Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

6 September 2017

Coal's Future Looks Uncertain As Rival Fuels Grow

by Jonas Crews and Charles S. Gascon

The coal industry has experienced a significant decline over the past decade. This descent has been driven predominantly by the advent of cheap natural gas, along with policies to promote cleaner, more sustainable sources of energy. While the industry’s overall decline has been a more recent phenomenon, labor productivity in U.S. coal production has increased steadily for over three decades as firms move toward complete automation of the mining process. From January 1985 to May 2017, the amount of coal produced by the average mine worker increased 224 percent.

The outlook for coal, which once was the dominant fuel for electricity generation, is waning. This article analyzes the coal industry both nationally and within our region (the states that make up the Eighth Federal Reserve District[1]) and ponders its future as a source of both electricity and jobs.

Coal serves two main purposes in the global economy: It can be burned to create electricity, or it can be used to produce steel. In 2016, the U.S. electricity sector’s coal consumption was equal to 93 percent of domestic coal production.

4 September 2017

Are India’s Government-Subsidised Solar Shops Thriving Or Barely Surviving

Jennifer Richmond and Kartikeya Singh

Government of India’s Akshay Urja programme sought to support the establishment of at least one shop per district for the sale of subsidised solar-powered technologies. Based on a survey of shop owners, this column finds that while the programme has been successful in establishing a network of solar shops across the country, many of the owners struggle to connect their products to large markets of consumers.

India’s Ministry of New and Renewable Energy (MNRE) began the Aditya Solar Shops programme in 1995 to support entrepreneurs who opened shops to sell subsidised solar-powered technologies. Shops were designed to sell items which would help poorer households without electricity access (or unreliable access) to tap into distributed solar power. Although most urban households in India tend to be connected to the grid – even if service is poor – many rural areas lie well beyond the reach of power plants and the central grid. This creates space for viable alternatives, such as distributed solar-powered systems and technologies.

Aiming at a barrage of clean development targets

In 2010, the Indian government rebranded the Aditya programme as the Akshay Urja Solar Shops programme and expanded its reach to set up at least one shop in every district in the country. This was a signal from the government that India was serious about providing electricity access to its less centralised populations and that it intended to promote clean growth. This became glaringly clear in 2015 when the government declared that it would provide reliable access to every household in the country by the next national election in 2019; that’s quite a promise considering nearly a quarter of the country’s 1.3 billion (130 crore) people still live beyond the reach of the grid and without any modern alternatives.

15 July 2017

The key to India’s solar energy dreams lies in public co-operation, not just in an investor-led approach

By Nimish Sawant 

Towards the end of last year, a report emerged that India houses the world’s largest solar power plant in a single location. The 10 sq km power plant located in Kamuthi, Tamil Nadu has a capacity of 648 MW and the project is spearheaded by the Adani Group. This is almost 100 MW higher than the Topaz Solar Farm in California, which held the top spot before Kamuthi.

According to Piyush Goyal, the Power and Renewable Energy Minister, India’s renewable energy target is 175 GW by 2022 and the solar power target stands at 100 GW by 2022. It does not get more ambitious than that because the total solar power installed capacity in India till April 2017 was around 13 GW. That still leaves over 80 GW worth of solar energy installations over the coming five years. Out of this, the government has plans to have around 40 GW as installed rooftop solar panels.

While the Kamuthi plant certainly helps India in its race to achieve its installed solar panel goals, there are still a lot of challenges ahead. Despite ample sunlight available throughout the year, India is just about getting started with fully realising its potential. In fact, a look at this report makes it clear that despite India being in the top 10 list when it comes to installed solar photovoltaics capacity, it still lags behind Germany (a nation which gets just a couple of months of sunny weather), when it comes to per capita solar photovoltaics (PV) capacity. At 511 Watts per person, Germany is much higher than its closest competitor, Japan. Germany generated enough renewable energy in 2016, to cover 32 percent of its electricity consumption needs.

10 July 2017

The Geopolitics of Renewable Energy


In this text, Meghan O’Sullivan, et al. focus on seven scenarios that both forecast and backcast the world’s future reliance on renewable energy. While all the forecasting scenarios expect us to rely more on this form of energy, none of them anticipate a revolution where it will surpass our continued dependence on fossil fuels. In contrast, the backcasting scenarios anticipate a world where renewables will make up 50-70% of the primary energy market by 2050. Read on to ‘unpack’ these projections and the seven factors that will shape them.

