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How decarbonization will affect Chile’s four biggest electricity generating companies

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With Chile planning to phase out coal-fired generation by 2040, an analysis of the country’s “four biggest generators” shows that Enel Generacion and Colbun are well-positioned due in part to their concentration on hydro and other renewables, says BNamericas.

For another company, while about 58% of Engie Energia Chile’s installed capacity is coal-based, its recently finished US$1.1 billion Infraestructura Energetica Mejillones project will help the company finance investments in renewable capacity without significantly increasing its debt, according to Fitch Ratings. The agreement to phase out coal is seen as being credit neutral for Enel and Colbun, “as both companies are well positioned to meet this challenge, with generation assets more concentrated in hydro, renewables and natural gas,” said the report.

The deal thus opens opportunities to invest in renewables for “Enel, which has already been doing it through its arm Enel Green Power,…Colbun, which already has a 45% installed capacity between hydro and renewables,…and Engie, which… will have the capacity to finance its energy transition program shifting toward more renewable energy,” Fitch Ratings analyst Jose Ramon Rio told BNamericas.

The situation of AES Gener, however, is more limited as 89% of its installed capacity in Chile is coal-based. Given development of its US$3 billion Alto Maipo hydroelectric project, which is 80% complete, the company “has limited room to execute a decarbonization strategy without affecting leverage given its current capital structure,” according to Fitch.

The two units the company will retire as part of the first section of the agreement, Ventanas I in 2022 and Ventanas II in 2024, are old and do not represent a significant cash flow loss for the company.

The agreement also leaves some room for companies in the form of a “strategic reserve” they could put their plants into. Under this scheme, generation units cannot be summoned to dispatch energy daily, but it must be available to dispatch with a 60-day notice from the regulator. “It is ultimately [grid coordinator] CEN that will determine if these plants go into a technical reserve state that will allow them to dispatch whenever the demand [requires it],” Rio said.

For example, if the drought in Chile remained, and hydroelectric generators injected below projected numbers, the regulator could call these coal-based units into operation. Units that apply and are accepted for strategic reserve will also be compensated with a payment for available capacity for five years after their retirement.

Under the coal retirement plan, announced by the government in April, the four companies will retire eight of the 28 coal plants by 2024, starting with the oldest ones. By 2040, all plants should be retired, although an exact date for the complete phase out will be negotiated between the plant owners and the government every five years.

The phase out is part of a plan to make Chile carbon neutral by 2050.

Report covers costs of various storage technologies, including pumped storage hydro

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A report recently released by the U.S. Department of Energy defines and evaluates cost and performance parameters of six battery energy storage technologies (BESS) and four non-BESS storage technologies.

The objective of this report is to compare costs and performance parameters of different energy storage technologies. Furthermore, forecasts of cost and performance parameters across each of these technologies are made.

The BESS technologies studied were lithium-ion batteries, lead-acid batteries, redox flow batteries, sodium-sulfur batteries, sodium metal halide batteries and zinc-hybrid cathode batteries. The non-BESS technologies studied were pumped storage hydropower, flywheels, compressed air energy storage and ultracapacitors.

Key findings include:

  • For a BESS with an E/P (energy to power) ratio of 4.0, Li-ion batteries offer the best option in terms of cost, performance, calendar and cycle life, and technological maturity.
  • Pumped storage hydropower and compressed air energy storage, at $165/kWh and $105/kWh, respectively, give the lowest cost in $/kWh if an E/P ratio of 16 is used inclusive of balance of plant and construction and commissioning costs. Pumped storage hydro is a more mature technology with higher rates of round-trip efficiency.
  • While the zinc-hybrid cathode technology offers great promise in terms of cost and life, its technology readiness level (TRL) and manufacturing readiness level (MRL) are both low at this stage.
  • Redox flow batteries appear to be well positioned, and rapid improvements are expected in overall cost, performance, life, TRL, and MRL. While the round-trip efficiency for these batteries is low, there is room for improvement with stack optimization and better flow battery management algorithms.
  • While lead-acid batteries are low cost with high TRLs and MRLs, their cycle life is limited, leading to a usable life of less than three years assuming one cycle per day.
  • Sodium metal halide and sodium sulfur have similar cost and life characteristics, and metal halide technology has a higher round-trip efficiency. While the planar design for the sodium metal halide technology is expected to reduce cost, as is the substitution of sodium with nickel, uncertainty associated with these innovations led the research team to not build them into the 2025 forecast.
  • For pumped storage hydro, compressed air energy storage, flywheels, and ultracapacitors, 2025 capital costs were assumed to be the same as those estimated for 2018. These are more mature technologies; hence this study assumed the 2025 costs to be unchanged. Further, pumped storage hydro and compressed air energy storage involve long-range development timelines and, therefore, a substantial reduction in costs is unlikely to be experienced in a relatively short number of years.

