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Concentrating Solar: Delivering Renewable Electricity When It’s Needed

MD Staff

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Last year, right after graduating from college, Hajar Abjeg left her vibrant hometown of Agadir on the west coast of Morocco to live in the middle of the desert in Ouarzazate. A newly minted engineer, her goal was to work at the sprawling solar complex on the outskirts of the city because, she said, it was the future.

“What’s exciting for me about this plant (is) that we use a resource that’s taken for granted… to produce something that is essential for us,” Abjeg said. “The more we study this kind of plant, the more we operate it, the more we find ways to make it as efficient as possible, and the less reliant (we are) on traditional energy-producing methods such as fossil fuels. And in the long term, that’s fantastic.”

Abjeg is not alone in her optimism.

Concentrating solar power (CSP) is moving ahead in many countries, especially in the Middle East, North Africa and Latin America, where exceptional year-round solar resources and vast swathes of available land make it an attractive option, often over traditional sources of power such as coal and oil.

With thermal storage that is superior to batteries for bulk energy storage, CSP provides power that is dispatchable any time there is demand for electricity. The plants store heat from the sun in large tanks of molten salt – where it can be stored for hours, days or as long as needed — and turn it into electricity on cloudy days or during peak usage, which occurs at night for many countries in the Middle East and North Africa. This allows electric utilities to regulate electricity production and integrate other variable renewable sources of electricity – solar photovoltaic (PV) or wind – into their energy mix more easily.

In 2017, CSP had a global installed capacity of 5.1 GW. That number is expected to reach 10 GW by 2022, with almost all new capacity incorporating storage, according to the International Energy Agency. Worldwide, 23 countries have CSP projects. While the largest installed capacities are in the United States and Spain, there are CSP plants in operation or under development in numerous other countries, including the United Arab Emirates, Egypt, Israel, India, China, South Africa, Chile, Mexico, Australia, Kuwait and Saudi Arabia.

In Morocco, the Noor Ouarzazate CSP project is the country’s first utility-scale solar energy complex, and expects to reach over 500 megawatts (MW) of installed capacity, ultimately supplying power to more than 1 million Moroccans and contributing to Morocco’s goal of producing 42 percent of its electricity through renewable sources by 2020.

But while CSP will undoubtedly play a role in the energy mix for some countries, significant hurdles remain.

The high cost of setting up a CSP plant is one such challenge. CSP technology is expensive and more time-consuming to build than wind or solar PV. Developing countries already face difficulties in financing capital-intensive infrastructure, so for a relatively new technology like CSP, investment can be much harder to attract. In many cases, the World Bank and other international financial institutions have stepped in and provided concessional financing to help attract private investors and make the market for CSP competitive and drive down prices even further.

Concern around costs, especially when compared to solar PV, is also a hurdle. But prices are dropping – in 2017 the cost per kilowatt hour (kWh) fell to 6 US cents in Australia and 7.3 US cents in Dubai.  Also, as CSP has a built-in storage solution, the true comparison is against solar PV plus batteries – the price of which are also falling, but remain expensive. Without costly battery storage, PV often cannot deliver power when its value is highest—which is where CSP shines. It offers the guarantee of continuous electricity production – especially at night – something solar PV cannot do.

Ultimately, solar PV plus some form of storage will likely be CSP’s biggest competitor.  But for the moment, CSP has a potentially important role in the energy mix for many countries – particularly those with abundant sunshine and available land – helping improve energy security and In Morocco, CSP is expected to decrease dependence on oil by about 2.5 million tons and reduce carbon emissions by 760,000 tons per year, CSP is expected to decrease dependence on oil by about 2.5 million tons and reduce carbon emissions by 760,000 tons per year. The Noor Ouarzazate project has also encouraged several start-ups in the country and youth, and women in particular, to pursue education and jobs in the renewable energy sector.

“The future of CSP is very bright,” said Abjeg. “When I first walked in here, (I saw) the sheer size of the plant and how much energy they produce. To produce that just from collecting sun rays – it’s amazing.”

World Bank

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The Energy Union gets simplified, robust and transparent governance

MD Staff

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An ambitious political agreement on the governance of the Energy Union was reached today between negotiators from the Commission, the European Parliament and the Council.

With today’s deal the Member States of the European Union will be equipped to govern the Energy Union – this common project aimed at ensuring that all Europeans have access to secure, affordable and climate-friendly energy. This new governance system will enable the European Union to realise its goals of becoming world leader on renewables, putting energy efficiency first, provide a fair deal for consumers and set the course for the EU’s strategy long-term greenhouse gas reduction.

By building trust and consensus between the Member States on energy and climate matters the governance will set the best way to achieve the energy transition and the modernisation of the EU economy and industry. The governance of the Energy Union will be instrumental to enable the political process required to deliver what 73% of EU citizens want: a common energy policy for all EU Member States.

