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Siemens and Accenture form smart grid joint venture Omnetric

April 9th, 2014

Siemens Smart Grid and Accenture have completed the formation of joint venture smart grid company Omnetric Group.

Omnetric will bring together Siemens’ smart grid products and solutions with Accenture’s capabilities in management and technology consulting, systems integration and managed services.

It will provide utilities with advanced smart grid solutions and services focused on data management and systems integration to improve energy efficiency, grid operations and reliability.

Omnetric is headquartered in Munich, Germany, and its chief executive Maikel van Verseveld, former managing director of Accenture Smart Grid Services in Europe, Africa and Latin America.

Martin Runge, who leads Siemens’ Smart Grid Centre of Competence for Central and Eastern Europe, has been appointed as chief operating officer.

Merkel government approves energy reform law

April 8th, 2014

Reform of Germany’s renewable energy sector is to take place after Angela Merkel’s government passed legislation on the subject.

The reform is necessary to curb a rise in the cost of electricity driven by the rapid expansion of green power under the country’s Energiewende policy.

The reform will slow the expansion of green energy, which accounts for 25 percent of Germany's electricity and force new investors in green power to take some risk.

According to Reuters, although industry will have to pay more for power in future, the sector has managed to hold on to a good share of the benefits it says it needs to stay competitive.
Sigmar Gabriel

As a result of the reform, householders are likely to see power bills rise at a slower pace.

Economy and Energy Minister Sigmar Gabriel (pictured) has had to resolve the complexity of maintaining growth in renewables with the requirement to keep heavy industry happy with affordable power.

In addition the interests of the European Commission and Germany's 16 states, which have differing energy priorities, had to be accommodated.

The government plans to increase the share of renewable sources to 40-45 percent of total electricity production by 2025 and to 55-60 percent by 2035. This is needed to offset the elimination of nuclear power by 2022.

Under the reform, new upper limits will be placed on onshore wind power expansion (at 2.5 GW in capacity per year), photovoltaic (2.5 GW per year) and offshore wind plants (6.5 GW to 2020).

Gabriel has also negotiated exemptions in Brussels that will continue to protect some heavy industrial users of power from a renewable energy surcharge, worth about $7bn a year but which adds 6.3 cents per kilowatt-hour to the power bills of ordinary consumers.

The European Commission - the EU's executive arm - was looking into whether such discounts on surcharges were giving Germany's industry an unfair advantage over rival companies in other countries within the bloc.

Germany’s industrial sector, which accounts for more than a quarter of the economy, warned that around 800,000 jobs could be at risk due to the government's energy policies.

Ulrich Grillo, head of the BDI industry association, told German radio that he was worried by creeping capital flows out of Germany, but also said he knew "compromises have to be made". But he added that the BDI welcomed the agreement between Brussels and Berlin.

He said: “The future regulations secure the chances of keeping industrial jobs permanently in Germany.”

For more power policy and regulation news

Review points to growing cyber threat to power generation

April 8th, 2014

The City of London-based Willis Group, one of the world’s largest insurance brokers launched its annual Energy Market Review on Tuesday, with a particular focus on cyber security for the market.

While much of the publication deals with the specific challenges facing insurers in the current energy market and in particular the oil and gas sector, there is much of relevance to power generation interests, in terms of potential costs to businesses.

In its foreword, Global Head of Willis Natural Resources, Mr AJC Rivers says, “a new and highly ominous threat has emerged onto the energy industry risk landscape – the risk of a catastrophic loss resulting from a cyber-attack. Alarmingly, this risk is currently excluded from most energy insurance policy forms. Although we can now detect the beginnings of a market for this critical risk, much more needs to be done to bring cyber, political violence and energy underwriting expertise together to forge a product that will truly meet the needs of the industry.”

In what may be seen as having implications for global power generation, the report highlighted the increasing effect cyber-attacks have on the energy industry in general.