This report was completed as part of DOE’s Water Power Technologies Office-funded project entitled Valuation Guidance and Techno-Economic Studies for Pumped Storage Hydropower. The overarching project is ongoing as of the date this report was published and being performed by a multi-lab team consisting of staff from five national laboratories: the Argonne National Laboratory, Idaho National Laboratory, National Renewable Energy Laboratory, Oak Ridge National Laboratory, and the Pacific Northwest National Laboratory.

Click here to read the full report.

Teesta-V hydropower project in India: An example of good practice in sustainability

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The 510-MW Teesta-V hydropower station, in Sikkim in northern India, has been rated as an example of international good practice in hydropower sustainability, according to an independent report.

The station, owned and operated by NHPC Limited, was reviewed by a team of accredited assessors using the Hydropower Sustainability Assessment Protocol (HSAP). The assessment, the first of its kind in India, was conducted between January and June 2019 and involved two visits to the project area, with stakeholder interviews.

According to the report, Teesta-V met or exceeded international good practice across all 20 performance criteria. It met proven best practice on its management of asset reliability and efficiency, financial viability, project benefits, cultural heritage, public health, and erosion and sedimentation. Teesta-V is also the first hydropower project globally to publish results against new performance criteria covering its resilience to climate change and mitigation of carbon emissions, after the HSAP was expanded in scope in 2018.

Teesta-V is part of a cascade of hydropower projects along the Teesta River. It was built to supply power to Sikkim’s Energy & Power Department and other state-owned distribution companies in India’s eastern region and commissioned in 2008.

The report documents how NHPC, formerly the National Hydroelectric Power Corporation, managed impacts on local communities and the environment and how the project has provided “significant” benefits, including providing low-cost electricity and employment.

“This assessment helped NHPC identify strengths as well as weaknesses in the Teesta-V project,” said Dr. Joerg Hartmann, lead assessor. “These lessons can now be applied across the company’s entire project portfolio, and because NHPC chose to be transparent with the results, across the entire Indian hydropower sector. In fact, some of the best practices identified in the assessment — such as conducting a follow-up Environmental Impact Assessment (EIA) ten years after project commissioning, to verify initial predictions of impacts and the effectiveness of mitigation measures — should be considered by project owners everywhere.”

NHPC Limited said: “Our company operates with a mission to achieve excellence in the development of clean power at international standards. Following this mission and vision in letter and spirit, NHPC sought a hydropower sustainability assessment of the Teesta-V Power Station using the Hydropower Sustainability Assessment Protocol.

“It is the first such assessment in India which itself proves the commitment of NHPC towards the sustainable development of hydropower. It is heartening to see that the Teesta-V Power Station has not only met basic good practices on all the parameters but it has also met global best practices on six performance areas. The results of this assessment will help NHPC to improve its business processes wherever required and to emulate best performance in its other projects.”

HSAP has been applied in more than 25 countries. It offers a way to benchmark the performance of a hydropower project against a comprehensive range of environmental, social, technical and governance criteria.

HSAP is one of two complementary assessment tools – including the Hydropower Sustainability ESG Gap Analysis Tool (HESG) – used to measure performance against a set of Hydropower Sustainability Guidelines on Good International Industry Practice (HGIIP). These tools are governed by the Hydropower Sustainability Assessment Council, which is composed of representatives of social and environmental non-profit organizations, governments, commercial and development banks, and the hydropower sector.

Assessors are trained and accredited by the International Hydropower Association (IHA), which serves as the council’s management body. IHA is a non-profit membership organization with a mission to advance sustainable hydropower by building and sharing knowledge on its role in renewable energy systems, responsible freshwater management and climate change solutions.

Malaysian company issues green sukuk to finance small hydro construction

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Telekosang Hydro One Sdn Bhd in Malaysia has issued an 18-year green sukuk to finance the construction of a 24-MW run-of-river hydro plant, according to Climate Bonds.

A sukuk is an Islamic financial certificate that complies with Islamic religious law commonly known as Sharia. The sukuk is valued at MYR470 million (US$115 million).

