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Microsoft To Buy Power From 175 MW Illinois Wind Farm

Computer software giant Microsoft has signed up to buy the power from the 175 MW Pilot Hill Wind Project, located 60 miles southwest of Chicago. In addition, developer EDF Renewable Energy has acquired a 96% stake in the Illinois project from Orion Energy Group and Vision Energy.

Microsoft’s newly inked 20-year power purchase agreement (PPA) represents the company’s largest wind investment to date, following a November PPA with RES Americas for the 110 MW Keechi wind project in Texas. The tech company says it is committed to reducing its environmental footprint and becoming carbon neutral.

Pilot Hill will consist of GE and Vestas wind turbines, and the wind project is situated on the same electric grid that powers Microsoft’s Chicago-area data center. EDF says physical construction will commence shortly, with commercial operation anticipated during the first quarter of 2015.

“The Pilot Hill Wind Project is important to Microsoft because it helps solidify our commitment to taking significant action to shape our energy future by developing clean, low-cost sources to meet our energy needs,” says Brian Janous, director of energy strategy for Microsoft. “Microsoft is focused on transforming the energy supply chain for cloud services from the power plant to the chip. Long-term commitments like Pilot Hill help ensure a cleaner grid to supply energy to our data centers.”

Ryan Pfaff, executive vice president at EDF Renewable Energy, says the company is pleased to partner with Microsoft.

“The participation of companies like Microsoft in renewable energy generation projects points to a growing trend of ‘blue chip’ organizations taking charge of their energy destiny by procuring directly, with a focus on both reducing their carbon footprint and controlling long-term energy costs,” says Pfaff.

“It is encouraging to see leading corporations investing in the U.S. wind sector based not only on their desire to positively impact the environment, but also because it simply makes good business sense, as the cost of wind energy continues to decline, and with the support provided by the federal production tax credit (PTC).”

In fact, Microsoft has joined other big-name U.S. companies in the past to call on Congress for PTC extensions.

 

Co-op Raises
C$2M In Two Weeks

The Oxford Community Energy Co-operative (OCEC) has raised more than C$2 million in two weeks to support funding for the Gunn’s Hill wind farm, located in Oxford County, Ontario.

The OCEC is a renewable energy co-operative established in response to the Green Energy and Green Economy Act. It offers Oxford County and Ontario residents an opportunity to become members and investors. The co-op says its goal is to create a more environmentally sustainable community without the need to compromise its stated objective for profit potential.

Construction on the project is expected to begin this fall, according to Juan Anderson, vice president of Prowind Canada, which is helping to develop the project.

According to the OCEC, project milestones include the following:

“This project creates opportunity for investment, contributing to a more integrated energy system in Oxford County and bringing local residents together to act in a more coordinated fashion to address environmental issues,” says Helmut Schneider, president of the OCEC.

The co-op seeks to raise an additional C$7 million in equity capital by September.

 

Renewables Dominate
New U.S. Capacity

Renewables provided 55.7% of new installed U.S. electrical generating capacity during the first half of this year (1,965 MW of the 3,529 MW total installed), according to the latest Energy Infrastructure Update report from the Federal Energy Regulatory Commission (FERC).

Citing the FERC statistics, renewable energy advocacy group the SUN DAY Campaign says solar alone has accounted for nearly one-third of new U.S. generating capacity thus far in 2014: 32.1% (1,131 MW). Wind provided 19.8% (699 MW), followed by biomass (2.5% - 87 MW), geothermal (0.9% - 32 MW) and hydropower (0.5% - 16 MW). Most of the balance (1,555 MW - 44.1%) of the new generating capacity was provided by natural gas, while no new coal or nuclear power capacity was reported.

The SUN DAY Campaign says the dominant role being played by renewables in providing new electrical generating capacity this year is continuing a trend now several years in the making. Since Jan. 1, 2012, renewable energy sources have accounted for almost half (48.0%), or 22,774 MW, of the 47,446 MW of new electrical generating capacity.

If calendar-year 2011 is also factored in, SUN DAY says renewables have accounted for approximately 45% of all new electrical generating capacity over the past three-and-a-half years. In fact, the group says since Jan. 1, 2011, renewables have provided more new electrical generating capacity than natural gas (31,345 MW vs. 29,176 MW) and nearly four times that from coal (8,235 MW).

