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Masdar honoured by UN for sustainable energy leadership

September 17th, 2015

Abu Dhabi-based Masdar has received a special recognition award from the United Nations Department of Economic and Social Affairs (UN-DESA) for its leadership in sustainable energy.

The award was granted as part of the ‘Powering the Future We Want’ joint programme between the UN-DESA and the China Energy Fund Committee that promotes innovative practices in sustainable development.

It was presented by UN General Secretary Ban Ki-moon to Dr Nawal Al-Hosany, Head of Sustainability at Masdar (pictured).Masdar honoured by UN

Wu Hongbo, Under-Secretary-General for Economic and Social Affairs, said: “We are pleased to present this award to an institution that furthers clean energy solutions that seek to address the social, economic and environmental dimensions of sustainable development, in line with our vision of sustainable energy for all.”

Dr Al-Hosany said that Masdar “represents the embodiment of the UAE’s commitment to advancing safe, clean and secure energy, and to transitioning from a resource-based economy to a knowledge-based economy”.

“We are committed to continuing to collaborate with local, regional and global partners to forward the sustainable energy agenda worldwide.”

Masdar chief executive Dr Ahmad Belhoul said that the company is “a successful model of public-private partnership. Masdar has been able to pioneer advances in delivering renewable energy solutions in some of the most difficult places in the world.”

In order to advance the goals of the post-2015 agenda, we will need to prioritize innovative partnership and creative collaboration on meeting the energy needs of the future.”

Masdar has committed $1.7bn to renewable energy developments and delivered 14 projects in five countries and has 13 ongoing projects across nine different countries.

Hear Masdar speakers at POWER-GEN Middle East

De Rivaz slams Hinkley Point C critics and confirms decision imminent

September 16th, 2015

The chief executive of EDF Energy, Vincent De Rivaz, says the final investment decision on Hinkley Point C nuclear power plant is close to hand following rigorous planning, but took aim at what he called ‘doubters and procrastinators’ whose ends were to derail the project.

Mr De Rivaz said at a visit to Dungeness nuclear power plant that rigorous scrutiny of the project has: "helped us to improve our plans and bring us to the brink of a Final Investment Decision.”
Vincent de Rivaz
The decision which has been delayed by two years is predicted to be made next month when the President of China, Xi Jinping visits Britain.

Speaking at the visitor centre at Dungeness B nuclear power station in Kent on Tuesday he professed gratitude for the rightful scrutiny the project has been subjected to "from Parliament, the European Commission, the regulator, the unions, from our workforce, suppliers, customers, partners and many other stakeholders."

He continued: "We are approaching the Final Investment Decision for our new nuclear project Hinkley Point C. As we do, scrutiny has naturally increased. Just as we embrace transparency, we welcome scrutiny. We relish challenge based on facts. Be in no doubt – Hinkley Point C is a vast undertaking.”

"New nuclear is good for Britain and Hinkley Point C is the first step in the journey. So we need to get it right. This analysis has been conducted through a rigorous, comprehensive and exhaustive set of processes which has taken the best part of a decade.”

" The processes are led by responsible and accountable people who concluded that it is an investment which Britain needs and that it is based on a good deal and a strong project.”

De Rivaz paid tribute to the resilience being shown in pushing the project through as overseen by three Prime Ministers and eight Secretaries of State.

"Short-term events have not changed the long-term case on which this project was based and its price deemed fair. The market price today is similar – even if it has decreased a little - to where it was two years ago when the price for Hinkley point C was agreed and welcomed.”

"Yet it seems to me that great infrastructure projects in this country often face scepticism in the final stages of development. It happened to Crossrail, the Channel Tunnel and Heathrow's Terminal 5.”

"For me, this is a great pity. Britain's infrastructure would be all the weaker if its leaders had allowed the doubters and procrastinators to derail those projects. The moment when we move from discussion and rhetoric into delivery is the time for courage and leadership."