“Globally, it is estimated that cyber-attacks against oil and gas infrastructure will cost oil and gas companies $1.87bn by 2018. In the US, 40 per cent of all cyber-attacks on critical infrastructure assets in 2012 occurred against the energy sector and the UK government estimates that oil and gas companies in the UK already lose approximately £400m every year as a result of cyber-attacks.

The report shows that the percentage of European board members who see cyber security as a significant risk has risen from 53 per cent in 2013 to 76 per cent this year, a statistic taken from an annual survey by Zurich on cyber risk management practice in Europe.

An example of one recent attack was the Stuxnet virus, which targeted Iran’s uranium enrichment centrifuge capability, destroying 20 per cent of by infecting the Siemens Step 7 software, which drove the system.

Chris McGloin of Invensys said, “Could it have caused a significant event outside of Iran? Yes it could have caused a major power station to be shut down with significant consequences.”

The Stuxnet virus, which has shown itself to be more than capable of evading the smartest security technologies, and has demonstrated the threat it poses to energy infrastructure anywhere according to the report.

Another virus, known as Shamoon, has particularly affected major energy companies operating in the Middle East. Although no lasting damage was done, one state-owned utility saw 30,000 of its computers infected, ‘with considerable loss of data and productivity.’

The review also features a chapter on the threat of global terrorism and political violence to energy infrastructure, and geographically the particular threat posed by these to the Middle East Africa and Central Asian regions. Iraq comes in for special mention as remaining vulnerable.
“While western employees have yet to be killed, the threat has certainly increased and any exodus of the international energy sector would seriously undermine the Iraqi regime,” the report says and also noting that cyber-attacks were on the rise in the Middle East. “53 per cent of attacks in 2013 were against the energy sector; in some cases resulting in expensive outages… critical energy infrastructure is an attractive target for terrorists seeking physical, economic and environmental damage.”

Finally speakers at the launch acknowledged that the present situation in Russia sees a potential exposure for investment assets, for all sectors including energy. Managing Director of Willis, Justin Blackmore told the audience, “It will be fair to say that from an insurance point of view there are no immediate implications. We will work it out if sanctions come in, and apply relevant sanctions clauses. It is not yet a major issue.”

For more power generation business news

Scottish grid firm opens in New York and signs US deals

April 8th, 2014

Scottish technology company Smarter Grid Solutions has opened its first US office and signed global pacts with two major American smart grid firms.

At a ceremony at the new base in New York, the compnay signed agreements with Silver Spring Networks and HEVO Power.

Glasgow-headquartered Smarter Grid Solutions has already won a deal with Con Edison to model and simulate micrSmarter Grid Solutionsogrid applications for the New York metro area.

The official opening was attended by Scotland’s First Minister Alex Salmond - pictured (right) with Smarter Grid Solutions’ chief technology officer and co-founder Dr Bob Currie - who said that “decarbonising our energy, while maintaining the resilience of our power grid, is a challenge for communities across the world”.

He said Smarter Grid Solutions was “working to prepare the grid for important changes, like the growth in electric vehicles and new ways to store greener energy”.

Dr Currie said: “In the short time we have been operating in New York, we have identified significant opportunities to accelerate our growth and have already started work with a number of prominent organisations in the smart grid sector.

He added the company’s technology and solutions were “being well received and leading to important new business relationships”.

A European first as UK government launches Solar Strategy

April 4th, 2014

The UK government today announced its Solar Strategy, the first such strategic document dedicated to solar by any European Union government.

It will entail the creation of 'solar hubs' whereby commercial and public sector buildings deploy solar arrays onsite, effectively shifting the focus of the market towards mid- to large-scale rooftop installations. It also reasserts the government's goal to deliver 20 GW of solar capacity by 2020 and sets out a new ambition to double the number of domestic rooftop solar arrays in the UK to one million homes by 2015.
Greg Barker
The announcement made by Energy Minister Greg Barker - at a Solar Strategy conference session at event SunSolar Energy in Birmingham - is a statement of intent by the UK government that it is seeking to play a more influential role in the global solar sector, estimated to be around 46 GW by analysts from Deutsche Bank.

