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Cape Wind Secures Financing

Cape Wind has signed a term sheet to engage The Bank of Tokyo-Mitsubishi UFJ (BTMU) as its coordinating lead arranger of the commercial bank portion of the total debt financing for the Cape Wind project, a 468 MW offshore wind farm planned for Nantucket Sound.

BTMU is providing a significant amount of debt capital toward the commercial bank financing for Cape Wind. The financing will be used to pay for the project’s development and construction costs.

Cape Wind expects to complete project financing and begin construction on the wind farm by the end of the year.

“Obtaining financing is one of the last steps to complete before proceeding with the construction of the project,” says Cape Wind President Jim Gordon. “Together with BTMU, we are engaging a group of experienced financial institutions as our core banking group and look forward to completing the financing of America’s first offshore wind farm, which will deliver significant environmental, energy and economic benefits to Massachusetts and the surrounding region.”

Barclays is Cape Wind’s sole financial advisor and will continue to advise Cape Wind on raising the remaining financing needed.

Cape Wind has sold 77.5% of its power output through long-term power purchase agreements to National Grid and NSTAR.

 

BPA Forecasts Lower
Curtailment Woes

The Bonneville Power Administration (BPA) says there is a smaller chance that oversupply conditions will lead to wind energy curtailment this spring.

Snowmelt runoff during the spring months has led to overgeneration in the Pacific Northwest in previous years, which has caused BPA to curtail large amounts of wind energy generation.

However, the Federal Energy Regulatory Commission ruled in 2011 that BPA unfairly discriminated against wind power in these instances, prompting BPA to consider ways to mitigate oversupply and treat each resource fairly when issuing curtailment orders.

Some of those measures include refining the process for ensuring transmission system reliability and protecting fish when there is too much power for the region to consume, as well as adopting new energy-storage methods.

Now, BPA says the likelihood that oversupply issues will occur this spring is 50%, compared to 65% in 2012. According to the Northwest River Forecast Center, the current water-supply forecast for January through July is 86% of the normal amount. If this forecast holds, the likelihood and expected costs of wind energy displacement could be lower, BPA says. However, BPA warns that this forecast could change at a moment’s notice.

BPA says it will continue to monitor forecasts throughout the spring and manage oversupply conditions with the most operationally feasible and cost-effective means available.

 

CAISO Approves
Transmission Projects

The California Independent System Operator Corp.’s (CAISO) board of governors has approved five new power-line projects specifically intended to meet California’s renewable energy goals.

The projects were part of the 2012-2013 transmission plan approved by the board. The plan also identified the need for 36 projects that support regional and national reliability standards. According to the CAISO, the 41 transmission projects approved in the plan – which are estimated to cost approximately $1.7 billion – are needed to maintain the reliability of the transmission system and allow the state to meet its 33% by 2020 renewable portfolio standard.

The transmission plan also examines infrastructure requirements for the ISO grid in the event that one or both nuclear power plants were to shut down. The plan is updated annually and looks out over a 10-year horizon to determine future grid needs.

Each annual ISO planning cycle includes the active participation of transmission owners, generation owners and other stakeholders, as well as coordination with the California Energy Commission and California Public Utilities Commission.

“The ISO is demonstrating California’s global energy leadership by showing how a greener grid is as resilient and reliable as the grids of yesterday while paving the way for tomorrow’s sustainable future and helping in the fight against climate change,” says Bob Foster, chairman of the CAISO board. “A more diverse grid is a more energy-secure grid.”

 

Small Wind Set
To Double By 2018

Annual global installations of small wind turbines (SWTs) will roughly double over the next five years, growing from 86 MW in 2012 to 172 MW in 2018, finds a new report from Navigant Research (formerly Pike Research).

By 2018, the SWT market will represent $3.3 billion in revenues, the report adds.

“While the U.S. market for small wind turbines tries to regain momentum following the reduction or expiration of rebates and other key incentive programs in leading states, the overall market for SWTs is growing as a result of feed-in tariff [(FIT)] policies in the United Kingdom and Italy,” says Dexter Gauntlett, research analyst at Navigant Research. “Beyond FITs, the small wind power market will be driven by growing demand for on-site generation, volatile diesel fuel costs and China’s growing need for power.”

At the same time, however, small wind faces strong competition from the solar photovoltaics (PV) sector, thanks to dramatic price drops in solar PV modules over the past few years, as well as the emergence of innovative business models – including leasing programs and third-party financing models – that have yet to be made available to the vast majority of small-wind customers.

