This newsletter peddles many and various stories, but none as big as the Inflation Reduction Act. It is not a stretch to imagine that the next generation will point to Joe Biden’s initiative as the moment that the energy transition got its wings.
COMPANY NEWS
Ørsted Posts All-Time High Offshore Wind Earnings
Earnings from the company’s wind and solar assets in operation amounted to DKK 6.9 billion, which was an increase of DKK 2.2 billion compared to the same period last year.
Ørsted said that earnings from offshore sites were at ”an all-time high” and ”back on track” as the ”key EBITDA driver” in the quarter.
Earnings from offshore sites amounted to DKK 5.9 billion, an increase of DKK 2.2 billion compared to last year.
The increase was driven by the ramp-up of generation from the Hornsea 2 and Greater Changhua 1 and 2a offshore wind farms in the UK and Taiwan, respectively. (offshorewind)
photo: Orsted
Court clears way for full nationalisation of EDF
The path has been cleared for the full nationalisation of energy giant EDF, as a French appeals court rejected a complaint filed by minority shareholders against the terms of a government buyout.
The government launched the buyout last year, aimed at delisting the company and taking full control of the group, including the debt it carries.
The move is part of President Emmanuel Macron‘s plans to ramp up nuclear energy, with at least six new reactors to be built in the coming years.
The Association for the Defense of Minority Shareholders (ADAM) had previously challenged the buyout price of 12 euros per share, but the court “rejected all of the plaintiffs’ demands”, according to a document seen by Reuters. (energylivenews)
UK NEWS
Octopus floats five-point plan to ease grid connections
In a new policy paper, ‘End the Gridlock’, Octopus’s generation arm spells out steps for greener, quicker hook-ups:
– Queue jumping should be encouraged, enabling wind and solar schemes closest to completion to secure confirmed connection permits earliest
– Weed out older connection offers with no-appeal sunset clauses, so fossil-reliant upgrades plants cannot block the queue
– Taking a transparent, data-driven approach to connections, granting permits within zones defined by evidenced, most urgent need for the most new renewables
– Increase competition between developers in the grid connection process, while at the same time
– Fostering collaboration to share and cut connection costs
Octopus calculate their proposed reforms could speed delivery of wind & solar power equal to the needs of 2.5 million homes, matching current demand from Manchester and Birmingham combined. Lower bills and less reliance on polluting fossil fuels would result, the company says. (theenergyst)
UK’s first transmission-connected solar farm goes live
Cero Generation and Enso Energy have announced the energisation of what is claimed to be the first UK solar farm to connect to the higher voltage transmission network rather than a local distribution network. The 50MW solar farm will be co-location with a 49.5MW / 99MWh battery energy storage system (BESS), allowing more flexibility and efficiency in power generation.
By connecting to the transmission network, the Larks Green solar farm will allow clean energy to be transported over greater distances. It will generate 73GWh of electricity annually.
Cero Generation is part of the portfolio of Australian financial services company Maquarie’s Green Investment Group (GIG), while Enso Energy is Cero’s UK development partner. (solarpowerportal)
photo: Cero Generation
Schroders Capital launches renewables fund
Schroders Capital announced yesterday it had received regulatory approval from the Financial Conduct Authority (FCA) to launch a long-term asset fund (LTAF) dedicated to renewable energy and the energy transition.
The LTAF will be managed by Schroders Greencoat and will invest in infrastructure assets for the UK defined contribution market, becoming the first LTAF to have an investment remit solely focused on renewable energy and transition-aligned infrastructure.
The news follows the recent launch of Schroder Capital Climate+ LTAF, which was the first to receive approval by the FCA in March. (businessgreen)
UK FFR prices fall to three-year low
Firm Frequency Response (FFR) auction prices in the UK have hit their lowest level since 2019 as market saturation begins to take effect, market analytics platform Modo Energy said.
The firm said the auction during April saw a drop in volume requirements leading to 86% of all bidded volumes, totalling 1.59GW, being rejected in each EFA block (Electricity Forward Agreement) for May delivery.
Perhaps more significantly, the reference price for this month’s tender round is just £5.69/MW/hour, a 16% fall on April and the lowest price since Modo started collecting the data back in January 2020. Prices were above £20/MW/hour from September to November 2022.
The saturation of ancillary service markets in the UK and the shift to merchant business models based around trading energy has been expected for some time.However, delays in battery storage projects coming online over 2022 meant this may not have happened as soon as expected. No new grid-scale projects came online in the UK in the four months from April to July 2022. (energy-storagenews)
Why has the government broken its promise on walking and cycling?
Buried in a written statement on 9 March, Transport Secretary Mark Harper announced that overall active travel funding for England in the current parliamentary term is being reduced from £3.8 billion to £3 billion. This includes a two thirds cut to promised capital investment in infrastructure for walking, wheeling and cycling, from £308 million to only £100 million for the next two years.
These cuts call into question the government’s commitment to net zero. Active travel isn’t a ‘nice to have’, it must be at the heart of the UK’s transport decarbonisation plan if it’s to meet its targets. Extrapolating Sustrans’ 2021 Walking and Cycling Index to the UK population shows that people walking, wheeling and cycling took 14.6 million cars off the road, saving 2.5 million tonnes of greenhouse gas emissions. Transport for Quality of Life found that even if 100 per cent of all new vehicle sales were ultra low emission vehicles by 2030, car mileage would still need to be reduced by between ten and 20 per cent to limit global temperature rise to below 1.5 °C. (greenallianceblog)
EUROPEAN STORIES
Sweden is building the world’s first permanent electrified road
Sweden is turning a highway into a permanent electrified road – the first of its kind in the world. This is a road where cars and trucks can recharge while driving.
