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Hybrid Energy Innovations 2015

AWEA Highlights U.S. Wind Success Stories Of 2013

As many expected, new U.S. wind installations took a massive dive in 2013. However, the American Wind Energy Association (AWEA) has released its U.S. Wind Industry Annual Market Report Year Ending 2013, which provides further details on some previously announced highlights from last year and offers even more success stories.

For example, AWEA notes that the industry ended 2013 with 61,110 MW operating in the U.S. across 46,100 wind turbines in 39 states and Puerto Rico. The 905 utility-scale wind projects operating exceeded 4% of the U.S. electricity generation during 2013 and are now able to power the equivalent of 15.5 million American homes. Meanwhile, AWEA says an average of $15 billion a year is invested in new projects, resulting in the industry posting a 19.5% average annual growth over the past five years.

Last year began slowly after a last-minute extension of the federal production tax credit (PTC) – leading to a 92% drop in U.S. installations, down from a record 13,131 MW in 2012. Nonetheless, AWEA notes that 2013 ended with a historic 12,000 MW of new wind projects under construction.

“Increasingly, America is powered by wind energy,” comments AWEA CEO Tom Kiernan. “As utilities and Americans become more familiar with this affordable and reliable energy source, they want more of it. Our industry is responding with record construction numbers, more business for American factories, and more deployment of wind energy that has become a new cash crop for our farmers and ranchers.”

AWEA adds that wind energy has become the primary choice for new energy capacity in wind-rich regions. Between 2011 and 2013, the report says wind energy delivered roughly 60% or more in the Pacific Northwest, Plains states and Midwest, and as much as 80% in the upper Midwest.

Wind’s continued market penetration is also evident nationally: It contributed 31% of all new electric generation capacity in the U.S. over the past five years, underscoring how both utilities and ratepayers are gaining a better understanding of wind’s affordability, reliability and other benefits, according to AWEA.

Other highlights from the report include the following:

The robust construction pace and other favorable indicators come as discussions continue in Congress over extension of the PTC, which expired at the end of 2013. AWEA says the wind industry needs an extension of the tax incentive this year to restart the development process and continue the exciting momentum that ended 2013.

“In the last several years, and highlighted by the tremendous industry activity that ramped up in 2013, U.S. wind energy has shown what it can do for America,” says Kiernan. “The time is now for Congress to give the industry a green light to keep contributing jobs and clean electrons to America, by providing a stable business environment for further investment.”

 

MAKE: N.A. Market
To Remain Strong

The North American wind market will recover in 2014 after a lackluster performance in 2013 and grow 207% year-over-year (YOY), according to a new report from MAKE Consulting. Specifically, the research firm says the region added 2.7 GW last year and is slated to install 8.3 GW this year.

In addition, MAKE expects North America to install 58.6 GW through 2023 – 30% of which is expected from 2014 to 2016 on account of an anticipated production tax credit (PTC) extension in the U.S. this year and provincial feed-in tariffs (FITs) and procurements in Canada.

Beyond 2016, MAKE expects two more growth cycles from 2018 to 2020 and from 2021 to 2023, which will largely track state renewable energy standard (RES) targets and fossil fuel capacity retirements in the U.S.

The firm says that although North American wind power development continues to hinge on intermittent policy support mechanisms, economic factors, including volatile natural gas prices and reductions in wind power’s levelized cost of energy (LCOE), will have growing importance and help drive new capacity through 2023.

Although this paints a very positive picture for development in the U.S., MAKE notes that the encouraging 17.1% compound annual growth rate is mainly on account of the PTC bubble in 2012, which caused an unusual downturn in 2013. Last year saw a 91% drop in installations from 2012, and it also marked the first year Canada outpaced the U.S. in terms of new wind turbine capacity installations.

From 2014 to 2016, the Canadian wind industry will have the largest three-year growth in its history, as it is expected to add 5.1 GW of new wind capacity. More than 70% of this record growth will occur in Ontario and Quebec, thanks to their provincial FIT and procurement policies specifically for wind power. New procurement policies in these two provinces were announced in 2013, with 1.4 GW of new wind power to be installed within the next four years.

