Tags Posts tagged with "renewable energies"

renewable energies

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Long-term contracts, known as power purchase agreements, are transforming how companies buy and sell renewables-based electricity in Europe with profound implications for the sector.

Scope Ratings says the surging demand for PPAs represents a profound shift in risk-bearing in the sector: from operators of unregulated renewable energy power plants (utilities, independent power producers and financial investors), on the one hand, to so-called off-takers, on the other. Besides energy suppliers, owners of generation assets increasingly find direct buyers with energy-intensive corporates.

For the seller of electricity under a PPA, the PPA can be considered a tool of risk transformation,” says Sebastian Zank, analyst at Scope. “For the off-takers, the long-term visibility on energy procurement, potential for profit associated with PPAs and reputational benefits offset the extra risk they take on,” Zank says.

We believe the overall impact of PPAs for sellers and off-takers is credit-supportive,” he says. However, the overall impact depends on the specifications of used PPAs and the impact on a seller’s revenue and margin recognition or an off-taker’s raw material procurement strategy.

PPAs do, however, introduce significant counterparty and forecasting risk because the contracts are complex, non-standardised transactions between a buyer and a seller unlike hedging transactions for conventional sources of electricity which typically take place on power exchanges or through short-term contracts.

The primary catalysts for PPA take-up in Europe are the phasing out of subsidies for newly installed wind and solar assets across Europe and the achievement of “grid parity” in many countries whereby solar- and wind-powered electricity generation has become competitive on price with coal, gas and nuclear power.

Owners of unregulated renewable energy assets/projects – such as Encavis, Energparc, Energiekontor, Neoen, Akuo – renewables divisions of large European utilities or financial investors – such as Octopus Investments, Aquila Capital, Greencoat Capital, Luxcara – have a natural interest to hedge electricity sales over a longer time horizon. Such long-term hedges in the form of PPAs are already well established with off-takers such as energy traders or utility incumbents, for example: Engie, Vattenfall, Axpo, Alpiq, Uniper among others.

Extra demand for PPAs is increasingly coming from industrial and corporate consumers, particularly energy-intensive companies. Aluminium supplier Alcoa, steelmaker ArcelorMittal and state railway companies Deutsche Bahn and SNCF are among those with PPAs in Europe wanting to procure environmentally friendly power supplies which they can use to burnish their “green credentials,” hence recent PPAs with renewable-energy suppliers.

The global market for corporate PPAs with direct consumers of electricity is set for a new global high this year, with the 13 GW contracted in the first nine months of the year already at the level of mid-to-long-term PPAs signed for all of 2018 – itself a record year – with much of the growth in the Americas.

Europe is catching up: “We expect continued strong growth in Europe judging by recent corporate PPAs struck in Q3 2019,” says Zank.

PPAs in EMEA, primarily Europe, will likely cover a renewables capacity of around 3 GW of electricity this year, up 30% from 2018. And this volume comes on top of the PPA signed between sellers and energy suppliers which is estimated at a volume of between 7 and 10 GW per annum (Source: Pexapark).

Another shift related to the rise in use of PPAs is the growing competition that the trading/supply businesses of incumbent European utilities face from smaller competitors. Consumers can directly procure energy volumes directly from the generator without an intermediary and newcomers, such as the energy-supply arm of British Octopus Energy, or smaller energy suppliers, such as Audax Renovables or Factorenergia, can source electricity using PPAs struck with individual renewable-energy projects without necessarily having generating assets of their own.

In doing so, they can take on the trading and even retail operations of the incumbents,” says Zank.

Source: Scope Ratings

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The RE-Source Platform has launched a comprehensive new toolkit, offering guidance and advice on corporate sourcing of renewable energy. The toolkit has a dual purpose: first, to raise awareness and inform entrant corporates and policymakers to the opportunities in sourcing renewable energy; second, to facilitate business transactions between buyers and sellers, making them faster, easier, and cheaper.

 

The Renewable Energy Buyer’s Toolkit includes an ‘Introduction to Corporate Sourcing in Europe’ report, that outlines the main business models of corporate renewable sourcing in Europe, and is intended for corporate energy buyers who are new to corporate sourcing and the European market to use as an introductory ‘how-to’ guide, helping them to start their journey in renewable electricity purchasing. The toolkit also includes:

  • European Federation of Energy Traders (EFET) Template corporate PPA: A standardised contract to provide guidance and simplify transactions.
  • European Corporate Sourcing Directory: Information on possible models of corporate sourcing in particular countries.
  • PPA training courses for corporate buyers: How to value and compare corporate PPAs.

