China Leads as U.S. Falls Behind in Global Smart Grid Investment

by Joshua S Hill

According to new figures from Bloomberg New Energy Finance (BNEF), global smart grid investment grew to $14.9 billion in 2013, up from $14.2 billion in 2012, and being led by China, who finished the year as the world’s largest smart grid market.

Renewable Energy. The Smart Grid. Image courtesy of Hitachi.
Renewable Energy. The Smart Grid. Image courtesy of Hitachi.

China’s place at the top comes at the expense of the United States, as the North American market continued to slow and China dollar investment into their smart grid exceeded that of the US, thanks in part to the installation of 62 million smart meters, a market which accounted for just under half of the total smart grid spending worldwide.

China’s investiture into smart grid technology amounted to $4.3 billion during 2013, with a large share going towards the installation of smart meters, bringing their national total up to 250 million. However, the country has indicated that it is aiming to extend the end-date for completing its metering program from 2015 to 2017.

On the flipside, US smart grid spending slowed during 2013, as the North American market shrunk 33% to $3.6 billion during 2013, thanks in part to the conclusion of US stimulus-funded projects.

Global investment in the smart grid increased relatively modestly last year after five years of rapid growth. But the fundamental drivers of the smart grid – greater grid reliability, further integration of renewable energy, and improved demand-side management – are stronger than ever.

Asian and European markets will drive growth through 2020, while in North America the focus will continue to shift from hardware to software as utilities look to squeeze additional value out of the vast amounts of grid data now available. — Colin McKerracher, senior energy-smart technologies analyst at Bloomberg New Energy Finance

China and the US aren’t the only markets when it comes to smart metering, but they are the largest. Bloomberg noticed several “promising signs” during 2013 for the European market, including a large metering contract in the UK, a new tender in France, and the completion of the long-awaited cost benefit analysis in Germany.

Elsewhere, Japan’s utilities are currently in the tendering and procurement stage of their smart meter deployment, while in South America, Brazil’s smart meter deployment has been delayed due to certification and financing challenges.

Bloomberg New Energy Finance sees the following developments in 2014 and beyond:

  • Asia still has years of growth ahead. Despite China’s recently announced slowdown in meter installation, China’s 5-10 year meter replacement cycle means that as this major wave of installations finishes in 2017, the first wave of replacements is expected to commence. 2014-15 will bring also an increase in distribution automation spending in China while smart grid activity in Japan, Korea, India and South East Asia will also ramp up.
  • The US is entering a second major smart grid phase: information integration. With its growing penetration rates for smart meters and distribution automation, the next phase for the US smart grid is using the new data coming in off the grid to improve areas like outage management, customer segmentation and theft detection.
  • Europe is the smart grid’s sleeping giant. Europe has installed only 55m smart meters but this is expected to rise sharply to 180m by 2020. Spain will remain as the most active market in 2014 but large-scale deployments in the UK, Germany and France will begin to ramp up in late 2015.

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This article, Global Smart Grid Investment Grows, China Leads, US Falls Behind, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy. Joshua S Hill.Joshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.

Credit Suisse says 85% Of New US Energy From Renewables till 2025

by Zachary Shahan

Credit Suisse on December 20 released a report with some bullish projections regarding renewable energy growth and generation in the United States

Here’s the short summary:

Our take: We see an opportunity for renewable energy to take an increasing share of total US power generation, coming in response to state Renewable Portfolio Standards (RPS) and propelled by more competitive costs against conventional generation.

We can see the growth in renewables being transformative against conventional expectations with renewables meeting the vast majority of future power demand growth, weighing on market clearing power prices in competitive power markets, appreciably slowing the rate of demand growth for natural gas from the power sector, and requiring significant investment in new renewables.

What percentage of future growth does Credit Suisse say might come from renewables? About 85%.

Renewables will meet most of US demand growth.

We estimate that ~85% of future demand growth for power through 2025 (including the impact of coal plant retirements) could be met by renewable generation with compliance to the existing 30 mandatory and 8 voluntary RPS programs.

From this we would see over 100 GW of new renewable capacity additions with wind and solar market share more than doubling from 2012 to 2025.

Other key points are that falling wind and solar costs make them competitive with natural gas, even ignoring externalities. As a result, Credit Suisse has cut its natural gas projections considerably.

“We estimate renewables slowing the rate of natural gas demand growth from power generation to <0.5 bcf/d through 2020 versus our prior estimate of 1.0-1.2 bcf/d even when taking into account planned coal plant shutdowns and assumed nuclear plant retirements.”

