Wind Investments to Top $101B by 2020

Global wind power investments are predicted to rise from $70 billion in 2013 to $101 billion by the end of 2020. The new report, “Global Wind Turbine Value Chain – Production, Market Share, Competitive Landscape and Market Size to 2020,” also finds that installed capacity should rise from around 364.9 GW in 2014 to 650.8 GW by 2020. © Ximinez | Dreamstime.com - Wind Turbine PhotoAlthough demand is on the rise, says Global Data who authored the report,” there may be a low growth rate for wind turbine components over the forecast period.

Wind turbine manufacturers produced approximately 11 percent of wind turbine gearboxes, 48 percent of rotor blades and 43 percent of generators in-house in 2013. Meanwhile, 10 percent, 62 percent and 37 percent of gearboxes, rotor blades and generators, respectively, were manufactured in-house in 2006.

Prasad Tanikella, GlobalData’s Senior Analyst covering Power, said, “Depending on wind power component supplies, turbine manufacturers make strategic decisions over whether or not to produce the equipment in-house. Some of the major manufacturers, such as Enercon and Vestas, prefer to develop components within their business structure, to avoid issues with quality control and design confidentiality.”

Tanikella cautions that constant growth in the global wind power market is forcing turbine manufacturers to seek multiple component suppliers to ensure smooth production. Indeed, several long-term agreements are currently being drawn up between turbine manufacturers and their suppliers. As such, component prices are decreasing thus the predicted low growth rate for component manufacturers.

Clean Energy Investments Jump

According to Bloomberg New Energy Finance (BNEF), clean energy investment rose for the first time in three years in 2014. New funds for wind, solar, biofuels and other low-carbon energy technologies gained 16 percent to $310 billion last year. It was the first growth since 2011, erasing the impact of lower solar-panel prices and falling subsides in the U.S. and Europe that hurt the industry in previous years.

The study reported that clean energy benefited from a number of trends that will be difficult to replicate in 2015. For example, with China’s commitment to renewables, funding increased 32 percent. In addition, a record $19.4 billion was committed to offshore wind projects during the year.

BNEF Trends in Renewable Energy ReportThe industry benefited from a number of trends that will be challenging to replicate this year. Funding surged because of a 32 percent expansion in China’s commitment to renewables, as well as a record $19.4 billion committed to offshore wind projects that were years in the making. And prior to the major drop in gas prices, investments were on the rise for electric vehicle development.

“Healthy investment in clean energy may surprise some commentators, who have been predicting trouble for renewables as a result of the oil price collapse,” said Michael Liebreich, chairman of the advisory board of the London-based researcher. “Our answer is that 2014 was too early to see any noticeable effect on investment. The impact of cheaper crude will be felt much more in road transport than in electricity generation.”

However, the BNEF, there may be trouble on the horizon for electric cars and offshore wind but even with lower oil prices, they predict installations for solar and wind power to grow about 10 percent in 2015. BNEF says the findings ease concerns that the oil price rout that began in the middle of last year would lead to a sharp reduction in funds for low-carbon energy, which is more costly than fossil fuels.

“This increase in renewable energy investment demonstrates the resilience of the sector in the face of tumbling oil prices,” said Ben Warren, head of environmental finance at the consulting firm EY. “This trend is set to continue as technology around renewables becomes more affordable. The increasing role that renewable energy plays in emerging markets will also help ensure sustainable growth for the sector.”

 

Nat. Gas Inventories Up, Wind to Lead Renewables in 2015

eiaNatural gas inventories are up dramatically from last winter, and wind is expected to lead renewable energy capacity additions in the coming year. Those are just a couple of findings in the U.S. Energy Information Administration’s (EIA) latest Short-Term Energy Outlook. EIA Administrator Adam Sieminski says those prices for natural gas have also dropped to two-year lows as growing domestic natural gas production has bolstered the inventories.

“Natural gas inventories at the end of the winter heating season in late March should be about 9 billion cubic feet above the five-year average, much higher than the same time last year when inventories were approaching 1 trillion cubic feet below normal.”

Sieminski adds that following nearly two years of relatively moderate generation capacity growth for renewables, wind power will be the clear leader in utility-scale renewable capacity additions in 2015.

“About 11 gigawatts of wind capacity is expected to enter service in 2015, the second-highest level of generating capacity that the wind industry has ever added in a given year.”

The EIA report goes on to say that petroleum producers continue to see dropping prices for crude oil and many oil companies have cut back on their exploration drilling in response. However, petroleum production is still expected to climb in 2015, as those producers concentrate drilling activities in established areas that already have productive wells.

DOE Offers $2.5M to Improve Wind Forecasting

The U.S. Department of Energy (DOE) has allocated $2.5 million to help improve wind forecasting. Louisville, Colorado-based Vaisala will research the atmospheric processes that generate wind in mountain valley regions and the data will be used to improve wind weather models for short-term wind forecasts. Better forecasts will allow energy plant operators to operate wind turbines closer to maximum capacity.

Screen Shot 2015-01-15 at 11.51.02 AMThe industry has found that mountain-valley areas bring additional challenges including varying degress of soil moisture and surface temperatures making it more difficult to forecast wind energy output. Vaisala and its partners will use advanced meteorological equipment to analyze specific environmental characteristics that affect wind flow patterns in the Columbia River Gorge region of Washington and Oregon.

Data collected during the project will be shared in near real-time with the National Oceanic and Atmospheric Administration (NOAA) and the Energy Department’s national laboratories, and will be used to develop improved atmospheric simulations for the Weather Research and Forecasting model, a widely used weather prediction system. These new wind measurements and simulations will also be incorporated into NOAA’s Numerical Weather Prediction models to improve short-term wind forecasts in complex terrain.

This important research builds on the Energy Department’s Wind Forecast Improvement Project, which previously explored wind energy resources in the northern Great Plains and western Texas. For the first time ever, NOAA assimilated wind data from tall turbines and nacelle anemometers into meteorological models for use by the wind industry and other sectors. Integrating these new data into existing models produced forecasts that were up to 15% more accurate at predicting future wind conditions in nearly flat terrain.

SheerWind Pilots Wind Project in Apollo Beach

SheerWind has been selected by Tampa Electric for a wind energy pilot project to be commissioned in Apollo Beach, Florida at Tampa Electric’s Big Bend Power Station. Tampa Electric has selected SheerWind INVELOX Infographicthe 200-KW INVELOX wind power generation to be built as a pilot project in 2015. According to SheerWind, after sufficient data is collected (6 to 8 months) and if the technology is shown to be viable, Tampa Electric may purchase a utility-scale 1.8MW INVELOX system.

The company explains its INVELOX funnel system is a solution that utilizes current wind power turbines and rotors but brings them to ground level for easier, safer, and cheaper operation and maintenance. Multiple turbines can be used in a row or series to increase output capacity for each tower while reducing downtime to near zero.

“We are pleased to be included in Tampa Electric’s Big Bend Power Station. They understand the importance of exploring and showcasing new technology,” said Steve Hill, Chief Operating Officer of SheerWind. “This project will assist in SheerWind’s mission to provide sustainable, affordable, electrical energy to anyone, anywhere.”

Nebraska Seeks to Export Wind Energy

Nebraska Renewable Energy Exports ReportThe Nebraska Power Review Board (PRB) has commissioned a study that identifies the factors that impact the desirability of developing between 5,000 -10,000 MW of renewable energy for the state. Performed by the Brattle Group, the study also presents options available to policy makers to meet the state’s economic development objectives. The report has been submitted to the Nebraska Legislature for review.

Based upon a review of state, regional, and national renewable energy and transmission policies, The study, “Nebraska Renewable Energy Exports: Challenges and Opportunities,” identifies the following challenges to wind generation developments in Nebraska:

1. Transmission Constraints: Transmission projects currently in development will provide transmission infrastructure sufficient to integrate at least another 2,000 MW of wind projects. However, achieving the considerably higher target of renewable generation in Nebraska would require a substantial expansion of the state, regional, and interregional transmission systems.

2. Limited and Uncertain Demand for Renewable Energy: The regional market for renewable generation is currently saturated. However, demand for additional renewable generation will likely emerge as costs decline relative to conventional resources, wholesale electricity prices increase, coal plants retire, and new environmental policies are implemented. Nebraska will need to better position itself to be prepared to take advantage of emerging new demand for renewable generation.

3. Less Attractive Economics Compared to Neighboring States: Renewable generation developers in Nebraska face competitive disadvantages relative to some other states in the wind-rich Great Plains region, including lower financial incentives and lower wholesale power prices.

4. Greater Perceived Risks: Due to the requirements of the Certified Renewable Export Facility (CREF) process and limited experience in developing renewable generation under that standard, there is a perception among developers that wind projects in the state are more risky and more difficult to pursue than in neighboring states.

The study discusses both the costs and benefits of supporting renewable generation development in Nebraska. If, after considering these tradeoffs, the Nebraska Legislature chooses to promote the development of renewable resources in the state, the authors identify a number of options available to meet these goals.

“Nebraska has some of the best wind in the country but a surprisingly low amount of wind generation installed and under development,” said Brattle principal Judy Chang, a co-author of the study. “Nebraska policy makers and legislators have been working to increase the attractiveness of the state to renewable energy developers. They have already reduced some barriers, including those related to limiting public power condemnation rights. We anticipate that Nebraska policy makers will consider the options laid out in our report to make decisions about further improving the economics and regulatory setting for renewable development.”

 

Senate Passes Tax Extenders

senateFollowing the recent action by the U.S. House of Representatives, the Senate on Tuesday evening passed the package of tax incentives for 2014 that will expire once again in just two weeks.

For the renewable energy industry, the legislation includes the second-generation biofuel production tax credit and the accelerated depreciation allowance for cellulosic biomass properties, as well as tax credits for alternative fuel vehicle refueling infrastructure, alternative fuel mixtures, and wind energy and the dollar-per-gallon Biodiesel Tax Incentive.

Renewable Fuels Association
(RFA) president Bob Dinneen says the temporary extensions are a step in the right direction, but called on Congress to provide more certainty in the future. “These incentives can help to level the playing field in a tax code that is overwhelmingly tilted toward incumbent fuels and established oil extraction technologies,” said Dinneen. “Congress should be commended for helping businesses and consumers alike. But next year is a whole new ball game and in order to balance the scales and make future tax incentives truly helpful, Congress must take a good hard look at overarching tax reform legislation.”

Noting the short term nature of the legislation, Senate Finance Committee Chairman Ron Wyden said, “With this tax bill, the Congress is turning in its tax homework 11 months late…The legislation accomplishes nothing for 2015.”

The bill now goes to the president who is expected to sign it.

Invenergy Wind’s Le Plateau 2 Wind Farm in Operation

Invenergy Wind and the Régie intermunicipale de l’énergie Gaspésie–Îles-de-la-Madeleine have begun commercial operations at their 21.15 MW Le Plateau 2 wind farm in Québec. Le Plateau 2 is located in the Ruisseau-Ferguson unorganized territory in the MRC d’Avignon, Québec, Canada, approximately 300 miles east of Québec City. The project features nine Enercon E-92 wind turbines, with output purchased by Hydro-Québec Distribution through a 20-year power purchase agreement.

Screen Shot 2014-12-15 at 9.28.21 AM“We are delighted to reach this milestone together with our community partner, the Régie,” said Jim Shield, Chief Development Officer at Invenergy. “Le Plateau 2 enhances our growing presence in Québec and demonstrates our ability to work in partnership with local communities. The Régie is an excellent and innovative example of the benefits of economic diversification in the Gaspésie–Îles-de-la-Madeleine region.”

The wind farm is a collaboration between leading North American clean energy company Invenergy and the Régie, a coalition representing MRC’s and municipalities comprising more than 90% of the Gaspésie–Îles-de-la-Madeleine administrative region. The facility is sited nearby Invenergy’s existing 138.6 MW Le Plateau wind farm that began operations in 2012 and also has a 20-year power purchase agreement with Hydro-Québec Distribution.

