• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      event logo
      Sustainable Investment Festival 2021

      The Sustainable Investment Festival will run online from 22-25 June and will include thought-provoking presentations from renowned keynote speakers, innovative breakout events and sessions specifically tailored to meet the information needs of fund selectors, financial advisers, pension consultants, trustees and scheme managers.

      • Date: 22 Jun 2021
      • Online, Online
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Thematic

Wanted: a 21st century grid to power a carbon-free future

Wanted: a 21st century grid to power a carbon-free future
  • Ridhima Sharma
  • Ridhima Sharma
  • @ridhi02
  • 13 September 2019
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

Renewable energy has become cheap and abundant. Now, we need advanced grid infrastructure to use more of it. 

Indiana is the second biggest coal-consuming state in the US. It is also among America's top 10 producers. However, having mined coal since the 1830s, Indiana is ditching fossil fuel in favour of solar and wind because, says its major utility, the move will save consumers billions of dollars. 

Related articles

  • Aging infrastructure driving opportunities worldwide, Natixis Global AM says
  • Comment: Renewables buck covid-driven energy investment downturn
  • Natural gas has a place in portfolio, argues Schroders' Simon Webber
  • Swiss & Global manager Roberto Cominotto issues warning on short-term investments in renewables

Indiana is not alone. In other US states, and in countries around the world, the cost of producing renewable electricity has fallen sharply, enabling solar and wind power to dethrone fossil fuels. 

However, cheap and clean energy is of no use unless it's delivered to where it's needed, day and night without fail. This is where the power grid comes into play. 

Power grids match the amount of electricity being generated with the load, or the amount being consumed. But today's grid infrastructure, already under stress from extreme weather events such as hurricanes or wildfires, is ill-equipped to deal with the rush of renewables. 

The intermittent nature of solar or wind means these power sources are also ill-suited for large-scale energy distribution, so there's a need to develop advanced transmission infrastructure.

To investigate possible solutions, members of the Pictet-Clean Energy Advisory Board (AB) and the strategy's investment team recently visited the National Renewable Energy Laboratory (NREL) in Denver and the Electric Power Research Institute in Palo Alto, two organisations renowned for their pioneering renewables research. 

Breaking the grid-lock 

The current power grid is based on a one-way system in which electricity flows from power plants to homes and businesses. It relies on alternating current (AC) for both long distance transmission and local distribution. 

Using a transformer, AC can be easily converted to different voltages. But its major shortcoming is that it loses power in transit. For a given voltage, an AC system has roughly twice the loss of a direct current (DC) system, which can transmit energy more cheaply and efficiently over very long distances. 

AC's constraints become more obvious when it comes to distributing renewable energy because solar, wind and hydroelectric power is usually generated far away from where the energy is used. 

Because of this, AC grids' renewable capacity is limited to just 15 per cent of their total power mix, our AB members estimate. 

Raising the percentage could destabilise the grid and lead to regular blackouts.

In its modern form, ultra high-voltage direct current (UHVDC), is even more powerful, capable of using voltages as high as 1,100kV, compared with conventional DC's 1.5kV. 

UHVDC can also link unconnected AC transmission systems across different areas . This means a UHVDC based macro grid lets operators tap into different clean energy sources hundreds or thousands of miles away throughout the day, and to effectively switch between sources depending on demand and weather. 

Almost a decade after becoming the first country to adopt UHVDC, China debuted the world's longest and most-powerful UHVDC line in early 2019. The new link stretches over 2,000 miles - more than the distance between London and Moscow. It delivers 66 billion kilowatt/hour of electricity from the country's far northwest - home to abundant solar and wind power - to the heavily populated east, meeting demand of 50 million households. 

HVDC is also gaining traction elsewhere, Europe is also planning to upgrade the grid infrastructure with an ambitious aim of turning itself into a "copper plate", in which a strong pan-European transmission network will make it easier to distribute power beyond borders. 

Germany, for example, is developing a HVDC grid link to transport renewable energy from the windy north to high-consumption regions of the south. 

The 800km Sudlink project should help Germany achieve its national target of generating 65 per cent of its energy needs from renewable sources by 2030, compared with the current 38 per cent. 

Critics say UHVDC's high upfront costs are a significant obstacle to its adoption. 

Yet the long run benefits could be huge. According to our AB members, the infrastructure projects in Europe usually pay for themselves in three to five years thanks to efficiency savings.

Wyoming's wind 

Crucially, the US, the world's biggest energy consumer, has also become a DC convert. 

The $3bn TransWest Express Project aims to install a UHVDC transmission line to bring wind power from Wyoming 730 miles to California, which is hungry for clean energy to meet its carbon reduction targets. 

NREL estimates that the line will save $1bn per year for Californian consumers. 

Research by the Earth System Research Laboratory found that power grids like these that make better use of abundant wind power potential could cut carbon emissions by as much as 80 per cent compared with 1990 levels. 

Investing in the world's transition to clean energy system 

Thanks to new and innovative grid technologies, renewable energy has the potential to pick up speed. This represents a bright future for investors, who should benefit from a long-term transition to a low-carbon world. 

The Pictet-Clean Energy portfolio invests in companies that are playing an important role in this clean energy transition. 

The high voltage DC industry presents a wealth of investment opportunities as the market is poised to grow at a compound annual rate of almost 9 per cent to reach $16.3bn by 2026.

Technologies that support the HVDC system should also experience growth. 

Silicon chips are needed to convert power between different AC and DC voltages and in different frequencies, which helps minimise power loss and maintain the stable flow of electricity. 

Demand for industrial semiconductor is expected to double between 2016 to 2022 to $81bn, registering 10 percent-plus growth every year.

Stephen Freedman, senior product specialist at Pictet Asset Management

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Thematic

More on Thematic

BlackRock launches ultrashort bond ESG ETFs range

  • Passive
  • 19 March 2020
Nikko AM releases 2019 sustainability report

  • Thematic
  • 18 March 2020
World Water Day beckons for ESG investors - KBIGI

  • Thematic
  • 17 March 2020
BlackRock, JP Morgan, Fidelity top latest Broadridge Fund Brand 50 ranking

  • Equities
  • 16 March 2020
Lombard Odier unveils climate transition strategy

  • Thematic
  • 16 March 2020
Back to Top

Most read

Amati Global Investors launches strategic metals fund
Amati Global Investors launches strategic metals fund
People moves: Phoenix Group, Franklin Templeton, TMF Group, AJ Bell, Arete, Just Group
People moves: Phoenix Group, Franklin Templeton, TMF Group, AJ Bell, Arete, Just Group
HSBC Malaysia appoints head of global banking
HSBC Malaysia appoints head of global banking
Nordic Fund Selector of the Year 2021 shortlist announced
Nordic Fund Selector of the Year 2021 shortlist announced
St James's Place predicts £200bn AuM by 2025 despite job cuts
St James's Place predicts £200bn AuM by 2025 despite job cuts
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading