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Battery power’s latest plunge in costs threatens coal and gas

 
LCOE global de referencia: fotovoltaica, eólica y baterías. Fuente BNEF. / Global LCOE benchmarks – PV, wind and batteries. Source: BloombergNEF.

Two technologies that were immature and expensive only a few years ago but are now at the center of the unfolding low-carbon energy transition have seen spectacular gains in cost-competitiveness in the last year. The latest analysis by research company BloombergNEF (BNEF) shows that the benchmark LCOE for lithium-ion batteries has fallen 35% to $187 per megawatt-hour since the first half of 2018. Meanwhile, the benchmark LCOE for offshore wind has tumbled by 24%.

Onshore wind and photovoltaic solar have also gotten cheaper, their respective benchmark LCOE reaching $50 and $57 per megawatt-hour for projects starting construction in early 2019, down 10% and 18% on the equivalent figures of a year ago.

BNEF’s analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices. Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience.

 

The most striking finding in this LCOE Update, for the first-half of 2019, is on the cost improvements in lithium-ion batteries. These are opening up new opportunities for them to balance a renewables-heavy generation mix. Batteries co-located with solar or wind projects are starting to compete, in many markets and without subsidy, with coal- and gas-fired generation for the provision of ‘dispatchable power’ that can be delivered whenever the grid needs it (as opposed to only when the wind is blowing, or the sun is shining).

Electricity demand is subject to pronounced peaks and lows inter-day. Meeting the peaks has previously been the preserve of technologies such as open-cycle gas turbines and gas reciprocating engines, but these are now facing competition from batteries with anything from one to four hours of energy storage, according to the report.

Offshore wind has often been seen as a relatively expensive generation option compared to onshore wind or solar PV. However, auction programs for new capacity, combined with much larger turbines, have produced sharp reductions in capital costs, taking BNEF’s global benchmark for this technology below $100 per MWh, compared to more than $220 just five years ago.

Although the LCOE of solar PV has fallen 18% in the last year, the great majority of that decline happened in the third quarter of 2018, when a shift in Chinese policy caused there to be a huge global supply glut of modules, rather than over the most recent months.

Source: BloombergNEF

Battery Power’s Latest Plunge in Costs Threatens Coal, Gas

London and New York, March 26, 2019 – Two technologies that were immature and expensive only a few years ago but are now at the center of the unfolding low-carbon energy transition have seen spectacular gains in cost-competitiveness in the last year.

The latest analysis by research company BloombergNEF (BNEF) shows that the benchmark levelized cost of electricity,[1] or LCOE, for lithium-ion batteries has fallen 35% to $187 per megawatt-hour since the first half of 2018. Meanwhile, the benchmark LCOE for offshore wind has tumbled by 24%.

Onshore wind and photovoltaic solar have also gotten cheaper, their respective benchmark LCOE reaching $50 and $57 per megawatt-hour for projects starting construction in early 2019, down 10% and 18% on the equivalent figures of a year ago.

Elena Giannakopoulou, head of energy economics at BNEF, commented: “Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience.

“Our analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices.”

The most striking finding in this LCOE Update, for the first-half of 2019, is on the cost improvements in lithium-ion batteries. These are opening up new opportunities for them to balance a renewables-heavy generation mix.

Batteries co-located with solar or wind projects are starting to compete, in many markets and without subsidy, with coal- and gas-fired generation for the provision of ‘dispatchable power’ that can be delivered whenever the grid needs it (as opposed to only when the wind is blowing, or the sun is shining).

Electricity demand is subject to pronounced peaks and lows inter-day. Meeting the peaks has previously been the preserve of technologies such as open-cycle gas turbines and gas reciprocating engines, but these are now facing competition from batteries with anything from one to four hours of energy storage, according to the report.

Tifenn Brandily, energy economics analyst at BNEF, said: “Solar PV and onshore wind have won the race to be the cheapest sources of new ‘bulk generation’ in most countries, but the encroachment of clean technologies is now going well beyond that, threatening the balancing role that gas-fired plant operators, in particular, have been hoping to play.”

Offshore wind has often been seen as a relatively expensive generation option compared to onshore wind or solar PV. However, auction programs for new capacity, combined with much larger turbines, have produced sharp reductions in capital costs, taking BNEF’s global benchmark for this technology below $100 per MWh, compared to more than $220 just five years ago.

Giannakopoulou said: “The low prices promised by offshore wind tenders throughout Europe are now materializing, with several high-profile projects reaching financial close in recent months. Its cost decline in the last six months is the sharpest we have seen for any technology.”

