This week we focus on solar power in the United States. A report by the US National Renewable Energy Laboratory has concluded that the country can fill 39% of its electricity needs with rooftop solar PV alone. And that doesn’t include the “immense potential” of ground-mounted PV units. Is an all-solar America on the horizon?
Popular Science: Rooftop Solar Panels Could Power Nearly 40 Percent Of The U.S.
The Energy Department’s National Renewable Energy Laboratory (NREL) issued a report last week that analyzed the ability of America’s roofs to host solar panels. They looked at rooftops in 128 cities across the country, analyzing buildings large and small for their suitability for hosting photovoltaic (PV) solar panels, and how much power could be generated in each location. The estimates varied by state and by region, but overall, the report found that 39 percent of the country’s energy could be generated by rooftop solar panels. “It is important to note that this report only estimates the potential from existing, suitable rooftops, and does not consider the immense potential of ground-mounted PV,” co-author Robert Margolis said. “Actual generation from PV in urban areas could exceed these estimates by installing systems on less suitable roof space, by mounting PV on canopies over open spaces such as parking lots, or by integrating PV into building facades. Further, the results are sensitive to assumptions about module performance, which are expected to continue improving over time.”
We continue with the usual eclectic mix of stories from the energy, climate and related fields, including OPEC’s trials and tribulations, another US rig count decline, Mexico’s oil and gas reserves fall, Sinopec to double gas production, Gazprom expects a record year for exports to Europe, Sunedison facing bankruptcy, the UK to get smart grids, a reprieve for Fiddler’s Ferry, a new, safer, cheaper nuclear fuel rod, storing energy on electric trains, whether climate change is good or bad for UK wine and whether it makes it immoral to have kids.
Hellenic Shipping News: OPEC Crude Output Climbs as Iran Pumps Most Oil Since 2012
OPEC crude production rose in March as Iranian output climbed to the highest level in almost four years. The Organization of Petroleum Exporting Countries increased production by 64,000 barrels to 33.09 million a day last month, according to a Bloomberg survey of oil companies, producers and analysts. Iranian output rose by 100,000 barrels a day to 3.2 million, the most since May 2012. The Islamic republic is seeking to regain market share after sanctions were removed upon completion of an agreement limiting its nuclear program. Iraqi production rose by 150,000 barrels a day to 4.35 million in March, according to the survey. OPEC’s second-biggest producer pumped 4.51 million barrels a day in January, the highest level in monthly data compiled by Bloomberg going back to 1989. Saudi Arabia, OPEC’s top producer, trimmed output by 10,000 barrels a day to 10.19 million, in anticipation of a deal with Russia and other producers to freeze output. The Saudis are keeping output almost flat at January levels.
Wall Street Journal: Nigeria Nominates Barkindo to Replace el-Badri as OPEC Chief
Nigeria has nominated the former chief of its state oil company to be the next secretary-general of the Organization of the Petroleum Exporting Countries, delegates with the group said, potentially ending a deadlock over the cartel’s leadership. The nomination of Mohammed Barkindo was put forward in recent days by Nigeria to replace Abdalla Salem el-Badri as OPEC’s secretary-general, the delegates said. Mr. Badri has led OPEC for over nine years and was supposed to leave at the end of 2012, but the cartel couldn’t reach a consensus on a replacement. The nomination comes at a critical time for OPEC, which is grappling with divisions among its 13 member nations over how to deal with the collapse in global oil prices. The secretary-general isn’t a decision maker in OPEC like Saudi Arabia’s oil minister Ali al-Naimi, for instance. But Mr. Badri has played a key role in brokering agreements and bridging differences between the cartel’s fractious members on production policies.
While some of the biggest producers will stumble along, five oil-producing economies are on the verge of collapse if oil prices do not stabilize soon, according to RBC Capital Markets. “There are five sovereign producers that are on the precipice of a major crisis amid the current low oil price environment,” Helima Croft, global head of commodity strategy, said in a report. These countries face a mix of social, political and terrorism-related upheavals that could either lead to a regime change or create great instability that could knock out their oil production, leading to an oil-supply shock. “Our ‘fragile five’ states…were already facing severe political and security challenges when oil prices were above $100/bbl and the situation has grown far more grim as these countries have struggled to fund their state apparatuses and provide essential services,” Croft wrote.
