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Special focus – Wind power in the EU

inside: Obama: prospects for alternative energy Can solar PV beat the downturn? Small wonders: biomass from algae Hydrogen production from renewables

January/February 2009

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Editorial

Many believe that the USA could very quickly become the next signiďŹ cant growth engine for the renewables industry.

Er, show me the money? By the time this editorial is in your hands the US President will have signed the American Recovery and Reinvestment Tax Act of 2009 – authorising the spending of US$789 billion. And though the details will become apparent in the coming weeks, early indications are that this could be a major boost for the renewables industry, with provisions including: t "O FYUFOTJPO UP UIF 1SPEVDUJPO 5BY $SFEJU 15$ TVOTFU EBUF t 5IF BCJMJUZ GPS UBYQBZFST UP FMFDU UP DMBJN UIF *OWFTUNFOU 5BY $SFEJU *5$ JO MJFV PG UIF 15$ GPS DFSUBJO QSPKFDUT t 5IF BCJMJUZ GPS UBYQBZFST UP SFDFJWF DBTI HSBOUT JO MJFV PG DMBJNJOH UIF *5$ PS 15$ GPS DFSUBJO QSPKFDUT

Editor David Hopwood d.hopwood@elsevier.com T +44 1865 843648 F +44 1865 843973 Assistant Editor Kari Larsen k.larsen@elsevier.com, T +44 1865 843639 F +44 1865 843973 Weekly/News correspondent Bill Eggertson eggertson@renewables.ca T +1 613 728 0822 F +1 613 728 2505

5IPTF XIP IBWF CFFO MPCCZJOH GPS ZFBST PO CFIBMG PG UIF SFOFXBCMFT TFDUPS JO the USA could well be forgiven a wry shake of the head. Financial support for renewables has, at best, been inconsistent in recent times - and there is an irony that it has taken an economic crisis to deliver substantial support for renewables UISPVHI UIF OPUJPO UIBU QSPNPUJOH BEWBODFNFOU JO DMFBO FOFSHZ XJMM TVQQPSU BO BJMJOH FDPOPNZ XJUI OFX KPCT XIFO USBEJUJPOBMMZ UIF NBJO BSHVNFOU VTFE against renewables is that the technology isn’t cost competitive with fossil fuels and not worth promoting. What a dierence a year – and a change of President - makes.

Correspondents’ network Asia/PaciďŹ c: Richard Mogg; Europe/ROW: George Marsh North America: Don Smith; Paula Mints Editorial advisory board Christine Hornstein Executive Director, ISES hornstein@ises.org Bradley Collins Executive Director, ASES bcollins@ases.org Production/Design Controller Russell Purdy Marketing Manager Tom Cox Tom.Cox@elsevier.com T +44 1865 843654 F +44 1865 843987

0G DPVSTF HFUUJOH UIF DBTI JT POF UIJOH TQFOEJOH JU XJMM BQQBSFOUMZ CF UIF OFYU hurdle to overcome. New Secretary of Energy Stephen Chu has already gone on SFDPSE UP TBZ UIBU IF MM IBWF UP iUSBOTGPSNw IPX QBSUT PG IJT BHFODZ %P& XPSLT if the President’s stimulus plan is to succeed. Why? Because the stimulus bill could see as much as US$40 billion handed over to the Energy Department XIJDI IBT B IJTUPSZ PG EFMBZT IJHI DPTUT BOE B MBDL PG FYQFSJFODF JO EFBMJOH XJUI spending on such a monumental scale. Despite that, the agency will be under pressure to hand out money quickly to projects that would modernise the electricity grid, build electric cars and make homes and buildings more energy eďŹƒcient – thus promoting renewable energy.

Sales Managers Janine Castle j.castle@elsevier.com T +44 (0) 1865 84 3844 F +44 (0) 1865 84 3973 Martine Cariou-Keen m.cariou-keen@elsevier.com Tel: + 44 (0) 1865 843845 Fax: +44 (0) 1865 843973 Advertisement sales – Germany/Austria/Switzerland: Irene Smetana ism@4m-media.com T +49 (0) 611 880 86-20 F +49 (0) 611 880 86-10 Commercial Director & Publisher Laurence Zipson l.zipson@elsevier.com T +44 (0) 1865 843 685 F +44 (0) 1865 843 973 Editorial and advertising oďŹƒces Elsevier Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, UK

David Hopwood Editor

But if this potential banana skin is avoided, many believe that the USA could WFSZ RVJDLMZ CFDPNF UIF OFYU TJHOJm DBOU HSPXUI FOHJOF GPS UIF SFOFXBCMFT industry, taking over some of the demand from Germany and Spain as modiďŹ caUJPOT UP UIPTF DPVOUSJFT 'FFE JO 5BSJĂľ T 'J5T LJDL JO BOE QVU UIF CSBLFT PO TPNF of the growth. One thing is certain though: With a new renewable energy directive in the EU now signed into law, and the US President’s signature on the TUJNVMVT QBDLBHF UIFTF BSF JOEFFE FYDJUJOH UJNFT UP CF BDUJWF JO SFOFXBCMF energy.

renewable energy focus

January/February 2009

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Contents

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Contents 01 04 20 22 28 30 32

Editorial News President’s corner Wind: Operation & Maintenance Steve Sawyer/GWEC Carbon Utilities/Renewables

Focus: Wind power in the EU 38 EU wind market: an introduction

32

What’s the state of play in the EU wind power marketplace, and how will the financial crisis affect wind players in the Bloc?

46 Harnessing geography for European wind The concept of location intelligence is playing a growing role in the planning, design and siting of European wind farms.

50 Siemens Wind: a profile What does the future hold for the major EU wind player? Interview with ceo Andreas Nauen.

54 Turbine innovation at BWEA30

Solar

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58 Full steam ahead for PV in US homes? How will recent tax legislation Stateside affect the takeup of new PV projects?

62 Can Solar PV beat the downturn?

Wind 70 Recycling wind turbine blades As more and more material goes into bigger and bigger turbines, what are the recycling options?

Editor’s pick 66 Economic stimulus in the USA 68 Renewables in Africa

54

Other articles 34 Hydrogen production from renewables 74 Biomass from Algae Small wonders – biomass from Algae

79 Chile to warm up renewables market 84 How to invest in geothermal 88 Obama: prospects for alternative energy 92 Product Finder 94 Upcoming Events renewable energy focus

January/February 2009

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News/Headlines

International

■ 3TIER, an independent provider of global

■ Trojan Battery Company has developed a

new RE Series line of batteries optimised to deliver “unmatched life, durability and excellent charge efficiency” in renewable energy applications. ■ ICP Solar Technologies Inc, a developer, manufacturer and marketer of solar panels and products, has entered into a binding Letter of Intent (LOI) to acquire Spanish Ibersolar Energía, which manufactures and supplies solar photovoltaic (PV) systems, solar thermal systems, and absorption units. Under the terms of the LOI, ICP will acquire 100% of the shares of Ibersolar. ■ A report indicating that 12% of the world’s energy needs could be supplied from wind in 12 years, and 30% by 2050, has been published by the Global Wind Energy Council (GWEC) and Greenpeace International. Global Wind Energy Outlook 2008 looks at the global potential of wind power up to 2050, and has found that it could play a key part in achieving a decline in CO2 emissions by 2020. ■ Aggressive investment in renewable power generation and energy efficiency could create an annual USUS$360 billion industry, providing half of the world’s electricity, and slashing over USUS$18 trillion in future fuel costs, according to the report Energy [R]evolution: A Sustainable World Energy Outlook from the European Renewable Energy Council (EREC) and Greenpeace International.

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renewable energy assessment and forecasting, has unveiled a 5 km resolution global wind map based on a dataset of global wind resources and their spatial and temporal variability. The Solar Electric Power Association (SEPA) has released a new report, Utility Procurement Study: Solar Electricity in the Utility Market, the first in a series of research reports to be released in 2009. The full report is available for download at www.solarelectricpower.org. Elsevier is launching a ‘one-stop’ site for energy researchers covering all aspects of energy including renewables – Energylocate (www. energylocate.com). The platform features energy content, social networking tools, discussion forums, subject news feeds, and RSS feeds powered by ScienceDirect and Scopus. RWE Energy, Siemens and partners have kick started a project focused on developing and implementing integrated concepts to harness and exploit the optimisation potential of information and communication technologies (ICT) in decentralised electricity markets. The project is called Development and demonstration of decentrally networked energy systems for the E-Energy marketplace of the future (E-DeMa). COP14 in Poznan, Poland, which took place in December 2008 made progress in the area of technology. The Global Environment Facility’s Poznań Strategic Programme on Technology Transfer endorsed a plan to scale up investment levels to aid developing countries in dealing with the effects of climate change. The finishing touches were also put to the Kyoto Protocol’s adaptation fund. For a

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January/February 2009

fuller overview, see GWEC’s Steve Sawyer report back from the conference on page 28.

Europe ■ OpenHydro has been selected by Électricité

de France (EDF) to develop a tidal current demonstration farm that will be connected to the French electricity grid. The project involves the installation of between four and 10 seabed-mounted marine turbines, with a total capacity of 2–4 MW in a tidal farm located in the Paimpol-Bréhat (Côtes d’Armor) region of Brittany. The turbines will be progressively connected to the French electricity network from 2011. ■ GreenFuel Technologies Corporation and renewables management company Aurantia are now in the second phase of their joint project to develop and scale algae farming technologies in the Iberian Peninsula. The goal is to demonstrate that industrial CO2 emissions can be economically recycled to grow algae for use in high-value feeds, foods and fuels. ■ Scottish and Southern Energy (SSE) will sell 50% of the equity in Greater Gabbard Offshore Winds Limited (GGOWL) to npower renewables, the UK fully owned subsidiary of RWE Innogy. RWE Innogy will reimburse SSE for 50% of the capital costs already incurred in developing the 500 MW project. The total cash consideration of the transaction is £308 million. ■ Global warming, energy security and rising oil prices have resuscitated the marine energy

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News/Headlines

more than double the 154,000 jobs recorded in 2007. ■ SeaGen, developed by Marine Current Turbines, has for the first time generated at its maximum capacity of 1.2 MW. According to Marine Current Turbines, “this is the highest power so far produced by a tidal stream system anywhere in the world...” SeaGen was deployed in Northern Ireland’s Strangford Lough in May 2008, and has since undergone commissioning trials.

North America ■ Enbridge, its utility, Enbridge Gas Distribu-

REpower Systems AG has installed the prototype for its new REpower 3.XM onshore wind turbine in the Südermarsch wind farm near Husum, Germany. It has a rated output of 3.3 MW, a rotor diameter of 104m and a hub height of 80m, and is characterised by particularly low sound emissions. It will now undergo extensive testing for certification, reports the company.

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sector. Ocean energy has the ability to supply approximately 10% of the world’s electricity needs, writes analyst Frost & Sullivan. DONG Energy and Wind Estate A/S have opened the second stage of the Overgård windfarm in Denmark. With the construction of 10 new 2.3 MW wind turbines next to 20 existing 2 MW turbines, Overgård is now said to be Denmark’s largest onshore wind farm. The farm, situated approximately 25 km northwest of Randers in East Jutland, has a capacity of 63 MW. A total Spanish solar capacity of 2.4 GW will have been installed by the end of 2008, according to the Spanish National Energy Agency CNE (Comisión Nacional de Energía). The actual installed capacity may reach 2.5 GW in Spain by the end of 2008, according to the current forecast in the EuPD Research study The Spanish Photovoltaic Market 2008 – Optimism Despite Legal Uncertainties. REpower Systems AG has completed the assembly of the first three 6 MW REpower 6M turbines in Bremerhaven, Germany. The wind turbines are expected to be erected at the Westre civic windfarm on the German-Danish border in early 2009, where they will undergo a comprehensive testing programme and checks for certification. Early tests of Cambridge Consultants’ Holographic Infill Radar technology indicate that it can distinguish between turbine blades and other moving targets such as aircraft. Tests of a prototype Holographic Radar system at

renewable energy focus

Ecotricity’s 66m diameter 1.5 MW turbine at Swaffham in Norfolk, UK, have provided proof of the principle, with a small-scale system discriminating effectively between the turbine and a moving target. Further tests are planned. ■ The European Solar Thermal Industry Federation (ESTIF) has elected Olivier Drücke (head of sales and marketing at KBB Kollektorbau GmbH) as its new President. ESTIF has also announced that development of national markets in 2008 saw an increase in new installations of 45%-50%, amounting to around 2.8 GWth of new capacity. ■ The Scottish Government has released the details for its £10 million Saltire Prize Challenge – purported to be the world’s biggest marine energy innovation competition. The prize will be awarded to the team that can demonstrate, in Scottish waters, a commercially viable wave or tidal energy technology that achieves a minimum electrical output of 100 GWh over a continuous two-year period. Any technology must use only the power of the sea, and will be judged on the merits of cost, environmental sustainability and safety. ■ The number of jobs in the European wind energy industry will more than double by 2020, according to the European Wind Energy Association (EWEA). The EWEA report Wind at Work – wind energy and job creation in the EU predicts that the number of wind energy jobs will reach 325,000 by 2020,

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tion, and FuelCell Energy have announced the opening of what they call the world’s first Direct Fuel Cell - Energy Recovery Generation power plant. The 2.2 MW DFC-ERG plant is said to be the first multi-megawatt commercial fuel cell to operate in Canada, and support for this US$10 million project was provided by both the federal and provincial governments. BP Wind Energy has announced the full commercial operation of phase I of the Sherbino wind farm in Pecos County, west Texas, USA. The first 150 MW of the project, which has a potential capacity of 750 MW, has been built through a 50-50 joint venture agreement with Padoma Wind Power LLC. Puget Sound Energy (PSE) has placed an order for 22 wind turbine generators from Vestas for the proposed expansion of the utility’s Wild Horse Wind and Solar Facility in Kittitas County, Washington, USA. The planned expansion will result in 149 turbines and a capacity of 269 MW at Wild Horse. The Mayor of Los Angeles has unveiled the Solar LA plan, which aims for 1.3 GW of solar power by 2020, enough to meet 10% of LA’s energy needs. The US Department of Energy (DoE) has announced up to US$200 million over 6 years (2009-2014) to support the development of pilot and demonstration-scale biorefineries. The funding, which is subject to annual appropriations, would go to biorefineries using feedstock such as algae, and production of advanced biofuels such as bio-butanol, green petrol and other innovative biofuels. EDF Energies Nouvelles is commissioning its 100.5 MW Wapsipinicon windfarm in Minnesota, USA. The facility features 67, 1.5 MW GE Energy wind turbines and was developed and built by enXco, the US subsidiary of EDF Energies Nouvelles.

News/Headlines

The US House of Representatives has passed a US$819 billion economic stimulus package, which includes provisions for renewable energy in the USA. At the time of going to press, the Senate has just passed its version of the Bill. President Barack Obama has pledged a doubling of renewables in the US in the next three years (for more information, see pages 88-91) ■ The US solar PV industry saw a 50% increase

in shipments in 2007, according to a report from the US Energy Information Administration (EIA), part of the Department of Energy (DoE). The overview report Solar Photovoltaic Cell/Module Manufacturing Activities 2007 shows that the industry is now more than ten times the size it was in 1998. ■ The US Department of Energy’s National Renewable Energy Laboratory (NREL) and Iberdrola Renovables have jointly deployed the first of several solar resource measuring stations as part of a planned instrumentation network throughout the United States. The stations located across Arizona are part of NREL’s Solar Resource and Meteorological Assessment Project (SOLRMAP) aiming to collect precise, long-term solar resource measurements.

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Africa, Asia and the Middle East ■ Britain has teamed up with Masdar and

Qatar to secure a mix of reliable and green energy supplies for the UK, which could see hundreds of millions of pounds pumped into the ‘green energy revolution’. The deals are: a Memorandum of Understanding between the UK and Abu Dhabi’s Masdar Initiative to work on technologies such as onshore and offshore wind, carbon capture and storage (CSS), as well as solar and marine energy;

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and a £250 million partnership between Qatar and the UK to develop renewable energy and low carbon technology. Sharp has opened a second production line in Katsuragi, Japan, for mass production of thin-film solar cells, increasing its production capacity for thin-film cells from 15 MW to 160 MW per annum. At the same time, with an investment of around €146 million in new manufacturing technology, Sharp is producing second-generation thin-film solar cells in Katsugari. Vestas Wind Systems A/S, has opened its regional R&D hub for Asia at Fusionopolis, Singapore. This marks the first milestone of the company‘s 10-year plan to invest up to US$500 million in Singapore to advance research in wind power technologies. Trina Solar has announced the development of a new product line fully based on Upgraded Metallurgical Grade (UMG) silicon material. UMG is a variety of solar grade polysilicon feedstock capable of delivering conversion rates comparable to higher grade polysilicon, but at a significantly lower cost. Trina Solar’s UMG-based product is currently meeting the company’s targeted conversion efficiency levels of approximately 14%. China’s plans to reach 100 GW of installed wind power generation capacity by 2020 are unlikely to be derailed - or even sidetracked - by the current global financial crisis. In a new assessment, China Wind Power Markets and Strategies, 2008-2020, Emerging Energy Research (EER) reports that despite

January/February 2009

inevitable slowdowns in markets elsewhere, China’s wind initiatives are so large in scale and so well supported by the Government, that the country’s new renewable energy goals are likely be met well before 2020. ■ China’s Huaneng Group plans a 9.1 billion Yuan (US$1.3bn), 166 MW solar project in the province of Yunnan, China, in 2010. It is co-invested by a unit of China Huaneng and Yunnan Provincial Power Investment. ■ According to the Japanese Ministry of Economy, Trade and Industry, the Japan Photovoltaic Energy Association (JPEA) will start accepting applications for the residential solar generation installation subsidies from mid-January as part of the implementation of the Japanese residential solar generation installation subsidy programme, which was incorporated into the supplementary budget for this fiscal year. The subsidy amounts to 70,000 Yen per nominal output of 1 kW. The annual subsidy budget is 9 billion Yen, and could be applied to as many as 35,000 cases. Eligible systems must have a maximum output of less than 10 kW.

ROW ■ Australia is in a strong position to develop

a thriving national solar industry over the next 20 years, according to a report into the renewable energy sector released by the Clean Energy Council (CEC). The report, undertaken by Access Economics, provides a compelling economic case for the implementation of a gross national feed-in-tariff (FiT) in Australia. ■ The first commercial aviation test flight powered by the second-generation biofuel jatropha has been successfully completed in Auckland, New Zealand. A biofuel blend of 50:50 jatropha and Jet A1 fuel was used to power one of the Air New Zealand Boeing 747-400’s Rolls-Royce RB211 engines, and more than a dozen key performance tests were undertaken in the two hour test flight. ■ Natural Power, an international renewable energy consultancy, has acquired the Chilean firm LatWind Eolica Latinoamericana Ltda, providing Natural Power with a base in Latin America to expand into the burgeoning renewables market there. According to Natural Power, wind power is a relatively new resource in Latin America so the primary focus of Natural Power Chile in the forthcoming years will be feasibility studies, permitting of client’s projects and project development.

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Company showcase

Argentine rainforest fungus produces diesel

Isofoton to electrify Guatemala and El Salvador schools Isofotón, a Spain, Madrid-based solar technology company, has won the tender for the rural electrification of 165 rural schools in Guatemala and El Salvador, which will permit access to education for 10,000 people. The tender forms part of the Eurosolar project, a regional EU programme in developmental aid that focuses on the most disadvantaged zones in South America. Financing will be effected via

funds from EUROPEAID, and this money will help deploy 600 PV electricity generation systems (or hybrids such as PV-wind energy), in rural areas of Central and South America. Each school in the project will have an isolated system of 1.19 kW. Specifically, the Isofotón project will provide electrification of 117 colleges in Guatemala and 48 in El Salvador, with an estimated investment of more than €5 million between both countries.

Researchers at Montana State University (MSU) have isolated a fungus that produces a new kind of diesel fuel. According to Gary Strobel, professor of plant sciences at MSU, the discovery may offer an alternative to fossil fuels. The find is even bigger, he said, than his 1993 discovery of fungus that contained the anticancer drug taxol. Strobel found the diesel-producing fungus in a Patagonia rainforest in Argentina in 2002. He discovered that the fungus, called Gliocladium roseum, produced gases. Further testing showed that the fungus – under limited oxygen – produced a number of compounds normally associated with diesel fuel from crude oil. “These are the first organisms that have been found that make many of the ingredients of diesel,” Strobel said. Described as myco-diesel, it could be an alternative to ethanol, he maintains. Further research is to be conducted by MSU’s College of Engineering and researchers at Yale University, including Strobel’s son, Scott, chairman of molecular biophysics and biochemistry at Yale.

npower and RLtec set to roll out smart fridges London-based RLtec, a clean technology company majority owned by Low Carbon Accelerator, is working with npower, a leading UK energy supplier, to trial Dynamic Demand, a new technology that helps maintain the balance between supply and demand across the national electricity grid. The trial will demonstrate the potential of Dynamic Demand for reducing the UK’s carbon emissions. It will involve 300 refrigerators, is the first demonstration action to be approved by OFGEM, the UK regulator, under CERT (Carbon Emissions Reduction Target) legislation, and will contribute towards npower’s carbon reduction obligations. Andrew Howe, ceo of RLtec, says, “appliances fitted with our Dynamic Demand technology automatically modify their power consumption in response to second-by-second changes in the balance between supply and demand on the grid – without affecting the fridge’s performance. This means that the amount of carbon emitting generating capacity used to maintain that balance can be dramatically reduced.” Howe claims that the technology has the potential to create a virtual power station and, if widely used in the UK, could save two million tonnes of CO2 per year for example. Dr Stephen Mahon, chief investment officer at Low Carbon Accelerator, adds, “the global market for demand response products is estimated at approximately US$15 billion per annum, and last year the National Grid spent £770 million on balancing services in the UK alone. We believe large scale roll out of RLtec’s technology would enable electricity companies to make optimal use of existing assets and reduce the need for new power generation.”

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renewable energy focus

Solar plant connects to Spanish grid Germany’s Concentrix Solar GmbH – together with its partner, Spain’s Abengoa Solar – have connected a 2 MW power plant to the public utility grid under the (still valid) version of the Real Decreto 661/2007, the first Spanish feed-in tariff (FiT) law. Called Casaquemada, the power station is located near Seville and consists of both silicon flat modules and concentrator PV modules mounted on tracking systems. It is claimed to be one of the first combination power plants of this kind. Hans jörg Lerchenmüller, ceo of Concentrix Solar, said, “Casaquemada is an important step for us to show that FLATCON is a competitive technology and an alternative to conventional PV technology.”

January/February 2009

Concentrix’s FLATCON uses Fresnel lenses, concentrating sunlight 500 times and focusing onto small highly-efficient solar cells. These cells convert the concentrated light directly into electrical energy. The systems are installed on grounds belonging to Abengoa. By the year 2013 total power of 300 MW is planned, which will supply electricity to 153,000 homes in the Seville region. Fernando Celaya, PV director of Abengoa Solar, said, “the excellent results of the test trackers on our test fields have reinforced our decision to use Concentrix technology.”

Company showcase

London’s hybrid bus fleet expands Transport for London (TfL) has unveiled a range of new, single and double deck, eco-friendly hybrid buses – the first stage in a major expansion of London’s hybrid bus fleet. The number of hybrids is expected to more than quadruple to 56 buses shortly, making London home to the UK’s largest hybrid bus fleet. A further 300 hybrids will be in operation by 2011. Boris Johnson, Mayor of London, said, “a wonderful alliance of fuel efficiency and fume deficiency makes hybrid engines the way to go for buses in our city.” By 2012, TfL expects all new buses joining the fleet to be hybrid. At a rate of 500 buses a year, it is likely to be the largest roll out of hybrid buses in Europe. Hybrid buses feature a combination of a conventional engine and an electric motor, using less fuel and emitting fewer pollutants. They are said to reduce CO2 emissions by up to 40%. Manufacturers include Alexander Dennis, Volvo, Optare and Wrightbus. All the new hybrid buses can be recognised by the green leaf motif over their traditional red livery.

Plutonic and GE submit bids for Canadian Hydro Vancouver-based Plutonic Power Corporation has joined with GE Energy Financial Services, a unit of GE, in submitting two bids for hydroelectric power projects costing more than C$4 billion. These would be Canada’s largest single private sector hydroelectric generation investments to date. The submissions to BC Hydro’s 2008 Clean Power Call will facilitate the development of approximately 1,200 MW of clean, run-of-river hydroelectric capacity, enough to power 330,000 homes, in the Toba and Bute Inlets along BC’s southwest coast, where GE and Plutonic are already building a 196 MW hydroelectric project. Donald McInnes, vice-chair and ceo of Plutonic, said, “this submission is the culmination of four years of planning, engineering, consultation, permitting and licensing. We are grateful to our First Nations partners, and the cities of Powell River and Campbell River, for supporting our bids, reflecting broad public endorsement. These projects will provide long-term economic and social benefits to these First Nations and their communities, in addition to providing BC Hydro with clean electricity.” The projects will expand GE Energy Financial Services’ US$4 billion portfolio of renewable energy investments worldwide.

HRH Prince Andrew shows support for marine energy Following a meeting with Cornwall-based wave energy producer Orecon, HRH Prince Andrew has indicated he will tackle the Government on the tricky issue of marine energy pricing. His presence adds heavyweight support to the marine lobby. The lunch meeting was organised by the UK’s South West Regional Development Agency. Regarding Prince Andrew, Orecon ceo David Crisp said, “I was hugely impressed by both his knowledge and his extremely incisive questions. His experience in the Royal Navy clearly helps him appreciate the marine challenges we are overcoming.” The Prince is the UK’s Special Representative for International trade and Investment. Crisp estimates the UK’s capital equipment market at more than £20bn, based on Carbon Trust projections. “Wave energy can provide significant numbers of jobs and economic benefit in areas such as Cornwall and the South West,” he maintains. Orecon says will deploy its first 1.5 MW buoy off the UK coast in summer 2010.

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January/February 2009

11

Company showcase

OWEL’s Grampus gains momentum UK, Cornwall-based Offshore Wave Energy (OWEL), in association with Basingstoke, Hampshire-based IT Power Ltd, has further developed its innovative wave energy converter, Grampus. New research into the geometric configuration of the Grampus will focus on optimising its performance and investigating its structural loading and mooring requirements. The name Grampus Griseus – or “Risso’s Dolphin” – was historically used to describe the Orca, the largest species in the dolphin family. The specific name Griseus refers to the mottled grey colour of the dolphin’s body. The SWRDA-supported project will run in parallel with a longer-term physical and mathematical modelling research programme at the Department of Engineering, University of Southampton. In addition to the internal configuration of the device, the research will also consider mooring, survivability and fatigue through a hydrodynamics programme involving comprehensive CFD – computational fluid dynamics – modelling and tank tests in a selected wave basin.

FedEx Express to double solar capacity with new hub FedEx Express, a subsidiary of FedEx Corp., the world’s largest express transportation company, has broken ground on a new hub at the Cologne/Bonn airport, the site of the company’s new Central and Eastern European gateway. The state-of-the-art facility will be the largest FedEx Express gateway in Germany. It will also be the first solar-powered hub for FedEx outside of the USA, and the company’s largest solar-powered hub worldwide.

Atlantis signs tidal agreement with CLP Singapore-based Atlantis Resources Corporation has signed a Memorandum of Understanding with Hong Kong-based CLP Group, formerly China Light and Power. According to Atlantis, this is the world’s largest tidal energy generation agreement to date, and will, with other agreements, increase its electricity generating project pipeline to more than 800 MW. Under the agreement, Atlantis plans to collaborate with CLP to develop commercial-scale tidal current renewable energy generation projects across the Asia-Pacific. Sites under investigation span AsiaPacific, Australia, the UK and North America. Timothy Cornelius, ceo of Atlantis, says, “this agreement has the potential to be the largest ever cooperation of its kind by applying the tidal current technology and deployment expertise of Atlantis with the international network and project development expertise of CLP, one of the region’s largest electricity investor-operators.” Atlantis successfully completed trials of its Solon tidal current turbine in September 2008 (see image) and has previously conducted many successful trials of its Nereus family of shallow water turbines. The commercial launch of a 2 MW Solon turbine is expected in summer 2009. Joseph Jacobelli, group director, Carbon Ventures, CLP, says, “through the MoU with Atlantis, CLP is able to explore opportunities to further expand our renewable energy portfolio to include tidal energy, in addition to our already diversified sources of wind, hydro, biomass, solar and geothermal.”

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January/February 2009

The hub is slated for completion in 2010 and is expected to employ 450 people. With a 1.4 MW solar PV power system, generating approximately 1.3 GW hours of electricity per year – equivalent to the annual consumption of 370 households – the new hub will nearly double the amount of electricity FedEx currently generates from solar power. The PV panels, fitted to the roof of the new ramp and sort facilities, will cover a total surface area of 16,000 m2.

Company showcase

SolarWorld provides ďŹ rst solar power for the Vatican Bonn-based SolarWorld AG has completed the Vatican’s ďŹ rst solar power plant next to St. Peter’s Cathedral – as a gift to the Pope. Almost 2,400 solar modules are generating electricity on the roof of the Papal audience hall. Frank H. Asbeck, chairman and ceo of SolarWorld, says: “This solar plant is designed to send out a visible signal for climatefriendly energy supply and the preservation of creation.â€? The new plant has a peak total output of 221.59 kW, generating some 300,000 kW hours of electricity.

The plant was blended into the historical ensemble of Vatican City with a great deal of technical and architectural eort. The solar modules were manufactured at SolarWorld’s facility in Freiberg/ Saxony, while the inverters were donated by SMA Solar Technology, and the grid connection was planned by Italian company Tecno Spot. Since becoming Pope, Benedict XVI has promoted the causes of environmental and resource protection. In fact, the idea of a solar plant in the Vatican dates back to 2002, as the late Pope John Paul II had also expressed interest in solar cells.

Ambient’s smart grid attracts new investment Massachusetts smart grid ďŹ rm Ambient Corporation has raised US$8 million from an existing investor Vicis’ Capital Master Fund, which raises Vicis’ stake to 65%.This reects a total Vicis investment of US$23.5 million. John J. Joyce, president and ceo of Ambient, says, “we are at a deďŹ ning moment, both as a company and as a nation. The incoming Administration in Washington has stated that the new clean energy economy is a top priority. Along with our partners and the continued support of Vicis, we are enabling energy eďŹƒciencies and technologies that will help the country drive towards energy independence.â€? Ambient’s technology consists of a network of data-carrying cables overlaid on medium- and low-voltage segments of the transmission grid. The network allows utilities to monitor energy use in real-time at all points on the grid, and provide customers with time-based pricing to manage demand more eectively. Ambient NMS, the latest version of the company’s network management system, is now in demonstration phase, alongside the X2000 communications node. Ambient NMS manages a exible hybrid communications platform created by Ambient Smart Grid, which provides a single platform for multiple applications. In 2006, Ambient signed a US$4 million deal with Midwestern utility Duke Energy to bring Ambient technology to 6,500 of Duke’s customers. In April 2008, Ambient received a follow-up order from Duke worth US$10.7 million.

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January/February 2009

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News/Roundup

EU renewables in short ■ In March 2007 the EU Heads of State agreed that Europe would provide for 20% of its energy consumption from renewable energy by 2020. Since then, Member States have been working towards a final deal that amongst other things tells all Member States how much they need to contribute towards this target (burden sharing); ■ All burden sharing targets for Member States are set in stone and can’t be lowered at a later date. For example the Italians had recently called for a review clause in 2014, after which time targets could be re-evaluated. The review clause is still there, but doesn’t have any impact on future targets, rather will “serve to improve, if necessary, the efficiency of cooperation mechanisms”; ■ The political agreement allows for cooperation mechanisms to allow Member States to: run joint projects with one or more Member States on green electricity production, heating or cooling; transfer renewable energy ‘statistically’ between each other; join or partly coordinate their national support schemes. The compromise also adds the possibility of counting green electricity consumed in a Member State, but produced by newly-constructed joint projects with third countries; ■ The informal compromise backs the target of at least 10% share of renewable energies in the transport sector by 2020, but there are some important amendments: ‘secondgeneration’ biofuels produced from waste, residues, or non-food cellulosic and ligno-cellulosic biomass will be double credited towards the 10% target; renewable electricity for trains will be counted only once; renewable electricity consumed by electric cars will be considered 2.5 times its input; to be counted, biofuels must save at least 35% of greenhouse gas emissions compared to fossil fuels; from 2017 greenhouse gas emission savings of existing installations must be at least 50%, those of new installations at least 60%. The Commission says it will develop a methodology to measure the greenhouse gas emissions caused by indirect land use changes i.e. when crops for biofuels production are grown in areas which have previously been used to grow a food crop, and this food crop production then moves to other areas which were not in use before (e.g. existing forests).