However, wind energy still offers unique advantages, and the growth of solar PV has, in some regard, paved the way for SWTs, Navigant says.

 

Report Reveals
Green Job Increases

The number of green jobs increased by 157,746 to 3,401,279 in 2011, the U.S. Bureau of Labor Statistics (BLS) said in a new report. At the end of 2011, jobs associated with green goods and services (GGS) represented 2.6% of the U.S. workforce.

California had the largest number of GGS jobs, with 360,245, accounting for 2.5% of employment in the state. The District of Columbia had the highest proportion of GGS employment, at 5.1%, and Oregon had the second-highest proportion, at 4.3%.

Ten states had over 100,000 GGS jobs in 2011: California (360,245), New York (266,308), Texas (227,532), Pennsylvania (167,397), Ohio (137,143), Illinois (136,447), Florida (117,433), North Carolina (108,094), Virginia (107,773) and Washington (101,593).

California experienced the largest increase in GGS employment, with an additional 17,366 GGS jobs, or 5.1%, added over the year. Maryland had the second-largest increase in GGS employment, with 14,143 GGS jobs, or 18.3%, added between 2010 and 2011.

 

Sector by sector

GGS employment accounted for 2.3% of private-sector jobs and 4.2% of public-sector jobs in 2011: The private sector had 2,515,200 GGS jobs, while the public sector had 886,080 GGS jobs.

Among private-sector industries, construction had the largest employment-rate increase, from 7.0 to 8.9 percentage points, while manufacturing had the most GGS jobs (507,168). Construction had 487,709 GGS jobs in 2011, constituting 8.9% of the sector’s employment. The construction sector had the largest increase in GGS employment from 2010 to 2011, up 101,932, or 26.4%.

The trade sector had 223,079 GGS jobs in 2011, accounting for 1.1% of the industry’s employment. This sector’s increase of 17,512 GGS jobs, or 8.5% over the year, was the second-largest significant change in the private sector. GGS jobs in the leisure and hospitality services sector grew by 14.8% to 23,696 jobs. In the transportation and warehousing sector, the number of GGS jobs decreased by 3,382 to 238,755, representing a decline of about 1.4%.

Utilities had 71,129 GGS jobs in 2011, or 12.9% of total private utilities employment. The private utilities sector added 2,098 GGS jobs in 2011, representing a 3.0% increase. Among the industries involved in private-sector electric power generation, nuclear electric power generation had the highest GGS employment, with 44,054 jobs in 2011. Hydroelectric power generation came in second, with 3,780 GGS jobs.

Wind energy generation came in third, with 2,724 GGS jobs, followed by biomass electric power generation (1,166), geothermal electric power generation (1,017) and solar electric power generation (522). (Note: Positions related to wind energy manufacturing were included in the manufacturing jobs category.) Other electric power generation had 525 GGS jobs in 2011.

The public sector had 886,080 GGS jobs in 2011, accounting for 4.2% of employment in the sector. Over the year, government GGS employment decreased by 14,890 (-1.7%). Local government had 424,201 GGS jobs in 2011 – the most in the public sector – representing 3.1% of local government employment. The transportation and warehousing sector had the largest GGS employment in local government, with 209,063 jobs.

In 2011, state government had 248,539 GGS jobs, or 5.5% of state government employment. Public administration led GGS employment in state government, with 164,952 GGS jobs. The federal government had 213,340 GGS jobs representing 7.5% of federal government employment in 2011, and the public administration sector had 139,884 GGS jobs – the most within federal government. The professional, scientific and technical services sector followed, with 39,714 GGS jobs.

Interestingly, the BLS notes that due to sequestration, it will no longer have the budget to calculate further studies on green jobs, including measurement of data on employment by industry and occupation for businesses that produce GGS; data on the occupations and wages of jobs related to green technologies and practices; and green career information and publications.

 

Xcel Breaks
Wind Power Record

Xcel Energy says it has achieved a new wind energy record: At 8 p.m. on Feb. 17, 1.713 GWh – nearly 33% of the company’s Upper Midwest customer electricity demand – was generated by locally sourced wind power.

“From our first purchase of wind energy in 1993 to the commissioning of our own Grand Meadow and Nobles wind farms in 2008 and 2010, we have been working toward this day,” says Judy Poferl, president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company. “We have learned a lot about how to successfully produce and integrate wind energy onto our system in a cost-effective manner for our customers.”

