Plus: Peak ICE in ’22; $16T Asset Managers tighten for net zero by 2050; Greening steel; Autonomously delivered toilet paper
Hi Everyone,
Due to a business trip coming up, I need to give myself a break – watch for the next issue in three weeks – on July 3rd.
Jump to my comments where I expose an issue with Alberta’s electricity system. Check out the feature stories and scan the rest of the headlines at your leisure.
You like getting this. Consider who else in your circle would like getting this too. Encourage them to subscribe. An expanding reader base keeps me going on this.
To the Dad’s, I wish you all an early Happy Father’s Day.
Thanks,
Peter
Observations, Comments & Questions
I am inviting you into a conversation I have been having for some time now. But first a small caveat: as an “oil & gas guy,” I admit I don’t have a full understanding of the intricacies of Alberta’s electricity system. So if you happen to be more of an expert, feel free to adjust my thinking. If you are from another jurisdiction, I want to hear about your experience with Time-Of-Use (TOU) pricing and demand response programs. I get into that more in a bit.
First, some history. As noted recently by Kristen van de Biezenbos:
Alberta’s power market is unique in Canada but is similar to ‘unbundled’ competitive markets in other parts of the world, including the U.S. and Europe.
Starting in the 1990s, Alberta unbundled or split the former electricity monopolies into the component parts of the power system — electricity generation, or power plants; transmission, or high-voltage power lines; distribution lines and poles in the cities connecting power to homes and businesses; and retail, or billing services.
The intention behind this was to create competitive markets for generation and retail services and to use regulation to keep transmission and distribution rates fair for both utilities and customers.
Next, the context and the problem. Electric vehicles are becoming more popular. The proportion of new car sales being fully electric continues to grow. Governments are not just leaving this to consumer choice, however. The Canadian government aims to mandate that all new passenger cars and light duty trucks sold will be electric from 2035. In Alberta, as it stands now, to my knowledge, there is no motivation for an EV owner to program their charger to charge the vehicle during off-peak times. The same rate is paid regardless of when power is used. This is because Alberta has no Time-Of-Use (TOU) pricing for residential consumers (industrial consumers are exposed to TOU pricing).
A common expected behavior would be to come home from work and plug in your car to charge it, then turn on the stove to cook dinner, turn on the TV, maybe do some laundry, and meanwhile, the air conditioner is likely also running to make the house comfortable. All that cumulative electricity demand together with more electric vehicles getting charged at the same time will create that much more of a peak.
To meet what will be a giant peak demand, more generation, transmission and distribution will be needed. A much higher peak than is necessary – and all those extra costs will be passed on to ratepayers. Yet it doesn’t have to be this way. Since I start this newsletter more than five years ago, I have seen many stories of utilities in other jurisdictions investing tens of millions in what is referred to as “demand response programs”. Providing an incentive to the consumer to shift electricity demand to off-peak times so that more expensive generation and more wires are not needed. Examples include off-peak charging of EVs and minor adjustments to air conditioner use .This can also extend to other efficiencies like timing when your water is heated. For years I’ve watched many, many other jurisdictions implement these cool ways for shaving peaks in electricity demand, yet it seems in most cases Alberta is blithely continuing on its present course without tending to what the future will require.
Yet the way Alberta’s electricity system is structured, each part of the system has its own drivers that are at cross-purposes for achieving overall system efficiencies. For generators: more electric cars – great! They’ll be happy to build out more generation capacity. More generation = more revenue = happier shareholders. The same can be said for transmission and distribution. Granted there are some checks and balances in the system, but the general premise holds – none are motivated to achieve system wide efficiencies. As far as I can tell, neither the Alberta Utility Commission (AUC) or the Alberta Electricity System Operator (AESO) has the authority to sort this out.
And let’s face it, energy is costing us all more. In Alberta, we rely on natural gas for a lot of our electricity. So electricity prices are going up regardless. But why should it be made that much worse by building out the system unnecessarily?
The solution: Alberta’s policy makers need to provide new rules of the game for electricity system participants to better accommodate the onslaught of electric vehicles in order to prevent the unnecessary buildout of generation, transmission and distribution. And while I have been focusing on EVs, there is a whole suite of other “non-wire alternatives” that could be pursued – among them the harnessing of all the connected smart devices and apps.
Exactly what all is needed to capture the efficiencies is a bit blurrier to me. Some form of consumer Time-Of-Use (TOU) pricing and deploying smart meters likely form part of the answer.
Yet, it is easy to point the finger at the government and say “This is your job to fix this.” Another way would be for system participants to convene themselves to sort the options and propose solutions. If you need help brokering the conversation, let me know as I have experience with this exact kind of complicated conversation.
Lastly, many of you are in another jurisdiction and I’d be happy to hear your experience. Take California for example, where I saw electricity costs four times as much during peak hours compared to off-peak.