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Landmark agreement on renewables, but EU climate change package underwhelms

The renewables industry breathed a sigh of relief as EU Heads of State left the renewables directive largely untouched in Brussels, but other parts of the EU’s package that are supposed to deal with climate change - namely carbon trading or ‘cap and trade’ - were not be so lucky. While the headline 20% reduction in greenhouse gases by 2020 was always considered untouchable, the cost of achieving this led to fierce negotiation and self-interest from Eastern European countries such as Poland, not to mention the huge industrial lobby in Europe. And in a stunning u-turn from earlier versions of the Bill, industrial sectors such as cement, chemicals and steel will now receive free carbon emission permits at least up to 2020, instead of having to buy them under an auction scheme, as previously planned. The concession represented a victory for Germany, Europe’s largest manufacturing nation. It means that revenues from the EU’s auction are now expected to be closer to €30 billion as apposed to €50bn by 2020. The concession will also minimise the incentive for cleaner technologies, give a huge windfall to recipients of the free permits, and punish companies that have already invested in clean technologies, many experts argue. In addition, for central and eastern European countries such as Poland that are burdened with highly-polluting power sectors from the Communist era, a deal was struck that will ease the financial pain of switching to a lowcarbon economy. When it comes to the renewables directive, however, the news is far better. The main 20% by 2020 target is still in place, and all of the original Member States’ burden sharing targets have

January/February 2009

survived. Many of the potential sticking points were also resolved successfully. On renewables trade, for example, Member States will be able to decide themselves whether (and to what extent) they will engage with other Member States, rather than have mandatory trading forced upon them, something that could have endangered national support schemes. On the thorny issue of biofuels a compromise of sorts has also been thrashed out, sources say. The 10% transport target has been retained, but this will include cars and trains running on electricity (electric cars count 2.5 times towards the target due to increased efficiency). The European Commission is to report within two years on the impact on land use of biofuels and on their ‘sustainability.’ And in its second EU Strategic Energy Review the European Commission proposed a wideranging energy package, which gives a new boost to energy security in Europe: ■ It puts forward a new strategy to build up energy solidarity among Member States, and a new policy on energy networks to stimulate investment in more efficient, low-carbon energy networks; ■ It proposes an Energy Security and Solidarity Action Plan to secure sustainable energy supplies in the EU, and looks at the challenges that Europe will face between 2020 and 2050; ■ It adopts a package of energy efficiency proposals aiming to make energy savings in key areas, such as reinforcing energy efficiency legislation on buildings and energyusing products.

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News/Roundup

NEF: Clean energy shares on the up after 61% battering in 2008? Clean energy shares have been benefiting from an ‘Obama Bounce’, surging from their lows in November last year, according to analyst New Energy Finance. The WilderHill New Energy Global Innovation Index, which tracks the performance of 88 clean energy stocks worldwide, slumped over 70% from its value at the start of 2008 to its low in November. Since then, however, it has recovered by over 45% as investors take heart from President Obama’s apparent commitment to the sector. The NEX index started last year at 455.19 and, despite the worsening conditions in the financial markets, defied gravity for the first three quarters of 2008, trading mainly in the 350 to 450 range. The final quarter of 2008, however, saw it collapse, touching an intra-day low of 132.96 in late November. As of 13 January 2009, it was up at 175.34. The drop in clean energy share prices was steeper than that for most non-specialist stock indices. The NEX’s fall compared with a 38.5% setback for the US S&P 500 index in 2008, a 31% fall for London’s FTSE100 index, a 44% retreat for the Dow Jones Eurostoxx 50, and a 41% fall for the US Nasdaq Composite. There were three reasons why the sector was hit so hard: ■ With oil and gas prices collapsing from their July peaks, the sector was bound to suffer as these are counted as energy stocks; ■ Investors were getting rid of stocks with technology or execution risk, in favour of longer-established businesses; ■ In an era of sharply constrained credit, investors penalised companies with high capital requirements, even the more established, asset-based clean energy companies, which bear no technology risk, are high-growth and therefore capital-hungry.

In addition, it should be noted that the index had experienced an extraordinary run-up during the last few years, particularly in 2007, when it soared by 58%, setting it up for an almost inevitable correction. Solar in the corner Solar was the star of 2007 but the dunce of 2008, according to NEF. Solar shares fell 75% on average last year as investors took a more cautious view of valuations and worried about the likelihood of falling prices ahead in everything from polysilicon to modules. The biofuels and biomass sector, which performed poorly in 2007, had another bad year in 2008 with its share prices falling on average by 68% as high feedstock prices and the credit crunch inflicted double damage. Wind, the largest sector of clean energy, saw share prices fall 56%, mainly because of fears of a weaker project development trend and therefore lower turbine prices for manufacturers. The most resilient sector by far was power storage, which enjoyed an average 6% share price gain as battery makers caught the imagination of investors. No fewer than 84 of the NEX’s 88 stocks lost ground in dollar terms in 2008. Michael Liebreich, chairman and CEO of New Energy Finance, says: “2008 was a bruising year for clean energy shares. There was a point when the NEX index was at a level we haven’t seen since September 2003 – before the ratification of the Kyoto Protocol, before Hurricane Katrina and President Bush’s statement that the US was ‘addicted’ to oil, before the publication of the Stern Review, before the premiere of The Inconvenient Truth. That’s plainly absurd, even in the light of the unsustainable surge in valuations in 2006 and 2007.

Which were the best and worst performing clean energy sectors in 2008?

“The growth prospects for clean energy investment remain exciting. Worries about climate change and energy security are still on the political agenda... And Obama is not the only leader seeing clean energy as an important element in the programmes they are planning, to help stimulate economic activity,” Liebreich comments. Figures for the NEX in the fourth quarter of 2008 show that the index slipped 36%, with the period split between a sharp decline up to the low of 21 November and then a significant rally to 31 December. Among the sectors on the index, solar stocks lost an average of 49% in Q4, and biofuels and biomass lost 44%. Hydrogen and fuel cells slipped 40% and wind 30%.

US wind grows by nearly 8.4 GW in 2008 The US wind energy industry installed 8,358 MW of new generating capacity in 2008, the American Wind Energy Association (AWEA) has reported. The outlook for 2009 is less certain, however, due to the continuing financial crisis. The growth in 2008 increased the country’s total wind power generating capacity by 50% and channelled an investment of around US$17 billion into the economy. Wind is now one of the leading sources of new power generation in the USA alongside natural gas. At year end, however, financing for new projects and orders for turbine components slowed to a trickle and

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layoffs began to hit the wind turbine manufacturing sector. “Our numbers are both exciting and sobering,” says AWEA CEO Denise Bode. “The US wind energy industry’s performance in 2008 confirms that wind is an economic and job creation dynamo, ready to deliver on the President’s call to double renewable energy production in three years. At the same time, it is clear that the economic and financial downturn have begun to take a serious toll on new wind development”. The new wind projects completed in 2008 account for about 42% of the entire new

January/February 2009

power-producing capacity added in 2008, according to initial estimates. Total wind energy generating capacity in the USA now stands at 25,170 MW and around 85,000 people are employed in the wind industry today. The top five states in terms of capacity installed are now: ■ Texas: 7,116 MW; ■ Iowa: 2,790 MW; ■ California: 2,517 MW; ■ Minnesota: 1,752 MW; ■ Washington: 1,375 MW.

News/Roundup

IEA World Energy Outlook 2008 changes tack In something of a departure from its previous reports, the International Energy Agency’s (IEA) World Energy Outlook 2008 (WEO-2008) warns of dire consequences of an inadequate response to the climate crisis, and calls for a radical retooling of the global energy system. “We cannot let the financial and economic crisis delay the policy action that is urgently needed to ensure secure energy supplies and to curtail rising emissions of greenhouse gases. We must usher in a global energy revolution by improving energy efficiency and increasing the deployment of low-carbon energy,” says Nobuo Tanaka, Executive Director of IEA. In the WEO-2008 Reference Scenario, which assumes no new government policies, world primary energy demand grows by 1.6% per year on average between 2006 and 2030 – an increase of 45%. This is slower than projected last year, mainly due to the impact of the economic slowdown, prospects for higher energy prices and some new policy initiatives. Demand for oil and coal will continue to rise, but modern renewables will grow most rapidly, overtaking gas to become the second-largest source of electricity soon after 2010. According to the WEO-2008, oil will remain the world’s main source of energy for many years to come, even under the most optimistic of assumptions about the developments of alternative technology.

Tackling challenges Stabilising greenhouse gas concentration at 550 ppm of CO2-equivalent, which would limit the temperature increase to about 3°C, would require emissions to rise to no more than 33 Gt in 2030 and to fall in the longer term, says the report. The share of low-carbon energy – hydropower, nuclear, biomass, other renewables and fossilfuel power plants equipped with carbon capture and storage (CCS) – in the world primary energy mix would need to expand from 19% in 2006 to 26% in 2030. The scale of the challenge in limiting greenhouse gas concentration to 450 ppm of CO2-equivalent, which would involve a temperature rise of about 2°C, is much greater. World energy-related CO2 emissions would need to drop sharply from 2020 onwards, reaching less than 26 Gt in 2030. Achieving such an outcome would require even faster growth in the use of low-carbon energy – to account for 36% of global primary energy mix by 2030, according to the report. However, IEA says these scenarios will not lower oil demand: “Even in [more optimistic] Policy Scenarios, OPEC production will need to be 12 mb/d higher in 2030 than today.” Mr. Tanaka says. Renewable Energy Outlook 2030 begs to differ However, some experts are already taking umbrage with the IEA’s figures. The Energy Watch

Group study Renewable Energy Outlook 2030 has come to the conclusion that phasing out the use of fossil and nuclear fuels can be accomplished at a manageable investment level. The study looks into the decrease in technology costs resulting from increased production volume, as well as the assumed individual development of the various world regions. On this basis, it generates a more optimistic perspective of renewable technologies than the scenarios of the International Energy Agency’s World Energy Outlook series has, according to the Energy Watch Group. The study’s main message is that renewables can be extended at much lower costs than many scientists assume. More than half of the electricity demand (54%) and 13% of the heat demand in the OECD countries can be covered from renewable sources by 2030, it concludes. Stefan Gsänger, World Wind Energy Association (WWEA) Secretary General, comments: “The Renewable Energy Outlook 2030 unveils a realistic path describing how wind energy and other renewable energy technologies will develop in the coming two decades. The study shows that, based on pure economics, wind energy will deliver a lion’s share of the global electricity needs in the not too distant future. We congratulate the Energy Watch Group for this analysis which is much more realistic than many other reports and scenarios published so far.”

Robot inspects wind turbine blades A robot has been developed by Fraunhofer Institute for Factory Operation and Automation IFF to inspect composite wind turbine blades in minute detail on location. The RIWEA robot is said to register any crack and delamination in the material, relaying their exact positions. It also checks the bond with the central strut. Rotor blades, have to withstand wind, inertial forces and erosion and therefore have to be inspected at regular intervals, but their often inhospitable locations – especially when it comes to offshore wind turbines – makes this task difficult. This is not a problem for the robot, which can pull itself up ropes and can climb wind turbines of any size, on- or offshore.

A robot ascends a wind energy converter to inspect its rotor blades for potential damage (image - Fraunhofer IFF).

The inspection system included in the robot features an infrared radiator conducting heat to the surface of the rotor blade. A high-resolution thermal camera can then record the temperature pattern and thereby register flaws in the material. An ultrasonic system and high resolution camera enable the robot to detect damage hidden to the human eye.

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January/February 2009

17

News/Roundup

FiT updates in Turkey and Greece

projects in brief The Carbon Trust is launching the Algae Biofuels Challenge, seeking to commercialise the use of algae biofuel as an alternative to fossil based oil by 2020; Vattenfall has acquired the 300 MW Thanet Offshore Wind project for £35 million from CRC Energy Jersey 1 Limited. The total investment for completing the wind farm is in the order of around £780 million; A cluster of excellence for the development of flexible organic solar cells and modules with a 10% increase in efficiency, will receive almost €2 million over four years from the German Federal Ministry of Education and Research; EDF Energies Nouvelles has officially opened the 7 MWp La Narbonnaise photovoltaic (PV) solar power plant in the Aude region of France, said to be the largest solar power plant currently operating in mainland France. The solar farm has 95,000 thin-film modules supplied by First Solar; RWE Innogy plans a 960 MW offshore wind farm off the German coast. It is to be built 40 km north of the North Sea island of Juist, with an area of around 150 km2 and water depths of 26-34 m. The windfarm is expected to be completed in 2015, representing a total investment of around €2.8 billion.

The purchase guarantee for power generation through renewable energy could be updated by the Turkish government for ten years with a new feed-in tariff (FiT). According to the proposed Bill, the purchase guarantee will be given for renewable power generation. The Government would purchase the electricity for an average of €0.05-€0.18/kWh. Unit prices would be rated by the Energy Market Regulatory Authority (EPDK) and would “not to be lower than average wholesale prices of previous year in Turkish market.” Greece has also introduced a FiT for photovoltaic (PV) through its new PV law. The law sets a deadline for issuing permits and by the end of 2009, all applications that have been submitted so far (more than 3 GWp) must be dealt with and approved or rejected. It also abolishes the unofficial cap of 0.8 GWp that was set by previous legislation. A separate programme for rooftop PV with a different

2009 February 2009 August 2010 February 2010 August 2011 February 2011 August 2012 February 2012 August 2013 February 2013 August 2014 February 2014 August Year ‘n’ from 2105 onwards

FiT guaranteed for 20 years will be set up, and the PV law introduces a tender process for PV systems >10 MWp. The new FiT are guaranteed for 20 years and will be adjusted annually for inflation (25% of last year’s consumer price index). A grid connection agreement can be signed, however, locking the FiT, and gaining another 18 months to finalise installation.

Technology

Turkish FiT: €/kWh first five years

Wind Biomass Geothermal Hydro Sun

0.06 0.14 0.07 0.05 0.18

€/kWh remaining five years 0.05 0.10 0.06 0.05 0.18

New Greek FiT for PV (€/MWh): Mainland Grid Autonomous island grids >100 ≤100 >100 ≤100 kWp kWp kWp kWp 400.00 450.00 450.00 500.00 400.00 450.00 450.00 500.00 400.00 450.00 450.00 500.00 392.04 441.05 441.05 490.05 372.83 419.43 419.43 466.03 351.01 394.88 394.88 438.76 333.81 375.53 375.53 417.26 314.27 353.56 353.56 392.84 298.38 336.23 336.23 373.59 281.38 316.55 316.55 351.72 268.94 302.56 302.56 336.18 260.97 293.59 293.59 326.22 1.3* 1.4* 1.4* 1.5* SMCn-1 SMCn-1 SMCn-1 SMCn-1

*SMC = System Marginal Cost

Hemlock and Dow Corning invest up to US $3bn in polysilicon production Hemlock Semiconductor will invest up to US$3.0 billion to expand polycrystalline silicon (polysilicon) production. The Hemlock Semiconductor group includes two Dow Corning Corporation joint ventures, Hemlock Semiconductor Corporation and Hemlock Semiconductor LLC. The expansion includes an initial investment of US$1.2bn to build a new site in Clarksville, Tennessee, and up to US$1bn to expand current operations in Hemlock, Michigan. Combined, the new Clarksville facility and the expanded Hemlock operations may add up to 34,000 tonnes of polysilicon capacity and ultimately as 18

renewable energy focus

much as US$3.0bn in investments to support the fast-growing solar industry. Construction of both the Michigan expansion and the new Tennessee site will begin immediately.

site will have the capacity to manufacture approximately 10,000 tonnes of polysilicon, with the ability to expand production up to 21,000 tonnes.

To execute the Hemlock Semiconductor group investment, the company’s shareholders formed Hemlock Semiconductor LLC, a new joint venture (JV) that will manage the Tennessee site. Hemlock Semiconductor Corporation will continue to manage the company’s existing Michigan site.

Most of the polysilicon produced by the new facilities will be consumed by firms in the solar industry; however, both sites will have the capability to manufacture ultra-pure silicon for the electronics industry as well as solar-grade material. In solar applications, polycrystalline silicon is the cornerstone material used to produce solar cells that harvest renewable energy from sunlight.

Hemlock Semiconductor LLC’s new production facility will be constructed at the Commerce Park site in Clarksville, Tennessee. Initially, this

January/February 2009

News/Roundup

Renewables in Asia – a roundup Thailand’s Energy Ministry has raised its targets for renewable energy use to 10% of total national energy consumption by 2011 from 8% in line with the Government’s push to encourage growth in renewable energy sources in the country. Once the renewable energy target is met, energy costs could be cut by US$4.4 billion to US$4.5 billion in that year. Electricity and heating power generation are gradually being replaced by biomass, biogas, solar cells, wind power, mini-hydro and waste, which now represent 4% of the total, almost double the renewable energy use of last year. The Thai Government foresees ethanol demand in 2011 to rise to 2.4 million litres a day from 900,000 litres now, while biodiesel will be three million litres, up from 1.3 million litres. Indonesia will use biofuel as alternative energy The Indonesia Government plans to use crude palm oil (CPO) and other biomass fuel as an alternative energy source as the fuel shortage has hit the country. Indonesia is the second largest CPO producer in the world. Together with Malaysia, it controls 85% of the global CPO production. Last year, there was a total of 4.1 million hectares of oil palm plantations in the country. Rice husk gasifiers to foster rural development in Burma Rice husk power plants have the potential to reduce Burma’s dependence on oil – at least to some degree – but their major selling point could be that they enable electricity supply in rural areas and foster development. In 2007, a 50 kW rice husk gasifier was installed in Tagoondaing Village in Yangon Division. The gasifier now provides electricity for 304 houses in two villages, Tagoondaing and Alesu.

Bangladesh government approves Renewable Energy Policy The Bangladesh Government has approved the landmark Renewable Energy Policy 2008, encouraging investment in electricity generation from renewables and for reducing dependence on traditional sources of energy. Under the policy, an independent institution - Sustainable Energy Development Agency (SEDA) - will be established under the Companies Act 1994, as a focal point for sustainable energy development and promotion, the policy maintained. As per provision of the policy, both government and private investors in renewable energy projects will get relief from corporate income tax for 15 years, and the electricity generated could be purchased by power entities through mutual agreement. It has been predicted that 5% of electricity demand would be met by 2015 through renewables, and 10% by 2020. The Bangladesh Energy Regulatory Commission (BERC) will approve the energy tariff as per the provision of the BERC Act 2003 if the capacity of renewable energy project is 1 MW or more. A network of micro-credit support system will be established, especially in rural and remote areas, to provide financial support for purchase of renewable energy equipment. Bangladesh’s newly-elected Prime Minister Sheikh Hasina has also asked energy ministry officials to push for comprehensive development of the energy and power sector by tapping the potential of renewable energy. The PM has announced waivers on taxes on solar panel and other renewable energy equipment to encourage mass use of clean energy in line with the Renewable Energy Policy approved by the previous interim Caretaker Government. Bangladesh currently has an electricity shortfall of 500 MW. Over 300,000 households already use solar energy equivalent to 15 MW, mainly in the coastal south-western region. Azam Mahmood, Asia correspondent

IRENA greeted as milestone for renewables The International Renewable Energy Agency (IRENA) has officially been founded in Bonn, Germany. IRENA is a milestone on the road towards a future-oriented energy supply. More than 120 government delegations from across the world attended the conference and a total of 75 nations representing a broad cross-section of developing and industrialised countries, signed the Agency’s statute on 26 January 2009. IRENA is the first international organisation to

focus exclusively on the issue of renewable energies. Its aim is to close the gap between the enormous potential of renewables, and their relatively low market share in energy consumption. The main work of IRENA will be to advise its members on creating the right frameworks, building capacity, and improving financing and transfer of technology and know-how for renewable energies.

In June 2009 the Preparatory Commission will decide on the location of the Agency’s seat and elect the first Director-General. The IRENA founding process was led by the German Federal Environment Ministry and the Federal Development Ministry, in close cooperation with the Federal Foreign Office. The American Council on Renewable Energy (ACORE) has urged the new US Administration to join IRENA.

California retailers must have 33% RE by 2020 Californian Governor Arnold Schwarzenegger has signed Executive Order S-14-08, revising California’s existing Renewable Portfolio Standard (RPS) upward to require all retail sellers of electricity to serve 33% of their load from renewable energy sources by 2020. The existing RPS requires retail sellers to supply

new goal, a substantial increase in the development of wind, solar, geothermal, and other ‘RPS eligible’ energy projects will be needed.

sion Initiative will identify renewable energy

The order seeks to accelerate such development by streamlining the siting, permitting, and procurement processes for renewable energy generation facilities.

■ The California Energy Commission (CEC)

zones that can be developed as such with little environmental impact; together with the California Department of Fish and Game (DFG) will collaborate to expedite the review, permitting, and licensing

20% of their total electrical load from renewable

To this end, S-14-08 issues two directives:

process for proposed RPS-eligible renewable

energy sources by 2010. In order to meet the

■ the existing Renewable Energy Transmis-

energy projects.

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President’s corner

I recently read a prediction that in ZFBST PG WFIJDMFT QSPEVDFE BSF MJLFMZ UP CF FMFDUSJD

Is the PEV/PHEV transition underway? One of the industries that has been hit hard by the global ďŹ nancial crisis is the car industry. The crisis, combined with uncertainties about the future price and availability of oil, has meant that many of the large car manufacturers are considering seriously ‘green’ car options including plug in electric (PEV) and hybrid electric vehicles (PHEV). In fact I recently read a prediction that in 7 years 30 % of vehicles produced are likely to be electric. This provides quite an opportunity for signiďŹ cant greenhouse gas reductions, especially when electricity supply systems have high penetrations of renewables.

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What I think is exciting are the vehicle-to-grid (V2G) possibilities of EVs – that is the option of delivering power from the vehicle to the grid as well as taking power from the grid for charging. This gives PEV and PHEV owners the option to park at special solar parking stations during the day on the understanding that they can deliver, on signal from a utility, power to the grid during peak periods – of course leaving enough power to get home. Alternatively, the cars could be used to run, say, home air conditioners during peak periods.

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Just recently I went to the ISES Regional Latin-American Congress in Florianopolis, Brazil. In the exhibition there was a PEV being developed by Itaipu, the world’s largest hydropower utility (14,000 MW of installed capacity.) Itaipu sees a good potential market for PEVs. The PEVs will provide the company with eet vehicles and a mechanism for peak lopping. 50–100 cars (depending on battery capacity) are needed per MW of load reduction.

20

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A global alliance with a vision: rapid transition to a renewable energy world Purpose: t &ODPVSBHF UIF VTF BOE BDDFQUBODF PG SFOFXBCMF FOFSHZ 3& UFDIOPMPHJFT t 1SPNPUF EFWFMPQNFOU BOE BDDFTT UP 3& UFDIOPMPHJFT HMPCBMMZ t 3FBMJTF B HMPCBM DPNNVOJUZ CZ GPTUFSJOH $P PQFSBUJPO CFUXFFO NFNCFST &YDIBOHF PG JEFBT BOE UFDIOPMPHZ t $SFBUF BOE EJTUSJCVUF MJUFSBUVSF QVCMJDBUJPOT 'BDJMJUBUF BO JOGPSNBUJPO FYDIBOHF 5SBOTGFS LOPX IPX t 0ĂľFS NFFUJOH PQQPSUVOJUJFT Bring together industry, research, political decision NBLFST JO TVQQPSU PG SFOFXBCMF FOFSHZ

Member Structure:

Two of the main criticisms for EV use are insuďŹƒcient range and lack of fuelling stations. Neither are valid restrictions. With a current range of between 100 and 200km, this is well within the distance travelled by most daily commuters. And with many homes having two cars, the second one can always be the one used for longer distance and genuine o-road travel. Also, with many PEVs a single household supply is all that is needed to recharge cars overnight and new developments, for example using supercapacitors to reduce charge times, look very promising.

Following my visit to Brazil, I attended the ISES Regional Asia-PaciďŹ c Congress in Sydney, Australia, where the latest advances in PV and Solar Thermal technologies were discussed. Australia is noted for excellent research work in these topics but the country is traditionally not so good at commercialising the technology. So I hope we are able to capitalise on such progressive thinking.

International Solar Energy Society (ISES)

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President: Monica Oliphant

inter

solar

North America

Exhibition

and

Conference

400 EXHIBITORS | 15,000 VISITORS | 1,600 CONFERENCE ATTENDEES

July 14 –16, 2009 San Francisco | California | Moscone Center PHOTOVOLTAICS | SOLAR THERMAL TECHNOLOGY | SOLAR ARCHITECTURE

Co-located with

w w w. i n t e r s o l a r. u s

R E S E R V E Y O U R E X H I B I T I O N S P A C E T O D AY A N D S E C U R E A P L AC E W I T H T H E I N T E R N AT I O N A L S O L A R I N D U S T RY !

CONNECTING SOLAR BUSINESS

Wind/Operation & Maintenance

The problem with O&M FRANK MASTIAUX, CEO OF E.ON CLIMATE AND RENEWABLES RECENTLY SAID THAT IF COMPANIES SUCH AS E.ON ARE TO REALISE THEIR PROJECT PIPELINES AND GET MW ON THE GROUND, THE WIND INDUSTRY HAS TO MOVE FROM “BOUTIQUE TO TRULY INDUSTRIAL LEVELS OF OUTPUT”. BUT AS THIS HAPPENS AT AN EVER INCREASING RATE CREDIT CRUNCH OR NO CREDIT CRUNCH, HOW CAN PROJECT DEVELOPERS AND TURBINE MANUFACTURERS ENSURE THAT THE TWIN DEMONS OF POOR TURBINE RELIABILITY AND HIGH COSTS OF O&M  BOTH WELL DOCUMENTED  DO NOT CONSPIRE TO REDUCE THE POTENTIAL SCALE OF WIND POWER? 22

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Wind/Operation & Maintenance

Over the next few issues In a new, regular, column, Renewable Energy Focus will look at various aspects of O&M.

the fault of an O&M team. If a wind turbine component is poorly engineered, it will make itself known very quickly to those in the wind industry.

In the first installment, Matthew Jackson and Stephen Rogers from the Arthur D. Little consultancy suggest how Offshore wind can overcome its various obstacles (see pages 24-27).

About the only area of design that allows field efforts to affect reliability is in the control system. Today’s wind turbine control systems can be over stacked with complexity. The turbine controllers are over protective, complicated and not user-friendly. Such controllers make troubleshooting difficult, especially if the wind turbine’s theory of operation is not made bluntly evident.

But first, Jack Wallace, wind turbine technical advisor with US-based Frontier Pro Services, asks whether extended periods of downtime might not just be a problem of faulty turbines, but rather on occasion be down to the lack of expertise – and poor attitude – of the O&M teams themselves…

Downtime and your O&M team – turbine availability begins at home With all the various and uncontrollable causes of turbine downtime that wind park owners and operators are all too familiar with, there remains a frequently overlooked, entirely manageable cause of turbine downtime: the operations and maintenance (O&M) team.

But if you have a specific wind turbine, or wind park, then that is what you get. That decision is a 20-50 year decision. It is final. In all probability no one is going to be replacing that turbine with another design anytime soon. So, the wind park operator needs to change his mindset from the list of problems inherent in the turbine’s design to creating a best-in-class operations plan for keeping the turbines running. Eventually the engineering problems will be worked out, and all that will be left to fix will be up to you.

The most important issue for any wind park operator is to ensure the turbines are available when the wind is on. As wind parks proliferate and turbine technology becomes increasingly complicated, the shortage of qualified wind energy technicians is taking a significant toll on downtime. The stress on O&M that leads to turbine downtime takes many forms. Insufficient training, poor employee motivation, engineering problems, over-complicated and over-controlled procedures, lack of a sense of urgency, as well as the O&M team’s failure to apply an appropriate attention to detail.

“Wind parks that deliver superior financial

The most important success factor for any wind park operator is turbine availability – when the wind is blowing, the blades must be turning. The cost of downtime from O&M inefficiencies can be difficult to calculate. The difference is often hidden; meaning that many days of wind can hide one day of a turbine being off line.

Jack Wallace, Frontier Pro Services

However, these outages add up to significant lost revenue when averaged over the course of a year or the lifetime of the wind park. Wind parks that deliver superior financial returns typically have well-trained, highly motivated O&M teams that are driven by incentives crafted to ensure the blades will turn whenever the wind is blowing. As a wind technician and field consultant for more than 20 years, I have heard and seen some mind-boggling and maddening things. Once a few years ago, I was discussing a customer’s O&M challenges with him, and he told me in all sincerity that “wind is our enemy.” That was as backward and disheartening a thought as I could imagine! So, I began to talk with him and his team further to understand what had them all so frustrated. I discovered that they were understaffed or staffed with unqualified people, and that the O&M team’s efforts were unappreciated insofar as their often times extraordinary service efforts were not acknowledged or recognised in anyway. Unrecognised for their work to keep the turbines up (or down!), their motivation to answer middle of the night calls to reset faults was clearly waning – and wind had become the enemy. It is true that a good portion of downtime on wind parks is related to the engineering of the wind turbine. Major component failures are usually not

returns typically have well-trained, highly motivated O&M teams that are driven by incentives crafted to ensure the blades will turn whenever the wind is blowing.”

For years I drove past a wind park that always had many machines off. I assumed that the turbine had a bad design and that that was the reason for such poor operations. Ten years later, and I am now running that wind park with a team of my technicians. The problem was not design. It was operator motivation. The operator did not try very hard. Today, that same wind park is now operating in its 23rd year, and running well. Maybe the manufacturer will help you get the machines running, maybe they won’t. Regardless, the reputation of your wind park is up to you. You know if you are trying or not, and so do your co-workers. Making the machines run is priority one. Yes, it’s challenging work; but it is the work of the O&M team. We are not talking wind turbine efficiency here. We are talking about reliability and run time. If you can keep them running in wind then you are doing your job. All incentives, recognition, processes and procedures must be in line with this fundamental objective: the wind turbines must be available when the wind is on. As far as efficiency problems go, they are engineering problems and have to be built in. If you find yourself with time to worry about efficiency – that is icing on the cake. The bulk of the problem, though, is ensuring the turbines are running. I have worked with many different types of wind turbines. The number one cause of nuisance faults causing downtime are controller issues. Once you have the controllers working properly, then the next most common cause of downtime is technician-related.

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Wind/Operation & Maintenance

Offshore wind project update The UK’s Thanet offshore wind farm has been saved by Vattenfall’s £35m purchase of the project. ScottishPower had been due to purchase the project, but pulled out late into negotiations. Onshore construction work had already begun on the project, with foundation installation due to start before the end of 2008. Foundations will now go in starting in February 2009, using A2Sea’s vessel Sea Jack. Installation of the 100 Vestas V90 turbines will take place in 2010 and will be performed by Marine Projects International. Commissioning on the £780m project is due by the end of 2010. Vestas is supplying 100 turbines with total capacity of 300MW. The high cost of the Thanet project and other forthcoming projects is cause for concern. Major developers such as Centrica have previously expressed concern. For the UK, the falling value of the pound against the euro is exacerbating fears, as is the overall economic slowdown. There is a risk that some of the more expensive projects will be postponed or cancelled. Developers may attempt to bring in new project partners to help share costs on the large offshore wind farms. Supply chain constraints will be an additional factor on projects due post 2010, with an increasing number of projects competing for resources each year. Late last year, the jack-up Titan-1 was lost at sea during transportation from the US to the UK. The jack-up was being moved from Pascagoula, Mississippi, to Liverpool ahead of starting an 817-day contract in the North Sea. The job would have covered the installation, servicing and maintenance of wind turbines off Denmark and the UK. The first project was aiding with installation at the 90 MW Rhyl Flats project off north Wales. Despite this loss, the Rhyl project is on schedule for completion in summer 2009. Other UK activity ongoing includes the 172 MW Gunfleet Sands project (consisting of the Round 1 and Round 2 projects combined), due for completion in autumn 2009. Installation work at Robin Rigg is well progressed, albeit behind schedule, with completion of the 180 MW site due in 2009. In Scotland, the bidding process for the Crown Estate’s separate licensing process saw 23 projects put forward from 14 companies or joint ventures, a higher response than first anticipated. It is hoped that the first of these projects would enter construction around 2016. The actual permitting process these projects would be subject to has yet to be determined. Denmark’s Horns Rev II project is well underway, with foundations all installed and cable installation taking place at present. Turbine installation will begin in March and is to be undertaken by A2Sea. The project remains on schedule for completion at the end of 2009. This will be the first offshore completion in Denmark since the first Nysted project was built in 2003. The other major current project off Denmark is an extension to the Nysted wind farm. The Nysted II project will see gravity base foundation installation start in February. Turbine installation and commissioning of the 207 MW project, which uses 2.3 MW Siemens turbines, will take place in 2010. A new 400 MW project is to be built between Djursland and the island of Anholt. The Danish Energy Authority has arranged environmental assessments of the site, the cable route and also geotechnical investigations. After an expression of interest early in 2009, full bids are expected by summer 2010. The Danish Energy Authority want the project to come online by the end of 2012. Eon, Dong and Vattenfall are expected to bid. continued on c1, page 26

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Controllers for wind turbines are becoming major technical innovations. Turbines are using controllers with thousands of parameters. Any little burp causes the entire machine to shut off requiring a reset, either remotely or an onsite reset. If it is the end of the day, windy, and a turbine is off, you need your technicians to go out and look at the machine. This is the difference between the turbine being off for 1 hour or overnight for 15 hours. More and more wind park O&M teams are not accepting the responsibility for ensuring that the turbines are running. As wind parks go mainstream and qualified technicians become scarce, a proud and elite profession is adopting very mainstream problems including low motivation, selfishness, lack of ambition, laziness, carelessness, “just a job” attitude, all of which are very dangerous in an industry that services massive machinery. The best run wind parks do not necessarily have the best machines, they just have the best motivated technicians with incentives aligned with the primary objective: keeping the turbines running.