The oil majors failed to replace all of the oil and gas reserves that they burned through in 2015, a worrying sign for the industry’s future. The Wall Street Journal reported that the seven largest oil and gas companies only replaced about 75 percent of the reserves on average that they produced last year, the worst replacement rate in over a decade.Perhaps the most eye-raising fact was that ExxonMobil, the world’s largest publically-traded oil company, was unable to replace 100 percent of the oil and gas it pulled from the ground. The oil supermajor replaced just 67 percent of the oil produced in 2015. Because the valuations of oil companies depend very heavily on their booked oil and gas reserves, the 2015 performance presents some troubling questions about the long-term return for shareholders. If drillers work through their reserve base and fail to replace the oil and gas produced, eventually production will have to decline. That means so will the company’s share price.
The number of rigs drilling for oil and natural gas in the United States fell for the 15th straight week to the lowest level since at least 1940, data showed on Friday, as the energy price rout takes its toll on shale producers’ financing and their ability to drill new wells. Drillers cut 14 oil and gas rigs in the week to April 1, bringing the total rig count down to 450, oil services company Baker Hughes Inc said in its closely followed report. That compares with 1,028 oil and gas rigs operating in the same week a year ago. Oil rigs alone fell by 10 to 362, the lowest level since November 2009, while gas rigs declined by four to 88, the least since at least 1987.
Mexico’s proven oil and gas reserves dropped 21.3 percent in 2015, as the state-run oil company, Pemex, cut back on investment because of plunging crude prices. Proven reserves, known as 1P, fell to 10.242 billion barrels of oil equivalent, or boe, as of Jan. 1, down from just over 13 billion the prior year, according to the National Hydrocarbons Commission, or CNH. The new estimate for so-called 1P certified reserves was set on Jan. 1, 2016, and covered oil and gas fields believed to have a 90 percent chance of being extracted with existing technology. Proven reserves of crude oil fell 21.3 percent to 7.6 billion barrels, while reserves of gas fell 17.3 percent to 12.7 billion cubic feet, according to the CNH data.
World Oil: Sinopec to double natural gas output by 2020
China Petroleum & Chemical Corp., one of the country’s state-run energy giants, plans to ride a wave of new gas discoveries to double annual output to 40 Bcm by 2020, as the country pushes to replace coal with the cleaner fuel. Sinopec, as China Petroleum is known, will produce 29.5 Bcm of conventional natural gas, 10 Bcm of shale gas and 500 MMcm of coal-bed methane by 2020, almost doubling its 2015 gas output of 20.8 Bcm, Chairman Wang Yupu said at a press conference in Hong Kong Wednesday. The 2020 target doesn’t include 2 Bcm of annual output from a shale gas production facility in southern Sichuan province that Sinopec will begin building this year, President Li Chunguang said at the same event. The bulk of the company’s shale gas output comes from its flagship Fuling field in Chongqing, Li said.
Russian energy giant Gazprom expects that its gas exports to Europe will reach record levels in 2016, the company’s CEO Alexey Miller said Friday. He added that the company saw a growth of export to the countries, who had used to be net exporters, including the United Kingdom and Netherlands. According to Gazprom, its export to the countries outside the Commonwealth of Independent States (CIS) has been increased by 28 percent in the first quarter of 2016. In January, Miller said that in 2015 Gazprom increased its European gas exports by 8 percent to reach 159.4 billion cubic meters of gas.
Financial Times: China wind energy groups cry foul over curtailment
China’s wind industry is considering legal action against government ministries in three Chinese provinces in an attempt to force the country to use more wind energy, as systemic problems hinder Beijing’s commitment to cut fossil fuel use. China has emerged as the world’s top region for wind power, accounting for a third of global installed capacity after overtaking the EU last year, according to the Global Wind Energy Council. But much of the electricity produced by its vast wind farms goes unused, with grids unable to accommodate fluctuating sources of power and amid rising overcapacity in the country’s total power generation. Chinese curtailment of wind power totalled 34bn kilowatt hours in 2015 — equivalent to the amount needed to power 8.5m UK households, according to the association. In winter, when curtailment rates are highest, wastage reaches as high as 60 per cent in some provinces. The association estimates that wind power companies lost a total of Rmb18bn ($2.8bn) because of curtailment in 2015.
The Japanese government has decided to lower feed-in tariff rates for solar power, as more than enough solar power capacity to meet its energy target is now expected to come online. The Ministry of Economy, Trade and Industry aims to reduce the feed-in tariffs for both systems by 2-3 yen per year through fiscal 2019. The government introduced a feed-in tariff system in fiscal 2012 to promote development of renewable energy power generation. The system has apparently worked since more than 1.5 million households now have solar power systems. And many businesses have installed large-scale solar farms. But on the flip side, the system has pushed up utility bills, since power companies naturally pass on the cost increases to customers. In fiscal 2016, this extra cost is estimated at about 675 yen per month for the typical household, up 10-fold from fiscal 2012.