2 July 2017

Three game changers for energy

By Nikhil Patel, Thomas Seitz, and Kassia Yanosek

New sources, mobility, and industry fragmentation are set to disrupt the system. Change is afoot in the energy system. Soaring demand in emerging markets, new energy sources, and the likely growth of electric vehicles (EVs) are just some of the elements disrupting the status quo. It is hard to discern how the aftershocks will affect the extraordinarily complex network of sectors and stakeholders. New research by McKinsey and the World Economic Forum has identified the game changers for companies and policy makers, as well as their implications.

Exhibit 1

 A proliferation of new energy sources 

15 June 2017

Energy industry becomes cyber war battlefield

By Alphonso Rivera 

U.S. energy facilities are increasingly being targeted by cybercriminals, according to a recent report released by government and private security officials. Just one agency, the Department of Homeland Security, reported a jump in cases with its investigators receiving reports of 59 significant cyber incidents occurring at U.S. energy facilities in 2016.

The agency handled 290 cybercrime incidents last year involving numerous industrial sites, including factories, power and chemical plants, refineries and nuclear facilities. Many of these incidents originated with “phishing emails” — emails sent by hackers that trick people into downloading virus-infected attachments or links. Many others came from “network probing” and “scanning” schemes.

Some viruses result from malware that was inflicted on systems years ago but keep spreading. Others result from increasingly sophisticated schemes that continue to be created.

In a study conducted in 2015 for Hewlett Packard Enterprise, the Ponemon Institute estimated cybercrimes are costing U.S. energy and utility companies about $12.8 million a year in lost business and damaged equipment. And the possibilities of catastrophic events being caused by cyberattacks are growing.

3 June 2017

To Control Its Future, India Must Control Its Energy Sources

Subhomoy Bhattacharjee

Continuing mismanagement has led to repeated crises in the coal sector and the coal scam was the culmination of it.

However, the present government’s bid to explore all aspects of energy for the first time is a good sign.

The conviction of former coal secretary H C Gupta by a Central Bureau of Investigation special court in one of the coal allocations is a sign of a much larger problem in India’s energy economy – that of mismanagement. And this partly explains how India is trailing China on ensuring energy security.

Energy is at the heart of any country’s assurance of economic security. Former United States president Barack Obama put it pithily when he declared ‘a nation that can’t control its energy sources can’t control its future’, spelling out a compelling reason for the need to get back to discovering the juice to power plants, cars and homes from within America instead of mining for oil in the deserts of Middle East.

Energy is the plumbing that underlies any economy. Below the flashing lights of banks of computer terminals, the smart cities, the digital economy is the energy lifeline. Roughly, for a 1 per cent growth of gross domestic product (GDP) for an economy, the rate of growth of energy supply has to be 1 per cent too. It has begun to climb down only now as energy efficiency of economies has begun to improve, both in usage of conventional fuels and larger use of renewable energy.

29 May 2017

India cancels plans for huge coal power stations as solar energy prices hit record low



The Independent Online A field of solar panels at Cochin International Airport in southern India CIAL

India has cancelled plans to build nearly 14 gigawatts of coal-fired power stations – about the same as the total amount in the UK – with the price for solar electricity “free falling” to levels once considered impossible.

Analyst Tim Buckley said the shift away from the dirtiest fossil fuel and towards solar in India would have “profound” implications on global energy markets.

According to his article on the Institute for Energy Economics and Financial Analysis’s website, 13.7GW of planned coal power projects have been cancelled so far this month – in a stark indication of the pace of change.

In January last year, Finnish company Fortum agreed to generate electricity in Rajasthan with a record low tariff, or guaranteed price, of 4.34 rupees per kilowatt-hour (about 5p).

Mr Buckley, director of energy finance studies at the IEEFA, said that at the time analysts said this price was so low would never be repeated.

Solar is now cheaper than coal-based electricity in India, but the math makes no sense



Solar energy prices are crashing through the floor in India.

In the last three months, solar tariffs have dropped by over 25%, with much of the recent action focused around Rajasthan’s Bhadla solar park, a 10,000-hectare facility on the edge of the Thar desert.

