THE ENERGY INDUSTRY TIMES - MAY 2024

Energy Outlook

Dr. Hasaneen: the role of AI

in driving energy efciency

cannot be overstated

lower medium investable grade, as of

April 2024 compared to BB+ stable,

which is the ‘best’ non investable

grade, just two years ago. Ratings were

even lower a few years earlier, well

into the ‘junk’ or ‘speculative’ grade.

Greece also has other business en-

couraging rankings. It was 42 out of

132 countries in the Global Innova-

tion Index and ranked 18 out of 40 in

the EY Renewable Energy Country

Attractiveness Index. The current

government, whose Prime Minister

was rst elected in July 2019, got a

fresh mandate in June 2023 and has

been highly focused on aggressive

investment and economic reform,

which have managed to attract foreign

investment through such measures as

cutting red tape. One of several ways

the country will be nancially sup-

ported is, for example, through access

to €35.9 billion ($38.4 billion) in

grants and loans by the EC – The

Recovery and Resilience Facility –

which will also cover public infra-

structure, including some energy

transition related investments.

Investment policy

The nation is blessed with a favourable

geographic location with high levels

of irradiation for solar PV and wind

resources among the most attractive in

Europe, which offer investors many

opportunities. In recent years, the gov-

ernment of Greece has established

benecial legal frameworks and nan-

cial environments, along with regula-

tory measures, to draw investments

into the renewable energy sector.

According to Tsaks Consulting,

project licensing procedures have

been simplied to facilitate solar PV,

wind, geothermal, biomass, and ma-

rine energy projects. The streamlining

included revising the licensing

framework aimed at avoiding regula-

tory delays, issuing a new licensing

code to avoid territorial overlaps,

amending the denition of ‘strategic

reece, like other EU nations, is

on a decarbonisation path. Its

abundant solar, wind and other

renewable energy resources offer in-

vestors a variety of opportunities.

Commitments

The national decarbonisation pledges

of Greece are intimately linked to

those set by the European Commis-

sion (EC). The government has found

it challenging meeting EC climate ac-

tion related directives, such as the 90

per cent reduction in GHGs. This is

due to the weak state of the national

economy and the EC-mandated scal

restrictions, which limits how much it

can spend on the energy transition.

Greece’s existing National Climate

and Energy Plan (NECP) envisages

€192 billion ($204.7 billion) in

spending through 2030. While the

NECP’s renewable energy capacity

ambitions are currently being toned

down by the government, it had en-

visaged adding nearly 13.5 GW by

2030. This would have included solar

PV reaching 13.4 GW, onshore wind

power rising to 7.6 GW, offshore

wind getting to 1.9 GW, and other

renewables totalling 0.8 GW. This

would be backed by energy storage

facilities touching 5.3 GW including

3.1 GW for batteries-based storage

and 2.2 GW for pumped storage. The

nal version of Greece’s NECP is

currently expected to be submitted to

the ECB in the next few months, ac-

cording to Balkan Green Energy

News.

Energy prole

Greek energy consumption has been

highly reliant on oil. It was responsible

for over 54 per cent of the total in 2022.

Non-fossil fuels accounted for less

than 20 per cent. The electric power

market landscape is different as clean

energy plays a central role. Large ad-

ditions of renewable energy capacity

in the past few years, especially solar

PV and wind power, led output from

clean energy sources to represent 48

per cent of the total in 2023, compared

to less than 10 per cent in 2008.

In part, this was thanks to less lig-

nite-red power production, a genera-

tion source that will be fully phased

out over the next few years. Electric-

ity consumption in Greece declined

by over a third since 2008, from 70

TWh to an estimated 46 TWh in

2023. Reasons for the drop include a

weak economy, a declining popula-

tion, and energy efciency improve-

ments. The government expects de-

mand to drop 6.2 per cent by 2030

from the 2020 level. This, however, is

in no way a negative factor for the

growth of renewable energy capacity

and related facilities, such as energy

storage. A large amount of new clean

energy capacity is being constructed

and more is under planning to replace

fossil fuel facilities.

