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Vattenfall announces cuts to adapt to ‘changing energy landscape’

September 7th, 2017

Vattenfall CEO Magnus Hall says the Swedish utility is to cut costs amounting to around $276m by 2020, in order to facilitate investment aimed at adapting the company to a changing energy system. 
Magnus Hall of Vattenfall
Hall said: “Vattenfall has a clear strategic direction and a path for transformation in which we include needed cost reductions to

 free up capital for future investments.
“A slim and cost efficient organisation is a prerequisite for profitable growth in the company. Therefore, this kind of initiative is a continuing part of our strategic objective to secure high-performing operations.”

The company said it has identified a need to increase efficiency in staff and support services in “light of a rapidly changing energy landscape”.

The savings have so far only been set in monetary terms but it is “very likely that a reduction in workforce will be an essential part of the solution”, Vattenfall said, although no target has been set for job cuts at this juncture.

“Vattenfall will handle implications for employees in a socially responsible manner and in consultation with workers’ councils and unions,” the company said in a statement.

The company said some efficiency programmes are already ongoing and will be included in the new plans.

RWE’s Innogy subject to Iberdrola takeover speculation

September 7th, 2017

Innogy, which is 76.8 per cent owned by top German utility RWE, saw its share price rise 2 per cent on Thursday, amid speculation of a takeover by Spain’s Iberdrola.

Spanish newspaper Expansion broke the news of Iberdrola interest in the renewables, network and retail business hived off by RWE in April of last year.
An Iberdrola spokesman said the company does not comment on rumours and sticks to the official investment plan, with the United States as one of the priorities.

Iberdrola is working investment bank Morgan Stanley to study M&A opportunities in Europe, including a deal with Innogy, sources familiar with the matter already told Reuters in July.

Innogy has also been linked in a potential share swap between France's Engie and RWE.

Innogy CEO Peter Terium has repeatedly said that no deal was in the making and that talk of a big M&A wave among power firms in Europe had "no commercial basis".

Engie considers shock move to purchase $19.8bn Innogy

Poland revives plans for nuclear power plant

September 7th, 2017

Poland’s energy minister, Krzysztof Tchorzewski, has confirmed that the government are intent on developing a nuclear power plant, after delays to initial plans.

Warsaw first proposed the facility in 2009 but the Fukushima incident and falling power prices eroded public support.

“We would like to build three units (of the nuclear power plant) in 5-year intervals, with the first one in 2029,” Energy Minister Krzysztof Tchorzewski told reporters on the sidelines of a conference in Krynica Zdroj in the south of Poland.

“Our initial estimates show that one unit will cost $7bn,” he added.
Krzysztof Tchorzewski
Last year, the ruling Law and Justice party (PiS) revived the plan after it won elections in 2015, and said it aimed to build the plant within ten years.

The minister said that three new coal-fired power plants are being built, but the government would then finish building coal plants altogether.

One of the project’s major obstacles for the nuclear plant has been financing. State-run PGE, Poland’s biggest power firm which was responsible for it, failed to take it to a decisive phase.

In 2010, PGE set up a special vehicle for the project and in 2014 agreed to sell a third of its stake to three state-run companies - KGHM, Enea and Tauron. The energy ministry is now working on a new financing plan, which was supposed to be ready by end of June.

“Our idea is to secure financing of the companies engaged in the project and not financing for the company which will conduct the project. This will help us extend the amortisation period and thus keep the electricity price at a lower level,” he said on Wednesday.

 “After finishing the investments which are now being conducted in big coal-fuelled units, we will not be planning new projects based on coal,” he said. 

Symantec warns hackers poised to shut down power infrastructure

September 7th, 2017

Global cyber security firm Symantec has warned that a hacking operation has successfully infected power companies in the US and Europe.

The Dragonfly group has been identified as having infiltrated firms in the US, Turkey and Switzerland, and has the capability to use cyberattacks to cause mass power outages, total shutdown of electrical grids, and major disruption of utilities.

