Electric utility alliance to launch at Cop 28

Market: Electricity
09/11/23

A new international alliance focused on strengthening, modernizing and expanding power transmission and distribution lines is taking shape for launch at the UN's Cop 28 climate summit later this month.

"If we want to have more investment in renewables, we have to invest in modernizing and strengthening grid systems, in transmission and distribution lines," International Renewable Energy Agency (Irena) director-general Francesco La Camera told Argus. "This is crucial," he added on the sidelines of the regional energy summit of the Latin American Energy Organization (Olade) in Uruguay.

The new alliance is spearheaded by Irena, the World Economic Forum and Abu Dhabi's TAQA utility.

It currently includes 18 utilities in Africa, Europe and the Middle East, including major players like Denmark's Orsted, France's Engie, Saudi Arabia's Acwa Power and Spain's Iberdrola. The Chilean government could be the first in Latin America to sign on to the initiative.

Regional bottleneck

La Camera said the focus on transmission and distribution is the most critical issue in Latin America, which has abundant natural resources for renewables, but requires more robust transmission and distribution systems and new regulatory frameworks.

Government authorities from around the region agree that power lines are the bottleneck.

Edward Veras, executive director of the Dominican Republic's national energy commission, said distribution has been his country's most pressing issue in the energy sector. He said the government has improved generation and transmission capacity, but distribution remains a challenge.

The Argentinian government is working on new plans to "unclog" transmission lines in order to ramp up renewable participation in the country's grids, Florencia Teran, undersecretary for renewable energy, said. It has a plan for new public-private partnerships to build transmission lines and increase the use of distributed energy systems to take advantage of its bioenergy, solar and wind capacity.

In Guyana, the government is also focused on distributed energy, with plans for small solar and hydroelectric plants, including 0.75MW and 1.5MW hydroelectric plants currently out for tender.

Chief executive of the Guyana energy agency, Mahender Sharma, said the government was evaluating proposals for 33MW of solar power that it wants to bring on line in the next 12-18 months.

La Camera said private investment is critical, but international cooperation and funding from multilateral financial institutions will a;sp be needed.

"The private sector is financing generation projects, but it can't do both," he said. It "will require multilateral participation."

By Lucien Chauvin

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19/11/24

Cop: Norway spending $740mn on Paris carbon credits

Baku, 19 November (Argus) — Norway on Tuesday launched a new initiative to buy carbon credits from developing nations under the Paris climate agreement, which will help it meet its emissions goals while financing decarbonization in other countries. The Norwegian Global Emission Reduction Initiative, with initial funding of $740mn, will use Article 6.2 agreements — bilateral agreements on carbon mitigation projects — to support emissions mitigation actions in developing countries. This is in turn will generate Paris agreement carbon credits known as internationally transferred mitigation outcomes (Itmos). Norway can use the Itmos toward its Paris emissions targets. In addition, the country believes its use of the agreements will help close the financing gap for emissions reductions in developing countries. "By working together, we can raise our collective climate ambition and increase the speed of green growth", Norwegian environment minister Tore Sandvik said at the programme's launch at the UN Cop 29 climate talks in Baku, Azerbaijan. The first agreements under the initiative are with Benin, Jordan, Senegal and Zambia. Zambian officials said the country will use the money it receives to support a plan it launched earlier this year to build more renewables such as wind and solar, lessening its dependence on hydropower, which accounts for more than 80pc of its electricity generation. "Our anticipation for Article 6 is that it will be concluded and operationalised at this Cop 29 so that it becomes part of our core financing for grid connected renewable power generation", said Douty Chibamba, permanent secretary of the country's ministry of green economy and environment. Article 6 of the Paris accord aims to help set rules on global carbon trade. A number of final issues for implementing Articles 6.2 and 6.4 still need to be finalised in Baku, but countries are allowed already to enter into bilateral agreements. Zambia signed one with Sweden in August . Norway said the credits will help support its goal of becoming carbon neutral by 2030. The credits could also be used to cover any shortfall in the country's nationally determined contribution (NDC), or emissions reduction pledge, under the Paris Agreement in the event the EU does not meet its 55pc by 2030 reduction target. Norway is not a member of EU but is counting on cooperation between the two to achieve its NDC. Under Article 6.2 of the Paris agreement, an exported Itmo can no longer be put towards the project host country's NDC. Sandvik said the program will set strict requirements to ensure the integrity of projects "and includes strong safeguards against corruption and human rights violations." Funding for the program could increase beyond $740mn as early as next year, if Norway's parliament agrees to the government's budget request. Norway also pledged up to $100mn to a fund in collaboration with the Global Green Growth Institute (GGGI) that will help the country develop programs and manage payments when emissions reductions are achieved. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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G20 mayors call for $800bn/yr to address climate change