Investment environment

Greece offers a variety of clean energy

projects opportunities for foreign in-

vestors and its investment prole for

foreign investors has progressively

been improving. The nation’s sover-

eign credit rating has been rising. Its

S&P rating is now BBB- positive, a

investments’ in energy and offer s-

cal, expedited licensing processes,

and government funding incentives.

This, in particular, for projects involv-

ing energy storage, green hydrogen,

offshore wind farms, solar PV, and

laying of submarine cables. Apart

from funding from the government,

there are also EU-related grants and

loans available for projects in Greece.

An example is the €400 million ($428

million) support from the European

Investment Bank for Mytilineos S.A.,

a Greece-based industrial and energy

conglomerate, to invest in solar PV

and battery storage systems an-

nounced in January 2024. Mytilineos

targets to add 2.6 GW and invest €2.5

billion ($2.7 billion) through 2027 in

Greece and across the EU.

Investors

There are a large number of companies

investing in renewable energy projects

in Greece. Some of the major domes-

tic investors include Ellaktor, Hel-

lenic Petroleum Renewable Energy

Sources, Motor Oil Corinth Rener-

ies, PPC Renewables, and Terna En-

ergy. Investors from other European

countries include France’s TotalEner-

gies, Germany’s RWE (via a JV with

PPC Renewables), Italy’s Enel Green

Power, and Spain’s Iberdrola and

Ecoener. Investments from outside

Europe have lagged. Chinese inves-

tors were early investors but have not

expanded their footprints. State Grid

Corp. of China took a stake in the na-

tional grid operator in 2016 and China

Energy Investment Corp. took a 75 per

cent stake in a wind farm in 2017. Pri-

vate equity is also interested in the

Greek renewables market. Australia’s

Macquarie Asset Management took a

50 per cent stake in Enel Green’s assets

in Greece for €250 million ($267.6

million) in January 2024.

Prepared for The Energy Industry

Times by Joseph Jacobelli at aCTEi.

THE ENERGY INDUSTRY TIMES - MAY 2024

Energy Transition Investment Series

Greece offers a

variety of clean

energy project

opportunities for

foreign investors

and its investment

prole for investors

has progressively

been improving.

This is the second in

a series of country

analyses where

TEI Times looks

at generation and

consumption proles,

policy, emissions

targets and ability to

attract the investment

needed to meet

government targets.

Greece: an abundance of clean

investment opportunities

Clean sources delivered almost half of power output in 2023, compared to under 10 per cent in 2008

RENEWABLES INVESTMENT PROFILE

RANK/RATING

YEAR

SOURCE

Business

Moody's sovereign credit rating

Ba1 stable

2024

tradingeconomics.com/

S&P sovereign credit rating

BBB- positive

2024

tradingeconomics.com/

Global Innovation Index

42/132

2023

wipo.int/global_innovation_index/

EY Renewable Energy Country Attractiveness Index

18/40

2023

ey.com

Other

Global Corruption Perceptions Index

59/180

2023

transparency.org/

Reporters Without Borders Press Freedom Index

107/180

2023

rsf.org/en/index

World Justice Project Rule of Law Index

47/142

2023

worldjusticeproject.org/rule-of-law-index/

Greece ranked 18 out of 40 in the EY Renewable Energy Country Attractiveness Index

very year, over 40 gigatonnes

of CO

are released into the

atmosphere, according to

TheWorldCounts. This poses a sig-

nicant challenge to achieving the

global goal of reaching net zero by

2050 through emissions reduction

alone.

Industries such as air travel, as well

as those deemed “hard to abate”, in-

cluding cement, iron, and steel pro-

duction, generate carbon dioxide

emissions through process reactions

that cannot be entirely eliminated by

transitioning to renewable energy

sources.