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Europe has set a target that 32% of its energy should come from renewables by 2030, up from 17.5% today. Corporates are and can play an even bigger role in meeting this target. Thousands of key corporate buyers – including from the steel, aluminium, ICT, and chemicals industries – and clean energy suppliers, are meeting in Amsterdam at the RE-Source 2019 event – for a two-day conference to discuss how to accelerate efforts to source more renewable energy.

The last weeks have seen an abundance of significant solar and wind sourcing agreements from major corporates around the world. Google announced its largest corporate renewable purchase in history, including nearly 800 MW of new renewable energy in Europe. Amazon recently unveiled plans to reach 100% renewable energy by 2030.

The Airports Council International (ACI Europe) also announced at the event a new partnership with the RE-Source Platform to accelerate the clean energy transition of the airport industry and help it achieve its 2050 net zero commitment. In addition, the RE-Source Platform received a €500,000 grant from Google.org to fund further the development of new renewable energy purchasing models, provide training and resources for consumers, and enable more widespread access to clean power.

Corporate sourcing of renewables has risen rapidly in Europe, with 7.5 GW of Power Purchase Agreement (PPA) deals signed over the past five years, and 1.6 GW worth of deals in 2019 alone. More European countries are engaging in PPA deals: 13 countries have inked PPAs in 2019 so far. Commercial and industrial on-site corporate sourcing accounted for 3.4 GW in 2018 and is expected to grow considerably in the next decade.

Industrial and commercial consumers account for more than half of Europe’s energy consumption today. Powering these corporate consumers with renewable energy could deliver both significant reductions in CO2 emissions and make European industries more competitive due to the rapidly falling cost of renewables.

According to a recent study from the European Commission, if EU-based corporate buyers committed to sourcing renewable electricity to meet 30% of their total electricity demand by 2030, the EU renewable energy sector would generate more than €750bn in gross added value and over 220,000 new jobs.

Governments can play their part in facilitating more companies to source renewables, by removing administrative hurdles for corporate renewable PPAs, and on-site and direct investments in renewable energy generation that exist throughout Europe. Under the new Renewable Energy Directive, European governments now have the duty to remove these barriers. Currently, only two of the draft National Energy and Climate Plans for 2030 even mention PPAs and none comply with the agreed legislation.

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Spanish renewable energy developers, asset owners and Independent Power Producers (IPPs) are missing out on opportunities to engage with international investors and maximise the value of their assets in the primary and secondary markets. This is according to Augusta & Co., a specialist financial adviser to the renewable energy industry, which has managed transactions to an aggregate value of over €10 billion throughout Europe.

In particular, Augusta has highlighted the limitations of an insular approach, whereby Spanish asset owners selling on projects are choosing to engage in bilateral discussions with familiar investors, rather than seeking to broaden the pool of prospective buyers – both domestic and international – via a Structured Sales Process.

These bilateral discussions limit the value that sellers can unlock from their assets, often allowing buyers to take the upper hand and dictate pricing. They are also leaving sellers vulnerable to complexities or weaknesses in the eventual Sales Purchase Agreement with respect to factors such as warranties or financial penalties.

Indeed, Augusta estimates that Spanish IPPs and developers could be missing out on up to 20% of potential asset value as a result of limitations to negotiating power, and inability to fully engage with the international investment community.

Spain is currently a hotspot for European renewable energy, and has recorded a huge amount of deal flow over the past 18 months, demonstrating considerable investor appetite,” said Axel Narváez, Managing Director, Head of Spain, Augusta & Co. “In order to sustain this momentum, however, and for owners to unleash full value from their development and operational projects, the market needs to ensure that it is open to and bringing on board the investors that are the best fit for these assets.

By entering a Structured Sales Process, supported by an advisor with a genuinely international network, developers and IPPs in Spain can mitigate the risks inherent in dealing with a single party, and ensure that they achieve a fair sale value.

For Spanish asset owners, an independently managed Structured Sales Process will bring a broader range of potential investors into play, including institutional investors from Spain and overseas. This will create a more competitive environment in which sellers have greater control over the terms of the sale, and the valuation of their project or portfolio.

By creating – and then narrowing down – a targeted shortlist of investors, advisors can ensure that buyers are sought who have a genuine interest in the asset and are prepared to offer a fair price. In turn, engagement with the wider international investment community will support Spain’s ambitions to more than double its installed asset base and meet its ambitious target of 74% renewable energy generation by 2030.

Source: Augusta & Co.