19/11/24

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19/11/24

G20 mayors call for $800bn/yr to address climate change

Rio de Janeiro, 19 November (Argus) — Mayors from G20 countries are asking for at least $800bn/yr in investments by 2030 to tackle the effects of climate change. "We need better and faster access to international financing to ensure infrastructure that supports the socioeconomic security of our communities," Rio de Janeiro's mayor Eduardo Paes said. The joint statement from nearly 60 mayors and urban leaders was drafted during the Urban20, a G20 forum that includes leaders from major cities worldwide, and was delivered to Brazilian president Luiz Inacio Lula da Silva. The statement will also be delivered to other G20 members during the ongoing G20 summit in Rio de Janeiro. Climate change is one of the main topics being debated at the G20 summit. Brazil, which holds the G20 presidency this year, has set the energy transition as one of its goals for the year. The group reaffirmed its support for the Paris Agreement climate goals , saying it "fully subscribes" to the Cop 28 deal struck last year, which included language on transitioning away from fossil fuels. Urban investments such as low-emission transport, clean energy, and climate-resilient infrastructure can "significantly reduce emissions" and boost economic growth, according to the statement. The funding could unlock around $23.9 trillion in returns by 2050, it said. The $800bn/yr would cover around 20pc of urban climate finance needs and "serve as a catalyst for additional private sector funding," according to the Global Covenant of Mayors for Climate and Energy, a non-government organization for climate leadership that comprises over 13,000 cities worldwide. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Indonesia gets $1.26bn green funding from Germany

19/11/24

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19/11/24

Cop: Indonesia gets $1.26bn green funding from Germany

Baku, 19 November (Argus) — Indonesia will receive €1.2bn ($1.26bn) in green financing for its power sector from German development bank KfW. The agreement was finalised at the UN Cop 29 summit in Baku, Azerbaijan. The funds will be used for the development of various green power infrastructure and clean energy projects. These will include pumped storage hydropower plants and the development of Indonesia's transmission network, to connect power plants. State-owned utility PLN aims to add around 102GW of additional capacity, out of which 75pc is to come from renewable energy. But there is a mismatch between the location of large-scale renewable energy resources such as geothermal and hydropower plants, and demand centres. A smart grid would help to deal with intermittency in variable renewable energy sources, and could enable and support the scale-up of up to 28GW of renewable energy in Indonesia by 2040, said PLN's executive vice-president of electricity system planning, Warsono Martono on 18 November. But a huge amount of funding is required to realise a smart grid, and Indonesia needs international support, especially concessional funding, said Warsono. Additionally, up to 70,000km of transmission lines have to be constructed to move energy from the source to the centre of demand. Constructing these, as well as the smart grid, could cost up to $235bn over 2024-40, according to PLN's president director Darmawan Prasodjo. KfW's involvement in state-owned utility PLN's green projects will help drive more international partners to collaborate with PLN, said Darmawan. "We believe that Indonesia and Germany can continue to strengthen partnership in the energy sector, moreover, in clean energy projects, like renewable energy and transmission," said Jurgen Kern, sustainability officer of KfW. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Q&A: If you break it down, it is tried, tested: Xlinks