Even if all industries capable of

adopting renewable energy were to

do so, data from the International

Energy Agency’s (IEA) ‘Global En-

ergy Review 2021’ shows a persis-

tent 10-20 per cent gap of unprevent-

able emissions would remain.

Additionally, historical carbon diox-

ide emissions, stemming from global

fossil fuel combustion and industrial

processes since the industrial revolu-

tion, stresses the need for substantial

progress through offset measures.

All these reasons outline an urgent

need for a comprehensive global car-

bon-negative strategy, that includes

removing excess carbon dioxide out

of the atmosphere to mitigate the es-

calating climate crisis.

One of the paramount objectives in

the direct air capture (DAC) industry

is the strategic reduction of the cost

per tonne of CO

removal. Accord-

ing to a 2023 report on DAC by

IEA, the cost of direct air capture

(the end-to-end cost of CO

removal

including nal storage) will need to

fall from $600 to $1000 per tonne of

today to below $200 per tonne

and ideally closer to $100 per tonne

by 2050, and preferably earlier. Cen-

tral to this pursuit is the difcult

challenge faced by DAC companies,

as they attempt to curtail costs to

align with the industry benchmark of

$100 per tonne.

Additionally, a pivotal facet inte-

gral to the cost equation involves the

imperative need for scalability to be

economically viable. Conventional

DAC solutions have yet to develop a

technology that is economically via-

ble at scale that addresses factors,

such as, low energy consumption,

continuous functionality, location

exibility, minimal maintenance re-

quirements, and overall cost-effec-

tiveness in both setup and operation.

In recent years, efforts to enhance

conventional DAC methods have

seen signicant strides, with ad-

vancements spanning from the utili-

sation of novel materials like Metal

Organic Frameworks (MOFs) as ad-

sorbents with improved efciency

and stability, to improved engineer-

ing design concepts, such as rotating

lters.

While these endeavors have been

ongoing for the past decade, the

emergence of electrochemical-based

DAC approaches represents a para-

digm shift within this landscape.

Electrochemical methods, including

electrodialysis (liquid-membrane),

liquid pH swing techniques, and Re-

pAir’s electrochemical cell-based so-

lution, offer promising avenues to ad-

dress the inherent limitations, such as

energy efciency and cost-effective-

ness, of existing DAC technologies.

Among these, RepAir Carbon

stands out as a transformative solu-

tion, strategically engineered to tack-

le key challenges at a gigatonne

scale, emphasising low energy con-

sumption and a fast path to seamless

scalability. Notably, RepAir’s ap-

proach distinguishes itself by operat-

ing in a solid-state conguration,

sidestepping the logistical complexi-

ties associated with liquid handling

and maintenance. Additionally, its

robustness against the presence of

other atmospheric gases sets it apart

from other emerging electrochemical

alternatives.

RepAir’s DAC design represents a

leap forward in carbon removal tech-

nology, offering a viable solution for

the immediacy of the climate crisis.

The technology behind RepAir’s

DAC system involves a series of

electrochemical principles. Like a

battery, the process employs two

electrodes placed on either side of a

selective separator creating a cell.

These cells are ‘stacked’ to multiply

the carbon-removal capacity. Atmo-

spheric air is drawn into the cath-

ode, where an electrical current

generates hydroxide ions that bind

to CO

molecules, forming carbon-

ate and bicarbonate ions. Only these

ions cross the separator into the an-

ode, wherein the binding process is

undone, the hydroxides are con-

sumed, and pure CO

gas is drawn

out. Achieving a continuous process

is realised by systematically switch-

ing cell polarity approximately ev-

ery few hours.

Lab results demonstrate impressive

energy efciency, using only 600

kWh/t of CO

removed. This is sig-

nicantly lower than other DAC

technologies. Electrochemical pro-

cessing enables operation at ambi-

ent temperatures, distinguishing it

from solvent-based or solid-based

capture methods that often require

high temperatures and signicant

water usage.

