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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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A New Energy Storage Solution Debuts In The Railway Sector

Battery technologies are all the craze these days as everyone is racing to find the perfect solution to energy storage for the growing share of solar and wind power in the grid.

But energy storage solutions are also making forays into the railways industry where batteries can help stabilize the railway electricity grid.

One new battery storage solution, developed by Italy-based power group Enel, will be tested and installed on the network of the Russian Railways.

“This is the first time this type of battery technology is used in the railway sector,” Enel, which has a very strong international renewables business, said upon announcing that it would test the “first-of-its-kind innovative storage system on Russia’s railway network.”

Enel and Russian Railways will team up to develop the energy storage solution in the hopes that it could help stabilize the Russian railway electricity grid, improve train operations, and avoid expensive grid upgrades that might otherwise be required.

While Enel was scarce on details in the announcement, CleanTechnica obtained more information from the Italian company about what this “first-of-its-kind” innovative storage system is.

The batteries will be lithium, with a minimum capacity of 10 MWh, Enel told CleanTechnica. At times of peak demand, the batteries can be automatically activated through an Enel in-house software to help respond to the growing energy demand of the railways system. Once installed on certain railway sections, the batteries could help make the train service faster, Enel says. Related: Why U.S. Oil Exports Are Only Heading Higher

The power company plans to couple the energy storage system with regenerative braking technology. This regenerative braking tech uses the energy that the train generates when it brakes to charge the batteries. The energy will be stored in the batteries for later use, which could help the railway network to reduce its overall energy consumption.

However, the Enel technology is still in a development and test phase—it’s not ready to be installed on the network of the Russian Railways yet.

The partnership with Russian Railways will entail a testing phase of up to three months, which is expected to begin by the end of 2018, Enel told CleanTechnica. During the test phase, Enel will install a single battery in a laboratory at Russian Railways, where the energy storage technology can be tested for performance in a controlled environment.

Enel and Russia also have collaborations in the renewables industry in the country.

Currently, Enel is active on the Russian power market with a listed subsidiary, Enel Russia, which operates four thermal power plants in the Russian Federation with a total installed capacity of around 9.5 GW.

Last year Enel announced its entry into the renewables sector in Russia. Enel was awarded two wind projects for a total capacity of 291 MW, as part of the Russian government’s 2017 tender for the construction of 1.9 GW of wind capacity in the country. The Azov wind farm in southern Russia and the Murmansk wind farm in northwestern Russia will be developed and built by Enel Green Power, Enel’s global renewable energies division.

Russia aims to have 4.5 percent of energy generation from renewables and 5.5 GW of installed renewable capacity by 2024, Enel said in June last year.

As odd as it may seem, Russia generates a fifth of its energy from hydropower. This might sound shocking for a country whose image is so tightly linked to oil and gas, but Russia has a lot of big rivers and it’s putting them to good use. Russia is moving into other renewables and into energy storage as well.

Enel’s battery technology for energy storage in the railway sector is in its very early stages, but it could turn out to be a development worth tracking.

By Tsvetana Paraskova for Oilprice.com

The World’s Emerging Oil Storage Hub

oil tanking

A natural harbor to the northwest of Cape Town keeps a secret that oil tracking professionals are still trying to uncover. The secret is exactly how much oil is in storage at any given moment at the Saldanha Bay array of tanks that can hold up to 45 million barrels. The reason this remains largely a secret is that these tanks, unlike oil storage facilities elsewhere, are half underground, making it harder to collect enough satellite imaging data to venture an estimate. Oil traders, apparently, appreciate this rare privacy of stocks.

The Saldanha Bay storage hub is among the largest in the world and came into existence during the apartheid years when the South African government sought to ensure adequate oil supplies for the country amid UN sanctions. Then the apartheid regime broke down and oil traders were quick to tap the storage capacity.

Bloomberg’s Paul Burkhardt writes about two recent instances when commodity traders made some pretty good money by storing crude in Saldanha Bay when the oil market was in contango, and then selling it later when prices improved. The first instance was in 2009 when prices crashed following the financial market crisis, and the second was in 2015 when prices tanked thanks to the global inventory overhang brought about by the shale boom in the U.S. and OPEC’s then-strategy of drowning the market in oil.

Now, the Saldanha Bay storage hub is getting expanded, with another 13.2 million barrels in capacity to be added in 12 new tanks. Construction, by a joint venture between the world’s second-largest oil storage capacity builder, German Oiltanking, and South African MOGS, began last year.

Relatded: Why U.S. Oil Exports Are Only Heading Higher

The first phase of the expansion will add 8.8 million barrels to the facility’s capacity, to be completed in the second half of this year. By the end of 2019, the rest of the storage capacity plus blending facilities will be completed. The blending component of the project will further enhance Saldanha Bay’s significance for Africa and for international markets. After all, the bay sits close to the Cape of Good Hope, a major oil transit route between Asia, Europe, and the Americas.

In 2016, some 5.8 million barrels of crude daily passed around the Cape of Good Hope. This compares with 5.5 million bpd going through the Suez Canal and 4.8 million bpd through the Bab el-Mandeb pass between the Arab Peninsula and North Africa. The route is preferred by some oil shippers because, in spite of being longer than the route through the Suez Canal, it is less expensive: most costs have to do with bunkering and crew wages. It is also safer than Bab el-Mandeb—a major chokepoint in an area with pirate activity, not to mention the war in Yemen.

There is also the issue of weight. The Suez Canal cannot handle very large crude carriers, unlike the Cape of Good Hope. Now, with the expansion of the Saldanha Bay storage hub, we will likely see even more commodity trader interest in storing crude oil there rather than somewhere else. Oil prices are falling again, and although the market is still in backwardation, with all the excessive volatility it’s anyone’s guess when it will swing into a contango, motivating traders to start building stockpiles in South Africa.

By Irina Slav for Oilprice.com

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