Hidroelectrica eyes hydrogen project with Verbund
Romanian state-owned hydropower generator Hidroelectrica will seek approval from shareholders this month to sign an initial agreement with Austrian utility Verbund for the development of the Green Hydrogen and Blue Danube project.
The project hopes to produce 80,000 t/yr of green hydrogen from renewable generation sources and transport the hydrogen to offtakers in central and western Europe.
Hidroelectrica and Verbund, along with a consortium of partners from Austria, Germany and the Netherlands, will install 2GW of renewable generation capacity in Romania and corresponding electrolyser capacity to produce hydrogen. The project will make use of off-grid wind and on-grid hydropower generation.
The firms also plan to deploy a liquid organic hydrogen carrier (LOHC), which is a diesel-like liquid that can "chemically store" and release hydrogen, according to Hidroelectrica. The benefit of using LOHC is that it can be handled in ambient conditions, enabling it to be transported on existing infrastructure that is used for fossil fuels, primarily ships and barges. Offtakers in central and western Europe will then reconvert the LOHC to hydrogen.
The project also aims to make use of hydrogen propulsion technology for vessels that will be transporting the liquids, to further minimise its CO2 footprint. A total of 40 hydrogen-fuelled barges could accompany the project, Verbund said in 2019.
The companies will seek funding from the EU as part of the Important Projects of Common European Interest (IPCEI) framework. The development of large-scale hydrogen production capacity will help in the substitution of fossil fuels and contribute to the European and national climate objectives and the European Green Deal as green hydrogen can be used as a substitute feedstock for steel and chemical production and refining among others, Hidroelectrica said.
After completing feasibility studies, Hidroelectrica and its partners plan to send the final notification of the project to the European Commission by the third quarter of this year or the first quarter of 2022 and begin implementation from the third quarter of next year until 2030.
Verbund was involved in the development of the hydrogen-operated railway in the Zillertal valley and part of a consortium that developed an electrolysis system at a steel production site in Linz.
Essen-based utility Steag last month joined forces with German steel firm Thyssenkrupp to build and operate an electrolysis plant with a capacity of 500MW. The firms will also seek funding within the IPCEI framework.
Hidroelectrica shareholders will vote on signing the Green Hydrogen and Blue Danube project initial agreement on 29 March.
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EU needs future power grids task force: Ember
EU needs future power grids task force: Ember
London, 18 September (Argus) — The EU must put in place a future grid task force to bring together scattered legislation and directives, so the bloc can better implement its power grid roadmap and integrate renewable capacity, according to UK-based think-tank Ember. Integrating intermittent renewables into the power grid adequately will require substantial upgrades to the power network across the continent. This is a political priority for the EU but responsibility is shared across a number of European governmental bodies, Ember said. Most of the 80 action points laid out in EU policy and legislation are the European Commission's responsibility, but some objectives are overseen by EU distribution system body DSO Entity, European grid operators association Entso-E, energy regulators' agency Acer, the EU's High-Level Forum on European Standardisation, and individual member states. The policy framework is a "positive step", Ember said. But significant grid work and modernisation are needed, which would be best met through a single body that can ensure "timely and effective" delivery, according to Ember. A dedicated task force would centralise policy support and monitoring through a single channel, provide access to financing from the European Investment Bank and European Bank for Reconstruction and Development, and develop a clear roadmap for all actions that are currently in the commission's remit. The need for a roadmap is significant as several of the commission's targets do not have scheduled completion dates, Ember said. The EU must centralise funding access for member states and grid operators to ensure stakeholders can use as much of the funding available to them as possible, according to Ember. Funding is currently underutilised and spread across several financial instruments. In addition to uniting these instruments, the access mechanisms should be streamlined and administrative burdens reduced so that stakeholders of varying sizes can utilise these funds. The EU should provide targeted funding for pilot projects on grid digitalisation, and then create a "technical toolbox" to support the digitalisation of distribution grids. The toolbox would detail best practice approaches, standardisation guidelines and interoperability technologies to ease digitalising the power network. These innovative grid technologies (IGTs) or grid-enhancing technologies (GETs) use existing infrastructure to improve renewable integration while reducing overall investment needs. IGT and GET technologies could improve renewable integration with costly network upgrades by as much as 40pc, according to a study by Latvian grid operator AST. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Asia-Pacific faces $815bn/yr green financing shortfall
Asia-Pacific faces $815bn/yr green financing shortfall
