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Green energy: why wind power will never be the answer

Wind farms only work with permanent public subsidy. Subsidy comes in various guises. The most obvious is contractual where the operator receives a guaranteed rate for electricity generated or a guaranteed top-up on what he sells his electricity for.

Such subsidy is inherently neither problematic nor exceptional. Nuclear power is also heavily subsidised.

Read more: ‘The green energy debate: the case for onshore wind’

Wind power is problematic because of its nature. Because they depend on wind, wind farms generate electricity that is unpredictable, intermittent and unreliable. This is unlike nuclear power stations which produce a constant stream of electricity (baseload energy) or gas plants, whose output can be varied on demand (dispatchable energy).
Wind’s intermittency would matter less if electricity could be stored at scale. But batteries only store comparatively small amounts, and there is no prospect of affordable batteries for grid-scale storage in the foreseeable future.

Electricity can be stored as potential hydro-electric power by pumping water uphill into reservoirs for release when required, like the Cruachan dam which operates as an adjunct to the Hunterston nuclear power station. However, Scotland lacks enough suitable topography, as well as the political will and money, to turn glens into hydro-electric power reservoirs for wind farms.

With storage not an option, the only way to control wind’s vagaries is to accommodate it within the wider electricity system, using primarily gas and nuclear generators to provide dispatchable and baseload power when wind can’t.

Balancing it in the wider electricity system constitutes a further subsidy, for it requires upgrades and extensions to the grid as well as keeping gas plants running on stand-by (“back-up”). But using the grid and other generators to make up for wind’s shortfalls becomes more challenging and expensive, the more wind generation enters the energy mix.

Increasingly, the grid is unable to take electricity from wind farms during windy periods. Wind farms are then “constrained off”, the energy effectively wasted and their operators compensated – last year to the tune of £125 million.

While the precise causes of the August 9 blackouts in England, in which Hornsea offshore wind farm is implicated, remain unclear, they testify to the increasing fragility of a national electricity system struggling to meet the challenges of increasing renewable generation.

Read more: ‘The green energy debate: are wind farms really worth it?

Like other European countries, the UK has reformed its subsidy regime in response to galloping wind farm development, exploding subsidy costs and ever-rising consumer bills. Abolishing the Renewables Obligation in April 2016 sounded the death knell for new onshore wind farms.

The focus shifted to offshore wind farms, and the new Contracts for Difference scheme for their subsidy. A kind of reverse auction, it encouraged operators to put in unfeasibly low bids for the prices at which offshore wind farms would generate. While many have heralded the apparently huge drop in offshore costs, no wind farms have actually begun operating at this rate. Industry experts doubt they ever will, suspecting the low offers were a ruse to lock out competition and then blackmail the government on pain of bankruptcy if the price is not raised.

The days where developers saw a prospective wind farm as a licence to print money while policymakers extolled wind energy as clean, green and free are long gone. In the end there is no escaping the laws of physics and engineering, or economics.

In coming years, a great deal of money and attention will have to be spent on improving the resilience of an electricity system undermined by too many remote and intermittent wind farms, and on finding ways to pay the still escalating costs of their subsidy contracts. There will be little appetite for a second wind bonanza whoever is in power.

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Renewable Energy

Renewable energy comes from the Earth’s natural resources – sunlight, wind, waves, the tides and geothermal heat from deep within our planet. It has two great advantages: unlike oil, coal and gas, it will never run out, and it’s clean – it doesn’t pollute the planet or cause dangerous climate change.

It is versatile and adaptable. Renewable energy can supply huge cities on the grid or remote villages unconnected to any mains electricity. It can also be built close to where the power is actually needed, and the sheer range of technologies means that one or another will be suitable almost anywhere.

The UK has some of the best renewable energy sources in the world. Our islands, battered by wind and waves, are perfect for tapping into these power sources. Even solar energy has a role to play – solar panels are more efficient in direct sunlight, but can generate power even on a cloudy day. New developments in battery storage mean renewable energy can be used even when the wind isn’t blowing or the sun shining. This provides a fantastic opportunity for the UK to be at the forefront of technological innovation, creating jobs and driving down costs even more.