In the U.S., 18.1 GW will be commissioned in the next three years. Nearly half of the new builds will occur in Texas, and another 36% in states with RES policies. MAKE expects a PTC renewal in the fourth quarter of this year, extending the eligibility deadline for new project starts until Jan. 1, 2016.

MAKE says the LCOE of new wind power is declining, while average wholesale electricity prices are rising. The company expects wind power’s LCOE to reach grid parity in key markets in 2016 and most of the U.S. by 2023. That will be a driver for the U.S. wind market during this decade, but grid parity is on a longer time horizon in Canada due to lower electricity prices and large reserves of hydroelectric power.

 

Sony, Hydro-Quebec
Form Storage J.V.

Sony Corp. and utility Hydro-Quebec have announced plans to launch a joint venture in June to research and develop a large-scale energy storage system for power grids. The new technology will be designed for various applications, such as meeting excess demand during peak times at electric power substations and integrating renewable energy sources.

The joint venture will utilize Hydro-Quebec’s operation and control technologies for electric power supplies, as well as its lithium-ion battery material technology, together with Sony’s control technologies for olivine-type lithium-ion iron phosphate rechargeable batteries and scalable module systems.

“I am confident that through our partnership with Hydro-Quebec, which possesses deep knowledge of lithium-ion rechargeable batteries, we will be able to develop an optimum large-scale energy storage system to meet the demands of customers,” says Sony’s Yoshito Ezure.

 

It’s Official:
Ontario Is Coal-Free

Ontario has become the first jurisdiction in North America to fully eliminate coal as a source of electricity generation. The Thunder Bay Generating Station, Ontario’s final remaining coal-fired facility, has burned its last supply of coal and will be converted to burn biomass.

According to the Ontario Ministry of Energy, this means the province has fulfilled its commitment to close all of its coal plants in advance of its year-end 2014 target. Ontario has replaced coal with a mix of emission-free electricity sources like wind, solar, nuclear and hydropower, along with lower-emission electricity sources like natural gas and biomass.

Last year, Ontario also introduced the Ending Coal for Cleaner Air Act, which the ministry says would ensure coal-fired generation as a source of electricity in the province never happens again. Citing a 2005 independent study, the ministry says the estimated cost of coal generation was approximately $4.4 billion annually when health, environmental and financial costs were taken into consideration.

“Getting off coal is the single largest climate change initiative undertaken in North America and is equivalent to taking up to seven million cars off the road,” comments Energy Minister Bob Chiarelli. “Today we celebrate a cleaner future for our children and grandchildren while embracing the environmental benefits that our cleaner energy sources will bring.”

 

50% RPS Target
Is Possible: CalWEA

A recent study performed for California’s five major utilities by the research firm Energy and Environmental Economics (E3) provides a roadmap for achieving 50% renewable energy by 2030 in the state with a relatively modest 2% impact on rates, or less, according to an analysis of the report by the California Wind Energy Association (CalWEA). Currently, California has a 33% by 2020 renewable portfolio standard.

The E3 report estimated the system average rate impact of a 50% solar-heavy renewables scenario at 14% in 2030. A more diverse E3 renewables scenario dropped that figure to 9%. However, CalWEA claims that its further analysis reveals that the E3 study did not fully utilize its sound methodological framework to develop a cost-effective mix of renewable resources and system-integration mitigation measures for a 50% renewable energy future.

According to CalWEA, it is possible to dramatically reduce total overall costs by applying the low-cost mitigation measures identified by E3 to a renewable resource mix with lower total costs (including both procurement and integration costs). The result was a 2% rate impact in 2030.

“E3’s model not only accounts for the variation in the many factors that influence system operations and costs under a high penetration of renewables, but it reduces integration issues and costs to a single ‘common currency,’” says Dariush Shirmohammadi, CalWEA’s transmission advisor. “This common currency readily enables these impacts and the mitigation measures to be directly and objectively compared under various scenarios and assumptions.”