Today’s deal means that four out of the eight legislative proposals in the 2016 Clean Energy for All Europeans package have been agreed by the co-legislators, after yesterday’s agreement on Energy Efficiency (see STATEMEMT/18/3997) and the agreements on 14 June and 14 May on the revised Renewable Energy Directive and the Energy Performance in Buildings Directive respectively. These four pieces of legislation complement the revision of the Emissions Trading System, the Effort Sharing Regulation and the Land Use Change and Forestry Regulation that were also adopted earlier this year. Thus, progress and momentum towards completing the Energy Union and combatting climate change are well under way. The Juncker Commission, working under its political priority “a resilient Energy Union and a forward-looking climate change policy“, is delivering.

This regulation will ensure that the objectives of the Energy Union, especially the EU’s 2030 energy and climate targets – reduction of 40% of greenhouse gas emissions, a minimum of 32 % renewables in the EU energy mix and the 32.5 % goal of energy efficiency savings – are achieved by setting out a political process defining how EU countries and the Commission work together, and how individual countries should cooperate, to achieve the Energy Union’s goals. This will be done by making sure that national objectives and policies are coherent with EU goals, while at the same time allowing individual countries flexibility to adapt to national conditions and needs. The regulation will equally promote long-term certainty and predictability for investors. The new rules stress the importance of regional cooperation in the development and implementation of energy and climate policies. EU countries are also called on to encourage their citizens to participate in the preparation of the plans. This will ensure that the views of citizens and businesses as well as regional and local authorities are heard. This will set a new relationship between European citizens and decision makers so that the governance and its national energy and climate plans all Member States of the EU to build further consensus on the best way to achieve the energy transition and move from a situation of decision by a few to a situation of action by all. This will contribute to have all Member States making the best and most cost-efficient choices and the right investments so that their energy decisions climate-consistent and avoid costly lock-ins.

Commission Vice-President for the Energy Union Maroš Šefčovič said: “With this ambitious agreement on the Energy Union’s governance, we put in place its cornerstone. It will enhance transparency for the benefit of all actors and investors, in particular. It will simplify monitoring and reporting of obligations under the Energy Union, prioritizing quality over quantity. And it will help us deliver on promises in the field of energy, climate and beyond. Now I am looking forward to the Member States’ draft energy and climate plans by the end of this year, as they send a strong signal to investors who need clarity and predictability. The Energy Union is on track, going from strength to strength.”

Commissioner for Climate Action and Energy Miguel Arias Cañete said: After agreeing on renewable energy last week, and on energy efficiency yesterday, today’s deal is another major delivery in our transition to clean energy. For the first time we will have an Energy Union Governance, fixed in the European Union rule book, encompassing all sectors of the energy policy and integrating climate policy in line with the Paris Agreement. When finalised by the Member States in their national plans, this will translate into the right investments to modernise the EU economy and energy systems, creating new jobs, lower energy bills for Europeans and reduce costly energy imports to the EU. One thing is certain, with the Energy Union governance we have the necessary stepping stone for the preparation of Long-Term Strategy to reduce the emissions of greenhouse gases that are warming up the planet and changing the climate.”

Main achievements:

  • Calls for each Member State to prepare a national energy and climate plan for the period 2021 to 2030, covering all the five dimension of the Energy Union and taking into account the longer-term perspective. These national plans would be comparable throughout the EU. Assessments of the draft plans, and recommendations by the Commission, will result in final plans that ensure that the 2030 climate and energy targets will be reached in a coherent, collaborative and least-cost way across the EU.
  • Aligns the frequency and timing of reporting obligations across the five dimensions of the Energy Union and with the Paris Climate Agreement, significantly enhancing transparency and delivering a reduction of the administrative burden for the Member States, the Commission and other EU Institutions.
  • Ensures that EU and Member States can work together towards further enhancing the ambition set up in the Paris Climate agreement and strengthens regional cooperation across the Energy Union dimensions.
  • Introduces the necessary flexibility for Member States to reflect national specificities and fully respects their freedom to determine their energy mix.
  • Ensures the follow-up of the progress made at Member State level to the collective achievement of the binding EU renewables target, the EU energy efficiency target and the 15% interconnection target.
  • Introduces a robust mechanism to ensure the collective attainment of the EU renewable and energy efficiency targets.
  • Establishes a clear and transparent regulatory framework for the dialogue with civil society in Energy Union matters and enhances regional cooperation.

Next steps

Following this political agreement, the text of the Regulation will have to be formally approved by the European Parliament and the Council. Once formally adopted by both co-legislators in the coming months, the Regulation on the Governance of the Energy Union will be published in the Official Journal of the Union and will enter into force 20 days after publication.