Although the LCOE of solar PV has fallen 18% in the last year, the great majority of that decline happened in the third quarter of 2018, when a shift in Chinese policy caused there to be a huge global supply glut of modules, rather than over the most recent months.

BNEF’s LCOE analysis is based on information on real projects starting construction and proprietary pricing information from suppliers. Its database covers nearly 7,000 projects across 20 technologies (including the various types of coal, gas and nuclear generation as well as renewables), situated in 46 countries around the world.

[1] LCOE measures the all-in expense of producing a MWh of electricity from a new project, taking into account the costs of development, construction and equipment, financing, feedstock, operation and maintenance.

 SourceL BloombergNEF

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Veronika Henze
BloombergNEF
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About BloombergNEF

BloombergNEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.

Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.

February 05, 2019

Most Utilities Executives Agree Risk of Consumers Going Largely Off-Grid Will Increase Significantly in Next Two Years, According to Research from Accenture   Stagnant electricity demand growth in the short term expected to turn around beyond 2025, as transport and heating electrification accelerates

  NEW YORK; Feb. 5, 2019 – Ninety-five percent of utilities executives agree that the risk of electricity consumers going largely off the grid and only using it as occasional backup will increase significantly in the next two years, according to a study from Accenture (NYSE: ACN), conducted as part of the company’s Digitally Enabled Grid research program.   The deployment of distributed generation (DG) technologies like rooftop solar is increasing faster than utilities can build new grid capacity to handle it in high-demand areas, according to the vast majority (95 percent) of the 150 executives surveyed across 25 countries. In fact, almost half (48 percent) of the respondents said that parts of their grid will reach maximum capacity in three years or less, with only 1 percent believing it will take longer than five years.   The proportion of both residential and commercial consumers with rooftop solar photovoltaics in the markets modelled could even exceed 15 percent by 2036 in some markets, such as California. This trend will likely continue to affect net electricity demand growth for the foreseeable future.

The study also notes that increased deployment of DG will complicate utilities’ operations, requiring distribution utilities to act now to avoid the excessive grid-reinforcement spending required to host new DG energy flows.
 
According to Accenture modeling, some markets could generate substantial capital reinforcement cost savings simply through better identification of local constraints on the distribution network. A 10 percent improved accuracy in DG forecasts, resulted in projected savings of 15-28 percent in New York, 14-18 percent in California, 14-15 percent in Australia, and 11-12 percent in both the United Kingdom and the Netherlands.
 
In fact, DG integration was ranked as the second-highest priority area as a cost-saving opportunity, selected by 59 percent of respondents as one of their top 5 choices. The top priority, chosen by 61 percent of respondents, was reducing supply chain unit costs through improved forecasting of materials and service requirements.
 
“Distribution businesses have had a tough time in recent years with weak demand, which is one reason why grid operators’ profits have been squeezed,” said Stephanie Jamison, a managing director at Accenture who leads its Transmission and Distribution business. “The proliferation of DG changes electricity demand profiles, potentially diminishing total demand without necessarily reducing peak demand. Successful DG integration will require substantial investments in new connections and grid reinforcement to modernize the network and sustain the same level of reliability and safety and secure operations.” 

While DG presents a challenge to distribution utilities, it’s also an opportunity, with 95 percent of respondents saying that DG and storage-services provision will be a major profit growth area for distribution companies beyond 2025. More than half of respondents globally also identified owning each of the following assets as an opportunity for their business going forward: large-scale DG; grid-connected storage; small-scale prosumer DG; and community storage.
 
Electrification of transport and buildings will bolster electricity demand growth after 2026
Accenture modeling predicts that, following a period of stagnation, electricity demand could grow by 31 percent between 2026 and 2036. The study and modeling partly attribute the growth to the meaningful impact that electric vehicles (EVs) and building heating electrification will have on demand growth starting around 2025.
 
The modeling revealed that the total percentage of plug-in electric vehicles in the overall vehicle stock is forecast to grow relatively slowly, from 1 percent this year to 3 percent by 2025, but could rise to 37 percent by 2040, led by municipal buses, scooters and small commercial vehicles.
 
This trend could translate to substantial new electricity demand. Indeed, while the electricity consumption of EVs is expected to represent just over 1 percent of the annual peak demand hour by 2025, it is forecast to rise almost fourfold in the markets modelled by 2040, to 4 percent. In some markets like France and California, forecasts are even higher by that year (10 percent and 8 percent, respectively).
 
The decarbonization of buildings is also likely to push up electricity demand in the long term, with 96 percent of utilities executives agreeing that decarbonization efforts will substantially reduce residential and commercial natural gas demand by 2040.
 
Just the combined effects of transport and heating electrification could push peak demand up significantly, with Accenture modeling suggesting that the average electricity consumption during the peak demand hour could rise by around 63 percent from 2016 in 2040.
 
