Monday 16th January 2017


January 16, 2017

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Trump urged to axe Amazon wind farm

North Carolina legislators have urged Donald Trump to terminate a $400m project for Amazon that is nearing completion.

Ten North Carolina lawmakers have signed a letter to urge to US president-elect Donald Trump, who is set to take office on Friday, to shut down a nearly-complete wind farm that Avangrid is building for Amazon in Pasquotank and Perquimans counties. The lawmakers said the turbines could interfere with US Navy security
systems, which are located in Chesapeake in Virginia.

The US wind industry will watch this case to see how Trump’s anti-wind views manifest themselves in office, as scrapping a nearly-complete scheme would damage investor confidence. All of the 104 turbines have already been installed and the project, Amazon Wind Farm US East, is due to be commissioned next month.

Read more about US wind and President Trump in Finance 2017.

UK GIB pays £731m for Lincs stake

The UK Green Investment Bank has bought a 75% stake in the 270MW Lincs offshore wind farm for £731m.

The bank’s dedicated Offshore Wind Fund has bought 44% of the project for £429m, while the bank itself has bought another 31% for £302m. Dong Energy owns the remaining 25%.

This deal represents British utility Centrica’s exit from the wind sector, as it previously owned half of Lincs. The project consists of 75 Siemens 3.6MW turbines and was commissioned in 2013. The UK GIB’s Offshore Wind Fund now manages assets worth £1.1bn.

Read our Wind Watch on UK GIB privatisation here.

New York backs 207MW wind farm duo

New York has awarded support to two wind developments totalling 207MW that are set to be built by Invenergy and NextEra.

The 106MW Number Three wind project in Lewis County is being developed by Chicago-based Invenergy and is due for completion in 2019; while the 101MW Eight Point project in Steuben County is being developed by Florida-based firm NexEra Energy Resources. The amounts awarded have not been disclosed, but the deals are part of a $360m programme that has backed 11 projects.

The announcement came days after New York governor Andrew Cuomo said the US state would back the construction of 2.4GW of wind farms in its waters by 2030.

Enel acquires US storage company

Enel Green Power has acquired US energy storage firm Demand Energy Networks to support its renewable power projects.

DEN specialises in the behind-the-meter storage market and has carried out 24 projects since it was founded in 2008, totalling 3MW/9MWh of installed capacity in the US and Latin America; and it claims a pipeline in excess of 30MW/100MWh. DEN will benefit from the deal by having access to Enel’s 36GW portfolio of projects.

Enel and DEN are set to collaborate to expand deployment of DEN’s Distributed Energy Network Optimisation System, a platform which enables real-time optimisation of energy management.

Renova sells Alto Sertao II for $204m

Brazilian power company Renova Energia has agreed to sell its 386MW Alto Sertao II project to AES Brazil for about $204m.

Renova has entered into a binding agreement to sell the wind scheme to AES Tiete Energia, a subsidiary of AES Brazil, the Brazilian unit of AES Corporation. The deal is part of a drive by Renova to repay its debts and to improve its cash position.

Meanwhile, Brazilian energy minister Fernando Coelho Filho has commissioned studies to prepare a solar and wind tender for the first half of 2017, after he axed the tender due in December 2016.

Wind Watch
By Ilaria Valtimora

Norway is set to be the first country to turn off its FM radio network. I’m just grateful the UK isn’t doing likewise as I’d never have heard Charles Hendry on Radio 4 talking about tidal lagoons while I was driving to work last week. This is highly relevant for wind.

The former UK energy minister was asked by the government in May 2016 to assess the case for tidal lagoons, and the role they could play in the UK’s energy mix. In particular, he had to advise the government whether to give green light to Gloucester-based firm Tidal Lagoon Power to build a scheme in Swansea Bay.

The company is in negotiations with the UK Government as it wants £1.3bn of state subsidies to help fund this 350MW trial.

And, last Thursday, Hendry published a report saying that the UK should go ahead with the project, which would be the first of its kind to be built. It would consist of a large U-shaped wall out into the bay with turbines, which would be driven by the regular rise and fall of the tide. Hendry said this would generate power for decades. But at what price?

The former minister says the best way to look at this is to spread the cost of subsidies over the lifetime of the project, which is around 120 years if the projections are to be believed. In this way, he said the cost would be “about a cost of a pint of milk a year on people’s bills”.

One pint of milk a year for every electricity bill payer in the UK for 120 years. For one project?! He’s lucky I kept control of the car!

You see, that’s the problem: the electricity produced by a tidal lagoon is only really competitive on price only if you assume it is going to have a really long lifespan. Hendry’s findings show that if you look at the price of electricity based on a 30-year period – the average lifetime of a renewable project – would be £120/MWh. That is uncompetitive with the price of offshore wind today.

Despite these cost concerns, the UK government is likely to back the project in Swansea Bay after Hendry’s enthusiastic report. So, what are the challenges and opportunities for wind companies?

If projects of this kind are going to be supported by the government, we expect big turbine makers to seize the opportunity to enter this new sector. Offshore wind developers and manufacturers already have the technology and expertise needed for tidal lagoons.

There is also an argument that businesses should welcome any spending on renewables, given that recent analysis by think thank Green Alliance showed that government investment in renewable projects including wind could decline by 95% between 2017 and 2020. This is another reason why wind companies should look to build their expertise in one of the few renewable power sectors that the UK government is apparently be keen to invest in.

But still wonder why the government is prepared to invest in tidal. Usually, governments back schemes and technologies like this at an early stage to help get an expertise that brings the costs down.

This is not be the case here. We have already got effectively the technology to build a project like this and, for this reason, Hendry said we won’t see in these projects the same cost reduction we have seen for example in offshore wind. The only effective way to reduce costs using tidal lagoons is with economies of scale.

There is an argument that the extra spending makes sense because the tides are more reliable than the wind, but forecasting in the wind sector is already very developed; and the use of storage technology will help address those concerns. It is also galling that UK leaders still refuse to back low-cost onshore wind.

This is an interesting project and it could be a way for the UK to diversify its energy while creating a new kind of industry – but it also reinforces a perception that clean power is the expensive option. That is simply not the case anymore.

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