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DNV GL comes out on top in E.ON wind forecasting competition

October 10th, 2014

A competition run by E.ON to test accuracy in wind power computer modelling has been won by DNV GL.

The achievement in predictive analysis is likely to lead to a direct improvement in the financing conditions for wind project developers, thereby reducing the cost of electricity delivered to the grid and improving returns.
Wind forecasting
Renewable Energy Foucs reports that the blind test challenged six participants, including some of the most reputable consultancies in the global wind industry, to accurately predict the wind regime at eight wind farm sites.

The most attractive wind farm sites are often found at locations where the wind conditions are difficult to quantify. Examples include sites affected by atmospheric stability, exposed and hilly sites as well as wind farms in or near forests. An ongoing challenge for the wind industry is to accurately predict the variation of wind speed across such “complex” sites in order to determine a credible estimate for the energy output of the project in question.

Participants were asked to make their best predictions of the wind conditions at locations corresponding to existing measurement masts at each site. The predictions were then compared to the actual measurements; the smaller the difference, the higher the ranking in the blind test.

DNV GL in recent years has developed cutting-edge computation fluid dynamics techniques to boost accuracy further.

Rosatom retracts South Africa nuclear contract announcement

October 10th, 2014

News that Russian state-owned nuclear firm Rosatom was to build a fleet of power plants in South Africa has been retracted by both parties amid confusion over the original agreement.

In late September Rosatom issued a statement quoting South African government officials, in which it said it had been given the right to build a number of nuclear plants in the country. However, this week the firm said that wasn’t what it meant to say.

"The wording from Rosatom wasn’t well chosen," Viktor Polikarpov, regional vice-president for sub-Saharan Africa, was quoted as saying. "We have to admit that we worded the statement wrongly. It was lost in translation."

South Africa’s energy ministry also issued a statement, saying that its strategic partnership agreement with Rosatom confirmed only the possibility of future co-operation in the nuclear sector.

While South Africa is seeking to procure 9.6 GW in nuclear capacity, it has not yet announced a tender, which is required by law before any contract can proceed. The head of the nation’s nuclear programme, Zizamele Mbambo, told South African media that the government intends to make strategic partnership agreements with other countries as well.

When the agreement with Rosatom was signed in September, there was confusion over its wording with South African lawmakers suspicious that it would enable Russia to limit their country's trade with other nuclear providers. While the government denied this claim, details of the deal were not released to legislators.

Rosatom has said that, if contracted, it will apply for a $50bn loan from the Russian government to help fund the nuclear plants. The firm said it will bid around $6500/MW for the contract, which South Africa has said could consist of up to eight power plants, most of which would be planned to be operational by 2030.

Agreement on $5.2bn coal-fired power plant in Myanmar

October 10th, 2014

Ratchaburi Electricity Generating has agreed to co-invest in a new coal-fired power plant in Myanmar.

Ratchaburi, Thailand's largest private power producer has confirmed it had signed an initial agreement with Myanmar to work with three other firms on the plant.
Myanmar flag
The three companies are Blue Energy and Environment, Vantage Company Limited (Myanmar) and Kyaw Kyaw Phyo Company Limited (Myanmar), the company said in a statement.

The agreement is the starting point for developing the 2,640 MW plant, which is expected to require about 170 billion baht in investment.

EDF chief attacks Energiewende

October 9th, 2014

The chairman of France’s biggest utility has blasted Germany’s energy policy, referring to it as a disaster.

Henri Proglio, chairman and chief executive EDF told reporters in London that while France undoubtedly has problems, their neighbours’ difficulties with the imposition of their ongoing Energiewende policy were far more acute.
“When it comes to energy they are in a disaster,” he said. “The two major companies, Eon and RWE are under huge pressure. One is more or less dead, the other is in a very difficult situation.”

Proglio was responding to a question about perceptions of France’s own faltering economy, which he agreed had difficult challenges to face.