Experts at Symantec believe Dragonfly, which has been trying to crack into the systems since 2011, may be sitting silently on the systems, waiting to interfere in state power generation apparatus.
Cyber attack graphic
It stated on its website: "The group has been in operation since at least 2011 but has re-emerged over the past two years from a quiet period following exposure by Symantec and a number of other researchers in 2014. This 'Dragonfly 2.0' campaign, which appears to have begun in late 2015, shares tactics and tools used in earlier campaigns by the group."

Hackers have been targeting employees using a tactic called "phishing" for several years.
The group of hackers, known as Dragonfly, Energetic Bear or Berserk Bear, infiltrated energy companies by tricking employees into opening Microsoft Word documents that harvest usernames and passwords, with the number of attacks rising in recent months.

An attack on the Ukraine’s power system, which caused widespread blackouts in 2015 and 2016 shows the potential for an attack and Eric Chien, a technical director at Symantec, said the attackers were “potentially political motivated”, with targets concentrated in the US and Turkey.

Even if they compromise a small energy company, they could put the entire power grid at risk by removing or putting too much power into the grid, he said.

“We see them active on operational machines, understanding how they work, potentially understanding how to run a sabotage campaign. There’s no evidence of them modifying or corrupting them,” he told the Financial Times. “They are waiting in case there is some kind of political event, then they have the cyber offensive means.”

CrowdStrike, another cyber security company, says the hackers are a nationalistic Russian group that may be trying to glean knowledge about the energy industry in order to use it as a diplomatic tactic.

Adam Meyers, vice-president of intelligence at CrowdStrike, said “They can assess how effective a threat to disrupt the flow of energy exports to a specific country might be and what recourse or action might be taken as a result”. Mr Meyers added that Turkey may have been particularly targeted by the Russians because there had been tensions after Ankara shot down a Russian warplane it believed to be in its airspace

Italian solar market set for consolidation

September 6th, 2017

The Italian solar power market, which has an existing capacity of 18 GW, is set for major consolidation.

Clean Energy Pipeline reports that Europe’s second largest market has stagnated somewhat since solar subsidies were effectively scrapped in 2013.

There is now a sizeable legacy of Feed in Tariff (FiT)-backed assets ready for consolidation in Italy according to the website which notes interest from investors including Quercus Asset Selection, SUSI Partners, Tages Group, F2i, Cubico Sustainable Investments etc.
Solar panels
London-based equity investment fund Basalt Infrastructure Partners II LP also announced the establishment of Marceccio Energia, a new renewable energy platform aimed at specifically aggregating ‘small-scale operational Italian solar parks’.

Basalt’s interest stems in part in the majority of installed solar being either individually owned or in small portfolios.

Rob Gregor, Managing Partner of Basalt Infrastructure Partners LLP told the site, “We are excited by the opportunity to establish this scalable platform as it enables us to aggregate assets in what is a very fragmented market.

“Mareccio also provides us with the opportunity to build on a successful operational relationship from our first Fund which will help us deliver additional operational value over the life of the assets. The transaction expands upon the team’s existing, successful involvement with solar energy through McEwan Power in the United Kingdom and Hyperion in the United States.”

Mareccio Energia has an initial target to acquire 100 MW of solar assets and has so far entered into transaction documents to acquire about 30 solar sites, with ‘further acquisitions scheduled for Q4 2017’.

On the buy-side, Quercus Asset Selection, US power firm ContourGlobal, Glennmont Partners, Macquarie European Infrastructure Fund 4/Renvico, Ardian Investment, and Enel Green Power all made purchases of both solar and wind assets.

Furthermore, Italian investment firm Tages Capital SGR was able to reach final close on its solar fund (Tages Helios) in June at €250m.

ESB set to spend billions on Irish Sea wind power

September 6th, 2017

Ireland’s state-owned utility is planning a move into offshore wind farm construction.

ESB has issued a tender seeking "the provision of renewable energy marine services related to offshore wind farms" in the Irish Sea.

It says it is planning to develop or acquire the wind farms from next year, through a pipeline of projects going through the planning process.
Individual projects are expected to range between 200 -500 MW in size, though some could be bigger. The plan is to locate the farms in the Irish Sea.

