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Half of businesses in the energy sector believe Brexit will have ‘a long-term positive impact’

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A state-of-the-nation study into how businesses in the energy sector are prepared for Brexit has revealed 62% believe the process of exiting the EU is currently having a positive impact on their business, while just 15% feel it hasn’t had any impact at all.

Commissioned by Huthwaite International, the report shows that post-Brexit business prospects remain positive, with 52% of businesses believing their growth potential will prosper post-Brexit, regardless of the outcome.

When looking at what worries businesses most about the UK leaving the European Union, international trade, uncertainty around trade agreements and changes to laws and legislation ranked as the highest concerns.

Improving negotiation skills also ranked as the biggest priority amongst businesses before the Brexit deadline, with many sighting it to be a key priority when it came to safeguarding profits and reducing overheads.

Tony Hughes, CEO at Huthwaite International, said: “Gaining the skillset and knowledge to survive this economic uncertainty is vital for business success. The UK is packed with ambitious and prosperous companies that in theory should flourish regardless of economic uncertainty, however the importance of obtaining the core skillsets to flourish shouldn’t be underestimated.

“One of the few certainties the UK faces is that, for selling organisations, things are getting tougher. As buying organisations entrench, delaying or even cancelling purchasing decisions, sales teams across all sectors and markets are having to up their game. This means sophisticated negotiation skills aren’t just important to ensure the UK secures a quality deal with the EU, but also form the fundamentals for ensuring business success across the UK too.”

Huthwaite International has published a white paper looking at five key elements businesses can implement to increase sales success in times of economy uncertainty. These include:

  • Confidence through coaching
  • Aligning capabilities
  • Utilising your service resources
  • Negotiation skills
  • Effective qualification

To access the full research white paper, visit: https://info.huthwaiteinternational.com/improving-corporate-negotiations.

Big business seeks to assert clean energy needs

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A group described as featuring the world’s most influential companies says it’s actively engaging with policy makers and utilities to accelerate the transition to renewable energy – but it is calling on governments to remove the remaining barriers.

Going 100% renewable: how companies are demanding a faster market response is the 2019 RE100 Progress and Insights Annual Report from international non-profit The Climate Group in partnership with CDP. It tracks the progress of more than 200 member companies toward 100% renewable electricity.

The report reveals that although members are increasingly opting for cost-effective sourcing methods that directly bring additional renewable energy capacity online, unfavourable policy and market structures are inflating prices and making it harder to switch in places such as China and Russia.

The good news is that half of members (49%) are planning to partner with and influence stakeholders (such as governments and energy companies) by the end of next year, to help create markets for renewables. Such efforts are already bringing about policy changes in the Republic of Korea and the Taiwanese market, where to date access has been difficult.

This week policy makers are gathering at the UN Climate Change conference (COP25) in Madrid, Spain, to discuss how to bring ambition in line with the objectives of the Paris Agreement. Analysis released last week by the UN Environment Programme showed on current unconditional pledges, the world is heading for a dangerous temperature rise of 3.2˚C.

Helen Clarkson, CEO, The Climate Group, said: “At a time when UN research has said countries are underdelivering on climate action, leading businesses are stepping into the void left by national governments and accelerating the clean energy transition.

“With ten years left to halve greenhouse gas emissions, it is vital that governments respond faster to rising demand for renewable energy. Without decisive action, countries and the energy sector risk losing out on billions of US dollars in investment from RE100 companies.”

Paul Simpson, CEO, CDP, said: “Corporate demand for renewable power is rapidly growing as the world moves to address the climate emergency. Encouragingly, we see renewable energy increasingly becoming a matter of business competitiveness in numerous markets around the world.

“Many companies are now making the shift because it makes business sense – in part due to changing expectations from their key stakeholders – be that investors, customers or employees. Now is the time to meet the demand and speed up the clean energy transition”.