That 46 GW represents a 50 per cent increase in existing installed capacity.

Barker said: “We have put ourselves among the world leaders on solar and this ambitious strategy will place us right at the cutting edge.

“There is massive potential to turn our large buildings into power stations and we must seize the opportunity this offers to boost our economy as part of our long term economic plan.

“Solar not only benefits the environment, it will see British job creation and deliver the clean and reliable energy supplies that the country needs at the lowest possible cost to consumers.”

Ministers have also set a target of delivering 1 GW of capacity on public buildings by 2020 and will set out plans for the first 500 MW of installations later this year.

The conference session was co-chaired by Solar Trade Association (STA) PV Specialist Ray Noble and chaired by STA Chief Executive Paul Barwell.

Barwell said: “It’s a clever move by the UK government to start strategising to maximise its stake in a global market estimated at $134bn by 2020. With The Royal Society, the IPCC and even Shell  anticipating solar could be the world’s biggest energy source, the UK needs to make the most of its R&D, product design and manufacturing skills to steal a march in the global clean energy race."

Noble said: “The Solar Strategy gives a clear signal that solar in the UK makes total sense. We still have work to do in developing solutions to some of the barriers but, working with government, these will be sorted during 2014. The message to the solar industry is full speed ahead and the message to the Minister is that we will achieve your ambition of 20GW.”
Solar power
Other highlights of the strategy include plans to work with BIS to increase economic opportunities for UK plc in solar, building on UK innovation leads; new industry collaboration on building integrated photovoltaics (BIPV) and the addressing removal of grid barriers that prevent the expansion of solar.

The strategy follows the 'Roadmap to a Brighter Future' which was published last October. It looks to showcase how the UK is at the forefront of innovation in solar PV and its importance in driving further cost reduction, meeting the challenges of balancing the electricity system, securing carbon lifecycle benefits, and identifying new financial models to help households invest.

For more solar power generation news

$675m coal-fired power plants for Sumatra

April 4th, 2014

A joint venture is to construct three coal-fired power plants at Dumai, Riau in Sumatra.

PT BTN Energy Prima (BEP), a venture bringing together Indonesia’s PT Biidznillah Tambang Nusantara (BTN) and Malaysia’s BTN Power Sdn Berhad, has joined forces with Chinese state firm China Machinery Engineering Corporation (CMEC) to build the $675m worth of coal-fired generation.
Coal-fired power plant stacks
The 3 x 150 megawatt (MW) coal-fired power plants in the Pelintung Dumai Industrial Area will start construction in July. Construction is expected to be finished by April 2018.

“The power plants will provide electricity for plants in the industrial area as well as for households,” said BEP president director Harijono during a press briefing in Jakarta on Thursday.

Chinese companies have expressed interests in investing in Dumai, a major ferry port with connections to Malaysian cities, but hesitated due to electricity shortages, according to CMEC deputy general manager Yaejun Chao.

For more Asian power generation news

Throwback Thursday

April 3rd, 2014

Back at the beginning of 2007, the global power sector was taking notice of Russia’s endeavours in growing its power capacity. RAO UES (Unified Energy System of Russia), the then dominant player in the domestic energy sector was putting forward an ambitious programme of investment to drive more power generation. You can read all about that here in 1/3/2007 magazine issue of PEi.

That entity (RAO UES) has since been split up but Russia’s power sector has been very prominent on world news media in recent weeks once again, following the annexation of the Crimea by Vladimir Putin’s government.

Fast forward seven years later to the present.

Europe in particular is concerned with the implications of the Russian action with US and EU threats to sanction the Russian government also threatening power generation projects as well as causing uncertainty in terms of gas supplies.

Siemens and GE have moved to protect their interests as featured in this report “Siemens committed to Russian power business despite sanction threat” while the UK Foreign Secretary has urged “EU to reduce dependency on Russian gas”.