The rise of renewable energy
In fact, renewable energy is slowly replacing fossil fuels. In 2015 renewables generated more power than coal for the first time ever, and by 2018 was approaching the level of gas generation and is set to continue growing. It’s also getting much cheaper – wind power now costs far less than nuclear, and between 2015 and 2017 the price of offshore wind halved.

All this makes much of the government’s attitude towards renewable energy at odds with its claim to being an international leader on tackling climate change. Cuts to government support for solar power has led to a drop in the number of solar panels being installed, and continued political and financial backing for fossil fuels and nuclear power just don’t make sense. The UK is legally committed to tackling climate change and, by 2050, reducing emissions by 80% compared to 1990. There is pressure on all governments to get to zero carbon emissions even before 2050 if we have any hope of keeping global temperature rises below 1.5 degrees.

Massively increasing renewable energy is the most important way the government is going to meet its commitments, and for us to have a chance of stopping the worst effects of climate change from happening.

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Frackers in UK get fresh hope government will loosen rules

A change of British government has given the much maligned fracking industry another opportunity to make out its case for stimulating the controversial technique to tap unconventional natural gas reserves.

Prime Minister Boris Johnson and his new business minister, Andrea Leadsom, have come out in favor of hydraulic fracturing in the past. That could provide impetus for an industry that has all but ground to a halt thanks to strict regulatory limits on the seismic activity around fracking wells.

As Cuadrilla Resources Ltd. resumed work at a site in Lancashire, the Department for Business, Energy & Industrial Strategy said Thursday that it saw shale gas as a crucial domestic energy source that can cut gas imports as well as working as a bridging fuel to get to net zero emissions by 2050. That may indicate the government could loosen rules that have hobbled the industry.

“For our industry in particular, we do need a review” of seismic limits, said Ken Cronin, chief executive officer of the U.K. Onshore Oil and Gas body.

Some sort of change is necessary to keep fracking alive. Cuadrilla has until Nov. 31 to work at its Preston Road site. After that, planning permission expires and only flow tests of existing boreholes are possible. The firm has applied to Lancashire County Council for an 18-month extension, but a decision on that is unlikely before summer 2020, a spokeswoman said.

Fracking involves pumping water and tiny particles into underground rock formations under high pressure, opening cavities to allow gas to flow into the wellbore. The technique can cause tremors in the earth, although most are so minor only scientific instruments can detect them.

In Britain, rules restrict fracking to operations that have underground seismic activity of below 0.5 on the Richter Scale. That’s a fraction of what’s allowed in Texas and Oklahoma where fracking has revolutionized the oil industry.

“We were stymied by the 0.5, and we think that there is good scientific evidence out there to increase that level,” Cronin said.

It’s one of the few technologies that could slow or even reverse the sharp declines in oil and gas production from the North Sea as conventional deposits run dry. Exploration has been halted a number of times over concerns about earthquakes caused by fracking, most of them too small for people to notice.

By comparison, a passing truck produces magnitude-3 quake on the Richter Scale, according to Bloomberg Intelligence. Cuadrilla Resources Ltd. had stopped its U.K. fracking operations in October, following a series of mini-seismic events at its site in Lancashire, north west England.

After years of delays, fracking in the U.K. seemed closer than ever when Cuadrilla Resources Ltd. said in February that the nation’s first horizontal fracking well had uncovered a large reservoir of high-quality fuel.

But that optimism however was short-lived as Cuadrilla blamed overzealous controls on seismic activity that prevent it from being able to fully tap the potential of the well. Both it and Jim Ratcliffe-owned Ineos Group Ltd., have said that unless the government loosens regulations they won’t be able to frack in the U.K.

Cuadrilla Chief Executive Officer Francis Egan said that government policy to explore and develop shale-gas “has not changed.” He said he took encouragement by government climate advisers, the Climate Change Committee, recognizing natural gas as an essential energy for the U.K.’s net-zero commitment.