One of the biggest sticks for critics to use on the project is the fact that the facility’s European Pressurised Reactor design has not yet been shown to be successful, but de Rivaz dismissed that concern, saying, "Again, I want to be clear. Our project is based on proven technology . Britain is buying the best and the safest.”

Meanwhile overall EDF Group Chief Executive Officer Jean-Bernard Levy said on Tuesday that the company would not be seeking power generation acquisitions in the immediate future, due to current debt factors.

"This is no longer the time for EDF to carry out acquisitions of major power generation groups." Levy said. "Now it is about focusing and savings."

He added that EDF would be refocusing its investments following a period of expansion that included major acquisitions in the United States, Germany and Italy with mixed results.


Policy tinkering sees financial lure of UK renewables sector plummet

September 15th, 2015

The UK’s attractiveness for renewables investment has plummeted in the last few months thanks to “policy-making in a vacuum”, according to a new report.

And the study from analysts at EY warns that this “inconsistent policy tinkering” could damage investor confidence in other key potential energy growth areas for Britain such as new nuclear, carbon capture and storage and shale gas.

EY has today published its annual Renewable Energy Country Attractiveness Index (RECAI) and for the first time since the survey started in 2003, the UK has dropped out of the top 10, slipping to 11th place.

The report states that this year alone, 23 large-scale projects representing around 2.7 GW of energy “have been publicly abandoned, putting a question mark over the long-term future for the UK’s renewable sector”.UK plummets in renewables poll

The report also points to the inconsistencies of the latest policy revisions as contributing to the UK’s dramatic fall.

These changes in policy include an end to support for some wind and solar projects and have come about following the UK General Election in May, in which the Conservative Party won a majority, ending five years of coalition with the Liberal Democrats.

Looking ahead, EY states that the government’s latest policy revisions are expected to have “a significant impact on onshore wind investment – a combination of the early expiry of support for projects under the Renewables Obligation and the unexpected loss of revenues from levy exemption certificates are likely to impact both existing and future projects”.

Ben Warren, Energy Corporate Finance Leader at EY said: “Few in the renewables sector would disagree that falling costs mean many renewables projects, particularly onshore wind and solar PV, will be cost-competitive and subsidy-free within the next three to five years. However, by prematurely withdrawing support, the government risks stalling or killing projects that would otherwise maintain the momentum to get the market to that critical point.”

Warren said that investors are currently “trying to make sense of what seems to be policy-making in a vacuum, lacking any rationale or clear intent. Worryingly, this trend of inconsistent policy tinkering could also sour investor confidence in other areas, such as new nuclear, carbon capture and storage and shale gas, as well as offshore wind.”

He warned that the UK renewables sector “is at a crossroads. It can continue to fight this policy tinkering, or see this as an opportunity to throw off the shackles of policy dependency and establish itself at the forefront of unsubsidized renewables in Europe. The latter won’t be easy, but it may well be worth taking the risk.” 

US leapfrogs China to top renewables investment table

September 15th, 2015

The US has leapfrogged China to the top slot in a highly-regarded annual analysis of the best countries in the world for renewable energy investment.

Last year, the US slipped to second place behind China in the Renewable Energy Country Attractiveness Index (RECAI), complied by consultancy EY.

However the latest issue of the report which is published today sees the US back at number one.

The driver behind the US regaining the top spot is President Barack Obama’s long-awaited Clean Power Plan (CPP), which EY states “sends a strong message of accountability at the state-level for the shift to a low-carbon economy and is expected to galvanize a significant increase in renewable energy investment over the next 15 years”.

Ben Warren, Energy Corporate Finance Leader at EY said: “The CPP is the most comprehensive, far-reaching and flexible emissions legislation in the US to date and gives a clear steer on the country’s long-term energy strategy. Targets alone will not construct new projects, but long-term visibility increases investor confidence that demand is there, and maintains momentum as we hurtle towards universal grid parity for renewables.”