CalWEA Executive Director Nancy Rader adds that “while many important policy and institutional changes will certainly be necessary to achieve 50 percent renewables, it is encouraging that E3’s study shows that this goal is affordable and technically achievable.”

 

IKEA Makes First
U.S. Wind Purchase

Home furnishings retailer IKEA has announced its first U.S. wind farm investment with the purchase of the Hoopeston Wind project in Hoopeston, Ill. The 98 MW project is IKEA’s largest single renewable energy investment globally to date, and Hoopeston represents the company’s second North American wind project: Last year, the retailer entered a deal with Mainstream Renewable Power for a 46 MW wind farm in Alberta.

IKEA says the U.S. project will help make a significant contribution to its goal to generate as much renewable energy as the total electricity the company consumes globally by 2020.

“We are committed to renewable energy and to running our business in a way that minimizes our carbon emissions, not only because of the environmental impact, but also because it makes good financial sense,” says Rob Olson, chief financial officer of IKEA US. “We invest in our own renewable energy sources so that we can control our exposure to fluctuating electricity costs and continue providing great value to our customers.”

IKEA expects Hoopeston Wind to generate up to 380 GWh of renewable energy each year, which is equivalent to 165% of the electricity consumed annually by IKEA US (38 stores, five distribution centers, two service centers and one factory).

Apex Clean Energy is currently constructing the wind farm, which will feature 49 Vestas V100-2.0 MW turbines and is slated for completion by the first half of 2015. IKEA will fully own the project, and Apex will manage the wind farm.

“Wind energy has been the fastest-growing source of new energy generation in the U.S., and the potential is only beginning to be tapped,” says Apex President Mark Goodwin. “This project with IKEA US is an opportunity for Apex to work with a new type of investor and partner to expand wind energy development in this country.”

Earlier this year, an IKEA representative spoke with NAW about the company’s global renewables push.

 

A&M-Led Effort
Receives Award

Gov. Rick Perry, R-Texas, has announced the Texas Emerging Technology Fund (TETF) is awarding $2.2 million to the Texas A&M University Wind Energy Center for a collaborative project that brings together researchers from universities across the state to develop and increase the capacity of offshore wind energy technology and help bring it to market. Texas A&M is also a partner in the GoWind consortium, and the governor says the award could help realize GoWind’s three-turbine, 18 MW offshore wind demonstration project in the Gulf of Mexico.

“Texas leads the nation in wind energy production, generating more wind power than all but five nations, and this investment will support an important collaboration between our universities and the growth of our offshore wind capabilities,” says Perry.

The TETF award will support the development of new offshore wind farms, turbines and platform technologies in conjunction with the U.S. Department of Energy (DOE) Offshore Wind Advanced Technology Demonstration Project.

Texas-based Baryonyx Corp., which leads GoWind, was one of seven developers awarded DOE grants to explore offshore wind projects in state and federal waters. The developer is now competing to receive a $47 million follow-up DOE grant and says the project will receive the state funds only if it wins the new federal funding.

 

BPU Rejects
Fishermen’s Appeal

The New Jersey Board of Public Utilities (BPU) has denied Fishermen’s Energy’s motion for reconsideration, and the offshore wind developer now plans to take its appeal to court.

In March, the BPU rejected the developer’s application, ruling that the proposed project would cost ratepayers too much. Fishermen’s plans to build a 25 MW offshore wind demonstration project off the Atlantic City coast, and the BPU’s approval would have allowed the developer to use state offshore renewable energy certificates (ORECs) as a funding mechanism.

In April, Fishermen’s asked the BPU to reconsider its decision and claimed that the regulators mistakenly based the decision on a $263/MWh OREC price when the actual proposed price was $199.17/MWh.

Now that the BPU has dismissed the Fishermen’s motion, the developer plans to file its appeal in court.

“[This] perfunctory NO vote by the BPU is the last step leading to our formal legal appeal,” says Paul Gallagher, Fishermen’s chief operating officer. “We are grateful New Jersey has an independent judiciary and look forward to having the merits of our application finally heard in the Appellate Division. We expect to be vindicated by the courts and to build the first offshore wind farm off of New Jersey, one that still could be the first in the United States.”