“For years I drove past a wind park that always had many machines off. I assumed that the turbine had a bad design and that that was the reason for such poor operations. Ten years later, and I am now running that wind park with a team of my technicians. The problem was not design. It was operator motivation.” Jack Wallace, Frontier Pro Services We all hear the grumbling from technicians about poorly designed machines. However, the machines you have are the machines you have. That’s it. It’s all you get. If you want other types of machines to work on, then by all means move to another wind park. But I guarantee, if turbine problems make you grumble, you’ll be grumbling at any wind park. The best technicians accept the challenges, and just work the problems they know they have – and keep the turbines running! Jack Wallace Jr., Frontier Pro Services

Offshore wind – how can it overcome the O&M obstacles? The offshore wind market is a small but growing part of the world energy market. Total capacity reached 1GW in 2007 (around 0.01% of global energy capacity) and is set to increase sevenfold over the next five years. Activity is currently confined to Europe. The lack of take up in other major markets such as the USA and China is due to the abundance of available land in these countries, meaning that Governments have little incentive to subsidise offshore developments.

Wind/Operation & Maintenance

The problem

year, with Vestas’ 30 turbines requiring a change of rotor bearings, at an estimated cost of ₏30m.

Theoretically, oshore wind should be a low risk investment, in that ďŹ xed costs represent a high proportion of overall costs. This provides a level of certainty which, combined with guaranteed taris, makes it particularly attractive during times of volatility. But oshore installation is roughly 50% more expensive than for onshore, and O&M costs are roughly twice as much.

Failures are also harder to repair because they tend to happen in stormy conditions, and are often not dealt with when they happen, but on an aggregated basis at intervals. That means it can be as long as three months before a turbine failure is repaired. The contrast with onshore reliability is dramatic, and availability levels of 97% are regularly achieved.

In this regard, technical problems present the biggest potential risk to the future of the industry. Technical failure rates in oshore wind can be high compared to onshore, and oshore failures are diďŹƒcult and expensive to ďŹ x.

As sites move further oshore, these problems are likely to get worse. That could mean oshore developments in deepwater areas will be seen as unviable. For example, all the potential sites in the German North Sea have been allocated, but it is uncertain as to whether investment will follow.

This is underlined by an analysis of maintenance records, which shows that while service teams for oshore wind farms are supposed to make two scheduled maintenance visits every year, unscheduled visits to many installations are made 20 times a year.

The gearbox The main area of concern in the industry surrounds the gearbox. The reason for gearbox failure is currently not a matter of universal agreement. Data indicates that gearbox failures onshore are in line with industry averages. Oshore, it appears that gearboxes in fact perform better than other parts of the turbine. The problem with oshore turbines is that conditions are more extreme, and the downtime which results from the replacement of a gearbox has a greater eect on availability compared with, for example, the failure of a generator. The technology of oshore gearboxes therefore needs to improve, and when it does, this will have a dramatic eect on availability levels (nb: in next month’s issue the O&M column will cover the Gearbox – ed).

Why do turbines fail? The heart of the problem is that the technology being used oshore is generally onshore technology that has not been modiďŹ ed suďŹƒciently to meet the dierent demands of an oshore environment. The classic example of this is the disaster at the Horns Rev wind farm in 2005, following which Vestas is reported to have removed and repaired 80 of its V90 models, designed for oshore use, owing to the eect of salty water and air on the generators and gearboxes, which became corrupt after only two years. A similar procedure has been reported this

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Wind/Operation & Maintenance

Marine project update Atlantis Resources Corp., has signed a Memorandum of Understanding with the CLP Group which lays the foundation for Atlantis to collaborate with CLP in the development of commercialscale tidal current renewable energy generation projects across Asia-Pacific. This, together with agreements with partners in other regions, will bring Atlantis’ total electricity generating project pipeline to over 800MW. Sites under investigation span Asia-Pacific, Australia, the UK and North America, positioning Atlantis as a genuine pioneer in global tidal energy generation. Atlantis recently completed trials of its Solon tidal current turbine and the commercial launch of a 2MW Solon turbine is expected in summer 2009. Last month, the company announced plans to build a tidal energy-powered data centre near Scotland’s Pentland Firth. Aquamarine Power Ltd has appointed ABB to complete the electrical engineering design and construct the electrical generating system for Aquamarine’s Neptune tidal stream device. With a contract worth over £2million, ABB will also install and commission the system at the European Marine Energy Centre (EMEC) in Orkney, where Aquamarine will demonstrate the first full-scale Neptune device. Marine Current Turbines Ltd (MCT) has agreed a partnership with Canada’s Minas Basin Pulp and Power Company Ltd (MBPP) to demonstrate and develop tidal power technology and facilities in Canada’s Bay of Fundy, Nova Scotia. MBPP of Hantsport, Nova Scotia is a sustainable energy and resources company. Working in partnership with MBPP, MCT will participate in the tidal power demonstration centre established by the Province of Nova Scotia. MBPP and MCT intend to deploy a 1.5MW tidal generator when the in-stream tidal energy centre enters full operation and is connected to the Nova Scotia grid. The Scottish Government has granted consent for the Siadar wave energy project on the Scottish island of Lewis. npower renewables, a UK-subsidiary of RWE Innogy will be the operator of the planned facility with Wavegen, the Scottish subsidiary of Voith Siemens Hydro Power Generation, the technology partner for the wave power units. Both npower renewables and Wavegen have been working together on the project since 2006.

perform relatively well considering that they receive the bulk of the torque to which the turbine is subjected. Generators are not tested as rigorously, and do not perform as well offshore. Improved testing for gearboxes might involve breaking prototypes rather than subjecting them to limited loads as is common now. Suggestions for improving the design itself include making the gear case more flexible, and possibly reducing the size of the gearbox, to two stages rather than three. Another solution that is not currently being considered is the possibility of complete nacelle testing. Currently the first time the components work together is when they are part of a live turbine. The bottom line for technical difficulties is that they have the potential to cripple returns, and thus the risk profile of projects is increased and their economics more dependent on generous Government support – not a sustainable model for the future of an industry that aspires to be a key source of world renewable energy.

Another solution that is not currently being considered is the possibility of complete nacelle testing [for offshore wind turbines]. Currently the first time the components work together is when they are part of a live turbine. What is needed? The change needed for the industry to secure its long-term future is for the technology to become more robust and reliable:

Adam Westwood, Douglas-Westwood Ltd. ■ Better design of individual components (i.e. smaller, two-stage gear-

The direct-drive system, pioneered by Enercon, and which bypasses the need for a gearbox, could be held up as a solution to this issue. The initial higher costs would be repaid by lower maintenance costs and higher uptime levels. Siemens Wind Power is another organisation currently testing a Direct Drive model. Realistically, the step-change required in the manufacturing facilities of the other main suppliers of turbines, all of whom use gearboxes, would be too great, and we are unlikely to see the disappearance of the gearbox in offshore installations, particularly considering the huge weight of the direct-drive system (up to 500 tonnes). Less rigorous testing is required for onshore turbine components, as they can be replaced with relative ease, on a ‘fire-fighting’ basis, whereas with offshore this is not feasible. For gearboxes, then, better testing will be a key requirement as part of – and in addition to – the development of the technology. Offshore blades are currently tested very thoroughly, and

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boxes); the drive train (smarter integration of key components) and foundations; ■ Increased levels of R&D – not only in design, but also access and maintenance methods; ■ More thorough certification testing so components really can withstand the offshore environment. Analysis from Arthur D. Little shows that testing is probably the crucial element that will stimulate work in the other two areas. To date, testing has clearly been inadequate. Manufacturers have claimed it is possible to test onshore without the expense of offshore testing. However, there is clear evidence that, while it may be possible to test individual components onshore, running a turbine in real offshore conditions for at least a year would bring to light many key problems and save considerable amounts of money. Such testing has already been shown possible, albeit with Government support. In Germany, for example, offshore testing is already taking place at Alpha Ventus (albeit on a partly commercial basis).

Wind/Operation & Maintenance

All this work will need to be underpinned by collaboration. To date, the industry has been characterised by a general atmosphere of secrecy and suspicion and, as a result, there has been fragmentation of knowledge and lack of research progress.

This kind of collaboration is not unusual in the energy sector. In offshore oil and gas, for example, E&P companies have collaborated for years on access and maintenance issues, and the results have benefited the entire industry. This shows that there is a clear model to follow.

The catalyst for change will come from a shift in the balance of power away from the wind turbine manufacturers towards bigger and more experienced customers.

Action is therefore needed from offshore wind farm owners and developers to apply pressure on turbine suppliers to ensure they invest in rigorous component testing and robust offshore-specific R&D; apply pressure on turbine and component manufacturers to take a long-term view and invest to secure a sustainable future for the offshore wind market; and finally help is needed from Governments to free up funding for public R&D centres, and projects that can act as catalysts for industry collaboration and ‘open research’.

These customers will have the knowledge as well as the muscle to make specific demands for improvements in testing and development in a way that was impossible for small wind farm owners. These higher standards will filter all the way down the supply chain and are likely to result not only in better design, but also better type testing of components and integrated systems during the production process. At the moment, individual company research into the causes of mechanical failures or ways of improving access and maintenance may be prohibitively expensive. Collaboration can reduce those costs significantly. In terms of testing, greater openness would facilitate the testing of integrated drive trains. Independent testing facilities – such as the New and Renewable Energy Centre (NaREC), in Blyth, UK – should continue to be used as a neutral location for such tests to be carried out without compromising secrecy. It is true that such shared schemes have been tried before and not succeeded, but in a changing climate these options will need to be considered again.

What should particularly concentrate minds in the offshore wind industry is the clear message that without collaboration, the offshore wind industry will not mature or progress.

About the authors: Downtime and your O&M team – turbine availability begins at home Jack Wallace Jr., is a wind turbine technical advisor with Frontier Pro Services +1 951-849-3194 jwallace@frontierpro.com Offshore wind – how can it overcome the O&M obstacles? Matthew Jackson is a business analyst in Arthur D. Little’s Energy and Utilities practice. Stephen Rogers is a director in Arthur D. Little’s London office.

Parc Chanot, Marseille, France 16 - 19 March 2009

Europe’s Largest Wind Energy Conference and Exhibition Conference: The comprehensive four-day programme covers every key aspect of wind energy – from technical and theoretical to political and practical. Exhibition: Over 290 exhibitors: manufacturers, component suppliers, developers, operators, utilities, consultants and financiers spread over more than 9,000 m2.

Networking: The EWEC social events are specifically designed to combine business networking and enjoyment. They are the perfect place to make the right connections. “Events like EWEC 2009 allow the wind industry, policy makers and journalists to be part of a valuable and positive experience that are of benefit to all.” Andris Piebalgs, European Commissioner for Energy and EWEC 2009 speaker.

Registration and more information: www.ewec2009.info SUPPORTING ORGANISATIONS:

ORGANISER:

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Steve Sawyer/GWEC

A long way to COP 15 GWEC’S STEVE SAWYER TAKES STOCK OF THE ACHIEVEMENTS AND FAILURES OF COP 14 IN POZNAN AND LOOKS AT WHAT NEEDS TO BE DONE BEFORE COP 15 IN COPENHAGEN AT THE END OF THIS YEAR. In the run up to the 1980 US presidential election, I confidently predicted that the American people would never be so stupid as to elect Ronald Reagan president. Since then, I’ve been somewhat more cautious with predictions. Nonetheless, in October 2008 I set out three conditions for success at the Poznan conference: ■ that Barack Obama would be elected president of the USA; ■ that the European Union would achieve a political agreement on its

“20/20/20” climate package before the conference started; ■ that we would begin to see the beginning of the end of the crisis of

confidence in the international financial system. Without these conditions being met, Poznan would be a damp squib. Well, unfortunately, this time I got it right. Although the general international euphoria surrounding Obama’s election and his early statements on the climate issue improved the atmosphere, the EU exhibited its trademark ability to shoot itself in the foot by finally agreeing the climate and energy package the day after the conference concluded, and as a result was unable to show any real leadership during the proceedings. In fact, some recalcitrant Governments cynically seized upon the disingenuous antics of the European fossil fuel and energy intensive industries to delay and weaken the package and prevent its agreement in time. However, having said that, what remains is by far the most progressive and positive piece of “domestic” climate legislation anywhere in the world. It’s just a pity that they couldn’t take advantage of it to further the international agenda. And of course we’re still waiting to see the bottom of the credit mess. Despite the fact that COP 14 was more just a marker and not a major milestone at the halfway point between Bali and Copenhagen, some things were accomplished. The Adaptation Fund was finally fully operationalised, and will finally begin disbursing much needed funds for adaptation to climate change impacts early this year. This unique pot of money is based on a 2% fee, sliced off the value of Certified Emission Reduction (CER) credits (from Clean Development Mechanism activities) when they are issued, through the UNFCCC process. It is therefore not “donor” money, and comes only with strings attached which must be fully agreed by all the parties. This fund, though relatively small at this stage and by no means adequate to deal with the rising costs of climate change adaptation, provides a new model for financing the international agenda. While an attempt to broaden the levy beyond the CDM to include the other “flexible mechanisms” under the Kyoto Protocol failed, this issue will no doubt come back in later stages of the negotiations. 28

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The parties also adopted something called the Poznan Strategic Programme on Technology Transfer, which merely gives a name to the complicated body of work which goes under the name of “technology transfer”. This is an obligation accepted by industrialised countries at the inception of the UNFCCC in 1992, but without having any clear idea of what it means, or what it implies that countries should do. This rather unusual discussion may warrant a future column of its own, but for now, the Poles are happy that at least some part of this process will force us to remember that we all spent two weeks in Poznan in December 2008. As is often the case, the most interesting conversations were held in the corridors, bars and restaurants, and at side events, of which there were many hundreds, on every imaginable topic. For the first time, the wind energy industry was there in force. We had our own “Wind Power Works Pavilion” near the entrance of the modern conference complex, housed in what was the original building on the site. This was the venue for the launch of the Wind Power Works campaign, an industry-wide campaign for the 12 month period between Poznan and Copenhagen, highlighting the key role that wind power can and must play in reducing greenhouse gas emissions. Also unveiled at the Pavilion was a photo exhibition highlighting 12 different wind power projects in key countries around the world, each demonstrating one or more of the key reasons why wind power is the key supply side technology for the power sector in the near future – in a carbonconstrained world. For more info, see: http://www.windpowerworks.net. We also hosted a number of side events and receptions on the subject of wind power, renewable energy, and climate change mitigation, and we also made the hall available for other events and meetings. One high point of the conference was a guest appearance by United Nations Environment Programme (UNEP) executive director and UN undersecretary general Achim Steiner at the Wind Power Works launch reception. Ever a big supporter of renewable energy in general, and wind power in particular, UNEP and Steiner have made support for renewables a top priority in their call for a “Global Green New Deal” to combat the climate, energy and economic crises facing us at present. Officially named the Green Economy Initiative, the UN-wide effort led by UNEP calls for major efforts to create green, clean jobs and sustainable economic growth through investment and policies designed to support clean energy, sustainable agriculture, reduced deforestation, sustainable cities and the required infrastructure.

Steve Sawyer/GWEC

“The competitive economies of tomorrow will be built around clean energy such as wind power,” Steiner said. “There are many good examples of how wind, solar, and other renewable energy technologies are – today – providing carbon free energy while creating jobs and contributing to local economic growth, but these need to be promoted more widely. UNEP is proud to support the Wind Power Works campaign as it is perfectly aligned with our own efforts to help countries in their efforts to move towards a greener economy.”

sion of existing renewable energy and energy efficiency technologies, as well as adaptation technologies. This would be a welcome redirection of the current discussion. This discussion is either conducted at levels of abstraction which make for meaningless generalisations, or it is focused on future technologies which may or may not make it out of the laboratory to the demonstration stage. Will these technologies make it from there to commercialisation at some point in the future? That is the question.

With these words we march forward into an uncertain future, with the only sure thing being an increased number and increased intensity of negotiations towards a post-2012 climate regime over the next 12 months. What needs to be done? The Bali Roadmap agreed a year ago requires that the package to be agreed on in Copenhagen must have four pillars: mitigation, adaptation, technology and finance.

On finance, the notion is widespread that there are somehow going to be many tens or hundreds of billions of Government funds available annually for the climate. And that the USA and other Governments will descend into the basement of their treasuries to print lots of notes to bail out the financial sector. This notion has not helped to dissipate this illusion. However, a well-financed version of UNEP’s Green Economy Initiative could go a long way towards creating the right conditions.

On mitigation, industrialised countries must put forward commitments which will form the basis of new legally binding targets under the Kyoto Protocol track, and these commitments need to be in the range of 25%-40% below 1990 levels if we are to heed the warnings of the IPCC. Negotiators have agreed that this is the appropriate range, but the only bloc to have agreed anything (and they did it two weeks too late) is the EU, which agreed to a 20% cut by 2020, with an agreement to go to 30% as part of a new international agreement, as well as a landmark agreement to source 20% of its final energy from renewables by the same date. Australia announced very disappointing targets the Monday after the conference – 4% below 1990 levels (5% below 2000 levels) by 2020, and President-elect Obama’s opening salvo, delivered to a gathering of western governors in the weeks running up to Poznan, was to return the US to 1990 levels by 2020. This would mean an approximate 16% reduction compared with today’s levels. This is ambitious given the recent history of the US, but nowhere near enough. Japan, Canada, and Russia, the other big players among industrialised countries, have yet to lay their cards on the table. Suffice it to say that this pillar of mitigation will need a lot of work. On adaptation, it will require billions to address the plight of the world’s poorest struggling to adapt to the increasing impacts of climate change, and other than “tithing” a global carbon market, nobody seems to have any idea where this money is to come from. On technology, countries need to be realistic and come up with an agreement that works to support the rapid and widest possible diffu-

Some are saying that this is too much to achieve in time for Copenhagen, and it is indeed a lot to do in 12 short months. But with the right political leadership this, and more, could be done. In the wee hours of 5 November 2008 I was, for the first time in decades, along with hundreds of others gathered at the Amsterdam Hilton, proud to be the owner of a blue passport with an American eagle on the cover. I am old enough to remember a time when the USA was a leader in global environmental issues, and I think I’ve now lived long enough to see that time come around again. With Carol Browner leading a strong team as climate czar(ina?), Steven Chu heading the Department of Energy and John Holdren heading up the science team, Mr. Obama has demonstrated a clear break with the past and a clear commitment to the future. Let’s just hope that the Obama administration ushers in the era of hope that we need, and that those hopes are not dashed by the time this article goes to print (so far so good! Ed).

About the author: Steve Sawyer joined GWEC as the first secretary general on 2 April 2007. He has worked in the energy and environment field since 1978, with a particular focus on climate change and RE since 1988. He spent 30 years working for Greenpeace, primarily on a wide range of energy issues. He was the ceo of both Greenpeace USA (1986 – 1988) and Greenpeace International (1988 – 1993), and he served as Head of Delegation to many Kyoto Protocol negotiations on climate change. He also lead delegations to the Johannesburg Earth Summit in 2002 and numerous sessions of the Commission on Sustainable Development. He is also a founding member of the REN21 Renewable Energy Policy Network and was a member of the Steering Committee of the Renewables 2004 ministerial conference in Bonn. He has also been an expert reviewer for the IPCC’s Working Group III.

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Carbon

Emissions trading: for better for worse IN THE LAST IN HIS SERIES OF COLUMNS ON ‘CARBON’, BILL EGGERTSON LOOKS AT A NUMBER OF HICCUPS IN THE EMISSIONS TRADING SYSTEM ETS THAT MUST BE OVERCOME TO EASE THE WAY FOR RENEWABLES. A number of recent issues have underscored the need for advocates of the renewable energy sector to remain aware of many eclectic issues in the global carbon market. Emissions trading is the sale of environment attributes from low-carbon technologies and it is a procedure that is used to ‘penalise’ highcarbon emitters. As the energy sector is a main culprit behind the high levels of greenhouse gas (GHG) pollution around the world, the quest for lower emissions makes it clear that wind turbines, solar panels, geothermal heat pumps and the entire arsenal of renewable energy products will become one of the key sets of technology ‘silver bullets.’ To date, most of the market in offset trading has centred on the capture and destruction of nitrous oxides (NO2) and hydrofluorocarbon (HFC) refrigerants from industrial operations, but those options are expected to start declining soon as they become less accessible and as other sources (notably renewables) become more widespread and lower priced.

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The combined value of both mandatory and voluntary offsets is currently estimated at US$60 billion a year, and the market is expected to continue skyrocketing as a result of the growing number of renewable portfolio standards around the world, the anticipation of more measures under the post-Kyoto framework, and the emergence of more national trading regimes such as the European Union Emissions Trading Scheme (EU ETS). The EU ETS was the first system off the block and recently connected with the UN carbon credit tracking system, meaning it can be involved in Clean Development Mechanism (CDM) and Joint Implementation (JI) offset projects under the UN process. During each issue of renewable energy focus (2008) and finishing in this issue, this column has noted the significant potential for renewable energy technologies to become a key commodity in the global offset market, and November 2008 noted the trade of the first Gold Standard CER (Certified Emission Reduc-

January/February 2009

Bill Eggertson tion) from the People’s Republic of China. That transaction by Essent Trading was derived from a 45 MW windfarm in Fujian Province, and is the first CDM project in China to reach the Gold Standard registration phase. Over the past few issues, we have tried to provide some insight into the potential for renewables in the carbon market. One thing is certain. It is important to remember that this is a fast-evolving sector, as noted by the election in the USA (where a new President has pledged his support for a cap-andtrade system, while the Western Climate Initiative and Regional Greenhouse Gas Initiative continue to expand their presence). And the profile of carbon cap and trade will be raised even higher as we move towards next December’s COP 15 summit in Copenhagen (where nations will agree on the second phase of the Kyoto Protocol). It is, therefore, important to draw attention to some potential hiccups in the path forward,

Carbon

which need to be overcome if the global vision is to include renewables to the degree which it must. The current economic crisis has already had wide-reaching impacts on investment plans and decisions around the world, and many pundits have predicted a curtailment for renewable energies as limited capital funds are directed to conventional recovery methods. For years, our sector has called for ‘Apollo-like’ campaigns to spur the inevitable transition to renewables, which result in higher job creation than any other investment option, even if one overlooks the extremely high environmental benefits and energy security facets. It has been argued that any fundamental rejigging of the free enterprise system should include a significant focus on renewable energies as a new economic underpinning, on the assumption that, well, the time is right and we have no choice in the long run. Assuming the world order returns to its premeltdown status quo, the UK consulting firm CarbonFree believes that the renewable energy sector is facing a crisis similar to the one it experienced 20 years ago, but with a difference. The industry of the 1980s was in its infancy while, today, some of the companies have achieved the scale which is required to survive a downturn. “Just as the Dot Com crash did not totally destroy the IT and communications sector, so companies with robust business models will survive the bursting of the Green Tech bubble,” it predicts, adding that renewables can compete and displace most other energy sources, even at US$30 for a barrel of oil. Another warning sign for renewables in the carbon market has also come out of Britain, which recently held its first auction for four million permits under the EU ETS, and then announced that the £60 million of revenue would be absorbed into general Government coffers. Environmental groups were quick to demand that the money be earmarked for renewables, energy efficiency and other green projects, either in the UK or abroad, in order to adhere to the underlying philosophy of carbon trading. They contend that a low-carbon future demands significant levels of investment, and that the ETS (or similar offset auctions) is a logical source for money which is derived from companies that are unable to reduce their GHG emissions in a sustainable way. But be thankful for small mercies – at least there was an auction – further disappoint-

Carbon market up 84% in 2008 at US$118bn New Carbon Finance’s latest analysis of 2008 trading activity confirms its Q3 2008 projections – with total transactions throughout the year worth US$118 bn, representing 4 billion tonnes of carbon allowances changing hands. This level of transactions is 42% higher than in 2007, but the change in market value is twice this at 84%, driven by the double effects of higher traded volumes and higher prices. In spite of the uncertain economic climate, the organisation expects growth in the global carbon market to continue, reaching US$150 bn in 2009.

New Carbon Finance’s analysis suggests that credits bought directly from CDM projects – the primary CER market – fell by around 30% in 2008 compared to 2007 from an estimated 551 mt (US$7.4 bn) to 381 mt (US$5.8 bn). This is driven by a smaller number of carbon credits entering the UN crediting approval process in 2008 than in 2007. In 2007 new additions to the approval process included some very large industrial gas projects (HFC, N2O). 2008 saw more projects entering the pipeline, but was characterised by a higher number of smaller projects (mainly renewable energy and energy efficiency).

The dominance of the European Union Allowance (EUA) market continues, with EUAs accounting for 70% of the volume of carbon emissions traded in 2008 – and 80% of the value. However, secondary or “guaranteed” Certified Emission Reductions (CERs), the main currency of the Clean Development Mechanism, have steadily increased their market share from 8% in 2007 to 13% by 2008, and in 2008 accounted for transactions worth over US$14 bn. This reflects the growing interest in these credits as a global carbon currency being eligible for compliance against emissions targets under the EU ETS, Kyoto Protocol and the potential Australian and North American schemes.

For 2009, New Carbon Finance anticipates continued market growth, albeit at a slower rate than that seen between 2007 and 2008. Its analysis suggests a total market size of US$150 bn by year-end 2009. This will be driven by moderate growth in the European allowance market (EUA), but most of the growth is expected to come from increased liquidity in the secondary CER market with more issuances and improved registries to transfer and hold these types of credits. The future of the CDM also looks more secure following the international negotiations in Poznan in December 2008, with firm commitments to improve the transparency and efficiency of the mechanism.

ment in this regard arrived recently in the final version of the EU’s climate change Bill – recently rubber stamped in Brussels. In a u-turn from earlier versions of the Bill, industrial sectors such as cement, chemicals and steel will now receive free carbon emission permits at least up to 2020, instead of having to buy them under an auction scheme, as previously planned. The concession represented a victory for Germany, by far Europe’s largest manufacturing nation. It means that revenues from the EU’s auction procedures – once forecast to hit €50bn a year by 2020 – are now expected to be closer to €30bn. This will minimise the incentive for cleaner technologies, effectively punish companies that have already invested in clean technology, not to mention give a huge windfall to recipients of the free permits, argue many experts. As this column has noted before, renewable energy advocates must also monitor how the eligibility criteria are set for offset trading, as any technology which emits less carbon than an old coal-fired plant can claim to be ‘clean’ – by comparison. If the definitions become too

obtuse, it will be difficult to ensure that the commonly-accepted emerging renewable energy technologies are at the front of the line. There are many critics of emissions trading, including those who see it as a commercial licence to pollute and others who fear that its success will result in a transfer of economic benefits to other regions, as well as the basic climate change deniers and those who do not believe that the trade of pollution offsets can be taken seriously. But the market does take emissions trading very seriously, and it is a growing reality in jurisdictions around the world. To deny its need or the existence of the market would be folly; to deny the economic benefits which can accrue to the renewable energy sector would be to lose a major business opportunity.

About the author: Bill Eggertson is a freelance correspondent for renewable energy focus, and has written on a variety of renewable energy topics for the magazine – including “Green Heat”. He is based in Canada.

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Utilities/Renewables

Utilities: the challenge of integration IN THE FIRST OF A REGULAR COLUMN ADDRESSING THE ENGAGEMENT OF UTILITIES WITHIN THE RENEWABLES MARKETPLACE, USBASED RENEWABLE ENERGY FOCUS COLUMNIST DON C. SMITH CONSIDERS THE CHALLENGES THAT US UTILITIES FACE IN INTEGRATING RENEWABLES.

One of the most vexing challenges facing US utilities in integrating more renewable energy sources into their energy portfolios can be summed up in two words: improving transmission. Irrespective of how many wind farms or solar parks are built and how much energy they generate, the fact remains that the electricity generated in these facilities will be of relatively little use unless it can be transported to demand centres across the country. A key hurdle related to substantially increasing the role renewable energy will play in America’s future energy portfolio is one that at first appears simple and yet on further examination is perplexing. Put simply, energy generated from renewable energy facilities must be transmitted to population and industrial centres where the demand is highest. The current transmission grid was never intended to serve such a purpose, a matter that the utilities, policymakers, and other stakeholders must successfully address if renewable generation is to reach its full potential. The underlying problem – which some have called the ‘dirty little secret of clean energy’ – is illustrated in a new report by Boston-based consultancy the Analysis Group. Authored by Susan F. Tierney, who was a member of the energy-related issues transition team for President-elect Barack Obama, the report concludes the US will not fully exploit its “rich domestic renewable resources in the near term without

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strategic improvements to the electric transmission system.” For example, wind farms must be located where the wind blows, and consequently “wind power development is inextricably tied to electric transmission,” Tierney writes. “Many recent studies have concluded that ensuring adequate transmission is built to deliver power from remote renewable projects to consumers in distant markets, is just as important as developing the renewable resources themselves,” she says. There is widespread agreement that constructing this ‘super transmission grid’ needs to be addressed now. A recent report by the North American Electric Reliability Corporation (NERC), the self-regulatory non-profit organisation for bulk power system reliability in North America, concludes: “The existing bulk transmission network is inadequate to reliably deliver power from new renewable resources to demand centres.” Rick Segal, the President and ceo of NERC, has bluntly stated: “We believe that inadequate investment in transmission lines will be the primary limitation to delivering clean, reliable power to consumers. Indeed this issue is already occurring in some areas, with forced curtailments of wind generation due to insufficient transmission capacity.” The new transmission system would preferably be an extra high voltage (EHV) supergrid,

January/February 2009

Don C. Smith

which would overlay and easily integrate with the current lower voltage electricity grid. As an example it would allow for the efficient long distance transmission of electricity generated by wind farms in, say, western Kansas or eastern Colorado to Atlanta, Miami, and New York. Energy company AEP, which has experience with its own existing EHV 765 kilovolt (kV) network, says that the nation’s transmission system “must be developed as a robust interstate system, much like the nation’s highways, to connect regions, states, and communities.” Such a system, consisting of 19,000 miles of transmission lines, would establish a combined additional capacity of perhaps 200-400 GW of bulk transmission, thus spurring significantly increased levels of wind energy in the overall energy portfolio. The cost, as estimated by AEP, would be in the range of US$60 billion (in 2007). By comparison, the US military budget for fiscal year 2009 is more than 10 times that amount. Two key issues in developing a super transmission grid involve dealing with transmission line siting decisions and providing for reasonable and equitable policies to allocate the costs of building the new transmission system. In both cases, what is needed is a federal response, specifically giving the Federal Energy Regulatory Commission (FERC) authority to take bold and decisive action. This will, of course, raise the long-standing controversy surrounding federal versus state powers, but there is no

Utilities/Renewables

compelling reason not to hand the responsibilities for these matters over to FERC. Despite states’ assertions to the contrary, the development of the supergrid cannot be left to the vagaries of 50 state responses. The siting of transmission lines has traditionally been handled by state level public utility commissions, and these commissions have tended to aggressively protect their corner when it came to anything that could be interpreted as reducing the states’ powers. While such an argument might have been reasonable years ago when the overall energy stakes were much lower, in today’s world the possibility (indeed probability) that individual states may be able to subvert the needs of the nation as a whole are as antiquated as the concept that states should have their own currencies. Moreover, investors in a supergrid would unquestionably be unwilling to even consider funding such efforts if the projects faced a veritable maze of state-level decision making processes. As such, FERC should have the sole responsibility – although after seeking the advice of the states – for making transmission line siting decisions. Similarly, FERC should decide on cost allocations for building the supergrid transmission lines. At the heart of this should be costs allocated on a regional or even nationwide basis, not on a local or state basis. Admittedly, this approach reflects a new paradigm in thinking about transmission-related issues. Historically, electricity typically involved moving the fuel to the consumer (for example, building coal-fired plants near demand centres and transporting coal in often enormously long train routes to the plants). Now, however, utilities must be encouraged to generate the electricity where the ‘fuel’ is (i.e. where the wind blows in the case of wind power) and deliver the electricity to the demand centres. One context in which to consider the challenges and opportunities associated with a new supergrid transmission system involves looking back at the philosophical underpinnings of the US Interstate Highway System, an effort begun nearly a half century ago by Republican President Dwight D. Eisenhower. As Susan F. Tierney writes, the vision then was to unite the states in a ground transportation system that would hasten commerce, recreation, and development. “It is easy to believe that the original estimates of the system’s value barely scratched the surface of the actual returns we have real-

New dawn for US’ transmission infrastructure? One of the most vexing challenges facing US utilities in integrating more renewable energy sources into their energy portfolios can be summed up in two words: improving transmission.

ised from the nation’s investments in our interstate highway system,” she writes. Similarly, “A national EVS overlay built to connect the nation’s … wind, biomass, and solar resources … will help to produce economic development, strengthen energy independence, and satisfy customer demand in markets throughout the country,” she concludes. There are indications that the Obama Administration clearly understands the opportunities at hand. As a presidential candidate, Obama said last September: “We’re going to have to rebuild our infrastructure, which is falling behind … making sure that we have a new electricity grid to get the alternative energy to population centres.” In January, Rob Church, vice president for the influential American Council on Renewable Energy (ACORE), said: “The Obama Administration is very up to speed on this issue and we understand it’s very important to them.” And this was also confirmed in a speech of 8 January, in which Obama made it clear that renewables – and updating the grid - would play an important part in “saving” the US economy. Outlining his American Recovery and Reinvestment Plan, which could see spending of up to US$775 billion and the creation or saving of three million jobs, Obama said that energy is one of his priorities. But as well as using “clean energy” as a job creation tool, he addressed the need to upgrade the American transmission system, pledging to start building a new smart grid. According to a report from consultancy KEMA, an investment

of US$16 billion in smart grid incentives over the next four years could work as a catalyst in driving associated smart grid projects worth up to US$64 billion. It also predicts that by the end of 2009, over 150,000 of the 280,000 new direct jobs will have been created. Despite the many compelling reasons to move ahead quickly and aggressively with a new supergrid, there will be many political issues to address not least of which is the matter of providing legislative authority to FERC to make the difficult decisions related to this effort. States and many local politicians will criticise this approach, but such criticism needs to be set in the context of similar objections raised 50 years ago by those who opposed the US Interstate Highway System. Even Joseph Kelliher, who was appointed FERC’s Chair by President George W. Bush, agrees that the additional authority should be mandated by Congress: “Without that authority, we are actually not going to develop a grid that this country needs to ensure reliability, to support wholesale competitive markets, but also to meet the climate change challenge.”