Wind farms produced almost 12% of the energy used by Xcel Energy’s Upper Midwest customers in 2012. The company says this puts it ahead of its 30% by 2020 renewable energy requirement established under Minnesota’s renewable portfolio standard. Of the 30% renewable requirement, at least 25% must come from wind energy.

 

GE In Offshore
Simulation Venture

GE’s Power Conversion unit has signed a contract with the Lindoe Offshore Renewables Center to build and commission a turbine nacelle test facility, capable of handling units with a power rating of up to 10 MW.

GE says initial testing for the Lindoe Nacelle Testing project, located in the Lindø Industrial Park in Denmark, will begin in 2014.

The nacelle tester will incorporate GE Power’s medium-voltage switchgear, transformers, inverter system, and permanent-magnet, direct-drive motor technology.

GE says it will also put the system through extensive fault ride through tests – simulations that help the turbine remain grid connected during malfunctions. Historically, electrical malfunctions and turbine protection systems have led to unforeseen excessive loadings of mechanical components and thereby reduced expected lifetime, GE says.

GE says it attempts to verify the stress levels under numerous different load cases, thereby helping to improve long-term project reliability.

 

Va. Offshore Lease
Moves Forward

The U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) has found that there is no competitive interest in the area where the Commonwealth of Virginia’s Department of Mines Minerals and Energy (DMME) has proposed to conduct offshore wind energy research.

Last year, the DMME submitted to BOEM an unsolicited nomination for a research lease for an area offshore Virginia. As an initial step in the leasing process, BOEM published a public notice to determine if there was other interest in acquiring a research lease for the area in which the proposed project would be located.

This will be the first wind energy research lease on the Outer Continental Shelf that BOEM has issued to a state agency. The data obtained under the research lease will be made publicly available and support the future production of renewable energy within and around Virginia’s wind energy area.

“Data collected under this research lease will be valuable to the offshore renewable energy industry, as well as to BOEM and other government agencies, universities, environmental organizations and other key stakeholders,” says BOEM Director Tommy P. Beaudreau.

 

PJM Set To Make
Grid Improvements

PJM Interconnection says it is studying the effects of existing wind energy on the grid and plans to make transmission improvements to handle it.

A report released recently by PJM identified nine grid stability problems at eight locations in Ohio, Illinois and Virginia resulting from conditions related to wind energy on the grid. PJM planned and authorized $97 million in transmission projects to ensure that energy from generators, such as wind power, that typically run during overnight hours can be delivered without causing stability problems.

Because the penetration of wind energy is expected to grow in the region and will be necessary to meet state renewable portfolio standards, PJM is continuing to evaluate what new transmission lines and improvements will be necessary in order to add more wind power onto the grid. The study also takes into consideration the possible impact of offshore wind and wind energy imported from other regions.

 

U.S. Held Trade
Surplus With China

The U.S. wind sector held a $146 million trade surplus over their Asian counterparts, according to a Pew Charitable Trust report on trade relations between the U.S. and China.

The report, titled “Advantage America: The U.S.-China Clean Energy Trade Relationship in 2011,” focused on wind, photovoltaic and energy smart technologies.

The report concluded that America’s clean energy trade strength is derived from leadership in innovation and entrepreneurship, as well as the global presence of American companies, notes Pew.

The U.S. wind industry excels in sales of relatively high-margin specialty materials, such as fiberglass, and sensitive electronic and other control systems. China’s largest sales were in turbine towers and rotors. China’s clean energy industry has an advantage in large-scale manufacturing and high-volume assembly of certain clean energy products.

However, the report notes that tensions between the two countries have been heightened in recent years by fiercely competitive market conditions affecting companies in both countries, as well as several high-profile trade cases.

Pew says that wind energy was the smallest of clean energy trade sectors examined, with more than $923 million worth of wind energy goods and services exchanged between the U.S. and China in 2011.

Overall, the U.S. and China traded more than $8.5 billion worth of clean energy goods and services in 2011, with the U.S. companies enjoying a $1.63 billion sales advantage over their Chinese counterparts.

 

Investor Focuses
On Clean Energy

Ontario investor Suns Group, manager of the Suns Sustainable Fund, says its future investment decisions will be heavily weighed toward renewable energy investments, such as wind and solar.

The mutual fund, which started in 2007, currently holds assets totaling just under $250 million. It invests solely in companies demonstrating a commitment to socially responsible goals, such as improving the environment and investing in communities, notes Suns Group.

