Issues for wind power

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Debate regarding wind power has centred on a number of issues. The body of evidence is accumulating, revealing problems and solutions are being proposed, but some of these issues still require much further study and analysis.

It should be emphasised that it is not within the scope of this report to present a full summary of all the evidence, arguments and conclusions in these matters. The purpose is to raise the issues and to point out that questions exist. Some of these questions have been answered, others remain to be answered.

Grid balancing

In order to maintain security of supply, a second-by-second balance between generation and demand must be achieved. An excess of generation causes the system frequency to rise whilst an excess of demand causes it to fall. To sustain the balance, the electric system must provide power at the instant the load demands it, and at the prescribed frequency and voltage limits. Variations outside these limits can either cause protective systems to shut down large parts of the network or can cause extensive damage to delivery equipment and customers’ facilities. This is a vital issue for intermittent sources of energy.

Network balancing problems have occurred because of the variability of wind power and these have sometimes been serious. It has been pointed out that this is the normal state of an electrical system and a wholly fossil fuel powered system requires a spinning reserve in any case. However, evidence suggests that wind power can exacerbate this problem.

Grid extension

Because in many countries wind turbines are sited in remote areas where wind speeds are high but the distance from load centres is considerable, the transmission of large amounts of energy has placed burdens on the transmission system and caused congestion. This has been acute in Germany where the main fossil fuel base load generators are located in industrial areas, requiring little transmission capacity and the transmission network has developed accordingly. It will also need to be addressed in the UK where offshore wind farm developments in the northwest of Scotland will place burdens on the transmission network to transport power south. Because wind proposals have not always come to fruition, National Grid at one time proposed requiring a deposit from wind developers to link them to the grid.

The effects of sudden and intermittent flows of electricity reach beyond the location of the wind generators, unless they are in an electrical island. Examples of this are found in Poland and the Slovak Republic. The Polish TSO, Polskie Sieci Elektroenergetyczne SA has stated that it will need to make new investment in transmission capacity to accommodate the additional power from Germany. Likewise the Slovak TSO, SEPS, Slovenska elektrizacna prenosova sustava, has told ABS that they will need to construct major new interconnection capacity with the Czech Republic to accommodate the surges of wind power flowing south from Germany.

Historical experiences with wind energy – USA experience

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Several states in the US have encouraged extensive development of wind energy.

Investigations in California following the power crisis reported to the state legislature that because electricity systems must be kept in balance on a real time basis in order to maintain system reliability and because output from wind power is intermittent, variable and unpredictable, other dispatchable generating units must be kept immediately available to provide back up. These must be kept connected to the grid and running below peak capacity or in spinning reserve mode. These units incur costs which are part of the real cost of wind power generation.

A study during the 2006 California heat storm revealed that output from wind power significantly decreased as peak demand increased, due to greater air conditioning and other demands that stem from high temperatures.

A sudden drop in wind speeds in Texas in December 2009 almost resulted in blackouts in western parts of the State.

The US Department of Energy (DoE) has published a comprehensive report listing the steps to implement in order to develop wind energy. The programme aims at installing a total of 100 MW in each of sixteen states by 2010, recently raised to 30 states. Three primary targets are identified:

  • Technology characterisation and data collection
  • Tools and methods of development
  • Applications and implementation

A substantial research and development programme is needed to examine both high and low wind speed turbines, including the deployment of smaller wind systems in distributed settings. The thrust of this structured plan is that the DoE wishes to assess the future potential for wind and to move progressively towards a manageable system; in small regional units rather than large wind carpets like the European systems.

Geographical distribution of coal reserves in South Africa

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The country’s coal reserves are mainly bituminous, with a relatively high ash content of about 45%, and low sulphur content of about 1%. South Africa’s recoverable coal reserves, estimated at 54.6 billion short tons (Bst), are the world’s seventh largest, representing approximately 5% of the world reserves. The South African Department of Mineral and Energy Affairs (DME) began a national study to reassess the country’s coal reserves which was expected to be completed by the end of 2003. The DME’s Discards Inventory was completed in 2002. The inventory tracks the discard or ‘waste’ coal from current and former coal operations in the country by size, location and quality. As much as one Bt of discard coal, which is South Africa’s largest source of industrial waste, is on the surface in South Africa.

According to a study published by the World Energy Council of 2001, commercially mineable hard coal reserves in South Africa amount to 49.5 Bt. More cautious assessments now put the quantity at only 34.4 Bt, if extraction continues rising beyond the current level. Some of the best-quality deposits are the Witbank, Highveld, Ermelo and KwaZulu. In 2009, South Africa’s hard coal production totalled 245.17 million tonnes (Mt) coal. Some 184.71 Mt was for domestic consumption.

