THE ENERGY INDUSTRY TIMES - MAY 2017 Europe News 7 EDF pours Hinkley concrete Nuclear power projects are starting to make progress in the UK but Westinghouse’s bankruptcy has highlighted the risks of undertaking such mammoth projects. Siân Crampsie EDF Energy has marked a milestone in the development of the Hinkley Point C nuclear power plant by pouring concrete for some of the first permanent structures at the site. The pouring of concrete for the plant’s power station galleries commenced after the UK’s Office for Nuclear Regulation (ONR) last month granted the first consent for construction at Hinkley Point C to start. The milestone was welcome news for EDF following months of speculation about the firm’s ability to fund the project. However, it came as Toshiba announced that its nuclear arm, Westinghouse, had filed for Chapter 11 bankruptcy in the USA. Westinghouse’s financial woes, and their impact on Toshiba’s balance sheet, have thrown the development of the Moorside nuclear power plant in Cumbria into doubt. They have also highlighted the risks associated with the development of large-scale nuclear infrastructure projects. EDF has been able to progress its Hinkley nuclear power project thanks to the financial backing of China General Nuclear (CGN) and the signing of a Contract for Difference with the UK government. A government-backed reorganisation of the French nuclear industry and EDF’s finances also enabled the state-owned energy firm to make its final investment decision on Hinkley in 2016. Toshiba reported a $4.8 billion loss for the three quarters to December 2016, with its poor performance largely the result of cost overruns and delays at four Westinghouse AP1000 nuclear power projects in the USA. Engie, Toshiba’s partner in Moorside’s development company NuGeneration (NuGen), has announced its intention to pull out of the project, which would see three Westinghouse AP1000 units built in the northern county. Toshiba says it will buy Engie’s 40 per cent stake in NuGen for approximately €130 million and will continue to look for a new partner for the Moorside project. South Korea’s Kepco is seen as the company’s most obvious partner for the project and in April UK business secretary Greg Clark met with senior South Korean government officials and nuclear industry executives in Seoul to discuss Moorside. Westinghouse said last month that UK regulators have approved its AP1000 design for construction in the UK. Meanwhile Horizon Nuclear Power announced that it has submitted its site application to the ONR to build and operate two Advanced Boiling Water Reactor (ABWR) units at the Wylfa Newydd nuclear power plant on the island of Anglesey, North Wales. Hitachi-owned Horizon says that it is on track to receive all the necessary permits for Wylfa Newydd by the end of 2018. The company plans to build a total of 5400 MWe of new nuclear generating capacity in the UK, split between the Anglesey site and a site at Oldbury-on- Severn. The UK is building its energy storage market and may have to consider regulatory rules governing such projects to encourage investment. Current rules prevent network companies such as National Grid and distribution network operators (DNOs) from developing and owning storage capacity. However, they believe there is a need for them to be allowed to be more innovative in terms of deploying new technologies in order to help them improve grid operations. A number of companies have Dong Energy and EnBW are to build the world’s first subsidy-free offshore wind farms after submitting ‘zero bids’ in Germany’s latest auction. The two companies have been awarded the rights to develop three offshore wind projects in the German North Sea totalling 1380 MW of capacity without subsidy. In the auction, EnBW won with its bid to develop the 900 MW He Dreiht offshore wind farm. Dong Energy, meanwhile, will build the 240 MW Borkum Riffgrund II West wind farm and the 240 MW OWP West wind farm. Dong was also awarded a third project, the 110 MW Gode Wind 3 project, based on a bid price of €60/MWh. pledged to develop energy storage projects in the UK under the country’s capacity market regime. These are mostly battery-based systems and are classed as generation projects for regulatory purposes. Energy storage schemes can provide a range of benefits to different stakeholders in the electricity market, however, including consumers, generators and network firms. National Grid has therefore called on the government to remove regulatory limitations on the technology, and free Greenpeace said that the zero-subsidy bids marked a “watershed” moment for the renewable energy industry. “Offshore wind has the potential for huge global growth from the USA to Taiwan as the technology massively improves, costs fall and governments wake up to the economic potential,” said Hannah Martin, Head of Energy at Greenpeace UK. Dong and EnBW said that a number of factors had enabled their zero bids, including technological developments that were enabling falling costs in the industry, the location of the wind farms and certain changes in German law. Dong CEO Samuel Leupold said that the extension of the realisation window up investment. Last month Anesco and Limejump announced that they would bring 185 MW of energy storage on line in the UK by the end of 2018, creating the largest portfolio of energy storage projects in the country. The companies said that Limejump would commercially operate the portfolio, connecting it to its Virtual Power Plant portfolio and enabling it to play an active role in Dynamic Frequency to 2024 had helped. “This allows developers to apply the next generation turbine technology, which will support a major step down in costs,” said Leupold. “Also, the bid reflects the fact that grid connection is not included.” Offshore wind is taking a growing role in Europe. TenneT reported in March that German offshore wind farms in the North Sea and the Baltic Sea generated 12.09 TWh of electricity in 2016, a 45.7 per cent jump compared to 2015. The rise in power generated by offshore wind turbines can be attributed to the new capacity grid-connected in 2015 that has reached full production capacity in 2016. Germany connected 546 offshore wind turbines with a total capacity of 2282.4 MW to the grid in 2015. In 2016, Germany added a further 818 MW of offshore wind capacity, with the total combined capacity reaching 4113 MW by the end of the last year. n The European Commission has cleared Denmark’s government to provide state aid to the 600 MW Kriegers Flak offshore wind project in the Baltic Sea. Kriegers Flak is being developed by Vattenfall, which will invest €1.3 billion in the project. The Commission said that the project’s contribution to green targets outweighed any potential market distortions caused by government support. n EnBW, Dong win in latest German auction n Kriegers Flak subsidy cleared Response. “As well as aiding grid stability, energy storage can help maximise the use of renewable power being generated, while breeding a more resilient local grid. It’s an exciting time for the sector and we predict momentum will continue to grow, as more and more generators look to benefit from the technology.” Anesco and Limejump will enter the UK’s next capacity market auction, slated for August 2017. The UK government is currently consulting on mechanisms for improving the flexibility of the electricity system. In its submission to the consultation, National Grid said that changes to regulations should be made to help the market develop and ensure the electricity sector and consumers can reap the benefits of storage. n Eneco and Mitsubishi are to build a 48 MW/50 MWh battery in the German state of Schleswig-Holstein to provide primary reserve and to store extra wind power. The lithium-ion battery will be supplied and integrated by NEC Energy Solutions and is due to start operating by the end of 2017. A proposed large-scale energy storage project in Northern Ireland would contribute to system flexibility and stability and facilitate the large-scale penetration of renewables into energy markets, the European Commission has said. The Larne compressed air energy storage (CAES) project has been awarded a €90 million grant for works under the Connecting Europe Facility (CEF). Developer Gaelectric said that the award confirmed its belief that gridscale energy storage was key to attaining a renewable energy-enabled economy and that it looked forward to carrying out further work to “bring the project to fruition”. The Larne CAES would be capable of generating 330 MW of power for periods of 6 to 8 hours and creating 250 MW of demand on the system. It is planned for deep underground salt caverns located in Antrim, Northern Ireland. UK urged to relax storage rules Germany selects subsidy-free offshore wind bids Larne CAES wins EU funds
Energy Industry Times May 2017
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