India’s economic, political and energy market reforms, as well as ongoing significant foreign investment, moved the country into third position ahead of Germany, where a new auction regime is not expected to accelerate the pace of deployment in the coming years.

EY highlights which countries are ‘hot’ and which are ‘not’, and one of the hottest is Chile, which moves into ninth place in the RECAI and where there is a call for renewables to account for at least 45 per cent of power contracted in future tenders.

This has been prompted by “the success of renewables projects in helping to drive down average energy prices in Chile after a landmark decision last year to allow intermittent energy supplies to compete with traditional power plants in the country’s national energy auctions”.

EY highlights that “with bids already being accepted for a May 2016 auction, recent months have seen a flurry of activity in this already buoyant market, with SunPower Corp, Alstom and Brightsource, SunEdison and Enel Green Power, to name a few, all announcing major project developments in the country”

Brazil moved into eighth place thanks to “government proactivity in addressing key challenges, such as low tariffs, and an increasing focus on its untapped solar market”.

France is also named as ‘hot’ following the adoption in July of its long-awaited energy transition law to cut the proportion of nuclear in its power mix from 75 per cent to 50 per cent, generate 40 per cent renewable electricity by 2030 and overhaul its subsidy regime.

In May France also become the first country in the world to introduce a carbon reporting obligation on financial institutions.

The government has also recently launched tenders for floating offshore wind and marine energy pilot projects, and doubled the capacity of solar PV to be tendered in 2015 to 800 MW.

If Chile and France are hot, then Australia, Spain and the UK are positively tepid according to EY, which highlights all three as problem areas for renewable investment thanks to policy U-turns on support for wind and solar power projects.

EY’s Warren said: “Policy changes still have an immense impact on renewable energy deployment and the RECAI movements reveal some policymakers are listening to market signals more than others.

“In today’s world, where the majority of the population is facing some form of energy crisis, public support for low-carbon energy solutions and the increasingly compelling economics, flexibility and scalability of renewables cannot be ignored. Policymakers must recognize the strategic imperative of a diverse energy mix to help address economic and societal goals, as well as environmental ones.”

MHPS wins gas turbine deal for Belarus cogen plant

September 15th, 2015

Mitsubishi Hitachi Power Systems has won an order for a 26 MW gas turbine for a power project in Belarus.

The order has come from China Machinery Engineering Corporation, which is the EPC contractor for the cogeneration project.

The project is being financed by the World Bank and involves the refurbishment and modernization of the existingMHPS H-25 gas turbine Gomel Combined Heat and Power Plant in the city of Gomel, some 300 kilometers southeast of Minsk.

The aim is to increase the plant's power generation and heat supply capabilities while simultaneously achieving energy savings.

The newly-ordered gas turbine is a H-25 model and will form the core of the upgraded cogeneration facility, which will also incorporate a steam turbine, waste heat recovery boiler, generator and auxiliary equipment.

MHPS will be in charge of manufacturing and supplying the gas turbine and also dispatching engineers to the site to provide direct guidance and instruction.

Mauritania must exploit renewables potential to meet demand says report

September 15th, 2015

Mauritania is poised to tackle its electricity access problems with a clean energy drive according to a new report from the International Renewable Energy Agency (IRENA).

The study, written in association with the United Nations Development Programme, says that developing Mauritania’s significant renewable energy resources will allow the country to grow its local economy and improve access to energy.

While the share of households in Mauritania with access to electricity has roughly doubled since 2000, access to energy services remains limited due to various geographic and economic factors, including widely-spread large urban population centres and significant rural populations distributed throughout the country.IRENA Mauritania report

The IRENA report states that several planned investments in wind and solar “would greatly advance renewable energy capacity in Mauritania, but not enough to keep up with demand growth stemming from the mining sector. Electricity demand is expected to grow by up to 600 per cent between 2010 and 2030, led primarily by industry needs and fuelled in part by rising domestic demand”.