 

MHI-Vestas J.V.
Fully Operational

Following recent approval from all relevant authorities, the offshore wind joint venture between Vestas and Mitsubishi Heavy Industries (MHI) has been formally established. The new company, MHI Vestas Offshore Wind, has 380 employees and is headquartered in Aarhus, Denmark.

The joint venture is responsible for the design, further development, procurement, manufacturing, installation, commissioning and service related to the V164-8.0 MW turbine, as well as all marketing, sales and after-sales service related to offshore wind. Plans for the joint venture were announced last year, and each parent company holds a 50% interest.

Anders Runevad, CEO of Vestas Wind Systems and vice chairman of MHI Vestas Offshore Wind, says he is confident about the future of the new joint venture. Masafumi Wani, chairman of the board of the new company, adds, “I am pleased to see MHI Vestas Offshore Wind now being operational. Vestas and Mitsubishi Heavy Industries each hold invaluable experience and knowledge, which makes this joint venture an ideal opportunity and a technologically and financially robust platform to obtain a global leadership position within offshore wind.”

 

Transmission Key
To Wind Success

Wind energy is breaking records across the U.S., thanks to long-needed transmission upgrades that are relieving congestion on the power grid and allowing more clean energy to reach consumers, according to the American Wind Energy Association (AWEA).

The group notes the Electric Reliability Council of Texas’ (ERCOT) announcement that it had set a new wind production record on its grid in late March, reaching over 10 GW. AWEA says this was the most ever for a U.S. power system – the equivalent of powering more than 5 million average Texas homes.

In two previously unreported records, wind energy also supplied a record 39.7% of total ERCOT electricity demand on March 31, and earlier in March, the Southwest Power Pool region just to the north of Texas set a new wind record with over 7.2 GW of wind production.

Nationwide, AWEA says that up to 60 GW of new wind energy development would be enabled by major transmission projects that are in advanced stages of development. The group adds that Texas is the national leader in wind energy, in part, because it has been a leader in creating policies that enable private-sector investment in and open access to an expanded transmission grid.

Specifically, AWEA says Texas’ recent wind records were made possible by the completion of the Competitive Renewable Energy Zone (CREZ) transmission lines earlier this year. The lines connect wind energy resource areas in West Texas and the Texas Panhandle to electricity demand centers, and the state currently has more than 7 GW of wind capacity under construction.

Other regions are following Texas’ lead in adopting policies that will enable long-needed grid upgrades, AWEA adds. The Midcontinent Independent System Operator has adopted similar cost-allocation policies for a set of transmission lines called the Multi-Value Projects. These projects will potentially integrate nearly 14 GW of new wind capacity. Similarly, AWEA says the Southwest Power Pool has adopted a Highway/Byway transmission cost-allocation policy and is making progress toward building a set of lines called the Priority Projects, which are expected to serve more than 3 GW of new wind capacity.

“It may have taken a few years, but in many parts of the country, the grid is finally catching up with wind energy’s rapid growth,” says Michael Goggin, senior electric industry analyst for AWEA. “These recent wind energy records, and the tens of billions of dollars of new wind energy investment in the pipeline, are a product of those transmission success stories.”

 

Xcel Wins Top
Wind Utility Again

For the 10th year in a row, Xcel Energy has been named the U.S.’ No. 1 utility provider of wind energy, according to the American Wind Energy Association’s recently released 2013 U.S. Wind Industry Annual Market Report.

“Xcel Energy is proud to be among the nation’s leaders in delivering affordable, clean energy from renewable sources,” says Ben Fowke, chairman, president and CEO of Xcel Energy. “We embraced wind energy early because it’s clean, cost-effective and will protect our customers against rising fuel prices in the future.”

As of 2013, Xcel Energy says it had 5,080 MW of wind energy on its systems – enough wind power to meet the energy needs of about 2.5 million homes. Wind also was about 15% of the company’s energy supply, and by 2020, Xcel Energy projects it will make up more than 20%.