Africa has been organised by landowner mining, that is, mining rights have remained with the owner of the land. State control merely took the form of a statutory approval procedure and mining supervision, so that no royalty had to be paid to the state. Wide areas of land are owned by big mining companies, and this is also true of the country’s coal deposits. Thus the government is gradually introducing profound change in this sector. The government and mining companies agreed on new draft mining laws under which, all of the country’s natural resources are transferred to state ownership. Present and future mining companies must re-apply for their mining rights, the issue of which is to be associated with statutory stipulations; deposits which are not exploited at present or whose short-term exploitation has not been applied for by the landowner can now be granted to other interested parties.

Electric vehicles in China

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Both grid operators are investing heavily in electric vehicle charging stations. China is expected become the main market for battery and plug-in hybrid vehicles in the mid-term and the largest market for battery electric vehicles in 2012. The number of electric vehicles on the road is forecasts to reach between 1 and 5 million electric vehicles by 2020. Generous subsidies are likely to drive the market in the short term. Government subsidies of RMB 3,000 per kWh are available for plug-in and pure electric vehicles meeting government requirements, up to RMB 50,000 per unit for PHEVs and RMB 60,000 per unit for BEVs. An additional subsidy of RMB 30,000 for PHEVs and RMB 60,000 for BEVs is available in Shenzhen for new vehicles certified and passed by experts in July 2010. Moreover, as part of the scheme in Shenzhen a total of 22,200 charging posts for low-speed, middle-speed and high-speed charging are planned to create a diversified and networked charging system. This should result in the province achieving its target of 25,000 privately-owned new energy vehicles on the road by 2012. Most battery and electronics manufacturers are located in this province, perhaps explaining why this incentive exists.

For buses a government subsidy of RMB 500,000 per bus was available for 1,000 buses in 2010, and up to RMB 600,000 for fuel cell-powered large commercial buses.

Sixteen of the county’s car manufacturers, amounting to a total of seventy one hybrid, electric and fuel-efficient vehicle models, are eligible for an additional government subsidy of CNY 3,000 (USD 441) per vehicle. Companies that will receive the subsidy include BYD, Hyundai Motors’ Chinese venture, Shanghai General Motors and Ford-backed Changan-Ford-Mazda joint venture.

Two key policies to promote the development of the electric vehicles include: 10% of cars on the road must be emission-free by 2013 and 20% of power has to come from renewable resources by 2020. To finance the uptake of vehicles, the Ministry of Finance in China has announced plans to spend RMB 4 billion to support the commercialisation of new energy vehicles in 2010.

The State Grid has published six standards for electric vehicles and electric vehicle infrastructure, and by the end of the year plans to have completed 75 charging stations; 6,209 AC charging spots and battery replacement stations are proposed. Already the State Grid has commissioned 101 electric vehicles, 30 pilot charging stations and, through the Beijing municipal government, 7 electric bus lanes and 58 electric buses.

The National China Grid Company, part of the State Grid, commissioned its first large electric charging station for electric vehicles, the Nanhu Charging Station, in Tangshan in March this year. The RMB 19 million station has 10 charging spots for 10 vehicles, two large DC chargers and eight medium chargers. This will serve the 19 electric vehicles on the road in Tanshan. A further 3 charging stations and 100 charging poles are planned for 2010 through strategic agreements between the North China Grid and the municipal governments of Tangshan, Zhangjiakou, Qinhuangdao, Langfang and Chengde.

In December 2009 the Southern Grid commissioned its first electric automobile charging facility in Shenzhen consisting of two charging stations and 134 charging poles. Another eight charging facilities have been installed since then. Furthermore six charging facilities have been installed in Guangzhou before the Asian Games commence in November this year.

Before the end of 2010 the Southern Grid expected to construct electric vehicle charging stations in Liuzhou, Guangxi. The first station should be a RMB 3 million station covering 700 m2 in the Yanghe industrial new district. Southern Grid is also in discussions with the Chinese automotive company, BYD, to construct an electric vehicle charging station.

Historical Overview of the Solar Industry in China

From time to time we take you back to one of our past reports to present the state of an industry as it was viewed when it was written. This time, we look at the solar industry.

China is emerging as a future leader in the global solar PV industry. There is a huge gap between production and consumption and manufacture has predominantly been for export until the domestic market develops. The solar PV manufacturing industry is growing rapidly and in 2006 and 2007 there has been a spate of IPO’s for Chinese solar companies on the stock exchanges in Shanghai, Hong Kong, New York and London. One Chinese company, Suntech, is the third or fourth largest cell producer in the world. Chinese module production increased from 134 MW in 2005 to 370 MW in 2006 but in that year installed capacity reached only 70 MW, due to a lack of fiscal incentives to stimulate the domestic market. Many would argue that solar energy will be constrained for some years to come by the relative ease of accessing coal, but consensus of opinion is that China will soon become a major market.