Feature Stories
Rapid EV Growth Hastens the Peak, Then Fall, of Internal Combustion | Bloomberg
BloombergNEF published its annual long-term electric vehicle outlook today, a deep look at the future on two, three, four and more wheels. The trends are clear: Despite the challenges of a pandemic, supply-chain crunches and trouble sourcing critical minerals, electric vehicles are eating into the transportation system and taking bigger bites every year.
Net-zero by 2050 means no fossil fuel car sales beyond 2038, says BNEF | The Driven
The global road transport sector can still reach net-zero emissions by 2050 through electrification, but urgent action is vital, and the last internal combustion vehicle (ICE) must be sold by 2038.
Finance & Sentiment
Investors align $16 trillion in assets with net-zero targets | S&P Global
Large money managers such as Danske Bank, BlackRock, and Wellington Management have agreed to align $16 trillion of their managed assets with 50% GHG reduction targets by 2030, and net-zero targets by 2050, the most recent analysis of the Net-Zero Asset Managers (NZAM) Initiative shows.
Russia cuts off natural gas supply to Denmark, company says | AP
Denmark’s largest energy company said Russia cut off its gas supply Wednesday because it refused to pay in rubles, the latest escalation over European energy amid the war in Ukraine. Russia previously halted natural gas supplies to Finland, Poland and Bulgaria for refusing a demand to pay in rubles. And on Tuesday, the tap was turned off to the Netherlands.
India’s Plan to Recycle Old Cars Failing to Woo Vehicle Owners | BNN Bloomberg
India’s plan to remove millions of older polluting cars from its roads in an effort to clear some of the world’s most toxic air looks set to face several challenges with a new survey showing the majority of vehicle owners aren’t interested in trading in their automobile based on age.
Meet the 50 fastest growing green companies in Canada | Corporate Knights
Last fall, an ambitious survey covering 10 countries found that 84% of young people aged 16 to 25 are at least “moderately worried” about climate change – and 59% are extremely worried. They don’t see the “adults” – in business or government – making any of the hard decisions required to avoid the climate crisis. Instead, they see our net-zero targets slipping away and they feel betrayed. But daunting challenges bring out the best in people. And that’s what Corporate Knights found when we went looking for the Future 50 – Canada’s fastest-growing sustainable companies.
Technology
Hydrogen
Coors Beer Clan’s New Brew: Cheap Hydrogen For Cleaner Trucks And Factories | Forbes
[Excerept] Hydrogen generated from steam reformation and electrolysis, under the best of circumstances, have energy efficiency in the mid-70% range, but “we’ve got a cell that’s operating at in the upper 80% to low 90% overall efficiency, with very high purity hydrogen coming out on one side and high purity carbon dioxide on the other,” Coors says.
Massive 6,000MW renewable hydrogen plans shelved over “water issues” | RenewEconomy
Plans for a potential six gigawatt-scale wind and solar backed renewable hydrogen production hub in South Australia have been shelved, the project’s developer has confirmed, due to “unacceptable” risks around water supply.
DOE closes on $504M loan guarantee for Utah hydrogen storage project with 150 GWh seasonal capacity | Utility Dive
With the first DOE loan since 2014, the Advanced Clean Energy Storage project aims to make hydrogen from excess wind and solar production and then use it to produce electricity when supplies are short.
Carbon Capture
PTTEP initiates Thailand’s first CCS project | Upstream
Thailand’s national upstream company PTTEP is gearing up to develop the country’s first carbon capture and storage (CCS) project at its producing Arthit offshore gas field, paving the way towards its net zero greenhouse gas emissions target.
High-Speed Carbon Dioxide Catcher Heralds New Era in Fight Against Climate Change | Newsweek
Researchers at Tokyo Metropolitan University have created what they say is the fastest carbon dioxide catcher ever, possibly heralding a new era in the fight against carbon emissions linked to climate change.
Steel
Volvo, Vattenfall, Iberdrola and Siemens Gamesa join SteelZero initiative | edie
Major businesses including Volva and Iberdrola are the latest to sign up to the Climate Group’s initiative to using 100% net-zero emission steel for products by 2050.
Buildings / Infrastructure
[UK] Low-carbon tech to remove household energy bills in Octopus Energy, ilke Homes scheme | Current±
A mix of low-carbon technologies such as solar, battery storage and air source heat pumps are to be rolled out in a new partnership between Octopus Energy and ilke Homes.
UK offers households up to $7,500 off heat pump costs | pv magazine
Homes and small businesses in England and Wales will be able to claim a discount off installation costs from a fund that will allocate $188 million annually as part of the subsidy program.
Engineers create world’s first zero emissions cement | Ground Engineering
Engineers from the University of Cambridge have filed a patent for the world’s first ever zero emissions cement which is a by-product of steel recycling. The new Cambridge Electric Cement is made using old concrete instead of lime-flux in steel recycling.
Energy Storage
China’s compressed air energy storage industry makes progress | Energy Storage News
A 300MWh compressed air energy storage system capacity has been connected to the grid in Jiangsu, China, while a compressed air storage startup in the country has raised nearly US$50 million in a funding round.