“Give the British people their mineral rights, and get fracking at last,” Johnson wrote in the Telegraph in 2014. As Mayor of London, he told the Times of London newspaper that the city “should leave no stone unturned, or unfracked, in the cause of keeping the lights on.”

Leadsom wrote in the Yorkshire Post in 2016 that “a shale gas industry will not only boost our economy and create thousands of jobs across the supply chain it will help to guarantee a secure energy supply which is an absolute must for this government.”

Despite apparent support at ministerial level, dozens of lawmakers in the Conservative Party oppose the practice partly on environmental grounds and partly because of the threat dozens of wells would have to the countryside.

So far, the government hasn’t committed to changing the rules. On Thursday it restated its enthusiasm for fracking without saying how it would balance the environment concerns.

“Shale gas could be an important new domestic energy source reducing the level of gas imports while delivering broad economic benefits, including through the creation of well-paid, quality jobs,” the business department said in a statement. “It could also support our transition to net zero emissions by 2050.”

Opposition parties point out fracking and producing more gas isn’t compatible with goals to rein in fossil fuel emissions and climate change.

“There is no way we can reach net zero by 2050 if we fully exploit the UK’s shale gas reserve,” said Rebecca Long-Bailey, the member of Parliament who speaks for the Labour opposition on business. “Simply put, there is no room left for fracking and it should be banned immediately.”

Environmental questions
The practice has come under fire from environmental campaigners concerned about the affect it has on rock structures and water systems as well as the emissions. Protesters have consistently disrupted prospective shale gas sites up and down the U.K. and have taken the issue to court to have it stopped.

In a new study from Cornell University, globally the industry is found to be behind rising greenhouse-gas emissions, according to Robert Howarth. The process contributes more methane than cows and wetlands. The gas has global-warming potential, 84 times greater than carbon dioxide across a 20-year period.

“The industry seems to have struggled to convince the British public that developing a new fossil fuel resource is an environmentally responsible thing to do,” Laurence Williams, a research fellow in environmental politics at the University of Sussex, said in an email Wednesday.

The argument that shale gas can work as a transition fuel “had only limited success in persuading environmentally minded people to support fracking,” said Williams. “And it struggles to compete with the simplicity and clarity of a phrase like ‘keep it in the ground.’”

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US start-up launches venture to convert organic waste into hydrogen gas for biofuels

US start-up company Electro-Active Technologies has licensed two biorefinery technologies to convert organic waste into renewable hydrogen gas for use as a biofuel.

The technologies were invented and patented by the Tennessee start-ups co-founders, Abjijeet Borole and Alex Lewis, while working at the Department of Energy’s Oak Ridge National Laboratory, according to a report by Renewable Energy Magazine.

The system combines biology and electrochemistry to degrade organic waste such as biomass or food waste, to produce hydrogen. Alex Lewis, the company’s CEO, said: “There are usually thousands of microbes that are required to convert a complex organic mixture from biomass into electrons.

“We developed an enrichment process to create this [microbial] consortium to efficiently extract electrons from organic materials.”

The electrolysis method they designed then combines the protons and electrons into hydrogen molecules. The pair originally developed both processes to tackle the problem of liquid waste formed during biofuel production; however, the company will now focus on fighting food waste.

Borole and Lewis chose food waste as a microbial feedstock after interviewing 80 customers at waste-to-hydrogen industries while participating in the Department of Energy’s Energy I-Corps, which helps to push commercialisation efforts at the laboratories. Because customers pay for the disposal of food waste, the food waste-based feedstock has economic advantages over using biomass.

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Small energy companies risk going bust in financial shock

Suppliers must pass renewable subsidies to Ofgem in August

Thousands of homes could lose their energy supplier in the coming months as a result of a financial shock looming over the industry’s smaller companies.

Suppliers are due to pass on millions of pounds’ worth of renewable energy subsidies, collected via energy bills, to the energy regulator, Ofgem, by the end of the month.

