UKRENERGO REVIEW 05-11 MAY 2018
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. 50 percent of electricity in Mexico will be generated by alternative sources by 2034. According to the Mexico’s Energy Secretariat (SENER), Mexico can achieve its goal of generating 50 percent of electricity using clean sources 16 years earlier than expected. “We have great confidence we can achieve this forecast,” said Leonardo Beltran, Mexico’s deputy secretary for energy transition. This confidence is based on the current growth rates and the effectiveness of the market mechanism introduced in the country. Mexico has an effective system of green certificates (quotas) and competitive tenders, which fix long-term conditions for the functioning of RES facilities. The existing plans specify that 50 percent of electricity must be generated by clean sources by 2050, while an intermediate target is set at the level of 37.7 percent by 2030. Still, Beltran believes that it will be achieved by 2024. Analysts also agree that these new goals can be achieved. However, they also point to the potential challenges associated with the rapid deployment of RES. It is worth noting that the population of Mexico amounts to 130 million people and the country is almost completely electrified. The power system’s installed capacity reaches 68 GW, and the share of “clean technologies,” currently dominated by hydropower, equals 28.3 percent. “Clean sources” also imply nuclear power in the capacity of 2.2 GW. At the same time, the further growth of the sector will be mainly fueled by the expansion of wind and solar power plants, currently able to generate the cheapest electricity in the country. This is reported by oilreview.kiev.ua with reference to the primary source.
2. Mercedes-Benz to wind down its household energy storages business. Recently, Mercedes-Benz, one of the most famous German automakers, has launched the sales of its energy storages in the US market. However, as reported by gisprofi.com, referring to the primary source, the company decided to close that project. A year ago, Mercedes-Benz Energy, the company’s subsidiary, started to work in America in co-operation with Vivint Solar, a company considered the main competitor of Tesla in the segment of household private solar power plants. At that time, journalists even called the storages produced by Mercedes “Tesla killers.”
However, now the project is closed, and the production company Daimler terminated the production of energy storage systems under the brand of Mercedes-Benz. What happened and why is the company withdrawing from the household energy storage market? Mercedes explains this as follows. They failed to achieve a full synergy between the production of batteries for electric cars and household energy storages. Performance requirements for complex car battery systems far exceed the requirements for household storages. The current analysis shows that the cost-effectiveness of household energy storage systems based on car batteries will not be achieved either in the medium or in the long term. Therefore, Daimler is currently planning the “reorientation” of its subsidiary Mercedes-Benz Energy. It is noteworthy that Daimler is about to continue to offer household energy storage facilities to its customers, but no longer under its own brand. Household energy storage systems will complement the offer within the EQ product and technology brand. In this way, German automaker demonstrates the rational assessment of risks and unpopular but effective business solutions.
3. Boom of reciprocating power units. At first glance, it may seem that reciprocating engines are very old-fashioned and today’s world is dominated exclusively by gas turbines. However, it turns out that lately, the popularity of reciprocating power plants has been increasing, primarily in the USA. Moreover, technological advances transformed these machines into fast, highly maneuverable and almost maintenance-free equipment complying with the requirements of modern energy projects. As reported by renen.ru with reference to the primary source, they proved themselves an effective option for combined heat and power generation. They are cheap, reliable and practical. For example, Entergy builds a new power plant in New Orleans, which should be put into operation in 2020. The object consists of seven reciprocating engines with the ability of self-start with a total capacity of 128 MW. The power plant is designed to help stabilize the grid and restore energy supplies after major storms. It is also a part of Entergy’s efforts to support renewable energy generation. In turn, Tucson Electric Power (TEP) plans to build a power plant consisting of 10 reciprocating units with the total capacity of 200 MW. TEP wants the new plant to ensure maneuvering capacity to help it integrate more renewable energy into its portfolio. The company notes that reciprocating engines provide a fast set of capacity during the periods of peak demand, as well as the balancing of the grid, which is important due to the volatility of RES power generation. The US Department of Energy (DOE) reports emphasize the wider use of reciprocating engines for power generation and combined applications in the field of heat and power generation in recent years. So, sometimes, new developments are based on somehow forgotten and upgraded old ideas.
4. Allianz terminates cooperation with the coal industry. Allianz, the world’s largest insurance company, announced that by 2040 it would gradually wind down its cooperation with the coal industry both in the insurance and investment businesses. The company’s headquarters are located in Germany, and the positions of the coal industry in Germany are still strong because the country has a developed brown coal industry. Such a long term of full “withdrawal from coal” may be explained by the terms of existing agreements and contracts. At the same time, the company sets a rather rigid interim constraint. For example, in the field of property and casualty insurance, Allianz instantly ceases to insure existing or planned coal-fired power stations and coal-mining enterprises all around the world. The companies producing electricity using various sources, including coal, will be further insured, but “individually,” based on certain environmental, social and managerial criteria. In this way, Allianz joined the “club” of insurers, already including Axa, Scor, Swiss Re and Zurich, which limited their transactions with the coal industry. As for investments, the group does not invest in energy companies with the share of coal generation in their portfolios exceeding 30 percent, and investments in such companies will be reduced to zero by 2040. In addition, the company will no longer invest in energy companies “that are actively building coal-fired power plants.” Let us remind you that such a trend is only gaining momentum. Most recently, similar statements were made by such global players as HSBC, Deutsche Bank and the International Bank for Reconstruction and Development. This is reported by elektrovesti.net with reference to the company’s press release.
5. California offers solar panels for all new buildings. According to nv.ua, referring to the primary source, California’s authorities may require solar panels on the roofs of almost all new buildings from 2020 onward. The West State is very close to the adoption of relevant regulations that oblige all new homes to install solar panels starting from 2020. The new rules include some exceptions for buildings that either cannot fit solar panels or would be blocked by higher buildings or trees. In all other cases, the building will need to be equipped with solar installations. This plan does not require that new buildings reach net-zero status using solar generation. However, it provides “compliance credits” for homeowners installing storage batteries, similar to Tesla’s Powerwall, allowing them to build small panel arrays knowing that excess energy will be available for use off-hours. If new regulations are approved, California will become the first state where the mandatory installation of solar panels is regulated at the federal level. It is expected that the new California energy standard will increase construction costs by up to USD 30,000. However, at the same time, in terms of 25-year lifespan, the building’s solar system will reduce the operating costs for owners by up to USD 60,000. Currently, about 15-20 percent of homes in California are equipped with plants for generating solar energy. Undoubtedly, it is an interesting step towards energy efficiency made by one of the richest US states.