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covid-19

Transition to renewables ‘to fuel post-COVID recovery’

 960 640 Stuart O'Brien
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Investment in renewable energy expansion will be an important cog in the wheel towards the post-COVID-19 economic recovery journey.

Expanding the renewables will not only help countries deliver stronger climate action under the Paris Agreement, but also fuel the economic activities across the value chain forming a powerful recovery mechanism to recuperate from the COVID-19 crisis.

That’s according to research from GlobalData, which says due to technological advancements, economies of scale and competitive auctions, the Levelized Cost Of Electricity (LCOE) for renewables has seen steep decline. For example, the LCOE of solar PV had witnessed a drop of 86% to reach 0.05USD/kWh in 2019 when compared with 2010. Likewise, for onshore wind the drop was 50.0% to 0.05USD/kWh.  

The declining LCOE has brought the renewable at par with fossils and in some countries even cheaper. This trend of cost competitiveness and innovation is likely to continue and could attract countries and investors to increase their renewable appetite. For instance, 2019 saw the highest solar power capacity additions and also the highest investment in the offshore wind segment. 

However, the planned investments in this sector until 2030 is lesser than the investments made in the last decade. The COVID-19 pandemic recovery stimulus provides an excellent window of opportunity for governments to channelize their investments in the renewables to offset the silos in the future investment schedule. These were earlier unable to reach the desired  2030 installations target decarbonizing the economy and putting forward a strong step towards climate sustainability. 

Somik Das, Senior Power Analyst at GlobalData, said: “ During the COVID-19 pandemic, renewable energy took the center stage. With declining electricity demand, utilities focussed on generating electricity from cost-effective renewable sources. By the end of 2030, the cumulative renewable installed capacity is estimated to be 3,600GW, about 1,900GW more than that of 2020, which is substantially lower than the required built-up of about 2,800-3,000GW for limiting the global temperature rise by 2c.  

“Incorporating higher investments in renewable energy might provide an opportunity to increase the investments and make up for the shortfall in the required installed power capacity by 2030. 

“Hence, increased investments in renewable energy in the recovery packages would benefit greatly and usher in a multitude of economic benefits. Not only it will provide a better opportunity in addressing climate change goals and global warming issues but also creates new jobs and stimulate economic activities.”  

Maximise opportunities for your business during Covid-19

 960 640 Guest Post
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The current Covid-19 pandemic has caused fluctuations in demand and consumption leading to uncertainty around energy procurement. 

While it is unclear what may happen in the coming months, the team at World Kinect Energy Services is on hand to help customers mitigate price risks and maximise opportunities.  

Through continuous, informed market insight and analysis, the global energy expert can identify the latest changes that could impact businesses and offer further guidance on these three top tips:

  • Reviewing your contract tenure
  • Being aware of your hedge position
  • Understanding your credit terms

Click here to find out more, or contact info@world-kinect.com for further advice. 

Coping with COVID-19: Waterscan’s Claire Yeates anticipates the long-term impacts for the water sector

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By Claire Yeates, Waterscan

A great deal of good will come from all this. Yes, yes, I know it is an easy thing for an optimist like me to say but I honestly believe it, having attended many day-long, socially distanced, virtual industry meetings over the last couple of months. That is not to say that it will not be difficult: there are obstacles to overcome in all battles and the collective fight against coronavirus in which we are all currently engaged is no different. 

But here is my take on why the water sector will be a better place once we emerge from current trading conditions.

First and foremost, industry regulator Ofwat and market operator MOSL have not deviated from their unified mission to ensure that the customer is paramount. Protecting customers’ interests is absolutely top priority at this time and they have been working at an unprecedented pace and scale to ensure that no-one is left unsupplied or unsupported in difficult times. Whilst this is an unwavering permanent objective, it is their sheer ‘sleeves rolled-up’, can-do attitude that has enabled many measures to be tabled, consulted upon, and implemented in short timeframes, and of course, without face-to-face contact. This flexible, pragmatic, contemporary approach could continue in a bid to speed up performance improvement in the future. 

And here is another positive theme: we are seeing higher levels of collaboration and engagement than ever before. When the self-supply community met for its Spring forum recently, both Ofwat and MOSL thanked attendees for their efficient responses to numerous calls for information to guide decision-making. Long may this level of customer engagement continue.

All of us working in the sustainability arena will be pleased with the positive environmental impacts that have been reported around the world. Emissions of carbon monoxide have fallen by around 50% in New York. Wild kangaroos have been hopping around downtown Adelaide. Venetian canals are clearer than many can remember, and a drop in air pollution has enabled citizens in India to see the Himalayas for the first time in their lives. Is it possible that these wonderful impacts become ‘light-bulb’ moments for the masses: a collective awakening to the possibilities that sustainable, low carbon economies can offer? We can hope. 

So far so good. I mentioned earlier, however, that there would be casualties in the water sector (just as there will be in many others). Several trading parties have been complaining that they are in firefighting mode and have reduced their service levels accordingly, others claim that they are already in need of monetary support to weather the anticipated financial fall-out. 

To me, this raises some really important questions around business continuity: how is it that some trading parties have been operating at the very outer limits of resilience? What we are seeing are weaknesses being exposed: a lack of business continuity planning, inadequate resourcing, an inability to service customers effectively by maintaining data provision and, in some cases, abuse of the very measures that have been put in place to secure their future… it’s not a pretty picture. 

But, is it a bad thing? A competitive market, by definition, is based on the principle of survival of the fittest. If a business is poorly managed, it does not deserve to survive and thrive. The water market could be more sustainable, trusted, and stronger as a whole if all of its constituent elements were run to a consistently high ethical standard.

My biggest concern about the whole situation is that some collaborative work that had begun to drive real change has been halted. As I write, the focus is necessarily on essential work around water supply and the treatment of wastewater. Added value services have largely fallen by the wayside.

In practical terms then, what are the likely longer-term ramifications of all this for commercial water users? 

Market rationalisation through some trading parties going out of business? 

Probably. While Ofwat is working hard to help everyone survive, it is surely inevitable that some businesses in a competitive marketplace will fail. With this in mind, the regulator is absolutely right to keep its focus firmly on the end-customer. 

Higher prices to level-out profit margins? 

There will certainly be a hole that needs filling to shareholder satisfaction. However, I would hope the shortfall will be delivered through efficiencies and innovation and I am confident that any price increases , if required, will be kept proportionate so long as the measures put in place by Ofwat and MOSL are not abused and problems exacerbated.

Greater competition to maintain or regain market share? 

Likely. It is unfortunate that the water retailers that are most at risk of failure are those smaller companies because these tend to be where enhanced services and innovation lie. Regardless of business size though, all suppliers will have to up their game when it comes to customer service and invest in modernisation and improvement programmes to grow market share. 

Administration burden, dealing with a major meter reading and billing backlog? 

Definitely – and this is really unfortunate because it is so unnecessary, especially considering that enabling customers to maintain visibility of their consumption and continue to process payments positively impacts market liquidity. Many thousands of water meters are located where they can be read safely in accordance with social distancing guidelines. I would urge large water users to prioritise the rollout of AMR and data systems in their operations to further alleviate this issue.

Better business continuity planning and higher levels of transparency?

Possible – but this is one thing that really should come out of our experience of Covid-19. 

Amid the chaos of coping with Covid-19 in the short term, I am confident that the market will emerge leaner, stronger, and performing better than ever before as key learnings are highlighted. Just you wait and see… 

www.waterscan.com

5 Minutes With… Martin Hamilton, World Kinect Energy Services

 960 640 Stuart O'Brien
By:

In the latest instalment of our energy management executive interview series, we spoke to Martin Hamilton, Head of Sales UK and Ireland at World Kinect Energy Services, about his company, industry opportunities, the challenges we face with COVID-19 and how new technology can help…

Tell us about your company, products and services. 

World Kinect Energy Services is a global leader in energy management, fuel supply, and sustainability. Our focus is Everything Energy, striving to help our customers buy better and buy smarter. Our core solutions are designed to make fuel, energy, and sustainability easier for customers, including physical supply, energy procurement, price optimisation and risk management, data management and sustainability. 

