Today’s Market View – UK Power Outage Highlights Need for Grid-Scale Li Ion and Vanadium Batteries

Acacia Mining (LON:ACA) – Approval to resume gold shipments from North Mara Avesoro Resources (LON:ASO) – Youga operations suspended Bluejay Mining* (LON:JAY) – Bulk sample for Rio Tinto Iron & Titanium underway

Acacia Mining - Today's Market View - UK power outage highlights need for grid-scale Li ion and Vanadium batteries

SP Angel – Morning View – Monday 12 08 19

UK power outage highlights need for grid-scale Li ion and Vanadium batteries


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Acacia Mining (LON:ACA) – Approval to resume gold shipments from North Mara

Avesoro Resources (LON:ASO) – Youga operations suspended

Bluejay Mining* (LON:JAY) – Bulk sample for Rio Tinto Iron & Titanium underway

Kodal Minerals* (LON:KOD) – Seeking clarity on funds from SVS

Shanta Gold (LON:SHG) – Interim results keep Shanta Gold on track to meet production and cost guidance

Thor Mining (LON:THR) – Metallurgical drilling results from Molyhil

UK power outage cuts critical services and highlights need for grid-scale batteries or additional capacity to balance wind and solar power

Lithium-ion and Vanadium Redox Flow Batteries ‘VFRBs’ could contribute a key part of the solution for grid balancing and backup power

Friday afternoon saw a significant power failure in many parts of the UK as the network automatically cut power to major parts of the country.

The outage was caused by the failure of a 727MW gas-fired power generator alongside a major 1.2GW wind-farm off the East coast.

While other generators scrambled to make up for the near 2GW power loss the 15 minute incident triggered widespread power cuts causing major disruption on trains and at one hospital where the back-up generators failed to work. Many consumers were also left without power.

The windfarm possibly went offline due to unusually high-gusting winds in which windfarms cannot operate.

The issue highlights the risk of moving to wind and solar power without adequate back up power supplies.

The UK grid wanted to tender mixed backup power but the EU halted the tender process in a court ruling last year.

The EU suspended the UK Capacity market auction which provides for back-up electricity generation and opened a investigation into its compliance with EU state aid rules

The next power tender / auction has been indefinitely postponed pending the EU court ruling

The UK 2016 Capacity Market auction for 2020/21 period permitted 500MW of battery projects.

Capacity market prices have fallen from £22.50/kw per year to £8.40/kw per year for 50.4GW procured in 2018 for 2021/22 winter.

Battery storage was awarded only 153MW out of 1.344GW that pre-qualified. Arenko won 15-year contracts for 73MW

UK has 900,000 homes with solar installations. The UK FIT ended in 2016. Smart energy storage is growing strongly e.g. products such as Powervolt.

UK Balancing Mechanism market worth £350m pa – this for Distributed Energy Resources (DERs). The market is expected to grow 179% to 145MW

The UK may look to install sizeable grid-scale battery power capacity with Lithium-ion and Vanadium Redox Flow Batteries ‘VFRBs’ potentially offering robust, credible and reliable source of back-up and distributed power to balance the imperfect supply of wind and solar power generation.

China EV sales decline for first time in 2 years

Monthly sales of ‘new energy vehicles’, a category that includes both hybrid and fully electric cars, declined by 4.7% yoy in July to 80,000 vehicles, per the China Association of Automobile Manufacturers (Financial Times).

The decline represents the first decrease in NEV sales for two years, causing the Association to cut its sales forecast for 2019 from 1.6m to 1.5m cars.

Falling NEV sales have been attributed in part to Chinese government cuts to NEV subsidies announced in March. In June, the final month before the NEV subsidy rules were applied, NEV sales jumped as buyers scrambled to take advantage of cheap prices.

Declining sales have also been attributed to high-emissions car owners taking full advantage of a government swap programme to trade-in for NEVs.

Cuts to government subsidies and tailing off of trade-ins increase the likelihood of consolidation of the EV market, as dozens of EV manufacturers compete to find a foothold on the back of strong market growth in the past few years.