Finding extraordinary engineers for exceptional clients

Pearlstone Energy teams up with Honeywell to provide Smart Grid programme

July 6th, 2016

Demand Response aggregator company Pearlstone Energy has announced that it has teamed up with US conglomerate Honeywell to provide a smart grid programme for a number of Honeywell commercial facilities in the UK.

The programme aims to reduce energy bills in these facilities while helping improve power reliability and meet carbon reduction commitments.

Under the programme, Pearlstone Energy will pay Honeywell to reduce their energy consumption in a number of their facilities for short amounts of time during periods when electricity demands exceed availability. In return, Honeywell will provide the technology to automate these reductions.
Electricity pylon
These automated energy reduction measures, known as automated demand response (ADR), can create additional revenue streams for participants while contributing to broader UK carbon reduction goals.

Dr. Azad Camyab, chief executive officer, Pearlstone Energy, said, “As well as implementing ADR in a number of Honeywell facilities, we’re also using Honeywell’s open-source smart grid technology to tap into buildings’ flexible energy needs to offer additional sources of grid stability along with savings and potential new revenue for participants.”

The programme’s centrepiece is Honeywell’s Demand Response Automation Server (DRAS) software-as-a-service (SaaS), which allows Pearlstone Energy to communicate with participating buildings to trigger pre-specified short-term energy reduction measures during times of peak demand on the grid, or peak pricing periods, when buildings are charged more for the energy they consume. Pearlstone Energy can then aggregate the resulting energy reserves and seek to apply them toward grid stabilization efforts, by tendering for National Grid’s Short Term Operating Reserve (STOR) service, which aims to reduce grid demands using clean methods that avoid producing carbon emissions.

In addition to payment to Honeywell for their participation, their facilities can also reduce their energy bills by avoiding costly peak pricing periods and network demand charges.

Vattenfall German coal sale may face additional scrutiny

July 5th, 2016

The Swedish government may have approved state-owned Vattenfall’s sale of its German coal-fired power generation and mining assets on Monday but the deal could still face a challenge.

The sale to Czech group EPH has come in for some criticism by environmental groups who say the plants should be decommissioned instead of sold, in line with the goals of the Paris climate change treaty in 2015.
Environmental Lawyers Client Earth’s EU energy and coal lawyer Ken Huestebeck in a statement to Power Engineering International said, “Several obstacles and risks will remain outstanding for months or even years. Due to the lack of transparency provided by the Swedish government which wholly-owns Vattenfall, it might well have betrayed not only its climate ambitions but also its fiscal responsibility by engaging in a highly problematic deal.”

“It’s not a done deal, quite yet.”

As acknowledged by Vattenfall, the deal cannot be closed before being notified to and receiving merger clearance from the European Commission. The EC will check under economic terms whether EPH’s takeover of Vattenfall’s lignite business in Germany would significantly impede effective competition.

Client Earth also noted that a competitor that proposed to pay a significantly higher price than EPH was excluded during the sales process and has already made a complaint to the Commission.

“If the Commission found unjustified State aid in the deal, Sweden would have to get back the difference between the higher price it could have obtained and the negotiated price from EPH. That could result in the deal imploding.”

Regarding the suggestion that the Swedish government will be able to stick by its climate commitments by buying and tearing up 300 million Swedish crowns in EU emissions rights, Huestebeck said, “This is a distraction which will cost the Swedish taxpayer additional millions. It does not have anything directly to do with the deal or with Sweden’s responsibility for it. The Swedish government has not shown that this will have any significant effect on the distorted/dysfunctional ETS market.”

Sweden approves Vattenfall coal plant sell-off

July 4th, 2016

The Swedish government has approved Vattenfall’s sale of coal power plants and mining assets in Germany to CLippendorf coal-fired power plantzech group EPH.

The sale has come in for some criticism by environmental groups who say the plants should be decommissioned instead of sold, in line with the goals of the Paris climate change treaty in 2015.

"I have informed the company that we back the deal that the Vattenfall board has decided on," Enterprise Minister Mikael Damberg told reporters.

The EUR1.9bn deal by a consortium comprising Czech energy company EPH and its financial partner PPF Investments includes coal-fired power plants and mines in the eastern German states of Brandenburg and Saxony, as well as clean-up and remediation costs.

Quercus secures debt financing for trio of UK windfarms

July 4th, 2016

Luxembourg-based Quercus Assets Selection has announced the successful debt financing of three solar PV plants in the UK.

Santander UK provided £13.6m ($15.1m) of portfolio level debt over a 10-year period for the Sidlesham, Burton and Stanton windfarms.

The deal places all threDebt financing for UK solar farmse projects under the ownership of Quercus Renewable Holding 2, a Quercus-owned holding company.

The Sidlesham, Burton and Stanton plants have a combined capacity of 21.3 MW and are located in Chichester, Swindon, and Stratford-upon-Avon respectively. They were all connected in May 2015.

Quercus founder and chief executive Diego Biasi said: “We remain constantly focused on delivering clean energy to the UK customer through our local renewable energy plants. We are very happy to partner with Santander and to have negotiated a vital and mutually beneficial deal to optimize our investors’ returns on these three plants.”

RWE’s Innogy to focus on power grid investment

June 30th, 2016

RWE's newly-named renewables and power distribution subsidiary Innogy is ready to make heavy investments in its power grids, according to Chief Executive Peter Terium.

Terium told shareholders the news as the company’s management prepares to list shares in the unit by the end of the year.
The German utility separated its renewable power generation, distribution and retail businesses from its troubled thermal and nuclear power generation operations last year.

The exact size of the Innogy listing will depend on market conditions but could exceed a minimum of 10 per cent that RWE has defined, Terium said.

According to Reuters Innogy has plans to invest up to $7bn (EUR7bn) between 2016 and 2018, mainly in its grids, as old equipment needs to be made fit for the digitalised nature of energy generation and usage of the future.

"The key to succeed in this environment is flexibility and speed to adapt," Terium said, citing partnerships with international energy service companies.

Analysts expect the sale of 10 per cent of Innogy to bring in about EUR2bn, which would give the entity a market value of EUR20bn, nearly three times that of RWE now.

EDF-owned French grid operator valued at $5.8bn

June 30th, 2016

EDF's plans to sell almost 50 per cent of its RTE unit would value the operator of Europe's biggest high-voltage electricity transmission grid at more than $5.78bn (EUR5.2bn).

Reuters reports that French-state owned EDF’s valuation is part of its sale strategy as it looks to offload non-core assets and reduce debt as well as finance its nuclear power goals.
Under a 2004 law, RTE's capital must be held by EDF or other public entities, which means EDF can only sell to state-owned investors such as CDC.

While EDF is keen to press ahead with the sale as they think there would be a lot of appetite from infrastructure funds, the government would prefer to first take CDC on board as an investor as a quick way to raise cash while avoiding confrontations with unions, a source told the news agency.

The parties are expected to decide on the issue by the end of July.

WNA releases report on health of global nuclear sector

June 29th, 2016

The World Nuclear Association has released a new report, which shows the nuclear power sector to be in a positive state.

The World Nuclear Performance Report found that more nuclear reactors are under construction and more reactors came on line last year than at any time in the last 25 years.

However the IEA’s Executive Director, Fatih Birol, while hailing the sector’s progress, warned that challenges lie ahead in enabling nuclear to help the world reduce its carbon emissions.
Bellefonte nuclear power plant
The report found that nuclear reactor performance has improved steadily over the last 35 years. The WNA pointed out that reactor performance ‘is not fundamentally affected by reactor age; older plants operate as well as younger plants.’

Significantly for the industry, analysis also found that construction times for new reactors have improved over the last 15 years, with reactors coming on line in 2015 having an average construction time of around six years.