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Public and private sector leaders are being urged to double annual investments in renewable energy to keep the world well below 2°C of warming, says a new report by the International Renewable Energy Agency (IRENA) published ahead of the UN Climate Action Summit in New York. With just 11 years left for action to limit the effects of climate change, annual investments of USD 4.3 trillion in the energy sector until 2030 is the world’s most practical and readily available climate solution.

Annual renewable energy investments for the next decade need to double from around USD 330 billion to nearly USD 750 billion per year until 2030.

The findings form part of a new climate investment report by IRENA that highlights how cumulative global energy investments must pivot overwhelmingly towards low-carbon technologies including renewables. More than USD 18.6 trillion of planned fossil-fuel investments by 2050 need to be redirected to hold the line called for by the Paris Agreement and reaffirmed by the recent special report of the Intergovernmental Panel on Climate Change (IPCC).

Despite the urgency, current investment patterns show a stark mismatch with the pathway necessary to ensure a climate-safe future. Together, renewable energy and energy efficiency, along with deeper electrification, can deliver 90 per cent of the energy-related emission cuts needed under the Paris Agreement.

It’s possible to limit climate change and meet the world’s growing energy demand by rapidly accelerating the speed at which we deploy renewable energy,” said IRENA’s Director-General Francesco La Camera. “Only an energy transformation driven by renewables will allow us to meet the goals of the UN 2030 Agenda and Paris Agreement. Renewables are the only ready and available instrument we have to hold the 1.5°C line over the next 11 years.

In meeting climate goals, we can also boost economic growth and deliver on sustainable development with renewables,” continued Mr. La Camera. “But there is an urgent need to rethink long-term energy investment decisions to ensure they lead us to the sustainable future we need. Doubling investments in renewables offers us a tremendous opportunity to improve health, create jobs, deliver economic opportunity and tackle climate change. No other solution is as plausible.”

Transforming the energy system with renewables offers a more cost-effective path than climate inaction. Every dollar invested in the energy transition will offer returns of up to three to seven times in improved human health, lower climate related expenditure and reduced subsidies.

But accelerating renewable energy deployment requires policies that create an enabling environment to unlock investment and encourage economic development, the new report concludes. IRENA will work closer to the ground, facilitating projects and assisting countries in building attractive investment frameworks for renewables. The Agency will also enhance cooperation with the private sector, international financial institutions and multilateral organisations.

In support of the UN Secretary General’s call for decisive climate action, IRENA has launched a campaign that underpins renewable energy as a practical climate action solution. In co-operation with the United Nations Development Programme (UNDP), the Agency’s “Lead the change. It’s possible with renewables” campaign aims to inform about the potential of renewable energy technologies and in turn encourage concrete climate action.

Source: IRENA

Parque eólico El Andévalo (Huelva) / El Andévalo wind farm (Huelva)

Iberdrola and Heineken España have added to their commitment to sustainability as a strategic thrust in their businesses with the first long-term Power Purchase Agreement (PPA) in Spain between an electricity supplier and a brewing group. The agreement reached by the two companies will promote the construction of a new photovoltaic plant in Andévalo, which will guarantee the supply of green electricity to the four breweries and offices of Heineken España. The plant will become operational in 2020, in PPA mode, avoiding the mission into the atmosphere of over 100,000 tonnes of CO2 a year.

Andévalo forms part of Iberdrola’s strategy of investing in clean power generation projects in Spain – where it plans to install 3,000 MW by 2022- and its commitment to using bilateral agreements with big customers who are committed to sustainable consumption as a way to promote the supply of energy at affordable, stable prices.

Through this partnership Heineken España will be able to brew its beer using only renewable energies by 2023. To achieve this, Heineken is implementing an ambitious road map which, among other initiatives, encompasses a 100% renewable electricity supply.

Located in the municipality of Puebla de Guzmán (Huelva) and with a surface area of 150 ha., the project will have an installed capacity of 50 MW and will consist of 147,000, 340 Wp polycrystalline silicon modules that will generate 82 GWh/yr. The plant will be built inside the biggest wind farm in continental Europe, El Andévalo (292 MW), developed and managed by Iberdrola since 2010.

In addition to its environmental impact, the new solar photovoltaic installation will contribute to reactivating employment in the local community

Iberdrola’s plan to relaunch clean energy in Spain

The Andévalo photovoltaic project forms part of the company’s commitment to strengthening its investment in the production of clean energy in Spain, by installing 3,000 new MW by 2022. By 2030, company forecasts point to the installation of 10,000 new megawatts (MW). The plan will create jobs for 20,000 people.

Iberdrola’s commitment is to lead the transition toward a completely carbon-free economy by promoting renewable energies and accelerating investment in Spain, where it intends to spend 8 billion euros between 2018 and 2022.

