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  • UKRENERGO REVIEW 24 November -01 December 2017

    Keep calm because winter has come. The days are shorter, the temperature is lower however, our Ukrenergo Review will light up and warm your Friday.  Today’s Friday recipe includes: 

     1. Remember about Brexit? There are still lots of discussions in Britain as regards to leaving the EU. This time the discussions are related to the power industry. Brexit could have a limited effect on energy markets  in both the United Kingdom and the European Union, according to a new study by the University of Cambridge and the Centre on Regulation in Europe.  In general, the study suggests that the UK and the EU “benefit substantially” from their current participation in common electricity, gas and carbon market arrangements. Moreover, the authors prove Without the weight of the UK’s vote – or even veto – on some issues,  the popularity of nuclear power could suffer even further, the ETS could lose a valuable ally and the willingness to use market mechanisms, in general, might decrease. However, the European Court of Auditors concluded on 13 November in its annual report on the EU’s participation in a landmark international energy project that Brexit could “have a significant effect” on attempts to crack nuclear fusion technology. The ITER project (the International Thermonuclear Experimental Reactor) is being constructed in southern France, supported by funding from across the world. The EU is footing about 45% of the total bill, whereas the lion`s share is paid by Britain.  It aims to show that fusion, the process of colliding hydrogen atoms to produce sustainable energy, is practically possible and not just a theory.  It also proves the deep integration and electricity markets synchronization is vital to overcome certain obstacles especially within political turmoil.

    2. End of regulated tariffs. French consumers may have a great possibility to save as much as 2.5 billion euros a year if the government stopped setting electricity prices. French association of independent power producers Anode said that if all retail customers on regulated tariffs were to switch to the most competitive market offer their combined gain in purchasing power would add up to 2.5 billion euros. Thus, Anode proposes scrapping regulated tariffs for new contracts from next July and ending them completely by mid-2022. In addition, they prove the consumers could save on their monthly bills as the regulated tariffs keep power prices high creating an obstacle to market entry for new players and slowing down innovation in electricity markets. It is not the first-ever experience for Anode. Для Anode подібний досвід не новий. In July, following a complaint by Anode, the State Council – France’s highest administrative court – ruled that France’s regulated gas tariffs are incompatible with EU legislation.  Anode has also filed a claim to overturn power tariffs with the State Council, but the court has yet to rule on that. Let’s follow the French market liberalization together. Qui vivra vera.

    3. EU okays power back-up scheme.  EU state aid regulators approved an Irish support scheme to reserve power (power back-up scheme) , known as a capacity mechanism, saying it would ensure secure electricity supply in the event of blackouts. The scheme has huge support from within the Irish industry and in the business community. The scheme represents a key component for improving the overall competitive position of firms in sectors ranging from manufacturing and hospitality, through to education and health. Under the joint Irish and Northern Irish capacity mechanism, power plants and other energy providers will be paid for making themselves available to produce power when required.  The companies will be selected be means of auctions. Demand response operators will also be paid for being ready to cut their consumption to help balance demand with supply. The European Commission said the scheme complies with the bloc’s rules aimed at ensuring a level playing field.  Why is it that important? The capacity mechanism therefore not only ensures that capacity is available, it also gives power plants an incentive to use this capacity to offer their electricity on the market when there is scarcity. Building of the interconnector between North and South is a next step towards the goal.

    4. About 40% of newly-built power capacity in India is solar. The solar energy sector has accounted for the largest capacity addition to the Indian electricity grid so far this year. It has contributed around 39%—over 7,100 MW—to the overall capacity additions, according to data from Mercom Capital Group. For comparison, solar energy capacity additions stood at only around 4,313 MW in all of 2016. In all, the country now has a total solar capacity of around7 GW.  The government is to install 175 GW of renewable energy until 2022.

    The Institute for Energy Economics & Financial Analysis (IEEFA) and the Financial Times (paywall) reported the India’s demand for coal is also likely to peak by 2027.   It will be replaced by renewables, which the IEEFA predicts will account for 27% by 2027. However, not everything is that bright on the solar Indian sky. The last few months, however, have been difficult for the sector.  First problem amounts to lack of power transmission infrastructure. For instance, nearly 1,000 MW of large-scale projects that are ready to be connected to the grid haven’t been commissioned yet due to delays by the government, according to the Mercom report. We have similar problems however, we have still to do a lot to achieve Indian “green” results.

    5. £1.9m on Smart Grid. Nothern Powergrid announce it will launch a £1.9 million project to define the best solution to integrate the distributed technologies into the electricity grid. The distribution company moves towards creation a low carbon energy market where the 3.9 million homes it serves can make their own money from solar panels, electric vehicles and home batteries. It claims costs could be cut by managing local energy sources.  It claims costs could be cut by managing local energy resources. They are to create an efficient, flexible system capable of balancing supply and demand. It also suggests developing smart services and infrastructure to support large volumes of clean renewable power is needed to accelerate the low carbon transition. Within the project, researchers at the University of Bath and Newcastle University will develop as well the laboratory models of distributed energy systems, local energy markets and network operations, tracking flows of energy, payments and information.  This virtual system will enable them to explore a range of different approaches and allow them to develop strategies and regulations for the future. The management claims:” We want to build this smart grid around the needs of our customers, delivering them the best service at the lowest possible cost “.

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