The project, which was not named, is expected to take 24 months to construct. The issuer signed a 21-year renewable energy power purchase agreement (REPPA) with Sabah Electricity, with a scheduled feed-in tariff commencement date of July 31, 2021.

Climate Bonds says this is the world’s first “mini-hydro” sukuk. Other sukuks have financed hydro but not exclusively, and not for a mini project. (Climate Bonds did not reveal what parameters it uses to define a hydro project as “mini.”) It is also the largest Malaysian bond since December 2017. The deal benefits from an AA3 rating from RAM.

Telekosang’s green sukuk is the world’s first for a mini-hydro project that is aligned with the requirements of Securities Commission Malaysia’s Sustainable and Responsible Investments Sukuk Framework, the ASEAN Green Bond Standards, and the Green Bond Principles.

Hydro already constitutes a significant proportion of Malaysia’s renewable energy mix, but renewables must grow further for the country to meet its NDC climate goals, Climate Bonds says.

Rhodes named president, CEO of Basler Electric

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Basler promotes Rhodes

Ken Rhodes has been appointed to president and chief operating officer of Basler Electric, after the retirement of Gary Dolbeare.

Dolbeare had been president and COO of Basler since 2003.

Rhodes joined Basler in 1983 and has held various roles in the engineering and purchasing departments. He was named director of supply chain management in 2004. In 2006 he became sales manager for the power systems group and in 2007 was promoted to director of sales for all product groups. In 2011, Rhodes was named vice president of sales and in 2018 was promoted to executive VP, responsible for the sales, marketing, engineering, and manufacturing functions for all Basler locations, in addition to managing E2 Power Systems LLC, a wholly-owned subsidiary of Basler, as well as Basler’s facilities in China and Singapore.

“We wanted someone who knew the company inside and out,” said Greg Basler, vice chairman of the board and chief executive officer. “Ken has demonstrated his ability at each level of the company and we are excited to see the continued growth of Basler Electric under his leadership.”

Basler is a privately held company based in Highland, Ill. The company was founded in 1942 and manufactures items for the HVAC and power industries.

IRENA, UNFCCC partner to escalate knowledge sharing on global energy transition

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IRENA UNFCCC agreement

The International Renewable Energy Agency (IRENA) and United Nations Framework Convention on Climate Change (UNFCCC) are jointly ramping up efforts to fight climate change by promoting the widespread adoption and sustainable use of renewable energy.

The new strategic partnership builds on a long history of cooperation that aims to ensure a low-carbon climate-resilient world in line with the Sustainable Development Goals and the Paris Agreement.  

In a memorandum of understanding signed between the heads of IRENA and UNFCCC, the two organizations have agreed to step up the exchange of knowledge on energy transition, collaborate more closely at expert meetings, increase capacity building to promote renewables and undertake joint outreach activities.

“The rapid transition to clean energy is crucial to meet the central goal of the Paris Climate Change Agreement, which is to hold the global average temperature rise to as close as possible to 1.5 degrees Celsius,” said Patricia Espinosa, executive secretary of UNFCCC. “Time is running out — we are already seeing worsening climate change impacts around the world — including unprecedented heatwaves, and we need to grasp all opportunities to rapidly deploy clean, renewable energy at scale to prevent the worst climate scenarios form becoming a reality.”

Francesco La Camera, Director-General of IRENA, added, “Falling technology costs have made solar, wind and other renewables the competitive backbone of energy decarbonisation and, together with energy efficiency, the most effective climate action tool available.”

La Camera also noted that renewable energy delivers jobs, delivers on sustainable development and will deliver a viable climate solution. “The renewables-based energy transition provides a clear opportunity to increase ambition in the reviewing process of the national climate commitments under the Paris Agreement. IRENA will fully support countries in realising this opportunity on the way to COP25 in Chile this year and to COP26 in 2020,” he stated.

IRENA includes hydropower in its definition of renewables, and UNFCCC is on record saying hydropower can “help climate action.”

This article was adapted from one previously published on the ESI-Africa website.

NY governor announces $1.1 billion project to extend life of Niagara Power Project

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Niagara project rehab

Governor Andrew M. Cuomo has announced that the New York Power Authority is launching a 15-year modernization and digitization program to significantly extend the operating life of the Niagara Power Project.

The life extension and modernization program, called “Next Generation Niagara,” centers on the 2,525-MW Robert Moses Niagara Power Plant, the Niagara project’s main generating facility. The New York Power Authority plans to invest $1.1 billion in the project. Next Generation Niagara will help realize Governor Cuomo’s aggressive clean energy goals for transitioning the state to 100% carbon-free electricity by 2040 and serve as a grounding force for the provisions in the Climate Leadership and Community Protection Act, which Governor Cuomo recently signed into law.