Iberdrola is the most prolific producer of wind energy in Spain, with installed power of 5,770 MW, while its total installed renewable capacity, including both wind and hydroelectric, is 15,828 MW. The company operates 883 MW in Andalusia, mainly using wind power. Globally, Iberdrola’s installed renewable capacity is over 30,300 MW, which makes its generation fleet one of the cleanest in the energy sector.

Iberdrola is a global reference point in the area of PPAs and has long-term power purchase agreements (PPAs) in markets that include Spain, United States and Mexico, with wind and photovoltaic power projects totalling over 1,500 MW. In Spain, the company has been a pioneer in promoting this type of agreement with companies from various sectors (banking, telecommunications, distribution and sports brands).

Beer brewed 100% using renewable energy: the commitment from Heineken España

After covering all the demand for electricity from its breweries in Spain with the development of this new solar photovoltaic installation, Heineken’s plan focuses on replacing its current gas boilers with others that use solar energy in order to bring about its commitment to making its beers using only renewable energy by 2023.

These measures form part of its sustainability strategy Brewing a Better World, which focuses on six priority areas in which the company considers that its activities can make the most positive impact. Among them is the fight against climate change by reducing the amount of CO2 emitted into the atmosphere, a commitment on which Heineken España has made great progress in recent years by reducing its carbon footprint by 64% since 2008. In 2018, the company succeeded in meeting the 2020 goals two years ahead of schedule, setting new challenges for 2030 in the areas of production, cooling and packaging in order to meet the commitments of the Paris climate conference (COP 21) and the UN Sustainable Development Goals (SDG), among which is the commitment to using only renewable energy for the entire production of its beers by 2023.

Source: Iberdrola

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Inerco Ingeniería, Tecnología y Consultoría enters a Strategic Business Alliance Agreement with the energy storage company SaltX Technology – listed on Nasdaq First North Premier –. The partners enter a joint development plan where the first step is to build a pre-commercial pilot in Megawatt scale during 2020.

Inerco has a strong reputation within thermal power generation engineering and technology. The Energy Storage system to be designed will be charged using a non-dispatchable renewable energy or high temperature waste heat. This system will also allow a controlled discharge in periods of high energy demand, as decarbonised high temperature heat (producing steam for electricity generation or heat for direct industrial use).

The goal is to lower the dependency on fossil fuels and increase the flexibility of thermal and renewable power plants. The partners have also agreed to a road map for commercialising the solution. The target markets for the alliance will initially be Spain, Portugal, Central and South America and Mexico. INERCO will be responsible for the development of the first pilot and will also lead the funding of it.

“Inerco finds relevant advantages in nanocoated salts for thermochemical energy storage, which have led us to establish a strong partnership with SaltX. The future of the energy sector undoubtedly implies the use of robust and cost-effective energy storage solutions to be integrated with hybridised conventional and renewable energy sources. SaltX´s nanocoated salts present intrinsic advantages with respect to systems based on other energy storage principles, such as those using molten salts, concrete, or electric batteries, due to their improved energy efficiency, management and safety characteristics. With this technological approach INERCO is convinced about finding competitive solutions for the new decarbonised energy scenario related to both power generation and energy intensive industries”, says Pedro Marín, CEO of Inerco.

Source: Inerco

Fotowatio Renewable Ventures (FRV), part of Abdul Latif Jameel Energy and a leading global developer of renewable utility-scale projects, has announced the financial close for Potrero Solar (296 MW dc), the Company’s second solar farm in Mexico.

FRV reached financial close last March with the International Finance Corporation (IFC) and Banco Nacional de Comercio Exterior (Bancomext), and it is expected that the plant which began construction in late May, will be completed by mid- 2020.

Potrero Solar is FRV’s first project in Mexico to be financed before having any of its products (energy, CELs or capacity) committed in the tender schemes, and one of the largest merchant PV projects worldwide. It is also one of the world’s largest PV projects to use bifacial technology. Once operational, the plant will trade the electricity generated as well as the associated clean energy certificates at the country’s energy market.

With an approximate area of 700 ha, Potrero Solar will be located in Lagos de Moreno, in the state of Jalisco, and will use bifacial PV modules, a new technology that has the ability to capture both direct sunlight from both the front and reflected light from the rear side.

The solar power farm will generate around 700 GWh of clean energy each year, enough to supply around 350,000 average Mexican homes and reduce the emission of 345,000 T/year of CO2. In addition, Potrero, which will be built by a consortium formed by multinationals Power China and Prodiel under an EPC contract, will boost the economic development of the local community including the potential of around 1,500 jobs during its construction phase.

