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  • UKRENERGO REVIEW 18 – 24 MAY

     

    1. EU adopted new regulations for the electricity market

    The Council of ministers of the EU formally adopted new EU legislation that redesign the EU electricity market. These documents conclude the remaining elements of the Clean energy for all Europeans package. The new rules will reinforce consumer rights, putting them at the heart of the energy transition, and will create green jobs, according to the European Commission’s statement

    For example, the new rules on the electricity market will make it easier for renewable energy to be integrated into the grid, encourage cross-border trade, and ensure that the market provides reliable signals for future investment. Today’s rules also require Member State to draft plans to prevent, prepare for and manage possible crisis situations in the supply of electricity in coordination with neighbouring Member States, and to enhance the role of the Agency for the Cooperation of Energy Regulators (ACER).

    In general, new package concentrates on the following elements:

    • Energy efficiency: the revamped directive on energy efficiency encourages to construct buildings with zero electricity consumption.
    • More renewables: new target of at least 32% of renewable energy by 2030 has been fixed.
    • A better governance of the Energy Union: each Member State drafts National Energy and Climate Plans (NECPs) for 2021-2030 setting out how to achieve their energy union targets.
    • More rights for consumers:the new rules make it easier for individuals to produce, store or sell their own energy, and strengthen consumer rights with more transparency on bills, and greater choice flexibility.
    • A smarter and more efficient electricity market:the new laws will increase security of supply by helping integrate renewables into the grid and manage risks, and by improving cross-border cooperation.

     

    1. Modernization or transformation – which way will choose energy companies

    Nowadays there is no single vision of the development of energy companies in the long run. There are two main approaches – modernization and transformation, writes American consultant company BRIDE Energy Group in its report.

    The transformation supporters emphasize investments into talent, infrastructure and capabilities. Yet critics of this approach claim that transformation is only taking place across a small sector of the business and don’t encompass all the segments of the company.

    The modernization supporters think that “slow and steady wins the day”. In their opinion, there is need to improve field workforce management, analytics and predictive maintenance schedules. Utilising news technology to address an existing business challenge will give an opportunity to strengthen their core deliverables before exploring new business opportunities.

    BRIDGE Energy Group analysts note that both approaches have an important role in the future development of the sector. Each offers advantages and disadvantages.

     

    1. Self-driving automobiles – how soon

    According to the automobile automation classification developed by the Society of Automotive Engineers (SAE), there are 6 levels of automation. At present the usage of 4th and 5th levels of automation is considered. Level 5 of automation means that the car can do anything a human driver could do.

    Level 4 of automation supposes that the driver’s constant attention isn’t needed. He can fall asleep or leave the driver seat. However, the car could be self-driving withing a geographical area (geofenced) or on a specific road type, such as a freeway.

    When autopilots appear on the roads, depend on the applied automation level. According to the European Road Transport Research Advisory Council (ERTRAC) Roadmap:

    • One can ride automated buses on dedicated roads since 2019
    • One will be able to ride them in mixed traffic backstopped by remote control centers by 2024
    • These buses will be fully automated within defined urban conditions by 2030.

    ERTRAC has a similar forecast for passenger cars: they predict “Highway Autopilot”, the road-specific form of Level 4, will be available in 2020, fully automated sometime after 2030.

    Predictions tend to focus on technology and cost. And don’t take into account other barriers that can delay implementation. These include legislation, safety and consumer acceptance. These matters are far from being resolved.

     

    1. Blockchain technology growth in popularity among energy companies

    The deployment of blockchain technology in energy-related applications has become a trending subject of sorts among industry giants as well as the start-up investor community. It can enable the creation of automated and transparent records of generated power and its subsequent consumption.

    Blockchain is widely applied in microgrids, which basically are localized networks of energy production, independent of utility providers and centralized power generation facilities. These grids can include solar and wind generated power for supplying electricity to consumers, in addition to being able to sell surplus power to the central grid.

    Suppliers in a microgrid would supposedly be able to receive payments for contributing electricity through the distributed ledger technology, reinforcing the decentralization of the power industry. The same can also be used on a larger scale by major utilities to trade amongst each other through blockchain, that can reflect in lower prices for consumers. 

    In order to promote blockchain technology in the energy sector, the non-profit organization Energy Web Foundation (EWF) has been established. It guarantees access of its members to the blockchain platform. Today, nearly 100 affiliates have joined EWF that will inform about key features and needs in the sector. It is expected that this initiative will boost trade among companies.

    These affiliates comprise energy giants such as Iberdrola, Total and German utility EnBW, suggesting tremendous interest in advancing blockchain technology in energy sector. 

     

    1. Hydrogen as an important part of energy transition

    International experts believe that “green” hydrogen will play an important role in energy transition. Hydrogen is universal because it can be produced from a wide range of sources and be used as fuel in energy and transport sector.

    Now clean hydrogen still costs too much to enable it to be widely deployed. Prices may not come down sufficiently until the 2030s, according to some estimates. However, there are more optimistic predictions as well.

    The way hydrogen is produced is also important. There are 3 ways nowadays:

    • “grey” hydrogen: produced industrially from natural gas, which generates significant carbon emissions
    • “blue” hydrogen:carbon emissions are captured and stored, or reused
    • “green” hydrogen:generated using renewable energy sources with no carbon emissions

    There are many initiatives to reduce the costs of this resource. For example, France’s hydrogen strategy includes indicative targets for greening the current use of grey hydrogen in industry. The French government has set a target of 10% green hydrogen use in industry for 2022 and 20% to 40% for 2027.

    A proposal from some industry players in Germany (Shell, Siemens, Tennet) aims to organise combined auctions of offshore wind fields for electrolysis, which would impact the hydrogen price. There are proposals to blend clean gas (including hydrogen) into the gas grids that would help kick-start the clean hydrogen market in Europe.

    Other important policy instruments include removing fossil fuel subsidies; guarantees of origin for blue and green hydrogen; implementation of the European Renewable Energy Directive (REDII); common quality and safety standards; and aligned regulatory approaches on what roles different market participants can play in this new market.

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