Industry sources said the construction cost per megawatt for an offshore wind farm is now in the region of €2m, having fallen in recent years. That means a 200 MW project would cost around €400m and a 500 MW project would cost around €1bn.

ESB will most likely partner with firms already active in the field, rather than take on all the project costs.

Potential construction partners would include the likes of Danish company Dong Energy or Japan's Mitsubishi, while institutional investors may provide financial backing.

"Offshore technologies are now well established and the cost of electricity production from these sources continues to decline. We are working on early and mid-stage development opportunities in Ireland and the UK," the ESB said.

Australian chief scientist advocates coal-fired power extensions

September 6th, 2017

Alan Finkel, Australia’s chief scientist, believes the country would be better off extending the life of existing coal-fired power plants, rather than investing in clean coal technology.

Finkel says the move would increase Australia’s energy security in an affordable manner.

He authored a report making 50 recommendations to address soaring prices and increased black outs, said building new ultra-super-critical coal plants would take eight years and carry much higher risks for potential investors. But he said the owners of coal fired generators could be encouraged to spend A$600m-$700m on upgrading the plants to extend their life by another 10 years.
Alan Finkel
“Investing in extending the life of existing coal generators is absolutely in line with our recommendations,” he said.

"There is a lot more generation coming into the market, wind and solar, and that's good, we need more generation … but we also need to ensure that we have got that dispatchibility," he said.

"That can be provided by batteries but they've got limited capacity. It can be provided on a large-scale by pumped hydro but that takes years to build … all of those things take time."

His comments came as the Australian Energy Market Operators recommended the development of 1000 MW strategic reserve of electricity for South Australia and Victoria as it warns the national electricity market remains vulnerable to climate risk and the loss of output from generation units.

In a report to the Federal Government AEMO there is a “tight” supply-demand balance in the National Electricity Market that means its resilience and responsiveness is at risk.

“Retirement of other coal generation in New South Wales after 2022, if not appropriately replaced by firming capability, could significantly increase the risk of load shedding,” AEMO said in the report — which is designed to assess the risk of blackouts in the coming peak summer demand period.

AEMO said a strategic reserve was needed for SA and Victoria because their ability to obtain long-term reserves was limited.

Doosan constructs solar and storage hybrid plant

September 4th, 2017

Doosan Heavy Industries & Construction has announced constructing a solar energy & storage hybrid power plant by integrating a 300kW solar generation system with a 1MWh energy storage system (ESS) on the rooftop of its Changwon head office in South Korea.

The hybrid plants combine renewable energies such as solar or wind power with ESS, helping green plants to remain effective despite weather changes.
ESS is a solution that helps increase energy efficiency by storing the excess power in batteries and enabling energy supply during periods of peak demand.

Doosan Heavy carried out the project as a turnkey EPC project, completing the design, installation and commissioning processes of the power plant using its own technologies. The company will also be in charge of the operation & maintenance (O&M) of the facilities. The advanced control system software that was used for the storage system was developed by the US-based 1Energy Systems, a company acquired by Doosan Heavy last year and which was renamed Doosan GridTech.

One hundred percent of the generated power will be sold to Korea Electric Power Corporation(KEPCO). Doosan Heavy obtained the Renewable Energy Certificate(REC), a certificate required in the renewable power business, with which it will be able to trade the generated power in the energy market.

“Starting with this new hybrid plant, this coming September, we will be installing more plants that integrate solar generation with ESS at five of Doosan’s worksites, including Doosan Infracore’s Incheon Plant and Iksan Plant of Doosan Corp’s Electronics BG. Doosan seeks to become the frontrunner in the delivery of optimized products and maintenance services for hybrid plants by capitalizing on the experience and know-how gained from operating these systems,” said Yongjin Song, head of Corporate Strategy at Doosan Heavy Industries & Construction.

Meanwhile, in collaboration with Korea South-East Power Co., Doosan Heavy has been developing a microgrid system that combines a 4.2 MWh ESS with a 100kW solar generation system for Doosan Engine’s Changwon Plant, which is planned for completion in September. 

Finland to marginalise coal power

September 1st, 2017

The Finnish government says it will almost completely phase out coal-fired power generation by 2030, and increase carbon taxes.