Fernando Salinas, Managing Director of FRV Mexico and Central America, highlights: “Mexico is a country that offers numerous opportunities for both FRV and international investors, due to its favorable market and weather conditions for renewable energy projects. Potrero’s financial close marks a milestone as the largest bifacial plant in the world and FRV’s first fully merchant project in Mexico. By carrying out this flagship project that will lead the way for other large-scale bifacial PV plants and that is also one of the largest PV merchant projects worldwide, FRV demonstrates its leadership once again and its ability to be a spearhead in the wider renewable energy industry.”

Bancomext assures that “Potrero Solar has all the features a financial institution looks for during a transaction: an experienced, highly professional sponsor, high-quality technology, an EPC provider with a well-proven track-record and a solid financial structure. With this project, Bancomext reaffirms its leading position in the Mexican market, supporting renewable energies under the ‘spot market price’ scheme and fostering job creation in the country during the construction and operation phases.”

Fady Jameel, Deputy President and Vice Chairman of Abdul Latif Jameel, said: “At Abdul Latif Jameel Energy, we are delighted to move forward to the next phase of the Potrero project. Potrero confirms FRV’s positioning as one of the leaders in the global renewable energy sector and further reinforces our long-term commitment to Mexico’s drive for clean energy. Mexico is a strong and promising market for FRV and Abdul Latif Jameel Energy, and we look forward to seeing Potrero spearhead the development of the sector in the country and further afield.”

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CoreMarine and CENER (National Renewable Energy Centre of Spain) have signedof a consortium agreement to promote engineering services to the floating offshore wind industry. This collaboration will combine their expertise in a one-stop shop for the development of floating wind projects.The combined offering will support projects from research and FEED studies, to simulation of components, detailed engineering and installation support.

Specifically, the agreement focuses on floating foundation design, mooring and dynamic cable analysis, transport & installation, wind turbine modelling, coupled analysis and scale model testing. Both entities have recognized the need to address the specific concerns and needs of the emerging floating wind industry.

As far as we can see, this is the first offering to the floating wind market from front end engineering and model testing through to detailed design and installation. This is a first for the industry and represents a significant strengthening of our capabilities in the floating wind sector”, says Carlos Lopez, director of CoreMarine Spain.

Additionally, Antonio Ugarte, director for the Wind Energy Department at CENER, comments: “Currently it is necessary to implement the latest tools for simulating wind components and validation tests in industrial processes. The alliance between CoreMarine and CENER makes it possible to combine precisely the engineering processes with the most advanced methods for the design, construction, transport and installation of innovative solutions for offshore wind energy”.

Over recent years both CoreMarine and CENER have made their commitment to floating offshore wind and have gained extensive know-how and experience in the engineering, design and validation of floating structures. This agreement solidifies and strengthens the commitment of both entities and provides added value to this emerging industry.

Source: CENER

Installed capacity of renewable power in Colombia is expected to rise from 2% in 2018 to 14% in 2025, with a further rise to 21% by 2030. Renewable capacity in the country is slated to increase fivefold to reach 5.9 GW at a compound annual growth rate (CAGR) of 24.4%. This growth can be attributed to new government policies facilitating funds for renewable energy projects, energy efficiency measures and announcement of renewable energy auctions in 2018, says GlobalData.

However, GlobalData’s latest report, “Colombia Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations and Competitive Landscape, also reveals that the country’s coal-based capacity will increase by 43% between 2018 and 2030 to reach 2.4GW while gas-based power will contribute 14% of total capacity.

Renewable energy and energy efficiency projects will handle the demand side management in the near future. The country’s onshore wind capacity is expected to increase from 19.5 MW in 2018 to 3.4 GW in 2030, representing the country’s largest growth among its renewable sources. PV capacity is expected to reach 1.7 GW in 2030 from 172.6 MW in 2019 at 23% CAGR, while the biopower segment will see growth of 7% CAGR to reach 719 MW. To date, Colombia does not have any installed geothermal capacity but it is expected to have 50 MW installed by 2024, leading to 115 MW capacity in 2030 growing at 15% CAGR.”

Colombia’s Generation and Transmission Expansion Plan 2015-2029 is expected to accommodate high volumes of renewable energy in the near future. The anticipated grid expansion and modernization of 4.2GW to 6.7GW, which is aimed to support 1GW coal and 1.5 GW hydro, will involve huge investment in grid infrastructure industry. This, in turn, is likely to open up new markets for energy storage and energy efficiency systems to enable steady supply of power when adequate renewable energy is unavailable.

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