RepAir’s low energy consumption

and efcient, continuous process,

leads to minimal operating expendi-

tures (OpEx). Additionally, the

straightforward, modular design fur-

ther contributes to its scalability, re-

sulting in low capital expenditures

(CapEx). This combination positions

RepAir’s solution as highly condu-

cive to large-scale production, offer-

ing maximum potential for swift and

sustainable implementation.

RepAir’s electrochemical techno-

logical approach has key differentia-

tors that yield notable benets com-

pared to other carbon capture

solutions:

n Low energy consumption: Re-

pAir’s DAC consumes 70 per cent

less energy than conventional solu-

tions, with core units exhibiting en-

ergy consumption of less than 0.6

MWh/t CO

, including regeneration.

n No heating required: The electro-

chemical process achieves regenera-

tion without the need for heating,

further streamlining operations and

lowering costs.

n Continuous process: Unlike DAC

technologies operating on a capture

and release system, RepAir’s contin-

uous process enhances efciency by

providing a streamlined carbon cap-

ture solution. Continuous separation

is achieved through the swift collec-

tion of separated CO

in a matter of

seconds during polarity switching.

n Mass manufacturability: Capacity

expansion is achieved by stacking

multiple cells into a single stack and

combining several stacks into a basic

unit, simplifying both manufacturing

and scalability. These building

blocks are called, “StackDAC” mod-

ules enabling seamless stacking of

interlocking modules for ease of de-

ployment and the fastest time to cap-

ture carbon at scale.

n Low cost at scale: Facilitated by a

low-cost approach, RepAir’s solu-

tion will be easy to scale up with es-

timated gures of $50/t CO

at the

gigatonne scale. Additionally, the

system’s compact footprint of ap-

proximately 15 t CO

underscores

its efciency and scalability.

n Liquid-free technology: RepAir’s

technology eliminates issues associat-

ed with liquid usage in other technol-

ogies, resulting in minimal mainte-

nance requirements, enhanced safety,

and environmental responsibility.

n Quick ramp-up/shutdown: With-

out the use of solvents or liquids,

RepAir’s solution operates instantly

at the ip of a switch. This allows

for a rapid response to intermitten-

cies, which may occur when transi-

tioning to renewable energy sources.

n No platinum group metals (PGMs)

or rare materials: RepAir’s electro-

chemical solution is based on abun-

dant materials, eliminating the need

for expensive rare-earth metals or

PGMs, enhancing affordability and

sustainability.

n Renewable electricity usage: Driv-

en by renewable energy sources, Re-

pAir’s process ensures high net cap-

ture and overall efciency.

Recently RepAir took its technolo-

gy out of the lab and on to the roof

with the launch of an outdoor pilot,

demonstrating the technical perfor-

mance of its carbon capture solution

in an operational environment for the

rst time. This marks a shift in Rep-

Air’s electrochemical solution to

Technology Readiness Level (TRL)

6, a signicant step forward on the

road to scale up and market viability.

The launch of the prototype serves

as an excellent tool for R&D to con-

tinuously assess results and to verify

that the energy consumption is in-

deed 600 kWh/t. RepAir plans to

launch its 1 ktpa commercial pilot by

2025.

On the commercial front, RepAir

is actively engaging sequestration

partners to create a comprehensive

solution throughout the value chain.

Simultaneously, it is recruiting off-

setters for the purchase of carbon

credits.

RepAir’s groundbreaking electro-

chemical approach not only ad-

dresses the fundamental drawbacks

of conventional DAC methods but

also offers a multitude of benets

critical for adopting a carbon-nega-

tive strategy.

With signicantly lower energy

consumption, unparalleled mass

manufacturability, and low costs,

RepAir’s technology presents a para-

digm shift poised to transform the

carbon capture landscape.