About the author: Don C. Smith is renewable energy focus’ US correspondent. He serves as Director of the Environmental and Natural Resources Law & Policy graduate programme at the University of Denver Sturm College of Law, and as Editor in Chief of Utilities Policy, a peer-reviewed journal focusing on the performance and regulation of utilities. He can be reached at dcsmith@law.du.edu or on +1-303-8871-6052.

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Hydrogen from renewables

Hydrogen production from renewables IF WE ARE TO HAVE A SUSTAINABLE TRANSPORTATION INFRASTRUCTURE THAT INCLUDES HYDROGEN FUEL CELL VEHICLES, WE MUST PRODUCE THE ENERGY CARRIER  HYDROGEN  IN LARGE QUANTITIES FROM CLEAN, NONFOSSIL ENERGY SOURCES, AND THAT MEANS FROM RENEWABLES. SO EXACTLY WHAT OPTIONS DO WE HAVE TO PUT US ONTO THE CLEAN HYDROGEN PATHWAY, AND WHAT CHALLENGES NEED TO BE OVERCOME ALONG THE WAY?

As we plan for the clean, non-petroleumfuelled automobile and truck fleet of the future, we envision a propulsion technology portfolio that includes biofuel powered, electric drive, and hydrogen fuel cell vehicles (FCV). The last of these is perhaps the most technically challenging, but also the most attractive technology in terms of its ability to dramatically decrease oil consumption, CO2 greenhouse gas emissions, and tail pipe pollution. However, hydrogen is not an energy source – it is an energy carrier. And to fully realise its benefits, we must produce it not from fossil sources, but from renewable energy.

potential for sustainability. That being asserted, there are many challenges to producing Hydrogen from renewables – and perhaps the major one is reducing the cost to be competitive with gasoline and diesel.

order in which we might expect to see them commercially available.

Renewable hydrogen can be produced in several ways:

Electrolysis

Electrolysis – splitting water into hydrogen and oxygen using electricity from one of the many renewable sources; Biomass conversion – via either thermochemical or biochemical conversion to intermediate products that can then be separated or reformed to hydrogen; or fermentation techniques that produce hydrogen directly;

The world produces huge quantities of hydrogen today for industrial and commercial purposes, probably in excess of 50 million tonnes/year. But most of that production is fossil-energy based, either from reforming natural gas, or electrolysis using electricity produced from coal, natural gas, petroleum, or nuclear.

Solar conversion – by either thermolysis, using solar-generated heat for high temperature chemical cycle hydrogen production or photolysis, in which solar photons are used in biological or electrochemical systems to produce hydrogen directly.

Renewables on the other hand are a desired energy source for hydrogen production due to their diversity, regionality, abundance, and

The order above is, in general, also representative of the technological maturity of these pathways, and thus roughly the chronological

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Dale Gardner

January/February 2009

Figure 1 opposite provides an overview of the various options.

There is a substantial worldwide business in producing electrolysers, and building electrolysis facilities for hydrogen production. The challenges for transportation-ready renewable hydrogen are both in cost, and in understanding the logistics and economics of large central production plants versus smaller distributed facilities located nearer the vehicle users. A 100% efficient electrolyser requires 39 kWh of electricity to produce 1 kg of hydrogen. The devices today require as much as 48 kWh/kg. So, if electricity costs are 0.05 US$/kWh, the power cost for the electrolysis process alone is 2.40 US$/kg of hydrogen. (NB: In the USA, average residential electricity cost is approximately 0.10 US$/kWh and industrial 0.06 US$/ kWh). Capital costs for an electrolysis facility can be a huge factor, and for smaller installations can actually become the predominant cost factor.

Hydrogen from renewables

One advantage of electrolysis is that it is capable of producing high purity hydrogen (>99.999%), which is good for FCVs, whose fuel cells will, at least initially, be susceptible to contaminants and will require ultra-high hydrogen purity.

Solar Energy Wind

Geothermal Photo-biological

Heat

Photovoltaics Hydro

Ocean

The worldwide electricity production potential from renewables is staggering. If addressed and utilised aggressively, there is sufficient resource to support not only large inputs to the electrical grids across the planet, but also significant hydrogen production. As an example, by itself the available wind power resource in the USA is estimated to be more than 2,800 GW (today, total US electricity generation capacity is roughly 1,100 GW), enough to produce over 150 billion kg/year of hydrogen, which exceeds the US gasoline quantity consumed annually in terms of energy equivalency. Several renewables-to-hydrogen electrolysis test projects are underway in the USA and worldwide. At the US National Renewable Energy Laboratory (NREL) in Colorado, a partnership between NREL and the local utility, Xcel Energy, has resulted in a pilot scale project using wind and PV (see figure 2 and case study – ‘renewables to hydrogen’). The hydrogen is stored, then used to fuel NREL’s Mercedes Benz F-Cell FCV, or converted into electricity for injection back onto the grid during times of peak electrical loads.

Biomass

Mechanical Energy

Photoelectrochemical

Concentrated Solar Power

Electricity Biochemical

Thermolysis

Electrolysis

Photolysis

Conversion Fermentation

Hydrogen Figure 1: Renewables-to-Hydrogen Technology Pathways

Biomass-to-hydrogen is complex, not only because of the technical details of the conversion processes themselves, but also because of the many process types that could be employed. The conversion type with the most potential for large-scale centralised production, as pointed out in the NRC report, is gasification, which in itself is but one of several technologies available within the larger category called thermochemical conversion.

If we are able to transcend the “chicken-and-egg”

In the 1920s and 1930s, MW-scale alkaline electrolysers were built next to hydroelectric facilities in several locations around the world. So, we know how to do renewable hydrogen through electrolysis, have done it in the past, and now need to overcome the relatively modest technical and economic barriers to renewable hydrogen electrolysis for future transportation needs.

Thermochemical

problem with respect to FCVs and the supporting hydrogen production and distribution infrastructure, we should be able to make

Biomass Conversion

the technical and business

Because biomass is our only renewable source of hydrocarbons, conversion of a small portion of the planet’s huge biomass resource to fuels is an important option for our transportation needs. Hydrogen can be produced from this renewable feedstock. A recent US National Research Council (NRC) report (Transitions to Alternative Transportation Technologies: A Focus on Hydrogen, July 2008) asserts that centralised production of hydrogen from biomass gasification is the renewable pathway that has the highest likelihood of commercial viability in the 2015-3035 timeframe.

case for renewable hydrogen as the energy carrier for our clean vehicles of the future. Gasification – whether steam, air/oxygen, catalytic, or indirect – involves subjecting the biomass to elevated temperatures and pressures in order to reduce the organic materials to hydrogen and carbon monoxide/dioxide

gases (along with varying quantities of undesirable solid and gaseous byproducts). From there, the hydrogen can be separated out by membrane, chemical, or catalytic steps. Technoeconomic analyses indicate that gasification biorefineries may have to be large to be economically feasible, which means significant capital investment as well as a broad feedstock production and delivery infrastructure to supply each installation. A second thermochemical option is to convert the biomass to a bio-oil via thermal decomposition known as fast pyrolysis, followed by catalytic steam reforming of the liquid (or its vapours) to hydrogen. An advantage of this approach is that the bio-oil, as an intermediate product, has a higher energy density than the biomass feedstock and can more easily be transported. This technique may prove to be applicable to smaller, distributed biorefineries, whereas the gasification process described above may cater to the large, centralised installations. Biochemical conversion of biomass to hydrogen also presents several possible pathways. Ethanol produced from lignocellulosic materials could be further reformed to hydrogen, as could other biofuels or intermediate products of various biochemical routes Certain regional implications, feedstock types, or end-use requirements might make this a viable, if not a widespread, option. More interesting perhaps is dark fermentation, a process that uses anaerobic microorganisms to produce hydrogen directly, much in the way that bacteria or yeast can produce ethanol via fermentation. Such organisms might be enhanced to better perform the hydrogen

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Hydrogen from renewables

Case study: renewables to hydrogen The US Department of Energy’s National Renewable Energy Laboratory (NREL) and Xcel Energy are running a ground-breaking multi-year project aimed at using electricity generated from wind turbines and photovoltaics (PV) to produce and store pure hydrogen, thus offering what may become a significant new template for future energy production, storage, and use. The demonstration project (wind-to-hydrogen or Wind2H2) facility links two wind turbines and a PV array to electrolyser stacks. NREL-designed power electronics condition the wind- and PVgenerated electricity, for the stacks to complete the splitting of the liquid water into hydrogen and oxygen. The resulting hydrogen can be stored and used later to generate electricity from either an internal combustion engine turning a generator, or a vehicle fuel. In either instance, the only by-product is water.

is being designed to make the necessary conversion. In addition, up to 10 kW of power from the PV array is conditioned with a DC-to-DC converter for use by the stacks. Two polymer electrolyte membrane (or proton exchange membrane) electrolysers from Proton Energy Systems and a Teledyne Energy Systems (HMXT-100) alkaline electrolyser are used to split water into hydrogen and oxygen gases. Finally, the hydrogen is compressed and stored. A hydrogen internal combustion engine (or potentially a fuel cell in the future) then converts it back to electricity to be put on the utility grid during peak demand hours. In addition, the compressed hydrogen also fills storage tanks and subsequently a fuel cell vehicle from Daimler that is used at NREL.

Located at NREL National Wind Technology Center west of Denver, Colorado, USA, the site includes a building that houses the electrolysers and a device to compress the hydrogen for storage; 6 large tanks to store the hydrogen; a generator run by an engine that combusts the hydrogen; a dispenser to fill hydrogen-based vehicles, and a control room where computers monitor and control all steps of the process.

The entire demonstration project will reveal integration and operational issues as well as identify opportunities for improvement and other potential benefits. NREL and Xcel Energy expect to release a public update soon on the project’s operation. Results of the project will also be shared with other utility companies interested in hydrogen’s future role in the utility industry and transportation sector.

The demonstration project uses two wind turbine technologies - a Northern Power Systems 100 kW wind turbine and a Bergey 10 kW wind turbine. The energy from the 10 kW wind turbine is converted from its ‘wild’ alternating current (AC) form to direct current (DC) and then used by the electrolyser stack to produce hydrogen and oxygen from water. Meanwhile, the energy from the 100 kW wind turbine is captured from its existing controller, which already powers a DC bus of nearly 800 volts. That voltage is too high for the electrolyser stacks, and new power electronics

From NREL’s perspective, the project has two unique aspects. First, the project will study how to achieve efficiency gains through a unique, integrated AC-to-DC and DC-to-DC power electronics-based connection between the wind turbines and the electrolyser stacks. Moreover, the project compares multiple electrolyser technologies, gauging their efficiencies and abilities to be brought on- and off-line quickly - as the wind and solar energy vary. NREL hopes to show significant cost and efficiency gains on the integrated wind- and PV-hydrogen systems.

H2 Vehicle Fueling Station

100kW Wind Turbine

10kW PV Array

10kW Wind Turbine Excess AC Power To Grid

DC Power from Wind Turbine

AC/DC Converters

Electrolyzers

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January/February 2009

Perhaps the most intriguing options, with huge potential but requiring more development time, are solar conversion techniques. These are thermolysis and photolysis, and are shown on the far left and far right of figure 1, respectively. Thermolysis involves using the heat produced from concentrated solar power (CSP) to drive one of many thermochemical reactions (hundreds of which are known) that can produce hydrogen, or to drive electrolysis at very high temperatures for more efficient water decomposition. Photolysis may be the ultimate “holy grail” for hydrogen production, using solar photons to produce hydrogen directly via biological or electrochemical systems. Photobiological methods use photosynthetic organisms such as some cyanobacteria and green algae to photoproduce hydrogen – no carbon-based molecules are needed in the process. Much work is still needed to optimise the processes within the organisms, and numerous engineering challenges need to be met to develop large hydrogen generation photobiological systems. Photoelectrochemical photolysis involves the disassociation of water into hydrogen and oxygen directly at the surface of a semiconductor through the irradiation the semiconductor by solar photons. This can be thought of as electrolysis without the electrolyser, because the photovoltaic semiconductor material acts as a catalyst to produce hydrogen directly at the semiconductor and water interface. A major hurdle is finding a semiconductor material that has the right photoelectrochemical properties, while being economical and robust enough to withstand the severe chemical and physical environment.

Is there enough? H2 Fuel Cell H2 Genset

Figure 2: NREL and Xcel Energy Renewable Electrolysis Project Diagram

Solar Conversion

H2 Compressor

DC/DC Converters

AC power from fuel cell or genset during peak demand periods

production task. They typically need to start with glucose, so the cellulosic ethanol pretreatment and hydrolysis techniques that are being developed now to break down cellulose into glucose would also be required for the dark fermentation pathway.

H2 Storage

Can renewables really produce enough hydrogen to make a difference? Figure 3 answers this question for the USA, providing a countyby-county indication of the hydrogen potential from solar, wind, and biomass – compared to gasoline consumption in the US alone.

Hydrogen from renewables

On a gallon of gasoline energy equivalency basis (i.e., no advantage given for fuel cell efficiency compared to a gasoline internal combustion engine)

Figure 3: U.S. Renewable Hydrogen Potential Relative to Gasoline Consumption by County

Only those in blue could produce less hydrogen than their equivalent gasoline use, and those in green approach the capability of 1,000 times more hydrogen than their own needs. The few counties that fall short are typically surrounded by others with an abundance. Even though the US has a significant renewable resource, a global analyses might be expected to provide similar results. So, with all these options for renewable hydrogen production and the significant, diverse renewable energy resources upon which we might draw worldwide, where do we stand in terms of the research and development (R&D) needed to address the challenges? The answer is not clear, largely due to the confusing global energy picture and recent economic downturn, combined with an apparent emphasis on nearer-term solutions being evaluated to reduce CO2 emissions and stem global warming. Some speculate that there is less enthusiasm for hydrogen than we have seen in recent years, while others offer that hydrogen and fuel cells need to find their place in the portfolio of future transportation propulsion options.

In the USA, the end of the President’s Hydrogen Fuel Initiative (in which President Bush pledged US$1.2 billion to hydrogen and fuel cell R&D during fiscal years 2003 through 2008) has had a budgetary effect on hydrogen R&D in general, and on renewable production R&D in particular. Whereas the US Department of Energy’s hydrogen R&D budget had been climbing to more than US$280 million in 2008, the Department’s fiscal year 2009 request showed a decrease, including a zeroing of applied R&D funding for hydrogen production (which had been US$40 million in 2008). The rationale was that at least one production pathway had made the US$2US$3/kg cost goal – albeit via a non-renewable pathway known as distributed steam reforming of natural gas – and that funding was being focused on hydrogen storage and fuel cell R&D, where there is greater immediate need. Internationally, renewable hydrogen production R&D efforts continue. The long-standing Hydrogen Implementing Agreement of the International Energy Agency (IEA), in place since 1977, continues to work toward renewable hydrogen production. And many individual countries, including Japan, Australia, Iceland,

to name just a few, continue to pursue renewable hydrogen options. Also, the more recent International Partnership for the Hydrogen Economy (IPHE) links many nations in collaborative efforts. If we are able to transcend the “chicken-andegg” problem with respect to FCVs and the supporting hydrogen production and distribution infrastructure, we should be able to make the technical and business case for renewable hydrogen as the energy carrier for our clean vehicles of the future. And, we should be able to do that, not by the 2040-2050 timeframe as some suggest, but in the nearer term in order to offer a renewable, sustainable, and clean transportation option to our future global portfolio.

About the author: Dale Gardner is the associate laboratory director for Renewable Fuels & Vehicle Systems at the National Renewable Energy Laboratory (NREL), a US Department of Energy laboratory located in Golden, Colorado, USA. His research, development, and demonstration technology portfolio at the lab includes biofuels, hydrogen and fuel cells, and advanced vehicle technologies.

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EU wind focus

Special focus – EU wind IN 2008, MORE WIND POWER WAS INSTALLED IN THE EU THAN ANY OTHER ELECTRICITY GENERATING TECHNOLOGY. STATISTICS RELEASED BY THE EUROPEAN WIND ENERGY ASSOCIATION EWEA AS WE GO TO PRESS SHOW THAT 43% OF ALL NEW ELECTRICITY GENERATING CAPACITY BUILT IN THE EUROPEAN UNION LAST YEAR WAS WIND ENERGY, EXCEEDING ALL OTHER TECHNOLOGIES INCLUDING GAS, COAL AND NUCLEAR POWER.

BUT JUST WHEN WIND POWER SEEMED SET FOR CONTINUED IMPRESSIVE ANNUAL GROWTH, THE CURRENT FINANCIAL CRISIS ARRIVED ON OUR DOORSTEPS. WHAT MANY NOW WANT TO KNOW IS WHAT KIND OF EFFECT THIS WILL HAVE ON THE MARKET IN THE EU, BOTH IN THE SHORT AND LONG TERM?

While most European markets are stabilising around utilities and opportunities are becoming scarce, many players will continue to leverage their experience to expand into other less developed and faster growing markets like North America, Asia, and Latin America. 38

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EU wind focus/the market

Introduction Market opportunity

For the first time, wind energy is the leading technology in Europe. A total of 64,949 MW of installed wind energy capacity was operating in the EU by end 2008, 15% higher than in 2007. In this special focus for Renewable Energy Focus magazine, we take a look at the wind power market in the EU bloc, starting with an analysis of the market dynamics and a look at how the financial crisis will affect wind industry actors – with the help of Emerging Energy Research (EER) and Frost & Sullivan (below, and pages 39-44). Then on pages 46-49, we look at the concept of location intelligence, which is playing a growing role in the planning, design and siting of European wind farms.. One of the most prominent wind organisations headquartered in Europe is Siemens Wind Power, and on pages 50-53 we run an exclusive interview with ceo Andreas Nauen.

And finally, we turn our attention to turbine innovation, and look at some of the novel ideas that pitched up at the British Wind Energy Association’s (BWEA) 30th anniversary show in London late last year (pages 54-57).

EU Wind market: an introduction On average, 20 wind turbines were installed for every working day of 2008, the European Wind Energy Association (EWEA) recently reported. By the end of the year, a total of 160,000 workers were employed directly and indirectly in the sector, which saw investments of about €11 billion in the EU. And the wind power capacity installed by end 2008 will, in a normal wind year, produce 142 TWh of electricity, equal to about 4.2% of the EU’s electricity demand, and avoid the emission of 108 million tonnes of C02 per year, the equivalent of taking more than 50 million cars off Europe’s roads. And according to Emerging Energy Research, with a compound annual growth rate (CAGR) of 17% between 2004 and 2008, and holding steady at around 8 GW capacity installed annually, Europe should re-assert its position in the near term as the bedrock of the wind industry, and many players continue to seek out opportunities in faster growing markets such as the USA and China.

Tapping out remaining sites

Late stage/ Operational project acquisition

Repowering

Offshore

Development competition

Market maturity overview

Greenfield developers and new entrants are locking up high resource sites for their first largescale installations

Tight competition between utilities, IPPs, and turnkey project buyers will scale portfolios of late-stage projects, with guaranteed returns

Utilities and experienced IPPs in mature markets are seeking remaining potential in saturated onshore markets such as Germany and the Netherlands Utilities with balance sheets and risk management skills to handle complex EPC to scale the industry are moving toward project execution offshore

Growth Markets

Scaling Markets

Consolidating Markets

Figure 1: Europe market opportunity and competitive landscape overview (courtesy Emerging Energy Research).

Stabilised market structure Utilities now own 26% of total wind power capacity installed, while industrial independent power producers (IPPs) are rapidly consolidating the league of independent players, leaving fewer opportunities for pure finance and development players. Few blockbuster, billion Euro (€) acquisition targets remain in play as mega utilities and strong IPPs are now firmly positioned to execute onshore pipelines while looking toward offshore on the horizon. The current financial crisis may in fact further cement Europe’s wind asset ownership structure, as the higher costs of equity may purge highly leveraged players from the market, creating opportunities for utilities and major IPPs to advance their portfolio strategies.

It is clear that project flow will slow among smaller players with lower internal rate of return (IRR) projects. Emerging Energy Research (EER) predicts steady growth of 9 GW to 10 GW through to 2011, which will eventually ramp up to 11 GW by 2014 as offshore sees paced growth, and as remaining onshore opportunities are tapped out. EER also forecasts that the European wind market will reach a total of 210 GW installed by 2020.

Competitive overview – consolidation, growth and scale There have been few shifts in terms of market maturity between 2007 and 2008. Figure 1 shows Europe’s groupings of consolidating, scaling, and growth markets – based on an

In brief: EU wind snapshot ■ Wind power has become a mainstream energy source in Europe; ■ Wind energy’s market structure has stabilised in Europe after a rapid period of M&A over the past three years; ■ Growth through to 2020 will see wind markets shifting Eastwards and embracing the offshore and re-powering markets, despite near-term financial challenges due to the global credit crunch; ■ The European wind sector growth continues to be driven by scaling markets and offshore;

■ Development of Europe’s growth markets relies on sporadic project activity; ■ Scaling markets will drive the bulk of Europe’s long-term growth; ■ Consolidating markets welcome wind as a key player in the generation mix; ■ Forecasts Point to 210 GW Market by 2020; ■ Europe to exhibit paced offshore expansion through 2020; ■ Wind players will be forced to adapt strategies to tap out remaining potential; ■ A consolidated Europe will solidify wind in the power mix;

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EU wind focus/the market

100%

75%

17.17%

20.00%

6.06% 7.07%

6.00% 6.00%

19.19%

19.00%

22.00%

19.80%

7.00% 6.00%

9.90%

18.00%

20.79%

50%

25%

50.51%

49.00%

47.00%

5.94%

24.00%

26.00%

10.00%

10.60%

5.00%

4.30%

20.00%

Utilities Top IPPs Other Spanish IPPs Other European IPPs/ German Investors

22.10%

43.56%

41.00%

37.00%

2005

2006

2007

0% 2002

2003

2004

Figure 2: European ownership shifts to utilities and IPPs (courtesy Emerging Energy Research)

evaluation of each country’s market concentration and wind penetration.

Does the economic slowdown have positive sides? First of all, according to analysts Frost & Sullivan, equipment prices will inevitably follow the raw material prices that sharply decreased in September- November 2008. For example, wind towers accounting for up to 20%-23% of the total wind turbine cost (the second most expensive element after blades) are predominantly made of steel. Steel prices – after reaching an all time historic maximum in JuneSeptember 2008 – crashed down to December 2007 levels in less than 3 months. Another factor contributing to a fall in prices is an increased level of competition along the value chain. The new reality will foster a fiercer competition between the suppliers turning into a growth opportunity for those who are capable of reducing their costs and prices faster. Delivery and construction times will see a huge improvement which in turn will make the project lifecycle shorter allowing for faster commissioning and a shorter wait until the project brings its first revenues. Lastly, the asset valuations that jumped out of control recently will return to sensible levels. Those interested in growing their wind portfolios will have a chance to acquire existing and new projects at a reasonable price.

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renewable energy focus

While countries such as Poland and Turkey moved ahead of the pack, Portugal’s days as a scaling market (characterised by strong remaining resource coupled with stable regulatory frameworks that will facilitate project development) are dwindling. Development of Europe’s growth markets relies on sporadic project activity. Wind energy growth markets include a number of different countries in which wind is a nascent market, including Turkey, the Baltic states, Romania, Bulgaria, Norway, Switzerland, the Ukraine, and Finland. These countries’ markets are nascent, where the gradual creation and implementation of stable regulatory frameworks are expected to facilitate sporadic project activation. At year-end 2007, these countries accounted for 2% of total wind energy capacity installed in Europe. Between 2008 and 2020, growth markets will contribute nearly 11% to

Europe’s new wind capacity. Scaling markets will drive the bulk of Europe’s long-term growth. These markets, including the UK, France, Italy, Sweden, Poland, Greece, Ireland, and Portugal will experience high project volume in the near term, and are expected to be Europe’s main growth motor going forward, accounting for over half of the total new capacity added in Europe by 2020. Consolidating markets welcome wind as a key player in the generation mix, and have reached a high level of maturity, are highly penetrated, and have limited Greenfield opportunities available. Despite having a lower growth rate than other

January/February 2009

market types, consolidating markets Germany, Spain, Denmark, Austria, the Netherlands, and Belgium will still contribute 47% to Europe’s installed wind base, declining from 76% in 2007.

Which EU countries are seen as the most attractive? The attractiveness and availability of Europe’s wind power development opportunities are reaching a critical point as markets mature and the competitive environment consolidates around a smaller set of key players driving the industry. Overall, Western European markets continue to consolidate, while less developed markets in Eastern Europe remain the target of regional expansion. Generally, utilities continue to make their presence felt as consolidators across Europe, acting as project buyers, partners, and greenfield developers – vye for project permits and grid connections with smaller IPPs and pure play competitors. While the barriers to entry continue to increase as wind finds its way into countries’ mainstream power mix, distinct development opportunities exist for those players with a strong understanding of local competitive environments. EER recently looked at each country in detail to gauge an idea of which European countries were the most attractive in terms of wind power development potential, ranking each market based on five key components: ■ ■ ■ ■ ■

Wind resources; Regulatory mechanisms; Site approval; Grid connection; Competition.

Some of the most significant shifts highlighted by EER’s 2008 Rankings are the improving positions of France (driven by an increasingly transparent permitting process and support for utility-sized projects with a €0.082/kWh feed-in tariff) and Sweden (where an improved regulatory framework has simplified the planning process for projects up to 25 MW). Countries whose market attractiveness declined in 2008 included Portugal (where a fully permitted or tendered grid capacity will limit development) and Greece (which is struggling with a bureaucratic planning and lengthy permitting process that can take up to five years.) ■ EER’s most attractive countries (Tier 1) currently include Spain, France, UK, Germany, Italy and Sweden;

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EU wind focus/the market

6,000

Megawatts

4,500

The wind value chain – who needs what?

Total Wind Plant Ownership, YE 2007 MW Change 2007*

3,000

1,500

0

Airtricity

Union Fenosa

Eurus Energy

Enerfin

Grupo ACS

RWE

Gas Natural

Electrabel

Essent

EDF Energies Nouvelles

Vattenfall

Enel

DONG Energy Renewables

E.ON

Babcock & Brown

Endesa

International Power

Acciona

EDP Renováveis

Iberdrola

-1,500

Note: *“MW Change” includes a company’s new build, new capacity, acquisitions, and divestments Source: Utilities, Developers, Emerging Energy Research

Figure 3: Wind plant ownership rankings, year-end 2007 (courtesy Emerging Energy Research)

■ Next (Tier 2) currently include Portugal, Denmark, Ireland, Poland, Norway, Greece; ■ Tier 3 include Netherlands, Belgium, Switzerland, Turkey, Austria, Estonia, Hungary, Czech Republic; ■ Tier 4 (less attractive) include Croatia, Bulgaria, Lithuania, Romania, Finland, Russia, Slovenia, Ukraine, Latvia, Slovakia.

What about the potential of offshore wind? The European offshore wind market continues to account for a fraction of the total wind power installed in the region, and its contribution to annual power production remains marginal. Nonetheless, Europe is expected to exhibit a paced offshore expansion through 2020, with three key markets—the UK, Germany, and Sweden—driving future growth. Overall, EER forecasts that the market will grow at a CAGR of 28% through the rest of the forecast period, from 1,109 MW installed at yearend 2007 to nearly 26,800 MW installed at year-end 2020. Current restructuring of the UK offshore market, with increased utility participation by players such as E.ON and Vattenfall, is a positive sign as large balance sheets are backing up long-term GW-size project plans.

Conclusion – development set to continue? Despite the credit crunch’s impact on 2009– 2010 growth, most experts predict that wind will remain a key source of clean energy as EU members adopt their 2020 renewable energy 42

renewable energy focus

targets. EER’s central predictions for the wind market’s evolution through 2020 include: ■ Countries aiming to achieve 2020 renewables targets will to continue build up their wind power installed base; ■ With opportunities dwindling in consolidating markets like Germany and Spain, fast growing market France will become the second-largest market in the region by 2020 in terms of new capacity installed; ■ As wind technology has matured, all utilities have embraced it as a scalable way to diversify their generation portfolios and expand into new markets without having to set up complex supply chains; ■ While most European markets are stabilising around utilities and opportunities are becoming scarce, many players will continue to leverage their experience to expand into other less developed and faster growing markets like North America, Asia, and Latin America.

The credit crunch and the outlook for 2009 and beyond; Despite wind’s strong fundamentals as a generation technology that delivers emissions reduction, supply security, and cost competitiveness, the market is bound to see significant challenges in the coming year resulting from the credit squeeze. However, experts believe that the EU’s strong commitment to renewables is likely to ensure the long-term development of the industry in Europe – in order that the Bloc achieves its 20% by 2020 renewables targets. This factor maintains 150 GW of wind capacity additions by 2020, 80% of which will be onshore.

January/February 2009

According to Frost & Sullivan, the need for financial resources varies greatly across the wind value chain. “Equipment manufacturers may have favourable post payment terms with the component and raw materials suppliers, and in some cases prepayment for their wind turbine shipments, which reduces their need for external finance for expanding their production capacities, M&A activities, etc. “Players engaged in wind farm construction are in greater need for funds as it could take up to three years until their assets start generating power and cash flows. As typically wind farms are financed with 30% of equity and 70% of external finance, players at the upper value chain segment are most exposed to feel the financial market squeeze. “Independent investors and project developers with high level of leverage and low cash level may fall first prey to the tightening market conditions as they will find it increasing difficult or expensive to turn to debt markets for re-financing or new debt. “While some players have to consider selling rather than buying, there is another category that seems to be able to benefit from the existing markets. Cash-rich utilities may choose not to approach banks or debt markets as they can fund projects off their balance sheets. If they prefer to turn to debt markets, often the interest rates they are able to obtain are lower than those offered to other companies. At cheap credit times, utilities could pay as little as 0.15 percentage points more than government bonds for their money. As of October, 2008 that spread rose to 3.5 percentage points.”

However, in the next two years some players will struggle to add new capacity, resulting in a possible slowdown of new additions in the region. According to analysts at New Energy Finance, the continued lack of credit finance worldwide, and tax equity in the US, means that turbine manufacturers will see sharp falls in their order backlogs for the first two quarters of 2009. Good deals will still go ahead, backed by club debt deals, however “it will feel like hard work”.

wpd: hall 1 stand 1613

Offshore wind development could also be hit. Over the longer term, financing, permitting, transmission issues, and supply chain bottlenecks will remain a constraint in the next three to five years. And there are concerns that the high-growth offshore markets such as the UK will suffer more than other countries. Adam Westwood of the DouglasWestwood consultancy cites the Thanet project as one example: “the high cost of the Thanet project and other forthcoming projects is cause for concern. Major developers such as Centrica have previously expressed concern. For the UK, the falling value of the pound against the euro is exacerbating fears, as is the overall economic slowdown. There is a risk that some of the more expensive projects will be postponed or cancelled. Developers may attempt to bring in new project partners to help share costs on the large offshore wind farms. Supply chain constraints will be an additional factor on projects due post 2010, with an increasing number of projects competing for resources each year”.

wpd think energy GmbH & Co. KG, Kurfürstenallee 23a, D-28211 Bremen, www.wpd.de

The second half of the year, however, should see lending freeing up considerably, with rates dropping, leverage increasing and a return to syndicated deals, according to a source at New Energy Finance: “Overall for 2009, investment in the wind sector will fall somewhat below that in 2008. It will be a difficult year for project developers. Some will run out of cash and be snapped up by utilities and a few deep-pocketed private equity and hedge funds. Turbine manufacturers will feel even more pain, particularly the smaller ones and those with less competitive technology. We expect to see 2009 end with fewer players than it started and many new entrants into the industry, particularly in China, will quietly disappear without ever shipping a turbine. By the end of the year, however, the industry will be in good shape for a return to robust growth in 2010. Turbine prices will be lower, helped by lower steel prices and the elimination of marginal players, new policy support will be in place in the US, and some ambitious projects will be ready to leave the drawing board and commence construction”.

www.m-schulz-ag.de

EU wind focus/the market

Slow growth in 2009–2010 before market rebounds EER’s forecasts for increasing wind power capacity in Europe takes into account: ■ ■ ■ ■ ■ ■

Resource; Wind-specific regulatory policies; Siting; Grid Transmission; Competition; Specific project development environments.

Energy starts in the head. We take care that thoughts change direction.

