Tags Posts tagged with "renewables"

renewables

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The mining industry faces an interesting paradox. It is the lynchpin of the transition to a low-carbon economy, providing the materials that go into new grids and electric vehicles, yet miners’ extraction processes gorge on large amounts of power. Miners account for 6% of the world’s energy demand, and meet most of it with fossil fuels.

Miners, which account for 22% of global industrial emissions, are facing more pressure to decarbonize than ever before – from investors, customers in the technology and auto industries, and even consumers further downstream. Companies recognize the risks to their operations from climate change, and continue to reaffirm their commitment to sustainability. Some 21 mining companies, including Glencore, Rio Tinto, BHP, Vale and Anglo American, are members of the Task Force on Climate-related Financial Disclosures, or TCFD. This means their financial reporting discloses risks and opportunities from climate change. The next step for many of these companies is implementing changes to drive direct decarbonization – a daunting task.

But things are starting to change, and fast

Mining companies have seen that part of the solution lies in tapping into renewables. Clean energy procurement by miners has accelerated to unprecedented levels in the last two years, as the drop in the cost of wind and solar power has made this an increasingly attractive pathway to decarbonize operations. Miners have contracted for 5.9 GW of clean energy in the last decade – three quarters of which was signed up in the past two years.

Big conglomerates have been driving this activity, such as BHP, which last year said renewables will power 100% of its largest copper operations in Chile by 2025. Rio Tinto has similar ambitions, announcing a plan last month to invest $1.5 billion to reach net-zero scope 1 and 2 emissions by 2050.

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A long way to go

Despite this momentum, solar and wind are still just a small fraction of the energy used by the industry today. Miners have been much slower in adopting renewables than other corporates. For instance, Google alone has procured more clean energy than the entire mining sector in the last decade.

Investors will play a big role in accelerating activity. The sustainable debt market is now worth more than $1 trillion, with major asset managers and institutional investors like Blackrock committing to divest from companies that are not aligned with a low-carbon transition. Increasingly, mining companies have to engage in decarbonization in order to access capital.

What does the path for 100% clean energy in the mining sector look like?

Solar and wind are the cheapest forms of new generation capacity in two-thirds of the world. This means miners can negotiate off-site, long-term power purchase agreements, or PPAs, at lower prices than thermal generation. It also allows them to sidestep the volatility of energy markets.

PPAs are the preferred clean energy procurement mechanism for miners. Many deals are structured as so-called sleeved contracts, in which a utility or energy retailer pulls from a portfolio of clean-energy projects to deliver round-the-clock electricity to mines. This model has proven effective in Chile, the leading country for renewable energy in mines. It allows companies like BHP or Anglo American to meet 100% renewable energy targets without forfeiting reliability.

Alternatively, miners can also install renewables on site at their operations. Mines could save up to 25% of their total electricity costs by leveraging solar, wind, or batteries on site, according to BNEF models. On-site renewables will appeal to mines where grid or fuel access is difficult, expensive, or unreliable – a common theme in markets like South Africa, Zimbabwe and Australia.

Source: BNEF

Amazon has announced four new renewable energy projects in Australia, Spain, Sweden, and the US that further support Amazon’s commitment to reach 80% renewable energy by 2024 and 100% renewable energy by 2030 on path to net zero carbon by 2040.

Amazon is investing globally to enable new renewable energy projects as the company works towards net zero carbon by 2040. Amazon’s first renewable energy project in Australia is a 60 MW solar project anticipated to come online in 2021 in northern New South Wales. Once complete, the project is expected to generate 142,000 MWh of clean energy annually, which is equivalent to the annual electricity of almost 23,000 average Australian households.

Amazon’s newest renewable energy projects in Europe include 122 MW from an onshore wind project in Västernorrland, Sweden, expected to come online 2022, and a new 50 MW solar farm in Zaragoza, Spain, expected to begin operations in 2021. Once enabled, these projects have the capacity to power the equivalent of 158,000 average European homes each year.

Amazon’s newest solar project in the US will be located in Halifax County, Virginia. The 65 MW solar project is expected to generate over 150,000 MWh of renewable energy annually and will be Amazon’s 11th renewable energy project in the Commonwealth of Virginia. Separately, Amazon also recently announced a new solar project in Pittsylvania County that will power Amazon’s new HQ2 headquarters along with other Amazon-owned operations across the Commonwealth, including Whole Foods Markets and fulfillment centers.