I think this report and the revisions implicitly highlight something very interesting that is going on in the energy industry. Renewable energy costs are primarily based on the cost of the technologies themselves, while fossil fuel costs are largely based on the fuel sources. As renewable energy grows, the technology costs come down. The opposite is true for fossil fuels. Forecasts should take this into account, but they routinely seem to underestimate renewable technology cost drops, and thus also underestimate renewable energy growth. Credit Suisse, Deutsche Bank, and others that are a bit better at these projections are quickly shifting their forecasts to catch up with the renewable energy revolution we’ve been seeing. This new report from Credit Suisse analysts is certainly one of the most positive I’ve seen.

The title of the first section says it all: “Renewables Are Economic and Disruptive to Conventional Markets.”

Credit Suisse analysts see Renewable Energy Standards (RES) as driving much of the coming growth, but they aren’t shy about saying (repeatedly) that renewables are also now cost competitive, and that technology improvements just keep advancing their prospects.

“We think old-line arguments against renewables – too expensive, too intermittent, too remote – will continue to fade, allowing a resource base that is underappreciated in the market but is positioned to have a broad impact on power and energy markets.”

The report projects that wind power, which is exceptionally cheap, will account for about 80% of the renewable energy growth, while solar will account for the other 20% or so. It sees a doubling of installed US wind power between 2012 and 2020, while it sees solar increasing 11 times over — starting from a much smaller installed capacity, of course. Together, solar and wind’s combined market share is projected to grow from ~4% to ~9%. By 2025, Credit Suisse projects that renewables will account for ~12% of US electricity generation.

Key drivers of the increasing competitiveness from wind and solar are a bit different in each of the industries. Wind farms have become a lot more effective at capturing energy from the wind and turning it into electricity.

“Wind utilization rates have increased by 15-20 percentage points, with new machines in the same wind resource yielding 50-55% utilization rates from 30-35% in 2007 due to improvements in turbine design, taller towers / bigger blades, and better wind modeling. Higher utilization has led to dramatic drops in levelized costs with many new projects clearing at ~$30/MWh (Exhibit 5-Exhibit 6), in effect ‘creating’ natural gas under 20 year PPAs at less than $3/MMBtu.”

In the case of solar, it’s a story that CleanTechnica readers should be very familiar with — the price of solar technology has fallen off a cliff.

“Solar capital costs have continued to bend the cost curve with utility scale PV today at ~$2000 per KW of capacity from $3250 in 2010, lowering levelized costs for utility scale solar to $65-80/MWh from well over $100/MWh and bringing solar to price parity with newbuild natural gas peakers.”

Efficiency improvements have also helped solar on this front.

Yes, solar costs came down due to massive oversupply of polysilicon, solar cells, and solar panels. However, as demand has come to match supply again, costs have remained down. In fact, most solar market research firms project that the costs will keep climbing down in the coming few to several years. Furthermore, many big efforts to bring down the soft costs of solar are also now in motion, as these are the costs that make US solar much more expensive than German solar and are now taking up a huge chunk of the solar price pie.

As we’ve written and read numerous times in the past year, all of this also means some hurt for utilities and fossil fuel generators. Renewables are expected to result in lower power prices than were previously projected, while fossil fuel plants will not be able to sell as much of their (more expensive) electricity to the grid, cutting into their profits.

Here’s a snippet regarding the power prices:

“Using our bottom-up power market models, the risks we see to power markets are rooted in a slower market recovery as more (and bottom of the stack) generation is added leading to a fundamental step down in power prices $1-2/MWh or ~5% relative to a scenario without significant renewables growth, as the overall supply curve is ‘pushed to the right’ with lower cost renewables added.”

And here’s one regarding the threat to fossil fuel generators:

“While generation output will be lower, the operating costs are broadly fixed meaning that coal and natural gas plants will produce less revenues without a change in cost structure, leading to some minor degradation in EPS.”

The entire report is very interesting, with many details that are surely useful to investors and industry insiders. But the overall trend is clear as a sunny day: the future is renewables.

This article, Credit Suisse Projects ~85% Of US Energy Growth Coming From Renewables Through 2025, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary ShahanZachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

‘Win-Win’ Megatons to Megawatts program concluded

by Guest Contributor Cliff Majersik

Megatons to Megawatts program
“All’s well that ends well.” 500 metric tons of Russian weapons grade uranium (uranium that is enriched to 20% or higher, is called highly-enriched uranium, weapons grade uranium, or in simple terms,  plutonium — and is for use in nuclear bombs) and was purchased by the United States beginning in 1993. Since that time, U.S. nuclear power plants worked to process it into 5% uranium (low-enriched) in order to be able to use it as fuel for U.S. nuclear reactors. The program cost the U.S. $13 billion dollars, but dramatically lowered the total weapons grade uranium stockpiles in Russia. Since 1993, about a third of all U.S. nuclear power plant output was powered by this high-quality Russian nuclear fuel.
Megatons to Megawatts was a great energy fix for its era. For ours, it’s energy efficiency.