Despite the short-term impact of the credit crunch on new additions, EER’s forecasts anticipates that utility leadership through balance sheet financing will ensure relatively steady near-term growth. EER sees the following market trends stemming from the crisis: Financial market restructuring may provoke reluctance from European governments to maintain renewable energy commitments, such as Eastern European countries that may seek to lower their targets to reduce the impact on their conventional generation market; ■ Utilities heavily invested in wind such as Energias de Portugal, Iberdrola, and Endesa have assured investors that their near-term projects will proceed based on balance sheet financing; ■ The current credit crunch poses significant uncertainty to pipelines in less strategic, riskier markets that lack the long-term feed-in tariff guarrenewable energy focus

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EU wind focus/the market

Top Utility Market 12,990 MW

During the next few years

Top Wind IPP Market 6,381 MW

the industry will have a

Union Fenosa RWE 2% Electrabel 3% 3%

International Power 16%

Total Ownership Market 56,666 MW

Essent 3% EDF 4%

German Investors 37%

Vattenfall 5% Iberdrola 42%

rectify remaining technical

Acciona 42%

DONG 5%

and operational drawbacks,

Other European IPPs/investors 22%

ENEL 5% Utilities 26%

Grupo ACS 6%

Other Spanish IPPs 4%

E.ON 8%

Top IPPs 11%

Endesa 10%

Airtricity 5% Babcock Brown 15%

EDP 9%

chance to take a breath,

train more technical personnel and enter a new market phase well

Figure 4: Europe utility, IPP market ownership split overview, year-end 2007 (courtesy Emerging Energy Research)

antees of Western Europe, such as in the Ukraine and the Balkans; ■ Cost competitiveness of wind has, until recently, been fairly unstable due to the rising overall generation costs compared with rising wind turbine prices. Rising turbine prices pushed installed cost-per megawatt beyond €1.2 million, and this has undermined wind’s competitiveness. To balance this fact, the price of oil rose from US$50 to US$140 per barrel between June and November 2008, illustrating that fossil fuel volatility could make wind an attractive hedge (despite the current return to lower oil prices). And in addition, in the current economic climate, lower raw material costs (for products such as steel) combined with a reduction in turbine orders from credit constrained organisations will lead to a reduction in the cost of turbines. While this could be challenging for the manufacturing supply chain, it should play nicely into the hands of those Project Developers who have access to cash, reducing the cost of projects.

As the current crisis in the financial sector has frozen project finance worldwide, IPPs and developers with weaker balance sheets will struggle to realise their pipelines. However, the Europe market is led by utilities and large IPPs that could view the current financial crisis as an opportunity to accelerate industry consolidation. The bulk of Europe wind power is expected to be increasingly concentrated in the hands of utilities, which have amassed the largest pipelines in the region and can finance and digest big acquisitions. The main trends in the market include:

Consolidation accelerated by the financial turmoil

Leading player pipelines have become increasingly international, with over 60% of their pipelines located outside of their core markets, and with several players venturing offshore. Proven development firms with over 100 MW of confirmed projects in their pipeline altogether have roughly 52 GW planned in upcoming years.

Consistent EU-wide political support for renewables urges the utilities to take strong positions in wind energy, which continues to provide opportunities for developers’ project and pipeline sales. At the same time, utilities’ continued moves upstream in locking up capacity growth threatens the Independent Power Producer (IPP) model that has flourished over the past five years. As such, the Europe wind energy market continues to consolidate, with Mergers & Acquisitions (M&A) proving a key growth strategy, and smaller independent power producers struggling to grow in the face of increasing competition for sites, grid access, capital, and turbines. 44

renewable energy focus

■ Utilities will steadily tighten their grip on the market; ■ The IPP model is in transition, with financial investors leaving the market; ■ Germany’s wind ownership structure shifts as utilities try to develop domestic portfolios.

Large players’ pipelines indicate greater consolidation

Offshore development promises large-scale growth, and players are taking positions to capture a large part of this growth; M&A remains a key growth option for Europe wind power owners, evidenced by a high level of activity from 2007 through early 2008; The current crisis in the financial industry could accelerate consolidation in Europe in favour of players with stronger balance sheets.

January/February 2009

equipped for a new wave of growth. What can we look forward to? According to analysts Frost & Sullivan, although wind energy industry growth rates will slow down, it does not mean the industry will stall. While unfortunate for certain industry players, the economic slowdown will turn out to be a growth opportunity for others. Cash-rich companies and those with higher credit rating will be able to extend their wind portfolios at reasonable prices. Cheaper equipment available at shorter lead times for new installations, as well as wider availability of specialised construction services and fiercer competition along every segment of the value chain, will force a total project cost down. Once the economic outlook brightens, lower project costs are likely to make the investments into wind power more attractive for wider range of countries and type of investors. During the next few years the industry will have a chance to take a breath, rectify remaining technical and operational drawbacks, train more technical personnel and enter a new market phase well equipped for a new wave of growth.

About the contributors Emerging Energy Research – Information used (and all the charts) are taken from a new study by Emerging Energy Research, Wind Power Development Strategies in Europe, 2008-2020, which analyses trends in market growth, competitive shifts across the value chain, and emerging investment opportunities in Europe’s wind energy markets in light of the recent financial situation. The complete study, released in November 2008, is available for purchase at http://www.emerging-energy.com Frost and Sullivan – Information used was taken from a report entitled, Economic slowdown: threats and opportunities for the wind industry. See http://www. frost.com.

EU wind focus

Harnessing geography for European wind WHAT’S THE BEST PLACE FOR A WIND FARM? NOT JUST ON ANY OLD HILLSIDE OR “SOMEWHERE OFFSHORE”. THE CONCEPT OF LOCATION INTELLIGENCE IS PLAYING A GROWING ROLE IN THE PLANNING, DESIGN AND SITING OF EUROPEAN WIND FARMS, SAYS JUSTIN SAUNDERS.

Justin Saunders

When the UK government approved the giant 750 MW Gwynt y Mor wind farm off the coast of Llandudno, North Wales, in December 2008, key considerations about the exact location included the distance from the shore and how the visual impact from points along the coast could be minimised. The developers had worked within a Government-set “strategic area”, carrying out studies and consultations to map the precise positions of turbines, and to show how they would affect visibility, marine navigation, ecology and fishing activities. Similarly, the environmental statement behind plans for the forthcoming 152-turbine onshore farm at Clyde in south Lanarkshire, Scotland, involved the graphical representation of physical survey results shown against customised map data. Consultants created a series of 3D visualisations, photomontages, ZTVs (zones of theoretical visibility) and digital terrain and elevation models that accurately predicted how the farm would appear.

Essentially, whether you call it a map or a “spatial context”, the point of using geographic information is to help extract value from data and provide a tangible return on investment. A mapping interface can inform vital decisions by showing information in a graphical form that can never be achieved by tables of figures or text alone.

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January/February 2009

And another example can be seen in northwest Portugal, where the December 2008 commissioning of the 240MW farm at Ventominho, also required a wide array of geographic assessments to be carried out during design and construction. Complex logistical issues had to be tackled to connect five sub-farms across a 30km zone with a single point of connection to the electricity grid.

EU wind focus/location intelligence

Location intelligence Deciding where to site a wind farm involves a range of criteria that can be termed “location intelligence”. More than simply a map, location intelligence concerns the ability to process, manage and share different kinds of information relating to a particular point or wider geographic area. The concept has evolved from the rather specialist preserve known as geographic information systems or GIS. These are essentially sets of software tools working together to create, manipulate and present digital map data on screen.

In a GIS that supports a site location map for a proposed wind farm, additional statistical data will typically be imported as files from a spreadsheet to a server-based database system. A statistical program then helps to categorise data inputs and define the geographic area parameters. This can help developers compare different turbine positions in relation to wind speed, grid capacity, power lines, visual intrusion and other factors. Finding the optimum position for a turbine can improve the efficiency of energy production and protect against unnecessary costs. That goes for both single turbines and industrial-scale farms whether on- or offshore.

Onshore, mapping at a scale of 1:50,000 is ideal for looking at the surrounding geographic context of a proposed development, including road infrastructure. Closer in, scales higher than 1:25,000 offer more detail, with individual building outlines, critical access routes and field boundaries coming into view. Preliminary site investigation must then take into account even more local factors such as slopes, lines of sight, ridge lines and gradients. These are contained in digital surface and terrain models, 3D elevation data and high-resolution aerial imagery that matches underlying mapping through a process called orthorectification.

Location, location, location – the need for better grid access Wind power developers across the EU have for years bemoaned the lack of a coherent grid strategy for transferring power between different Member States; many of the grids are owned by vertically-integrated power players, and this inevitably leads to an unfair advantage when it comes to allowing wind power onto a grid. According to the European Wind Energy Association’s (EWEA) Christian Kjaer, the grid is a monopoly and should be regulated as such, because “if you own production, and if you own grid assets within the same Corporate structure, due to the nature of the whole electricity market the grid is a wonderful way of optimising profits but it’s not a very market-friendly way”. However, better news might be at hand, and EWEA themselves have welcomed the key role given to offshore wind energy in the European Commission’s Strategic Energy Review (SER) published late in 2008. The review includes a commitment to publish a blueprint for a North Sea offshore grid. With 1,486 MW of capacity currently installed offshore and 30,882 MW more capacity planned by 2015, investor interest is high, but the sector needs a European legislative framework, including a dedicated offshore grid to reach its full potential. Although nine countries - one-third of the EU Member States - now have operational offshore wind farms, the offshore electricity infrastructure needs to be vastly improved and the overall electricity grid updated and reinforced. Crucially, the European Commission gives one of its aims in the Strategic Energy Review as to “ensure the development of the grid to permit the achievement of the EU’s renewable energy objectives”. “An offshore grid and increased interconnector capacity will allow large amounts of offshore wind energy to be integrated into the electricity

network, while improving the functioning of the internal electricity market” Kjaer added.

integrated power market and greatly enhance security of electricity supply.

A section of the SER is devoted to the importance of renewables. It gives the Commission’s intention to identify and tackle barriers to their development, starting with the tabling of a communication entitled “Overcoming barriers to Renewable Energy in the EU” in 2010. This decision demonstrates that the Commission is aware of the need to reduce obstacles and is actively taking steps to do so. The SER will provide the basis for an Energy Action Plan, which should be adopted at the Spring Council 2010 and form the new EU energy policy.

Once installed, EuropaGrid will consist of a large grid of sub-sea AC and DC cables. These will connect Ireland with the UK and France and the UK with France and Belgium. Future interconnector projects will connect other countries in Europe and interconnectors will be linked to form a “mesh” or a grid.

Commercial grid operator seizes the moment Meanwhile Imera Ltd, a Dublin-based asset development company specialising in subsea power interconnectors and power transmission grids, has received EU approval for its first interconnectors linking Ireland and the UK. The EU approval came in January 2009 as an EU Exemption for Third Party Access on Imera’s East West Interconnector (Ireland -UK). According to Grace Samodal, senior VP, commercial and trading, at Imera, “This exemption allows us to operate on a merchant basis.” At present, Imera holds five licences to build, own, and operate interconnectors and is actively developing interconnectors between Ireland and the UK, France and the UK, and Belgium and the UK. These projects form the foundation for EuropaGrid. The company is now set to build the North Sea and Atlantic electricity grids, connecting key markets and offshore wind farms as the foundation of a pan-European offshore electricity network. The company claims that EuropaGrid will enable the development of a true European

Connections to this grid for large offshore wind projects will be provided in order to connect all major wind projects and national transmission systems in Europe. Rory O’Neill, Imera’s ceo, said, “there are two main factors driving the development of the North Sea Grid – the EU’s call for increased interconnection across Europe as a priority issue, and its target of 20% of its required energy from renewable sources by 2020. Imera’s EuropaGrid will not only fast-track increased cross-border interconnection in Europe, but also enable enormous growth in renewable generation developments.” Imera’s approach is expected to allow electricity produced from offshore wind generation to be traded in the single electricity market. It is also said to be the most efficient way of building interconnectors and transmission connections for offshore generators as it eliminates duplication and unused capacity on sub-sea cables. And O’Neill added, “because we are a private company, we can build networks faster and cheaper than most regulated organisations. We also have access to the largest fleet of specialised cable-laying vessels and marine engineering expertise through our parent company, Oceanteam.” Imera is currently raising over €100M in investment to finance the development of the first phase of EuropaGrid.

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EU wind focus/location intelligence

Dena believes it is necessary to identify pilot zones in relatively shallow waters within 50km of the coast and to lay bundled cables into an expanded onshore grid. The agency says laying many parallel cables through sensitive ecological areas such as the Wadden Sea would create a serious risk to the undersea environment. Belgium provides another national case study of the use of location intelligence. There, successive Government directives on wind farming have also laid down criteria for the selection of zoning, and hence emphasised the benefits of accurate geographic information.

The European Wind Atlas – and beyond

Consultants create a series of 3D visualisations, photomontages, ZTVs (zones of theoretical visibility) and digital terrain (pictured) and elevation models, and use them to accurately predict how wind farms appear on the landscape.

Precise geographic data can be used to: ■ Help develop accurate analyses; ■ Present site plans for the official planning approval process; ■ Deliver ongoing project management; ■ Provide contextual information to enable

In the construction phase of an offshore farm, for example, GIS can help engineers and project managers to monitor and track activities as they happen on and under the sea. This can be vital for ensuring the health and safety of personnel and the protection of kit and infrastructure assets.

insurers to assess risk and provide cover for the turbine machinery, connections and cabling; ■ Mapping can also show noise contours around a potential site to help influence design and address any abatement needs. Bespoke web services are enabling users to embed mapping components directly into their database applications, thus replacing shipments of off-the-shelf data stacks that require onward processing. This trend towards web-based location intelligence is opening up engineering-grade data

And combining GIS and the internet allows different layers of information to be fed in to multiple workstations and mobile units, giving different users an up-to-date picture of weather conditions, wind speed, boat movements, wave heights and so on. All the information is captured, referenced, connected, analysed and stored online. In Germany, the renewables industry has long recognised the importance of location to the viability and efficiency of wind farms. The push to offshore generation is in part down to a lack of suitable land for onshore developments and the influence of stricter planning requirements.

for mainstream use that was once the sole domain of geographic technologists.

Benefits of GIS GIS as a technical subject, far from being the preserve of experts, is easy-to-use, and its practical applications are likely to benefit sectors such as the wind power industry.

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renewable energy focus

On the research side, the Deutsche EnergieAgentur (dena), has used geographic information in a study of how best to integrate on- and off-shore grid capacity. One of the considerations was the need to compensate for the sizeable extra cost of laying foundations and grid connections for the growing number of offshore turbines.

January/February 2009

As with other EU countries, Belgium looked to the European Wind Atlas as a starting point for assessing wind energy applications. This atlas was first published in hard copy in 1989. It was intended as a comprehensive data bank of the wind climate across Europe, containing statistics from more than 200 weather stations and a software pack for producing regional charts of wind speed and directions. Researchers at the University of Brussels, acting on their agreed national criteria, then published an inventory of suitable locations based on regional zoning maps. This phase considered issues such as planning and building regulations and further investigations into topographic and environmental issues. The next step was to work with utility companies to examine the capacity of the grid and cost of connecting with preferred locations. The study produced a “capacity map” to help compute the bulk cost of wind-generated electricity. The growth of professional standard mapping in the wind farm sector has now been strengthened by advances in surveying that make it possible to measure and portray the lay of the land in centimetric detail so that the most optimal positions for power facilities can be found. Laser-driven airborne techniques, aerial photography and satellite imagery are central to the mix, along with ground-based data capture fixed with GPS. All of this can sit within a common geographic reference framework for ease of sharing and associating data. An example of such a framework is OS MasterMap in Great Britain. At the same time, the trend towards online delivery and web services means developers can have a fully hosted “location solution” brought direct to the desktop rather than

EU wind focus/location intelligence

UK offshore boost to move forward The UK Government recently concluded its study on locations for future offshore energy developments, identifying scope for between 5,000 and 7,000 more offshore wind turbines. The conclusion of the UK Offshore Energy Strategic Environmental Assessment states that “there are no overriding environmental considerations to prevent the achievement of the offshore... wind elements of the programme”. The Department of Energy and Climate Change minister Ed Miliband said in a statement that “in terms of electricity, offshore wind power could potentially make the single biggest contribution to our 2020 renewable energy target”. Renewable energy is central to the UK Government’s objectives to secure diverse energy supply and to reduce carbon dioxide emissions by 60% by 2050. The Government has set a target to generate 10% of the UK’s electricity supply from renewable sources by 2010. With onshore wind farms already making a considerable contribution in the UK, the new horizon for larger scale development lies offshore. Offshore wind is a new activity for The Crown Estate – the body which owns the coastline around the UK - and areas of seabed have already been made available through two rounds of previous development since 2000. A third round of development is now underway (see image), with 96 ‘entities’ having expressed an interest in developing sites. Developers that registered have been invited to bid for one or more of 9 development zones identified through the Marine Resource System by The Crown Estate. Successful bidders will have exclusive rights to develop wind farms in specified Zones, in partnership with The Crown Estate. It is hoped that development of Round 3 zones will lead to 25 GW of wind power in by 2020, following around 7.2 GW resulting from the earlier rounds.

just a data feed. This has benefits in data storage, copyright management and time and cost savings. Hosted services such as eMapSite provide multiple search criteria and the means of exporting data in different formats for CAD, GIS and graphics software. Looking ahead, it is likely that more and more site projects will be managed through dedicated web resources, just as in other land and property sectors that use advanced mapping solutions. In larger wind energy construction projects, for example, authorised consultants and contractors will increasingly be given appropriate tiers of access to site plans and other map data through secure log-ins to assist with asset management, health and safety, information storage and analysis. One of the core considerations going forward will be the need to strike the right balance between cutting carbon emissions overall and sustaining biodiversity around specific site locations. In the UK, guidance produced by the British Wind Energy Association and nature conservation bodies recognises the potential benefits of wind energy as long as the “right development is in the right location”. In this regard, geographic boundary analysis can help to ensure wind farms do

not cause adverse effects on the integrity of nature reserves, Special Areas of Conservation or Sites of Special Scientific interest. European and national legislation also governs the protection of plants and animal species through the mapping of bird migration routes, local flight paths, foraging areas and cliff, headland, valley, ridge and other habitats. When adjacent wind farms are proposed, geographic information can help to show the wider cumulative impacts on biodiversity through scenario models.

Return on investment Essentially, whether you call it a map or a “spatial context”, the point of using geographic information is to help extract value from data and provide a tangible return on investment. A mapping interface can inform vital decisions by showing information in a graphical form that can never be achieved by tables of figures or text alone. For example, viewing a fly-around animation built with geographic co-ordinates, 3D visualisation tools and topographic and elevation mapping can help bring a proposed development to life on screen – ideal for presentations, planning applications and reports. The geographic context can help

clarify the development proposition to stakeholders and allow engineers to iterate turbine position in response to wind models, accessibility, surface geology and visual impact. A key challenge for map data providers: to work with consultancies and wind energy companies to continue to enhance data quality and functionality. Solutions should be available in industrystandard development environments such as Javascript and use internationally recognised protocols such as XML (eXtensible Markup Language), WMS (Web Map Service) and WFS (Web Feature Service). The requirements of application developers and solution providers are best served through a suite of accessible, interoperable web services that adhere to these standards. For the end user, the watchwords are accuracy, cost-effectiveness and ease-of-use.

About the author Justin Saunders is co-founder and technical director of the UK mapping provider, eMapSite (http://www. emapsite.com/renewables), and a member of the British Wind Energy Association (http://www.bwea. com).

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49

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EU wind focus

Siemens Wind Power: a profile THE SIEMENS WIND POWER BUSINESS IS A FORCE TO BE RECKONED WITH. ACTIVE IN THE WIND INDUSTRY FOR 25 YEARS, IT HAS 5,600 EMPLOYEES WITHIN AN ENERGY DIVISION EMPLOYING 73,500 AND 7,800 OF ITS WIND TURBINES HAVE BEEN INSTALLED WORLDWIDE, EQUIVALENT TO ALMOST 9GW OF INSTALLED CAPACITY. RENEWABLE ENERGY FOCUS TALKS TO CEO ANDREAS NAUEN ABOUT THE COMPANY’S PLANS FOR THE FUTURE.

Alice Hohler and David Hopwood

Testing times: Erection of the first Siemens direct drive test wind turbine near the city of Ringkøbing in Denmark (copyright Siemens). Siemens Energy will test two 3.6 MW wind turbines with direct drive (DD) technology for a minimum of two years. The purpose of this project is to assess whether direct drive technology is competitive with geared machines for large turbines. The wind power business is one of the major contributors to the Siemens environmental portfolio.

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EU wind focus/company profile

The Siemens Wind Power Business Unit is part of one of the world’s leading engineering groups. This not only gives it a considerable edge when it comes to R&D, but also enviable access to a large balance sheet, a presence in many other renewable technologies, such as solar and biomass, and access to many of the components it uses in its turbines from other parts of the Siemens group. But this position of strength doesn’t make Andreas Nauen, ceo of Siemens Wind Power, at all complacent, and Siemens will need to take advantages of all its resources and scale if it is to sail through the current economic climate unscathed. Many are predicting a tough year for the windpower industry in 2009, certainly in the first six months, with less project activity and much tighter margins along the value chain. As clean energy investment specialists’ New Energy Finance predict, “the continued lack of credit investment finance worldwide, and tax equity in the US, means that turbine manufacturers will see sharp falls in their order backlogs for the first two quarters of 2009. Good deals will still go ahead, backed by club debt deals, but it will feel like hard work”. One of the most sobering lessons of the credit crunch to date has been that even the world’s largest institutions are not immune, so how does Siemens think it will be affected? “In recent years the wind power industry has seen an unprecedented growth phase,” begins Nauen, “but unfortunately the global economy is currently experiencing a slow down due to the financial crisis. This will also impact the wind power industry, including Siemens. Up until now, we have not had any cancellations of orders received. However, we are experiencing delays with future wind projects, because many of our customers are finding it more difficult to obtain financing. And as a consequence, the wind power industry will face lower growth rates than expected”.

Diversification key Nevertheless, Nauen believes that Siemens Wind Power’s diversification will help it weather the storm. Siemens is commercially, geographically and technologically diversified. Not only is it active along the wind power value chain – from turbines to grid connection – but its operations are increasingly global, including recent expansion in the US where renewable energy is poised to take off under Barack Obama’s presidency (developments in recent weeks have seen Obama throw the full weight of his political aspirations behind clean energy – see Obama: prospects for Alternative Energy, page 88). Furthermore, Siemens has been establishing a leading position in offshore wind, building on its established track record onshore. In October 2008, Siemens announced that it will supply E.ON with 90, 2.3MW wind turbines for the Rødsand II offshore wind farm in the Baltic Sea. With an installed capacity of 207MW, the project will be one of the largest offshore wind farms in the world and is due to be built in 2010. The deal, which includes a two-year service contract, is worth around €275 million.

Offshore wind farm Burbo: Burbo Bank Offshore Wind Farm in Liverpool Bay with 25 wind turbines supplied by Siemens Energy (copyright Siemens). The wind turbines of type SWT-3.6-107 are rated at 3.6 MW each. The offshore wind farm was completed ahead of schedule in only 43 days, and has a total installed capacity of 90MW – supplying power to more than 80,000 households.

completed in 2011. And in September 2008, Siemens was awarded a €87 million contract to connect the 300MW Thanet wind farm to the UK grid. Siemens’ offshore success is based on strong sales of its 3.6 MW turbine, of which 245 will be installed in four projects between now and

Total Siemens offshore capacity ■ Installed*: ■ Orders: ■ Total:

628 MW 1183 MW 1811 MW

Offshore the key? Nauen believes that the E.ON deal is just one that is consolidating Siemens’ position as a leader in the offshore wind industry. In August 2008, Siemens won the contract to supply (and grid connect) 140 turbines to the largest offshore wind farm in the world, the 500MW Greater Gabbard offshore wind farm off the UK coast, due to be

Siemens offshore turbines installed to date Turbine types

Installed*

Orders

Total

SWT-2.3

299 MW

416 MW

715 MW

SWT-3.6

284 MW

767 MW

1051 MW

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EU wind focus/company profile

Siemens offshore projects – since 2000 2000 Middelgrunden, Denmark ■ Location: near Copenhagen, Baltic Sea; ■ Installed Capacity: 40 MW; ■ Scope of supply: 20 * 2.0 MW; ■ Distance to shore: 3,5 km, Water depth 2 – 6 m; ■ Operator: Dong Energy, Middelgrundens Vindmøllelaug. 2002 Samsø, Denmark ■ Location: near Samsø, Baltic Sea; ■ Installed Capacity: 23 MW; ■ Scope of supply: 10 * 2,3 MW; ■ Distance to shore: 3,5 km, Water depth: 20 m; ■ Operator: Samsø Havvind A/S; 2003 Rødsand (Nysted), Denmark ■ Location: Southern Denmark, Baltic Sea; ■ Installed Capacity: 165,6 MW; ■ Scope of supply: 72 * SWT-2.3-93; ■ Distance to shore: 6- 10 km , Water depth: 6 – 9,5 m; ■ Operator: Dong Energy, E.on Sweden. 2007 Lillgrund, Schweden ■ Location: Öresund, near Malmo, Baltic Sea; ■ Installed Capacity: 110 MW; ■ Scope of supply: 48 * SWT-2.3-93; ■ Distance to shore: 10 km, Water depth: max. 10 m; ■ Operator: Vattenfall.

Burbo Banks, Great Britain ■ Location: Liverpool Bay, Irish Sea; ■ Installed Capacity: 90 MW; ■ Scope of supply: 25 * SWT-3.6-107; ■ Distance to shore: 6 – 8 km, Water depth: max. 8 m; ■ Operator: Dong Energy. 2008 Lynn / Inner Dowsing, Great Britain ■ Location: Greater Wash, East coast of England, North Sea ■ Installed Capacity: 194.4 MW ■ Scope of supply: 54 * SWT-3.6-107 ■ Distance to shore: 5 km, Water depth: 10 m ■ Operator: Centrica 2009 Gunfleet Sands, Great Britain ■ Location: Thames estuary, North Sea ■ Installed Capacity: 108 MW ■ Scope of supply: 30* SWT-3.6-107 ■ Distance to shore: 7 – 9 km, Water depth: 8 m ■ Operator: Dong Energy Gunfleet Sands II, Great Britain ■ Location: Thames Estuary, North Sea; ■ Installed Capacity: 64,8 MW; ■ Scope of supply: 18 * SWT-3.6-107; ■ Distance to shore: 8 km, Water depth: 8 – 18 m; ■ Operator: Dong Energy.

2012 for customers such as Scottish and Southern Energy, Centrica plc, DONG Energy, and RWE AG. Offshore wind is therefore something of a priority for Siemens. “Maybe we are the only ones who really foster and really try offshore because we believe there are completely different market rules,” says Nauen. It has dawned on the wind industry in recent times that simply taking offshore technology and dumping it 60 miles out in the sea isn’t good enough – new, specific offshore technology is needed: “As a turbine supplier you need to be confident that your technology works offshore in harsh environments. Siemens has 17 years’ experience in offshore wind power and we know that our turbines work reliably in the sea. Some competitors don’t have the same experience with offshore wind power that we do”. In addition to this approach, Nauen also believes that Siemens’ ability to supply offshore turbines as well as connect them to the grid gives it an edge over other manufacturers. Recently, Siemens connected the Lillgrund wind farm in Sweden and the Lynn / Inner Dowsing wind farm in the UK to their respective power grids. For both projects Siemens also delivered the wind turbines. However, Siemens has also bid and won orders for offshore wind farms without Siemens turbines. Siemens’ share of the offshore market, based on turbines installed between 2000 and 2007, is currently 39%, second only to Vestas with a

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Rhyl Flats, Great Britain ■ Location: North Wales, Irish Sea; ■ Installed Capacity: 90 MW; ■ Scope of supply: 25* SWT-3.6-107; ■ Distance to shore: 8-10 km; ■ Operator: RWE npower renewables. Horns Rev 2, Denmark ■ Location: Blåvandshuk, North Sea; ■ Installed Capacity: 209.3 MW; ■ Scope of Supply: 91 * SWT-2.3-93; ■ Distance to shore: 27-35 km; Water depth: 9-17 m; ■ Operator: Dong Energy. 2009/2010 Greater Gabbard, Great Britain ■ Location: Thames estuary, North Sea; ■ Installed Capacity: 504 MW; ■ Scope of supply: 140* SWT-3.6-107; ■ Distance to shore: 25 km, Water depth: 32 m; ■ Operator: Scottish & Southern Energy. 2010 Rødsand II (Nysted II), Denmark ■ Location: Southern Denmark, Baltic Sea; ■ Installed Capacity: 207 MW; ■ Scope of supply: 90 * SWT-2,3-93; ■ Distance to shore: 25 km , Water depth: 5,5 – 12 m; ■ Operator: E.on Sweden.

56% share. However, its market share is expected to grow significantly based on installed turbines and firm orders up to 2012, overtaking Vestas, and climbing possibly even higher. Taking current order volumes and forecasting offshore growth, Emerging Energy Research believes Siemens could take as much as 47% of the offshore market by 2012. Nauen’s confidence that offshore will be increasingly important for Siemens reflects this statistic: “A round number would be for offshore to account for a quarter of our business and I see definitely that coming,” he says.

Direct Drive technology Siemens’ direct drive technology, currently under trial, has helped boost its profile in the onshore and offshore markets. Siemens acquired the technology in 2004, with its acquisition of Bonus Energy A/S, the wind turbine manufacturer, which had been working on direct drive for almost 10 years. However, it has taken several years to reach beta testing. The appeal of direct drive is the absence of a gearbox, which means fewer moving parts in a turbine, making it more reliable and durable and less expensive to maintain (see ‘making wind more efficient’, pages 40-42, Renewable Energy Focus November/December 2008). On the downside, direct drive turbines are around 20% heavier than their gearless counterparts, although Siemens expects to reduce this differential over

EU wind focus/company profile

time. Overall, though, lower O&M costs make direct drive turbines particularly attractive for offshore use, where operating costs are almost twice those of onshore turbines, and unplanned maintenance can cost as much as 10-15 times more. Siemens is not the only turbine manufacturer investing in direct drive, but it is in the spotlight as it is in the process of testing two different direct drive 3.6MW turbines using permanent-magnet excited generators, one from Siemens Industry Sectors’ Large Drives Business Unit, and the other from marine generator supplier Converteam. The first model started testing in July 2008, and the erection of the second turbine has been postponed because of the late delivery of some components. However, Siemens is confident that the second trial will begin soon. The trials will take two years, so it is hardly surprising that Nauen is reticent about early results on the technology, given what is at stake. “It just started, so it’s too early to give any indications. We have to await the results of the tests,” he says. Direct drive is by no means Siemens’ only cutting edge technology. Nauen is particularly proud of the company’s patented jointless blade manufacture. The bigger turbines get, the more their aerodynamics and robustness are pushed to the limit, all the more so when they are used offshore where wind speeds tend to be higher. And again when it comes to offshore turbines, low O&M is a prime consideration; there is little margin for error. Siemens’ ‘one-shot’ fiberglasscoated blade technique not only means there are no joints to be put under stress, but also fewer adhesives and chemicals are used in the manufacturing process.

Moving forward Nauen has plenty to look forward to in an uncertain world. His outlook for the business is positive. In spite of a slight slow-down in the US, Siemens is making inroads in North America, and recently completed its first onshore project in Canada, where it plans to expand. “If you come to Europe, we see still the UK doing fine, especially in Scotland of course. Then there are some other countries picking up now; Italy, France. And Eastern Europe, with countries like Poland, Croatia and so on. Then you have all offshore, which we see progressing at the moment from the UK, Denmark, further south to Germany and then let’s see how far along the European coast south we may get. So that is Europe. For the time being, Asia is mostly Australia and New Zealand, simply because we can compete there with imported technology. But we are analysing how we can get started in China and have some activities going on there; we are already very active on the supply chain side. So business is advancing,” he says. You could say that.

About the authors: David Hopwood is editor of renewable energy focus magazine. Alice Hohler is a freelance correspondent.

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EU wind focus

Turbine innovation at BWEA30 IT IS NOWHERE ENGRAVED IN STONE THAT THE PREVAILING THREEBLADE “PROPELLER ON A STICK” WIND TURBINE MODEL WILL STILL BE DOMINANT TWO OR THREE DECADES FROM NOW. TECHNICAL INNOVATION IN WIND ENERGY IS ALIVE AND WELL, AS EVIDENCED AT THE BRITISH WIND ENERGY ASSOCIATION’S 30TH ANNIVERSARY SHOW IN LONDON LATE LAST YEAR. SO IF YOU’RE INTERESTED IN WHICH INNOVATORS ARE CHALLENGING THE PREVAILING MODEL, READ ON…

NHeolis blades do not generate lift in the same way as a conventional turbine but instead exploit the Venturi effect. This occurs when a “fluid” (in this case air) is driven down a tube that is wider at the entry end than at the exit, like a windsock at an airfield. The resulting constriction speeds up the flow and increases the pressure in the downstream end of the tube/windsock.