This deadline has in the past proved fatal for financially unstable energy suppliers, and it is feared that a string of collapses may follow in the coming months. Suppliers have until 31 August to pay their share of the renewable energy subsidies, or can opt to pay the amount owed – plus interest – by 31 October.

In the past week, Solarplicity has gone bust, leaving 7,500 homes without a supplier. URE Energy was stripped of its supplier licence for failing to pass on its renewable energy funds from last year’s deadline. In total, 14 suppliers have crashed out of the market since the start of last year, and some predict the same number will fail in the years ahead.

A spokeswoman for Ofgem said that given the “huge growth in the number of suppliers” it expects there to be a “period of consolidation” as some exit the market or merge. The energy market has grown rapidly, from 12 suppliers in 2010 to 70 last year, thanks to policies designed to encourage startups into the market as possible.

“Given the large number of suppliers, it’s also more likely that one may collapse – but Ofgem’s safety net will ensure that their customers are already protected,” she added.

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Renewable Energy

Clean, renewable energy is a vital tool in our plans to reduce the worst effects of climate change. Replacing fossil fuels with wind and solar to power our homes and businesses will dramatically cut our greenhouse gas emissions. The added bonus is it will cut air pollution at the same time.

enewable energy comes from the Earth’s natural resources – sunlight, wind, waves, the tides and geothermal heat from deep within our planet. It has two great advantages: unlike oil, coal and gas, it will never run out, and it’s clean – it doesn’t pollute the planet or cause dangerous climate change.

It is versatile and adaptable. Renewable energy can supply huge cities on the grid or remote villages unconnected to any mains electricity. It can also be built close to where the power is actually needed, and the sheer range of technologies means that one or another will be suitable almost anywhere.

The UK has some of the best renewable energy sources in the world. Our islands, battered by wind and waves, are perfect for tapping into these power sources. Even solar energy has a role to play – solar panels are more efficient in direct sunlight, but can generate power even on a cloudy day. New developments in battery storage mean renewable energy can be used even when the wind isn’t blowing or the sun shining. This provides a fantastic opportunity for the UK to be at the forefront of technological innovation, creating jobs and driving down costs even more.

The rise of renewable energy
In fact, renewable energy is slowly replacing fossil fuels. In 2015 renewables generated more power than coal for the first time ever, and by 2018 was approaching the level of gas generation and is set to continue growing. It’s also getting much cheaper – wind power now costs far less than nuclear, and between 2015 and 2017 the price of offshore wind halved.

All this makes much of the government’s attitude towards renewable energy at odds with its claim to being an international leader on tackling climate change. Cuts to government support for solar power has led to a drop in the number of solar panels being installed, and continued political and financial backing for fossil fuels and nuclear power just don’t make sense. The UK is legally committed to tackling climate change and, by 2050, reducing emissions by 80% compared to 1990. There is pressure on all governments to get to zero carbon emissions even before 2050 if we have any hope of keeping global temperature rises below 1.5 degrees.

Massively increasing renewable energy is the most important way the government is going to meet its commitments, and for us to have a chance of stopping the worst effects of climate change from happening.

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Strong winds in Europe boost Innogy’s H1 renewables profit

Above average winds in most of continental Europe coupled with higher electricity prices have boosted earnings in Innogy’s renewables segment during the first half of this year, ahead of the likely re-incorporation of the German utility’s green generation business into parent RWE.

Adjusted earnings before interest, taxes, depreciation and amortisation in renewables rose to €415m ($464m) in the first half of 2019, compared to €322m in the same period a year earlier.

Innogy’s renewable generation business together with that of rival E.ON will be bundled under a new RWE, while Innogy’s grids and retail segments are slated to go to a beefed-up E.ON if a complex share and asset swap deal wins final approval by competition authorities – a move expected in September by E.ON.

Wind levels in North-Eastern, Central and much of Southern Europe – regions where most of Innogy’s onshore wind farms are located – during the first half were higher than the long-term average, more than compensating for lower winds in the UK, Ireland and the Netherlands.

That helped the utility’s output from renewable sources to rise to 5.5TWH, from 5.3TWh in the year-ago period.