Seven critical areas for energy sector transformation revealed

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A new report has mapped seven critical areas for energy sector transformation and outlines a path that world leaders and companies involved in the energy sector should consider to mitigate the looming climate crisis in the next decade.

The by Rocky Mountain Institute (RMI) report, ‘Seven Challenges for Energy Transformation,’ was launched during three connected international events in Delhi, Beijing and New York entitled ‘EMERGE’ that brought together senior energy stakeholders to discuss issues faced within the energy sector.

The report frames RMI’s view on the most critical areas for collective action in the next three to five years that will keep global temperature rise to well below 2 degrees Celsius.

It identifies tipping points for rapid change that can be leveraged across investment, breakthrough policies, cross-sectoral partnerships and more. It calls for decisive actions on the part of citizens, corporations, philanthropic institutions, subnational leaders, regulators and policymakers to work together in new ways that leapfrog outdated boundaries and scale new and existing technologies.

“Working together, public and private institutions can harness market forces to dramatically accelerate the deployment of clean energy technologies,” said Richard Kauffman, chair of the New York State Energy Research and Development Authority. “I’m proud New York is showing how these partnerships are making good progress towards our climate goals.”

The events serve as a starting point for leading energy sector thinkers and catalysts across India, China and the U.S. to explore the seven challenges and develop innovative, market-led ideas that will transform global energy use. Guided by the framework of the report, senior leaders from the public, private and philanthropic sectors will identify the highest leverage points to massively scale zero-carbon solutions together.

This ongoing work — part of a multiyear effort spearheaded by RMI — is being undertaken via a series of global labs for stakeholders to forge powerful, cross-sector connections and drive exponential impact.

“The time for action is now,” said Jules Kortenhorst, CEO of RMI. “The window of opportunity to avoid the most severe consequences is closing quickly. This report, and our efforts to mobilise the world’s top leaders to solve it together, is a critical first step to bring about urgently needed change.”

To download the report, visit https://rmi.org/seven-challenges-report.

UK power market hits consolidation as Brexit looms

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A major change is underway in the UK power market, with increasing competition, regulatory headwinds, growth in renewables and investors’ uncertainty in Brexit all playing a part.

That’s according to research by GlobalData, which says a significant number of mergers and acquisitions (M&A) within the UK power sector has signalled a period of consolidation, along with over 10 electricity and natural gas suppliers folding their businesses within the last year.

GlobalData says the smaller scale suppliers are most at risk, with some exiting the market after they failed to hedge the risks properly, and others falling prey to big players through M&A.

“It is evident that companies will only be able to survive in this competitive market if they are able to achieve economies of scale,” said Ankit Mathur, Practice Head of Power at GlobalData. “The small players have provided an opening for large energy companies to diversify and enter the UK energy retail business.

“For example, Shell Energy debuted into the UK energy market after acquiring First Utility in 2017 and recently proposed to acquire Green Star Energy. This proposed transaction along with announcements of Octopus Energy acquiring Co-op Energy, and Ovo Energy slated to acquire SSE Energy’s retail business, marks the third such announcement in the last three months that indicates the UK retail market is under a consolidation phase.”

GlobalData says the UK’s Big Six energy suppliers (British Gas, EDF Energy, E.ON SE, npower, Scottish Power and SSE) have been badly bruised by the fierce competition from more than 60 smaller competitors offering cheaper and affordable prices.

According to Ofgem, the Big Six companies have lost around 1.3 million customers and are serving just above 70 per cent of the domestic customers. Their cumulative profits tanked by 10 per cent and earnings before interest and taxes (EBIT) fell by 35 per cent in 2018 as compared to 2017.

Mathur added: “The smaller companies in the next tier are boosting share; however, they are more prone to the risk, with some exiting the market. The new stringent entry requirements for new suppliers including tighter funding requirements, providing a customer service plan and passing a ‘fit and proper’ test may restrict new entry into the market.”