One early morning hour in May 2013, wind energy provided more than 60% of Xcel Energy’s electricity supply on its Colorado system, which the company says is a national record. The company also estimates it has saved $37.5 million in fuel costs since working to improve wind forecasting in 2009.

“We’ve been fortunate to operate in states with both excellent wind resources and policies that support the fair and cost-effective development of wind power,” says Frank Prager, vice president for policy and strategy at Xcel Energy. “These things have enabled us to increase the use of renewable energy and to reduce emissions at a reasonable cost for customers.”

Xcel Energy says wind energy has also helped its efforts to reduce carbon emissions. The company is well ahead of its goal of reducing carbon emissions 20% by 2020 compared to 2005 levels and projects a 31% reduction by 2020.

Last year, Xcel Energy announced plans to expand its wind power use by another 40% over the next several years. The company is finalizing approvals and agreements to participate in nine new projects that will add a total of 1.9 GW throughout its service territory. The company says the projects are being offered at prices competitive with new natural-gas-fueled generation and are estimated to save customers more than $900 million over the length of the contracts.

 

Global Investment
Bounces Back

Investment in clean energy worldwide rose nearly 10% in the first quarter of 2014 compared to the same period a year earlier, reaching $47.7 billion, according to a new report from Bloomberg New Energy Finance (BNEF).

The report notes that the first quarter is often the weakest of the year for investment in clean energy, reflecting the fact that developers tend to rush to finance projects in the closing months of each year to take advantage of expiring subsidies, as well as the effect of colder weather in the Northern Hemisphere on project progress. So, although global investment in Q1’14 was down from the $58.1 billion seen in the fourth quarter of last year, BNEF says the more useful comparison is with the first quarter of 2013’s $43.6 billion.

Notably, BNEF recently reported that full-year 2013 global investment in clean energy fell 11% to $254 billion, the lowest annual figure since 2009.

“It is too early to say definitively that 2013 was the low point for clean energy investment worldwide and that 2014 will show a rebound, but the first-quarter numbers are encouraging,” comments Michael Liebreich, chairman of the advisory board for BNEF.

Breaking the figures down by region, the report says Asia and Oceania, excluding China and India, saw $12.1 billion of investment in Q1’14, up 26% compared to the same quarter of 2013, helped by the solar boom in Japan. The U.S. enjoyed a 95% gain in Q1 compared to a year earlier, although investment – at $7.9 billion – was only half the bumper figure for Q4 last year, when a number of large wind projects were financed.

BNEF says Europe’s investment was down 30% compared to Q1’13, at $11.1 billion, while China’s was up 18% at $9.9 billion. The biggest percentage gain on the year came in Brazil, where investment rebounded to $1.3 billion in Q1 this year, up 211%. The Americas, excluding the U.S. and Brazil, saw an 11% drop in investment compared to the same quarter last year, with the latest figure at $2.1 billion. The Middle East and Africa managed an 82% increase to $2.4 billion.

Looking at the different types of investment, the report says the dominant driver of the rise in investment was spending on small-scale projects of less than 1 MW, including rooftop solar. This increased 42% compared to the first quarter of 2013, reaching $21.2 billion.

Also rising strongly year-on-year was public markets investment in specialist clean energy companies, with a 195% gain to $3.6 billion. The report says the biggest capital raisings of the quarter were a $2 billion convertible issue by U.S. electric vehicle maker Tesla Motors, followed by a $603 million secondary share issue by Danish turbine manufacturer Vestas Wind Systems.

Overall investment in solar was up 23% at $27.5 billion, while that in wind fell 16% to $13.9 billion. Investment in energy-smart technologies, such as smart grid, efficiency, power storage and electric vehicles, powered up 243% year-on-year to $3.1 billion in Q1, while investment in biofuels fell 28% to $664 million. Investment in geothermal heated up from virtually nothing in Q1’13 to $1.8 billion in the first quarter of this year, the report adds.