“The Niagara Power Project is New York’s largest source of clean electricity and this modernization project will allow it to continue operating for another 50 years,” Governor Cuomo said. “This extraordinary investment is a crucial part of our nation-leading plan to decarbonize New York’s electric power system by 2040 and will continue supplying job-producing companies across the state with clean, low-cost energy.” 

After the collapse of Niagara Mohawk’s Schoellkopf Power Station in 1956, and the elimination of tens of thousands of jobs in the Niagara region and nearly 25% of the city’s tax base, the Federal Power Commission issued a license in 1957 to NYPA to redevelop Niagara Falls’ hydroelectric power. The authority employed 11,700 workers and within three years, 12 million cubic yards of rock were excavated. The herculean effort led to the construction of a massive main structure that is 1,840 feet long, 580 feet wide and 384 feet high.

When the Niagara Power Project produced its first power in 1961, it was the largest hydropower facility in the Western world and President John F. Kennedy called it “an example to the world of North American efficiency and determination.” After 60 years of operation and its obtaining a new 50-year federal operating license in 2007, the Niagara Power Project remains the crown jewel of New York’s power infrastructure.

The improvements will include replacing aging equipment with the latest machinery, reflecting advanced digital technologies for optimizing the hydroelectric project’s performance. The Niagara Project, through the state’s low-cost power allocation programs, directly supports more than 200,000 jobs and $17 billion in capital investments. Next Generation Niagara also will support an estimated 60 union construction jobs over the course of the project.

NYPA’s Board of Trustees approved the major capital investment in the Niagara project, which began operating in 1961, at its July 30 meeting. The $1.1 billion investment makes Next Generation Niagara the largest capital project in NYPA’s history.

The initiative will encompass four major phases, including a comprehensive inspection of the Robert Moses plant’s penstocks; refurbishing the 630-ton crane that enables mechanical work at the plant; upgrading and digitizing the control systems; and building a new back-up control room and replacing mechanical parts that have reached the end of their operating life.

Work is set to begin later this year.

NYPA also owns and operates about one-third of New York’s high-voltage power lines. These lines transmit power from NYPA’s three large hydroelectric generation facilities, including its flagship Niagara plant, and from wind power generation facilities, connecting nearly 7,000 MW of renewable energy to New York State’s power grid. This includes more than 6,200 MW of hydropower and about 700 MW, or more than a third, of New York State-generated wind energy to the grid.

NYPA is the largest state public power organization in the nation, operating 16 generating facilities and more than 1,400 circuit-miles of transmission lines. More than 70% of the electricity NYPA produces is clean renewable hydropower. NYPA uses no tax money or state credit. It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity.

GE CFO stepping down as company predicts power rebound

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GE announced that its chief financial officer, Jamie S. Miller, is stepping down after two years in the job and 11 years with the company.

Miller, who oversaw the fiscal activities during a period of restructuring and executive leadership changes, will remain in the CFO role while GE looks for a successor.

“I deeply value the opportunities I’ve had at GE over the last 11 years,” she said. “I couldn’t be prouder of the team around me. With the progress we’ve made  and the stabilization beginning to take hold, the time is right for my transition.”

GE Capital CEO Alec Burger will report directly to GE overall CEO Lawrence Culp Jr. GE senior vice president and treasurer Jennifer VanBelle will report to Miller and the next CFO when named.

“I greatly appreciate Jamie’s professionalism, expertise, and many contributions to GE’s significant transformation during this critical time,” Culp said. “She has been instrumental in developing our portfolio strategy, furthering our efforts to make GE a more focused industrial company, and spearheading our de-leveraging plan during a challenging period.”

GE was in free fall amidst financial losses and struggles in its power division. In 2018, Culp replaced CEO John Flannery, who was ousted from the job after only one year.

The company also restructured its Gas Power business unit, naming Scott Strazik to head those operations. Strazik was a keynote speaker at last year’s POWERGEN International in Orlando.

GE’s latest quarterly financials, released Wednesday, showed lower earnings for the most recent three months–impacted in the aviation sector by Boeing’s troubles–but lifted the forecast.

The company’s stock dropped from nearly $25 per share in July 2017 to less than $7 in December 2018. GE has sold off assets and focused on core areas, including power, while its stock has rebounded to more than $10 in recent trading.