Experts say dynamic charging allows them to travel longer distances with smaller batteries, and to avoid waiting at charging stations.
The chosen motorway, European route E20, connects logistic hubs between Hallsberg and Örebro, located in the middle of the country’s three major cities, Stockholm, Gothenburg, and Malmö.
The project is currently at the procurement stage and is planned to be built by 2025.
The charging method for E20 hasn’t been decided but there are three types of charging: catenary system, conductive (ground-based) system, and inductive system.
The catenary system uses overhead wires to provide electricity to a special kind of bus or tram and therefore can only be used for heavy-duty vehicles.
Conductive charging, on the other hand, works both for heavy-duty vehicles and private cars as long as there is a conduction system such as a rail. The vehicles are charged through a stick that touches the rail.
The inductive charging system uses special equipment buried underneath the road that sends electricity to a coil in the electric vehicle. The coil in the vehicle then uses that electricity to charge the battery.
In 2020, Trafikverket built a wireless electric road for heavy trucks and buses in the island city of Visby. (euronews)
photo: Smartroad Gotland
BMW Group Leads Car2Car End-of-Life Recycling Project
A Car2Car project that explores the circular economy in car manufacturing is being led by BMW Group and is being funded by the German government. BMW Group is collaborating with experts from the recycling sector, commodities processors, and the scientific community to find ways to raise the caliber of secondary raw materials produced through the recycling of end-of-life automobiles.
The project is supported by €6.4 million from the Federal Ministry for Economic Affairs and Climate Action in Germany under its “New Vehicle and System Technologies” funding guidelines.
Future innovations in dismantling and automated sorting techniques should make it possible to make much more resources from scrap cars usable for new cars. That’s what the project is about. A comprehensive assessment of the ecological and financial effects of the materials in a closed-loop recycling is also part of this research. (cleantechnica)
FOCUS ON: THE INFLATION REDUCTION ACT
The Revolutionary Potential of the Inflation Reduction Act
Cities, states, municipalities, and nonprofit organizations want to build green-energy infrastructure. But in the past, the federal government has incentivized green energy mostly through tax credits—a system that doesn’t help the public and nonprofit sectors. To get a tax credit, you need to have tax liabilities, which these entities rarely have. But starting this year, something will be different: As a result of the Inflation Reduction Act’s “direct pay” feature, the federal government will provide subsidies straight to these groups, without needing to go through private investors.
There’s debate in left-liberal spaces about how to characterize the Inflation Reduction Act, the large climate bill the Democrats passed in 2022. The IRA allocates $369 billion to clean energy, around $270 billion of which is in the form of tax incentives for investments by individuals and organizations. Will these billions primarily support the private sector? Even as the new law brings down carbon pollution, is it a missed opportunity to challenge the status quo?
Not necessarily, since the direct-pay part of the IRA creates an opportunity for the public sector to start building things again. If it’s executed well, the IRA can expand state capacity, which can then be extended from green energy to all kinds of other public investment. It could help transform what local governments can do. (nation)
Solar Panel Orders Point to Clean Energy Boom
Over the past five decades, the US has installed about 140 gigawatts of solar power generation capacity, enough to provide more than 3% of its power. That is just a start: Between now and the end of the decade, the country might add three times that much .
It might seem fanciful to expect a market to quadruple in size in only eight years. But for that we can thank President Joe Biden’s Inflation Reduction Act and its generous, decade-long subsidies for both clean energy manufacturing and generation in the US. Adding 360 gigawatts of solar in eight years does not require an exceptional year-on-year growth rate, though it does require investment. And it will certainly need a speeding up of the often-fraught process of interconnection that brings new projects onto the grid.
A good way to look at whether this good news is translating into business is to look at a solar module manufacturer such as First Solar
First Solar has substantial manufacturing capacity in the US; its solar technology is exempt from the tariffs that vex many international companies and impede climate progress . The company’s products are therefore in high demand.
Very high demand. First Solar’s order book, the total of its expected future sales, grew slowly if steadily over the second half of the last decade. By the start of 2020, it had reached 11.5 gigawatts — a significant if not massive number in the global context.
Since then, though, it has grown almost seven-fold, including a doubling from the second quarter of 2022 to the end of the first quarter of 2023. (Biden signed the IRA into law in August 2022.) The company’s order book at the end of the last financial quarter was nearly 70 gigawatts’ worth of modules. (bloomberg)
GLOBAL STUFF
Green Hydrogen Sails Under Anti-ESG Radar In Texas
Texas Governor Greg Abbott is generally associated with unwavering support for fossil fuel interests and will take any chance to snipe at all things ESG. Maybe we should watch what he does rather than says sometimes.
Abbott is among those cheering the arrival of a new, $4 billion green hydrogen operation under the wing of the companies Air Products and AES Corporation, to be located on the site of a former coal power plant in Wilbarger County.
Billed as the biggest green hydrogen facility in the US, the project is expected to push $500 million into the state’s economy over its lifetime.
“This project will not only bring hundreds of jobs and millions in revenue to the Lone Star State, but will also expand our state’s robust energy sector and further solidify Texas as a global powerhouse in this critical industry,” Abbott enthused in a press statement last December.
The Governor’s office further notes that the project will “broaden Texas’ energy portfolio and will position our state as the country’s leader in green hydrogen while helping to reduce emissions,” which is the long way around to saying that green hydrogen — meaning hydrogen produced from water with the help of electricity from renewable energy — will help push petroleum fuels out of the transportation market. (cleantechnica)