This is a guest post by Cliff Majersik, executive director of the Institute for Market Transformation

In 1993, the United States and the Russian Federation signed an agreement to convert 500 metric tons of highly enriched uranium from Russian warheads into low-enriched uranium that could fuel U.S. nuclear reactors. The Megatons to Megawatts program was born. For 20 years, Megatons to Megawatts provided much of the low-enriched uranium that U.S. nuclear reactors needed—about one-third of it. And when you consider that nuclear plants supply about a fifth of the country’s electricity, well, that’s a lot of our meals cooked and homes heated by fuel from 20,000 former bombs. Meanwhile, the Russian economy got a $13 billion boost over two decades.

But all good things must come to an end, and Megatons to Megawatts is expiring. On Tuesday, Dec. 10, the New York Times reports, the last shipment of uranium from the program will arrive at the Port of Baltimore.

Looking forward, there is one great source to fill the fuel gap: energy efficiency. Inarguably, the cleanest kilowatt hour is the one you don’t consume. Energy efficiency has the potential to save far more energy than Megatons for Megawatts generated. In fact, John A. Laitner, a researcher at the American Council for an Energy-Efficient Economy (ACEEE), has found that since 1970, energy efficiency has met 75 percent of new energy service demands in the U.S.

Likewise, well-known research by McKinsey in 2009 showed that the U.S. economy has the potential to cut annual, non-transportation energy consumption by roughly 23 percent by 2020, eliminating more than $1.2 trillion in energy waste—more than double the upfront investment cost required. This reduction in energy use would avoid 1.1 gigatons of greenhouse-gas emissions every year, the equivalent of taking the entire fleet of passenger vehicles and light trucks off America’s roads.

Energy efficiency will help us avoid the emissions that worsen climate change, but it can also help us adapt better to the changes we’re already seeing. An energy-efficient building is a stronger and more resilient building.

Last year, Hurricane Sandy knocked out power for millions up and down the Eastern seaboard. Days after Sandy hit, cold temperatures worsened victims’ misery; officials in New York City set up warming shelters and handed out blankets to shivering residents. In an extended power outage like that one, a home that’s built to a high standard of efficiency (that is, it’s airtight and well insulated) will be more habitable, with an indoor temperature less affected by a cold snap or heat wave.

Cities around the country are moving to make their buildings more resilient, and energy efficiency will be a crucial component of their disaster-readiness. Efficiency also has major benefits at the scale of the neighborhood and region, not just for individual buildings. By reducing peak consumption, it lessens the strain on the electricity grid and helps prevent future blackouts.

Megatons to Megawatts was the ideal program for its era, finding an unexpected energy source in nuclear disarmament after the fall of the Soviet Union. In a new era that’s characterized by dwindling resources, climatic uncertainty, and the urgent need to reduce emissions, the best energy source is clear: energy efficiency.

Cliff Majersik is executive director of the Institute for Market Transformation (IMT), a nonprofit organization in Washington, DC, that promotes energy efficiency in buildings. Under his leadership, IMT has expanded its work nationally and internationally and become a recognized leader in the energy efficiency field.

Majersik oversees IMT’s principal activities to advance energy efficiency in the built environment, including in the areas of building energy performance policy, energy codes, and energy efficiency finance. His work helped lead to the introduction of federal legislation in 2011 to account for energy efficiency in mortgage underwriting, and he helped craft the innovative building energy benchmarking and disclosure laws in the District of Columbia and New York City.

This article, Goodbye Megatons to Megawatts. Hello, Energy Efficiency, is syndicated from Clean Technica and is posted here with permission.

About the Author

Important Media Group

Guest Contributor is many, many people all at once. In other words, we publish a number of guest posts from experts in a large variety of fields. This is our contributor account for those special people. 😀

U.S. Fossil Fuels Losing to Wind and Solar Power

by Giles Parkinson.

Wind turbines
Fossil Fuels, Coal, Oil, and Natural Gas, are losing the electrical generation battle to Solar and Wind Power.

Originally published on RenewEconomy

The price of new power purchase agreements for wind farms and new solar projects in the US continue to defy all expectations, making some energy experts wonder why anyone would contemplate a new fossil-fuel plant.

A new report by UBS analysts in the US has crossed our desk. It is basically a write-up from a webinar hosted by UBS and Declan Flanagan, head of local renewable energy group Lincoln Energy, but  it provides some fascinating insight of what is happening in that market.