Speaking at the launch of the report WNA Director General, Agneta Rising, said, “This report shows that, despite challenging market conditions in some regions, existing nuclear plant performance is strong and the pace of new build is accelerating.”

While the sector has had to contend with highly publicised challenges, major new build programmes, new technology developments, reactor restarts in Japan and strengthening public support mean prospects for the years ahead are brighter.

The WNA warned that ‘the rate of new grid connections will have to increase significantly to support global economic growth, alleviate energy poverty and provide enough clean energy to meet agreed climate change targets. The WNA considers that there should be 1000 GWe of new nuclear build by 2050, with nuclear generation supplying 25 per cent of global electricity demand.Fatih Birol of WNA

Meanwhile Birol told a nuclear conference in Paris that he noted the growth in the sector last year, mainly in China, but added that challenges such as ageing plants and low electricity prices could hobble the sector.

"This is a major challenge for electricity security and climate change. The bulk of this retirement is from OECD countries mainly Europe and United States," he added.

Birol said for the world to meet its CO2 emission reduction target, the share of nuclear in the power mix needed to rise from 11 per cent to 20 per cent by 2040.

The IEA chief also said that the current low coal prices and inexistent or low prices on carbon emissions was not providing the right signals to investors.

Brexit: What’s next for European utilities?

June 28th, 2016

“The defensive nature of utilities may help them outperform other sectors due to investor flight to safety amid uncertainty” in the wake of last week’s ‘Brexit’ vote.

That’s the view of Elchin Mammadov, industry analyst at Bloomberg Intelligence, which has today released research into the impact of the Leave decision.

On foreign exchange and earnings, Mammadov said: “The weak pound may boost earnings of UK utilities such as National Grid or Centrica with overseas operations, while hurting foreign peers with significant UK exposure such as Iberdrola, Dong Energy and RWE.”

He said “investors remain committed to the UK – but Scottish independence poses a major risk”.

Bloomberg suggested Centrica and National Grid may benefit from the British pound depreciating against major currencies, given their overseas businesses, but it added that “the opposite holds true for Sweden's Dong Energy and Eurozone-based Iberdrola and RWE, which generate significant revenue from the UK. The utilities limit the negative impact of a weaker pound on earnings and cash flow through near-term currency hedging. Their pound-denominated debt also provides a partial hedge through lower interest payments in euros.”Engie chief executive Isabelle Kocher regrets UK's Brexit decision

Mammadov noted that executives at European energy firms, including Engie chief executive Isabelle Kocher, have said that they regret the British people's decision to leave the EU. “Yet, they say their companies remain committed to the UK. EDF is among those that say its strategy won't change, while RWE says it doesn't expect major UK trade hurdles. A weaker pound is seen as a major risk, but may be mitigated by the fact that Britain represents only a fraction of overall earnings for many international utilities, such as Engie, EDF, and E.ON.

But Mammadov did stress that Brexit “raises the risk of further delay or cancellation to EDF's Hinkley Point C nuclear project amid uncertainty over the future of the British government and energy policy. This could also delay RWE and E.ON's planned sale of their 33 per cent stake in Urenco, where the UK government holds a 33 per cent share.

Bloomberg anticipates that the UK “will keep attracting investment in energy and water infrastructure despite its vote to leave the EU. The UK is an attractive investment destination amid stable energy-network and water regulation. Unless it reneges on its environmental commitments, the UK will have to offset nuclear and coal-fired power plant closings with new gas-fired units and offshore wind farms and new power lines with Europe. Thus, renewables and interconnector projects may be delayed, yet will eventually proceed, despite Brexit.

And Mammadov said that despite the Brexit vote, the European Investment Bank will continue funding loan contracts relating to UK energy projects that have already been approved. He noted that the UK, France, Germany and Italy each hold a 16 per cent share in the EIB and added that according to an EIB spokesman, the bank will continue to appraise new projects on a business-as-usual basis "unless and until a decision to change lending activity is taken by the EIB's shareholders".

