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Costs of Technologies reshaping Energy-related Investment

Costs of Technologies reshaping Energy-related Investment

Following on the ever-increasing ease of accessibility of all renewables-hardware, the costs of technologies reshaping energy-related investment per The International Energy Agency’s World Energy Investment 2019 report have mainly affected and/or facilitated the surging demand for even more power. In effect, it is in the developing world, including, the MENA region where the market seems to be the highest, that this is happening before our very eyes. Hence this article of the World Economic Forum.

A general view of the DanTysk wind farm, 90 kilometres west of Esbjerg, Denmark, September 21, 2016. Picture taken September 21, 2016. To match EUROPE-OFFSHORE/WINDPOWER  REUTERS/Nikolaj Skydsgaard - D1BEUNDQTLAA
The costs of technologies are reshaping energy-related investment
Image: REUTERS/Nikolaj Srkydsgaad

The world invested almost $2 trillion in energy last year. These 3 charts show where it went

By Charlotte Edmond, Formative Content.

22 May 2019

The world invested $1.8 trillion in energy last year, with spending on renewables stalling, while oil, gas and coal projects increased.

The International Energy Agency’s World Energy Investment 2019 report shows overall global investment in energy stabilised in 2018 after a recent decline, with the power sector continuing to make up the biggest proportion of this spending. Much of that investment has been fueled by the world’s rapidly increasing demand for electricity.

Investment in coal increased for the first time since 2012, despite reduced Chinese spending to focus on power generation.

When it comes to cleaner fuels, there was little movement in the overall investment in renewables and no net addition to capacity, driven in part by the falling costs of some technologies. But production of biofuels, which has fallen behind the IEA’s sustainable development targets, saw a rise in investment last year.

The agency’s report also showed minimal increases in energy efficiency investments, with spending on transport efficiency remaining constant even though sales of electric vehicles are motoring upwards.

Indeed, the IEA warns there is a “growing mismatch between current trends and the paths to meeting” the world’s climate goals laid out in the 2016 Paris Agreement and “other sustainable development goals.”

The changing landscape

The costs of technologies are reshaping energy-related investment, as the chart below demonstrates.

Some of the most marked changes have been seen in the power sector, where there have been dramatic falls in the costs of solar, onshore wind and battery storage.

Prices for some efficient goods such as light-emitting diodes (LED) and electric vehicles have continued to fall, too. But investment in efficiency innovations is still being held back by governmental policy and financing challenges.

On the other hand, there has been little change in the costs of nuclear power projects and carbon capture and storage – a technology that aims to trap greenhouse gases before they enter the atmosphere.

Who invests the most?

China remained the biggest market for energy investment last year, even as the US is rapidly catching up, the IEA report said.

Increases in oil and gas — particularly in the shale sector — have driven the bulk US investment. By contrast, China is putting much of its money into low-carbon projects, with big investments in nuclear power and renewables.

India is the most rapidly growing market for investment. Elsewhere, investment in energy generally has fallen in recent years in Europe, the Middle East, Southeast Asia and sub-Saharan Africa, according to the agency.

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Renewable Energy Now Accounts for 33% of Global Power

Renewable Energy Now Accounts for 33% of Global Power

Nicole Garman May 21, 2019

According to the International Renewable Energy Agency, or IRENA, 171GW of renewable energy was added to the global system in 2018. That made up two-thirds of the overall new power generation capacity added for the year and one-third of the world’s capacity in whole.

Wind and solar energy contributed 84% of the renewable sources, with solar seeing the largest growth for the year at an increase of 94GW in capacity. Most of these solar facilities were installed in Asia, which also hosted over 40% of new wind energy.

Wind accounted for 564GW in total, joining 1,172GW of energy from hydropower and 480GW of solar to register 2,351GW of renewable energy for the year.

The Price is Right

In part, such innovation can be attributed to record-breaking efficiency in production cost. For the first time, the industry saw renewables running a lower price tag in production than fossil fuels.

According to analysis and data culled from Bloomberg, The Frankfurt School, IRENA, and UN Environment by Kaiserwetter Energy Asset Management, fossil fuels generated energy costs ranging from $49 to $174 per MWh in 2017, while renewables logged rates from $35 to $54 per MWh over a comparable period of time.

Renewable energy programs have been growing for the past five years, bolstered by technological innovations that make wind and solar energy easy to access for both commercial and residential users.