Businesses ‘waste billions’ stockpiling rubbish

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Homes and businesses across the UK are storing rubbish and old junk that is wasting space, energy, rent and rates.

That’s according to research by Censuswide for Skoup, a ‘pay-as-you-throw’ service for surplus clutter and waste.

The research indicates that homes and business are wasting space and money on storage for bulky items that they’ll never use, such as sofas, filing cabinets, old equipment and general junk that can’t be recycled at the kerbside.

The data also found that the average home is wasting six square feet of living space, storing rubbish because the items are too large or too difficult to recycle or dispose of.

The scale of this waste at national level is eye-opening: Collectively, the national “waste of space” in UK homes amounts to 3,444 acres of living space, equivalent to the entire floor space of 164,000 average sized UK houses, 1,722 football pitches or ten Hyde Parks.

The worst part of the country for storing rubbish is Norwich, where the biggest hoarders store a colossal 7.36 square feet on average in their homes.

In the South East a staggering one in 50 homes have more than 20 square foot dedicated to junk storage. Age was also a factor in hoarding – the baby boomer generation (age 55+) store more than twice as much junk as Gen Z (age 16-24).

“Many of us wish that we had more space in our homes and businesses, and often we overlook the rubbish that has literally become part of the furniture,” said George Pearce, Commercial Development Manager, who is leading the national launch of Skoup.

To gauge pent-up demand, Skoup placed a skip in a street in Solihull and filmed what happened next. The skip was filled within just three hours.

“If you replicate what we did with this experiment nationally, it’s clear that there are thousands of skips’ worth of rubbish that UK homes are desperate to get rid of, not counting the extra waste that they tolerate,” Pearce added.

Businesses are also housing unwanted desks, chairs, old equipment and more, according to Skoup polling. The average office of a small business has enough space taken up with rubbish to seat an additional two employees and most say they have been hoarding for a matter of years rather than weeks or months.

Office floor space equivalent to just one employee’s work area can cost around £6,000 per annum, based on a per square foot rental fee of £4 per month.

“When you consider the cost of business rent and rates for storing rubbish, clutter and junk, the total national bill for SMEs alone stretches into the tens of billions of pounds per annum, which is simply staggering,” Pearce added.

Censuswide surveyed 2,000 respondents across the UK between 20th and 23rd September 2019.

Image by Thomas B. from Pixabay

Renewables to represent 30% of US total installed capacity by 2030

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The contribution of renewable power to total installed capacity in the US is expected to double from 15% in 2018 to 30% by 2030, reaching a total of 442.8 gigawatt (GW).

According to the latest numbers from GlobalData, that’s equivalent to a compound annual growth rate (CAGR) of 7.3%, attributed to more states adopting and updating renewable energy policies, as well as imposed emission taxes increasing the cost of fossil fuel power generation.

Energy utilities in the US are also in favour of switching to renewable power as they must comply with the state renewable energy targets. 

GlobalData’s latest report, ‘US Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations and Competitive Landscape’, reveals that the share of coal-based capacity will decline from 27.2% in 2018 to 13.5% in 2030 as it is replaced by renewable energy, storage projects and stable gas-based generation in the near future. 

Arkapal Sil, Power Industry Analyst at GlobalData, said: “During 2019-2030, offshore wind capacity is set to see the largest growth rate among renewables reaching 11.7GW from 60 megawatt (MW) at a 62% CAGR, while solar photovoltaic (PV) capacity is expected to reach 220GW from 75.3GW, growing at a 10% CAGR.”

The onshore wind segment, which registered a growth of 22% CAGR during 2000-2018 (reaching 96.3GW), will witness a steady growth of 5% CAGR over the forecast period to reach 185.5GW in 2030 and account for 12% of overall generation mix compared to 8% in 2018. 

Sil added: “Biopower, geothermal and solar thermal segments are expected to jointly grow at an average of 3% CAGR over the forecast period. Increased renewable capacity addition will open up new markets for wind turbines, modules for solar plants and associated equipment required for transmitting the generated power to the grid.”