George Marsh

As a precursor to the European Wind Energy Association’s EWEC conference – taking place in Marseille in March – it seems the perfect time to revisit some of the more ingenious devices that were on display in London, late last year, at the BWEA’s 30-year anniversary event. French company NHeolis, for example, featured a demonstration unit at the event, and claims a breakthrough in wind turbine design with an innovative blade form that amplifies the strength of the wind impinging on the blade, thus increasing rotor efficiency. Although in this case the rotor axis is still horizontal, the blades/ sails are very different from normal blades. A conventional wind turbine blade operates like an aircraft wing on its side, developing lift by virtue of its aerodynamic shape. Because the blade is attached to a horizontal shaft, this lift is converted into turning moment. NHeolis blades do not generate lift in the same way but instead exploit the Venturi effect. This occurs when a “fluid” (in this case air) is driven down a tube that is wider at the entry end than at the exit, like a windsock at an airfield. The resulting constriction speeds up the flow and increases the pressure in the downstream end of the tube/windsock. Imagine a windsock being cut in half longitudinally, then take one of the concave halves and attach the wide end to a horizontal shaft such that the blade/”windsock”

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Aerospace Research Centre, and wind tunnel tested at CNES, the French Centre for Scientific Research, is two metres long and weighs some 21kg. Maximum rotor diameter (at the trailing edge) is 2.3m. NHelios says that the system is three or four times more compact than a standard turbine, but provides the same power. CNES is undertaking modelling studies to assess the viability of larger turbines.

AeroCam

According to Stephen Else, president of BroadStar, the company can deliver 250kW and 500kW AeroCam machines for US$250,000 and US$500,000 respectively, making it the “first turbine to break the US$1/watt cost barrier”.

extends at an angle downwind and can rotate with the shaft (see diagram). Attach two more similar half ”windsocks” to the shaft so that all three form the “blades” of a wind turbine. Although each “windsock” blade lacks the forward facing half of a full tubular structure, the constricting effect on captured air is maintained by the pressure of the oncoming wind. Thus, if it is correctly aligned, thanks to the Venturi effect, the blade reacts to the wind by trying to move away from it, thus turning the shaft. NHeolis produces its highly volumetric blades in carbon-epoxy composite, each half “windsock” sail (the French company calls it a shroud) being mounted to and stiffened by a composite tube or spar. The rotor shaft drives a synchronous generator. The entire assembly is mounted on a vertical pivot so that it can rotate into wind, driven by a fixed rudder. The initial model develops 3kW (nominal) and can be mounted on a steel lattice tower or on a roof. It is said to behave well in turbulent flow so that nearby obstacles do not unduly impede operation. A cut-in wind speed of 2.5m/s (9km/s) and maximum speed, verified in wind tunnel testing, of 45m/s (164kph) are claimed, giving an unusually wide operating window so that an annual output in the region of 3400kWh might be expected.

Another application of intelligent science, at least according to Dallas, USA-based BroadStar Wind Systems, is the AeroCam wind turbine concept, which provided a compelling visual focus at BWEA 30. This too has its rotor turning around a horizontal axis but is far from conventional. An AeroCam rotor is reminiscent of a water wheel, but more “articulate”. Each of the parallel “paddle” rotor blades alters its pitch continuously, according to where it is in its 360 degree rotational cycle. Those at the top of the trajectory and advancing into wind become near-horizontal so that optimum ”wing” lift is generated over the aerodynamic profile, thereby exerting maximum turning moment on the rotor. Retreating blades become more nearly vertical, providing downwind “sails” so that they too contribute to the turning effect. The cyclical change of blade orientation is brought about mechanically by an offset cam system. Like the NHeolis, BroadStar’s patented system is said to be able to operate in wind extremes. Some models can extract energy from air flows as low as 4mph, to winds in excess of 80mph. Efficiency is said to be high because each blade sees air impinging at equal speed all the way along its length, though the design lacks the low airspeed, low-lift regime experienced near the hub of a conventional HAWT. Consequently, says BroadStar, AeroCam is approximately 30% smaller than a normal HAWT developing similar power.

Electromagnetic and aerodynamic brakes are incorporated. Noise is said to be minimal thanks to lower wind shear.

Because the system’s rotors are relatively small vertically, hub heights are low and special cranes are not needed for installation and maintenance. The horizontal orientation of the blades makes the system inherently stable, say the makers, enabling it to operate in turbulence with low noise, vibration and wear. Devices, particularly single-rotor types, are therefore readily integrated with low and high-rise urban roofs.

Each blade, the design of which was optimised with the help of ONERA, the French

They can be deployed in architectural enclosures designed to concentrate airflows and

A third turbine concept aired at the BWEA show was Nordic Windpower’s N1000 1MW two-blader. This company, originally Swedish but now a US enterprise, has revisited the two-blade WT configuration that fell out of favour two decades or so ago, arguing that this is the time to resurrect its advantages.

increase wind speeds. According to Tom Stephens, BroadStar’s vice president of research and design, “because AeroCam packs so much efficiency into its compact configuration, it’s opening up opportunities to businesses and communities that could never have considered wind energy before. We believe this has the potential to redefine the market.” “Because it can be deployed at low level, AeroCam can be used to capture surface wind energy without disrupting the airflows that larger turbines need to operate effectively. This makes them suitable, says the company, for installing between large utility turbines at new and existing wind farms, thereby offering a means to enhance energy production. Barriers to wind energy development might be overcome by installing low-profile wind farms based on AeroCam, providing a higher power yield per square mile than conventional turbines. Small-scale generation can be contemplated by municipalities, making property assets from low-rise to commercial buildings and shopping malls to city parks their own generators. This point is emphasised by a recent agreement signed with US retailer JCPenney. AeroCams will be installed at a 1.6m ft2 distribution centre in Reno, Nevada. According to Stephen Else, president of BroadStar, his company can deliver 250kW and 500kW machines for US$250,000 and US$500,000 respectively, making it the “first turbine to break the US$1/watt cost barrier”. Else adds that AeroCam is well suited to off-grid distributed electricity generation, though with the additional possibility, where appropriate, of connecting to the grid via smart metres.

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can be used, making the blades both lighter and cheaper to produce than conventional equivalents. This, along with the decrease in the number of blades needed, reduces blade cost overall.

Blue H’s platform carries a modest demonstration turbine, but the company hopes to build a full-scale 90MW wind farm at 120m depth, off the coast of Italy.

Although a two-bladed turbine is less efficient than a three-blader, Nordic Windpower says that the difference in annual energy production of around 2%-3% can readily be compensated for by a 1% increase in turbine diameter. According to ceo Steve Taber, two-bladers originally fell out of favour less because of the disadvantages noted above, rather because the two-blade configuration had not successfully been modelled in software and was therefore more difficult to engineer. Now, he says, the company operates such a programme, developed and refined in Sweden over almost three decades.

Two-blader revisited A third turbine concept aired at the BWEA show was Nordic Windpower’s N1000 1MW two-blader. This company, originally Swedish but now a US enterprise, has revisited the two-blade WT configuration that fell out of favour two decades or so ago, arguing that this is the time to resurrect its advantages. Disadvantages, most notably fatigue and noise originally experienced with smaller “farm-scale” two-bladers, are scarcely noticed at utility scale, says the company. Visual disturbance that some members of the public felt with fast revolving small-scale rotors is less evident in slower revolving large rotors. One important advantage is that, unlike a threeblade rotor that has to be lifted to the hub by crane, a two-blader can be mounted to the nacelle on the ground, reducing deployment time and cost. Another is that, with only two blades to look after rather than three, maintenance costs are reduced. A third plus is that, thanks to the lack of a third blade, head weight is reduced. This means that, for the same power output, the drive train and gearbox can be less highly rated and therefore lighter. Basic wind turbine science says that, to capture a certain amount of wind, a rotor needs a certain aerodynamic area. Loss of area occasioned by adopting a two-blade configuration rather than three is compensated for by increasing the blade’s chord (edge-to-edge dimension or width). Blade thickness is then increased to maintain a blade thicknessto-chord ratio of about 15%-20%. A thicker blade is inherently a stronger one. Because of this form strength, less structural material

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Taber points out that a necessary prerequisite of a successful two-blade design is a teetering hub – a term adopted from the helicopter world meaning that the blades are attached to the turbine shaft via hinges. Although these have only a small range of movement, +/− 2 degrees, this motion has a decisive influence on the loads acting on the turbine system. Associated damping ensures that dynamic loads are passed into the drive train more evenly, mitigating the vibration and fatigue that would otherwise ensue. These are further reduced by enclosing the gearbox, drive shaft and generator within a unified tubular housing which serves to retain the system and allows forces to dissipate away from the gearbox. Two twin-blade turbines, of 2MW and 3MW, operated for six years to 1988, provided invaluable base data. A second, subsequently commissioned 3MW prototype is still operating and has become the world record holder, claims Nordic, for power production and accumulated operating hours. Steve Taber indicates that it has seen 11 years in service with no major component failures and almost zero maintenance. The only attention required, he asserts, was an occasional service of the elastomeric hinges. Currently four N-1000 turbines are operating in Sweden. Caution shown by investors daunted by unfamiliar technology led to the unfortunate bankruptcy of the original Swedish company, which was subsequently acquired by US interests. Recently, investor Goldman Sachs took a gamble on the two-blade concept, injecting funds to enable the 1MW model to progress to market.

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The company itself is determined to move forward with its design. Alex Potier, global sales manager for Nordic Windpower, says, “with an innovative and cost-effective technology, our order book is growing strong. Over the next several years, the company is poised to earn the trust and respect of wind farm developers around the world as we continue to deliver new and reliable wind turbines designs.”

Nordic Windpower has revisited the two-blade WT configuration that fell out of favour two decades or so ago, arguing that this is the time to resurrect its advantages The world’s largest turbine? A fourth wind turbine concept, aired in an entertaining “Dragon’s Den” type session at BWEA 30 (Dragon’s Den being an English TV programme in which a panel of millionaire investor “dragons” pass judgment on entrepreneurial ideas), breaks the mould on scale alone, though its configuration is conventional. The Britannia 7.5MW machine, currently under development by Clipper Wind Power Inc, will have a 150m diameter rotor and a tower more than 100m high, substantially higher than Big Ben. As if this were not enough, “presenter” David Steele spoke of a potential 10MW machine currently under consideration. Advocating the merits of scale, Steele said, “we’re talking long distances offshore for machines

EU wind focus/turbine innovation

like this. The expense of working in deep water many miles from shore means it makes sense to maximise the available power for each installation. Thanks to advanced design, our 7.5MW machine will have a similar weight to a typical 5-6MW machine of today.” The technology of the world’s largest turbine is being adapted from that of Clipper’s Liberty 2.5MW turbine, which has earned plaudits from the US Department of Energy. A novel drive train architecture is said to be able to accommodate the low rotor speed, high torque and high point loads that characterise large-scale conventionally-configured machines. The Clipper solution is to mount the main rotor shaft firmly within twin taperedroller main bearings, so that shaft axial movement and misalignment are prevented, and split the input torque to four permanent magnet generators. Together with two-stage helical gearing, this approach greatly reduces the stresses found in standard three-stage planetary gearboxes used in today’s multi megawatt machines. Additionally, it provides redundancy in the load path and in case of generator outage. Other forward looking features likely to influence “Project Britannia” include the placing of high-speed gear sets in “cartridges” that can be replaced without gearbox removal, the provision of multiple inspection ports, an advanced gearbox health monitoring system, and an on-board jib hoist to facilitate on-site maintenance without the need for a crane. Permanent magnet generators are relatively simple, should require little maintenance and generate direct current, which is then converted by high-power electronics to alternating current at the required frequency. The first 7.5MW Britannia is already spoken for, having been ordered by the UK’s Crown Estate so that it can better appreciate the challenges faced in developing wind turbines for deep water deployment. Development is now proceeding at Clipper Wind Power’s British base at Blythe, Northumberland, with support from the UK’s North-East Regional Development Agency. The Blyth-based New and Renewable Energy Centre (NaREC) is to evaluate the drive train, rotor and generators. An erected prototype is expected to go on line in 2012. It will be interesting to see how Clipper’s concept fares against the direct drive (gearless) technology being investigated by Siemens Energy as it installs two machines, of 2.3 and 3.6MW power, off Denmark for a

Vertax’s VAWT, with its relatively few moving parts and lower stresses, could “serve for 40 years with minimal maintenance and high reliability”, according to the company.

two-year test period. Siemens’ cto, Henrik Stiesdal, has suggested that direct drive could compete with geared drive in large turbine sizes.

A vertical axis Vertax Wind Ltd believes a better answer for offshore could be the vertical axis wind turbine, engineered in sizes up to 10MW. Peter Hunter of Vertax told BWEA 30 delegates that a large VAWT would be a “steady plodder” compared with the more efficient “Formula 1” HAWT, but is just what the offshore sector needs because, with its relatively few moving parts and lower stresses, it could serve for 40 years with minimal maintenance and high reliability. The system could, says Hunter, keep working over a higher band of wind speed than conventional HAWTs, resulting in a higher capacity factor. A VAWT could drive a permanent magnet generator directly rather than through a gearbox. Much of the support structure could be concrete, saving cost and avoiding metal supply chain constraints. A stall regulation system is being trialled.

Floater Installing foundations in the seabed for enormous offshore machines could give engineers an equally enormous headache. One way around this is to avoid seabed structures altogether by installing turbines on floating

platforms, in the manner of many offshore oil and gas installations. Blue H, a firm registered in the UK but based in the Netherlands, has built a 25m wide prototype platform and located it in 113m of water off Brindisi, Italy, some 21km from shore. The platform carries a modest demonstration turbine, but the company hopes to build a full-scale 90MW wind farm at 120m depth in the region. As Neil Bastick of Blue H told the BWEA Dragons’ Den audience, “we think this is offshore wind’s secret hope for grid parity. There’s no assembly out at sea, no seabed preparation. Standard cranes can lower the tower and wind turbine aboard the platform in harbour or close to shore. You can do the work in the winter and tow the platform to its intended location in summer when the weather is kinder.” The platform is held in position by chains attached to counterweights on the sea bed. Bastick believes the system is best suited to depths over about 35m. And as we go to press it has been announced that Project Deepwater Turbine, a consortium led by Blue H and including BAE Systems, EDF Energy, CEFAS, SLP Energy and Romax, has been selected by the UK’s Energy Technology Institute (ETI) as one of the first projects to receive funds as part of its £1.1 billion initiative. This specific project will aim to develop an integrated solution for a 5MW floating turbine deployed offshore, in waters between 30 and 300 metres deep.

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Feature article

Full steam ahead for PV in US homes? THE US CONGRESS FINALLY VOTED TO EXTEND AND ENHANCE TAX CREDITS FOR SOME RENEWABLES, NOTABLY SOLAR. BUT WILL THIS PROVIDE THE BOOST THAT THE RESIDENTIAL SECTOR IN THE USA HAS BEEN WAITING FOR? MARK BOLINGER, GALEN BARBOSE, AND RYAN WISER OF THE LAWRENCE BERKELEY NATIONAL LABORATORY CONSIDER THE IMPLICATIONS OF THE LEGISLATION FOR EXISTING INCENTIVES.

In October 2008, the United States Congress extended both the residential and commercial solar investment tax credits (ITCs) for an unprecedented 8 years. It also lifted the US$2,000 cap on the residential credit, removed the prohibition on utility use of the commercial credit, and eliminated restrictions on the use of both credits in conjunction with the Alternative Minimum Tax. These significant changes, which apply to systems placed in service on or after 1 January 2009, will increase the value of the solar credits for residential system owners in particular, and are likely – in conjunction with state, local, and utility rebate programmes targeting solar – to spur significant growth in residential, commercial, and utility-scale photovoltaic (PV) installations in the years ahead. Significantly, there are three areas in which removal of the US$2,000 cap (on the residential ITC) will have significant implications for PV rebate programme administrators, PV system owners, and the PV industry: ■ Reduced rebate levels to at least partially compensate for the more-

valuable ITC; ■ Reconsideration of complementary low-interest loan programmes – “subsidised energy financing”; ■ Third-party financing.

Sign of things to come? SOLARA is the first development to be delivered under the California Energy Commission's Zero Energy New Homes program. This multi-family affordable housing complex is located in Poway, CA. The total 141 kW PV system, which is located on the roof of each building and most of the carorts, will function as 63 separate systems serving 56 families. Most of the cost of the PV system and energy efficiency upgrades to the project were covered by state and federal programs available to affordable housing developers (image courtesy of Community HousingWorks, Owner/Developer).

State, local, and utility PV programmes – effect of rebates With the exception of the smallest systems, which have not been impacted by the US$2,000 cap on the residential ITC, most residential PV systems installed – starting in 2009 – will realise significant additional value from the elimination of the ITC cap. State, local, and utility PV programme administrators may, in turn, wish to ratchet down the size of the rebates they offer, in order to stretch fixed programme budgets and avoid overstimulating the market. Indeed, at least three major PV programs have already reduced their incentive levels for residential PV as a result of the ITC cap removal, and others are considering the same. Working with the 2008 residential rebates (i.e. prior to the elimination of the ITC cap) and assuming that they were set at a level that provided the desired 58

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amount of support to the residential sector, figure 1 shows the maximum amount by which these rebate levels could – in theory – be reduced starting in 2009 once the ITC cap is gone; this assumes that system owners are not left any worse off than they are now on an after-tax basis – under current rebate levels and the US$2,000 ITC cap. Note that figure 1 assumes that rebates are non-taxable, which is the case if the rebate is provided through a “utility programme” (see details of the original report, noted at the end of the article, for a discussion of what constitutes a “utility programme”). This tax distinction is important because, if the rebates are considered to be federally taxable income, then a rebate recipient can claim the 30% ITC on the full cost (or “tax credit basis”) of the system. If, however, the rebates are not taxable income, then the rebate recipient must reduce,

$/W by which non-taxable rebate could be reduced

PV/US policy

$3.5 System owner’s income tax bracket does not impact results for non-taxable rebates $3.0 $2.5 $2.0 $1.5 $1.0

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Figure 1: Maximum amount by which a non-taxable rebate can be reduced in response to the removal of the US$2,000 cap on the residential ITC

by the amount of the rebate, the tax credit basis to which the federal ITC applies. The magnitudes shown in figure 1 would, therefore, be somewhat larger if taxable rebates were assumed.

means that the removal of the US$2,000 ITC cap provides greater benefit to a system receiving a smaller non-taxable rebate. Such a system can, in theory, therefore withstand a larger reduction in the size of the rebate.

For non-taxable rebates, the magnitude of the potential rebate reduction depends only on the starting rebate level as well as the size and cost of the system (figure 1 assumes that per-unit installed costs decline along a concave curve from US$10.50/W at 0.5 kW to US$7.75/W at 10 kW). As shown, small systems (0.5 kW–2 kW) cannot withstand as much of a rebate reduction as can larger systems, because smaller systems will benefit less from the removal of the US$2,000 cap (i.e. they were not as impacted by the cap in the first place). Above roughly 3 kW, however, the curves more or less level out, revealing that a rebate currently set at US$1/W could be reduced by as much as US$2.5/W (in theory, going negative) without leaving the system owner any worse off on an after-tax basis.

While the idea of shifting part of the cost of supporting residential PV to the Federal Government must look quite appealing to many State Utility and local PV programme managers, there are, nevertheless, several factors that programme managers may wish to consider when deciding whether – or by how much – to reduce residential rebate levels. These include:

Meanwhile, starting with a non-taxable rebate of US$4/W, the size of the potential reduction is smaller, at roughly US$1.25/W. Falling in between these two extremes are starting rebate levels of US$2/W and US$3/W. This rank-ordering makes intuitive sense: a small non-taxable rebate reduces the project’s “tax credit basis” by less than a large non-taxable rebate, which

Reacting to the Federal policy changes State, local, and utility PV program administrators must remain nimble in responding to the recent changes in federal solar policy: ■ Most obviously, programme managers may wish to reduce their

rebate levels to at least partially compensate for the more-valuable ITC; ■ Complementary low-interest loan programs that can be characterised as “subsidised energy financing” may no longer make sense for residential PV, and should potentially be re-tooled (to focus on providing “unsubsidised” support) or re-directed at other clean technologies for which subsidised energy financing is not as large an issue; ■ At the same time, third-party financing and ownership models that have recently begun to make inroads into the residential sector may now face a somewhat harder sell. Thus, there may be a continuing need for policies that address financial barriers and support innovative financing models.

■ PV system owners may have to wait up to a year or more (depending

on how early in the year the system is installed) before they file their annual tax returns and realise the benefit of the ITC. During this waiting period, the accrued dollar benefit of the ITC must effectively be financed by some other means, which renders the ITC less useful than an equivalent up-front cash rebate; In this light, it is worth noting that the idea of temporarily (i.e. for projects completed in 2009 and 2010 only) giving taxpayers a choice between the existing ITC or a cash grant of equivalent value (to be disbursed within 60 days of project completion) has been included in an early version of the much-anticipated “stimulus bill” currently being debated by Congress; ■ With the US$2,000 cap removed, the uncapped ITC may be too large for some taxpayers to absorb in the first year, or perhaps ever (in the most extreme cases). Although any unused portion of the credit can be rolled forward at least through 2016, doing so reduces the value of the credit in current dollars; Again, the grant program proposed in an early version of the stimulus bill (and described in the previous bullet) would address this issue, as would a “refundable” ITC, which has also been discussed (i.e., if the taxpayer cannot make use of some or all of the credit in the year it is generated, the government would refund the difference via a cash payment); ■ In recent years, the PV market in the US has been increasingly dominated by the commercial sector. Maintaining the status quo on residential rebate levels, or reducing them by less is possible, and may help to restore more of a balance between the residential and commercial markets; ■ Somewhat related, figure 1 assumes that current rebate levels are set at the “correct” level to provide the desired amount of support for the residential sector. If instead current residential rebate levels are too low to adequately stimulate desired market demand, then the results shown in figure 1 may be too aggressive. renewable energy focus

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About the report This article is adapted from a longer Berkeley Lab report entitled “Shaking Up the Residential PV Market: Implications of Recent Changes to the ITC” and available at http://eetd.lbl.gov/EA/EMP/cases/res-itcreport.pdf. This work was funded by the Clean Energy States Alliance, and by the US Department of Energy (the Office of Energy Efficiency and Renewable Energy, Solar Energy Technologies Program, as well as the Office of Electricity Delivery and Energy Reliability, Permitting, Siting and Analysis) under Contract No. DE-AC02-05CH11231.

■ Finally, leaving residential rebate levels unchanged should accelerate the

adoption of residential PV at no extra per-system cost to the programme. This motivation, however, must be weighed against the foregone benefit of any additional installations that could be supported by reducing rebate levels – and thereby stretching fixed programme budgets further.

Why could subsidised loan programmes lose their luster? A number of State and local Government agencies offer low-interest loan programmes to help finance the installation of PV systems. Although these programmes can ease the burden of purchasing a PV system, if the Internal Revenue Service considers such a loan to be “subsidised energy financing,” then the 30% ITC will only apply to the portion of installed project costs not financed by the loan. With the residential ITC capped at just US$2,000, the reduction or loss of the ITC due to the use of subsidised energy financing has – up to this point – not necessarily been a losing proposition. Depending on the specifics of the programme, attractive financing terms may actually outweigh the loss of the capped ITC. This is particularly true for larger residential PV systems, where the capped ITC represents a smaller proportion of the overall costs that need to be financed. Now that the cap has been lifted, however, much more economic value is at stake. A 4 kW system installed at US$8.5/W and receiving a US$3/W rebate will now be eligible for an ITC of either US$10,200 or US$6,600, depending on whether or not the rebate is taxable. The loss of this amount of tax credit value (or some fraction thereof, if only a portion or the system is financed through such a programme) will obviously impinge upon system economics much more than the loss of just US$2,000, and is likely to make even the most aggressive low-interest loan programmes uneconomical. Although low-interest loan programmes may continue to fill an important need for those residents who are unable to make efficient use of the uncapped ITC, it is now more important than ever to understand whether such programmes are at risk of being considered “subsidised energy financing,” and to take steps to minimise the potential for such a characterisation. Finally, it is worth noting that an early version of the stimulus bill currently being debated by Congress eliminates this “antidouble-dipping” provision altogether, which (if ultimately signed into law) would allow projects to benefit from both subsidised financing and the ITC without any of the negative consequences described above.

Third-party ownership structures may still have potential For several years now, the non-residential sector in the USA has benefited from third-party PV financing structures, including leasing and power 60

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purchase agreements (PPAs), that enable site hosts to “go solar” without the associated up-front costs and, in some cases, risks of ownership. By engaging “tax equity” investors with an appetite for tax credits, these third-party ownership structures also enable the efficient use of the substantial tax benefits (including the commercial ITC and accelerated tax depreciation) provided to a commercial PV project. Because commercial PV projects have historically received greater tax benefits than residential systems, one would think that – other potential benefits aside – the ability to monetise and pass along these greater tax benefits would have made the residential sector a particularly attractive market for commercial third-party ownership. Yet, due to a combination of heightened credit concerns, larger proportional transaction costs, and a simple need to first gain comfort with the structures in a commercial setting, third-party ownership has been somewhat slower in coming to the residential sector than to the commercial sector. Within the past year, however, several PV installers have begun to offer third-party leases and PPAs to the residential sector. Just as these offerings have begun to make inroads, however, the elimination of the US$2,000 residential ITC cap starting in 2009 has removed a major advantage of these third-party ownership structures in the residential sector. Specifically, going forward, commercial and residential systems will be on roughly equal footing from a tax perspective, each receiving net tax benefits equal to about 30% of the installed costs on a present value basis. The loss of this tax-based arbitrage opportunity, however, does not necessarily sound the death knell for third-party ownership in the residential sector. As discussed earlier, with state and local PV programmes reducing their residential rebate levels in response to the ITC revisions, system owners having to wait up to a year or more to realise the tax benefits of the ITC, and “subsidised” financing programmes no longer making much sense for PV, there are likely to be fewer financing options available to cash-strapped prospective PV owners. This could potentially create a greater need for third-party ownership than currently exists. Furthermore, third-party ownership provides other potentially attractive benefits besides tax credit monetisation (e.g., no performance risk), which may continue to provide a compelling rationale for third-party ownership of residential PV systems. At the same time, however, many of the tax equity investors that have traditionally financed these third-party-owned projects – i.e. large banks and insurance companies – have withdrawn from the PV market as their need to shelter taxable income has disappeared along with their profits, amidst the global financial crisis. Furthermore, if some of the changes to the ITC proposed in early versions of the stimulus package (and described above) come to fruition – e.g. making the credit refundable, or exchanging it altogether for a cash grant of equivalent value – then the need for third-party ownership in the residential sector will likely diminish further.

Conclusion Although policy support for emerging technologies generally seeks to reward early adopters, in the case of the residential ITC, procrastinators have been the beneficiaries – initially in 2006 when the capped ITC was first implemented, 2008 when the US$2,000 cap was eventually lifted – starting in 2009 , and perhaps once again in 2009 as a result of the impending stimulus package, remains to be seen. Though welcomed by the industry and prospective PV owners, these changes in federal tax policy have required reactive planning at the state and local levels.

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Feature article

Can solar PV beat the downturn? NOT ONLY HAS THE USA EXTENDED THE ITC FEDERAL TAX INCENTIVE FOR 8 YEARS AND REMOVED THE UTILITY EXEMPTION SO THAT UTILITIES CAN NOW PARTICIPATE SEE FULL STEAM AHEAD FOR SOLAR PV IN US HOMES, PAGE 58, BUT OTHER COUNTRIES ARE TAKING THEIR OWN SIGNIFICANT STEPS TO BOOST SOLAR. IS THE TIME RIGHT FOR THE PHOTOVOLTAIC PV INDUSTRY  WITH ITS TECHNOLOGIES STILL A SMALL PART OF THE GLOBAL ENERGY MIX  TO SHOW FURTHER DRAMATIC GROWTH? OR WILL THE FINANCIAL CRISIS PROVE DIFFICULT TO RIDE OUT IN THE NEAR TERM?

First the good news. Despite the economic doom and gloom enveloping the world at present – which is bound to have an effect on clean energy – the solar PV industry still has a lot going for it. Aside from the arguments of climate change, energy security, and off grid potential in the developing world, the fact that the USA is increasingly seen as a huge potential market – supported by new President Obama – could help in time take some of the pressure off Spain and Germany (which have pretty much driven the industry in terms of demand in recent years, but in light of recent changes to those countries’ feed-in tariffs will cool). In October 2008, the United States Congress extended both the residential and commercial solar investment tax credits (ITCs) for an unprecedented 8 years. It also lifted the US$2,000 cap on the residential credit, removed the prohibition on utility use of the commercial credit, and eliminated restrictions on the use of both credits in conjunction with the Alternative Minimum Tax. These significant changes, which apply to systems placed in service on or after 1 January 2009, will increase the value of the solar credits for residential system owners in particular, and are likely – in conjunction with state, local, and utility rebate programmes targeting solar – to spur significant growth in residential, commercial, and utility-scale photovoltaic (PV) installations in the USA in the years ahead. In addition to the US move, Japan’s Government plans to restart its residential rooftop programme, and in Europe aside from the more mature markets of Spain (which has introduced a cap), and Germany (which

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Paula Mints, David Hopwood

has instituted triggers to control programme growth), many other countries now have introduced feed in tariffs – from Ukraine to Bulgaria. And EU markets such as France and Italy are being touted as the next big movers. The most attractive feed-in tariffs can now be found in Italy. The market is growing rapidly as investors have discovered the opportunities, certainly with currently decreasing module prices. In terms of size, Italy will still be smaller than Spain in 2009, but with many projects under development, Italy could become the second largest market in the world in 2010.

Spain Feed-In Tariff Rates

Classification

System Size

2009 Tariff (€/kWh)

Rooftop or BLDG 2009

< 20.0 – kWp

0.340

Rooftop or BLDG 2009

20-kWp – 2.0-MWp

0.320

Ground 2009

<10.0 – MWp

0.320

Rooftop or BLDG 2010

< 20.0 – kWp

0.306

Rooftop or BLDG 2010

20-kWp – 2.0-MWp

0.288

Ground 2010

<10.0-MWp

0.288

1

Degression According to the demand, 10% reduction per year if the cap is met, 50% raise if cap not reached in 2 consecutive terms.2

Term (years)

Cap (MWp)

25 26.7 25

240.0

25

233.3

25

29.3

25

264.0

25

206.7

Change in Spain: After a period of dynamic growth, Spain’s change to its Feed-in-Tariff (FiT) will cool the market.

PV/Market outlook

Table 1 – Regional PV demand, 2000–2008* Region/country

GW percentage (%) USA Canada

1407.4

10%

46.8

0%

North America

1454.2

10%

Latin America

173.0

1%

5761.1

41%

Germany France

88.5

1%

Netherlands

79.1

1%

Switzerland

73.8

1%

Spain

2303.0

16%

UK

38.4

0.3%

Italy

200.0

Austria

39.7

0.3%

1%

Belgium

21.8

0.2%

Portugal

156.3

Denmark

15.8

1% 0.1%

Greece

11.6

0.1%

Other Europe

40.7

0.3%

Europe

8829.8

62%

Middle East

41.2

0.3%

North Africa

32.1

0.2%

Central & S. Africa

152.6

1%

India

412.7

Nepal

7.0

0.05%

Pakistan

3.0

0.02%

Afghanistan

2.3

0.02%

Bangladesh

3.9

0.03%

Other West Asia West Asia

4.7

3%

3%

Japan

2247.6

16%

China

255.5

2%

South Korea

139.1

1%

Mongolia

5.6

Taiwan

48.9 2696.7

0.04% 0.3% 19%

Indonesia

57.4

0.4%

Thailand

36.4

0.3% 0.1%

Malaysia

21.1

Philippines

12.0

0.1%

Vietnam

19.3

0.1%

Other S.E. Asia

10.6

0.1%

S. E. Asia

156.7

1%

Oceania

236.2

2%

Total World 2000-2008

14206.10

As if the preceding strong developments were not enough, the new US Administration of Barack Obama includes forward thinking pragmatists who see the coming green economy as imperative for the economy and the environmental health of the planet. Solar and other renewables are viewed as part of the economic, job creation engine that will help drive the US (and other countries) out of recession. Europe, a leader in the planet’s green future, has been on board for years by recognising the need to support and promote renewable technologies – again, for the environment as well as the economy. And Japan’s move to restart its successful and popular residential rooftop programme should strengthen that country’s PV market, all the more if healthier economic times return. Thus, the year 2008 would have appeared to end on a note of optimism.

Will the party continue? Then came the global economic recession, a global banking crisis, the resulting credit crunch and falling house prices in the US and other countries. New building has stalled and foreclosures have risen. In addition, the changes in the feed-in-programmes in Germany and Spain have essentially erased over a gigawatt of potential demand. These changes will, effectively, lead to dramatic business plan changes.

0.03%

433.6

Asia

removing the need to own the means of electricity production. While systems are still sold, and system ownership should and will remain an important industry and personal goal, new business models return the energy paradigm to the end users’ comfort zone – buying ready kilowatt hours (kWh), rather than their own solar hardware.

100%

Who wanted all the PV? It’s clear that Germany and Spain have been major markets over the past few years, but will this continue? (data republished with the kind permission of Paula Mints, PV Program Director, Navigant Consulting).