Double Time

In U.S. cities alone, the Environment America Research and Policy Center reports doubled solar energy capacity in the last six years; Honolulu ranks as the top per-person producer at 646 watts per resident, and Los Angeles took top honors for overall installed capacity.

45 of the country’s 57 largest cities logged substantial numbers, with one-third tallying photovoltaic capacity at quadrupled rates.

Regional leaders for solar capacity per capita include Burlington, Vermont in the Northeast; Washington, D.C. in the South Atlantic; San Antonio, Texas in the South Central region; Indianapolis for North Central; and Las Vegas for the Mountain region.

Honolulu led the Pacific, leading the charge for Hawaii’s goal to transition completely to renewable energy sources by 2045.

In addition to advances in technology, effective public policy and passionate advocacy are credited for the earth-friendly energy surge.

  • This article was originally published on II Thomas.
  • Image Credit: lovelyday12 / Shutterstock.com
Egypt’s giant solar park operational in 2019

Egypt’s giant solar park operational in 2019

Reuters Sustainable Business May 5, 2019, reported that Egypt expects giant solar park to be fully operational in 2019. This piece of news went viral throughout the MENA region. Would Egypt’s giant solar park operational in 2019 be a new trend?

Image result for Egypt's giant solar park operational in 2019
Boats sail in the Nile river in Aswan on the road to the touristic Nubia, south of Egypt, October 1, 2015. REUTERS/Mohamed Abd El Ghany.

CAIRO (Reuters) – Egypt expects the 1.6-gigawatt solar park it is building in the south of the country to be operating at full capacity in 2019, the investment ministry said in a statement on Sunday.

The $2 billion project, set to be the world’s largest solar installation, has been partly funded by the World Bank, which invested $653 million through the International Finance Corporation.

Some parts of the park are already operating on a small scale, while other areas are still undergoing testing.

Egypt aims to meet 20 per cent of its energy needs from renewable sources by 2022 and up to 40 per cent by 2035. Renewable energy currently covers only about 3 per cent of the country’s needs.

“Egypt’s energy sector reforms have opened a wider door for private sector investments,” World Bank President David Malpass said during his visit to the site alongside Egypt’s Investment Minister Sahar Nasr.

Image result for Egypt’s Investment Minister Sahar Nasr
Egypt’s Investment Minister Sahar Nasr

Egypt is on a drive to lure back investors who fled following the 2011 uprising with a slew of economic reforms and incentives the government hopes will draw fresh capital and kickstart growth.

Most of the foreign direct investment Egypt attracts goes toward its energy sector.

Reporting by Ehab Farouk; Writing by Nadine Awadalla; Editing by Yousef Saba and Jan Harvey.

Further reading on this project can be found here; it is the World’s Largest Solar Park Project. Alcazar Energy’s 64 MW Solar PV plant (Picture above) is the first of thirty projects in the Benban Solar Park to complete construction and enter commercial operation. Benban will be the largest solar power installation in the world with up to 1.5 GW capacity located in Aswan, Egypt.

Why the new ‘solar superpowers’ will probably be petro-states in the Gulf

Why the new ‘solar superpowers’ will probably be petro-states in the Gulf

Why the new ‘solar superpowers’ will probably be petro-states in the Gulf and not those countries of North Africa? Why indeed; here is Dénes Csala, Lancaster University‘s opinion.

File 20190430 136794 45bqac.jpg?ixlib=rb 1.1

capitanoproductions / Shutterstock

Every now and then, the idea of powering Europe using the vast solar resources of the Sahara Desert comes up. Were this to actually happen, we may witness the rise of new energy superpowers in Northern Africa. But a look at the economic and political energy system suggests what’s more likely is the oil-rich countries of the Arabian (or Persian) Gulf will continue to dominate energy trade even in the post-fossil era.

Renewable energy, of course, is very location dependent – the sunnier a place is, the more energy you get out of photovoltaic panels. Over the course of a year, southern Algeria, for example, gets more than twice as much solar energy as southern England. The graph below, which I put together as part of my PhD, shows that some of the best solar resources in the world are indeed found in Algeria, Libya, Egypt, Niger, Chad and Sudan.

Russia and Canada have lots of low-solar land, but the most sunny areas are elsewhere. Denes Csala / NREL, Author provided


So, one could build large Saharan solar farms and then transmit the power back to densely populated areas of Europe. Such a project would need to overcome various technical challenges, but we can say that in theory it is possible, even if not practical.