Rising electricity prices in the UK and Germany also pushed earnings higher, although some 60% of Innogy’s renewables earnings are quasi-regulated due to fixed feed-in tariffs (FITs) in Germany.

A positive contribution to earnings came also from operational improvements of the existing portfolio in part from a bonus for timely, on-budget completion of the Galloper offshore wind farm in the UK and higher earnings at the Belectric project development subsidiary.

“In Renewables, the fact that we extended our scope to international markets right from the outset has paid off,” said chief executive Uwe Tigges.

“We currently have three large-scale projects simultaneously under construction: the Limondale solar plant in Australia, the Triton Knoll offshore project in the UK, and the Scioto Ridge onshore wind farm in the US.”

Earnings were also bolstered by onshore wind farms commissioned in 2018 and 2019 in the UK, Ireland and Italy.

Innogy’s overall adjusted Ebitda fell to €2.14bn during the first half compared to €2.25bn in the same period in 2018, while net profit went down to €488m compared to €662m during the first half of 2018, as lower grids and retail earnings pulled results down.

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Ørsted earnings hold firm as utility on track for ‘ambitious green transformation’

Ørsted remains on track to deliver what it’s described as “one of the most ambitious green transformations” in the energy sector after it reported steady growth in H1 2019.

Reporting its half-year results today, Ørsted revealed its H1 earnings to have reached DKK8.8 billion (£1.1 billion), up marginally (2%) on last year’s performance.

That performance means the utility is on track for its full year guidance of earnings between DKK15.5 (£1.9 billion) and DKK16.5 billion (£2 billion).

First half profit did however slip 6% to DKK3.7 billion (£457 million).

It achieved this, chief executive Henrik Poulsen said, undertaking “one of the most ambitious green transformations in the global energy industry”, triggered by a commitment to the Paris Agreement and UN Sustainable Development Goals (SDGs).

Its share of energy generation determined to be green rose from 71% to 82% in H1 2019, and Poulsen said the firm was on track to meets it target of achieving a 98% reduction in its carbon emission intensity from generation by 2025.

Furthermore, the firm said it was now taking the “next major step” in its decarbonisation agenda by targeting indirect carbon emissions from its business, occurring primarily within its natural gas and consumer-facing units, while phasing out all fossil-fuelled cars from its fleet by 2025.

“We remain very pleased with the operational and financial performance of the company as we continue to expand our position as a global leader in green energy,” Poulsen said.

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Energy prices to fall for millions as Ofgem lowers cap

The price of energy is set to fall for millions of British households this October after the regulator, Ofgem, lowered price caps.

Ofgem sets maximum prices that can be charged for gas and electricity to those who have not switched suppliers and are on default tariffs.

The new cap could see these households typically pay £75 less a year.

However, bills will still be higher than they were in January when the first price cap came into force.

Ofgem boss Dermot Nolan said: “The price caps require suppliers to pass on any savings to customers when their cost to supply electricity and gas falls.

“This means the energy bills of around 15 million customers on default deals or pre-payment meters will fall this winter to reflect the reduction in cost of the wholesale energy.”

About 11 million households are on default, or standard variable tariffs, and are set to be affected. Such a household, which uses a typical amount of energy and pays the bill by direct debit, should now expect to pay £1,179 a year.

Consumer groups say they could save hundreds of pounds by shopping around for a better deal.

Another four million people are on pre-payment meters, so pay for their energy in advance. The price cap will fall on their tariffs too, with the typical customer paying £1,217 per year, down £25 from the previous cap level.

 

How do these caps work?

Energy price capping, brought in under Theresa May, is designed to protect the vulnerable and those who have stayed loyal to their energy supplier.

From next year, Ofgem will set the cap twice a year for households in England, Wales and Scotland. Northern Ireland has a separate energy regulator and its own price cap.

The regulator sets a cap on the unit price of energy for electricity and gas, and a maximum standing charge.

Energy companies are not allowed to charge default tariffs that are higher than these thresholds.

Are the caps effective?