“Mass adoption of electric vehicles and the electrification of building heating is poised to alter demand growth and load shape in the longer term,” Jamison said. “This suggests high growth potential for utility distributors, but it will also put pressure on grid stability. The key will be to navigate this disruption by making the grid more resilient through greater use of smart technologies and utilizing all sources of flexibility including on the demand side, adopting a more customer-centric approach.”
 
Research Methodology
Accenture’s annual Digitally Enabled Grid research evaluates the implications and opportunities of an increasingly digital grid. For the most-recent research, Accenture surveyed 150 utility C-suite and Senior Vice-President level executives from 25 countries: Argentina, Australia, Brazil, Canada, China (including Macau and Hong Kong), Denmark, France, Germany, Indonesia, Ireland, Italy, Japan, Malaysia, the Netherlands, Norway, the Philippines, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, Thailand, the United Kingdom and the United States; the quantitative online survey was conducted in February and March 2018. In addition, Accenture developed a geographic-level electricity demand impact model to quantify the forecast combined hourly impact of individual electricity demand drivers for a selected sample of 18 countries (Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, South Korea, the Netherlands, Poland, Spain, Sweden, Switzerland and the United Kingdom) and five of the most-populous U.S. states (California, Texas, Florida, New York and Illinois).
 
About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions ? underpinned by the world’s largest delivery network ? Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 469,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

(Source: https://newsroom.accenture.com/news/most-utilities-executives-agree-risk-of-consumers-going-largely-off-grid-will-increase-significantly-in-next-two-years-according-to-research-from-accenture.htm)

Zambia on track to energy surplus following major boost in electricity production

05/02/2019

Zambia’s constant power cuts are now a thing of the past. Thanks to a robust hydraulic and solar power generation industry in recent years, the country is now self-sufficient in energy.  And, there is even better news for citizens of the South African nation- electricity production could soon be in surplus.

Zambia generates practically all its energy production from its own primary resources: biomass, coal and hydroelectricity, with flagship plants such as the power station near the Itezhi-Tezhi Dam, in the south-east of the country, taking centre stage.

The $375 million Itezhi-Tezhi hydroelectric generating station became operational in 2016. The plant has a 120-megawatt capacity and is the fruit of the first public-private partnership project in the Zambian energy sector. Its primary objective has been to produce enough power to end the crippling daily blackouts and meet consumer needs of the country’s 17 million inhabitants.

 

Zambia stopped electricity imports in early 2018

Itezhi-Tezhi power plant has already increased the country's power generation capacity by 7.5% and supplied an extra 50,000 people with electricity. In the first quarter of 2018, and for the first time in its history, Zambia stopped importing electricity from neighbouring countries such as Mozambique.

As far back as September 2017, national operator Zesco's head of power transmission, Webster Musonda, told Ecofin agency: "Zambia's power generation capacity has improved and will now be able to largely meet its energy needs." "Overall, we will be able to meet demand and routine energy imports will cease [...] but we will continue to import energy to meet occasional peaks in demand."

 

The next step for the Government of Zambia includes plans for an energy surplus over the next two years. To meet this goal, it is exploring renewable energy, such as solar power.

The country’s new hydropower stations at the Musonda, Lusawaki and Kafue Gorge dams are important developments and in September 2018 the government inaugurated a 50 MW power plant at a cost of $60 million. An even more ambitious programme is under way, involving the construction of mini solar plants with an eventual overall capacity of 600 MW at an estimated cost of $1.2 billion.

The African Development Bank which is championing its High 5 development priorities, such as the "Light up and power Africa, initiative under which this project falls, contributed $55 million to the Itezhi-Tezhi plant.  Additional funding has been provided by international donors including the Netherlands Development Finance Company, the Development Bank of South Africa and Proparco France.

The Bank’s portfolio in Zambia currently includes 23 ongoing projects, amounting to an investment of one billion dollars, in three main sectors: transport, water and sanitation and agriculture.

Cross-border collaboration

A strong partnership with Zimbabwe has been the key to Zambia’s success. The two southern African neighbours are working on a major energy project on the Zambezi River, which marks their common border. The 2750 km long river is the fourth-largest on the continent.

The project, which has a projected output of at least 2400 MW, is to be built upstream of the Kariba dam, close to the famous Victoria Falls, at a cost of $3 billion.

Electricity output will be shared equally between Zambia and Zimbabwe, with excess production sold on to other member countries of the Southern African Development Community (SACD), according to the project's initiators.