Renewable energy sources now account for 16.28% of total installed U.S. operating generating capacity: hydro - 8.57%, wind - 5.26%, biomass - 1.37%, solar - 0.75%, and geothermal steam - 0.33%. SUN DAY says this is up from 14.76% two years earlier (i.e., June 30, 2012) and is now more than nuclear (9.24%) and oil (4.03%) combined.

 

Interior Plans N.J.
Offshore Auction

The U.S. Department of the Interior (DOI) and Bureau of Ocean Energy Management (BOEM) have announced plans to sell leases for nearly 344,000 acres offshore New Jersey for commercial wind power development.

BOEM proposes to auction the designated Wind Energy Area (WEA), which begins about seven nautical miles off the coast from Atlantic City, as two leases: the South Lease Area (160,480 acres) and the North Lease Area (183,353 acres). The agency says analysis by the National Renewable Energy Laboratory shows the New Jersey WEA could support up to 3.4 GW of wind generation, enough to power about 1.2 million homes.

The proposed sale notice, which was published in the Federal Register, includes a public comment period ending Sept. 19. Comments received or postmarked by that date will be made available to the public and considered before the publication of the final sale notice, which will announce the time and date of the lease sale.

The end of the comment period also serves as the deadline for any companies wishing to participate in the lease sale to submit their qualification package. To be eligible to participate in the lease sale, each bidder must have been notified by BOEM that it is legally, technically and financially qualified by the time the final sale notice is published.

This latest announcement builds on the DOI’s ongoing offshore wind initiatives. To date, BOEM has awarded five commercial wind energy leases off the Atlantic coast: two non-competitive leases (Cape Wind in Nantucket Sound off Massachusetts and an area off Delaware) and three competitive leases (two offshore Massachusetts-Rhode Island and another offshore Virginia). BOEM also expects to hold additional competitive auctions for WEAs offshore Maryland this month and Massachusetts in the coming year.

 

New Report Details
Growth And Trends

Double-digit growth continued in the global wind market in 2013, according to a new report from the Worldwatch Institute. Of today’s 318 GW total generating capacity, 35 GW were added in 2013 alone. However, the report says this growth (a 12.5% increase over 2012) was a significant drop from the average growth rate over the last 10 years (21%). In addition, overall investment declined slightly from $80.9 billion in 2012 to $80.3 billion in 2013.

According to the report, onshore wind power is becoming more cost-competitive against new coal- and gas-fired plants, even without incentives and support schemes. Over the past few years, capital costs of wind power have decreased because of large technological advances such as larger machines with increased power yield, higher hub height, longer blades and greater nameplate capacity.

The report says offshore wind capacity continued to see impressive growth in 2013 as projects became larger and moved into deeper waters. Until recently, deepwater offshore wind has developed on foundations adapted from the oil and gas industry, but deeper waters and harsher weather have become formidable challenges requiring newly designed equipment. Shipbuilders are expanding to make larger vessels to transport bigger equipment and longer and larger subsea cables to more-distant offshore projects.

The report says these trends have kept prices high in recent years. As of early 2014, the levelized cost of energy (LCOE) for offshore wind power – which includes the cost of the plant’s full operational and financial life – was up to nearly $240/MWh. By comparison, the report says the LCOE of onshore wind installations in various regions of the world is under $150/MWh, having fallen about 15% between 2009 and early 2014.

Furthermore, the report says tighter competition among manufacturers continues to drive down capital costs, and the positioning of the world’s top manufacturers continues to shift. The top 10 turbine manufacturers captured nearly 70% of the global market in 2013, down from 77% the year before.

In an effort to maintain profitability, manufacturers are trying new strategies, such as moving away from just manufacturing turbines, the report notes. Some companies focus more on project operations and maintenance, which guarantees a steady business even during down seasons and can increase overall value in an increasingly competitive market. Some manufacturers are also turning to outsourcing and flexible manufacturing, which can lower overall costs and protect firms from exchange rate changes, customs duties, and logistical issues associated with shipping large turbines and parts.

Among the world’s regions, the report says the European Union is in the lead for installed wind power capacity. Its 37% share of global capacity edges out Asia’s 36%. However, the European wind market slowed in 2013. The two most dynamic markets were Germany, which added 3 GW to bring its total to 34.25 GW, and the U.K., which installed nearly 2 GW, much of which was offshore installations.

In 2013, China installed 16.1 GW of new wind power capacity, 24% more than it added the previous year. By the end of 2013, total installed wind capacity there measured 91.4 GW.