 “It’s very difficult to make a judgment about France in a few minutes. It’s a country where you have some very good and some very bad examples. We have to force the country to make some improvements in public overheads to drive more investments,” he said.

RWE announced a 62 per cent fall in profit in August and said it planned to shut down more power stations. Germany’s second-biggest utility by market value blamed its situation on the expansion of renewable energy, which it said had left many of its power stations unable to cover their operating costs.

Alstom awarded wind farm contracts in Brazil

October 9th, 2014

Votalia Energia do Brasil has handed Alstom a $17.8m contract to provide electrical balance of plant systems at two wind farms in north-east Brazil totalling 201MW.

The contract includes medium and high voltage systems and the French company will be responsible for the construction of the collection system, step-up substation, transmission line and connecting bays.
Wind turbine
High voltage equipment will be manufactured locally in Alstom’s (Euronext: ALO) plants at Itajubá and Canoas.

The Ṣo Miguel do Gostoso complex with a total capacity of 108MW is located in the state of Rio Grande do Norte and is made up of four wind farms РCarna̼bas, Reduto, Ṣo Cristo and Ṣo Jọo, each with 27 MW. It so is scheduled to start commercial operations in March 2015.

Meanwhile the Vila Amazonas complex, in the state of Ceará, has a total capacity of 93MW from Junco 1, Junco 2 of 24 MW each, Caiçara 1 of 27 MW and Caiçara 2 of 18 MW. They should start serving the grid in 2016.

“In the past year, Alstom has been selected in Brazil for more than 10 projects in the wind energy sector… reinforcing Alstom’s growing leadership in the wind segment in Brazil,” said Alstom Grid vice president Sergio Gomes.

Honduras utility forecasts losses of 31.7 per cent by 2015

October 8th, 2014

Honduras's state-owned energy firm the National Electric Power Company (ENEE) has said it expects losses of 31.7 per cent next year. Of that percentage, 12.5 per cent will come from technical losses and 19.5 per cent form commercial losses.

Esmerk Latin American News said that the public company will lose over $400m due to a lack of maintenance on its transmission lines.

Local newspaper El Heraldo also quoted figures from The World Bank pointing out that energy prices and electricity losses are the main causes of ENEE's delicate financial situation.

Almunia says Hinkley approval sets no precedent

October 8th, 2014

European Commission vice-president Joaquín Almunia said today that the EC’s approval for Hinkley Point C nuclear plant in the UK “will not set any precedents”.

He stressed that the go-ahead for revised plans for the project (see European Commission votes approval for Hinkley Point) did not mean that Brussels was favourable to nuclear at the expense of renewables, which it has long backed.

“The choice to promote nuclear is a choice by the UK”, he said, and added: “There is no change of energy policy in the EU.”

Speaking at a press conference this afternoon where he confirmed that the UK government’s plans to support Hinkley “will not lead to undue distortions” of state aid rules, he said: “Without public support this investment cannot take place – the aid is proportionate to the needs.”Joaquín Almunia

He said the EC had been persuaded by the UK that there was no cheaper or less risky alternative to Hinkley, which will be the first nuclear power station built in Britain for almost 20 years.

Almunia (pictured right) stressed that he had assessed – and was comfortable with – the safety risks associated with nuclear. “I can assure you that I care about the risks involved in this kind of energy. I have paid attention to all the risks in this project.”

He told journalists that Hinkley would take almost ten years to build, would be operational for 60 years and cost £34bn – a significant rise on the £16bn price tag that has been quoted by EDF, which will build the plant.

The EC’s decision today was welcomed by the UK’s Nuclear Industry Association. Its chairman Lord Hutton of Furness said the approval was “an important step in securing the UK’s home-grown low-carbon electricity generation while adding jobs and prosperity to the economy”.

He added: “Reaching this decision has been a long process, but it was right the Commission should thoroughly review all the relevant issues. We look forward to EDF Energy taking its final investment decision with the interested investors. This will set in train an important time for the nuclear sector in the UK as new build projects get under way to replace the current ageing generation. It also gives certainty to other European countries looking at the UK system of contracts for difference as a mechanism to secure their own supply.”