Yet plans to actually set up mass Saharan solar have floundered. The most notable project, Desertec, was fairly active until the mid 2010s, when a collapse in the price of oil and natural gas made its business case more difficult. At that time, the major technology considered was concentrated solar power, where you use the heat from the sun to run a steam turbine. Energy can be stored as heat overnight, therefore enabling uninterrupted energy supply and making it preferred to then expensive batteries.

Solar is getting cheaper and cheaper. Nature


Since then, however, the cost of both solar panels and battery storage have dropped drastically. But, while conditions might look favourable for Saharan solar, it is unlikely that new solar energy kingpins will arise in North Africa. Instead, we should look one desert further to the East – the Rub al Khali on the Arabian peninsula, the home of the reigning energy powers.

Sun shines on the Gulf

The economies of the United Arab Emirates, Saudi Arabia, Qatar and the other Gulf nations are built around energy exports. And as climate change imposes pressure on the extraction of fossil fuels, these countries will have to look for alternative energy (and income) sources in order to keep their economies afloat. The International Renewable Energy Agency set up its headquarters in Abu Dhabi, and the region has no shortage of ambitious solar projects promising extremely cheap electricity. However only a small amount of capacity has actually been deployed so far. Low oil revenues have not helped with the megaprojects.

 

Countries in the Sahara also have little history of trading fossil fuels, outside of Libya and Algeria, while things are rather different for the petro-states of the Gulf. And this matters because, in the energy business, worries over longer-term security of supply mean countries tend to trade with the same partners.

This would be the Achilles’ heel of a Northern African energy project: the connections to Europe would likely be the continent’s single most important critical infrastructure and, considering the stability of the region, it is unlikely that European countries would take on such a risk.

Which brings us to an alternative way to transmit energy: hydrogen. A process called electrolysis can use renewable electricity to split water into hydrogen and oxygen, and the resulting hydrogen can store lots of energy. Soon it will become feasible to move energy around the world in this form, using shipping infrastructure similar to that already in use today for liquefied natural gas.

Sure, there are disadvantages compared to batteries. It would mean introducing two more conversion stages and thus reduced efficiency (30% roundtrip efficiency compared to 80% for batteries), but it would overcome the distance barrier. And perhaps just as importantly: shipping energy by hydrogen would mean no significant change to the existing maritime trade infrastructure, which will hand an advantage to established energy exporters.

If this means the Sahara is unlikely to develop renewable energy superpowers, then perhaps this is for the better. With the booming populations of Sub-Saharan Africa in dire need of electrification, clean solar power might be better used to alleviate the energy crisis in somewhere like Nigeria rather than sent to Europe. While these countries may eventually be able to shake off any solar resource curse, in the short term, exports like these could just look like yet another European attempt to extract natural resources from Africans.


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Dénes Csala, Lecturer in Energy Storage Systems Dynamics, Lancaster University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Investment in Renewables now led by Developing Countries

Investment in Renewables now led by Developing Countries

Populations increases amongst many other things in all developing countries are turning these to be the largest source of energy demand, to the point of overtaking all developed countries in terms of growth. As a consequence, investment in renewables now led by developing countries is showing the way.

Scientific American Observations article by Riccardo Puliti,
Director for Energy and Extractives at the World Bank and Morgan D. Bazilian, Professor of Public Policy and Executive Director, were posted on April 25, 2019. Here there are.

How a Key Energy Technology Can Help Developing Countries

The World Bank has a new program for financing the advanced battery storage systems essential for making wind and solar power work.

How a Key Energy Technology Can Help Developing Countries
Artist’s rendering of a battery backup system for storage of renewable energy. Credit: Getty Images

A global energy transition is under way. Its potential to redraw the landscape will be most profoundly felt in developing economies. These economies will be the key locations of growth and investment. Developing countries have already become the largest absolute source of energy demand, and they are far outpacing OECD countries in terms of growth. Similarly, investment in renewables is now also led by developing countries. Sub-Saharan Africa, home to a majority of the world’s population living with limited, poor quality or no electricity, will likely witness some of the most significant of these transformations.

What we can safely guess about the changing system is that it will include a large role for batteries for both electric vehicles and power storage. How governments respond will be essential, and the World Bank is responding with a focused, first-of-its-kind program to help.

The global energy storage (excluding pumped hydro) market is forecast to attract over $600 billion in investment over the next 20 years. Bloomberg New Energy Finance sees the market for both utility scale and “behind-the-meter” (on-site at businesses, industrial facilities, and homes) growing exponentially to reach about 7 percent of total installed capacity by 2040. This battery revolution is happening all over the world, and its rapid growth is due to both falling prices, and the many benefits to the electricity system, ranging from helping shift demand to enabling the integration of solar power to improving reliability.  