Slide Show – Power Engineering International March 2014 Top Ten Stories

April 3rd, 2014

Here are our audience’s top ten most popular stories on Power Engineering International for March. Articles about nuclear power were hugely prominent in our traffic profile with a long-running European nuclear power plant saga garnering the most interest from our followers. Count down from ten to one – the March 2014 Top Ten.

Start Slideshow >>

Merkel changes her mind on wind subsidies

April 3rd, 2014

German Chancellor Angela Merkel has decided to ease cuts in offshore wind subsidies in an attempt to gain support from regional governments for her energy policy.

The decision means the government will allow more onshore wind projects and reduce cuts in offshore-wind subsidies, Economy Minister Sigmar Gabriel said after he and Merkel met with state heads.

The heads of Schleswig-Holstein, Bremen, Hamburg and Lower Saxony had been concerned that the cuts would lead to job losses in the sector.
The four northern states welcomed Merkel’s government decision to exclude projects that replace older onshore wind turbines, known as repowering, from a yearly capacity cap of 2.5 GW. It also agreed to reduce planned cuts to subsidies for turbines built at locations with low wind speeds, in a boon to developers eager to build projects in Germany’s southern states.

Agreements at yesterday’s talks mean Merkel will meet a self-imposed deadline of April 8 to convince states and industry to back legislation setting new subsidies and capacity caps in a major overhaul to the 14-year-old EEG clean-energy law.

The government also agreed to halve the speed of regular subsidy cuts to new offshore wind farms in 2018 and 2019, and will permit more sea-based turbines, Gabriel said.

Stepping back from earlier plans to charge industry more for the clean-energy expansion, the government also said companies that produce their own power in plants fired-up before Aug. 1 won’t have to pay the EEG-Umlage, a fee to finance clean-energy subsidies that has risen more than fivefold since 2009.

This and other stories feature in this week's PEi Broadcast below:

For more wind power news

Coal plants face ‘stranded capacity’ scenario warns report

April 2nd, 2014

As much as 37 per cent of global investment in coal power plants over the next 40 years could be “stranded” if climate action is delayed, with China and India set to bear most of the costs, according to a new report.

The study from the International Institute for Applied Systems Analysis in Austria uses the term ‘stranded capacity’ for power plants that sit idle while their owners and investors suffer huge losses.

IIASA researcher Nils Johnson, who led the new study, said: “If we are serious about meeting climate targets, then the reality is that eventually we will have to start shutting down coal-fired power plants. But the longer we delay climate action, the more stranded capacity we’ll have.

“Delaying action encourages utilities to build more coal-fired power plants in the near-term. Then, when policies are finally introduced, we have to phase out coal even more quickly and more investments go to waste.”

The study found that as much as 37 per cent of global investment in coal plants over the next 40 years could be stranded if action is delayed, with China and India – as the biggest builders of new coal power stations – bearing the brunt.

The report goes on to explore strategies to reduce stranded capacity in coal plants while limiting future climate change to the internationally agreed 2°C target.

Johnson said that “the best strategy would be to stop building new coal power plants starting today”, but IIASA researchers conceded that this might not be realistic “if governments are not yet willing to limit new plant construction”.

The study therefore examines two strategies: grandfathering existing plants so that they are exempt from future climate policies, or retrofitting plants with carbon capture and storage.

However the report states that “both of these strategies create a major risk that average temperatures will rise above the 2°C goal. While the grandfathering strategy would allow power plant operators to keep the old ones running, it would lead to greater emissions and reduced chances of limiting climate change to the 2°C target.”

And it adds that while the CCS option could “theoretically be used to retrofit coal plants”, this would mean “hundreds of power plants would need retrofitting in a short period of time”, which would put “a lot of pressure on a technology that as yet remains both technically and politically uncertain”.

Volker Krey, co-author of the study, said: “CCS could buy us time, but what if it doesn’t work? It’s a risky strategy.”

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