The British union for energy and engineering construction workers, the GMB, was also enthusiastic about the EC go-ahead.

National secretary for energy Gary Smith said: "Nuclear new build is crucial to delivering low carbon electricity and keeping the lights on. Our energy infrastructure is creaking and we need to get on with this and building other nuclear power plants as a matter of urgency. This won't solve the immediate crisis in energy but the longer we delay the worse it will get and the more expensive the construction project will be.”

Smith also said that the threat of a legal challenge to the decision from Austria (see Austria confirms it will take legal action if Hinkley Point approved) was “based simply on anti-nuclear prejudice. UK civil nuclear power has run safely for generations and the new power stations will have even higher standards than in the past.”

He added: “New nuclear is expensive but so are renewables. Both renewables and nuclear need subsidies and everyone should be honest about this. Renewables are also invariably intermittent and this means we still need a dependable base load supply with back up to meet peak demand. New nuclear has to be part of the UK energy mix as a result.”Hinkley Point C

The GMB’s national officer for engineering construction, Phil Whitehurst, said: "Hinkley Point C power station is badly needed not only for the thousands of jobs it will secure in the construction industry and supply chain but also to prop up our failing energy production capacity.

“So many coal fired stations are closing and due to the indecisiveness of the government on green subsidies they are not being converted to biomass. Hinkley Point C will be built and managed under safety regimes second to none in the world.”

On the threatened Austrian challenge, the GMB said that “Austria is the EU’s most hostile nation to nuclear energy. However what happens in the UK has nothing to do with Austria. GMB respectfully ask their government not to interfere with this much needed station.”

John Cridland, director-general of the Confederation of British Industry, said: “The European Commission’s green light for Hinkley Point is a significant milestone in the United Kingdom’s energy future.

“Hinkley should set the ball rolling for the UK’s nuclear new build programme, putting us on the right path to achieving a secure and sustainable energy mix. It represents a real opportunity for growth, with the potential to create tens of thousands of jobs for people – not just in the local community, but up and down the whole country.”

Financial close announced for 24 MW Jordanian solar PV plant

October 8th, 2014

US-based solar firm SunEdison has closed financing arrangements for the construction of one of Jordan’s largest solar photovoltaic (PV) power plants, the company has announced.

Work on the $50m project is scheduled to begin in the fourth quarter of this year, with grid connection expected in late 2015.

Funding will be provided by the European Bank for Reconstruction and Development (EBRD) and the US government’s Overseas Private Investment Corporation (OPIC).

The 23.8 MW power plant is to be located in the Ma’an Governate in the southern part of the country, occupying around 50 ha of land. SunEdison’s solar modules on single-axis trackers are expected to generate 57,000 MWh/year and save 35,000 tonnes in CO2 emissions. The plant will sell its power to Jordan’s National Electric Power Company (NEPCO) under a 20-year power purchase agreement. NEPCO will also build a substation to connect the plant to the grid.

Nandita Parshad, EBRD’s Director for Power and Energy, said: "We are delighted to finance the EBRD's first renewable project in Jordan. This is a region with a rapidly growing demand for power but also with a large potential for the development of renewables. Jordan in particular is a country where solar energy can make a clean and reliable contribution to meeting rising demand and reducing dependence on expensive hydrocarbons. We are very pleased to cooperate again with OPIC in Jordan and excited to be working for the first time with SunEdison.”

European Commission votes approval for Hinkley Point

October 8th, 2014

Brussels has voted to allow the UK’s newest nuclear power plant to go ahead, after receiving final approval from the European Commission.

The £16bn Hinkley Point project had been heavily scrutinised, subject to evaluation under state aid rules.

The European Commission said Britain had agreed to "modify significantly" the financing for the project, reducing the burden on British taxpayers. The changes agreed by the UK would cut the subsidy by more than £1bn.
Europe approval
16 commissioners voted in favour, with five voting against and one abstention.

