Archive for the ‘Renewables’ Category

$65 Billion Wind Energy Investment by China WindPower, Iberdrola SA, and Duke Energy!

Tuesday, March 23rd, 2010

Wind-power will generate almost 41 gigawatts of energy generation capacity this year.  This is the equivalent of 34 new nuclear power plants!  Wind development is growing exponentially, especially in the U.S. Southeast and Midwest.  $65 billion will be invested in new wind development this year!  Turbine costs are falling, driving up demand as government subsidies further enhance the wind energy market.  Renewable energy is certainly gaining market share, but at lower margins for manufacturers.

According to Mr. Loon and Mr. Morales of Bloomberg, “China WindPower Group Ltd., Iberdrola SA and Duke Energy Corp. will lead development of an estimated $65 billion of wind-power plants this year that let utilities reduce their reliance on fossil fuels.

The estimate from Bloomberg New Energy Finance assumes a 9 percent annual increase in global installations of wind turbines, adding as much as 41 gigawatts of generation capacity. That’s the equivalent of 34 new nuclear power stations.

Utilities that built natural gas-fired generators during the last decade are increasingly erecting turbines and buying wind power from competitors, tapping a renewable-energy source as governments consider ways to penalize carbon-based fuels.

“Wind development is moving fast,” James Rogers, chairman of Duke, which owns utilities in the U.S. Southeast and Midwest, said in London on March 18 at the Bloomberg New Energy Finance conference. “In the last 10 years, 90 percent of plants we’ve built have been gas. I’ve used gas plants like crack cocaine.”

While gas-fired plants are relatively cheap to build and pollute less than coal plants, they still emit carbon dioxide, which will carry higher costs if governments tighten environmental rules.

Last year, $63 billion was invested in turbines, adding 37.5 gigawatts of new capacity and bringing potential output of electricity from wind to 157.9 gigawatts, according to the Global Wind Energy Council, a Brussels-based industry group. A third of those turbines were installed in China, which doubled its capacity to 25 gigawatts.

Lower Prices

Wind is gaining support as turbine costs fall and government stimulus money helps pay for the plants. Prices for turbines have declined by about 15 percent to 1.05 million euros ($1.44 million) per megawatt over the past two years, according to William Young, an analyst at Bloomberg New Energy Finance.

“It makes sense and it makes money,” said Michael Liebreich, founder of the London-based consultant bought by Bloomberg LP in December.

If this year’s forecast holds, the new wind turbines may supply up to 12.3 million homes, less than the almost 33 million customers that the 34 nuclear plants would power with the same capacity, according to data from the U.S. Department of Energy and American Wind Energy Association. Output from a nuclear plant is steady while turbines work only when the wind blows.

Renewables Boom

Worldwide investment in renewable-energy, which also includes solar and biomass facilities, may top $200 billion this year after outlays fell 6 percent to $162 billion in 2009, Bloomberg New Energy Finance estimates.

That investment is moving ahead even after world leaders failed to reach a binding agreement limiting emissions from carbon-based fuels when they met in Copenhagen in December, Deutsche Bank AG Vice Chairman Caio Koch-Weser said. The cost of carbon permits for December 2010 traded in Europe has fallen 3.2 percent since that summit ended.

“The renewables story is gaining momentum independently now,” Koch-Weser said in an interview at the same conference. “I see with many clients from China to California to India now a really good renewables paradigm shift happening.”

This year, Duke plans to install 250 megawatts of wind equipment in the U.S., Rogers said. Bermuda-based China WindPower will invest about HK$900 million ($116 million) in 10 to 12 wind farms this year, nearly doubling its capacity, the company said on March 8. Iberdrola SA’s clean-energy unit expects to add 1,750 megawatts of new capacity in 2010, most of that from wind power, it said last month.

Market Share

Renewable energy sources may expand their share of the electric power generation market to 9 percent worldwide by 2030 from 2.5 percent now as gas use remains about 21 percent, the International Energy Agency estimates. Natural gas consumption has risen 20 percent since 2000, the IEA says.