Background

The Regulation on the Governance of the Energy Union is part and parcel of the implementation of the Juncker Commission priorities to build “a resilient Energy Union and a forward-looking climate change policy”. The Commission wants the EU to lead the clean energy transition. For this reason the EU has committed to cut greenhouse gas emissions by at least 40% by 2030, while modernising the EU’s economy and delivering on jobs and growth for all European citizens. In doing so, it is guided by four main goals: putting energy efficiency first, achieving global leadership in renewable energies, providing a fair deal for consumers and being a leader in the fight against climate change. To put these goals into action, a robust governance system of the Energy Union is needed.

To that effect, the Commission presented on 30 November 2016, as part of the Clean Energy for All Europeans, package, its proposal for a Regulation on the Governance of the Energy Union. The Regulation as provisionally approved emphasises the importance of meeting the EU’s 2030 energy and climate targets, sets out how EU countries and the Commission should work together through an iterative process and how individual countries should cooperate to achieve the Energy Union’s goals. It takes into account the fact that different countries can contribute to the Energy Union in different ways. It also puts obligations on Member States to plan for the low carbon development in the longer run, at least 30 years from now.

If an individual country’s draft integrated National Energy and Climate Plan does not sufficiently contribute to reaching the Energy Union’s objectives, or if the EU collectively does not make sufficient progress towards these objectives, the Commission may issue recommendations to countries. The provisionally agreed Regulation also includes other ways of ensuring that the new plans are fully developed and implemented: in the area of renewable energy, these could include additional national measures (ranging from contributions to a financing platform to measures in the heating and cooling and transport sectors) and EU-level measures. In the area of energy efficiency, additional measures could in particular aim to improve the energy efficiency of products, buildings and transport.

The Regulation also foresees a more streamlined electronic reporting system, to ensure robust and transparent information in this area. The Regulation will from 2021 replace the Climate Monitoring Mechanism Regulation EU 525/2013, which governs EU’s and Member States reporting obligations towards the UN.

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OPEC’s big test: A choice between right and wrong

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As the Organization of Petroleum Exporting Countries (OPEC) prepares to meet later this week in Vienna, tension is rising among some of the cartel’s biggest members on what is said to be one of OPEC’s biggest decisions since its establishment.

On June 22, OPEC members along with Russia are going to gather once again to decide whether it is time to end a deal which has held their oil production at a certain level for near 18 months and pushed the oil prices to significant highs.

Although in making the historical deal in 2016, all members came to gather as a unanimous voice to save the market from clashing, this time the situation is far from what it was in the past.

On one side, under the U.S. influence [either in the form of alliance or sanctions] Saudi Arabia and non-OPEC-member Russia, which had a significant role in reaching the deal, are said to be willing to ease the production cap and use some of their spare capacities.

On the other side, less privileged OPEC members like Iran, Venezuela, Iraq, Angola, Libya and Nigeria whose production levels have been under pressure by different geopolitical and economic factors like U.S. sanctions and budget deficit need the prices to stay at current levels.

Since the beginning, all sides of the deal stuck with the pact and fully complied with what was decided for their production levels. Shortly after, since the U.S. shale production wasn’t able to offset the production cuts that OPEC and non-OPEC nations made, oil prices rose significantly through 2017 up to 2018 and that made the Trump administration worried about the effect of higher prices on Trump’s political stance.

The U.S. president repeatedly voiced his dissatisfaction with OPEC through social media accusing the cartel of driving up the oil prices, this consequently caused some turbulence in the market and resulted in Saudi Arabia’s reaction. As U.S. ally, they raised their production levels slightly to appease Trump and keep the prices from further rising.
It is said, though, that U.S. and Saudi Arabia have been discussing ending the OPEC/non-OPEC pact long before this week’s meeting and Saudi is going to propose what is in fact a U.S.-induced decision in Vienna.

In accordance with Saudi Arabia, Russians whose economy has been under pressure by the U.S. sanctions also seem to be intrigued by the idea of taking some of the market share that the supply losses from Venezuela and Iran is going to present.

However, Iran as one of the OPEC founders, believes that the organization should not sacrifice its members’ interests for the sake of U.S. agendas.

After writing to OPEC and calling for the organization’s support for members targeted by sanctions, Iran, along with Venezuela and Iraq, is going to veto Saudi Arabia and Russia’s proposal at the June 22 meeting.

Iran’s representative to OPEC, Hossein Kazempour Ardebili, told Bloomberg on Sunday that “Three OPEC founders are going to stop it.”

“If the Kingdom of Saudi Arabia and Russia want to increase production, this requires unanimity. If the two want to act alone, that’s a breach of the cooperation agreement,” the official said.