The report finds that development of renewable energy in the country would be facilitated by the existing electricity network of mini-grids. Such a transition would be mainly driven by solar and wind resources and could be strengthened by co-operation with both the Maghreb region and West Africa. It would enable Mauritania to not only provide energy for domestic economic development, but also make the country a renewable energy exporter.

IRENA Director-General Adnan Z. Amin said: “Mauritania has already taken steps towards the large-scale use of renewable energy both for on-grid and off-grid applications.

“Now, with renewable energy sources cost-competitive with oil-generated electricity in most regions in the country, Mauritania has an opening to rethink its energy strategy, and build a framework integrating technical solutions and business models based on renewable energy.”

Awards for phase 3 of Dubai solar park in Q1

September 14th, 2015

Dubai is to announce the winners of the third phase of a $3.3 billion solar energy park in the first quarter.

The contract for the additional 800 MW of solar power capacity are set to be shared by more than one company, according to Saeed Mohammed Al Tayer, chief executive officer of Dubai Electricity & Water Authority (DEWA).
Dubai iconic building in solar
DEWA is still deciding whether to build the plant all at once or at different times to take advantage of lower costs. In January, DEWA tripled its target for solar energy production to take advantage of lower building costs.

The Kingdom of Saudi Arabia, the world’s biggest crude exporter, has ample solar resources and open land and eventually “won’t need fossil fuels,” Oil Minister Ali Al-Naimi said in May.

DEWA in January awarded a contract to build a 200 MWplant to a group led by Saudi Arabia’s ACWA Power International, in the second phase of the park. The first solar factory at the park started in October 2013, with a 13 MW photovoltaic plant that was the largest of its type in the Middle East and North Africa at the time. First Solar Inc built the facility at a cost of $33m-$35m.

E.ON forced to remove nuclear operations from spin-off

September 11th, 2015

Germany’s largest utility, E.ON, is set to record a massive €9bn ($10bn) loss due to impairment costs this quarter after deciding not to unload its nuclear business into a new company.

The decision came after the German government announced its intentions to ensure utilities bore the brunt of liabilities of the country’s phasing out of nuclear power.
E.ON had planned to move its nuclear operations into Uniper, a company being established to operate conventional power, trading, exploration and production. The spinoff will proceed but without German nuclear activities.

“We cannot and will not wait for possible policy-making decisions that could delay the spinoff of Uniper,” Chief Executive Johannes Teyssen said. “We will not play chess with politicians.”

He added that the government move was a surprise and said making shareholders “perpetually liable” for financing burdens without operational control isn’t acceptable.

Government proposals would make utilities permanently liable for the costs of nuclear waste and plant decommissioning.


Regulatory uncertainty voted biggest barrier to new power plants in Asia

September 10th, 2015

The biggest challenge to adding power generation capacity in Asia is regulatory and policy uncertainty.

That was the opinion of an audience at POWER-GEN Asia in Bangkok who took part in an electronic voting session which gauged their views on several key issues facing the ASEAN region.

Some 75 per cent thought regulatory and policy uncertainty was the biggest hurdle to building new capacity, while the second biggest obstacle with 13.9 per cent of the vote was financing.

The audience were then asked, what will be the dominant energy source in Asia in the next five years? Some 59.9 per cent said coal, 29.7 per cent voted gas and 10.8 per cent opted for solar, while no-one saw a five-year future for nuclear or wind.

But with the question opened out to a time span of beyond five years, the answers changed to gas 44 per cent, solar 27.8 per cent, coal 22.2 per cent and nuclear 5.6 per cent – still no-one was putting any faith in windpower.