At an auction for 500 megawatts of capacity at the park on May 12, the state-run Solar Energy Corporation of India managed to discover a record-low tariff of Rs 2.4 per kilowatt-hour. The previous low was two days before that when tariffs hit Rs 2.6 per kilowatt-hour during auctions for another phase of the Bhadla solar park.

At such rock-bottom prices, solar power is even cheaper than India’s coal-based thermal power plants. The country’s largest power company, NTPC, sells electricity from its coal-based generation units at a princely Rs 3.2 per kilowatt-hour.

Moreover, India’s solar-generation capacity is expected to touch 8.8 gigawatts this year (a jump of 76% over 2016) to become the third-largest solar market in the world, according to renewable energy consultancy Bridge To India. And, on the back of prolific growth in non-conventional power, consulting giant Ernst & Young reckons that India is the world’s second best market for investing in renewable energy.

23 May 2017

*** Winds of change? Why offshore wind might be the next big thing


Falling costs and rising acceptance are promising signs, but the industry needs to keep improving.

The landscapes of Rembrandt glow with the great painter’s rendering of light. And they are distinctive for another reason: windmills are everywhere. As far back as the 13th century, the Dutch used windmills to drain their land and power their economy. And now, 800 years later, the Netherlands is again in the vanguard of what could be the next big thing, not only in wind power but also in the global energy system as a whole: offshore wind.

In December, the Netherlands approved a bid for its cheapest offshore project yet—€54.50 per megawatt-hour, for a site about 15 miles off the coast. Just five months before, the winning bid for the same site was €72.70. Denmark has gone even further, with an auction in November 2016 seeing a then record-winning bid of €49.90 per megawatt-hour, half the level of 2014.

Europe, which has provided considerable economic and regulatory support, accounts for more than 90 percent of global capacity. As a result, Europe now has a maturing supply chain, a high level of expertise, and strong competition; it is possible that offshore wind could be competitive with other sources within a decade. By 2026, the Dutch government expects that its offshore auctions will feature no subsidies at all. But it might be even sooner: in the April 2017 German auction, the average winning bid for the projects was far below expectations, and even less than the Danish record set only six months before. Some of the bids were won at the wholesale electricity price, meaning no subsidy is required.
Prices and costs

20 May 2017

Reform of the Global Energy Architecture

David Goldwyn, Phillip Cornell 

This report focuses on the current state of international energy governance and whether the overarching global energy regime should be reformed. After exploring these topics in detail, the text’s authors conclude that 1) there is no consensus on the direction of transnational energy policy and governance; 2) the governance structures that do exist don’t always reflect contemporary realities and have obvious capability gaps; and 3) for several reasons, the sheer number of initiatives now competing to shape the world’s energy architecture aren’t necessarily a bad thing. Finally, the authors close their analysis by providing policy options for those in the US government who work in the international energy governance field.

Download 

13 May 2017

China's Big Play for Middle East Oil

Robin M. Mills 

China's Middle East energy footprint has been expanding. In February, it made a deal for a stake in Abu Dhabi’s onshore oil. In March, Saudi Arabia’s King Salman bin Abdulaziz travelled to China to strengthen trade ties, and now a Chinese consortium is lining up for a stake in the Aramco IPO.

Geopolitical trends favor deeper engagement, but Chinese companies need to show they can deliver.

The Chinese need new upstream opportunities. Domestic production from the country's highly mature fields has slumped: down 6.9 percent last year and 8 percent year-on-year so far in 2017. But, encouraged by the government to guarantee energy security, companies' capital budgets are set to soar again this year. Sinopec will spend as much as BP, and even at the low end of estimates, PetroChina, the listed unit of China National Petroleum Corp., or CNPC, will be the highest-spending listed oil company in the world.

7 May 2017

In China Become the World’s Clean Energy Leader?


By 2015, China held a third of the global market share [PDF] for hydropower, wind power, and solar energy. The country’s private sector invested $32 billion in 2016 toward international clean energy projects, adding to the $102.9 billion invested a year prior by the government into domestic renewable energy. Many of these investments were made in major developing countries, including Brazil, Egypt, Vietnam, and Kenya. 