18/11/24

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18/11/24

Q&A: If you break it down, it is tried, tested: Xlinks

London, 18 November (Argus) — Project developer Xlinks plans to connect 11.5GW of Moroccan wind and solar capacity, and a 5GW battery energy storage system, with the UK through two 1.8GW sub-sea cables, an ambitious project using "tried and tested" technologies. Argus spoke to chief executive James Humfrey about the project's timeline and progress. Edited highlights follow: For those who may not know, can you describe the Xlinks project? We are excited to bring clean energy from the Moroccan Sahara to north Devon. This will be a transformational surge of reliable, clean power, and we will bring it during the hours the UK needs electricity most, supporting Britain's ambitions to decarbonise, which you see in the news and most recently in Baku [at Cop 29]. The project will benefit the broader economy by displacing expensive, volatile imported gas and reducing wholesale power prices. It will also help balance the grid, feeding into the south of England, which has very high demand without significant grid upgrades. The independent Afry consultancy group calculated the project's socioeconomic benefit to be £17bn. It will also offer a reliable wind and solar energy supply, with nearly two times the solar radiation factor. [Moroccan] wind generation is slightly negatively correlated to UK output, helping overcome the dunkelflaute [dark lull] scenario, which is the advantage of moving electrons in time and space. This reliability complements the UK domestic renewables pipeline, primarily offshore and onshore wind, while aligning with Morocco's green export ambitions. Can you provide our subscribers with an update on the project, its timeline and any key milestones? It will be ready next decade. And we are set up to rapidly mobilise and deliver the project. We have a strong team of people who have worked on these projects before. For example, our HVDC cable team, led by Nigel Williams, built the North Sea Link between Blythe and Norway, tackling more complex problems than we face. They've built lots of interconnectors and know how to do it. I realise that Xlinks holds connection agreements for two 1.8GW connections with National Grid. Has Xlinks progressed with other national authorities, particularly those through which the cable will transit? We have worked with the Moroccan government, including [plans] around the land and conducting one of the world's longest [wind and solar] measurement campaigns. So, we've got excellent resource data regarding wind and solar energy. We have already obtained permits from [the transit countries] for route surveys and we have vessels in the water at the moment, undertaking geophys and geotech. Next year, we'll apply for the final installation permits, based on the environmental studies and other benefit data. We've taken a longer but less challenging route, with lower water depths, making it technically easier. It is, for example, less deep than the North Sea Link, which was a deliberate technical decision. The previous government marked Xlinks as a project of national significance . Do you expect any change under the new administration, and in what way has this classification affected progress ? No, it hasn't affected us. We completed the public consultations over the summer and are about to submit our DCO [development consent order] application, which is a large amount of work. We have finished that, with no changes [since the change of government]. It is probably worth saying that our land route in Devon is all underground. We don't have any pylons, which is much less intrusive. Has this improved Xlink's ability to generate capital interest? Is there any specific attempt to generate interest from sovereign wealth funds or other institutional investors? We've been fortunate that our blue-chip investors [Octopus, TotalEnergies, Taqa, GE Vernova and Africa Finance] are very keen on the project, and it matches their strategic plans. They want to go all the way through to construction. We may have further investors at the close, but they are our primary focus right now. Do you have an update on the contract for difference (CfD) process? Xlinks has published a desire to reach a £70-80/MWh strike price at 2012 prices. Yes, that remains our guidance. We are working through the CfD and Treasury Green Book process with the Department of Energy. It is quite a structured process. How do you reconcile that strike price with far lower prices reached in recent allocation rounds (AR), namely AR6, although the technologies are not directly comparable? Firstly, in the NESO report, the forecasts for offshore wind [prices] rise quite a bit as they move out to 2030, so AR6 is a reference, but there are figures in the NESO report that are above our £70-80 [strike price]. Importantly, it is not a comparison between apples and apples. Our profile is completely different from that of offshore wind. We offer firm power for 19 hours a day, optimised for peak hour demand and very high reliability, akin to nuclear. Given our flexibility, we can also provide various other services, including frequency and even black start services. The development contains ambitious plans for vast-scale battery storage of up to 5GW. Given the difficulties faced by several European battery manufacturers, do you foresee any significant supply chain challenges? We have an ongoing battery procurement process, and the invitations to tender have gone out. We've had good interest at competitive levels and are confident in it. We are not seeing any challenges, and it's going very well. And what does the flexibility and opportunity a battery offers at this scale mean for a project like Xlinks? It allows us to optimise during the dinural shift of solar power, when the UK grid needs us most. Additionally, it gives us a sub-second response, giving us flexibility and opening the door to the frequency services we mentioned earlier. It is very valuable and allows us to provide benefit at scale and at speed. Does the UK's ambition, corroborated by NESO's latest report to become a net power exporter beyond 2030, change the project's economic viability or impact it in any way? No, the report does not change our viability or where we fit in the future system. In fact, it further emphasises the part we can play. If you look at demand, it is very likely to increase again by another 23pc in 2030-35, and considering our generation profile, producing in periods of low domestic wind production, [it fits well]. Additionally, when we compare it to other sources of clean [baseload] generation, such as nuclear, you see solar, wind and transmission projects have extremely good predictability of outcome and a shorter delivery timeline. Xlinks has stated an ambition to investigate a Morocco-German link. What might this look like? Would it involve an entirely new generation facility, too? First, the Morocco-UK power project is very much our first priority. We're focused on that and we think bringing this to a financial close will help unlock a range of projects across the industry. And demonstrate the art of the possible. We do have some early feasibility work going on. It would be entirely separate, and that would include generation as well. Do you have any closing thoughts that you would like to leave our subscribers? What is different about this is its scale. But when you break it down, these are all tried-and-tested technologies. There is nothing unusual about them, whether wind and solar in Morocco or large-scale batteries. We are not an interconnector, but long-distance transmission has a long history in the UK. When you look at the water depths, it is less complicated than North Sea Link. It has all been done before, in its parts — just the scale is different. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Progress on actions to cut emissions uncertain