The audience were asked, what are the chances were of more Asian countries starting a nuclear programme. The majority (47.4 per cent) felt it was unlikely, while 28.9 per cent thought it moderately likely. Sarah Fairhurst, a partner in Hong Kong’s Lantau Group, suggested this result was because nuclear “correlates with the rise of solar. Nuclear’s big benefit has always been that it is low carbon, but if you can find something just as low carbon, then it diminishes.”

Matthew Wittenstein, electricity analyst at the International Energy Agency, said that “nuclear doesn’t make sense for flexible back-up to renewables”.

Wittenstein had earlier told the audience that investment in OECD countries has shifted from coal and nuclear to gas and renewables, but these economies still rely on a legacy of regulated investments.

He said that renewables costs have come down “to a level that some years ago would not have been thought possible. The market case for renewables is becoming more and more clear in many markets.”

“Market integration of renewables will send signals to develop more system-friendly solutions. We need more market perspective on how better to integrate renewables into the system.”

POWER-GEN Asia: The ‘tension and challenges of keeping renewables alive’

September 9th, 2015

The investor landscape in southeast Asia has changed rapidly in recent years, with local banks and institutions entering a market that they had previously left well alone.

The challenges and opportunities of the Asia power investment sector were put under the microscope at a special panel session at POWER-GEN Asia in Bangkok.

It was chaired by Edward McCartin, senior vice-president of Synova LLC, who wanted to discuss what’s going on right now in cross-border transactions in southeast Asia and compare the experiences of developers, financiers and advisors across the region.POWERGEN-Asia renewables investment

Speaking before the session, McCartin told Power Engineering International that he wanted to “examine the tension and the challenges of trying to fit renewable energy projects and keep them alive. With coal being as cheap as it is, it’s very difficult to do renewable projects and get the necessary finance.”

He said that southeast Asia had seen new investors coming in who were financial players rather than “your traditional power companies, but those guys also have their own objectives and their own proclivities that don’t necessarily fit with a 25 or 30 year power development”.

“Similarly with financing we are seeing local banks in places like Thailand and the Philippines – and certainly India – who are the ones driving the bus in terms of financing projects, but international financiers are still important in places such as Myanmar, Indonesia and also Singapore.”

McCartin said that power was “going through a change. A lot of the power companies out of the US and Europe are evaporating out of the region and we are seeing very strong activity from the Japanese and the Korean trading companies. And the Chinese are starting to move into that bit of the business and not just technology.”

But he stressed that the ASEAN region “is still a very solid place to be putting your investment dollars”.

Once the session was underway, the subject of renewables was tackled and Cyril Cabanes, senior vice-president of development at Marubeni Asian Power Singapore said that the most important thing for renewable investors is regulatory certainty.

Cabanes said that the role of governments in the region was to “keep the train moving. The train may slow but it must keep moving. But if you leave it to the market, then the train will stop and that will be very uncomfortable for the passengers.”

Justin Wu, head of Asia-Pacific at Bloomberg New Energy Finance, said that the drivers behind renewable developments in Asia have changed, particularly in China. “Most new developers in China don’t care about carbon emissions – they are building renewables because there is a desperate need for energy.”

Saud Siddique, executive chairman of Singapore-based Odyssey Capital, said that “investors have come to understand the risks of power projects. They have understood that the best investments are underpinned by good governance and law and environmental issues are dealt with.”

One type of financing that is struggling in Asia is private equity. Gregory Karpinski, chief executive of MAXpower Group said that “private equity in Asian infrastructure is a horrible mix”.

He said that while some private equity firms would “take a punt”, he said that private equity is “fundamentally incompatible with power projects in Asia”.

The panellists were asked to pick the countries that offered the best opportunities for cross-border investment.

McCartin opted for the Philippines – “a very solid place” – but he warned that “competing with the local guys is hard – they are very savvy”.

Kaminsky and Cabanes also picked the Philippines while Mark Hutchinson, an energy expert with Thailand’s Advisors in Energy, singled out Thailand: “Very stable, long term predictability and the general ease of doing business.”

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