Renewable capacity expansion will necessitate grid modernization in order to manage a high volume of renewable energy with inherent variability. This, in-turn, will involve huge investment in grid infrastructure and open up new markets for energy storage systems to enable a steady supply of power when adequate renewable energy is unavailable. GlobalData estimates that the battery storage market in the US is expected to reach around $5bn in 2030. 

Sil concluded: “The increased cost of nuclear power due to higher safety standards will result in a slight decline in the nuclear capacity during the forecast period. As a result, gas-based power will dominate the generation mix, accounting for 41% of installed capacity, and catering to the country’s base-load power requirement in 2030.”

CENTRICA REPORT: Why sustainability is good for business

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Sustainable businesses see energy as an opportunity, not a financial burden. They’re exploiting distributed energy technologies, such as onsite generation and storage, to cut costs and carbon emissions.

This also increases operational resilience and enhances reputation.  

Download Centrica’s research report to see the 4 steps you can take to accelerate your energy sustainability and improve your business performance.

Energy M&A activity hit $158bn in 2018

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Transaction volumes within the global power mergers and acquisitions (M&A) market remained strong through 2018, reaching US$158bn, the second highest in the last five years.

Deals registered in 2018 decreased slightly, from 651 to 622 in 2018.

The statistics, researched by leading data and analytics company GlobalData, found that out of the 622 transactions reported in 2018, 597 were acquisitions while the remaining 25 were mergers.

As of 2019 year-to-date (YTD), 244 M&A deals were witnessed. The largest announced M&A deal in the power industry in 2018 was the acquisition of Innogy by E.ON for US$52.9bn.

The report, ‘M&A in Power – Thematic Research’, also revealed that the solar energy segment registered the highest number of M&As during the period 2015–2019 YTD with 661 M&A deals, followed by T&D, wind, fossil fuels and hydropower segments, with 654, 461, 305 and 214 M&A deals, respectively.

The report highlights that over the past few years, the power industry has seen a transition towards sustainable clean energy. Power utility companies in mature markets are now witnessing a wave of consolidations, looking to create scale due to the shift towards renewable energy sources, which is pushing them to alter their business models.

The consolidation through acquisitions is driven mainly by few companies’ incapability to attain that organically and the acknowledgment that companies require collaboration or cooperation for this transition to occur.  

Sneha Susan Elias, Senior Power Analyst at GlobalData, said: “Power and utility companies are focusing on crucial climate goals and measures in the form of clean energy growth and enhanced natural gas-fired generation to deal with the intermittency issues, safety and security of energy supply, phase-out of coal-fired power plants and nuclear decommissioning. M&A deals involving renewable energy are expected to rise in future due to power and utility companies’ transition towards sustainable clean energy.

“Over the coming two to three years, M&A activity in the power industry is likely to remain strong, backed by a global urge to move away from thermal power towards renewables, although the former will remain relevant.”

Image by rawpixel from Pixabay

Renewable energy now employs 11m people globally

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Eleven million people were employed in renewable energy in 2018, compared with 10.3 million in 2017, according the International Renewable Energy Agency (IRENA).

The organisation says that until now, renewable energy industries have remained relatively concentrated in a handful of major markets, such as China, the United States and the European Union.

However, East and Southeast Asian countries have emerged alongside China as key exporters of solar photovoltaic (PV) panels. Countries including Malaysia, Thailand and Viet Nam were responsible for a greater share of growth in renewables jobs last year, which allowed Asia to maintain a 60 per cent share of renewable energy jobs worldwide.

“Beyond climate goals, governments are prioritising renewables as a driver of low-carbon economic growth in recognition of the numerous employment opportunities created by the transition to renewables,” said Francesco La Camera, Director-General of IRENA. 

“Renewables deliver on all main pillars of sustainable development – environmental, economic and social. As the global energy transformation gains momentum, this employment dimension reinforces the social aspect of sustainable development and provides yet another reason for countries to commit to renewables.”

Solar photovoltaic (PV) and wind remain the most dynamic of all renewable energy industries. Accounting for one-third of the total renewable energy workflow, solar PV retains the top spot in 2018, ahead of liquid biofuels, hydropower, and wind power.

Geographically, Asia hosts over three million PV jobs, nearly nine-tenths of the global total.

Most of the wind industry’s activity still occurs on land and is responsible for the bulk of the sector’s 1.2 million jobs. China alone accounts for 44 per cent of global wind employment, followed by Germany and the United States. Offshore wind could be an especially attractive option for leveraging domestic capacity and exploiting synergies with the oil and gas industry.

The solar PV industry retains the top spot, with a third of the total renewable energy workforce. In 2018, PV employment expanded in India, Southeast Asia and Brazil, while China, the United States, Japan and the European Union lost jobs.

Rising output pushed biofuel jobs up 6% to 2.1 million. Brazil, Colombia, and Southeast Asia have labour-intensive supply chains where informal work is prominent, whereas operations in the United States and the European Union are far more mechanised.

Employment in wind power supports 1.2 million jobs. Onshore projects predominate, but the offshore segment is gaining traction and could build on expertise and infrastructure in the offshore oil and gas sector.

Hydropowerhas the largest installed capacity of all renewables but is now expanding slowly. The sector employs 2.1 million people directly, three quarters of whom are in operations and maintenance.

IRENA’s Renewable Energy and Jobs Annual Review can be downloaded here:  

https://www.irena.org/publications/2019/Jun/Renewable-Energy-and-Jobs-Annual-Review-2019

Image by Oimheidi from Pixabay

The energy storage market ‘paving the way for next energy revolution’

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The energy storage market has caught the eye of a number of stakeholders involved in the power industry, leading to its considerable growth and opening the way for the next energy revolution.

So says GlobalData’s latest thematic report, Thematic Research: Energy Storage, which highlights the present scenario and emerging market trends across electrochemical, mechanical and thermal energy storage.

The report says demand for energy storage system (ESS) devices in the power sector is increasing rapidly, particularly after the increase in the renewable energy integration into the grids. Intermittent power supply led to demand for the storage of electrical energy and supply during peak load periods. ESS devices can help make renewable energy – whose power output cannot be controlled by grid operators – smooth and dispatchable.

With the global energy storage market becoming one of the rapidly growing segments within the renewable power mix, GlobalData says equipment manufacturers or technology providers of energy storage technologies are focused on innovating their energy storage solutions and offering advanced energy storage systems.

Sneha Susan Elias, Senior Analyst of Power at GlobalData, said: “Battery energy storage system (BESS) is regarded as a crucial solution for overcoming the intermittency limitations of renewable energy sources (RES). The battery energy storage market reported cumulative deployment of 4.9 GW at the end of 2018 and is expected to reach 22.2 GW in 2023, with the US accounting for 24.7% of the global capacity. The deployment is expected to grow, due to a large number of countries opting for storage utilization to support their power sector transformation.

“The expansion in battery manufacturing capacity and falling costs resulting from the electric vehicle (EV) industry are driving growth in energy storage services and new markets. This fall in battery prices has favored the battery energy storage market and has speeded the deployment of energy storage projects globally.

“Currently, lithium-ion (Li-ion) batteries dominate the electrochemical energy storage market but other battery energy storage technologies such as sodium-sulfur (NaS), lead-acid and flow batteries are now getting deployed. While, thermal energy storage utilizing molten salt is among the most widely used technology in association with concentrated solar power (CSP) projects, among mechanical energy storage technologies, pumped hydroelectric storage systems is among the most mature energy storage technologies and offers a number of benefits such as energy-balancing, stability, storage capacity, along with ancillary grid services which include network frequency control and reserves.”

Image by Bert Braet from Pixabay