POWER Digest [March 2020]

Siemens Buys Out Iberdrola, Readying to Spin Off Gas and Power and SGRE Businesses. Siemens AG will acquire Spanish renewables giant Iberdrola SA’s full 8.1% stake in Siemens Gamesa Renewable Energy (SGRE) in a €1.1 billion deal announced on Feb. 4. While the acquisition is expected to resolve legal disputes between the two companies, Siemens and Iberdrola also signed a cooperation agreement that covers “certain projects” for wind power generation and for improving the distribution grid. “For these projects, Iberdrola, as a customer of SGRE and Siemens, will grant these companies exclusive negotiation rights for a limited period of time,” Siemens said. Siemens now plans to contribute all SGRE’s shares to Siemens Energy, a new company it plans to form this April when it initiates the spin off of its lucrative Gas and Power business. “This move will create a pure-play energy company with a unique value proposition in the area of conventional and renewable energies,” Siemens said. Siemens Energy, which will then hold about 67% of the voting rights at SGRE, will have a two-thirds majority at the company’s annual general meeting.

Australia Pours Investments to Stabilize Reliability-Stricken New South Wales Grid. In a major deal that promises to lower power prices and stabilize Australia’s East Coast power grid, the federal government and the state of New South Wales reached a AU$2 billion ($1.4 billion) joint funding agreement on Jan. 31 to develop two interstate power transmission lines, increase gas supply, and add new power plants. The five-year deal includes at least AU$450 million in federal grants (matched by AU$1 billion from the state government) to establish emissions reductions initiatives, but it also underwrites the delivery of the HumeLink interconnection line from Snowy Hydro to southern New South Wales, and the Queensland-New South Wales interconnector project to strengthen grid reliability. The state government will meanwhile also offer investment opportunities to inject an additional 70 petajoules (663 MMBtu) of gas per year into the East Coast market and “remove barriers” to coal supply for Energy Australia’s 700-MW Mt Piper power plant, which has typically produced about 15% of the state’s power, but is currently facing an acute shortage of black coal. The federal government also pledged to support new generation projects in the state through its AU$1 billion Underwriting New Generation Investment program. A program shortlist so far includes five gas-fired power plants (a 132-MW plant in Queensland and a 220-MW plant in Victoria have so far been approved), six pumped hydro plants, and a coal upgrade. The deal follows a series of emergency measures instituted by the Australian Energy Market Operator for New South Wales, Australia’s most populous state, over the summer as the grid strained under the impact of high temperatures, generator outages, and high demand. Earlier in January, regional grid stability was further threatened by devastating bushfires that swept across the Snowy Mountains, taking out two substations and forcing the disconnection of the Victoria-New South Wales power interconnection.

Cybersecurity Alliance Agrees to Equip New Products with Cyber Presets. The Charter of Trust (CoT), a diverse coalition of companies that have pledged to abide by 10 cybersecurity principles, on Feb. 14 agreed to deliver next-generation products with in-built cybersecurity, though there are no uniform regulations governing the issue yet. Coalition partners also agreed that “no undocumented functionalities or possibilities for remote connection should be part of initial device setup.” Formally launched in February 2018 by Siemens and eight industrial partners, the CoT now has 17 partners, including AES, Airbus, Allianz, Atos, Cisco, Dell Technologies, Deutsche Telekom, IBM, Mitsubishi Heavy Industries, NXP Semiconductors, SGS, Total, and TÜV SÜD. The partners last year agreed on concrete baseline requirements with which they can increase the security of their supply chains. “Since then, numerous suppliers of CoT companies have already committed to meeting these requirements. Siemens has been introducing them step-by-step since Feb. 15, 2019, and they have been internationally anchored and made binding as part of the general ordering conditions,” Siemens told POWER.

Lockheed Martin, MHPS Team on Flow Battery Opportunities. Lockheed Martin and Oriden LLC, a Mitsubishi Hitachi Power Systems (MHPS) venture, on Jan. 30 announced a teaming agreement for future energy storage projects using GridStar Flow, Lockheed Martin’s innovative flow battery technology. The energy storage system is reportedly capable of storing six to 12 hours or more of energy and dispatching it as needed, and unlike conventional batteries, it allows customers to optimally size megawatts and energy megawatt-hours independently. Significantly, it can also reportedly maintain its energy capacity without degradation throughout project life. Under the teaming agreement, the companies will work together to identify and support long-duration energy storage projects.

Total Boosts Renewable Assets with Major Indian Deal. French multinational oil and gas company Total in early February acquired a 50% stake in Indian conglomerate Adani Group’s renewable arm, Adani Green Energy Ltd. (AGEL) in a $510 million deal. AGEL operates about 2 GW of solar power across 11 Indian states, all which have 25-year power purchase agreements with national and regional electricity distributors. Total, which said it is “fully engaged in the energy transition,” noted that India’s solar capacity is set to increase from 81 GW in 2019 to 225 GW in 2022. The deal, it said, will contribute to the oil company’s ambitions to deploy 25 GW of renewable energy by 2025.

Botswana Pushing Ahead with 100-MW Coal Bed Methane Project. Botswana is mulling accelerating projects to bring a $4 billion coal-to-liquid (CTL) refinery online in 2025 and a 100-MW pilot coal bed methane power plant online by 2022, Lefoko Maxwell Moagi, minister of mineral resources, green technology, and energy security, said in early February. State-owned firm Botswana Oil, which issued a tender for the CTL plant three years ago, is seeking investors to build the project. Moagi noted that the country has 212 billion tonnes in coal reserves. The government expects to finalize power purchase agreements for the coal bed methane plant this year, he told Reuters. Reuters also reported on Feb. 4 that Tlou Energy and Sekaname, a subsidiary of Kalahari Energy, have been shortlisted to develop the project. ■

Sonal Patel is a POWER senior associate editor.

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