Monday 3rd February 2014


February 3, 2014

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Canadians commit £644m to London Array

Dong Energy has decided to sell half of its 50% stake in the 630MW London Array offshore wind farm to a Canadian pension fund for £644m.

The divestment to La Caisse de dépôt et placement du Québec means that the fund joins Dong, E.ON and Masdar as owners of the world’s largest offshore wind farm.

La Caisse is no stranger to offshore wind investments, having already invested in the 288MW Butendiek project in Germany, and having recently joined forces with GDF Suez and EDPR under the Neoen Marine moniker in France’s 1GW second-round offshore wind tender.

Isle of Man invites offshore investment

The government of the Isle of Man has invited expressions of interest and tenders for offshore wind farms as it seeks to become an ‘Ecoisland’.

In a presentation given in London last week, Ken Milne, Senior Manager for Energy Policy, outlined opportunities for offshore energy initiatives on the 4,000km2 of seabed owned by the self-governing island in the Irish Sea.

The island has offered to lease parts of this seabed to interested parties, who could then take advantage of onshore infrastructure suitable for O&M bases and the planned North Seas Countries’ Offshore Grid Initiative (NSCOGI) interconnector hub to export energy to the UK grid.

Likewise clean tech businesses could enjoy the benefits of a location to trial new technology, a precision manufacturing sector, access to European markets and strong intellectual property protection.

Delays risk future of £450m UK offshore hub

The future of the UK’s Able Marine Energy Park has been cast into doubt following an argument between the developer and the Association of British Ports (ABP).

The stand-off centres around a small area of land which Able UK believes is critical to the development of the £450m offshore wind hub in the Humber Estuary in northeast England.

ABP has already accepted plans to build a new jetty on the land, however, which Able UK believes could risk the creation of 4,000 new jobs and the prospect of the project going ahead at all.

US in 1.2GW PTC construction boom

The end of 2013 saw more U.S. wind energy construction than ever before, with over 12,000MW in the pipeline, 10,900MW of which began in Q4.

According to a report published by the American Wind Energy Association (AWEA), following a 92% slow-down in wind energy capacity brought online in early 2013, the industry rebounded to see 1,012MW of projects completed in Q4.

Behind this pattern was the extension of the Production Tax Credit, a 10-year 2.3 cents per kWh tax relief incentive, to apply to all projects underway before December 31st 2013.

This sparked a surge of construction activity before the New Year.

Nordex doubles German market share

Nordex has revealed that it doubled its market share in Germany last year to 8.4%.

The German turbine manufacturer recorded a 165% increase in new installations in the country, adding 251MW of capacity.

Total onshore installations in Germany rose by 29% to almost 3GW in 2013.

Wind Watch

87.5% of all the territory that falls under the jurisdiction and ownership of the Isle of Man is underwater.

In other words, that’s 4,000sq km of prime, undeveloped Irish Sea real estate.

Viewed in this light, perhaps it’s not therefore surprising that the locality has a growing appetite to attract and retain so-called clean energy solutions.

It’s been taking it seriously, too. Over the past twelve months the Isle of Man Department of Economic Development, working in collaboration with a major consultancy, has identified a number of potential offshore wind sites.

Industry insiders suggest that as a direct result of this, an unofficial generation target of 2GW has been set – with the first 1GW set to be consented, installed and operational ahead of 2020.

A further 1GW would be developed post 2020, in deeper waters – most likely bringing the projects into sight of some of the existing operational projects located of the UK coast.

For the Isle of Man government, the initiative has been cited as part of its wider push to become a supposed ‘Ecoisland’.

All well and good but surely the revenue generating potential, coupled with a decreasing reliance on an ageing diesel powered electricity generating fleet increasingly plays its part?

Indeed, given the existing subsea cable and trading arrangements that are already in place – thanks to a 67MW subsea UK cable interconnect and a Bord Gais Irish gas pipeline link – the island is already reasonably well connected.

The problem for the islanders of course, is that right now the traffic is predominantly one-way. And these are currently cost contraptions as opposed to profit producers.

The UK Energy Bill might just change that. And in the process provide the island with a fantastic opportunity through which to export renewable energy and capitalise on a potentially lucrative Contracts for Difference (CfDs) framework.

And yet there’s a wider issue at play at here too. For, while the Isle of Man is unique in so far as the strength of its existing cable connectivity relative to it’s isolated island status is concerned, it is setting an important precedent.

Traditionally islands are renowned for running inefficient diesel generators that are fed by expensive, typically shipped, oil fuel imports. That’s expensive, inefficient and does nothing to create energy independence.

In leasing its land, capitalising on its cables and keeping a cool commercial head, the Isle of Man would be wise to raise its ambitions. An ‘Ecoisland’ is one thing – a net exporter of renewable energy power is quite another.

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