By Renato Piazzon Falcone. Peru is expected to launch its fifth renewable energy auction before the end of the year, according to industry sources, as reported in Gestión. Although official details have not yet emerged about the technology or capacity requirements, the auction is expected to include new capacity in solar PV and potentially other technologies, such as wind, biomass, and small hydro (no larger than 20 MW).
 
As per Peru’s 2008 renewable energy legislation, renewable energy auctions must be considered every two years to comply with the country’s 5% renewable energy target, which led to the auctions held in 2009, 2011, 2013 and 2015. The 2015 auction achieved worldwide record low prices for solar PV and wind at the time. However, the auction to be held in 2017 was cancelled due in part to generation oversupply.
 
To address these challenges and to improve competitiveness of renewables in Peru’s energy market, the Ministry of Energy and Mines (MINEM) has announced that it is reviewing the country’s renewable energy regulatory framework. Among the measures under consideration are regulatory acknowledgement of firm power in renewable sources (to avoid mandatory backup generation), hourly blocks in auction designs, as well as possible tax benefits. A clear and stable renewable energy policy framework would advance Peru’s energy security and environment goals since, according to new estimates, generation oversupply is expected to end in 2021.
 
In terms of deployment, Peru’s largest to date utility-scale solar projects, which were contracted in prior auctions, have begun operations in 2018: Enel’s 145 MW Rubi Project and Engie’s 40 MW Intipampa Project. Enel has also begun operations of a 132 MW wind farm, Wayra I.

In addition, by the end of 2019, Peru also reportedly plans to install some 140,000 solar panels in various areas of the country that require electricity in accordance with the government's goal of raising rural electrification coverage to 99%. 

By Blanca Lopez Bassa. Chile will award between 7.200 GWh to 7.900 GWh of energy power supply contracts in an energy auction to be held by the end of 2018, according to a presentation by the Chilean Energy National Commission (CNE).

On March 14, 2018, the CNE opened the registration process for institutions and users interested in presenting technical observations on the 2018 energy auction’s preliminary reports. This process officially launches the 2018 energy auction, according to article 131 ter of Law 20.805.

Since the reforms introduced by Law 20.805 of 2015 and Transmission Law 20.936 of 2016, Chilean energy policy has been characterized by unsubsidized and technology neutral energy power supply auctions. The Chilean model has demonstrated that it is possible to attract new renewable energy generators to the market by removing barriers for clean power generators and incentivizing investments in generation.

During prior energy auctions in 2016 and 2017, Chile succeeded in its policy objectives of stimulating competition, decreasing energy prices (Figure 1), and incentivizing entry of new renewable energy generation actors. For example, Auction  2015/01 of 2016 registered the lowest renewable energy price up to that date, US$29.2 MWh (almost half the carbon price in the same auction). The energy supply will come from “new wind capacity (45.5%), new solar capacity (6.8%) and a mix of conventional capacity (47.6%)” (IEA, at 95).

In the energy auction of 2017, the majority of new entry participants were renewable energy generators, the lowest energy price registered was US $21.48 / MWh, and the average price awarded was US $ 32.5 / MWh, as reported by Emol.economia.

Chile’s innovations in energy auction design include the use of hourly and quarterly sub-blocks, which are particularly beneficial for renewable energy generators. In addition, the government established longer contracts and more flexibility, among other regulatory and policy incentives, to attract investment. For example, the government allows up to five years “to postpone the term of beginning of the energy supply or put an early termination to the contract if, for reasons not attributable to the successful bidder, its generation project it is delayed or if it becomes unviable,” according to article 135 ter of Law 20.805. 

Annual global electric vehicle (EV) sales will increase from 1.1 million worldwide in 2017 (a record) to 30 million in 2030, according to a new forecast by Bloomberg New Energy Finance (BNEF). 

The falling cost of batteries is a main driver of increased adoption. BNEF projects that by 2024 the upfront cost of EVs will be competitive on an unsubsidized basis and that by 2030 EVs will be cheaper to make than internal combustion engine cars. 

By 2040, BNEF projects that 60 millions EVs will be sold annually, equivalent to 55% of the global light-duty vehicle market (see chart), and that electrified buses and cars will displace a combined 7.3 million barrels per day of transportation fuel. 

California is the largest U.S. market for EVs, and the State is moving forward with plans to increase the number of zero-emission vehicles on its roads.