“By choosing to focus more narrowly on the renewable energy sector, investors are signaling their concern that the world simply cannot afford to wait much longer for innovative green energy solutions,” notes Jemmy Oscar, fund manager at Suns Group .

Suns Sustainable Fund has investments in more than 100 publicly traded companies, such as Scottish and Southern Energy Ltd., Johnson & Johnson Inc., Johnson Matthey PLC and Unilever N.V.

 

IESO Expects
More Integration

Ontario’s Independent Electricity System Operator (IESO) says a significant amount of renewable energy will be integrated into the province’s bulk power system.

According to the IESO, more than 3.2 GW of renewable energy will be integrated into the system in the next 18 months, including Ontario’s first two transmission grid-connected solar projects.

Additionally, total wind and solar generation connected to the province’s transmission and distribution systems are expected to reach approximately 6.8 GW and produce approximately 14.9 TWh of energy annually by August 2014.

The next element – dispatch of grid-connected renewable resources – is planned to be in place within the forecast period and will give the IESO a necessary tool to help manage the system efficiently and reliably, notes the system operator.

“Integrating renewable resources into Ontario’s changing supply mix has been a learning process for both us and the renewable generators,” says Bruce Campbell, vice president of resource integration for the IESO. “Everything we’ve learned will be applied in the coming months as wind and solar gain even more prominence on the grid.”

The IESO also says that progress continues to be made in removing coal-fired generation from Ontario’s supply mix, saying that the remaining generating units at Lambton and Nanticoke are scheduled to stop burning coal by the end of the year. Additionally, the IESO says the conversion of the Atikokan generating station – from a coal-fired unit to biomass – is underway, with the unit expected to be in service by the third quarter of 2014.

 

Pattern Prevails
In District Court

Pattern Energy Group LP says the Federal District Court for the Southern District of California ruled in favor of the Ocotillo Wind project and the Bureau of Land Management (BLM) in two separate suits.

Pattern says the court granted it and the BLM summary judgment motions in a case brought by the Quechan Tribe of the Fort Yuma Indian Reservation and in a separate case brought by several other parties, including the Desert Protective Council.

In issuing its decisions, the court denied the challenges to the Ocotillo project and dismissed each of the many claims that had been asserted against the project by the plaintiffs.

The court concluded that the BLM and Pattern conducted thorough studies of the effects of the project and had adopted appropriate mitigation measures to avoid or minimize the project’s impact.

“These rulings confirmed that we and the BLM followed the rules, working with Native American tribes, community groups and local residents during the development process,” says Mike Garland, CEO of Pattern Energy. “We remain committed to building a renewable energy project responsive to the concerns of the local community and respectful of the environment and local cultural resources.”

The Ocotillo Wind project, a 265 MW wind power project in Imperial Valley, Calif., has 94 turbines that are operational. The remaining 18 turbines will be installed in the spring, Pattern notes.

 

Poll: Ohio Wind
Has Strong Support

A solid majority of Ohio residents support investment in renewable energy and approve of the state’s law that encourages those investments, the American Wind Energy Association (AWEA) reports, citing a study conducted by Fallon Research & Communications Inc.

According to the results of the poll, nearly 80% of Ohio voters support laws requiring Ohio to produce a portion of its electricity from clean energy sources, especially wind and solar power. In fact, three out of four Ohioans support increasing the number of wind farms in the state.

The poll also found that nearly two-thirds of Ohio voters support the state’s policy that promotes new sources of clean energy to make Ohio less dependent on fossil fuels. Nearly 60% of Ohioans would even be willing to pay, if necessary, up to $3 per month extra on their monthly electricity bills in order to use clean sources of energy.

The poll results were released as Ohio’s Senate Public Utilities Committee plans to hold hearings reviewing the state’s clean energy law.

“It is clear [that] a strong majority of Ohio citizens support the state’s clean energy law, despite the repeated attempts by some General Assembly members to either repeal or weaken Ohio’s clean energy laws,” says Rob Gramlich, AWEA’s interim CEO. “The upcoming Senate hearings should confirm and continue the positive steps Ohio has taken on clean energy.”

In May 2008, Ohio enacted its Alternative Energy Portfolio Standard, which requires Ohio’s utilities to obtain an increasing percentage of electricity from renewable sources. This year, utilities need to acquire 3% of their electricity supplies from wind, solar, geothermal, biomass, biologically derived methane gas and other generating sources. w

New & Noteworthy

Cape Wind Secures Financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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