“Today all of the Gaspésie-Îles-de-la-Madeleine region is delighted with its 2008 decision to establish the Régie,” added Richard St-Laurent, spokesman for the Régie. “The wind farm brings financial benefit to the municipalities through our share of the profits, in addition to the usual host voluntary payments. Our establishing a solid and successful relationship with Invenergy reflects a regional consensus and proves that by working together, we can achieve great results.”

Biodiesel, Ethanol & Wind Lead Energy Jobs in Iowa

advancedenergyeconomy1Biodiesel, ethanol, wind and energy efficiency are the leaders in a survey on job growth in advanced energy in Iowa. This news release from the Advanced Energy Economy Institute says those industries employ more than 22,000 people.

Prepared by BW Research Partnership, a leading workforce and economic development research firm, the Iowa Advanced Energy Employment Survey report is available at http://info.aee.net/ia-jobs-report-14. The AEE Institute published a similar report on California’s advanced energy industry, California Advanced Energy Employment Survey, last week, which is available at http://info.aee.net/ca-jobs-report-14.

Advanced energy comprises a significant part of Iowa’s economy, employing 1.3 percent of Iowa’s total workforce. Employment in advanced energy-related businesses is greater than employment reported for crop production, general freight trucking, and animal production in Iowa.

“In states from coast to coast and in between, the advanced energy industry is substantial and growing,” said Graham Richard, CEO of AEE and the AEE Institute. “This first-ever survey of advanced energy firms in Iowa shows that energy efficiency, biofuels, wind power, and other advanced businesses are creating jobs and contributing to the Iowa economy.”

While advanced energy jobs in Iowa dropped by 4 percent from 2013, the survey shows advanced energy employment is expected to rise 6 percent in the coming year.

AWEA: Wind Provides Economic, Consumer Benefits

According to a study recently released by the American Wind Energy Association (AWEA), AWEA Report- economic benefits of wind energy in SPPwind energy provides the Southwest Power Pool Region (SPP) with $2.8 billion in societal benefits per year. In 2013, wind energy accounted for 10.8 percent of the electricity produced in this region.

“The economic benefits of wind energy in the Southwest Pool” looked at the effect of wind energy in Kansas, Oklahoma and Nebraska as well as parts of New Mexico, Texas, Arkansas and Missouri. The study found that one MWh (megawatt hour) of wind energy in SPP, enough to power an average home for one month, provides an average of $109 in economic benefits to society and $7 in benefits to consumers.

The report found four major societal benefits:

  1. Wind reduces the cost of producing electricity. Wind energy is a zero-fuel cost so when utilities use the least-cost power plant first electricity produced from sources such as wind are tapped first.
  2. Wind energy reduces pollution. The reports notes that pollution from fossil-fired power plants, that are shown to harm health, are not currently reflected in electricity market prices. Wind reduces the costs to society in terms of pollution including no production of sulfur dioxide, smog-forming nitrogen oxides and greenhouse gases.
  3. Wind energy hedges against fuel price volatility. Wind energy helps to hedge against price volatility because unlike fossil fuels, wind energy is sold at a long-term fixed price through a Power Purchase Agreement.
  4. Fixed-priced wind energy becomes an even better deal as other fuels increase in price over time. Nearly all of wind plant’s costs are fixed up front and the majority of prices are fixed through the PPA. In contrast, the cost of conventional generation changes significantly based on fuel costs. These costs are passed along to consumers.

The report also cites two major benefits:

  • Wind energy protects consumers by reducing use of the most expensive power plants. Because wind energy has a low production marginal cost because it has zero-fuel costs it drives down the market price for all electricity that is being purchased in the market.
  • Fixed-price wind energy reduces consumer prices more as other fuels get more expensive. Fossil fuel prices are expected to increase whereas wind energy is a fixed price and the savings are passed along to consumers.

The report concludes that due to a drastic decline in wind energy adding new wind generation to the SPP will result in significant societal and consumer benefits.