As well as a continued flow of Government-driven incentives in a wider range of markets, PV technology, while having the benefit – and challenge – of being disruptive and state of the art, has also improved in terms of cost and efficiency: thin film has gained wider acceptance and system design continues to improve, for example, in regard to the balance of system components. In addition, new business models are emerging to address the high upfront cost of system ownership by

A change in Spain Will the recent changes in Spain’s feed-in tariff result in the loss of a hugely significant market? (data republished from the “Solar Outlook bimonthly PV update, Issue SO2008-6”, with the kind permission of Paula Mints). In September 2008, the new Royal Decree - Real Decreto 1578/2008 - changed the feed-in program in Spain, with the introduction of new classifications for the projects, adjustments to the program cap, and reductions in the feed-in tariff levels. A 500-MWp program cap was introduced for 2009, with a 450-MWp cap set for 2010. Recently, Spain’s national commission on energy, the CNE, inspected 30 solar farms. They found that 40% of the plants were operational, 30% had started producing electricity after the 30 September deadline to receive the 2008 tariff, and 30% were not up to specification due to under-production of electricity, lack of modules or lack of proper documentation. For the 30% of systems that are currently under producing or are without appropriate permits, etc., the owners will need to fix the irregularities, but the systems will not qualify for the 2008 tariff and will have to wait four years before the plants can receive the current FiT. The system owners will be able to sell the electricity generated by these systems for 8c€/kWh. The changes to the program in Spain are presented in the table on page 62.

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January/February 2009

63

PV/Market outlook

With changes in the Spanish

16000.0 14000.0

Conservative Accelerated

12000.0

and German programmes,

MWp

10000.0 8000.0

along with the economic

6000.0 4000.0 2000.0 0.0 Conservative

2007

2008

2009

2010

2011

2012

3073.0

4905.8

5595.8

6358.2

7886.6

10165.4

5100.0

6125.3

7944.0

10482.3

14550.7

Accelerated

Figure 1: conservative and accelerated demand growth 2007-2012 (republished with the kind permission of Paula Mints).

For example, during the last two years, most of the industry has been sending products into Spain, without a thought to potential repercussions. Now that they have arrived, experts are predicting an end to Spain’s solar party. Representing more than 70% of European demand, Germany and Spain have provided the largest market for PV products in the world for several years. The table on page 63 gives an interesting picture of global demand and the few markets that have driven growth. And for any product, goods or service to rely on one primary market, is not a healthy situation. In 2007, more than 3 gigawatts (GW) of PV modules were sold, and it is difficult to imagine what would happen if 70% of these sales evaporated. Of the approximate 5 GW of sales in 2008, more than 75% were into Europe (primarily Spain and Germany) – again, imagine if 75% of these sales disappeared. At the annual PV Specialists Conference, autumn 2008 in Valencia, Spain, the unbalanced market situation was discussed at length. Many agreed that reliance to this degree on one primary market was an unhealthy market situation. The point was made several times, that other markets – China, India, South Korea, Australia, along with Japan and the USA – need to ramp up their respective domestic markets to balance demand – so that if one market retracts the result is not disaster. In the near term it is unlikely that China, India, South Korea and Australia will be able to develop stronger markets. But Japan and the USA could be the saviours, with strong potential for both markets. Especially in the case of the USA, there is significant untapped potential for the use of solar electricity, from now and also in the longer-term. Several energy utilities in the USA have discovered PV as a serious and viable option for power supply. Many large scale PV projects, like the 800 MWp project by PG&E in California, are being prepared and developed. The push for renewable and solar, and an economic recovery, could make the USA one of the major PV markets from 2010 onwards.

Lack of confidence Unfortunately, before we all breathe a sigh of relief, the global economic crisis renders a sudden boom in demand in the US and Japan highly unlikely. In the US in particular, consumer confidence continues to hit new lows while unemployment continues to rise. And in California, the largest US market, unemployment recently topped 8%. Considering unemployment fears, tight credit, a stalled housing market and the loss of personal wealth represented by the continuing

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problems in the US and Japan, a slowdown in demand for at least two years seems inevitable. fall in house prices, it is highly unlikely that the US residential market will continue to show strong growth (despite the recent lifting of the US$2,000 on the residential credit cap) and the commercial market will also experience problems. Also in the USA, the power purchase agreement model (PPA) will be confronted with difficulties during the current credit and economic crisis, and companies with pure PPA business models will have to try to hang on through some painful times. With changes in the Spanish and German programmes (and no other markets in Europe currently capable of taking excess module product), along with the economic problems in the US and Japan already discussed, a slowdown in demand for at least two years seems inevitable (figure 1 provides a conservative and accelerated demand forecast through 2012). So where does all this lead us in the next year or two? According to experts, to a sharp drop in prices of new modules, and a slowdown in new capacity as excess supply can no longer all be absorbed by Germany and Spain – where changes to incentives will slow the markets. Some major manufacturers of PV products, including Q-Cells, Suntech Power Holdings and SunPower have spoken of this in recent weeks. Reuters recently reported on an interview with Frank Asbeck, ceo of SolarWorld, who predicted that in 2009 and 2010 the price of solar modules will decline by more than 10% due to overcapacity (nonetheless, it is worth noting that he still saw sales growing 25%-30% in 2009 from this year). And Q-Cells, one of the industry’s flagship companies, recently reported that it was to cut sales and production outlook for 2008 and 2009: “the uncertainty and the weakening market demand arising from the financial crisis have resulted in a number of Q-Cells’ customers postponing agreed deliveries until next year. These volumes could not be placed elsewhere at short notice,” a source explained. Add to this currency issues eating into margins (a weak Euro against a strong dollar), and the predicted fall in prices of polysilicon next year which could lead to even stronger supply, and it is easier to see why caution abounds for investors, and why all but the larger manufacturers

PV/Market outlook

(who can build cheaper and undercut competitors to shift volume) may struggle to compete. According to Peter Thiele, executive vice president of Sharp Energy Solution Europe (SESE), while the European market situation was previously characterised by high demand for solar modules and limited supply, 2009 brings fundamental changes to the conditions in the solar industry: “new subsidisation regulations now apply in the world’s most dynamic solar power markets Germany and Spain, impairing the sales markets. In addition, the worldwide expansion of production in causing the intensity of competition to increase [means that] – for the first time, the supply of solar power products will exceed the demand. Photovoltaics has come of age and is presenting new challenges, especially to us producers,” he concludes: “We shall see who can follow the market shift. A high quality brand, state-of-the-art production as well as efficient sales strategies will be key criteria for the future markets. Particularly in these economically tense times, consumers are paying more attention than ever before to the brand, and thus to an optimal relationship between quality and price.”

Light at the end of the tunnel? That said, although the outlook for solar is slower growth for the near term, all industries currently share this prospect, in particular the US car industry, now standing ready for a handout, or failure or both. But the PV industry has been through difficult times before, and survived to succeed and profit. Of course, the manufacturing side of the industry was unprofitable until 2004 – the first year that companies broke even or showed a glimmer of profit. Technology development is a long, committed and expensive road from research to pilot line to commercial production. The process of developing markets is also a non-trivial task requiring incentives, justification of the need for incentives, and significant capital investment. The PV industry is filled with entrepreneurs and survivors, scientists, engineers, analysts and business people – optimistic pragmatists to the very last. Despite numerous roadblocks over 30 years of technology and market development, the industry persists, and will persist – long past this downturn and through all the upturns and downturns to come.

inter

solar

2009

May 27–29, 2009 New Trade Fair Centre Munich, Germany

INTERNATIONAL TRADE FAIR FOR SOLAR TECHNOLOGY Photovoltaics Sol ar Therm al Tec hnol ogy Sol ar Archi tecture 1,300 Exhibitors 100,000 sqm Exhibition Space w i th Internati onal C onferenc e s 4 t h European Sol a r Therm a l Energy Conferenc e - estec 20 0 9 5 t h PV Industry Forum

So slowdown from time to time shouldn’t be feared, especially in a sector with such strong fundamental drivers, excellent potential markets in the USA and Japan, and which has shown such good growth rates over the past few years. Yes, falling prices in 2009 will impact major players; and we will see technologies that only a few years ago were labelled as novel (such as low-cost thin-film technologies for example) achieve cost advantages over traditional multicrystalline producers that may leave them especially well-positioned to survive any shakeout.

About the author: Paula Mints is the principal analyst for Navigant’s PV Service Market Research Program, executive editor of the Solar Outlook Newsletter, and associate director of the Energy Division. The PV Services Department at Navigant Consulting was founded in 1974 at Strategies Unlimited, and Ms Mints moved it to Navigant in 2005. The practice is based on classic market research principles, that is, all data are primary, not secondary, and the analysis is independent and not based on the work of others.

w w w. i n t e r s o l a r. d e

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Editor’s pick

Economic stimulus in the USA THINGS APPEAR TO BE MOVING FAST IN WASHINGTON, AS PRESIDENT OBAMA ALREADY SEEMS TO BE LIVING UP TO HIS PROMISE OF SUPPORTING RENEWABLE ENERGY DEVELOPMENT. BUT DO THOSE IN THE INDUSTRY THINK HIS POLICIES WILL WORK? DR. MARIANNE OSTERKORN, DIRECTOR GENERAL OF THE RESPECTED RENEWABLE ENERGY AND ENERGY EFFICIENCY PARTNERSHIP REEEP, SPEAKS TO MEMBERS OF THE ALLIANCE TO SAVE ENERGY ASE AND THE AMERICAN COUNCIL ON RENEWABLE ENERGY ACORE ON THE PROSPECTS FOR BOTH ENERGY EFFICIENCY AND RENEWABLES IN THE USA. As credit availability in the USA increased in the years leading up to 2008, several things started to happen. Global consumption rose, as did commodity prices. The market for renewable energy and energy saving products was growing healthily. Emissions, meanwhile, had been increasing on the back of higher consumer demand, given the lack of a comprehensive Federal greenhouse gas emissions policy. But now that the bubble has burst, a big question arises: Will the fall in emissions linked to lower economic output weaken the drive for new energy efficiency and renewable energy investment? On the surface, it looked likely. In a recession, a particular form of energy conservation kicks in that can in some cases replace typical energy efficiency investment: energy demand decreases because there is more unemployment and less disposable income to spend. So far, US consumption has neatly followed this pattern. In mid-2008, when the US economy was already slowing, it was importing, and therefore burning, 500,000-750,000 barrels less than usual per day. August 2008 saw the largest single month’s year-on-year fall in vehicle miles travelled (VMT) since World War II. This decrease in VMT was also partly responsible for the decline in oil prices, although some oil industry production factors played a part in that too. As the economy continues to slow down, some companies may opt to shut down their less efficient plants, and that too 66

renewable energy focus

will contribute to lower emissions. Chemical company BASF, for example, has shut down production at one of its plants in Geismar, Louisiana for two months until the end of January 2009 due to a fall in demand. As Lowell Ungar, policy director at the Alliance to Save Energy (ASE) in Washington DC confirms, energy pricing is a very important factor affecting investment in energy efficiency equipment: “there is much more energy efficiency investment in a period of very high energy prices,” he states. That was indeed the case less than a year ago, when Americans began to buy smaller and more fuel efficient cars. Oil prices are at nearly half their spring 2008 levels, and that would seem to point to lower energy and fuel efficiency investment in the short term. At the same time, the funds available for investment in renewable energy have taken a hit. Afflicted by the market’s overall woes, clean energy stocks fell by 61% over the first three quarters of 2008. Liquidity in the wind market is inadequate, because an enormous chunk has been taken out of tax equity capacity, while debt financing for new projects is weak or expensive. Solar is in a similar position for the same reasons; its future growth rate is likely to be considerably restricted in comparison to its extraordinary performance over the last few years. Current tight credit and falling solar panel prices may lead to business failures. In the biofuels sector, the biggest-listed US ethanol producer, VeraSun Energy, has

January/February 2009

gone bankrupt following poor hedging on cereal prices. In the construction sector, some building supplies companies producing energy-efficient materials have begun to make redundancies, such as USG, a Chicago-based insulation producer. The company announced in November that 900 jobs or 20% of its salaried workforce was to go. One reason for redundancies in this sector is the lack of re-financing mortgages. These were previously used, in some cases, for home improvements that included upgrades to better insulation or energy efficient equipment.

All bad news? Fortunately, a few bright spots liven up this distressed picture. Emissions are not, of course, the only motivation underlying energy efficiency and renewable energy investment, and in December 2007, the Energy Independence and Security Act was introduced. This set a mandatory Renewable Fuel Standard (RFS), requiring fuel producers to use at least 36 billion gallons of biofuel in 2022, representing a nearly fivefold increase over current alternative fuel use. It also improved fuel economy standards by 40%, mandated a complete phase out of incandescent bulbs by 2012 and set new appliance efficiency standards. In a sector conceived as a result of environmental and energy security concerns that become part of Government policy, the regulatory drive has a greater force than in many other industries; it is designed to override

Editor’s pick

As the economy continues to slow down, some companies may opt to shut down their less efficient plants, and that too will contribute to lower emissions.

short term economic fluctuations. According to Joe Loper, vice president of policy and research at ASE, over the last 35 years about a fifth of US energy efficiency and conservation investment has been driven by Government and utility policies and programs. Government and utility support for energy efficiency – including appliance rebates, low interest loans, energy audits, research and development – currently exceeds US$3 billion, according to ASE. Continued Governmental attention to the need for increased energy efficiency could drive substantial energy efficiency investment activity throughout a US recession. And the unexpected energy addendum to the US$700 billion bank bailout funding (Emergency Economic Stabilization Act) agreed in early October 2008 is probably the brightest lining in the gathering clouds. It pledges to extend Investment Tax Credits (ITC) – a form of tax refunds – for the solar industry for another 8 years and the Production Tax Credit (PTC) for wind, biomass, hydropower, landfill gas and energy from waste facilities for another year; this will buoy up struggling renewable energy projects and help maintain employment while existing projects continue. “There was a great flurry to finish projects [before the production tax credit was due to expire]. In the last quarter of 2008 there was a pickup of new construction activity for existing projects in their early stages,” states Rob Church, vice president of industry research & analysis at the American Council on Renewable Energy (ACORE). However, the one year production tax credit extension will have a limited effect, he predicts: “the finance industry’s ability to utilise tax credits will decline next year, and the number of companies active in this area have gone down.” According to Church, wind power, and corn-based ethanol may be the hardest hit because of their size

and growth rate. [As we go to press] The Bill is currently winding its way through both the House and the Senate. However, energy utilities are entitled for the first time to claim the PTC in the bailout bill, which is likely to have a positive effect on EE/RE investment. “Coupled with a declining interest from traditional tax equity investors, this will probably push things towards more utilities providing equity financing, but that won’t happen quite yet,” suggests Church. While project and debt finance for renewable energy are severely affected by the financial crisis, venture capital (VC) is in reasonable shape. “Whereas the banking business has been heading for the doors, there is not a sense that the situation is particularly grim for the VC sector, rather that it’s something of concern, that will slow down but not reverse investment,” Church says. That is, of course, partly because the VC sector has poured less money into renewable energy than banks and partly because it is focusing on future technologies such as second and third generation biofuels. On the energy efficiency side, the picture is also mixed. Large industrial groups such as General Electric (GE), whose revenues from this sector are forecasted to rise by 21% to US$17 billion in 2008, will bolster up long-term investment. Existing government incentives are attractive, but as Loper puts it, “they make a difference when people purchase, but not if they’re not buying anything.” Energy Service Companies (ESCOs) could also be affected by the credit crunch. ESCOs carry out energy service performance contracts (ESPCs), which are arranged as an alternative to Federal spending. Budgetary restrictions relating to energy efficiency could increase the need for alternative financing of Govern-

ment energy efficiency projects, which could increase the use of ESPCs, according to Loper. On the other hand, ESCOs are heavily reliant on financing and could have difficulty obtaining financing for ESPC projects. In December, President-elect Barack Obama called for an effort to make public buildings more energy-efficient. Obama announced a plan to seek energy-efficient upgrades for Federal and public school buildings. “First, we will launch a massive effort to make public buildings more energy-efficient. Our Government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs,” he said in his radio address. The new Obama administration is also strongly supporting the renewable energy sector. Barack Obama has pledged to double alternative energy production in three years. In previous speeches he has pledged to enact climate change legislation and a cap and trade scheme. According to Reuters, an Obama aide said the administration would seek to add 20 GW or more of wind power and 4 GW of geothermal and solar power in the next three years, doubling the nation’s current renewable power base of 24 GW through loan guarantees and, eventually, national renewable energy requirements. The Obama administration is well on its way to providing the leadership and support required to further accelerate renewable energy in light of the financial crisis. The new president says his administration wants 10% renewable electricity by 2012, and will put one million plug-in hybrid cars on the road by 2015. He has also said he will catalyse the private sector to invest in clean energy through US$150 billion in cash injections over the next ten years.

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Editor’s pick

Renewables in Africa DIETER HOLM, LONG-SERVING MEMBER OF THE INTERNATIONAL SOLAR ENERGY SOCIETY (ISES) LOOKS AT THE ROLE RENEWABLE ENERGIES CAN PLAY IN COMBATING CLIMATE CHANGE IN AFRICA, AND ARGUES THAT THE EEG (FEED-IN-TARIFF) LEGISLATION PIONEERED IN GERMANY WOULD BE THE PERFECT PLACE TO START. Climate change affects all of us, but SubSaharan Africa most perniciously, according to the Stern review. In economies reliant on (eco)tourism and subsistence farming, the poor inexorably bear the brunt of climate change caused by better-resourced, large polluting industries which can reposition themselves with ease. For example, South Africa’s vertically integrated state owned monopoly, Eskom, generates about 50% of Africa’s total electricity and concomitant pollution through power stations running over 90% on coal. Eskom and Sasol alone produce 45% of the country’s greenhouse gases. Many similar large companies in Africa feel little pressure as they are shielded by the Developing Country status of their host country. However, Africa has 95% of the world’s best winter sunshine area, receiving more than 6.5kWh/m2.d (Germany receives less than 1,0kWh/m2.d). Therefore Africa could potentially generate 95% of the world’s solar thermal and solar electrical energy. Other RE resources are also abundant. This means Africa can produce ample clean and sustainable energy for its own use, plus a good surplus for export. The most important constraint is not the lack of money, men, machines, material or management but the motivation: it’s the lack of inspired political will. Therefore, given suitable laws like the Feed-in-tariff (FiT) and others, Africa could rapidly and effectively combat climate change while achieving the crucial local needs of sustainable job creation. Given a framework of low-risk, long-term contracts and reasonable FiTs, industry and investors will flock to Africa, implementing technology transfer – creating local renewable energy enterprises. Africa has invested relatively little in the old centralised and vulnerable sunset fossil 68

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infrastructure. It could leap-frog to the sunrise renewable energy technologies, including distributed generation and co-generation: by way of example, cellular telephones are displacing old technology fixed landlines at a breathtaking rate.

Joining the dots in Africa The lack of Eskom electricity in South Africa caused Rio Tinto, a major global player, to shelve a huge beneficiation project indefinitely, which probably means permanently. This entails the loss of 20,000 jobs in a country with an unemployment rate of about 40%. Suitable renewable energy incentives in place could have avoided this, not to mention similar catastrophes in Africa. The situation in affected neighbouring Southern African Development Countries (SADC) is comparable. None have implemented FiTs, and all are restrained under the lack of private initiative driving renewable energy. The direct linkage between renewable energy and the 8 Millennium Development Goals is clear; they all depend on energy, which currently is not being provided reliably. Goal number 8.6 especially – i.e. “to build global partnerships with private sector new technologies” is pertinent, and merits special attention. The mistake of spreading developmental resources too thinly, creating unrealistic expectations while disappointing stakeholders through sub-optimal technologies and services should be avoided. Instead, a focussed strategy of building a viable renewable energy installation and service industry through suitable incentives like a FiT, followed by local manufacturing, where practical is indicated. A visible market penetration of at least 15% should be targeted per area and technology.

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All renewable energy technologies (RETs) should be very robust, low-maintenance, fail safe, modular, tamper- and theft-proof, as well as be protected against insects, rodents, dust and high ultraviolet radiation levels. The full gamut of RETs should be applied, depending on public domain resource assessments and local conditions, as well as probable climate changes. Solar thermal cooling and electrical vehicles are neglected technologies that are suitable for Africa.

Increasing market penetration What role do the different forms of renewable energies/energy efficiency and conservation play in providing access to energy in Africa? Currently all three play a miniscule role, demonstrating a wide market gap. If the well-heeled role-model sector of the population is not seen to be using RETs, then these become stigmatised as “the poor man’s energy”. This situation is worsened if the rural poor get the impression that experiments are being done on their back with unproven technologies in remote rural areas with typically problematic service delivery and difficult communications. Provided the necessary environmental, water and food security precautions have been taken, energy crops/biomass can play an important role. Waste-to-energy technologies also fall into this category. Major energy parks in the Sahara could contribute to regional development as much as oil wells could. It depends on the structure of the value chain.

Editor’s pick

Small-scale hydropower plants (less than 10MW) are also a very attractive option but have been found to be onerous to implement because of the non-existence of FiT tariffs. A small South African hydropower scheme took at least 5 years, while the Government wind demonstration project even took a decade. Apart from a FiT, what else would help? ■ Awareness creation (radio is most popular in Africa); ■ Levelling the playing field by terminating overt and covert subsidies to non-renewables (€42 billion are projected to be sunk on subsidising fossil power plants in the developing world until 2030 [UNDP, 2000]. And despite its policy, the World Bank is often the financier; ■ Tax rebates often make little sense in a poor developing country, and can lead to distortions; ■ Uniform and transparent industry standards, planning permits and building codes foster fair competition and more reliable performance;

■ Africa has a community tradition. Community power systems ensure public buy-in and support; ■ The energisation priorities should be a) productive use of renewable energy (industry, business); b) health (clinics, hospitals); c) education (schools, training) with d) social and amusement, as well as residential uses coming provisionally last in Africa’s relatively benign climate. In Africa women generally are in charge of the household chores, plus food production/ processing, and of energy procurement. If firewood collection could be reduced/eliminated through the use of renewable energy, then this would reduce/eliminate deforestation or even desertification in Africa, and climate change would be abated. It would reduce the health impact of open fires, and allow more time for study, leading to better work opportunities and family planning, reducing poverty. African women play a strong and decisive role in the household, probably needing little external gender-related interventions. In addition, political decision-makers require relevant objective information, enabling

them to make rational renewable energyrelated decisions. However there is no harm in knowing the difference between kW and kWh, or between energy carriers and energy services. In developing countries, politicians are inclined to believe that the only energy carriers are grid electricity and oil.

Overlap with external policy Most of Africa is importing fossil energies and their technologies. The populist tendency is to subsidise energy delivery through centralised systems, which are mostly under Government’s political control. Consequently, service delivery suffers and foreign debt increases, causing more calls for debt release. At present renewable energies replace little imported energy, except in countries with hydropower. Transport is entirely fossil based. Substantial replacements are feasible. NB: this article comes from a speech Dieter Holm gave at a hearing on ‘renewable energies in development cooperation’, which took place recently at the Deutsche Bundestag (Germany).

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Feature article

Recycling wind turbine blades WITH A BOOMING WIND ENERGY INDUSTRY, DRIVING THE DEVELOPMENT OF LARGER AND LARGER TURBINES, THE QUESTION IS NOW ARISING OF HOW TO DEAL WITH WIND TURBINES AT THE END OF THEIR LIFECYCLE, AND PARTICULARLY THOSE WIND TURBINE BLADES MADE OF HARD-TO-RECYCLE COMPOSITES. RENEWABLE ENERGY FOCUS’ KARI LARSEN INVESTIGATES POSSIBLE ROUTES FOR THE RECYCLING OF WIND TURBINE BLADES.

The global wind industry is growing fast, in terms of both the number of turbines and their sizes. According to the Global Wind Energy Council (GWEC), modern turbines are 100 times the size of those in 1980. Over the same period, rotor diameters have increased eight-fold, with turbine blades surpassing 60 m in length.

young, there is only a limited amount of practical experience on the recycling of turbines – particularly offshore, and it will take time to gain practical experience in the dismantling, separation, recycling, and disposal of windpower systems.

Wind turbine blades typically consist of reinforcement fibres, such as glass fibres or carbon fibres; a plastic polymer, such as polyester or epoxy; sandwich core materials such as polyvinyl chloride (PVC), PET or balsa wood; and bonded joints, coating (polyurethane), and lightning conductors.

At the moment, there are three possible routes for dismantled wind turbine blades: landfill, incineration or recycling. The first option is largely on its way out, with countries seeking to reduce landfill mass. Germany, for example,

As turbines grow in size, so does the amount of material needed for the blades. Professor Henning Albers from the Institut für Umwelt und Biotechnik, Hochschule Bremen, estimates that for each 1 kW installed, 10 kg of rotor blade material is needed. For a 7.5 MW turbine, that would translate into 75 tonnes of blade material. In a presentation at Composites Europe in September 2008, Albers predicted that by 2034, around 225,000 tonnes of rotor blade material will need to be recycled annually worldwide.

The most common route is incineration. In so-called combined heat and power (CHP) plants, the heat from incineration is used to create electricity, as well as feed a district heating system. However, 60% of the scrap is left behind as ash after incineration. Due to the presence of inorganic loads in composites, this ash may be a pollutant, and is, depending on the type and post-treatment options, either

250,000 World without Europe Europe without Germany Germany

Blade material, Mg/a

Wind turbine blades are predicted to have a lifecycle of around 20-25 years. The question is what to do with them afterwards.

What are the current options?

introduced a landfill disposal ban on glass fibre reinforced plastics (GRP) in June 2005, due to their high (30%) organics content such as resin and wood.

200,000

150,000

100,000

50,000

0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Ref.: WindEnergy-Study 2006, fk-wind-data base

The problems is – according to experts – because the wind-turbine industry is relatively

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Figure 1: Expected amount of rotor blade material world wide

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Year

Wind/Blade recycling

dumped at a landfill or recycled as a substitute construction material. The inorganic loads also lead to the emission of hazardous flue gasses in that the small glass fibre spares may cause problems to the flue gas cleaning steps, mainly at the dust filter devices. Wind turbine blades also have to be dismantled and crushed before transportation to incineration plants, placing further strain on the environment in terms of energy used – and emissions. Albers suggests that there are also causes for concern in relation to the health and safety of workers involved in the incineration process. The alternative is recycling – either material recycling, or product recycling in the form of re-powering – where old turbines are replaced by newer, more efficient ones. At the moment, however, there are few established methods for the recycling of wind turbine blades, and only 30% of fibre reinforced plastic (FRP) waste can be re-used to form new FRP, with most going to the cement industry as filler material. So what attempts have been made at recycling projects to date?

Recycling projects REACT Between 2003 and 2005, a project led by the consultancy company KEMA and the Polish Industrial Chemistry Research Institute (ICRI) looked at the mechanical recycling of FRP, including wind turbine blades, where the material is ground and then re-used. Funded by the European Commission’s CRAFT project, the REACT project also involved HEBO Engineering, C-it, Fiberforce Composites Ltd, Hamos GmbH, Plasticon, ZPT and the European Composite Recycling Services Company (ECRC). The REACT consortium, through HEBO and KEMA, designed, built and tested a hybrid shredder for ‘fit-for-purpose-size’ reduction. The shredder has a capacity of 2.5 tonnes/ hour and can reduce FRP to 15-25 mm with “minimal internal damage” to the fibres. This was done with hammers slamming the resin out of the fibre structure. To avoid dangerous situations during grinding, an electronic sensor for volatile organic compounds (VOC) was developed by C-it. After shredding, the fibre was upgraded by a reactivation method, specially developed by

A wind turbine blade before and after pyrolysis. (Picture courtesy of ReFiber.)

ICRI to achieve better properties through a new chemical bonding with the new matrix. Another technology was developed by HAMOS for fibre length separation, and the removal of undesired impurities. One of the problems in reusing shredded FRP waste is to rebind fibres with the new resin, as the shredded fibres often have resin residues, making bonding more difficult. Bart in’t Groen, consultant at KEMA, remarks: “you need longer fibres to have good bonding with your new matrix compared with virgin fibres.” For wind turbine blades, an additional step is required. The blades must be cut into chunks on location to ease transport. This can be done with a demolition claw (a crushing/grabbing claw attached to the end of a crane or digger), a technology which is widely available. Initially, the REACT project aimed high when it came to possible applications for FRP recyclate, but found that there was not the same demand for composite recyclate as for materials such as steel. The consortium therefore started looking at smaller, more niche markets. Examples include parts for FRP silo tanks, reinforcement of concrete, new hand laminate products, reinforcement of recycled

polyproplene (PP) resin, sand-resin mixture for producing large flower pots, and sandwich panels. One challenge that arose when turning to the composite industry itself was product guarantee certificates, as found in the boat building industry. When using recyclate, companies often feel they are taking a risk with the materials, thereby endangering their guarantee certificates. Another challenge is that recycled fibres will be shorter than original fibres, coated with some ‘historical’ resin, and are harder to arrange in a given direction. This makes it more difficult to increase strength, as is needed, for example, in car bumpers. This has not stopped the car industry from recycling and reusing its own waste, however. According to in’t Groen, it is just a matter of knowing your input material. Despite the challenges, he is keen to point out that the recycling of FRP materials, including wind turbine blades, is important: “Because composite usage and so its end-of-life waste will increase enormously…, so a lot of initiatives are there and solutions will be found. It’s a waste dumping this material.”

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Wind/Blade recycling

ReFiber’s recycling concept in short ■ On site cutting to ‘container’ size pieces

■ In a second rotating oven the glass fibre

with hydraulic shear or similar tools; ■ Once at the plant, the parts are shredded to hand-sized chunks; ■ The material is fed continuously into an oxygen-free rotating oven with a temperature of 500° C – the plastic is now pyrolysed to a synthetic gas; ■ The gas is used for electricity production as well as for heating the rotation ovens;

material is ‘cleaned’ in the presence of atmospheric air; ■ Metals are removed by magnets for recycling; ■ The dust is removed from the clean glass material remaining; ■ The glass fibres are mixed with a small amount of polypropylene fibres and pass through an oven where the PP fibres melt and connect to the glass fibres creating stable insulation slab.

However, Dr Richard Court, Technology Specialist – Wind Renewables at the New and Renewable Energy Centre (NaREC), points out that “grinding uses a lot of energy due to the hardness of the glass, and the value of the filler is quite low, so it is not easy to make it economic – unless you find a cheap source of energy.”

The end products from ReFiber’s pyrolysis are primarily thermo-resistant insulation materials. The fibres can also be used for fibre-reinforcement in filler, glue and paintings, thermoplastic parts, asphalt and concrete; and raw material for new glass fibres. The energy content of the composites is used for generating electricity, for process energy and district heating.

ReFiber Erik Grove-Nielsen, of ReFiber ApS in Denmark, remarked in a presentation at Borås University in Sweden in 2007 that mechanical recycling in the form of material crushing retains the tensile strength of glass fibre, but that it gives impure end-materials. The filler market is flooded with similar materials such as chalk, and the energy content is not recovered. A recycling possibility is chemical recovery through solvolysis. With this method, most of the tensile strength of the glass fibre is retained, and the plastic material can partly be used as new raw material. However, GroveNielsen questions the use of aggressive and hazardous chemicals, and highlights the high cost. The option favoured by ReFiber is thermal and material recovery in the form of pyrolysis and gasification. Although the fibres lose a “considerable part” of their original tensile strength, and despite the high cost of the technical plant, the end product is very “homogenous,” and the energy content of the plastic is recovered (see box – ReFiber’s recycling concept in short).

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It makes sense to develop a recycling industry to maturity before the big amounts arrive.

“As of today, most Danish worn-out blades and production failures are sent to landfill, as this is the cheapest solution for the companies,” says Grove-Nielsen. “ReFiber tried to get finance for a 5000 tonnes/year recycling facility, [but] as it is possible to dump the material on landfills, [that] is what is done. The possible investors didn’t feel safe… so we had to set the project on stand-by for some time.” The 5000 tonnes/year facility would be fed by approximately 4000 tonnes of production waste from the Danish GRP industry, 500 tonnes/year from worn-out wind turbine blades, and 500 tonnes/year of other glass fibre waste. GroveNielsen predicts that there may be a supply of blades from the wind turbine retrofit market in Northern Germany in the near future, as older, smaller turbines are decommissioned and replaced by new, bigger and more efficient versions. There is also the possibility that some of the better turbines may be sold to Eastern European countries for a ‘second life.’ “For the early years we will have to depend on delivery of production waste and worn out GRP products other than blades. The real big amounts of worn out blades will emerge 15 years from now. It makes sense to develop a recycling industry to maturity before the big amounts arrive,” Grove-Nielsen says. In 1995, the Danish Government passed legislation banning the disposal of rubber car tyres on landfill and through incineration, which created a new recycling industry for car tyre rubber, but no such approach has been taken for GRP. “We asked the Government here to do the same for GRP recycling, but they want ‘the market’ to solve the problem,” Grove-Nielsen says.

Grove-Nielsen does not believe that the recycled GRP wind turbine blade material can be reused in new blades, however: “Recycled glass fibres will always have lower strength than virgin materials. Therefore the industry cannot use recycled reinforcement fibres. For carbon fibres it is different. ReFiber has recovered, in its pyrolysis facility, carbon fibres from prepreg epoxy/ carbon material with unchanged E-modulus and only 5% lower values for ultimate tensile strength. Still, for the glass fibre, it makes sense to allow the glass fibres to ‘retire’ for a life as a heat insulation material in buildings.”

Viability of recycling

Despite ReFiber’s apparent success in establishing a disposal and recycling route for GRP and wind turbine blades, finances have stopped the project:

A similar point was made by Thomas Wegman, Director Global Account Management at Reichhold Composites and Chair of the European Composite Recycling Company (ECRC).