New Chinese policies are spurring the development of solar PV. In March 2009, a subsidy was approved for building-mounted  PV systems which would pay up to 20 yuan per watt for systems of more than 50 KW. For ground-mounted projects, the government is paying a feed-in tariff. For a 10 MW project in Dunhuang, the first in a series of planned ground-mounted projects; this has been agreed at 1.09 yuan per kilowatt-hour. The incentives on building mounted installations are expected to drive up to 100 MW of additional capacity, but the Chinese provincial authorities are expected to develop further incentives; Jiangsu province has led the way with plans announced to install 400 MW of solar up to 2011. This is likely to include 260 MW of new roof capacity, 10 MW of BIPV and 130 MW of ground-mounted capacity.

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Historical Overview of the Solar Industry in India

From time to time we take you back to one of our past reports to present the state of an industry as it was viewed when it was written. This time, we look at the solar industry.

In India there is relatively little manufacture of silicon. The major solar PV companies are Central Electronics Ltd., BHEL, REIL who are in fact assemblers sourcing the cells from elsewhere.

The country is developing a production base, with 8 cell manufacturers and 14 module manufacturers. India’s primary solar PV producer, Tata BP Solar, expanded production capacity from 8 MW in 2001 to 209 MW in 2009. Indosolar, one of India’s largest cell manufacturer and Luminous, a solar inverter manufacturer, announced plans for a IPO in June 2010.

EPIA estimates just 120 MW capacity in India as of 2009, of which only 6 MW is grid-connected. However, there are signs that annual installed solar PV capacity may grow and overtake wind capacity in the future. Given that India is a medium wind profile country with saturation of most of its optimum wind sites and overall low plant capacities.

Government backing for solar is evident; the National Climate Change Action Plan of June 2008 makes solar one of eight priorities. In January 2009 the government announced significant programmes to promote MW scale solar power in India, including 80% rebate incentive on solar power projects, no import duty or excise tax on materials, loans for solar power installations, FiT levels of $0.25 / kWh and mandatory dependence on solar for all new government buildings and multi-storey building projects. Later in 2009 the government introduced the National Solar Mission plan for 20 GW of solar PV by 2022 with interim targets of 1 to 1.5 GW by 2012 and 6-7 GW by 2017. Longer term goals of 100 GW by 2030 and 200 GW by 2050 have been established by India’s government.

Growing demand for power has created supply shortages in some rural and urban areas.By 2030 it estimated that $ 1 trillion needs to be invested in new power generation capacity. Four renewable sources have the potential to produce 85,000 MW of electricity, wind (45,000 MW), small hydro (15,000 MW), biomass (25,000 MW) and solar (35 MW of PV and thermal capacity per km2).

The sector is projected to grow to at least 1 GW capacity by 2017 to meet the aims of The National Solar Mission.solar-power

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Petronas

Petronas is Malaysia’s state-owned oil and gas company with natural gas projects in Malaysia and internationally.

The company is expanding its business both through the entire supply chain and internationally. In August 2011, Petronas acquired a stake in GMR Energy Singapore (GMIRE), which developed an 800 MW combined cycle gas turbines (CCGT) power plant in Jurong Island in Singapore. Domestic production of natural gas by the company is mainly offshore. The company made two new offshore oil and gas discoveries in 2011. Surprisingly Petronas has also developed a regasification terminal in Melaka in Peninsula, Malaysia for imports of natural gas.

Internationally Petronas has several pipeline and LNG projects. The company has also been awarded exploration blocks in Mozambique. Key projects in the pipeline includes in Argentina, Australia, Indonesia and Thailand and LNG regasification facilities in Europe. The LNG market is a major growth sector for the company. The company’s LNG complex in Bintulu, Sarawak was once the world’s largest LNG facility with a capacity of around 23 million tonnes per annum. It is Petronas’ only LNG facility in Malaysia and is comprised of three LNG plants owned and operated by of Petronas’ joint venture companies – Malaysia LNG Sdn Bhd, MLNG Dua Sdn Bhd and MLNG Tiga Sdn Bhd.

LNG produced at Petronas’ facilities is supplied to China, Japan, South Korea and Taiwan through long-term contracts. It is also supplied to Belgium, India, South Korea, Spain, Turkey and the USA through Asean LNG Trading Company (ALTCO) via spot and swap LNG cargo contracts. Petronas only started supplying China in 2009 through a 25-year sale and purchase agreement (SPA) with Shanghai LNG signed in 2006. This contract was for up to 3.03 million tonnes of LNG per year.

In 2011 Petronas entered the shale gas sector through its subsidiary Petronas International Corporation (PICL), which formed a strategic agreement with Progress Energy Resources to develop the Altares, Lily and Kahta shale gas assets in British Columbia, Canada. As part of the agreement, PICL has a 50% stake in the three areas for CAD 1.07 billion. Progress Energy operates the sites.