The solar revolution has already had an impact. Many countries in Africa are rapidly deploying centralized, utility-scale systems, as well as decentralized, smaller systems that can power homes and businesses. These decisions are motivated by economics. The price of photovoltaics (PVs) has dropped roughly 80 percent over the last decade. Batteries can be deployed quickly and offer modularity—both very attractive qualities to the region.

As an example, countries in the Sahel such as Burkina Faso and Mali are developing regional solar parks that will serve as demonstration projects for other countries in West Africa. And the focus is not limited to residential uses. A priority is to power local agricultural processing, irrigation and light industry. A shift to a low-carbon and more secure energy future, lower operating costs and strengthening grids has multiple benefits to these countries ranging from economic and social development to security. Well-designed regulations are fundamental to realizing these benefits, and to ensuring they are realized in developing countries.

Battery storage systems are delivering reliable power at roughly a third of the cost of diesel generators, and have better supply chain resilience. There are other benefits as well: poor-quality and adulterated diesel is highly polluting and linked to major health impacts across the continent. The selling of diesel is also often tied with organized crime; consumers can pay even higher prices for fuel in poor communities where there is little monitoring.

Storage comes in many varieties. Energy storage can complement and, in some cases, replace transmission infrastructure projects, as well as diesel generators and gas power plants. Pumped storage has been in use for decades, but it is battery storage that is receiving the lion’s share of attention now as costs come down and technologies proliferate. The International Energy Agency (IEA), in its World Energy Outlook 2018, included for the first time the contribution of batteries to flexibility of power systems. By 2040 the IEA foresees a hundredfold increase in grid-connected battery additions compared to today.

Battery storage systems have already proven cost-effective in balancing supply and demand on a timescale of seconds. As a result, frequency swings are limited, there are fewer blackouts, operating costs go down, and system stability is enhanced for the benefit of all customers. In South Africa, the national utility Eskom is focused on developing battery storage capacity (the largest in the region) that will be used to enable the integration of current and future variable renewable energy capacity. The Gambia and the Central African Republic are looking to battery storage to help stabilize their fragile grids.

The coming boom in batteries promises another range of benefits, if managed right. Demand for the metals and minerals that are critical components in these next-generation batteries (such as cathode materials like lithium, nickel, manganese and cobalt) is expected to grow very fast—in some cases by almost tenfold by 2050—and large deposits of some of these are found in African countries. One of the largest challenges of Africa’s energy transition will be ensuring that the governance and management of extractive industries be strengthened so that the benefits of this coming boom are enjoyed by Africans, and that issues of sustainability and labor conditions in supply chains are addressed.

Last autumn, the World Bank Group committed $1 billion for a program to accelerate investments in battery storage in developing countries. Associated with this program is a new international partnership to help expand the use of energy storage and bring new technologies to developing countries’ power systems.

Recognizing the need to sustainably scale up the deployment of energy storage in developing countries and the significant opportunity that storage brings for increasing access to electricity and integrating more renewable energy, the Energy Storage Partnership (ESP) will foster international cooperation on: Technology Research Development & Demonstration, System Integration, and Policies and Regulations to help develop energy storage solutions tailored to the needs of developing countries.

To date, the investments have been small in scale, but significant in the nascent market. Globally, the bank has financed roughly 15 percent of the stationary battery storage capacity that is already deployed or currently under development—mostly through mini-grid projects and in island states to improve resilience. But now larger projects are being developed. For example, in Mali and Burkina Faso the bank is developing the largest solar parks in the region with PV-battery systems. These projects will combine standard tenders and de-risking instruments to attract private developers. 

In some ways, the pace of the energy transition will be set by developing countries. So far, grid-scale battery technologies have been deployed primarily in OECD countries, but by sharing the lessons learned and showing the benefits of battery storage, this new solution should be a foundation of economic growth in the Global South.

The views expressed are those of the author(s) and are not necessarily those of Scientific American.

About the authors:

Riccardo Puliti is Senior Director for Energy and Extractives at the World Bank.

Morgan D. Bazilian is a Professor of Public Policy and Executive Director of the Payne Institute at the Colorado School of Mines. He is an affiliated faculty member with Mines’ Space Resources program, which just started offering a first-of-a-kind PhD in Space Resources.

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Should we turn the Sahara Desert into a huge solar farm?