The first caps came into force at the start of January and have been revised twice since then – once in April when they went up, and now for October, when they will fall.

However, Stephen Murray, energy expert at MoneySuperMarket, warned that the new cap for a standard variable and default tariff is still higher than the £1,137 level set back January.

He added: “Crucially, there are more than 100 cheaper tariffs available to consumers in the market today.

“That means someone switching today could secure a deal that delivers three times the saving the price cap offers, while protecting themselves from this rollercoaster of price fluctuations every six months. It’s a no-brainer.”

Major energy companies such as Centrica have complained the price caps are squeezing their business, while a number of smaller suppliers have blamed the policy for putting them out of business.

But Ofgem boss Dermot Nolan told BBC Radio Four’s Today programme that the cap was working “reasonably well”.

“I think it has done what parliament has asked us to do which is to make sure the cap protects people who don’t wish to switch.

“It’s forced some of the bigger companies to make efficiency savings… and it’s also still permitting switching. So you still see fairly significant switching, you see lots of other firms in the market.”

Will my bill fall automatically?

The cap is per unit of energy, not on the total bill. So people who use more energy will still pay more than those who use less.

The new cap also takes effect in October, just when people are starting to switch the heating back on, which will offset the impact of lower prices.

Ofgem recommends consumers should shop around for cheaper fixed rate deals – something that would make the cap irrelevant for them.

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Turning Natural Gas Into Fuel Just Became Cheaper

The advantages of natural gas over the other two fossil fuels—coal and crude oil—seem to be indisputable when it comes to carbon emissions. Natural gas is a much less carbon-intensive fuel, which has drawn attention to it as an alternative to oil-derived liquid fuels. However, there have been challenges that now a team of Chinese scientists claim to have come closer to solving.

Natural gas consists mostly of methane and some propane. Methane is a sticking point between the industry and environmentalists because it is a much more powerful greenhouse gas than carbon. But if this methane can be turned into fuel it would be a win-win situation since the byproducts of burning natural gas are water vapors and carbon dioxide.

Processing natural gas into liquid fuel is tricky, Phys.org reports in an article on the Chinese scientists’ breakthrough. This processing involves the introduction of oxygen-hydrogen compounds into the gas, which rearranges its atoms. However, not all atoms react to the oxygen and the hydrogen at the same speed and this could ruin the resulting alcohol that would be used as a fuel.

What the Chinese researchers did, essentially, was increase their control over the conversion process, which allowed them to manipulate the speed at which the carbon and hydrogen in the methane and propane rearranged themselves to create alcohol molecules. This, according to the team, would make gas-derived fuel more economical to produce.

The potential of natural gas as a replacement for gasoline and diesel should not be underestimated especially amid the current abundance of natural gas, notably in the United States, thanks to the shale revolution.Related: Why Oil Prices Plunged Today

“Our conclusion is that natural gas as a transportation fuel has both adequate abundance and cost advantages that make a strong case to focus interest in the technology as a real game changer in U.S. energy security.” This is what one engineer from the Argonne National Laboratory told Talking Points Memo, a news outlet, seven years ago, a few months after the Obama government launched a US$30-million grant program for research into making natural gas a more popular fuel for vehicles.

Since then, however, little progress has been made and part of the reason is that challenging conversion process. A simpler form of natural gas—compressed natural gas or CNG—is already in use for some countries’ public transport vehicles and also in passenger vehicles, but it has yet to become a real challenger for gasoline and diesel. While cheaper and more efficient, CNG gets burned up more quickly, it requires a larger tank, and has less torque than gasoline and diesel.

This is where the potential of liquid natural gas fuels lies. In liquid form, natural gas would probably be more competitive with oil-derived fuels but only after the challenges with its conversion into liquid are overcome.

It’s a positive that scientists are working on this. If research is successful it could eventually motivate oil producers to seek ways to reduce gas flaring, which in the U.S. last year grewby 48 percent driven by the shale boom. That’s a lot of methane being burned for no revenues when it could be captured and turned into fuel at some point in the future.

By Irina Slav for Oilprice.com