Once complete, the four new Amazon renewable energy wind and solar projects will provide almost 300 MW and approximately 840,000 MWh of additional renewable capacity to the grids that supply energy to the company’s AWS data centers, which power Amazon and millions of AWS customers globally.

To date, Amazon has launched 26 utility-scale wind and solar renewable energy projects with over 2,200 MW of renewable capacity, that will deliver more than 6.2 million MWh of clean energy annually – enough to power 560,000 U.S. homes. Amazon has also installed more than 50 solar rooftops on fulfillment centers and sort centers around the globe that generate 122 MW of renewable capacity and deliver 193,000 MWh of clean energy annually.

Source: Amazon

FuturENERGY February 2020

Despite widespread expectations of another increase, global energy-related carbon dioxide emissions stopped growing in 2019, according to last IEA data. After two years of growth, global energy-related CO2 emissions were unchanged at 33 Gt in 2019 even as the world economy expanded by 2.9%. This was primarily due to a sharp decline in CO2 emissions from electricity generation in advanced economies, thanks to the expanding role of renewable sources (mainly wind and solar), fuel switching from coal to natural gas and higher nuclear power generation. Other factors included milder weather in several countries and slower economic growth in some emerging markets…

 

FuturENERGY February 2020

Spain’s renewable sector is at a turning point. 2019 has broken records as regards the commissioning of projects, in particular PV and wind power, the vast majority of which have been facilitated by the renewables auctions held by the Government in 2016 and 2017. The effects of these auctions will continue given that the present Government has announced its intention to auction 3,000 MW of capacity every year. Turning these projects into a reality furthermore depends on a determining factor such as the availability of financing, an item in which access to the advice and experience of sector experts is vital. One such entity is Grupo Avanza A+A, a pioneer in the successful launch and leadership of the first private equity and venture capital management funds for renewable projects…By Manuel Lopez-Feliu Mani, Principal & Business Manager, Grupo Avanza A+A.

FuturENERGY February 2020

Enercapital Developments is a company specialised in the integral development of renewable energy projects (wind and PV power). With more than 15 years of experience and hundreds of projects undertaken around the world – over 5 GW in PV projects alone -, the company focuses its activity on the development of projects to bring them to the Ready to Build stage (RTB). Its services cover simple assessment to full implementation, making the company a reference in the sector. Enercapital is currently developing around 1.5 GW of PV projects in Spain, including a significant part of the Audax Renovables portfolio…

FuturENERGY February 2020

Mexico is a key market for solar power. In line with the national targets arising from the Energy Reform, by 2024, 35% of energy will come from renewable sources, a percentage that must rise to 50% by 2050. The abundant solar resource, high energy prices, the fall in technology costs and the growing need for resource diversification all combine to position Mexico among the world’s leaders in the development of the solar industry. With levels of solar irradiation that vary between 4.4 kWh/m2 and 6.3 kWh/m2, Mexico is the ideal country in which to implement solar technologies, whether PV or thermal. Forecasts rank Mexico fifth in terms of the new PV capacity expected for 2021, with 10 GW of capacity and a growth of 84%. All this places Mexico in a unique position for the development of the solar market and this is the context in which Intersolar Mexico will be held this September…

FuturENERGY February 2020

Tamoin is currently an Independent Service Provider (ISP) and a reference in the European and global wind power market. Its engineering maintenance division offers high value products and technological solutions for wind farms, maintaining over 6.5 GW of wind power in different technologies. The company’s value proposals include integrated maintenance contracts, the supply of spares and design improvements…

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Despite widespread expectations of another increase, global energy-related carbon dioxide emissions stopped growing in 2019,according to IEA data just released. After two years of growth, global emissions were unchanged at 33 Gt in 2019 even as the world economy expanded by 2.9%. This was primarily due to declining emissions from electricity generation in advanced economies, thanks to the expanding role of renewable sources (mainly wind and solar), fuel switching from coal to natural gas, and higher nuclear power generation. Other factors included milder weather in several countries, and slower economic growth in some emerging markets.