Investing in clean energy at home also creates opportunities for China to expand its marketing of products such as solar panels abroad, says Jennifer L. Turner, the director of the Wilson Center’s China Environment Forum. China seems poised to surpass the United States in leading clean energy innovation and efforts to mitigate the effects of climate change, but Beijing faces internal challenges to energy reform, she says. 

Why are China’s clean energy investments surging? 

The surge has been driven by two primary factors. The first is air pollution. This has become more salient lately, but China was trying to develop more alternatives to coal even before it signed the Paris Agreement. Since then, there’s also been a growing awareness that investing in clean energy development domestically is going to open up more opportunities for China to expand marketing for these products globally. It’s not surprising that China has already captured the global market on solar panels. 

6 May 2017

From Standard To Smarter Oil

DEBORAH GORDON

Summary: The days of simply sticking a pipe in the ground and tapping a pool of easy-to-handle and profitable crude oil are fading. Changing resources require people challenge conventional thinking on oil.

Today’s crude oils can be as light as paint thinner or as heavy as peanut butter. They can be trapped tightly in fissures of buried rocks. Or their wells running low with each depleted barrel containing more water or gas than oil. Whether ultra-light, extra-heavy, or depleted, these oils are more difficult to extract, harder to refine, more challenging to transport, and yield a different array of products than yesterday’s oils.

For example, blending the heaviest and lightest oils may make them flow more readily but this creates dumbbell crudes that are difficult to refine into the typical slate of highly-profitable petroleum products. These oddball mixtures that do not contain essential hydrocarbon molecules have thrown the oil industry and policymakers a serious curve ball.

Transforming challenges into opportunities calls for significant innovation. As long as we continue to consume petroleum, we need to make smarter oil choices that satisfy both private interests and the public good.

26 April 2017

The world’s energy is getting cleaner (and cheaper)—but not quickly enough

David Victor


A growing array of evidence suggests that twists and turns at the federal level won’t automatically change how U.S. firms behave. The Trump administration may roll back U.S. regulations on clean power and on methane leaks from oil and gas operations, for example, but many states already have their rules in place, and the courts will likely halt some of Trump’s most ambitious rollbacks.

Indeed, the states such as California and New York that account for most of the nation’s economic growth—and thus most of the innovation and technology and policy—are the bluest politically and poised to do even more to cut emissions.

Nuclear Power Is Set To Get A Lot Safer And Cheaper - Here's Why

by Michael Fitzpatrick

High-profile disasters such as Chernobyl and Fukushima have given nuclear power a bad name. Despite 60 years of nuclear generation without major accidents in many countries including Britain and France, many people have serious concerns about the safety of nuclear energy and the impact of the radioactive waste it generates. The very high capital cost of building a plant is also seen as a significant barrier, particularly given recent low oil prices. Plans to build a new British plant at Hinkley Point in Somerset are facing fresh opposition after it emerged the estimated lifetime costs had risen to £37 billion.

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Yet the high priority of reducing carbon emissions thanks to climate change means nuclear power looks more important than ever. Luckily, the next generation of reactors could hold the answer. With more in-built safety systems and a way to reuse old fuel, they are set to make nuclear power safer and, potentially, cheaper.

Human error and a natural disaster played major roles in the Chernobyl and Fukushima incidents, respectively. But in both cases, the failures occurred when the plants could no longer keep the reactors cool enough. At Chernobyl this was because of deliberate action and human error, and at Fukushima because the backup generators to drive the cooling pumps had been destroyed as a result of the tsunami.

Pathways and obstacles to a low-carbon economy


The energy transition is happening. But the pace of change depends on a range of technical, business, and societal factors. 

Technological advances and falling prices are driving the momentum toward low-carbon energy production across the globe. In this episode of the McKinsey Podcast, McKinsey partner Arnout de Pee and Lord Adair Turner, chair of the Energy Transitions Commission and the Institute for New Economic Thinking, speak with McKinsey Publishing’s Cait Murphy about the shift toward renewable resources and the future of sustainable development. 

Podcast transcript 

Cait Murphy: How can the world produce the energy it needs to broaden prosperity without damaging the environment beyond repair? The Energy Transitions Commission, whose members comprise leaders from the public, private, and social sectors, is dedicated to answering that question. 