What have been the biggest challenges the Energy Management industry has faced over the past 12 months?

Covid-19 has superseded all other challenges faced during the last 12 months. The level of uncertainty as a result of the pandemic has had a major impact on the global energy market, particularly on production, commercial and demand. 

From an energy risk management point of view, a level of uncertainty is usually good for the market because it means our expertise is called upon and utilised. But this level of uncertainty has been so unprecedented, it makes it more difficult to determine the accurate level of risk involved across all markets.

And what have been the biggest opportunities?

From a commercial perspective, when the dust settles from the pandemic, the price of oil is going to be incredibly appealing. This needs to be capitalised on in order to future proof market opportunities, which customers will want to take advantage of – particularly financial. 

For those committed to contracts, the global uncertainty has also presented an opportunity to reforecast and make sure everyone gets back to their correct positions. 

What is the biggest priority for the Energy Management industry in 2020?

Commercially, like many, trying to stay in business during the current climate is the top priority. This means continuing to support our customers and making sure they stay in business too. 

Extracting what is best and what is available in the current market and offering contractual set ups will certainly help customers to ensure their futures are protected, do business and employ people. Examining risk policy and securing the supply is also crucial for the months ahead.

What are the main trends you are expecting to see in the market in 2020?

Covid-19 aside, the main trend we are seeing in the energy market surrounds sustainability. It is certainly our most expansive division of the business and we are dedicated to recruiting the best industry professionals and strengthening our diverse offering.

This gives us the flexibility to be able to find sustainable solutions for our customers and prospects, and allows us to intelligently speak about the opportunities, pros and cons for products, whilst making sure we deliver. 

What technology is going to have the biggest impact on the market this year?

On the thread of sustainability, electric vehicles are a key technological development. They are rapidly evolving, and will no doubt become more mainstream in the years to come. We’re already working with customers looking to integrate EVs, by creating bespoke strategies, ensuring they secure the best contractual conditions and have systems in place to manage the increased loads on electricity networks. 

Artificial intelligence is also really coming into play for World Kinect Energy Services. There is a lot going on in this area, from weather forecasting to price validation. These technologies are allowing us to increase accuracy on our price determinations, and with various projects in the pipeline, it will continue to have a significant impact. 

In 2025 we’ll all be talking about…?

EVs and AI are going to continue to be hot topics, there is no doubt about it. But sustainability is really going to ramp up for us and our customers as we progress towards the net zero deadline. 

Senior level discussions are already taking place with our customers across the globe, and we are developing strategies with specific 2025 goals to help steer them.

Considering that everything will need to be publicised to supply chains and customers via marketing teams, I would imagine there will be reviews taking place on the progression, from targets set in 2020, and serious discussions about the next stage.  

Which person in, or associated with, the Energy Management industry would you most like to meet?

I am intrigued by Elon Musk. I certainly don’t agree with everything he says and does, but I think it would be fascinating to gain insight into the mind of a genius that has driven such high-profile technological advances. 

What’s the most surprising thing you’ve learnt about the Energy Management sector?

How competitive the space has become during my 20 years in the industry – the sheer number of market leaders continues to surprise me every day. 

You go to the bar at the Energy Management Summit – what’s your tipple of choice?

Definitely a G&T…or maybe a dark rum. I’m not too fussy!

What’s the most exciting thing about your job?

The large diverse service offering that I can have conversations about, such as making changes to benefit businesses commercially, but also supporting net zero campaigns. The industry has really shifted from being all about the commercial aspect, with the mindset among the majority of customers and colleagues being to genuinely make things better for the planet. 

And what’s the most challenging?

How competitive the energy market has become is making it increasingly challenging to do the right thing whilst remaining commercially viable. Due to excess competition, it can often become a race to the bottom from a price perspective. Nobody wants to devalue the quality service offered by their company, but the market ultimately dictates the price point.   

What’s the best piece of advice you’ve ever been given?

My grandmother’s motto was “it’s nice to be nice” – she said it to my brother and I all the time when growing up. 

Peaky Blinders or Stranger Things?

100% Peaky Blinders

https://world-kinect.com/European-Solutions-Homepage

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