18/11/24

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18/11/24

Cop: Progress on actions to cut emissions uncertain

Baku, 18 November (Argus) — Progress on mitigation — actions to cut greenhouse gas emissions — is uncertain at the UN Cop 29 climate summit, as talks on a specific text related to the issue are at risk to be pushed back to 2025, losing any progress made in the past year. Some countries had proposed using the mitigation work programme — a work stream focused on reducing emissions — to progress the commitment made at Cop 28 in 2023 to "transition away" from fossil fuels. But talks have stalled and could end without a conclusion at the summit. Developed countries as well as developing nations including some small island states and countries in Latin America — such as Brazil, Colombia, Peru, Mexico — have expressed disappointment about how mitigation talks were going. New Zealand called on countries to follow up on last year's decision on mitigation at Cop 28 and Norway added that these issues deserved "more than silence on mitigation". Switzerland complained that mitigation was "held up by a select few", and said that the discussion was critical for increased commitments for next year's 2035 Nationally Determined Contributions (NDCs). NDCs are countries' climate plans that include emissions reduction targets. Cop parties are due to submit new versions by February 2025. The US also said that Cop 29 needed to "reaffirm the historical Global Stocktake decision" taken last year. And developed nations, led by the EU, called for the discussion to continue this week — the second week of Cop 29. But countries including Bolivia, Iran and Saudi Arabia, for the Arab Group, pushed back on this. The mitigation work programme is "not… open to reinterpretation", Saudi Arabia's representative said today. The country said earlier that it did not want new targets to be imposed, complaining about the "top-down approach" taken by developed countries. India reminded developed countries that they have yet to deliver on their new finance commitment — a crucial step for more ambitious NDCs in developing nations. But "Cop 29 cannot and will not be silent on mitigation", the summit's president, Mukhtar Babayev said today. "On mitigation we have been clear that we must make progress, "he said, adding that he has asked ministers from Norway and South Africa to consult on what an outcome on mitigation could look like. EU climate commissioner Wopke Hoekstra today said that it is "imperative that we send a strong signal this week for the next round of NDCs", he said. Points related to mitigation — including transitioning away from fossil fuels and phasing out inefficient fossil fuels subsidies — are currently mentioned in the draft text for the new finance goal, known as the new collective quantified goal (NCQG). It is the key issue at Cop 29. Developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25, and Cop parties must decide on the next stage — including the amount. Developed countries are likely push for the fossil fuel language to stay in the finance goal text, especially if mitigation talks stall elsewhere. But countries such as Saudi Arabia have long opposed this, while developed countries have received some criticism for still not having given an amount for the new finance target. By Georgia Gratton, Prethika Nair and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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