....3.UK solar causing grid stability headaches – but it could be worse
What’s happening? The UK’s National Grid is seeking capacity turn-down offers from wind and, for the very first time, solar farms during weekends, in an emergency move to secure grid stability. This expensive last-resort action is necessary, the operator says, because of lockdown-affected electricity demand and, in part, rising seasonal solar output. Into this mix comes the announcement that the government has approved the UK’s largest solar scheme to date, the 350 MW Cleve Hill project in Kent, while a 500 MW project in Cambridgeshire is close to an application.
What’s next? As the lockdown eases, so working week electricity demand should recover, at last to some extent – but weekends will continue to challenge grid stability with low demand and surplus generation. UK solar capacity stands at 13.4 GW installed, with midday peaks forecast to approach 9 GW into early June. With demand falling below 20 GW at weekends, the grid’s challenge becomes clear if the wind blows. The real story, however, is that the midday peak problem would be much worse had solar subsidies not been withdrawn several years ago. Flagship projects like Cleve mask the fact that in the last year, just 195 MW of new solar have been added – an increase of less than 1.5% over the period.
4. US’s record corn acreage adds to price woes; Brazil sees more support
What’s happening? Prices of corn in Brazil, the world’s second-largest exporter of the coarse grain, hit record nominal highs this year as robust domestic demand, low stocks and favorable exchange rates boosted local prices. At the same time, producers in the US, the top exporter of corn, are seeing corn prices at breakeven levels due to the collapse in demand from ethanol sector, which accounts for the bulk of the consumption, following COVID-19 related restrictions on movement.
Go deeper: Brazil’s sugar and ethanol markets planning a post-pandemic strategy
What’s next? Markets are keeping a close eye on Brazil, as corn prices are likely to ease when the harvest of second corn crop hits the market in June. However, Brazilian corn prices are still expected to be significantly higher than previous years even during the peak supply season, as most of the corn is consumed by the livestock industry, unlike the heavily ethanol-dependent US corn market. US corn prices have already hit multi-year lows recently, reaching $3.01/bu on April 21. The outlook for corn prices remains bleak in the US, as the corn planted area in the 2020-21 marketing season is projected to touch a new record, while corn stocks are seen at levels not seen since 1987-88.
Reporting by Jing Zhi Ng, Philip Vahn, Su Yeen Cheong, Mugunthan Kesavan, Henry Edwardes-Evans and Harry Weber
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HT: ZH
