Financial support for the transition needs clear and carefully chosen definitions of what qualifies for that support. Getting it wrong leads to unintended consequences, some which may not reduce emissions, explains James Sallee at the Energy Institute at Haas. Ever wondered why SUVs and big cars proliferated after the 1970s in the U.S. (and are on roads all over the world now)? The 1970s oil crisis triggered new rules that penalised fuel … [Read more...]
Event summary: Electricity Market Design – how can reforms accelerate the Transition and help cut energy prices?
Here is our written summary of our online panel discussion held last week on the EC’s Electricity Market Design reform proposal. Catharina Sikow-Magny, Director, DG ENER presented the main elements of the proposal, and answered questions from the panellists: Wanda Buk, VP for Regulatory Affairs, PGE Polska Grupa Energetyczna; Leonardo Meeus, Director, Florence School of Regulation; JĂ©rĂ´me Le Page, Chair of Electricity Committee, Federation of … [Read more...]
Making Hydrogen will consume 2% of total global renewable capacity growth by 2027
25 countries plus the EU have announced big ambitions for renewable hydrogen production. But how much renewable energy will be needed to make the H2 over the next five years? Nations are not keen to expend new clean energy generation on (expensive today) hydrogen production when their grids are still not emissions-free. According to the IEA, for 2022-2027, their main case forecasts around 50GW of renewable capacity will be dedicated to hydrogen … [Read more...]
EU electricity market reform: completing, not dismantling, the integration is the answer
Leonardo Meeus at the Florence School of Regulation explains why electricity market reform in the EU must be about completing the process of integration, not unwinding it. He breaks down his argument into five categories – Electricity Markets, Contracts for Difference (CfD) and Power Purchase Agreements (PPA), Capacity Remuneration Mechanisms (CRM), Energy Communities, and Demand-side Flexibility – and with each he defines their purpose, looks at … [Read more...]
Investing in Hydrogen: is there a “first mover advantage”?
Is there a “first mover advantage” – or not - for an investor in the new hydrogen economy? Michiel Korthals Altes offers a series of “tests” of investment decisions based on the following criteria: economics, climate efficiency, system optimum, price stability, regulation, technology, now and in the future. He concludes that until the sector reaches maturity, conversion inefficiencies make the production of hydrogen a poor choice for most … [Read more...]
How to ramp up Hydrogen under the new REPowerEU targets
What needs to be done to develop hydrogen as a major fuel in Europe as the continent looks to diversify away from Russian oil and gas supplies? The war in Ukraine has led to the EU substantially raising its hydrogen ambitions. While the earlier “Fit for 55” target for 2030 was set at 5.6 Mt, the new REPowerEU strategy has increased the target to 20 Mt, to replace 50 bcm of Russian gas. That means, for example, the use of hydrogen in industrial … [Read more...]
Solar + Storage Hybrid plants are poised for explosive growth in the U.S.
At the beginning of 2021 the U.S. had 73 solar and 16 wind hybrid projects, amounting to 2.5GW of generation and 0.45GW of storage. By the end of 2021, over a third of the 675GW of solar in the grid connection queue were hybrids, and 19GW were wind hybrids. Only one in four typically get approved, built and connected. But that still points at a twenty-five-fold increase in hybrid generation. It’s why Joachim Seel, Ben Paulos and Will Gorman at … [Read more...]
CEPP incentives and penalties: current design could undermine U.S. clean energy growth
The Clean Electricity Performance Program (CEPP) is a key part of President Biden’s energy and climate plans. It will steer utilities towards clean energy with incentives and penalties, and is still being designed. Severin Borenstein and James Bushnell at the Energy Institute at Haas, Steve Cicala at Tufts University and Ryan Kellogg at the University of Chicago warn that current proposals will allow utilities to game the system, resulting in … [Read more...]
Financial incentives for Grid Modernisation: the problem with guaranteed returns on investment
Grid modernisation is going to be very expensive. What’s the best way to pay for it? The financial incentives governments put in place now will determine what investments get made, how cost-effectively it’s done, and who ultimately pays. Meredith Fowlie at UC Berkeley’s Energy Institute at Haas explains that a common method is for a government to give some sort of guaranteed return on investment for the new asset. But it’s far from ideal. … [Read more...]
Norway an EV role model? Their pathway is expensive and paid for with oil & gas exports
Norway is an EV leader thanks to a generous pot of tax incentives. Today, battery-electric cars make up more than half of all new car sales in Norway. Schalk Cloete takes a detailed look at what those incentives cost, and how many tonnes of CO2 they avoid. In short, Norway – a major oil and gas exporter - needs to sell over 100 barrels of oil (which emits 40 tonnes of CO2) to pay for the tax breaks it gives EVs to avoid one tonne of CO2. And … [Read more...]
A circular economy for waste solar PV materials: what needs to be done to get it started
Solar is already in the vanguard of the energy transition, and can similarly lead the world’s transition to a circular economy. Decommissioned PV modules could total 1 million tons of waste in the U.S. by 2030. Yet there are virtually no incentives or regulations to promote its recycling or reuse. In fact, says NREL, most current regulations in the U.S. define it as solid waste, making it difficult to introduce it to a recycling value chain. In … [Read more...]
U.S.: Counting Renewables jobs and projects under threat, what can be done and why
All sectors across all economies are trying to add up their potential job losses and projects in jeopardy, then telling their governments to prioritise them for Covid lockdown support. Mike Jacobs at the Union of Concerned Scientists looks at renewables in the U.S. He quotes news reports that over 100,000 workers in this fast-growing industry filed for unemployment in March 2020. On top of that, the already planned expiry and phase-down of … [Read more...]
IEA: Three ways governments can keep Renewables growth on track
Before the coronavirus pandemic, 2020 was set to be another record year for renewables installations. That is now looking very unlikely. Heymi Bahar at the IEA identifies three main challenges facing the growth of renewables due to the global economic consequences of the pandemic: Supply chain disruptions, anywhere, will surely lead to delays in completing projects everywhere; Compounding those delays, major renewables incentives expire at the … [Read more...]
UK nuclear plans are in tatters. But current incentives help gas, not wind and solar, step into the gap
The scrapping of plans for a new nuclear power station in Cumbria and the suspension of work on another in Anglesey have put the brakes on the UK’s nuclear future. But the government appears more keen to fill the gap with gas rather than renewables. David Toke of Aderdeen University criticises the current incentives and regulations and makes the case for wind and solar. … [Read more...]
