The week in clean energy and carbon: Japan’s energy storage push

That Japan launched its generous feed-in tariff scheme for solar, wind, biomass and geothermal from 1 July 2012 is well-known. It made another announcement last week on energy-storage batteries that could place it in an altogether different league in the clean energy industry.

The storage market would grow to ¥20 trillion ($US250 billion) by 2020 and Japan could take 50 per cent of the market, a report from the Ministry of Economy, Trade and Industry said. Its share last year was 18 per cent of the ¥5.2 trillion market.

Storage batteries are used in electric cars, and also enable the delayed consumption of renewable electricity. A solar plant with storage for instance would make possible consumption of solar power at night when there is no sun.

“If we keep promoting renewables, the stability of power systems may be at risk and surplus power may be wasted. Storage batteries are one solution,” the ministry said. It also set targets for efficiency improvements and for cost declines in the installation of batteries.

A different kind of storage made the headlines in the UK, as bidding closed for a £1 billion ($US1.55 billion) carbon-capture support program. The Department of Energy and Climate Change said that it had received signals of “significant interest” in the three months that the bidding window was open. A decision on the projects to fund will be announced later this year.

The International Energy Agency released its renewable capacity projections for the next five years and estimated the addition of 710GW by 2017, and the displacement of Europe as the centre of clean energy activity. China will account for 40 per cent of the addition, at 270GW, followed by the US with 56GW, India with 39GW, Germany with 32GW and Brazil also with 32GW, the IEA said.

By 2017, at least 70 countries will have 100MW of wind capacity, and 45 countries would have 100MW of solar PV, it said.

Roll-backs on renewable energy incentives continued in Europe. Bulgaria slashed by more than half the incentive tariffs for ground-mounted PV plants and shaved off a quarter for wind power plants from 1 July 2012.

Bulgarians were also hit by a 13 per cent increase in electricity prices this month. The State Commission for Energy and Water Regulation blamed the increase on the larger share of clean energy in the mix.

The slide in solar panel prices claimed another factory in the US, in this case one being built by General Electric. The company announced that it was suspending construction of its thin-film solar factory in Colorado – slated to be the biggest in the country.

There was traction visible in the electric vehicles market in the US. Sales of Chevrolet Volts more than tripled to 1,760 in June – from 561 a year earlier – and reached 8,817 in the first half. Toyota sold 695 units of its plug-in Prius last month. Nissan’s Leaf hatchback however saw a 69 per cent dip in June to 535 units as it made changes to its sales strategy.

Electric cars will get a dash of glamour soon, when actor Leonardo DiCaprio promotes the Karma sedan from Fisker Automotive as an environmentally-friendly vehicle. DiCaprio is an equity investor in the maker of luxury plug-in hybrid cars.

More than 1,000 Karmas have been delivered by Fisker in the US and Europe since December. Priced at over $US100,000, the Karma is able to travel up to 50 miles on a single charge, before the gasoline engine is activated.

EU CARBON RISE SUBSIDES ON FEARS OVER WEAK ECONOMY

After a month of steady rises, European carbon allowances, or EUAs, for December 2012 delivery ran out of steam last week with weak economic figures in the US and EU. EUAs lost 2.2 per cent last week, closing at €8.07/t, compared with €8.28/t at the end of the previous week. Lower US jobs figures than expected helped to unsettle markets. Weaker economic data puts in question the strength of demand for power, and hence demand for emission allowances. Meanwhile, the EU confirmed it would allocate free permits to power stations in Bulgaria, the Czech Republic and Romania during the third phase of the bloc’s cap-and-trade scheme starting in 2013. United Nations Certified Emission Reduction credits, or CERs, for December 2012 sank 6.7 per cent last week to close at €3.90/t, down from €4.18/t the week before.

WATER INVESTMENT CONTINUES IN SAUDI ARABIA

Saudi Arabia’s massive water upgrades continued, with state-owned National Water awarding contracts of SAR2.1 billion ($US560 million) to unnamed companies for water projects, the official Saudi Press Agency said. Meanwhile, Saudi Arabia allocated $US35 million for water and sanitation projects in Azerbaijan, while Germany’s state development bank, KfW, increased its funding to €100 million ($US123 million) for like projects in that country, Trend reported. Following the divestment the week before of its UK unit, Veolia Environnement acquired a majority stake in a Chinese environmental services firm, Bloomberg News said. China itself has allocated CNY340 million ($US53 million) for flood and drought relief and water repairs, according to Xinhua News Agency. Aquatech International, a US water purification technology provider, announced it had won a contract for a wastewater system at the Chinacoal Tuke facility in China. In Brazil, Sabesp said it will invest BRL2.4 billion ($US1.2 billion) over 30 years to expand water services in the state of Sao Paulo. Norway’s AF Gruppen said it won contracts of around NOK220 million ($US36 million) to build sewage treatment plants in Bergen.

PLANT EXTENSIONS AFTER “MAN-MADE” FUKUSHIMA

In Japan, a parliamentary inquiry, the Fukushima Nuclear Accident Independent Investigation Commission, labelled the March 2011 disaster “man-made” in a report last week, citing failures such as regulators working with Tepco to avoid safety measures, the New York Times said. World nuclear power output declined a record 4.3 per cent last year, according to the World Nuclear Industry Status Report 2012 published last week, following post-Fukushima plant closures. The report also said that the slowdown in new construction has increased pressure to extend plant lifetimes. Indeed, Belgium’s cabinet agreed to postpone the closure of Electrabel’s 962MW Tihange 1 reactor to 2025, 10 years later than planned, although the 433MW Doel 1 and 2 reactors will be shut in 2015, Platts reported. Spain is also reconsidering a decision to close the 466MW Garona nuclear plant, its oldest, in 2013, and has invited Endesa and Iberdrola to seek to extend its life to 2019, Bloomberg News said. Meanwhile, Areva will bid with China Guangdong Nuclear Power Corporation for the UK’s Horizon project, the BBC reported, while Areva’s chief executive Luc Oursel told Bloomberg News that the nuclear giant would also seek fresh talks to sell reactors to China.