In India, the report says government policies in support of wind power have lapsed. Only 1.7 GW were installed there in 2013, compared with a record 3 GW in 2011. To return to more robust growth, the Indian government reintroduced its generation-based incentive for wind and solar power projects between 100 kW and 2 MW.

According to the report, the U.S. now has 61 GW of wind power capacity installed. But the report also notes that the expiration of the production tax credit (PTC) at the end of 2013 led to factory closures and layoffs due to the scarcity of new turbine orders. Renewal of the PTC was proposed as part of a larger bill this spring. If the legislation passes, the report says it could mean an uptick in new wind power projects this year and in 2015. However, the bill will likely remain stalled until after the November elections.

Sub-Saharan Africa, North Africa, and the Middle East saw only 90 MW of new wind power additions in 2013. Taken together, these three regions have 1,255 MW of installed capacity.

Continuing its drive to increase energy security and diversify supply, Latin America added almost 1.2 GW of new capacity, bringing the region up to 4.8 GW by the end of 2013. The report says innovative policy approaches taken by Brazil and Uruguay played a big role in the region’s wind expansion last year.

 

Quonset Board OKs
Cape Wind Lease

The Quonset Development Corp.’s (QDC) board of directors approved an agreement with Cape Wind Associates LLC at its July 15 meeting. The agreement provides Cape Wind with a 12-month option to lease nearly 14 acres at the Quonset, R.I.-based business park for one year, with the ability to extend for two additional one-year terms.

Under the terms of the agreement, the QDC will make available to Cape Wind 11.6 acres of land within Parcel 17 of the business park and 2.2 acres of Terminal 4 at the Port of Davisville. Both areas would be used for staging and assembly for offshore wind construction.

“As Cape Wind continues to ramp up for the construction of their wind farm off the coast of Cape Cod, we are positioned to support their project,” says Steven J. King, managing director of the QDC. “A project of this magnitude will require the key assets of both Rhode Island and Massachusetts to be available. The federal and state investments made to modernize Quonset’s infrastructure can be a vital asset to Cape Wind, and we are ready to help them achieve their goals and create more jobs for the entire region in the years ahead.”

Quonset Business Park is now home to more than 175 companies, employing approximately 9,500 people in full-time and part-time jobs across several industries. The Port of Davisville at Quonset is also one of the top 10 auto-importers in North America, notes the QDC.

 

Study: States Ready
For EPA Rules

States are well positioned to implement the U.S. Environmental Protection Agency’s (EPA) recently proposed Clean Power Plan, according to a new report from Analysis Group.

The report, funded by the Energy Foundation and the Merck Family Fund, was released at the National Association of Regulatory Utility Commissioners’ conference in Dallas. Analysis Group says the study is based on a careful analysis of states that already have experience regulating carbon pollution. It finds that those states’ economies have seen net increases in economic output and jobs.

“Several states have already put a price on carbon-dioxide pollution, and their economies are doing fine. The bottom line: The economy can handle – and actually benefit from – these rules,” says Analysis Group Senior Advisor Susan Tierney. “Those states have shown they already have the tools available to cut CO2 emissions while generating macroeconomic benefits and protecting consumers from dramatic hikes in their energy bills.”

The EPA’s proposed Clean Power Plan would regulate carbon emissions from existing fossil-fueled power plants using the agency’s authority under the Clean Air Act. Due to be finalized next year, the draft rules allow states to choose a variety of market-based and other approaches, such as renewables, to cut the greenhouse-gas emissions.

The Analysis Group team analyzed the carbon-control rules already in place in several states to see what insights they might hold for the success of the national rule.

“We found that well-designed programs implementing the Clean Power Plan will not lead to major price impacts or economic disruption,” comments Paul Hibbard, vice president of Analysis Group. “Costs from well-designed CO2-pollution-control programs will be modest in the near term and likely offset by longer-term benefits for all and common protections for low-income customers.”

So far, the report says net economic effects on states that already regulate carbon pollution have been positive in terms of both economic output and jobs, and the same can be expected if states comply thoughtfully with the Clean Power Plan. States that work together to form carbon markets or other collaborative initiatives have the potential to experience greater benefits than they would by trying to meet the new standards by themselves, the report says.

“Experience shows that states that work together on market-based compliance initiatives – like [the Regional Greenhouse Gas Initiative (RGGI)] in the Northeast – can provide net economic benefits in terms of jobs and economic output,” says Hibbard. “And RGGI shows that each state can have control over its own program design, so that combined efforts don’t step on states’ rights.”