 

 

Three accords finalized for 147-MW Ruzizi III hydropower project

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Ruzizi III development

IPS, the industrial and infrastructure development arm of the Aga Khan Fund for Economic Development (AKFED), and Norwegian renewable energy company SN Power have signed project agreements for the 147-MW Ruzizi III hydropower project with the governments of Burundi, the Democratic Republic of Congo (DRC) and Rwanda.

The proposed Ruzizi III is a run-of-river hydropower project to be located on the Ruzizi River between Rwanda and DRC. Ruzizi River flows from Lake Kivu to Lake Tanganyika in central Africa and delineates the southern border of Rwanda with DRC and also forms the border between DRC and Burundi.

“Ruzizi III is truly a ground-breaking project; it is the first privately financed project in sub-Saharan Africa that will utilise a common regional resource to generate power that will be shared equally between three countries,” said IPS Chief Executive Officer Galeb Gulam. “Despite the complexities and challenges that this region has faced, this project sets a unique precedent for public-private partnership projects globally. Ruzizi III will contribute significantly to socio-economic development, building confidence in these economies, increasing access to reliable and affordable power to millions of people across the region.”

Currently, it is projected that the project will benefit a population of 30 million people, 70% of whom are living under the poverty line and averaging a 6% electricity access rate.

Once commissioned, Ruzizi III will double Burundi’s current capacity, increase Rwanda’s installed capacity by 33% and provide much-needed baseload power in Eastern DRC, a region that is otherwise isolated from DRC’s interconnected grid.

“This landmark project will generate clean and renewable power, reducing the region’s reliance on expensive thermal generation that currently costs in excess of $35 cents per kWh. It will also reduce the local communities’ dependence on wood fuel and charcoal; a major threat to the countries’ forests and biodiversity,” added Erik Knive, president and CEO of SN Power.

The project is structured as an independent power project based on a build, own, operate, transfer (BOOT) structure and underpinned by a 25-year concession agreement and power purchase agreements.

The respective national utilities will be responsible for developing the transmission lines that carry the power from the main substation at Kamanyola to the principal load centers.

With an estimated project cost of $650 million to $700 million, Ruzizi III will produce power that is expected to cost $0.11 to 0.13 per kWh.

“Considering the remote and challenging location of the power project, maintaining an affordable tariff is crucial. Financing of the project will, therefore, entail the largest blended financing in the region comprising of a unique combination of concessional funds, commercial debt, grants (contracting state equity) and privately financed equity; a first of its kind in Africa” explained Gulam.

Concessional funding is expected to be provided by, amongst others, African Development Bank, European Investment Bank, European Union, KfW, AFD and the World Bank.

For IPS, Ruzizi III will be part of the Africa Power Platform that was recently established by IPS, CDC and AKFED.

The project is expected to reach financial close in 2021 and is expected to be operational in 2025/2026.

This article was adapted from one previously published on the ESI-Africa website.

Orbital Marine Power contracts FAUN Trackway for tidal stream turbine anchor fabrication

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Orbital tidal turbine

Orbital Marine Power Ltd has selected FAUN Trackway to manufacture the anchors for its O2 tidal stream turbine.

FAUN Trackway will manufacture four steel anchor structures, along with bespoke mooring connectors, to be installed in the Fall of Warness, Orkney Islands, where Orbital has a berth and grid connection with the European Marine Energy Centre (EMEC).

The 2-MW O2 tidal turbine is an optimized version of Orbital’s SR2000 turbine.

“This is a transformational project for Orbital, and for the tidal sector, and these anchors will have the important job of holding the O2 on station so it can generate gigawatt hours of clean, predictable power from the strong tides we have around Orkney — so we are delighted to be engaging the experience and precision of FAUN Trackway for this critical supply,” said Orbital Chief Executive Officer Andrew Scott.

Orbital is also a berth holder at the Morlais tidal energy project venture off Anglesey in North Wales, which is seeking to provide a route to larger arrays of tidal turbines.

Orbital (formerly Scotrenewables) is a Scottish engineering company focused on developing a tidal energy turbine technology capable of producing a step-change reduction in the cost of energy from tidal currents. The Orbital technology has been under continuous engineering development, including testing of scaled systems in tank conditions and open ocean environments, since the company was founded in Orkney in 2002. Orbital were the first company in the world to successfully grid connect a floating tidal turbine in 2011, with their 250-kW scale system, which was operated at EMEC.

FAUN Trackway is a division of the KIRCHHOFF Group and specializes in design engineering, bespoke fabrications, painting, and welding.

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