Amir Shiner is CEO, RePair Carbon

Capture.

There is an

urgent need for a

comprehensive

global carbon-

negative strategy,

one that includes

removing excess

carbon dioxide out of

the atmosphere using

technologies such

as Direct Air Capture

(DAC). RepAir

Carbon Capture’s

Amir Shiner,

describes an

electrochemical cell-

based DAC solution

that cuts energy

usage by 70 per cent

for cost-effective

carbon removal at

gigatonne scale.

Answering the urgent call for

negative emissions

THE ENERGY INDUSTRY TIMES - MAY 2024

Technology Focus

Schematic representation of a

100 ktpa DAC facility. RepAir

plans to launch a 1 ktpa

commercial pilot by 2025

“StackDAC” modules enable seamless stacking of interlocking

modules for ease of deployment and the fastest time to capture

carbon at scale

THE ENERGY INDUSTRY TIMES - MAY 2024

Final Word

hinese medicine can be effec-

tive, even if sometimes unpal-

atable. No doubt that must be

the thinking of many western coun-

tries as they observe China’s transition

to a green energy economy and the

impact of its efforts in tackling cli-

mate change on the rest of the world.

The importance of the country can-

not be understated; its energy transi-

tion affects us all. Accounting for one

quarter of the world’s energy use, not

only is China the world’s highest

emitter of carbon emissions, it is also

the largest investor in clean technolo-

gies. Good reasons for DNV to publish

last month its rst standalone transi-

tion report for China.

According to its ‘Energy Transition

Outlook China 2024’, which gives the

most likely forecast to 2050, last year

China was responsible for a third of

the world’s energy-related CO

emis-

sions. But at the same time, the

country is establishing itself as a green

energy leader with an unrivalled build-

out of renewable energy and export of

renewable technology.

Launching the report Remi Eriksen,

DNV’s Group President noted: “It is

impossible to understand the forecast

for the global energy transition with-

out understanding and forecasting the

transition in China. China’s emission

reduction trajectory and its position as

a leading supplier of clean energy

technology worldwide are central as-

pects of the global transition.”

At the COP28 climate conference

late last year it was made clear that

much more needs to be done if the

world is to curb carbon emissions

sufciently to stay within the 1.5°C

rise in global temperature, agreed in

Paris in 2015 as the limit to avoid di-

sastrous climate change.

So where is China in its journey to

fullling its pledge for carbon neutral-

ity by 2060? According to DNV, by

2050 the country will have cut its

carbon emissions by 70 per cent,

thereby reducing its share of global

emissions from one third to one

fth.

This will largely be achieved by re-

placing coal with renewables in the

power generation mix and the electri-

cation of end-use demand. Today,

coal accounts for about 60 per cent of

China’s electricity production use.

According to DNV, by mid-century

that will fall to just 3 per cent, as solar

and wind become the cheapest form

of electricity in the country.

The increase in solar and wind is

phenomenal. DNV forecasts that solar

will account for 38 per cent of all

electricity produced in China by 2050,

up from about 5 per cent today. More

than a third of installed solar capacity

will be combined with storage,

mainly batteries, says the report.

Wind growth is slightly more slug-

gish but still grows from delivering

about 8 per cent in 2022 to 38 per cent

in 2050.

As Erisksen noted: “The scale of

change is hard to picture: mountains

of coal will be replaced by square ki-

lometres of solar PV and thousands of

wind turbines.”

He added: “Together with energy

storage, renewables will do the job of

making China’s energy use not only

cleaner but greatly more efcient. And

more independent. But no one should

underestimate the scale of the chal-

lenge of what China is undertaking to

move its economy off coal depen-

dence. China’s goal is carbon neutral-

ity by 2060. Our forecast shows China

falling a little short of this goal.

However, we believe with more focus

and effort the goal is achievable.”