On the subject of a second Scottish independence vote arising from the vote to Leave, Mammadov said that “independence would pose several risks for utilities operating in Scotland, ranging from uncertainty over whether the rest of the

UK would continue to pay it subsidies, or over future tax implications and the treatment of pension liabilities”. He highlighted that SSE, Iberdrola and Dong Energy are among the publicly-traded power utilities operating in the UK with the most exposure to Scotland.

IEA calls for energy investment to cut air pollution

June 28th, 2016

“We need to revise our approach to energy development so that communities are not forced to sacrifice clean air in return for economic growth."

So said the executive director of the International Energy Agency in London yesterday as the IEA launched its first ever in-depth analysis of air quality.

Fatih Birol said that “clean air is a basic human right that most of the world's population lacks. No country – rich or poor – can claim that the task of tackling air pollution is complete. But governments are far from powerless to act and need to act now. Proven energy policies and technologies can deliver major cuts in air pollution around the world and bring health benefits, provide broader access to energy and improve sustainability.”IEA executive director Fatih Birol

According to the IEA, an estimated 6.5 million deaths a year are linked to air pollution – and it says this number will increase significantly in coming decades unless the energy sector takes greater action to curb emissions.

At a press conference yesterday, Birol said that no country is immune and to highlight this stated that 80 per cent of all cities that monitor pollution levels fail to meet the World Health Organizatio air quality standards.

The IEA said that premature deaths from outdoor air pollution are projected to rise from the current level of 3 million to 4.5 million by 2040, with most of this increase set to be in developing Asia.

The IEA report released today states that energy production and use – mostly from unregulated, poorly regulated or inefficient fuel combustion – are the most important man-made sources of key air pollutant emissions.

However, the IEA stresses that “the air quality outlook is not set in stone, but rather it is a policy choice” and goes on to suggest that a 7 per cent increase in total energy investment between now and 2040 would be enough to “produce a sharp improvement in health”.

“Under such a scenario, premature deaths from outdoor air pollution would decline by 1.7 million in 2040… and those from household pollution would fall by 1.6 million annually.”

The report highlights three key areas for government action: Setting an ambitious long-term air quality goal, to which all stakeholders can subscribe and against which the efficacy of the various pollution mitigation options can be assessed; Putting in place a package of clean air policies for the energy sector to achieve the long-term goal, drawing on a cost-effective mix of direct emissions controls, regulation and other measures, giving due weight to the co-benefits for other energy policy objectives; and Ensuring effective monitoring, enforcement, evaluation and communication: keeping a strategy on course requires reliable data, a continuous focus on compliance and on policy improvement, and timely and transparent public information.

Dr Birol said that implementing the IEA’s strategy could “push energy-related pollution levels into a steep decline in all countries. It can also deliver universal access to modern energy, a rapid peak and decline in global greenhouse-gas emissions and lower fossil-fuel import bills in many countries.”

Tesla chief says conglomerate value could reach $1trn

June 27th, 2016

The chief executive of Tesla Motors, Elon Musk, says he believes the synergies to be gained by combining solar power, electric vehicles and storage could enable the company to reach a valuation of $1trn.
Elon Musk of Tesla
According to the FT Wall Street is yet sceptical of Musk’s claim after a proposed acquisition of SolarCity.

"I have no doubt about this — zero," Musk, a major shareholder of both companies, said on a conference call with analyst before markets opened on Wednesday. "We should have done it sooner."

"As a combined automotive and power storage and power generation company, the potential is there for Tesla to be a trillion-dollar market cap company," he added.

The ambitious sustainable energy conglomerate is currently well away from that target with combined value of the two companies now about $27bn.

Designing and making solar panels and storage systems together has technology advantages, according to Mr Musk. The Apple approach provides another argument for Mr Musk’s conglomerate. Tesla’s retail stores could become showcases for the sustainable energy lifestyle.

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