Reuters has carried an opinion piece analysing the differences between the German and British energy strategies. Both countries are retiring conventional power generation capacity due to EU emissions and renewable energy policies (Germany’s being largely due to the decision to close nuclear power plants following the Fukushima disaster). Germany has already invested and continues to invest heavily in renewable energy, whereas Britain is more reliant on gas-fired power stations. The effect is that, because of (ten times) higher renewable energy levies and the need to cope with intermittent power generation, domestic power is more expensive in Germany, while British domestic power is more prone to price increases with increases in the gas market. However, for industrial power, Germany has lower marginal costs and therefore less expensive power, while Britain is 51% more expensive. Both countries face a spare capacity squeeze in the coming five years – Britain’s is expected to shrink from the current 13% to 4% by 2015 (and then lower by 2018), while calculations by RWE show the practical spare capacity in Germany is presently close to zero but will rise to 5 GW by 2015 (theoretically, with solar and wind energy at running at full capacity, Germany has 100% spare capacity). In the future, Germany intends on pursuing more renewables, whereas in Britain, renewables will play a part, but gas and nuclear are seen as key. This will mean higher up-front costs for Germany, but lower risk of power failures due to decentralisation, and in Britain continued exposure to international gas prices in a period of growing demand. The future of unconventional gas appears to be of high importance to Britain, and the news that Romania and Lithuania have given approval to Chevron for shale gas exploration might be significant.
Japan’s structuring of its energy sector is currently the subject of debate by a government committee, and it is proposing a major shake-up following the Fukushima nuclear disaster. With the experience of the disruption caused when a large power plant is non-functioning, the committee is pushing for a more decentralised approach to power generation, breaking up the nine major regional power monopolies now in existence and shifting to a deregulated model, with the power companies being split into power generation, grid, and retail companies. Changes are tentatively pencilled in for 2020, but the nation’s power companies are resisting the push, saying the picture might change once there is a clear idea of how many nuclear power stations will go back online following the country-wide shutdown in 2011.
The Global Carbon Capture and Storage Institute used a forum in Washington D.C early in February to call for more governmental incentives for development of carbon capture and storage technology. The CEO, Brad Page, was anxious that CCS technology should always be included in programs that aim to develop clean energy, pointing out that in some cases it is and in some cases it is not. In addition, he recommended that governments adopt emissions reduction policies if they do not currently have them, as they would further incentivise CCS technology development. He highlighted the fact that worldwide, one-third of government money earmarked for CCS technology development has not been granted, and said governments should accelerate the award of that money. During the same forum he announced restructuring to the GCCS Institute – as initial seed money from the Australian government peters out, the institute will seek to gradually transition to a foundation model, charging its member organisations fees, which will become the chief source of finance for its activities by the time government funding expires in 2017. It will also move to a more international focus, expanding its presence in North America, while it shifts its base from Canberra to Melbourne, cutting Australian staff numbers.
After an almost fourteen-year wait, the Indian government has given approval to a $US 2.6 billion/€1.97 billion National Thermal Power Corporation (NTPC) power plant project in the eastern state of Jharkhand. The state-owned company, India’s largest power generator by capacity, has understandably welcomed the news, which has been observed keenly by private companies hoping that the move signals a coming sequence of large project approvals. Amongst them are steelmakers Posco from South Korea, which has had a $US12 billion//€9.1 billion project waiting since 2005, and Indian-owned ArcelorMittal. An analyst from K.R Choksey Shares and Securities predicted that many large projects would be approved before the May 2014 Indian elections, with the government keen to get industry onside. There are around 100 large projects waiting approval in India; land negotiations and environmental permits are the typical barriers to go-ahead.
Research, Development and Technology
Tore Amundsen, Chairman of CO2 Technology Centre Mongstad, Norway, has given an interview to the UK’s The Engineer magazine, in which he has outlined the reasoning behind the centre. While Norway’s electricity is 97% hydro-powered, giving the impression the country would have little interest in carbon capture, its economic dependence on oil and gas exports means that it would benefit greatly from a low-carbon future for the combustion of oil and gas. The Norwegian government decided to 75% fund the centre, a full-scale facility on 63 hectares, as an alternative to giving technology development grants/subsidies, an approach that has provided stability, where grant giving approaches throughout the European Union have been riven by commercial uncertainties. The centre’s primary aim is to develop cost-effective solvents for the absorption of CO2, after which it may focus on other research areas. Mr Amundsen sees that ultimately, research and development in the area will be less government supported, although he states that the current period requires it.
Mr Amundsen’s group may be interested in the news from Australia. Researchers at Monash University have developed a photosensitive metal organic framework (MOF) material which they say can capture CO2 and release it in the presence of sunlight. According to Associate Professor Bradley Ladewig, the material represents “a step-change in carbon capture technologies,” as it is significantly more energy efficient over the capture-and-storage process compared to existing technologies because of its use of sunlight to liberate captured CO2. The researchers now aim to optimise the material for industrial applications.
The US Office of Fossil Energy’s National Energy Technology Laboratory (NETL) has installed a new supercomputer, High-Performance Computer for Energy and the Environment (HPCEE), which it aims to use for computational fluid dynamics and computational chemistry. The new machine, consisting of 24,192 separate 2.6 gHz Intel processors, is ranked 55th in the list of top 500 supercomputers worldwide, which gives an idea of its sizable power. Its installation will have a significant impact on NETL’s work, as researchers at the laboratory have frequently encountered a shortage of computing resources, and HPCEE provides an order of magnitude higher computing power. One example of work it will now be able to progress is modelling of coal jet penetration into gasifiers, and it will also aid the work of the Carbon Capture Simulation Initiative, which amongst other aims is attempting to develop a commercial sorbent for CO2 capture.
German cement manufacturer G Power Cement is to invest $US 90 million/€68 million in building an 800 tonne/annum cement plant in Cameroon. In doing so, it will become the third cement manufacturer to establish a plant in Cameroon in the last two years, the other two being Morocco’s Addoha and Nigeria’s Dangote, according to the report from Reuters. Construction is to begin in the next few months, and the plant is expected to be operational by 2015. Demand for cement within Cameroon is estimated as being 4 million tonnes/annum (growing at 8%); CIMENCAM, the Cameroonian national producer, currently has capacity to make around 1 million tonnes/annum, Addoha’s new plant produces 0.5 million tonnes/annum, and Dangote’s plant 1.5 million tonnes/annum, meaning G Power’s output should be fully consumed.
The newly formed Nippon Steel & Sumitomo Metal Corp has posted a profit of $US 265 million/€201 million in the October-December quarter, after a merger last year made it the world’s second largest steelmaker. While competition from China is strong, the weakening of the Yen has cheapened the price of Japanese steel, even while it has increased the cost of input imports. It has also increased steel demand from the domestic sector, as the cheaper Yen creates more international purchases of Japanese motor vehicles and ships. While the current quarter is also expected to be profitable, the company forecasts an overall loss for the year due to earlier losses.