In January 2018, California Governor Edmund G. (Jerry) Brown Jr. ordered "all State entities [to] work with the private sector and all appropriate levels of government to put at least 5 million zero-emission vehicles on California roads by 2030." (Executive Order B-48-18). To achieve this goal will require significant investment in charging infrastructure, a goal supported by an array of programs administered by the State's energy agencies and utilities. Zero-emission vehicles are a key part of California's effort to meet its ambitious goal of reducing greenhouse gas emissions pollution to 40% below 1990 levels by 2030.

Despite California's leadership, BNEF projects that the US will account for only 11% of EV sales in 2030 whereas China will "lead this transition" with sales accounting for almost 50% of the global EV market in 2025 and 39% in 2030. 

Brazil awarded 1,024.5 MW of clean power supply contracts in an energy auction held on April 4, 2018.

Reflecting solar's increasingly competitive pricing in Brazil, solar PV accounted for approximately 80% of total contracted capacity (806.6 MW). The final average price for solar was 118 BRL (US$35.2)/MWh, according to a report in PV Magazine.

The remaining capacity was allocated to wind (114.4 MW), biomass (61.8 MW), and small hydro projects (41.6 MW).

The April 2018 auction was the fifth national auction in Brazil that included solar PV. In the previous four auctions held between 2014 and 2017, a total of approximately 3.5 GW of large-scale PV capacity was allocated.

Also in April, Brazil's Ministry of Mines and Energy announced plans to hold a new energy auction on August 31, 2018 to contract power from wind, hydro, and thermal plants (biomass, natural gas and coal). The government will award power purchase agreements (PPA) with a term of 30 years for hydro, 20 years for wind, and 25 years for the other sources, according to a report in Renewables Now.

Global clean energy investment totaled $334 billion in 2017, up 3% from 2016, according to Bloomberg New Energy Finance (BNEF).

Notable trends include the following.

• Global solar investment increased to $161 billion in 2017, up 18% from 2016.
  
• The cost of utility-scale solar photovoltaic systems continues to fall. They are about 25% cheaper per megawatt (MW) than two years ago.
• China continues to lead in clean energy investment. China invested $133 billion in 2017 (40% of the global clean energy investment total), followed by the U.S. at $57 billion.
• Mexico and Australia invested $6 billion and $9 billion, respectively, achieving all-time clean energy investment records for their countries.

 
The clean energy investment trends report and press release can be accessed on the BNEF website. Clean energy investment figures include renewable electricity generation systems (wind, solar, biomass, small hydro, geothermal, and marine), biofuels, and energy smart technologies such as digital energy, smart grids, power storage, hydrogen and fuel cells, advanced transportation, and energy efficiency. Hydro projects larger than 50MW and solar projects smaller than 1MW are not included.

By Priya Aggarwal. While microgrids have always had their share of admirers, certain events in the past year have brought them increased attention, and they now are (or should be) on every energy company’s and utility’s radar.

As defined by the U.S. Department of Energy Microgrid Exchange Group, a microgrid is "a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode."

Earlier considered mainly because of their ability to island (i.e., operate independently from the grid) and serve remote areas, microgrids are now experiencing mainstream adoption as communities, companies, and governments recognize the key benefits of microgrids in terms of resiliency and energy security.

The following events can be credited with bringing microgrids into the public spotlight.

1. The year 2017 saw many tragic natural disasters that not only resulted in loss of human life, but also disrupted entire communities for days, weeks, and months. Power outages cost nations millions not only due to infrastructure rebuilding requirements but also due to decreased economic activity. Hurricanes Maria, Irma, and Harvey, all brought attention to the potential advantages of having a microgrid at times of large-scale grid failure, and with resulting news articles and discussions on the topic, microgrids increased their public profile.

2. Another event that got attention was not a grid failure but rather a local accident that caused one of the busiest airports of the world, Atlanta, to have an eleven hour long blackout in December 2017. The resulting chaos from stranded travelers and delayed flights again brought focus on the need for utilities to modernize and implement more resilient options.

In addition, a major energy security concern that is receiving increased attention is the potential for central grid sabotage by non-state actors. The threat of intentional hacking of the grid to cause power failure to harm the nation’s economy is a real possibility and has many policy makers thinking about cybersecurity. One solution highlighted is dividing the grid into many smaller ones to avoid a large scale central disruption. This can be accomplished by deploying microgrids.