Singapore, 18 September (Argus) — Asia-Pacific holds significant investment opportunities in the energy transition, but obstacles such as insufficient public funding, lack of regulation and investment risks have resulted in a financing shortfall in the region. The Asia-Pacific region needs at least $1.1 trillion/yr in climate financing, but actual investment falls short by at least $815bn/yr, said Singapore's ambassador for climate action Ravi Menon at a conference in Singapore last week, referencing data from the International Monetary Fund (IMF). There is existing green funding in the region such as from the Asian Development Bank (ADB), which estimated its investments amounted to $10.7bn in 2023, and bilateral arrangements like the $600mn India-Japan fund, established by India's National Investment and Infrastructure Fund and Japan Bank for International Co-operation in October 2023. But this is insufficient, especially as the region's energy demand is only set to rise further. Energy demand in Asia is growing by 2.9pc/yr, the highest of any region in the world, said Menon. Renewables such as solar and wind are now more cost-competitive than fossil fuels, but the region needs more grid connectivity and capacity to make renewable energy a viable option. Building transmission lines and energy storage in the region alone will cost about $2.4 trillion over the next 10 years, added Menon. Obstacles to capital flows Total energy investment worldwide is expected to exceed $3 trillion in 2024, with about $2 trillion going to clean technologies and slightly over $1 trillion toward fossil fuels, according to the IEA's World Energy Investment 2024 report. Fossil fuel financing by the world's 60 largest banks rose to $705bn in 2023 , up by 4.8pc from $673bn in 2022, with the rise largely driven by LNG financing. The continued investments in fossil fuels and fossil fuel-based technologies will lead to more carbon-intensive infrastructure, divert capital from clean energy alternatives and undermine climate targets, derailing Asia-Pacific from its energy transition goals. Emerging economies typically have "many developmental needs" to take care of, hence public financing in these countries cannot shoulder the overall trajectory of growth of energy transition financing, said the Institute for Energy Economics and Financial Analysis' (IEEFA) sustainable finance and climate risk research lead Shantanu Srivastava at the IEEFA Energy Finance 2024 conference earlier this month. Many smaller economies rely on financing from multilateral development banks (MDBs), but this comes in "bits and pieces" and with many strings attached, he added. It is hence essential to bring in private capital, but the region faces challenges in attracting private investments. The lack of a sound climate information architecture hampers accurate assessment and tracking of climate risks, which impedes investors' ability to make decisions and prevents the scale-up of climate finance, according to the IMF. Other measurable risks — such as political risk, credit risk, and foreign exchange risk — often significantly raise the risk premium of investments into the region. Investors tend to expect higher returns on investments with higher risk premiums, but there are limited investment opportunities available which would provide such returns and this prevents foreign capital from scaling, according to Srivastava. Insufficient regulatory and government measures in the region as well as the inconsistency of existing ones also deter private investors, as these increase project execution risks. Policy continuity and long-term visibility of what the country is going to do is essential as a "policy flip-flop" deters investor confidence, Srivastava said. Tools to attract more climate finance Blended finance is necessary to mobilise private capital for Asia's energy transition, according to Menon. Governments and development finance institutions could provide concessional or risk capital in the form of grants and limited guarantees, while MDBs can provide technical assistance in the form of development expertise, capacity building and institutional support, he said. Finance can also be encouraged through sovereign sustainable bonds, which can stimulate local sustainable bond markets by setting long-term price benchmarks, boosting liquidity, and serving as models for private issuers, according to IEEFA. The issuance of these bonds also signal a dedicated government commitment to sustainability goals and can drive the development of a robust and transparent regulatory environment, IEEFA added. This is crucial for the long-term growth and stability of the region's sustainable bond markets, which is essential for boosting investors' confidence. Another method is through revenue generation tools, such as carbon pricing and carbon taxes, according to the Financing Just Transition Through Emission Trading Systems report released earlier this month by think-tank Asia Society Policy Institute (ASPI). Carbon pricing sends a strong signal to reduce greenhouse gas emissions and indicates the government's intent to intensify efforts related to energy transition, which encourages private capital flow, stated the ASPI report. Carbon pricing also has the potential to generate substantial revenue, which can be allocated to climate funds to support low-carbon technology innovation and aid enterprises in making green investments, to aid low-carbon transition efforts, the ASPI report added. By Joey Chan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesian Sumsel 1 coal-fired unit eyes December start
Indonesian Sumsel 1 coal-fired unit eyes December start
Manila, 18 September (Argus) — The first 300MW unit of the 600MW Sumsel 1 mine-mouth coal-fired power plant in Indonesia's south Sumatra province is scheduled to begin commercial operations in December following several years of delays. The plant, which is located in Muara Enim regency, is being developed by China Shenhua Energy and Lion Power Energy, which have 75pc and 25pc respective stakes in the project. Once fully operational it is expected to consume around 2-3mn t/yr of coal. Lion will be responsible for sourcing the coal. The $750mn plant is part of Indonesia's 35GW power generation roadmap developed by the Indonesian government in 2015. The project was contracted to China Shenhua Energy in 2016. The first unit at the plant was originally scheduled for completion by 2020. But land acquisition delays and the Covid-19 pandemic and resulting restrictions on the movement of people and travel bans delayed construction, Lion said. Construction work on the plant structure is now in the final stages and operational testing is expected to begin soon. But hitting the operational target date also depends on the completion of a 275kV high-voltage line that will connect the plant to the grid, state-owned utility PLN said. The 80km transmission line will pass through four districts in south Sumatra. The local government is pushing for the acceleration of the voltage line construction and has instructed the sub-district head and local government offices to provide support for the power line construction, PLN said. Sumsel 1, once fully operational, will operate on a build-own-operate basis with a 25-year power supply contract with PLN, the utility said. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK launches global clean power alliance
UK launches global clean power alliance
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