Canadian compressed air energy storage selected for Australian city | Energy Storage News
An advanced 1.5GWh compressed air energy storage project has been selected as the preferred option for creating backup energy supply to Broken Hill, a city in rural New South Wales, Australia.
Fully merchant battery storage project in California raises US$78m debt financing | Energy Storage News
Siemens’ international financing arm, US development bank NADBank and energy storage developer EnerSmart Storage have signed a US$78.2 million loan facility to finance a fully merchant battery storage project in California totalling 165MW.
Energy Dome launches world’s first multi-megawatt ‘CO2 Battery’ project in Sardinia, Italy | Energy Storage News
Italian startup Energy Dome has launched the first demonstrator project of its carbon dioxide-based energy storage solution, a 4MWh system in Sardinia, Italy, while also revealing Series B plans.
Solar and Wind
Prime Infra plans massive 3.5 GW/4.5 GWh solar-plus-storage project in the Philippines | pv magazine
Philippines-based Prime Infrastructure Holdings has unveiled plans to construct a massive solar farm and energy storage project featuring up to 3.5 GW of PV backed by up to 4.5 GWh of battery energy storage in the Southeast Asian nation.
Lease terms for up to 4.5GW California offshore wind projects released | AP
The Biden administration has released the lease terms for offshore wind projects that would place hundreds of turbines in California’s coastal waters — the first such project off the nation’s Pacific coast. The two projects along the state’s northern and central coasts are envisioned to generate up to 4.5 gigawatts of wind energy.
China Is on Track to Double Its Solar Panels From Last Year’s Record | BNN Bloomberg
China will add enough new solar power this year to nearly double last year’s record amount of installations as the the country accelerates its clean energy drives. The nation is set to add 108 gigawatts of solar power to the grid this year, up from 54.88 gigawatts in 2021, state-owned CCTV reported on Monday, citing the National Energy Administration. There are 121 gigawatts of solar projects currently under construction, the NEA said.
China’s Renewable Energy Fleet Is Growing Too Fast for Its Grid | BNN Bloomberg
China is wasting more and more clean energy as it adds wind turbines and solar panels faster than its grid is able to digest them.
Fact check: Energy costs of wind turbine manufacturing recouped in months | USA Today
[Excerpt] Wind turbines recoup the energy expended to manufacture them within a year of normal operation, according to Eric Lantz, wind analysis manager at National Renewable Energy Laboratory.
New York announces 2 GW of new solar across 22 projects | pv magazine
New York has announced its largest land-based renewable energy procurement effort to date. Once installed, the selected projects will bring the state’s renewable energy mix to 66% renewable, in pursuit of 70% by 2030
Autonomous Vehicles
Driverless Trucks to Deliver Toilet Paper to Dallas Sam’s Clubs | Transport Topics
Gatik via YouTube
Self-driving trucks soon will make deliveries to Walmart Inc.’s Sam’s Club stores in the Dallas-Fort Worth area, marking a significant expansion of autonomous vehicles operating in live traffic.
Transportation
An EV charging rebate program expands in Massachusetts – here’s why it matters | Electrek
National Grid, a utility that serves more than 20 million people in New York, Massachusetts, and Rhode Island, is expanding its Off-Peak Charging Rebate Program in Massachusetts that it runs with ev.energy, a certified B corporation and global provider of managed EV charging software.
Buick unveils sleek new Wildcat car concept to shake off stodgy image and reinvent the brand for EVs | CNBC
General Motors on Wednesday unveiled the Buick Wildcat, a new concept car designed to signal a revolutionary change for the brand, as it moves to offer only electric vehicles in North America by the end of this decade.
Colorado commits $65 million to electric school buses | Electrek
Colorado Governor Jared Polis has signed into law SB 193, an air-quality bill which among other things creates a $65 million grant program for electric school buses in the state.
BAE Systems to provide more than 500 electric drive systems for Ontario bus fleets | BAE Systems
BAE Systems, a leader in electric propulsion, has been selected by the Toronto Transit Commission (TTC) to provide more than 335 electric drive systems for its new fleet of zero-emission capable hybrid transit buses. This follows an order of 165 additional Series-ER (Electric Range) systems for nearby Mississauga Transit.
Policy
Gas stations, commercial lots in Vancouver must have EV chargers by 2025 or pay $10K a year | CTV News
If a Vancouver gas station or commercial lot with 60 spots or more wants to avoid a $10,000 annual licence fee, it will need to have electric vehicle (EV) chargers available by 2025.
Biden invokes Defense Production Act to boost domestic manufacturing in clean energy, grid sectors | Utility Dive
The U.S. Department of Energy aims to build up domestic production of solar panels, electric transformers, heat pumps, insulation and hydrogen-related equipment under the Defense Production Act, or DPA, determinations issued Monday by the White House.
Biden to pause solar tariffs for 2 years amid supply chain disruption from Commerce investigation | Utility Dive
The White House is expected to announce a two-year reprieve on solar panel tariffs from Cambodia, Malaysia, Thailand and Vietnam, which would run parallel to the ongoing anti-circumvention investigation in those countries.