Each week brings us new discoveries and achievements, ups and downs, victories and failures. Ukrenergo review closely monitors the current of events in the world of energy so that our readers miss none of the important developments. This week we will talk about the following.
1.Growth of world investments in power grids. According to the report of the International Energy Agency, the electric power industry attracted USD 750 billion in 2017, primarily due to the development of power grids. This amount is already ahead of the oil and gas industry for the second year in a row. In particular, total expenditure for power grids in 2017 increased by 1% up to USD 300 billion. The share of power grids in the total volume of investments amounted to 40%, which is the highest indicator for the last decade. China remains the largest market for grid investments, while the United States holds the second place.
The amount of financing is growing at the expense of technologies that ensure the flexibility of grids as well as the integration of RES and new consumers. Power companies are upgrading their grids and purchasing SmartGrid-related businesses, including smart meters, switchgear and electric charging stations, accounting for more than 10% of the grid expenditure. At the same time, investments in stationary energy storage systems decreased by 10% to less than USD 2 billion, although this figure is still six times higher than in 2012.
2.Drones watching energy security. Unmanned aerial vehicles (drones), used for air video shooting, can become a new effective tool for power companies. Previously, European power companies used helicopters with cameras to monitor tens of thousands of kilometres of their grids. Now, however, Italian Snam, the largest gas company in Europe, launched testing of BVLOS, the drones specially designed for the company. RTE, a French TSO, also tested one drone, which inspected about 50 km of power lines and immediately transmitted the processed data, thus allowing the specialists to simulate the inspected grid area. The company said it planned to invest EUR 4.8 million during the following two years to further develop that technology.
It should be noted that such drones cost about EUR 20 thousand per unit, while BVLOS drones are even more expensive. Moreover, to monitor the grid, a fleet of dozens, if not hundreds of such aircraft, is required. Navigant Research predicts that power companies all over the world will spend more than USD 13 billion a year to establish drones infrastructure against USD 2 billion today. Another issue relates to the legislative restrictions and regulations for using drones, which, for example, operate in the EU. However, despite the difficulties, this approach is rapidly evolving and will soon replace the practice of monitoring grids with the help of helicopters and planes.
3.The world’s largest grid security solution. GE Power, a division of General Electric, launches the first phase of the world’s largest solution for power grid security, which will operate in the north of India. The project constitutes a part of a USD 52.2 million contract signed by GE in January 2014. It provides for the installation of WAMS (Wide Area Monitoring System) in all five regional grids of north, south, east, west and northeast India. The company has already launched the first phase of the project. The solution will allow monitoring 110 substations in the Northern Grid and respond to fluctuations within 1 second, which will be critical to overcoming the imbalance of electricity demand as well as ensure the stability by means of integrating renewable energy into the grid. When fully commissioned, the new WAMS solution will be the largest in the world, comprising 1,184 Phasor Measurement Units (PMU), 34 control centres throughout India and 350 substations nationwide. The development and testing of new software and substation devices has been performed by GE groups from India, the United Kingdom and the United States during two years. “This will prove to be an important milestone in ensuring supply of uninterrupted, 24/7 high-quality power supply and integration of renewable energy with the country’s electrical grid,” said Sunil Wadhwa, Managing Director, GE T&D India Limited and Leader of GE Power’s Grid Solution business in South Asia. Thus, India demonstrates another power breakthrough.
4.Electric vehicles can become a problem for balancing power grids. After RES brought more volatility into electricity supply, it is expected that an increase in the number of electric vehicles will further complicate the balancing of power grids. For example, according to National Grid, a British TSO, it is expected that in 2030 the number of electric vehicles in Britain will reach 11 million. According to estimates prepared by Future Energy Scenarios, that number can reach the level of 36 million in 2040. Subsequently, demand for electricity will increase. Depending on when people charge their electric vehicles, the pressure on the British power grid will also strengthen. “The continued growth in electric vehicles, a greater volume of low carbon generation and the advancement of storage technology, are among the major trends we are seeing,” said Fintan Slye, a National Grid director. Power supply and demand balancing will become an ever more complex process if to compare today and 2050. A similar situation can be extrapolated to other countries, and power companies need to start preparing for such challenges today.
5.Ireland to become the first country in the world to abandon its investment in fossil fuels. The Republic of Ireland will become the first country in the world to sell its investments in a fossil fuel company. The Irish fossil fuel divestment bill was passed in the lower house of parliament on Thursday and it is expected to pass rapidly through the upper house, meaning it could become law before the end of the year. As established by the new law, the state investment fund will have to sell all its investments in the amount of EUR 8 billion in coal, oil, gas and peat “as soon as possible,” which is expected to be five years. The Irish State Investment Fund has more than EUR 300 million in investments in organic fuel in 150 companies. For comparison, Norway’s sovereign wealth fund only partially turned away from fossil fuels, focusing on some coal companies, and is still considering its oil and gas assets. Proponents of divestment argue that the existing resources of fossil fuels are already exceeding the permitted limits of future emissions and environmental standards. The exploration and production of new fossil fuel resources is morally false and economically risky. Therefore, Ireland can become the first country in the world that will not have any business with fossil fuel investments by the end of this year.