 

Wind Helped Cut
U.S. Emissions

In 2013, the U.S. wind power fleet reduced carbon dioxide (CO2) emissions in the power sector by 96 million metric tons, or 4.4%, the equivalent of taking 16.9 million cars off the road, according to the American Wind Energy Association (AWEA).

The group adds that, at the end of 2013, there was over 12 GW of wind energy under construction, which will eventually help to make an even bigger dent in emissions. On average, AWEA says wind generation avoids roughly 0.6 metric tons (1,300 pounds) of CO2 for every megawatt-hour of wind generation. When all 12 GW has completed construction, the group expects operational wind projects in the U.S. will reduce power section emissions by a total of 117 million tons annually, or over 5.3% of the sector’s emissions.

“Wind energy is leading the U.S. to a low-carbon future,” says Emily Williams, senior policy analyst for AWEA. “Not only is wind energy reliable and affordable, but it’s providing sustained emissions reductions in the sector that contributes the most to climate change: the power sector.”

AWEA also points to analyses by independent grid operators that confirm increasing wind energy could significantly reduce emissions.

For example, a 2014 study for Mid-Atlantic grid operator PJM found that a scenario of 20% wind energy would reduce the region’s CO2 emissions by 80 million tons, or 18%, while reducing the cost of producing electricity by more than $9 billion.

Furthermore, AWEA says a 2013 study covering the western region of the U.S. found that producing 33% of the region’s electricity from wind and solar energy would reduce CO2 emissions by nearly 34%.

 

Younicos Buys
Storage Assets

Younicos Inc., a wholly owned subsidiary of Berlin-based Younicos AG, has acquired Xtreme Power’s assets with a winning bid in a Chapter 11 auction supervised by the U.S. District Bankruptcy Court of West Texas. Financial details of the deal were not disclosed.

Younicos has acquired all relevant strategic assets and will also retain members of Xtreme Power’s former management, engineering, business development and operations team. Xtreme, which filed for bankruptcy in January, was among the few companies in the industry with multi-megawatt energy storage installations in the field. Teaming up with Duke Energy, the company implemented a wind energy storage system at the Notrees project in West Texas. In Hawaii and Alaska, Xtreme Power’s energy management systems are deployed at five locations, providing island renewable integration and grid support.

“This is a historic and strategic moment for Younicos,” says James P. McDougall, CEO of Younicos. “We’re on-boarding a great and talented team, acquiring important assets, know-how and customer relationships that are complementary to our current product and services offering. Younicos AG is the industry leader in Europe. The Xtreme Power asset acquisition and joining of forces establishes Younicos firmly in North America, one of the highest potential growth markets for large-scale energy storage applications.”

 

Virginia Awards
Offshore Grants

The State of Virginia has awarded research grants totaling $860,000 to four local companies. According to Gov. Terry McAuliffe, D-Va., the research will help give the state a competitive advantage and accelerate the development of offshore wind power and its associated industry supply chain.

The four proposals were selected for first-round awards under a request for proposals that generated 20 responses for projects requesting a total of $4.83 million in Virginia Department of Mines, Minerals and Energy funding and which offered a total of $5.38 million in matching funds.

The grant winners include the following:

In September 2013, Dominion won the commercial auction conducted by the U.S. Bureau of Ocean Energy Management (BOEM) to develop wind power on just over 112,000 acres approximately 24 miles off Virginia’s coast. According to BOEM, the federally designated Virginia Wind Energy Area has the potential to support up to 2 GW of wind generation.

McAuliffe claims that the gradual slope of the Outer Continental Shelf off of Virginia, with relatively shallow water at offshore distances sufficient to minimize conflicts with commercial shipping and military training, and an excellent wind resource make the area ideal for wind power development. In addition, the governor says that Virginia is well positioned along the Atlantic coast to become the central hub to support wind power development planned in other states to the north and south.

Nonetheless, McAuliffe notes that much data still needs to be gathered, such as information on sub-sea geology, waves and currents, and marine and avian species, before commercial development can begin.

“The projects selected for awards today will help to fill some of these gaps,” he says, later adding that the awards are “the latest examples of the commonwealth encouraging and supporting private-sector investments in offshore wind development. There is more to come. We’re ready for business.”

