Welcome to Grid Brief. Here’s what we’re looking at today: solar installations are ramping up in America, natural gas and renewables should sink coal generation this summer, Tokyo Gas (kind of) pivots to renewables, and more.

US Solar Installations Jump 47% in Q1

A new report from Wood Mackenzie and the Solar Energy Industry Association reveals that solar installations in America jumped nearly 50% in Q1 of 2023.

“The market installed 6.1 GW_dc of capacity, a 47% increase from the first quarter of 2022,” reports Wood Mackenzie. “Granted, these volumes are bolstered by delayed projects from last year finally coming online, and the industry is still supply chain constrained.”

Utility-scale installations saw a 66% rise to 3.8 GW from Q1 of ‘22, while residential solar climbed by 30% to 1.6 GW.

Solar installations made for 54% of total new electricity generation built in Q1 of this year in America, with Florida leading the charge in installing capacity. The report predicts that America will see 29 GW total in new solar additions, up from last year’s 21 GW.

EIA: Renewables + NatGas to Sink Summer Coal Demand

The Energy Information Administration expects renewable and natural gas will see the largest increases in electricity generation this summer due to more projects from each coming on line. The new kids on the block will force out the former king of electricity production: coal.

“Natural gas remains the primary source of generation in the electric power sector, and we expect U.S. natural gas-fired generation will grow by 3%, or 16.7 terawatthours (TWh), this summer compared with last year. Additional natural gas-fired generating capacity and favorable fuel costs are the primary drivers of our forecast increase in generation from natural gas this summer,” reports the EIA.

Meanwhile, the American power sector has added about 14.5 gigawatts of solar capacity and 8 GW of wind capacity between May ‘22 and May ‘23. The EIA forecasts that wind will produce 7% (5.8 TWh) and that solar will produce 24% (10.8 TWh) more than last summer.

But nuclear will also see an uptick compared to last summer, with an additional 4.5 TWh coming from the recently completed Vogtle plant in Georgia.

“We expect the increase in summer generation from solar, wind, and nuclear power to contribute to reduced generation from coal-fired power plants,” reports the EIA. “Between June 2022 and May 2023, about 11 GW of U.S. coal capacity retired, and we expect 15% (36.0 TWh) less U.S. coal-fired generation this summer compared with last summer.”

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Tokyo Gas Pivots to Renewables

Tokyo Gas is moving away from upstream gas investments to renewable energy in an effort to combat climate change, according to the company’s president.

"We are shifting our overseas focus from upstream gas projects to renewable energy and Asia's infrastructure as we have limited resources ... and as we need to invest in decarbonization," President Shinichi Sasayama said.

“In common with global peers, Japanese energy companies are changing their portfolios as they pursue 2050 carbon neutrality targets,” reports Reuters. “Japan's biggest city gas provider plans to spend 200 billion yen ($1.4 billion) over the next three years to boost its renewable capacity at home and abroad to 6 gigawatts by 2030 from 1.5 GW now, with a focus on offshore wind farms.”

But Tokyo Gas isn’t drawing a hard line in the sand. While it’s still divesting from its Australian gas investments, LNG from Down Under supplied the company with half of its imports. Sasayama also said that he would be open to investing in American shale if it promised high profitability. Moreover, Sasayama expressed a desire for government help in securing long-term LNG contracts.

Conversation Starters

• More Russian oil to flow to Europe. “Russia's piped supply of Urals crude to the European Union (EU) via the southern Druzhba pipeline in June is set to increase by 16% compared to May as EU refiners seek to secure more oil amid fears of disruptions in transit via Ukraine, two sources said,” reports Reuters. “Russian pipeline oil supplies to Europe are excluded from an EU embargo, but the route crosses Ukraine and has been under constant risk of disruptions since Russia sent thousands of troops into Ukraine last year in what Moscow calls a ‘special military operation.’”

• 🇦🇪 ⚛️ 🇦🇪. “Barakah's operations team has begun the final operational readiness testing needed before the fourth unit at the site near Ruwais in Abu Dhabi can receive an operating licence from the UAE's nuclear regulator,” reports World Nuclear News. “Construction of the fourth Korean-designed APR-1400 unit at Barakah began in July 2015, three years after work began on the first Barakah unit. The first three units are now fully operational - unit 3 was declared in commercial operation in February this year. Lessons learned from each of the previous three units have been effectively applied to the next unit, the Emirates Nuclear Energy Corporation (ENEC) said, with each unit passing through the preparation phases more efficiently while maintaining quality and safety standards.”

• Chinese coal stays affordable. “Despite scorching heat boosting power demand as fans and air conditioners get switched on, Chinese coal hasn’t been this cheap in over two years — and it could get even cheaper,” reports Rigzone. “The fuel used by power plants dropped this week to 772 yuan ($108) a ton at the port of Qinhuangdou, its lowest since April 2021. The latest figures on supply show domestic production running nearly 5% ahead of last year, while imports have risen a whopping 90%. Indicators, from elevated inventories to a contraction in manufacturing activity, all point to souring demand as China’s economic recovery stalls.”

Crom’s Blessing

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