DNV says China will still have a

sizeable reliance on coal and oil by the

end of the forecast period, which

leaves “room for accelerated prog-

ress”. Eriksen notes that since energy

security and decarbonisation pull in

the same direction, “there is a logic for

moving faster”.

Its rapid transition to renewables

means China is not only producing

solar panels and wind turbines for

domestic use but is also producing a

signicant amount of clean energy

technology for the rest of the world.

In that sense it is a key enabler for the

global energy transition.

For some countries, this is a head-

ache. China’s success is in some ways

proving to be a double-edged sword

for the rest of the world.

Sverre Alvik, Vice President, Energy

Transition Research Director, said:

“The large majority of the world’s

solar panels, wind turbines, electric

vehicles and batteries are produced in

China. We see that the geopolitical

realities are a challenge in this respect

and protectionism is growing in North

America and Europe. We see EU

politicians looking to see if there are

unfair subsidies that are changing the

competitive landscape.”

Just last month the EU Commission

announced that it will launch an in-

quiry into Chinese suppliers of wind

turbines under the new Foreign Sub-

sidies Regulation.

Announcing the new inquiry, Com-

mission Executive Vice-President for

Competition Margarethe Vestager

said that the large excess capacities

of subsidised Chinese wind turbines

“is not only dangerous for our com-

petitiveness. It also jeopardises our

economic security”. She added that

the EU must not repeat the mistakes

it did in losing its solar manufacturing

industry.

The EU wants to increase its wind

energy capacity from 220 GW today

to 425 GW by 2030 and 1300 GW by

2050. Currently, nearly all the wind

turbines built in Europe today are

European wind turbines – produced by

European manufacturers and assem-

bled in Europe. But there is a very real

risk that the expansion of wind the EU

wants will be made in China, not in

Europe.

The EU is keen to avoid this. More

broadly, it wants to strengthen its en-

ergy security and understands the

dangers of an over-reliance on China

for strategic clean technologies like

wind. In her State of the Union speech

last September Commission President

Ursula von der Leyen said: “The future

of our clean tech industry has to be

made in Europe.”

The Commission has also launched

two investigations into Chinese

manufacturers of solar panels sus-

pected of benetting from “distor-

tive” state subsidies and gaining an

“unfair advantage”.

China hit back at Europe’s recent

wind turbine subsidy investigation

labelling such a move as “typical

protectionism”. Ministry of Com-

merce (MOC) spokesperson He Ya-

dong said at a press conference that

Chinese new energy companies, in-

cluding those in the wind power sector,

have rapidly developed to gain com-

petitive advantages and secured a

leading position globally through

continuous technological innovation,

a sound production and supply chain

system, and full market competition.

“This could not be achieved through

subsidies,” said He.

“Committed to providing high-

quality products for the global efforts

in coping with climate change, the

Chinese new energy sector has made

positive contributions to the green

transformation of countries world-

wide, including the EU,” He added.

Speaking at the World Energy Con-

gress in Rotterdam last month, Saudi

Aramco’s Chief Executive Amin

Nasser defended China against accu-

sations that it was “dumping” cheap

solar panels and electric vehicles on

Europe.

“China really helped by reducing the

cost of solar energy,” he said. “A lot of

what happened in solar panels is be-

cause of what China did in terms of

reducing [prices]. We can see the same

now in electric vehicles. Their cost is

one-third to one-half the cost of other

electric vehicles. So we need globalisa-

tion and collaboration if we are going

to achieve our energy targets by 2050.”

No doubt Nasser’s stance is inu-

enced by Aramco’s desire to serve

China’s continuing need to import oil.

Yet it is a fair point.

The Paris Agreement is a shared

undertaking by the world’s nations and

China’s success in tackling climate

change is crucial to all of us. If China

fails, the world fails. Yet its leadership

in the green energy sector could prove

to be a bitter pill for the rest of the

world to swallow.

Chinese medicine

Junior Isles

Cartoon: jemsoar.com