The government plans to increase its reliance on nuclear power but will also continue to reserve some coal in order to maintain energy security.

“This strategy has a goal of getting rid of coal as an energy source by 2030 ... We have to write a law ... and that will be next year,” Riku Huttunen, director general in Finland’s energy department, said.
Finland flag
Coal produces roughly 10 percent of the energy consumed by Finland, which is the Nordics’ heaviest coal consumer and burned about 4.1 million tonnes of oil equivalent in 2016.

The law will, however, leave “room for manoeuvre” to ensure security of supply, Huttunen said, meaning coal-fired power plants could still be available to avoid the risk of blackouts.

Finland is increasing its nuclear capacity but the stability of Finland’s power system will be under pressure as coal is more flexible than other forms of energy, a Thomson Reuters analyst said.

Helsinki is raising its nuclear power capacity to reduce dependency on Russian energy imports. Two new reactors, Olkiluoto 3 and Hanhikivi 1, are due to go online in 2018 and 2024, respectively.

The owner of Hanhikivi 1, Fennovoima, has said the project is on track, but Huttunen, the government official, said the schedule may be “enthusiastic” given that the company had yet to submit several documents regarding safety and economy. 

UK needs billions in power investment to meet new demand scenario

September 1st, 2017

The British government must invest billions in its power infrastructure in order to meet the challenges of developing a cleaner grid.

Reuters reports that facilitating the proliferation of electric vehicles expected in the coming decades is challenge enough, and there is also the issue of replacing a large extent of old nuclear and coal-fired power plants set for closure, in order to cope with new demand.
Pylon from below
In July, the government said it would ban the sale of new petrol and diesel cars and vans from 2040 so as to reduce air pollution, cutting carbon emissions by 80 per cent by 2050 from 1990 levels.

This means the number of electric vehicles is predicted to increase to 20 million by 2040 from its present number of 90,000, meaning expensive implications for power grid development.

Estimates vary on future numbers of electric vehicles, as well as hybrids and those powered by hydrogen fuel cells which do not require mains electricity. However, analysts surveyed by Reuters said up to an extra 50 terrawatt hours (TWh) would be needed for them by 2040.

Overall demand could increase by 41-49 TWh, or 13-15 percent of current levels. A 15 per cent rise would translate into a 40 per cent jump in peak demand if drivers charged their cars between 6 and 9 pm, when electricity consumption is at its highest.

This problem can be eased by encouraging charging at night, when demand is currently only about a third of during peak periods.

Its “extreme scenario” projection of a 40 per cent rise in peak demand equates to 24 GW But National Grid, which operates the transmission system, has said the rise in peak demand can be kept to 5 GW if there is smart charging and time-of-use electricity tariffs.

Spreading out charging through the night could save £2.2bn of expenditure in replacing or upgrading cables or transformers.

Adding to the complexity, and expense, it is estimated that 43 percent of households have no off-street parking, meaning drivers could not recharge their cars overnight in their garage or driveway as they slept in their homes.

An alternative is more public power points at supermarkets, allowing cars to be charged while their owners shop inside. However, few drivers would probably want to buy groceries in the dead of night, the best time for easing grid loads.

Even if the grid can bear the burden, increasing charging points from the current 13,000 is set to greatly add to the expense of the transformation required.

“The UK by 2040 needs 1-2.5 million new charging points. An average public charging point costs 25-30,000 euros so it would need to invest 33-87 billion euros from now until 2040,” according to analysts at Wood Mackenzie.

In terms of ensuring there is enough power capacity to meet the demand, the government will need to invest further. The government has projected that almost 140 GW of generation capacity is needed by 2035 to replace ageing plants and as electricity demand increases. This is around 30 GW higher than current levels.

At the end of last year, gas-fired power capacity totalled 32 GW and the government has said more such plants could help fill the gap left by coal. However, weak wholesale power prices have stunted new development.

Another risk is that by using this fossil fuel to meet extra power demand, Britain could end up emitting more greenhouse gases in charging EVs than conventional cars do already.

As well as gas Reuters reports that onshore and offshore wind, biomass, nuclear and power links with Europe can all be part of the solution. 

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