The world’s largest renewable energy developer, SunEdison, may be on the verge of filing for bankruptcy protection; its stock has fallen from a high of $30 per share in June last year to 36 cents today. A Wall Street Journal report this week revealed that SunEdison is being investigated for overstating its cash position. SunEdison’s shares have fallen drastically since then. Today, SunEdison is $11 billion in debt, according to Reuters. By contrast, in 2014, the company, with about 7,200 employees, pulled in $2.4 billion in revenue with an operating income of $536 million. During the previous 12 months, shares of SunEdison had gained 175%, “placing it among the top performers in solar stocks,” according to a MarketWatch investor bulletin at the time. A SunEdison spokesperson declined comment.
Business Morning: Gore, Attorneys General Announce Climate Change Coalition
A coalition led by New York Attorney General Eric T. Schneiderman and former Vice President Al Gore announced a partnership to combat climate change on Tuesday. The coalition includes Attorneys General William Sorrell of Vermont, George Jepsen of Connecticut, Brian E. Frosh of Maryland, Maura Healey of Massachusetts, Mark Herring of Virginia and Claude Walker of the U.S. Virgin Islands. The announcement came during a one-day attorneys general climate change conference in New York. “With gridlock and dysfunction gripping Washington, it is up to the states to lead on the generation-defining issue of climate change,” Schneiderman said in a statement. “We stand ready to defend the next president’s climate change agenda, and vow to fight any efforts to roll-back the meaningful progress we’ve made over the past eight years. Our offices are seriously examining the potential of working together on high-impact, state-level initiatives, such as investigations into whether fossil fuel companies have misled investors about how climate change impacts their investments and business decisions.”
The Energyst: Government backs Adonis’ smartgrid plan
The government will implement the recommendations of the National Infrastructure Commission, according to the Budget statement. The National Infrastructure Commission last week urged Decc, Ofgem and National Grid to align the smartgrid building blocks of demand-side response and battery storage together with local grid control. It claimed such an approach would lead to £8bn bill savings by 2030 by ensuring the UK does not have to build as many new power stations. The Commission also said better interconnection with Europe must be prioritised. Although there is little detail on how those recommendations will be implemented, by backing the Commission’s report the government is mandating major structural change of the energy industry. One concrete detail is that Treasury will make “at least £50 million” available to support demand-side response, energy storage and other smart energy tech. It will also support up to 9GW of interconnection. Meanwhile, according to the Budget Statement, Ofgem will consult on the future of its innovation competition later this year to ensure the projects it is funding start delivering a smarter grid. The Budget also announced a small nuclear reactor competition and £30m in funding to develop small nuclear capability.
The government will be forced to come up with another mechanism to get new gas power stations built as the capacity market “isn’t working,” the former chief executive of RWE Npower has said. The trouble is nobody wants to build new gas right now because they can’t see enough spikes in the price to warrant building new gas without some sort of incentive,” said Paul Massara, speaking at an event in London. Massara said excessive market intervention is one of the main barriers to more gas being built, adding that the unintended consequences of government policy are “absolutely rife in the energy sector at the moment.” He highlighted subsidies for renewables, which he said had left gas plants only able to run in “shoulder periods” for four to six hours a day. “You’ve got an intervention in every single part of the market … Surprise, surprise if you intervene everywhere else you are going to have to intervene on gas”, he continued. “My prediction is that the government will have to come up with some mechanism beyond the capacity market to encourage new gas builds.”
It went largely unnoticed by the general media, but last week there was a significant announcement for the UK gas industry: the country’s main gas storage site may have its capacity cut by around a quarter, reducing the volumes that can be held in reserve next winter. The UK’s main gas storage site is the Rough storage facility, operated by Centrica Storage. Rough is an offshore gas field, located in the North Sea some 29 km off the coast of Yorkshire. Rough began producing gas in 1975 and was converted into a storage facility in 1985, allowing gas to be pumped back offshore in the warmer summer months ready for withdrawal during the higher heating demand periods of winter. According to National Grid’s latest Ten Year Statement on the national gas network, Rough alone makes up 72% of the UK’s existing gas storage capacity. Centrica Storage says that during a recent routine inspection of the facility, it “identified a potential issue with well integrity that could affect all Rough wells.” The company says it is “still evaluating if the well integrity issue can be remedied and, if so, how long this would take.” But it warned that as a result it may have to cut the amount of stock that can be held in Rough by around a quarter, from a maximum 41.1 TWh achieved in 2014 to a new capacity of around 29-32 TWh (from around 3.9 billion cubic meters to around 2.7-3.0 Bcm).