The first notable conclusion is the declining cost of wind energy. Contracts in Texas, which accounts for around one quarter of all US installations, are regularly below $30/MWH, and some are at $25/MWh. Even with a tax incentive, this still put wind well below $50/MWh.

Why is this happening? New equipment is lifting capacity factors by 5 percentage points, and Texas’ excellent wind conditions mean that wind farms are getting capacity factors in the high 40s or low 50’s (per cent). Nearly half of this occurs during peak load, defying most characterizations of wind as essentially an off-peak power source.

What does this mean? Greentech Media recently quoted Stephen Byrd, Morgan Stanley’s Head of North American Equity Research for Power & Utilities and Clean Energy, speaking at the Columbia Energy Symposium in late November.

“Compare that to the variable cost of a gas plant at $30 per megawatt-hour. The all-in cost to justify the construction of a new gas plant would be above $60 per megawatt-hour.” So who would build gas?

Not as many people. Citigroup recently reported that some peaking gas plants were already being replaced by solar PV plants.

Why is this so? The UBS research note says that in Colorado, local utility Xcl has just announced new contracts for solar PV plants below 6c/kWh ($60/MWh). This, UBS said, was the lowest reported solar pricing it had seen in the US, although it confirms a recent survey by the National renewable Energy Laboratory, which found pricing in that range and with no inflation kicker, meaning that the solar plants would be producing for an effective $40/MWh by the end of their contracts.

That would match even depreciated fossil fuel plants. The variable costs of gas fired plants are likely to be at least $30/MWh, and that does not include their capital costs.

This article, US Fossil Fuels Losing Out To Wind And Solar, is syndicated from Clean Technica and is posted here with permission.

About the Author

Giles ParkinsonGiles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

Obama: Federal Government Has 7 Years To Triple Renewable Energy

Originally published on Climate Progress by Emily Atkin

When President Obama made his second State of the Union address, he talked extensively about the importance of addressing global climate change.

“For the sake of our children and our future, we must do more. But if Congress won’t act soon to protect future generations, I will.

I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.” — President Barack Obama

Image Credit: Obama in Charlotte, NC via Action Sports Photography / Shutterstock.com
Image Credit: Obama in Charlotte, NC via Action Sports Photography / Shutterstock.com

 

Obama now seems to be making good on those statements.

Thursday, the administration released an executive order directing the federal government to triple its use of renewable energy by 2020, which would bring the government’s renewable energy usage to 20 percent.

The order will apply to all federal agencies, including the military.

The Associated Press, which obtained a copy of the executive order before it was published,noted that the federal government itself occupies approximately 500,000 buildings and operates 600,000 vehicles, and purchases more than $500 billion per year in goods and services. The order does not disclose the cost of the transition, but says the goal will be reached “to the extent economically feasible and technically practicable.”

The top priority for federal agencies is installing agency-funded renewable energy on-site at federal facilities, and retaining renewable energy certificates, or RECs. An REC is a certificate that represents the environmental value of one megawatt-hour of electricity. In buying a REC, the government essentially pays a little bit of money in order to claim and keep track of the clean benefit of the electricity produced.

Obama has pledged to address climate change during his second term, and in a June speech detailed a three-tier plan for the administration.

That plan would cut carbon pollution in America, lead international efforts to cut global emissions, and prepare the U.S. for the costly impacts of climate change. President Obama framed the action as a moral obligation to do what we can for “the world we leave our children.”

“This is the global threat of our time.

And for the sake of future generations, our generation must move toward a global compact to confront a changing climate before it is too late.

That is our job. That is our task. We have to get to work.” — President Obama said in June.

But once the President makes an official announcement of the executive order, he will likely face harsh opposition from fossil fuel-backed politicians who have historically opposed his attempts to mandate the use of more renewable energy.

After his June speech, Senator Joe Manchin (D-WV) — a coal insider who maintains an income of almost $2 million from a coal firm — compared the President’s rhetoric on climate change to a war on America.”

The military has already begun a transition to efficient and renewable energy, after the head of the U.S. Pacific Command cited climate change as “probably the most likely thing that is going to happen … that will cripple the security environment, probably more likely than the other scenarios we all often talk about.”

The Army is now proceeding with its “Net Zero Energy” initiative, which means that on some domestic bases, they will aim to produce as much energy, water, and waste as they consume. Cost and reliability are the primary reasons, but cutting carbon pollution will be one of the outcomes.

The executive order can be read in full here

This article, Obama: Federal Government Has 7 Years To Triple Renewable Energy, is syndicated from Clean Technica and is posted here with permission.