 

Oklahoma Reaps
Wind Benefits

The wind energy industry in Oklahoma has invested more than $6 billion in wind farm construction and contributed more than $1 billion to the production of goods and services in the state, according to a new study commissioned by The Wind Coalition Oklahoma office.

“Wind energy is no longer ‘alternative’ energy,” says Curt Roggow, director of The Wind Coalition Oklahoma. “It has become a mainstream, reliable and cost-effective source of energy for the people of Oklahoma.”

Compiled by independent consulting firm Economic Impact Group (EIG), the report also shows that wind industry project construction and operating activities in Oklahoma from 2003 to 2012 created the following:

“The property improvements made by developers created a tax base that will provide more than $43 million in property taxes annually to Oklahoma municipalities and school districts following the property tax abatement period,” says Russell Evans, principal and co-founder of EIG. “These projects provide more than $22 million annually in payments to local landowners and approximately $15 million in direct wages to local workers.”

Oklahoma wind projects range in capacity from 40 MW to 300 MW, with the average facility incorporating 68 turbines to produce 130 MW of energy. These wind farms represent more than 3 GW of electricity generation capacity.

“With 26 active wind farms in our state, Oklahoma is now ranked sixth in the country for the amount of wind energy generated for consumers,” Roggow adds. “That’s enough energy to power nearly 770,000 homes every year.

“As this industry grows, it is important to understand the economic impact wind energy has on Oklahoma now and the potential it has to meet our future energy and economic needs. This data will be essential for policymakers and elected officials to understand the importance wind energy has in our state, and to forecast its potential impact.”

 

SSE Backs Away
From Offshore Wind

U.K.-based energy company SSE is stepping back from its offshore wind investments – a move that industry stakeholders say signals the need for policy certainty.

SSE has revealed plans to reduce its stake in the approved 750 MW Beatrice offshore wind project from 75% to no more than 50%. Furthermore, the company has decided not to proceed in the long term with its stakes in four other offshore wind projects: Galloper (50% ownership stake), SeaGreen (50%), Forewind (25%) and Islay (100%).

SSE says the decision follows a comprehensive review of the company’s offshore wind portfolio and is in line with an ongoing need to streamline its business.

The company has also announced it is freezing its domestic electricity and gas prices until 2016 and instituting measures to bring down business costs, including the loss of about 500 jobs.

“In offshore wind farm development, there are two major, related hurdles that projects currently have to overcome,” explains Jim Smith, SSE’s managing director of generation development. “The first is the Levy Control Framework, which has the reasonable objective of controlling costs to customers from government energy policies – but which also means there is limited support for offshore wind. The second is cost – the future of offshore wind farm development depends on a sustainable and lower-cost supply chain.”

Smith later adds, “Taking [Beatrice] forward to subsequent stages of development and construction will be challenging, but achievable, and that is what we are working toward.

“While increasing our commitment to the development of Galloper, SeaGreen and Forewind is not the right option for SSE at present, in the context of our wider investment plans, we will continue to work with partners and other stakeholders to achieve the most positive possible outcome for each project.”

Trade group RenewableUK says SSE’s plans highlight the dangers of policy uncertainty.

Maria McCaffery, chief executive of the group, comments, “As the SSE announcement makes clear, there are some aspects of policy which are troubling developers, so policymakers should take notice. The lack of clarity about the government’s support for offshore wind past 2020 is in stark contrast to its support for nuclear, where they’ve set out a clear package of financial support.”

Lindsay Leask, senior policy manager at Scottish Renewables, agrees.

“These decisions reinforce the uncertainty which developers have about the future of the offshore wind sector, and to reinforce that continued, strong support from both the Scottish and U.K. governments is absolutely critical to the future of the industry,” says Leask.

“In turn, the sector needs to continue to work hard to deliver cost reductions which will further prove that offshore wind is an economic alternative to other forms of generation.” w

New & Noteworthy

AWEA Highlights U.S. Wind Success Stories Of 2013

 

 

 

 

 

 

 

 

 

 

 

 

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