Multi-state market-based programs to control CO2 emissions can also respect the practicalities of electric system operations and can work for both traditionally regulated and competitive electric markets, the report finds.

Analysis Group notes that the report was based on states’ existing track records. Although the report suggests energy efficiency has so far proven to be the most economically beneficial way to achieve carbon cuts, many renewable energy industry stakeholders predict the Clean Power Plan will also greatly help spur renewable energy development. In fact, the American Wind Energy Association recently said the EPA plan could be the third largest driver of wind-powered generation behind state renewable portfolio standards and the federal production tax credit.

 

Firm Acquires
Invenergy Stake

La Caisse de depot et placement du Quebec is acquiring a 24.7% interest of Invenergy’s wind division.

Terms of the deal were not disclosed, and the transaction must be approved by the relevant U.S. regulatory authorities.

The two firms are certainly no strangers. In early 2013, La Caisse invested $500 million in Invenergy’s portfolio of 11 wind farms in the U.S. and Canada.

In April of this year, La Caisse added a second Quebec wind farm to the portfolio by investing $42 million in the Parc des Moulins wind energy project at Thetford Mines.

“As soon as we began discussions with Invenergy over two years ago, our objective was to build a long-term partnership,” says Macky Tall, senior vice president of private equity and infrastructure at La Caisse. “When we first invested in the company’s wind farms, we were impressed by the strong management team and the quality of the projects in the portfolio. With this transaction, we continue to strengthen our partnership and increase our exposure to the U.S. – a promising market for years to come.”

Invenergy says it has developed more than 6.3 GW of utility-scale renewable and natural-gas-fueled power generation facilities in the U.S., Canada and Europe – with approximately 1.6 GW under contract or in construction.

 

Dominion Studies
Offshore Wind Site

Dominion Virginia Power commissioned a 110-foot-long lift vessel off the shore of Camp Pendleton in Virginia Beach, Va., to study core samples needed to move ahead with its proposal to build wind turbines 27 miles off the coast.

The Inez Eymard, which usually works in the Gulf of Mexico, has spent several weeks collecting core ocean floor samples at the turbine site.

Dominion has received two U.S. Department of Energy grants totaling $51 million for its wind turbine demonstration project. If the project is approved, the company plans to build two 6 MW turbines and test design features intended to lower the cost of construction, reduce maintenance and withstand hurricane-force winds.

The company intends to use lessons learned from the demonstration turbines to guide the development of up to 2 GW of wind energy. Dominion also holds the lease on 112,800 acres of a commercial wind area adjacent to the demonstration project.

To develop the demonstration project, Dominion says it is working with a team of national and international organizations recognized for their offshore expertise. The team includes Alstom Power; engineering, construction and services firm KBR; and the Commonwealth of Virginia Department of Mines, Minerals and Energy, which will hold the lease on the demonstration site.

The four borings at the turbine site will be collected approximately 330 feet below the ocean floor. The samples will be used to determine soil characteristics such as composition and strength to finalize the design of the wind turbine foundations.

At press time, the vessel has finished two borings near shore and has nine more to complete. The samples will be used to finalize the installation plan of the underground distribution line that will run from the turbines to Camp Pendleton, where they will be connected to Dominion’s electrical grid. Each of these borings will be obtained approximately 80 feet below the ocean floor.

Dominion still needs to obtain several regulatory approvals. Based on approval by mid-2016, major construction would occur in 2017, and the wind turbines would begin operating later that year.

 

NWF: Offshore Atlantic
Wind Is Near

According to a new report from the National Wildlife Federation (NWF), more than 1.5 million acres off the Atlantic coast are already designated for offshore wind energy development and could generate more than 16 GW of electricity.

The report, “Catching the Wind: State Actions Needed to Seize the Golden Opportunity of Atlantic Offshore Wind Power,” underscores the potential economic and environmental benefits if offshore wind resources off the Atlantic coast were maximized. According to the NWF, offshore wind can do the following:

In fact, the report mentions that two offshore wind projects are on track for construction in 2015: Cape Wind in Massachusetts and Deepwater Wind’s Block Island Wind Farm off the coast of Block Island. The NWF says that permits and/or leases and power contracts are in hand and offshore construction will begin next year.

However, thanks to the cost of offshore wind power and uneven state policies, progress has been rocky. The report recommends five key actions required by Atlantic Coast leaders:

New & Noteworthy

Microsoft To Buy Power From 175 MW Illinois Wind Farm

 

 

 

 

 

 

 

 

 

 

 

 

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