Some energy companies and utilities realized the importance of microgrids five years ago after Hurricane Sandy, but for many others 2017 was a threshold year.  A November 2017 report by GTM Research forecasts $12.5 billion in microgrid investment within the United States over the next six years, and states from California to New York are implementing policies to accelerate microgrid commercialization and deployment.

The Brazilian government announced this week that it would end construction of mega-dams in the Amazon, the world’s largest rainforest, according to news reports (O Globo, Mongabay).

For years, mega-dams in the Amazon have drawn intense opposition from Indigenous peoples, energy and economic experts, social and environmental organizations, and millions of citizens in Brazil and globally.

In particular, campaigns against the Belo Monte and São Luiz do Tapajós mega-dams mobilized a broad coalition of Indigenous and civil society organizations, who urged the government to develop the country’s wind and solar resources and invest in energy efficiency instead of funding mega-dams in the Amazon. Paulo Pedrosa, Brazil’s Executive Secretary of the Ministry of Mines and Energy, acknowledged the impact of this societal resistance, as well as the high costs and risks of mega-dams, in statements to O Globo.
 
In addition, Brazil’s world-class wind and solar resources, the falling costs of wind and solar technologies, and advances in integrating renewable energy made a compelling economic case for a transition away from new mega-dams toward other sources of energy. For example, solar projects dominated the December 18, 2017, Brazil national power auction, and Brazil’s most recent national energy plan projects more than 40,000 megawatts of wind and solar installed by 2026, a significant increase over prior projections. With this week’s announcement, the national energy matrix is expected to continue to change by integrating more wind and solar power, small hydroelectric, biomass, and decentralized generation.

Heather Rosmarin, Executive Director of the InterAmerican Clean Energy Institute, issued the following statement:
 
“We congratulate the government of Brazil on this historic decision to end mega-dam construction in the Amazon, and we are profoundly grateful to the Indigenous peoples of the Amazon and the citizens of Brazil for years of dedicated work to protect the Amazon and advance clean, renewable, and affordable energy solutions.”

Photo: "Rivers for Life," a human banner involving 1500 people on Rio's Flamengo Beach, promoted the importance of free-running rivers, truly clean energy sources like solar power and including indigenous knowledge as part of the solution to climate issues during the international Rio+20 conference in 2012. The activity was led by Brazil’s many indigenous peoples organized under the umbrella of the Articulation of Brazilian Indigenous Peoples. At this time, during the height of the Belo Monte protests, the Brazilian government insisted that mega-dams in the Amazon were "green." Credit: Spectral Q/Chico/Paulo (2012)

On December 4, 2017, the Institute was honored to join a panel of experts to discuss renewable energy in Latin America at an event sponsored by the Energy Institute at Haas and Berkeley Energy and Resources Collaborative (BERC). More than 60 students and energy professionals attended the event. The panelists were James Cook, Director of Business Development at First Solar, Heather Rosmarin, Executive Director of the InterAmerican Clean Energy Institute, and Cristian Sjogren, Founder of SolarWatt. Professor Lucas Davis of the Haas School of Business moderated the panel. The discussion covered many aspects of renewable energy in Latin America with a focus on renewable electricity auctions and market trends in Mexico, Chile, and Brazil. The Institute thanks the Energy Institute and BERC for hosting this great event.

Four Latin American nations were among the top 10 emerging nations for clean energy market conditions and opportunities, as ranked by Climatescope 2017, a detailed, country-by-country assessment of more than 70 countries worldwide. The top-ranked Latin American nations are Brazil (2), Mexico (4), Chile (7), and Uruguay (9). The top 20 also included Honduras (14), Costa Rica (18), and Argentina (20). According to the report,  Latin America and Caribbean nations can collectively achieve their climate targets by "mitigating emissions from the electricity sector alone." In one scenario, displaced fossil generation could be met equally by solar and wind generation if the region builds a total of 138GW of solar plants and 85GW of wind, which is eight times the region’s current wind capacity and 39 times the solar capacity as of December 2016.

Renewable energy tenders have been a particularly popular mechanism in Latin America and the Caribbean (LAC). A new REN 21 report, Renewable Energy Tenders and Community [Em]power[ment], looks at the interface between the tendering process and the role that communities can play in renewable energy uptake in the LAC region. It also proposes a mechanism to promote community-driven renewable energy projects in the context of renewable energy tenders.