Should we turn the Sahara Desert into a huge solar farm?

Amin Al-Habaibeh, Nottingham Trent University

Whenever I visit the Sahara I am struck by how sunny and hot it is and how clear the sky can be. Aside from a few oases there is little vegetation, and most of the world’s largest desert is covered with rocks, sand and sand dunes. The Saharan sun is powerful enough to provide Earth with significant solar energy.

The statistics are mind-boggling. If the desert were a country, it would be fifth biggest in the world – it’s larger than Brazil and slightly smaller than China and the US. Each square metre receives, on average, between 2,000 and 3,000 kilowatt hours of solar energy per year, according to NASA estimates. Given the Sahara covers about 9m km², that means the total energy available – that is, if every inch of the desert soaked up every drop of the sun’s energy – is more than 22 billion gigawatt hours (GWh) a year.

This is again a big number that requires some context: it means that a hypothetical solar farm that covered the entire desert would produce 2,000 times more energy than even the largest power stations in the world, which generate barely 100,000 GWh a year. In fact, its output would be equivalent to more than 36 billion barrels of oil per day – that’s around five barrels per person per day. In this scenario, the Sahara could potentially produce more than seven times the electricity requirements of Europe, with almost no carbon emissions.

Global horizontal irradiation, a measure of how much solar power received per year.
Global Solar Atlas / World Bank

What’s more, the Sahara also has the advantage of being very close to Europe. The shortest distance between North Africa and Europe is just 15km at the Strait of Gibraltar. But even much further distances, across the main width of the Mediterranean, are perfectly practical – after all, the world’s longest underwater power cable runs for nearly 600km between Norway and the Netherlands.

Over the past decade or so, scientists (including me and my colleagues) have looked at how desert solar could meet increasing local energy demand and eventually power Europe too – and how this might work in practice. And these academic insights have been translated in serious plans. The highest profile attempt was Desertec, a project announced in 2009 that quickly acquired lots of funding from various banks and energy firms before largely collapsing when most investors pulled out five years later, citing high costs. Such projects are held back by a variety of political, commercial and social factors, including a lack of rapid development in the region.

The planet Tatooine from the Star Wars movies was filmed in southern Tunisia.
Amin Al-Habaibeh, Author provided

More recent proposals include the TuNur project in Tunisia, which aims to power more than 2m European homes, or the Noor Complex Solar Power Plant in Morocco which also aims to export energy to Europe.

Two technologies

There are two practical technologies at the moment to generate solar electricity within this context: concentrated solar power (CSP) and regular photovoltaic solar panels. Each has its pros and cons.

Concentrated solar power uses lenses or mirrors to focus the sun’s energy in one spot, which becomes incredibly hot. This heat then generates electricity through conventional steam turbines. Some systems use molten salt to store energy, allowing electricity to also be produced at night.

A concentrated solar plant near Seville, Spain. The mirrors focus the sun’s energy on the tower in the centre.
Novikov Aleksey / shutterstock

CSP seems to be more suitable to the Sahara due to the direct sun, lack of clouds and high temperatures which makes it more efficient. However the lenses and mirrors could be covered by sand storms, while the turbine and steam heating systems remain complex technologies. But the most important drawback of the technology is its use of scarce water resources.

Photovoltaic solar panels instead convert the sun’s energy to electricity directly using semiconductors. It is the most common type of solar power as it can be either connected to the grid or distributed for small-scale use on individual buildings. Also, it provides reasonable output in cloudy weather.

But one of the drawbacks is that when the panels get too hot their efficiency drops. This isn’t ideal in a part of the world where summer temperatures can easily exceed 45℃ in the shade, and given that demand for energy for air conditioning is strongest during the hottest parts of the day. Another problem is that sand storms could cover the panels, further reducing their efficiency.

Both technologies might need some amount of water to clean the mirrors and panels depending on the weather, which also makes water an important factor to consider. Most researchers suggest integrating the two main technologies to develop a hybrid system.

Just a small portion of the Sahara could produce as much energy as the entire continent of Africa does at present. As solar technology improves, things will only get cheaper and more efficient. The Sahara may be inhospitable for most plants and animals, but it could bring sustainable energy to life across North Africa – and beyond.


Click here to subscribe to our climate action newsletter. Climate change is inevitable. Our response to it isn’t.The Conversation

Amin Al-Habaibeh, Professor of Intelligent Engineering Systems, Nottingham Trent University

This article is republished from The Conversation under a Creative Commons license. Read the original article.