THE ENERGY INDUSTRY T I M E S December 2017 • Volume 10 • No 10 • Published monthly • ISSN 1757-7365 www.teitimes.com The perfect storm for M&A The nuclear option The rise of renewables, aided by artificial intelligence and big data to improve forecasting, is creating a perfect storm for mergers and acquisitions. Page 13 Despite the challenges facing new build projects, nuclear is still an important part of the energy mix in some countries. Page 14 News In Brief Global energy system “being reshaped”, says IEA In its recent World Energy Outlook, The International Energy Agency says four major forces will reshape the global energy system over the next two decades. Page 2 Chile auction sees prices tumble The Chilean government says it expects energy prices to fall following the country’s latest renewable energy auction. Page 4 South Korea backs super grid plan Plans for a northeast Asian super grid are taking shape as the region looks to improve energy security and ease political tension. Page 5 Helm review highlights UK market complexities A major review of energy policies in the UK has concluded that energy prices are too high because of the country’s multiple and complex market interventions and legacy of renewable energy support mechanisms. Page 6 Strong growth forecast in global storage sector The global energy storage market is on the cusp of a major period of expansion thanks to the growing need for flexibility in electricity grids around the world. Page 8 Structural issues hit Siemens and GE “Unprecedented challenges” in the world’s changing energy markets are causing industry technology stalwarts Siemens and GE to implement aggressive restructuring. Page 9 Technology: Changing the diesel game MAN Diesel & Turbo recently unveiled what it has dubbed “the game changer” – a family of reciprocating engines with industryleading power output and efficiency. Page 15 Advertise advertising@teitimes.com Subscribe subscriptions@teitimes.com or call +44 208 523 2573 Final Word Coal’s long-term survival will need more than a little luck and a helping hand from Trump, says Junior Isles. Page 16 World gets hotter as tempers flare at COP23 Global carbon emissions are once again on the rise as the international community rallies around the Paris climate accord. But in the face of growing resentment at climate change talks in Bonn, the US said it is sticking to its decision to exit the agreement. Junior Isles US President Donald Trump’s planned withdrawal from the Paris Agreement will push up global temperatures nearly half a degree Celsius by 2100, according to a report released at UN climate talks in Bonn. Current data from research group Climate Action Tracker (CAT) predicts global temperature will be 3.2°C above pre-industrial levels – well above the target agreed in Paris – by the end of the century. The Paris pact, adopted in 2015, calls for capping the rise at “well below” 2°C, and even 1.5°C if possible, to avoid irreversible climate change. CAT had previously calculated that if all countries – including the US – honour carbon-cutting pledges under the 196-nation treaty, the world would see 2.8°C of global warming. Commenting on the revised figure, CAT said in a statement: “This is largely due to the fact that the United States is walking away from its 2030 target, and long-term 2050 goals.” In June, President Trump announced his administration’s intention to withdraw from the Paris Agreement, throwing into doubt its role at UN climate talks and related bodies like the Green Climate Fund. The Bonn meeting was the first set of climate negotiations since the announcement. Although the US is now the only UN member not part of the Paris accord, there was no sign that President Trump or his advisers were rethinking their demands that the agreement be changed significantly to prevent a Washington exit. In a closing statement at the meeting, Judith Garber, an acting assistant secretary of state, told the forum that the administration remains open to rejoining the Paris agreement “under terms more favourable to the American people”. In a panel discussion held at the conference, White House climate adviser George David Banks extolled the virtues of coal fired power generation to ensure “universal access” to electricity and security of supply. “We believe there is a rational way forward that does not force countries to choose between mitigation, development and energy security,” Banks said during the event. His remarks sparked a protest by over 100 climate activists, who interrupted the discussion before walking out. “Promoting coal at a climate summit is like promoting tobacco at a cancer summit,” said Michael Bloomberg, the former New York mayor. Continued on Page 2 Reformed ETS demonstrates Paris commitment, says European Commission The European Union’s decision to overhaul Europe’s carbon market after 2021, is being hailed as a key step toward meeting its pledges to cut greenhouse gases under the Paris climate agreement. The deal between EU member states and the European Parliament includes measures to reduce the surplus of permits that has caused the EU’s carbon price to fall by almost 70 per cent over the past nine years. The EU Parliament also wanted to block aid to coal-fired power plants but this was resisted by Poland and other central European countries that still rely heavily on coal for electricity. A compromise was reached under which no funds would go to coal plants with the exception of district heating projects in countries with per capita gross domestic product more than 30 per cent below the EU average. The deal still needs to be formally ratified by the EU parliament and member states but officials are confident this will happen. The EU’s Climate and Energy Commissioner, Miguel Arias Cañete, said in a statement that the “landmark deal demonstrates that the European Union is turning its Paris commitment and ambition into concrete action”. MEP Julie Girling, who led parliament in negotiations, said the agreement sent “an important signal” about the integrity of the trading scheme and gave “certainty” to stakeholders. Eurelectric, the organisation representing Europe’s electric utilities welcomed the agreement. “Investors across Europe have received the much needed legal clarity that will enable them to take better informed decisions on low-carbon investments,” said Eurelectric Secretary General, Kristian Ruby. The agreement to revise the ETS was followed weeks later by a positive vote by the European Parliament’s industry and energy committee (ITRE) to increase efficiency and renewable energy targets. MEPs supported a 40 per cent efficiency goal and national targets for 2030. Both targets will be legally binding. The vote on the energy efficiency directive was preceded by a vote on the renewable energy directive, where MEPs supported increasing the Commission’s proposed 27 per cent target to 35 per cent without imposing binding national targets. In a separate development designed to further accelerate EU deployment of renewables, SolarPower Europe and WindEurope, RE100 and WBCSD established the RE-Source Platform. It is the first and only multistakeholder platform in Europe bringing together the interests of both renewable energy buyers and sellers. The RE-Source platform will pool resources and coordinate activities to promote a better policy framework for renewable energy sourcing, at EU and national level. n Luxembourg and Lithuania have signed a statistical transfer agreement that will see the Baltic country transmit renewable electricity to Luxembourg so as to help it achieve its 2020 national renewable energy goal. The pact, the first of its kind between two EU member states, was officially announced by the EC. Under its terms, Lithuania will transfer 700 GWh, or more if needed, of renewable energy generation to Luxembourg between 2018 and 2020 as the Baltic nation has already reached its 23 per cent target under the EU Renewable Energy Directive set for 2020. In 2015, the renewables share of its total energy consumption was 25.75 per cent. THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com
Energy Industry Times December 2017
To see the actual publication please follow the link above