Telegraph: Reprieve for Fiddler’s Ferry
The Fiddler’s Ferry coal plant, which was earmarked for closure, has had an unexpected reprieve after securing a new contract to provide “ancillary services” to the National Grid. The plant in Widnes, Cheshire, which is owned by energy firm SSE, will now remain open until March 2017, safeguarding 213 jobs. The one-year contract will use just one of the four available units at the power station but two further units will now be entered into market auctions, SSE said. Three of the four turbines were previously set to close by April this year. “Challenging economic and environmental conditions for coal as the UK cleans its electricity mix mean that the longer term future of the site remains uncertain but we are very pleased to have secured this 12 month contract,” said Martin Pibworth, a director at SSE. The site currently provides two gigawatts of power to the north west of England, producing enough electricity to supply around two million homes.
Britain’s special relationship with China is becoming more expensive by the day. It now threatens to destroy the British steel industry, a foundation pillar of our manufacturing economy. Britain is not alone. Most of Europe’s steel foundries are heading for annihilation under the current EU trade regime. What we know is that the British government has for the last three years been blocking efforts by the EU to equip itself with the sort of anti-dumping weaponry used by Washington to con-front China. The EU trade directorate has been rendered toothless by a British veto. “The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade,” said one official in Brussels bitterly.
Herald Scotland: Government to scrap Scottish island green energy plan?
A major scheme to unlock the green energy potential of Scotland’s islands is at risk, industry leaders have warned, amid growing concerns the UK Government is preparing to ditch promised subsidies. Industry insiders have warned time is running out for the Department of Energy and Climate Change (DECC) to clear its plans with Brussels. At stake is investment in the Western Isles, Orkney and Shetland potentially running into hundreds of millions of pounds. A string of major wind farms on the islands have been approved but cannot go ahead because the transmis-sion infrastructure to export the power to the mainland does not exist. Previous attempts to pro-vide extra subsidies, to allow generators to build suitable transmission cables, have fallen foul of EU state aid rules. Industry insiders have been told an agreement has been reached informally but that DECC has so far failed to make a formal bid to go ahead with the subsidy scheme, known as the Remote Island Wind Contract for Difference (CfD). The delay has prompted fears the UK Government is preparing to scrap the plan.
Plummeting coal use in 2015 led to a fall of 4% in the UK’s annual carbon dioxide emissions, according to government energy statistics published on Thursday. Coal is now burning at its lowest level in at least 150 years. The closing of old polluting coal-power stations and the rapid rise in renewable energy meant coal consumption fell by 22% compared to 2014, the biggest drop ever seen outside of miners’ strikes, according to analysts at Carbon Brief. Production of coal in the UK also fell to a new record low, dropping by 27% due to mines closing. The rapid decline in coal use is continuing in 2016, with four more stations closed in the last fortnight, including Longannet, Ferrybridge and Eggborough, leaving six operational. The government has pledged to close all coal plants by 2025 to help meet climate change targets.
Offshore Wind Journal: Renewable energy industry could be harmed by Brexit
The UK’s renewable energy industry could be harmed by Brexit with the loss of incentives to develop a low-carbon economy, legal experts have told OWJ. Pinsent Masons said a vote to leave Europe could remove legally binding carbon-free targets, which in turn could dilute the political will to deliver green power. Glasgow-based planning specialist Jennifer Ballantyne, a partner in the international legal firm, warned of the paradox facing the UK renewable sector if Britain opts for Brexit. “It is a huge contradiction that Brexit could result in a system where it is easier to develop renewables infrastructure in the UK, but at the same time there could be no strong incentive to make it happen,” she said. “There is good and bad for the industry in terms of the UK’s current relationship with the EU.”
Britain must be on alert for terrorists trying to get their hands on nuclear materials or launch devastating cyber-attacks on nuclear power stations, the Government warned last night. David Cameron is jetting to Washington to hold talks with Barack Obama and other world leaders on how to stop nuclear material falling under the control of Islamic State and other fanatics. During a two day summit, Mr Cameron will pledge British support to help secure nuclear sites across the globe and prevent IS seizing the materials to make a ‘dirty bomb’. The UK and United States will take part in a joint exercise next year to prepare for any online attack against nuclear power plants and waste storage facilities.