(Source: https://www.afdb.org/en/news-and-events/zambia-on-track-to-energy-surplus-following-major-boost-in-electricity-production-18969/)

Collaborative PV Solutions Deliver in Karanda


KARANDA MISSION
HOSPITAL
PV DEVELOPMENT

BACKGROUND

Image 1: View of Karanda Mission Hospital

At the beginning of 2017, our partners from maxx|solar energy spoke to us here at Sunergy to look for organisations that could benefit through a fundraising / crowdfunding venture to install solar systems with the aim to improve their daily operations substantially.

The Karanda Mission hospital was chosen as a deserving project because at the time, they were upgrading and expanding their facilities and surgical services through the addition of an extra surgical unit.

Image 2: Newly arrived solar panels

The Karanda Mission hospital is located North East of Mount Darwin on the banks of the Ruya river. It was established in the 1950’s and has grown to become a major contributor to the medical wellbeing of the population in the surrounding areas as well as to patients throughout Zimbabwe.

Karanda has access to the main ZESA (Zimbabwe Electrical Supply Authority) grid power but due to its remoteness, power cuts are frequent and of varying duration. This leaves access to self-generated power as the only alternative. There is also a delay between a power outage and turning on the generator, which means a power shortage that affects the operating theatres can affect operations considerably.

Image 3: Moving PV panels onto the roof
Image 4: Mounting solar panels into position

PROJECT SCOPE AND DESIGN

The equipment required was sourced through a combination of donations and other funds which can be tracked transparently through the maxx|Blockchain Hub at all stages.Donors receive an online login where they can follow the system’s electricity production and have proof that their contribution has reached its destination.

Image 5: View from within the inverter room

It was decided that the new theatre block and the day surgery facilities would be linked to a solar system, which would become the main power source.

The design of the system was commissioned in mid-October of the present year, comprising of 54 solar panels providing 15kW of power. The panels are mounted on an IBR covered roof in an East/West configuration on a building adjacent to the theatre block as this roof was free of any shade constraints. That power is processed through combiner boxes into 3 x Steca PLI5000 inverters, one for each phase, and then routed through the existing electrical system to the theatres. There is a Hoppecke battery bank which serves as a backup to the system for limited night time use.

Image 6: View from within the inverter room

OPENING BRIGHT NEW POTENTIAL

The Karanda PV Project was launched publicly in Harare on the 19th of October 2018, with representatives from the Karanda Mission Hospital in Zimbabwe, as well as many of the project’s implementation partners from Germany, South Africa and Zimbabwe such as the German Energy Agency, dena. The event marked the unique convergence of leading technologies, expertise, support and innovation to achieve a common purpose.

Image 7: Representatives from dena, Sunergy, maxx|solar,and Karanda Hospital press the Karanda Hospital live feed button at the Launch Event.

We hope this represents the first of many such similar systems for Zimbabwe and our neighbours.

Sunergy Zimbabwe along with our partners JVS Projects of Zimbabwe and maxx|solar energy of South Africa, and the many organisations and people who supported the initiative, are proud to enable the harnessing of power from the sun to improve the health and wellbeing of the community of Karanda and beyond, long into the future.

Live feed of PV generation from Karanda Mission Hospital

Karanda Mission Hospital PV Installation Project Partners

With special thanks to everyone involved, named and unnamed around the world, who contributed so much towards ensuring this project’s success.

German Energy Agency (dena)

dena is Germany’s centre of expertise for energy efficiency, renewable energy sources and intelligent energy systems. As Agency for Applied Energy Transition dena helps achieve energy and climate policy objectives by developing solutions and putting them into practice, both nationally and internationally. In order to do this, dena brings partners from politics and business together, across sectors. dena’s shareholders are the Federal Republic of Germany and the KfW Group. https://www.dena.de/en

German Energy Solutions Initiative

The transfer of energy expertise, the promotion of foreign trade and the facilitation of international development cooperation are part of the German Energy Solutions Initiative, which is coordinated and financed by the German Federal Ministry for Economic Affairs and Energy. The initiative offers networking and business opportunities in Germany and abroad, it showcases reference projects and facilitates capacity building. www.german-energy-solutions.de/en

dena Renewable Energy Solutions Programme (dena RES Programme)

The dena RES Programme was developed by the Deutsche Energie-Agentur (dena) – the German Energy Agency. This programme, supported by the Federal Ministry for Economic Affairs and Energy within the German Energy Solutions Initiative, helps German renewable energy companies enter new markets. Within the framework of the programme, reference and demonstration projects are installed in cooperation with prestigious institutions. The installation is accompanied by comprehensive PR,marketing and training programmes. These projects showcase high-quality German renewable energy technology and help participating companies gain a foothold in new markets. www.german-energy-solutions.de/en/res

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