Speaking with us today is Lord Adair Turner, head of the Energy Transitions Commission, and Arnout de Pee, a partner at McKinsey’s Sustainability and Resource Productivity group. I’m Cait Murphy of McKinsey Publishing. 

Let’s start with the broad question. Lord Turner, what is meant by the term “the energy transition,” and why is such a transition necessary? 

Lord Adair Turner: The term “energy transition” describes the fact that over the next several decades, we are going to have to achieve a really dramatic transition in the world away from reliance on fossil fuels. Fossil fuels have been absolutely essential to the original industrial revolution, to the growth of prosperity that we’ve achieved in an increasing number of countries over the last 200 years. 

In order to limit global warming to below two degrees centigrade above preindustrial levels, we will have to really very significantly move away from fossil fuels, while still delivering in many countries even more energy use than there is today. 

25 April 2017

OPEC’s Misleading Narrative About World Oil Supply

Leonardo Maugeri

At a time when energy market headlines focus mainly on OPEC cuts, observers may be forgiven for concluding that a supply crunch and higher prices are imminent. On the contrary, there is still too much oil in global markets. In this context, OPEC production cuts (which notably fall short of the original target envisaged by the organization) appear to serve mainly as a psychological support to oil prices.

Analyzing trends from my proprietary database of more than 1,200 global oilfields helped me to make a bold prediction in 2012 regarding a coming oil supply boom. In January, my similar field-by-field analysis indicated that world oil production capacity and actual production were still growing—while prospects for demand growth were not sufficiently high to absorb the excess supply. In particular, actual oil production (which includes crude oil and other liquids such as condensates, NGLs, and more according to the standard definition used by most statistics) was almost 99.5 million barrels per day (mbd)—leaving a voluntary and involuntary spare capacity (the result of local civil wars and other geopolitical factors) of more than 4 mbd.

NYC, SF, and LA Outages Surface Concerns About Power Grid Attack The Department of Energy needs to step its game up.

Peter Hess

On Friday morning, a series of power outages struck New York City, San Francisco, and Los Angeles. Officials tracked down the root causes of each issue, none of which seemed to be related to cyber attacks, but the incidents got a lot of people thinking about how vulnerable the United States’ power grid is to terrorist attacks — not to mention weather and squirrels.

The outage in New York City disrupted public transit, but not much else since it was limited to a single subway station. In Los Angeles, things were a bit more serious, with passengers experiencing difficulties and delays at Los Angeles International Airport, as well as power losses in some other areas around the city. San Francisco got it worst, with outages causing gridlock and taking some companies’ websites offline. The city was pretty much out of commission until power came back on.

So while these concurrent power grid failures appear to be unrelated accidents, they gave the U.S. a snapshot of what a power grid attack might look like. They also raise the question: What is being done now to protect the grid?

Earlier this year, the U.S. Department of Energy published a report saying that the nation’s electrical grid “faces imminent danger” from cyber-attacks. Given growing fears over cyber-attacks, whether DDos attacks affecting the internet of things or international efforts to undermine U.S. democracy, even the most absurd concerns that the U.S. power grid could be targeted by cyber-attacks are not totally out of line.

19 April 2017

Energy Fact & Opinion: India Joins International Energy Agency as an Association Country


In March 2017, India activated the association status with the International Energy Agency (IEA), an organization comprising 29 member countries and 6 association countries. 

Membership in the IEA, which is restricted to advanced economy members of the Organization for Economic Co-operation and Development (OECD), requires them to demonstrate their net oil importer status, have reserves equivalent to 90 days’ average of crude oil and/or oil products imports in the prior years, and have a demand restraint program for reducing national oil consumption by up to 10 percent. 

In an effort to reflect the rising role of non-OECD economies with major impact on the global energy market, the IEA introduced the “association” status in 2015. Since its inception, China, Indonesia, Thailand, Singapore, Morocco, and now India have become associated with the IEA. 

The association status allows these countries to participate in meetings of IEA standing groups, committees, and working parties, without prior invitation. Association countries can work with the IEA on matters of energy security, energy data and statistics, energy policy analysis, and benefit from priority access to IEA training and capacity-building activities. 
With India’s inclusion, the IEA accounts for about 70 percent of the world’s energy consumption.