The U.K.’s steel crisis — worsened by Tata Steel Ltd.’s decision to sell its plant in Port Talbot, South Wales — has been exacerbated by three green taxes that the government implemented to boost clean energy, according to the manufacturer’s association EEF. The three levies are the Carbon Price Floor, Renewables Obligation and Feed-In Tariff policies. Together, they increase steelmakers’ energy costs by about 30 pounds ($43) per megawatt-hour this year, Electricity is an enormous cost for steel companies. The U.K.’s seven steel plants used about 3.2 million megawatt-hours of power in 2014, according to the EEF, not including what they generated themselves. In its effort to save Britain’s last remaining steel works, Prime Minister David Cameron’s government is considering ways to reduce impact of the levies on the industry. The Department of Energy and Climate Change is consulting about a plan that would exempt energy-intensive businesses such as steelmakers from the levies, which it says would reduce tax revenue by 390 million pounds a year.
Technology Review: This New Fuel Could Make Nuclear Power Safer and Cheaper
With 65 reactors under construction worldwide and another 173 planned, the nuclear power industry is placing bets that its long-awaited renaissance is near. But making existing and new nuclear plants more economical continues to be the biggest challenge. One way to help meet the challenge is to make reactors’ fuel rods safer and more efficient. Lightbridge, a company in Reston, Virginia has unveiled a metallic fuel for nuclear reactors that it says will do just that. The fuel rods made by Lightbridge differ from today’s in several ways. Rather than a ceramic oxide of uranium, they’re made of a uranium-zirconium alloy that transports heat more easily. And rather than a tube that contains cylindrical uranium pellets, each one is a single piece of metal, ridged like a piece of licorice and spiraling in a helix. This shape allows more water to flow across the rod’s surface, transferring more heat and thus increasing electricity generation. The bigger surface area also increases the safety margin of the reactor core, allowing the rods to sustain nuclear reactions at much lower temperatures: their internal temperature during operation is around 360 °C, nearly 900 degrees cooler than conventional rods.
Rail is commonly regarded as a green form of travel, typically boasting lower levels of carbon emissions and air pollution than road transport, but could it also serve to deliver a cleaner and more resilient power grid? That is the hope of innovative US start up Advanced Rail Energy Storage, LLC, which yesterday announces it has secured a crucial right-of-way lease from the Bureau of Land Management (BLM) to develop its planned 50MW gravity-based energy storage project. The ARES Nevada project uses the same principles as pumped hydroelectric energy storage projects, but instead of relying on water in a water-stressed region it plans to make use of an inclined rail track and generator locomotive cars that will run along it. Once operational, the project will encompass 106 acres of public land in Southern Nevada, near Pahrump in Clark and Nye Counties. ARES plans to connect the energy storage system to the power western grid via the facilities of Valley Electric Association, providing grid stabilization services to the region. “Creative solutions like ARES Nevada provide a more reliable and modern electric grid and help create an even cleaner energy future for our citizens” said Angie Dykema, Director of the Nevada Governor’s Office of Energy.
Carbon Brief: Is climate change good news for the UK wine industry?
Not so long ago, the prospect of a world-class English wine industry was a pipe dream. Thirty years on and the UK wine industry is blooming. Where premier champagne houses once turned their noses up at an English vintage, our sparkling whites are now celebrated by wine buffs the world over. The UK industry attributes at least some of its success to climate change, says Alistair Nesbitt, one of the UK’s leading researchers on wine-production. From Riesling to Chardonnay, warmer weather has seen yields flourish and wine quality skyrocket. But there’s little room for complacency. The biggest risks to successful grape growing haven’t gone away and may even by amplified as temperatures climb higher, says Nesbitt. According to his research, two thirds of UK vineyard owners view climate change as a threat to their livelihoods, not as a benefit.
This creature, this tiny newborn person, was half me. I felt a primordial bond that I’d never felt before, a connection different from anything I’d ever known. And I realized a deep, heavy re-sponsibility: protecting him was instantly the most important job of all my jobs – to keep this thing alive, healthy, happy, thriving. Future climate meltdown was already a theoretical concern for future generations: what kind of world would my great-great-grandchildren inhabit? Now it all feels more pressing. How am I going to protect my kid? Was it fair for me to bring him into this world at all? Was it immoral? Was I complicit in the damage? I remember every extra paper towel I’ve ever unspooled from the roll, and think about a tree falling in the Amazon, and then think about my son growing up in a gray, dying world – walking towards Kansas on potholed highways. Maybe while trying to protect his own son, like the father in The Road. Will he decide to have a kid? I have foisted upon him a decision even more difficult than my own. It’s all very depressing.