Coal, which produces the most carbon when burned, also is benefiting from rising energy demand. Its market share for electric generation will grow 3 percentage points by 2030 to 44 percent, according to the IEA.

The world needs to invest $26 trillion through 2030 to meet growing energy demands, the IEA, an adviser to oil-consuming nations, said last year. Proven gas reserves are sufficient to provide supply for 60 years at current production rates, the group said in its World Energy Outlook, published in November.

‘Scalability’

Lower wind turbine prices mean more power for the same money, and developers are rushing to take advantage of $184 billion in economic stimulus money set aside for clean energy projects, said Mike O’Neill, president and chief operating officer of wind project developer Element Power.

“We are getting low-cost, low-risk money into this market,” O’Neill said. “You are getting money coming in.”

Making wind power even more attractive is its “scalability,” or the ease with which a developer can add turbines as demand rises, said Petra Leue-Bahns, chief financial officer of Ecolutions GmbH.

“Wind is relatively easy to install in big packets and then scale up,” she said. “Wind will probably reach grid parity” and be able to compete with fossil fuels without subsidies within four years, she said. Ecolutions invests in renewable-energy projects in Europe and Asia.

BP Plc, the world’s biggest oil producer, is investing in wind and solar power as renewable energy gains market share on fossil fuels.

“If you want to have the same size of company that you have today, then you need to start the shift,” said Katrina Landis, chief executive of the London-based company’s alternative energy unit. “It means to some degree giving up what you’ve done for the last 100 years.”

Sahara Desert Solar Project

Wednesday, March 10th, 2010

Solar projects have been rampant since 2006.  After slowing down in 2008, projects in the solar space, despite declining subsidies in Germany and Spain, have been getting more and more attention.  The latest news involves, Siemens and Munich Re (A REINSURANCE COMPANY!) teaming together to launch solar fields in the Sahara desert that could generate power for European countries.  Morocco would be the first target for the venture.


According to Jeremy Van Loon of Bloomberg,  “Siemens AG and Munich Re’s plan to develop solar-electricity generators in the Sahara Desert aims to win above-market prices for the energy they would export to Europe, the project chief said.

The Desertec Industrial Initiative will work with Morocco in the next month to arrange negotiations with the European Union to provide so-called feed-in tariffs for electricity produced by using large mirrors in the desert, Paul van Son, who heads the initiative, said today in an interview.

“We’re just at the beginning of this, and we’re putting together a work package with Morocco first,” he said in Berlin. “The difficult part is putting all the pieces together while dealing with so many different governments and structures.”

Feed-in rates, or above-market prices subsidized by consumers, are used in most EU countries as incentives for producing more electricity and heat from wind turbines, solar panels and wood pellets. Currently there are no such premium prices available for renewable energy exported from North Africa to the 27-member European bloc, van Son said.

Desertec is part of a plan to reduce Europe’s dependence on fossil fuels such as coal and natural gas for power generation. The developers plan to use curved mirrors that focus sunlight to heat liquids and turn power turbines. The 400 billion euro ($546 billion) plan must also obtain backing from European and African governments as well as investors.

Loan Guarantees

Germany is considering seeking loan guarantees for the project through the European Investment Bank, the country’s economy minister, Rainer Bruederle, said today in Berlin. Part of the goal of Desertec is also to provide energy for North Africa, he added.

“This is the kind of large-scale infrastructure project that the European Investment Bank was created for,” Bruederle said at a press briefing, without providing details.

The project may create as many as 2 million jobs and provide 15 percent of Europe’s power demand by the middle of this century, Siemens and Munich Re have said.

Generating electricity from the desert and delivering it to Europe will require high-voltage cables to move power from sparsely populated areas of North Africa under the Mediterranean Sea to Europe, whose transmission grids already struggle to accommodate power increasingly supplied by solar and wind farms built in the last few years.”