A significant decrease in emissions in advanced economies in 2019 offset continued growth elsewhere. The United States recorded the largest emissions decline on a country basis, with a fall of 140 Mt, or 2.9%. US emissions are now down by almost 1 Gt from their peak in 2000. Emissions in the European Union fell by 160 Mt, or 5%, in 2019 driven by reductions in the power sector. Natural gas produced more electricity than coal for the first time ever, meanwhile wind-powered electricity nearly caught up with coal-fired electricity. Japan’s emissions fell by 45 Mt, or around 4%, the fastest pace of decline since 2009, as output from recently restarted nuclear reactors increased. Emissions in the rest of the world grew by close to 400 Mt in 2019, with almost 80% of the increase coming from countries in Asia where coal-fired power generation continued to rise.

Across advanced economies, emissions from the power sector declined to levels last seen in the late 1980s, when electricity demand was one-third lower than today. Coal-fired power generation in advanced economies declined by nearly 15% as a result of growth in renewables, coal-to-gas switching, a rise in nuclear power and weaker electricity demand.

Source: IEA

The year 2018 saw $2.8 billion spent on renewables projects in sub-Saharan Africa (excluding South Africa) – a regional record and some $600 million more than the previous year, according to a new report published by BloombergNEF (BNEF). More renewables investment flowing to sub-Saharan African countries than ever before is a testament to how cheaper technology, investor familiarity and subsidy schemes are helping clean energy spread across the continent.

As investors cast a wider net, projects are being built outside of mature markets such as South Africa. Many utility-scale solar projects are being developed in countries that have not built much renewables infrastructure to date. Some 1.2GW of PV are expected to come online in 2021 outside of South Africa – that is more than twice the amount commissioned in 2018.

Country-level targets and incentives are backed by assistance from multilaterals, which remain a key source of finance and have helped roll out renewable energy auction programs. The World Bank’s Scaling Solar program for instance awarded just under 400MW of PV capacity over 2015-18, equivalent to 39% of the total installed outside of South Africa over the same period. Such auctions have yielded some of the world’s lowest bid prices for solar power – several projects have won capacity at prices under $0.04/kWh.

But such auctions are double-edged. On the one hand, they prove that large-scale renewables can be procured throughout the region and help develop local familiarity with clean energy. Many are bundled with features designed to reduce project costs and risk, such as pre-secured sites. Yet, as BNEF analyst Antoine Vagneur-Jones points out, “that helps lower prices, but can also lead to government expecting to procure power at the same rates for projects that are not backed by such frameworks.”

Other hurdles remain to be overcome. Several sub-Saharan African countries sport an apparent surplus in installed power generation capacity. Taken at face value, this can weaken the case for adding renewables. But plant availability issues and transmission constraints mean that the gap between supply and demand is often less clear than it would seem.

Meanwhile, a prevalence of take-or-pay contracts means that producers are remunerated for power that is not consumed. Whether by attempting to terminate or renegotiate contracts, governments are striving to reduce their obligations in countries such as Ghana, Kenya and South Africa. Achieving clarity on how to balance future clean energy investments with procurement agreements will be vital if the clean energy is to grow at scale.

The development of regional power markets will allow countries to move beyond such bilateral agreements. Power has long been traded in southern Africa, and nascent power pools in eastern and western Africa will enable countries to exchange surplus electricity across their borders. But a lack of private investment in transmission infrastructure, concentrated power markets and small generation fleets will hinder their growth.

Developers having access to guarantees and hard currency lowers barriers to investment, but risk perceptions are such that access to local financing for large-scale renewables remains a distant prospect. Yet recurrent shortages of hydropower and a shift away from financing coal by such backers as the African Development Bank are increasing the attractiveness of clean energy.

Source: BloombergNEF (BNEF)

FuturENERGY Dec.19 - Jan. 2020

The end of 2019 has brought us a new sustainability stimulus in the form of the European Green Deal. To mark this commitment, which aims to turn Europe in a climate-neutral continent by 2050, we had the opportunity to hear the European Commission’s Director-General for Environment, whose presentation on the European Green Deal closed with a quote from Benjamin Franklin: “Energy and persistence conquer all things”… By José María González Moya. Managing Director of APPA Renovables, the Spanish Renewable Energy Association.

 

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