Iran believes that OPEC and Russia not only do not need to appease Trump, who sanctions two OPEC founders and also Russia, but they should stand against such arrogant attitudes.

All and all, considering the current global oil market which is almost balanced and well-supplied and the global economy which is stepping toward a stronger and more resilient position, hurting the oil supply and demand circle is not going to be a good idea.

It will be wiser for OPEC to abide by its basic values for protecting its members and make the right choice which is keeping the deal at least up to the end of 2018.

First published in our partner MNA

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Europe leads the global clean energy transition

MD Staff

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An ambitious political agreement on increasing renewable energy use in Europe was reached today between negotiators from the Commission, the European Parliament and the Council. Today’s deal means that two out of the 8 legislative proposals in the Clean Energy for All Europeans package (adopted by the European Commission on 30 November 2016) have been already agreed by the co-legislators. On 14 May, the first element of the package, the Energy Performance in Buildings Directive, was adopted. Thus, progress and momentum towards completing the Energy Union is well under way and the work started by the Juncker Commission, under the priority “a resilient Energy Union and a forward-looking climate change policy” is delivering its promises.

The new regulatory framework includes a binding renewable energy target for the EU for 2030 of 32% with an upwards revision clause by 2023.Thiswill greatly contribute to the Commission’s political priority as expressed by President Juncker in 2014 for the European Union to become the world number one in renewables. This will allow Europe to keep its leadership role in the fight against climate change, in the clean energy transition and in meeting the goals set by the Paris Agreement. The rules agreed today serve also to create an enabling environment to accelerate public and private investment in innovation and modernisation in all key sectors. We are making this transition to a modern and clean economy taking into account the differences in the energy mix and economic structures across the EU. Beyond updating and strengthening our energy and climate legislation, the EU aims at developing enabling measures that will stimulate investment, create jobs, improve the skills of people, empower and innovate industries and ensure that no citizen, worker or region is left behind in this process.

Commissioner for Climate Action and Energy Miguel Arias Cañete said: “Renewables are good for Europe, and today, Europe is good at renewables. This deal is a hard-won victory in our efforts to unlock the true potential of Europe’s clean energy transition. This new ambition will help us meet our Paris Agreement goals and will translate into more jobs, lower energy bills for consumers and less energy imports. I am particularly pleased with the new European target of 32%. The binding nature of the target will also provide additional certainty to the investors. I now call on the European Parliament and the Council to continue negotiating with the same commitment and complete the rest of the proposals of the Clean Energy for All Europeans Package. This will put us on the right path towards the Long-Term Strategy that the Commission intends to present by the end of this year”.

Main achievements:

  • Sets a new, binding, renewable energy target for the EU for 2030 of 32%, including a review clause by 2023 for an upward revision of the EU level target.
  • Improves the design and stability of support schemes for renewables.
  • Delivers real streamlining and reduction of administrative procedures.
  • Establishes a clear and stable regulatory framework on self-consumption.
  • Increases the level of ambition for the transport and heating/cooling sectors.
  • Improves the sustainability of the use of bioenergy.

Next steps

Following this political agreement, the text of the Directive will have to be formally approved by the European Parliament and the Council. Once endorsed by both co-legislators in the coming months, the updated Renewable energy Directive will be published in the Official Journal of the Union and will enter into force 20 days after publication. Member States will have to transpose the new elements of the Directive into national law 18 months after its entry into force.

Background

The Renewable Energy Directive is part and parcel of the implementation of the Juncker Commission priorities to build “a resilient Energy Union and a forward-looking climate change policy”. The Commission wants the EU to lead the clean energy transition. For this reason the EU has committed to cut CO2 emissions by at least 40% by 2030, while modernising the EU’s economy and delivering on jobs and growth for all European citizens. In doing so, the Commission is guided by three main goals: putting energy efficiency first, achieving global leadership in renewable energies and providing a fair deal for consumers. By boosting renewable energy, which can be produced from a wide variety of sources including wind, solar, hydro, tidal, geothermal, and biomass, the EU lowers its dependence on imported fossil fuels and makes its energy production more sustainable. The renewable energy industry also drives technological innovation and employment across Europe.

The EU has already adopted a number of measures to foster renewable energy in Europe. They include:

  • The EU’s Renewable energy directive from 2009 set a binding target of 20% final energy consumption from renewable sources by 2020. To achieve this, EU countries have committed to reaching their own national renewables targets. They are also each required to have at least 10% of their transport fuels come from renewable sources by 2020.
  • All EU countries have adopted national renewable energy action plans showing what actions they intend to take to meet their renewables targets.

As renewables will continue to play a key role in helping the EU meet its energy needs beyond 2020, Commission presented on 30 November 2016, as part of the Clean Energy for All Europeans, package, its proposal for a revised Renewable Energy Directive.

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