The French firm EDF Energy (Euronext: EDF) is due to build the plant, which will provide power for about 60 years, and a cornerstone of the country’s strategy in moving away from fossil fuels towards low-carbon power.

The nuclear power station is expected to begin operating in 2023.

Britain made amendments to introduce tougher profit clawback clauses to the contract, which would limit excess upside for private investors throughout the plant’s lifespan.

The decision will reverberate around Europe and potentially open the door for a new generation of heavily subsidised nuclear plants across the bloc.

Austria’s Johannes Hahn, the regional policy commissioner, expressed outright objections to the plan and Vienna is preparing a legal suit against the project.

Crucially for EDF, there has been no change to the “strike price” of the 35-year contract for difference, which guarantees a minimum revenue for low carbon power generators.

The UK government has agreed to pay EDF £92.50 per MWh for the electricity output from Hinkley Point C – roughly twice the current wholesale price of power. In nominal terms, this rises to £279 per MWh in 2058, the last year of the scheme.

The “gain-share mechanisms” required by the commission are designed to recoup any unexpectedly high profits from the building of the plant, or from any refinancing and equity sales.

For instance over the life of the project, which could last more than 60 years, any profit beyond a 13.5 per cent return would be 60 per cent returned to the taxpayer. This kicks in at an earlier point than the mechanism first agreed between the UK and EDF, which proposed a 50-50 profit share after the project started making a 15 per cent return.

The Hinkley reactors are the first two of twelve that the UK intends to build, and is expected to provide seven per cent of Britain's power for the next six decades. 

Agneta Rising, Director General, World Nuclear Association said: “Today’s announcement takes the UK forward towards joining the global investment trend in a new generation of clean, affordable and reliable nuclear energy. The move puts nuclear alongside other forms of clean generation in a market mechanism called Contract for Difference, which is part of the UK Government’s pioneering Electricity Market Reform.”

“The Electricity Market Reform is an innovative approach to encourage the decarbonisation of the electricity supply system in a deregulated market. The decision will be welcome by all those planning new nuclear build projects in the EU and similar markets.”

CEZ mulls nuclear expansion plan

October 8th, 2014

Czech utility CEZ is considering the possibility of expanding its nuclear power capacity.The group is looking at two huge investments – to build nuclear reactors in the Czech Republic and to acquire its Slovak counterpart Slovenske Elektrarne.

A large proportion of the company’s power capacity comes from lignite plants, but with those facilities ageing and the EU preparing a tougher carbon credit regime, nuclear power is being seen as a means of maintaining profitability.
Martin Novak
Expanding the nuclear power stations at Temelin and Dukovany would address this, but CEZ was forced in April to cancel the tender to bring in a partner for Temelin after Brussels began a probe into whether a similar investment contract between EDF of France and the UK government to build Hinkley Point C constituted illegal state aid.

The decision by the European Commission to allow the Hinkley Point project to progress potentially opens the door for a similar arrangement in the Czech Republic.

Martin Novak, chief finance officer (above), admits that without some kind of power price guarantee it will not fly. “Without this kind of support, nobody would be able to take the risk of building the plant,” he says, though he insists that it will happen one day.

Jan Mladek, the Social Democrat economy minister, also remains keen on the project, pointing out that “the Ukraine crisis supports the case for building nuclear power in the Czech Republic” so the country can become more energy-independent.

The FT reports that the Czech government is less united on CEZ’s other grand project, the potential acquisition of 66 per cent of Slovenske Elektrarne, which Enel of Italy has put up for sale. CEZ argues that the cultural and technical similarities of the two companies – once united in the former Czechoslovakia – offer substantial synergies. “There is nothing that would better suit us,” says Mr Novak.

Andrej Babis, the powerful finance minister and leader of the centrist Ano party, has questioned it on the basis of CEZ’s patchy acquisition record.

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