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Per Dannemand Andersen, Head of Section, Department of Management Engineering, Technical University of Denmark, suggests that the problem is not the material itself, but the lack of volume, making recycling financially difficult: “There are now technologies available to reuse fibre-glass and blades from wind turbines and other components in cars. The problem is not technologies, but… that there is not enough scrap […] so it is not commercially viable to put up a plant that could use only these blades.”

Wind/Blade recycling

The ECRC has an active conversion system in place in France, where composite materials are reduced to smaller parts, fibres and powders, and then sold on to different applications. To their surprise, the amount of material offered for recycling and processing does not amount to what the outlets are capable of receiving. “I think the reality is that the quantity of waste that is offered to us, as well as other companies, is relatively small. If you’re talking about waste streams that can be used in cement manufacturing, people are looking at hundreds of tonnes per week – well, I think we’re currently receiving tens of tonnes per year,” Wegman says. Court at NaREC, however, believes the material is part of the problem: “Industries that use a lot of thermoset composite materials tend to make longer-lived items, and are probably waiting to see what, if any, recycling options are developed in the coming years. I am sure the wind turbine blade industry would welcome any research into recycling of thermoset composites – although from my own awareness of the materials and chemistry of thermosets, it’s difficult to see what those recycling options could possibly be. Recycling thermoset composites is certainly a major challenge, and it will be interesting to see what developments are forthcoming.” Wegman at Reichhold and ECRC is more optimistic looking 15-20 years ahead in time: “I would say that recycling is going to become more important.… For environmental reasons, but also for economic reasons.”

Recycling is going to become more important.... For environmental reasons, but also for economic reasons Who’s responsibility is it? Who is responsible for what happens to wind turbine blades at the end of their life cycles? Albers says that typically the responsibility ends up with the manufacturer of the end product, as seen in the car industry. As far as renewable energy focus has been able to establish, there is no European-wide legislation in place for the recycling of wind turbine blades.

Wegman believes this could come at some point in the future, whilst remarking that “there is a desire from the manufacturing companies and the people involved in composite businesses to find ways to actively [find solutions] and not wait for legislation to come.” Working with the ECRC, Wegman finds that the waste streams are not unmanageable at the moment, but a solution must be found. “We will work step by step towards a sustainable structure based on commercial outlets for composite waste. ECRC has access to unlimited industry expertise to make this happen.”

New materials Some thought has gone into developing new ways of producing wind turbine blades to make the disposal and recycling process easier. Court at NaREC explains: “There are… thoughts about trying to use thermoplastic matrix composites in wind turbine blades, the idea being that thermoplastics are easier to recycle, as evidenced in the automotive sector. Whether the mechanical and physical performance of the thermoplastic based materials is sufficient for a multi-megawatt wind turbine blade has yet to be proven. For micro-wind turbines, e.g. up to around 5 kW, it is possible to, and some do, use some form of moulded thermoplastic, reinforced or otherwise – in which case recycling is much more of a possibility.” In September 2008, Risoe DTU announced it is aiding the Chinese forestry commission to examine the use of bamboo in wind turbine blades. The blades will initially be made from bamboo shreds glued together using epoxy, but the hope is to be able to replace the synthetic epoxy material with a bio-based adhesive. Reichhold and ECRC’s Wegman believes it is not just about making the resins more recyclable or greener: “When you make a complex product like windmill blades, it’s not just one material, it’s… a system. Sometimes there are metal parts inside for specific functional reasons and there are different core materials which can range from PVC to balsa wood – so it’s a complex system. “For Reichhold as a company to just develop a specific resin that would be more easily recycled – I don’t think that’s what we’ve looked at, as this is only one element of a composite system – we’ve taken the route of working together with some other companies making reinforcements, fillers and other components to take an integrated approach and to get

Composite recycling companies ERCOM Composite Recycling (19922004) – terminated due to economic problems. Used crushing and separation in different particle sizes and material recovery. Put recycled products into new products (10%-40%); Seawolf Design Inc of Florida, USA – uses non-destructive reduction of fibres with special mill technique. Possible fixation of glass fibres with spray-up systems as filling material in new products; ReFiber ApS of Denmark – pre-crushing to 25 cm × 25 cm, then pyrolysis at 500° C, separating into glass fibres, metal and filling material, but sees 50% loss of fibre strength. Applications include insulation materials.

rid of the waste and reusing the waste in a good way.” Philipp Angst, Product Manager Core Materials at Alcan Airex, part of Alcan Composites Core Materials, advocates the use of polyethylene terephthalate (PET) foam in wind turbine blades: “PET foam is [being] adopted by more and more wind companies. It is a thermoplastic structural foam that is fully recyclable. You can recycle it and put it back into production. It is clearly the concept for the future in wind blade production. It must be ground/shredded and then mixed back into new products. It keeps the same properties and strength.” Alcan Airex already recycles its own PET foam, AIREX® T91. The recycling of wind turbine blades is still seen as problematic, but progress has been made in both methods for recycling GRP and possible applications for the recyclate. With the amount and size of wind turbines ever increasing, it is clear that there will be significant waste to handle in 15-20 years, but and also that the industry is waking up to the challenge – not only in terms of recycling, but also in research into new materials. And if there is one thing that all our experts agree on, it is that the recycling is the way forward for making wind energy even greener.

About the author: Kari Larsen is assistant editor of renewable energy focus magazine.

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Feature article

Small wonders: biomass from algae FUELS MADE FROM LIVING BIOMASS RATHER THAN ORGANISMS FOSSILISED SOME 200 MILLION YEARS AGO HAVE ATTRACTED WORLDWIDE ATTENTION – AND SUSPICION. WHILE DEVELOPMENT CONTINUES APACE, FIRST AND SECOND GENERATION FUELS BASED ON TERRESTRIAL PLANTS ARE CONTROVERSIAL BECAUSE THEY REQUIRE CULTIVATION RESOURCES THAT COULD OTHERWISE BE USED FOR GROWING FOOD. WHAT ABOUT THE THIRD GENERATION? GEORGE MARSH REPORTS.

The third generation of biofuels is both promising and different: it is based on simple microscopic organisms that live in water and grow hydroponically. These micro-algae do not need soil and land, and because many of them thrive in water that is salty, brackish or just plain dirty – wastewater or agricultural run-off, for example – they need not compete for scarce fresh water resources either. Also important, they are far more productive than terrestrial fuel crops. Given plenty of sunlight, these organisms can photosynthesise enough organic matter, from carbon dioxide (CO2) and organic nutrients present in the water they are suspended in, to double their mass several times a day. Depending on the species, up to half their mass is made up of lipids – natural oils. These can be extracted and used as straight algal ’crude’, or refined to higher-grade hydrocarbon products ranging from biodiesel to biojet fuel for aircraft. Strains of algae that produce more carbohydrate than oil can be fermented to make bioethanol and biobutanol. Algae biofuels contain no sulphur, are non-toxic and are biodegradable. A number of strains produce fuel with energy densities comparable to those of conventional (fossil) fuels. They are made from a renewable resource that is carbon neutral: the emissions that result from burning the fuel are balanced by the absorption of CO2 by the growing organisms.

Photobioreactor (Source - Oregon State University).

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Small wonder that these miracle organisms are the subject of intense study. Algae are familiar to the general public as pond scum and to oceanographers as the algal blooms that blossom over huge areas of ocean at certain times of year. The abundance of wild algae and the lipid nature of many of them have engendered high optimism about their potential as fossil fuel substitutes. But exploiting the potential of a technology that currently exists only at laboratory and pilot scale could prove a long and expensive undertaking. For a start, isolating a couple of score that might make a viable basis for fuel production from the 30,000 or so existing algal strains represents a formidable challenge. Fortunately, much work has already been done in this area, notably by

Biofuels/Algae

the US Department of Energy (DoE) with its Aquatic Species Program that ran for almost two decades, culminating in a final report in 1997. Algae can be grown on open settling ponds, but this approach is unlikely to provide the best yields. Regrettably, the hardy strains that resist encroachment of viral, fungal and other algae borne in the atmosphere are not the most lipid-rich. Covering ponds with translucent membranes or the use of greenhouses overcomes this drawback, allowing the more productive strains to be grown free of atmospheric contamination. Closed pond systems also enable some control to be exercised over growth factors including the amount of sunlight, water temperature, nutrient mix and concentrations, acidity/alkalinity (pH) of the water and CO2 concentration.

Photo-bioreactor Even closed ponds may not be ideal, however, because the growth of a top scum layer tends to block the passage of light to algae lower down in the pond. This has prompted a number of pioneers to abandon ponds altogether, instead adopting fabricated enclosures termed photo-bioreactors (PBRs) that are more three-dimensional. A variety of designs have evolved, all aimed at maximising photosynthesis by slowly circulating the algae, along with nutrients and CO2, in closed transparent structures that are exposed to light. US firm Valcent Products, for instance, in a joint venture with Canadian company Global Green Solutions, is growing algae in long rows of suspended moving plastic bags in a patented system called VertiGro. A pilot for the process has been assembled in a large high-density greenhouse near El Paso, Texas. Valcent President and CEO Glen Kertz explains: “By going vertical you can get a lot more surface area to expose cells to sunlight. Our moving system keeps the algae hanging just long enough to pick up the solar energy needed for photosynthesis.” Kertz told CNN that he could produce up to 100,000 gallons of algal oil a year per acre, compared with 30 gallons/acre from corn or 50 from soybeans. But he admits that algae are no ‘silver bullet’ alternative to oil since it is a “long and winding journey” to cultivate and harness the crop, then extract and refine the algal oil into a usable fuel. Algae-culturalists using racked glass or polycarbonate PBR systems include Massachusetts-based GreenFuel Technologies Corporation, which aims to utilise waste CO2 from flue gases, power stations, cement production facilities and other emitters as the source of carbon required by the algae. GreenFuel argues that its solution helps to mitigate CO2 production at the same time as producing fuel. During 2008 the company raised almost US$14 million of venture capital to use expanding its technology to production scale. A2BE Carbon Capture LLC, which similarly intends using PBRs and waste CO2 , has patented a reactor that is 450 ft long by 50 ft wide and consists of twin transparent plastic algal waterbeds – thus providing parallel redundancy in case a single bed has to be closed down. Counter-rotating currents induced within the beds ensure maximum exposure of algae to the light as they pass through the phototropic zone. Internal temperature is controlled. For harvesting, a biological agent aggregates the algal cells into larger, more separable entities that can be extracted relatively easily. Internal rollers operating in both directions serve to clean internal surfaces of the waterbed tubes and re-suspend algae.

Algae farm (Source - A2BE Carbon Capture LLC).

A2BE co-founders Jim Sears and Mark Allen do not pretend that all the problems have been solved. As Sears, who earlier helped launch another algae-to-oil venture, Solix Biofuels, points out: “You’re dealing with adaptive life processes and we need to work with them not against them.” Despite the difficulties, he anticipates construction of a commercialscale algae-to-biodiesel plant in 2012. Commentators caution, though, that investors should not be impatient for quick returns. Meanwhile, Solix Biofuels is working with Colorado State University’s Energy Conversion Laboratory on a 20m long fifth-scale PBR that will utilise CO2 emissions from a brewing facility. Business Development Coordinator Sam Jaffe is clear that the company is engaged in a commercial race to make algae-to-oil technology work on a large scale and at an affordable price. Another PBR exponent, the GreenShift Corporation, headquartered in New York, has produced a pilot-scale reactor with the intention of co-locating it with an ethanol producing facility so that it can utilise CO2 emissions from that plant. Enclosed PBRs offer the possibility of achieving highly controlled and optimised growth conditions. But the associated infrastructure, along with that for harvesting the grown algae, has led to systems that, in the view of some experts, have become too complex and expensive. Furthermore, controlling temperature and other parameters, running harvesting machinery, introducing nutrients and capturing waste CO2 from a fossil fuel burning plant all consume energy. Some companies, such as New Zealand’s Aquaflow Bionomics and US company LiveFuels Inc, therefore, remain loyal to the open-pond approach, using alternative techniques to prevent invasion by unwanted competing organisms. LiveFuels has been working with scientists from Sandia National Laboratories in developing a ‘green crude’ product it hopes will be price competitive with fossil crude oil. Tel Aviv-based Seambiotic Ltd similarly grows a high-yield, oil-rich algal strain in open ponds, using waste CO2 emissions. In a joint venture with Inventure Capital of Seattle, it is combining its technology with an advanced conversion process developed by Inventure, with the aim of producing biodiesel and ethanol at an intended commercial biofuel plant in Israel. Another youthful company, PetroSun Inc, is pinning its hopes on large saltwater open-pond systems located on the Texas Gulf coast and elsewhere. Raw oil extracted on site would be sent by barge or truck to biodiesel refineries.

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Project case study – phytoplankton Scientists at Biofuel Systems (BFS) in Alicante, Spain are producing fuel from microscopic marine algae. BFS’ Bernard Stroïazzo Mougin, a thermodynamics engineer, has teamed up with Christian Gomiz, one of the few biologists in the world specialising in phytoplankton. Phytoplankton is microscopic alga which in high concentrations appears as a greenish discoloration in water. The greenish hue comes from a substance known as chlorophyll located within the plant’s cells. Photosynthesis is the chemical chain reaction which occurs when sunlight is absorbed by chlorophyll producing carbohydrates from carbon dioxide and water. A major by-product of this process is oxygen. In fact more than half of the planet’s oxygen is produced by phytoplankton. At BFS, a small amount of algae is collected from the sea and then harvested in a photosynthesis machine. Within this machine, the single celled organisms reproduce by cell division, or mitosis, resulting in an extremely fast growth rate. Depending on the species of alga, this division can take anywhere from 8 to 24 hours. When sufficient biological mass has accumulated it is removed, dried and pressed into easily transportable bricks. This raw material can later be separated into hydrocarbons (used for biofuels), carbon (for use in electricity production and water desalination), and waste products such as cellulose – which can be used in the manufacture of paper and biodegradable plastics. The microscopic algae used by BFS can be harvested every 24 hours and are grown in vertical towers which occupy one square metre of surface area. The Algae grown in just one of these towers will produce the energy equivalent to a 1000 m2 sunflower plantation. Michael Plescia

Diversified Energy Corporation also believes that closed systems based on PBRs have become over-complex and costly, but has a different answer – a much simplified closed system engineered for low cost. Aiming at agricultural levels of simplicity, DEC has avoided the need for a rigid structure by laying what are essentially transparent plastic tubes in furrows ploughed in the ground. Although this Simgae™ (simple algae) approach requires land, this can be low-grade land that would be unsuitable for food crop cultivation. Infrastructure for CO2 and nutrient injection and water circulation is based on pumps and piping widely available in agriculture.

Harvesting oils Harvesting the grown biomass poses an even greater challenge than strain identification and cultivation. At small scale, a producer typically skims wet scum from the area of water it grows on, whether in a pond or a PBR. Then the wet glutinous mass has to be scraped from the skimmer into a receptacle. It is difficult to mechanise and expand this messy and laborious process in a repeatable and reliable way. After it is collected, the damp biomass has to be dried, naturally or in a heated space. Only then can oil extraction take place. Extracting oils from the dried algae can be as simple as forcing them out with mechanical presses. Alternatively, cell membranes can be broken down with enzymes and chemicals, the oil then being extracted by dissolving it in a solvent – typically hexane, or even water where appropriate algal strains and membrane-eating enzymes are used. Other possible solvents include benzene, ether and CO2 liquefied under

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pressure. Alternatively, solvent use can be avoided with methods such as centrifuging and flocculation.

Innovation Algal fuel development is at an early stage – and wide open to innovation. Although much basic R&D work is still the province of government science and academia, commercial drive is evident in the way the pace of innovation is accelerating. New companies seem to enter the field on a weekly basis, bringing with them radical ideas for enhancing productivity, reducing cost and increasing scale. One strand of development is aimed at improving yield by selecting appropriate algal strains and in some cases modifying them by selective breeding or genetic manipulation. For example, Florida-based PetroAlgae LLC, recently acquired by investor group PetroTech Holdings Corporation, is employing natural strains of algae developed by Arizona State University and bred selectively over many generations. It cultivates the strains in bioreactors that it plans to scale up for the commercial production of biodiesel and other fuels. It reportedly uses a centrifuging method to extract oil from the harvested and dried algal biomass. Left-over residue constitutes a high-protein meal that can be used as livestock feed. In an intriguing display of lateral thinking, a California company has developed a novel production method that completely avoids the need for sunlight and photosynthesis. Instead, Solazyme LLC cultivates microalgae by fermentation in large enclosed tanks, potentially achieving the scale of open pond cultivation without the risk of contamination. The company claims that the process of feeding certain sugars to algae grown in the dark is several times more productive than growing algae in ponds with sunlight. Collecting the biomass is said to be easier than when it is conventionally grown, while reduced capital costs result from less need for equipment and infrastructure. A possible objection, of course, is that growing the required sugar makes demands on land, energy and water. Moreover, some critics have suggested that avoiding photosynthesis eliminates the chief advantage that algae have over plants, their superior photosynthetic efficiency. Undaunted, Solazyme has demonstrated Solardiesel fuel produced in this way and oil major Chevron is backing the company financially to develop and test its process at commercial scale. Chevron’s Technology Ventures unit is also working with the Nation Renewable Energy Laboratory (NREL) to identify the most suitable algal strains. Another radical departure that avoids major parts of the conventional process route can be seen in the use of gasification to extract oils. In this approach, dried algae are vaporised with heat. Passing the resultant vapour through a catalyst system provides oil products. Different catalysts encourage the assembly of different organic molecules so that products ranging from crude oil to diesel, kerosene, petrol, etc, can be formed, depending on the catalysts used. This approach avoids the need for the more usual oil extraction, transesterification, refinement/cracking and cleaning processes. The Solena Group, specialists in renewable bio-energy, has leveraged gasification technology developed by NASA. Washington-based Solena uses a plasma gasifier to heat biomass to 5,000 °C, so producing synthetic gas (syngas). OriginOil Inc of Los Angeles claims to be addressing three primary process issues with patent-pending ‘next generation’ technologies.

Biofuels/Algae

Project case study – reducing the cost of creating biofuel from microalgae? At APP’s International Algae Congress held in Amsterdam recently, there was a consensus that the capability to cultivate microalgae in sufficient volumes for biofuel production on a commercial basis was nearing reality. Global Companies like Neste Oil and UOP also have the ability to process and convert the algal oil within the microalgae biomass to JP-8 and other high grade fuels. But one of the biggest pinch points that remains is how to extract the oil from the microalgae biomass in an efficient, cost effective manner. How, after all, can one extract such a small quantity of oil from each microbial algae cell? Traditional methods have been considered but these are neither efficient nor economic. These also seek to extract the oil by using external energy to break down the microbial cell walls. The amount of energy required to achieve this makes the whole process too costly. The solution appears to come from a biomass pre-treatment technology that is used to break down biomass feed stocks prior to anaerobic digestion. The microbes in anaerobic digesters break down organic material generating biogas. The smaller the particle sizes of the feedstocks entering the digester, the more efficient the digestion process. A UK company, Eco-Solids International Ltd, has been trialling a new proprietary patent pending process called Cellruptor with utility Yorkshire Water, to enhance biogas production at one of its wastewater treatment sites. Cellruptor effectively gives the sewage sludge being treated at the site “the bends” before the sludge enters the digester. As deep sea divers are aware, it is critical that they do not rise to the surface too quickly after a deep sea dive, otherwise the CO2 within their bodies expands too rapidly rupturing their internal organs. Cellruptor replicates these conditions within its own reactor. The CO2 that is used comes from the biogas that the digester generates. Biogas typically contains 40% CO2 by volume. The biogas itself is mixed with the sludge under pressure prior to the digestion process and during a short residence time, the CO2 permeates through all the microbial cells. The pressure is then suddenly dropped and the carbon dioxide within the cellular material expands very rapidly. The cell walls are unable to withstand this rapid expansion and the cell structures rupture. Enhanced biogas production then results when the material is fed into the digester. Importantly, the CO2 coming out of solution is recycled back into the reactor. Thus the process uses internal expansion energy to break open the microbial structures, which provides significant advantages compared with existing external energy technologies. Eco-Solids holds the rights to the Cellruptor technology for pretreating biomass prior to anaerobic digestion, and has been working with the licensor in the US to develop the capability to extract algal oil from microalgae biomass. The potential of Cellruptor to do this has been recognised by General Atomics, a multibillion dollar organisation that has secured US Defence Agency funding to develop affordable algal-derived JP-8 jet fuel. Nicholas Gill

According to the company, the first challenge is to introduce the CO2 and nutrients needed for algae growth without agitating the water, since preferred algal strains thrive best in a calm fluid environment.

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The second is to distribute light evenly within the algae culture, and the third challenge, arising at the oil extraction stage, is to maximise oil yield by cracking the tough walls of as many of the algal cells as possible with the smallest amount of energy. A process the company calls Quantum Fracturing™ is used to create a slurry of micron-sized nutrition bubbles that are channelled to the algae culture. Increased contact between the micronised nutrients and the algae ensures maximum absorption without fluid disruption or aeration. Fracturing helps again at the oil extraction stage by encouraging the breakdown of cell walls. In this ’lysing‘ process, water and special catalysts are fractured ultrasonically, with little energy, to help crack the tough membranes. In a pre-cracking stage, algal biomass is subjected to low-wattage microwave bursts to weaken the cell walls. This combination of microwave pre-cracking and ultrasonic cracking avoids the use of energy intensive mechanical methods (which are not always effective), or potentially hazardous solvent chemicals like benzene and hexane. An even distribution of light is secured through careful design of a Helix BioReactor™, a low-pressure unit in which the culture medium is contained in a rotating vertical shaft around which lights are arranged helically. Growth is optimised by engineering the lighting elements to produce light at specific frequencies. This growth environment allows the algae to replicate exponentially, doubling the colony’s biomass in as little as a few hours. OriginOil says that multiple Helix BioReactors can be stacked to form an integrated network of automated, remotely monitored growth units, thus ensuring scalability. For full industrialisation, each reactor group can be connected to a single extraction sub-system to form a complete networked production facility.

Awakening giant? It is too early to know whether algal biofuels are an awakening giant or whether the hope currently invested in them will be confounded. It seems significant that the US DoE, whose Aquatic Species programme did much to lay the groundwork for algae exploitation but was shelved in the late 1990s for budgetary reasons, recently started work on algae again, through its National Bio-Energy Center (NBC) at NREL. Group Manager of the NBC, Al Darzins, is optimistic about the prospects for algae biofuels, declaring “Wherever there’s a lot of sun and a lot of water, you can grow algae. With these organisms, we have the potential to produce 10,000 gallons of oil per acre. In the future, the bulk of the energy on our planet will be produced photosynthetically.” However, Jim Sears of A2BE cautions that this future might yet be years away, saying: “The journey will be complex, difficult and it’s going to take a lot of players.” The main challenges lie in scaling up the technology for commercial viability. As Jennifer Holmgren, Director of Renewable Energy and Chemicals for Honeywell International’s process technology company UOP LLC, comments: “Converting algal oils to fuel is not the fundamental obstacle. The gap is getting the oils in large quantities and demonstrating that they can be manufactured in a cost-effective fashion.” UOP is working closely with Airbus, International Aero Engines and Jet Blue Airways in a programme aimed at developing biojet fuel for aviation. We will have to wait to see how this develops.

Feature article

Chile to warm up its renewables market

Located in the north of Chile, the vast Atacama has some of the strongest sun rays on earth but is still unexploited on a large scale basis. Its proximity to some of the largest mines gives it added appeal as a site for solar energy (Credit: Colin Bennett).

LOOKING TO REDUCE DEPENDENCE ON IMPORTED ENERGY AND DIVERSIFY THE SOURCES FEEDING THE MAIN POWER GRID, CHILE’S INTEREST IN HARNESSING RENEWABLE ENERGIES HAS GROWN SIGNIFICANTLY OVER THE LAST YEAR. A MAJOR CONFERENCE IN SANTIAGO TACKLED THE BARRIERS TO ENERGY INDEPENDENCE, REPORTS COLIN BENNETT.

The Chilean Government’s support for new renewable energy sources took an important step forward in March 2008. President Michelle Bachelet signed a bill into law that requires new energy contracts to include 5% of their energy from non-traditional renewable sources. The Government has also paved the way for up to US$400 million on renewable energy projects. But despite this increased momentum and a wide range of renewable resources, the road ahead for renewable energy firms is challenging. Obstacles include a consolidated market price-driven energy market, an expan-

sive and rugged geography and a lack of direct subsidies. To better understand these challenges and opportunities, Renewable Energy Focus attended the Government’s Third International Conference on Renewable Energy and CDM, held in the Chilean capital of Santiago late last year. The conference demonstrated the Chilean Government’s focus on energy security and improvement as a top tier agenda item in the last year. But while it believes renewable energy resources are an important asset for the future, it takes a pragmatic view of the near term possibilities.

“When compared to the rest of the world, Chile is slightly behind, but we have great potential in terms of natural resources for renewable energy,” said energy minister Marcelo Tokman, who officially opened the event. Tokman sees several key challenges in Chile’s energy future. Supply must be guaranteed and diversified, prices kept down, and energy needs integrated along with other demands on Chile’s limited usable land. In the short term, he aims to limit demand to that which is strictly needed and ensure that the entire population has access to energy.

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Currently Chile receives a small share of its power from non-traditional renewable sources. The country produces only 347 MW from renewable sources, or 2.7% of its energy supply, according to the National Energy Commission (Comision Nacional de Energia, or CNE). Of this 347 MW of installed capacity, the largest share comes from Biomass, which accounts for 55%, followed by mini-hydropower (39.2%) followed by wind power (5.8%). This will likely change however as several large scale wind parks become operational in 2009 and 2010 (see . Many new projects are entering the construction phase, some sponsored by Chilean investment promotion agency Corfo, and some privately financed. These could significantly augment Chile’s installed capacity as Corfo’s portfolio alone includes 1000MW of projects being studied or constructed. However, according to Pedro Maldonado, professor of energy policy at Chile’s largest university, Universidad de Chile, privatisation of the market has created an added barrier to renewable energy generators that want to enter the market. This barrier sees renewable sources having to compete on a purely economic basis – without the help of any significant subsidies or fixed rates to make them more economically feasible.

Maldonado also believes that the high concentration of the market makes it harder for smaller companies to enter the market without some sort of Government assistance. But this situation has spurred the Government into action, and Corfo – which started giving financial backing in 2005 – now supports more than 120 projects.

What about legislation to push renewables? In addition, a new law of March 2008 obliges new energy projects to generate an escalating percentage of total energy from renewable sources – or face fines. This initiative follows the so called “short law” passed in 2004, which set standards and allowed small generators to connect to the national grids. The new law requires new energy generation contracts to include 5% generated from renewable sources starting in 2010, with possible fines in place starting in 2014. That quota of renewable energy will then increase, starting in 2014, by 0.5% each year through to 2025, when generators must secure 10% of power generated through renewable sources. The law gives a fairly broad definition of renewable energy, and includes hydropower projects under 40 MW of installed capacity.

Chile’s energy sector: factfile ■ Chile’s privatised electrical industry

is divided among 31 generation companies, five transmission and 36 distribution companies; However, the market is in the hands of several large international firms, the largest being the Spanish giant Endesa and Chilean owned Chilectra; ■ The power grid is separated into four main systems: The far north of Chile, mostly part of the vast Atacama Desert, holds the SING system, which primarily feeds Chile’s large mining industry. In central Chile about 60% of the country’s population uses the SIC central system. In the south, home to Patagonia and an expansive area of remote territory, there are two small systems: the Magallanes and the Aysén; ■ Today the majority of Chile’s energy comes from a combination of large hydropower projects and imported fossil fuels. However, several factors have led Chile to look for alternatives. Rainfall has decreased and, as a result, dam levels feeding hydropower projects are lower. In addition, the supply of natural gas from neighbouring Argentina is unstable; ■ Energy consumption is increasing in Chile at an average of 7% annually, with production barely keeping pace with the increase in demand. The cuts in natural gas supply have not only affected the SIC central system, but also the northern mining operations, which relied on natural gas from across the border. These operations have been forced to switch to diesel.

Some, however, believe that more aggressive measures must be taken. According to Marcelo Banto, South America manager of UK-based wind energy developer Seawind, to further promote investment in renewable energies the Government must take a more direct approach and either subsidise renewable operations directly or develop a fixed rate for renewables entering the main grid.

Chile’s energy minister Marcelo Tokman (left) and Carlos Álvarez (right), VP of the state run investment promotion agency Corfo, are the two leading government figures behind the new push for greater use of renewable energy in Chile (Credit: Colin Bennett).

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And according to Maldonado, the new law – and growing interest in renewables in Chile – constitute an important first step, but a larger Government programme is needed, one that shares the financial risk in order to develop new projects. Indeed a joint study between the Universidad de Chile and the Universidad Federico Santa Maria and published by sustainable development NGO, Chile

Regional/Chile

Most of Chile’s operational renewable energy projects are still very small scale, such as the 2MW Alto Baguales wind park in the far southern region of Aysén (Credit: Víctor Seguel, courtesy of Corfo).

Sustainable, came to a similar conclusion. Its report argues that Chile must see renewable energy as more than just a complementary measure to the main grid, and that more leadership – and stronger incentives – are needed.

study estimates that 28.1% of energy could come from renewable sources, in a “best-case” scenario, by that same year. The study also recommends several other actions that if taken would benefit the renewable energy sector in Chile:

Looking forward, the study estimates that using a conservative model, Chile could receive 16.8% of its energy from renewable sources by 2025, with mini-hydropower the leading source. However, if geothermal and wind energy are used more aggressively, the

■ A large round of feasibility studies needs to

be funded to map out the resources available at a national scale; ■ The potential of the human capital at a local level needs to be evaluated and

developed. For example, determine where and to what degree the scientific, operational, and technical know-how exists, and then improve on it. Also study the impact that renewable energies could have on employment and job development; ■ Ways to increase energy efficiency on all levels in Chile needs to be researched; ■ Investments in energy infrastructure need to be incorporated into the tariff scheme. Find ways to encourage greater investment in both renewable energy and energy efficiency on the part of energy companies.

Energy sources in Chile Energy Source Renewable

SIC - Central Electricity Grid (MW) 312.7

% of total SIC

SING – Northern Electricity Grid (MW)

% of total SING

Total Installed power (MW)

3.43

12.8

0.36

325.5

run of river hydro over 20MW

1377.3

15.1

0

0

1377.3

Dam

3393.4

37.22

0

0

3393.4

Coal

837.7

9.19

1205.6

33.47

2043.3

75

0.82

271.8

7.55

346.8 582.9

Oil/Diesel Dual (Diesel gas/ gas IFO180) Natural gas Total Installed power

582.9

6.39

0

0

2539.30

27.85

2111.7

58.62

4651

9118.3

100

3601.9

100

12720.2

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for mini-hydropower, and is home to thriving forestry and agriculture sectors that are suitable for biomass energy generation.

Windpower Wind energy’s largest potential is in the south of Chile, in the remote area of Patagonia. However, the distance to the central SIC energy grid makes a large wind farm unprofitable as local demand is still low. Most projects in this wind-rich area are geared towards industrial and remote sites, and do not feed directly into the main grid. Chile’s renewable energy resources

Can foreign investment play a part? In order to achieve this potential growth, Chile is looking to foreign firms to invest in local projects. Chile has long been a favourite destination for companies of varying sectors, and renewable

How do the country’s two laws promote renewables? Short Law

energy is set to be no exception. According to the World Economic Forum’s Infrastructure Private Investment Attractiveness Index, Chile is the top country for foreign investors in Latin America for electricity, roads and communications. Corfo takes a lead role in attracting foreign investors and matching them with compatible projects. The agency is focusing on funding feasibility and pre-operation studies, as well as guaranteeing credit from banks – rather than directly funding or subsidising operations. This approach, resulting from Chile’s ultra free market thinking, tends to make the country attractive to foreign investors.

■ Passed in January 2004 the legislation

was designed to allow smaller energy producers to connect the national grid; ■ The law assured small producers the right to sell energy at node, or market prices; ■ Fully or partially released renewable energy producers from paying transmission tolls on surpluses under 20 MW. Short Law II ■ Passed in March 2008 the legislation

obligates generators to receive an increasing share of their energy from renewable sources; ■ New energy generation contracts must incorporate a 5% share of energy from renewable sources starting in 2010, with possible fines in place from 2014 onwards; ■ That quota of renewable energy will then increase starting in 2014 by 0.5% each year through to 2025, when generators must secure 10% of their power generated through renewable sources.

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And then there’s the Kyoto Protocol’s Clean Development Mechanism (CDM). This provides a framework for investors to support renewable projects in certain countries, and Chilean officials and project managers have traditionally been interested in meeting CDM investors. Corfo has been quick to grasp this investment opportunity. As of October 2008 Chile had 56 CDM projects in the pipeline, 28 at validation, 2 requesting registration, 25 registered and 1 with correction requested. Moreover Chile’s attractive investment climate extends to the CDM, where it is ranked the third most attractive CDM market globally – according to carbon trading research firm Point Carbon.

A climate for renewable energy? Chile’s diverse geography provides good renewable resources. An extremely dry and hot desert with year-round sunlight in the north, and a vast coastline of some 4300 km provide viability for both wave and wind technologies. The south of Chile also offers sites

January/February 2009

The most viable locations for wind farms are along the coast to the immediate north of the capital, Santiago, and two Spanish firms, Endesa and Enhol, are targeting this area with projects due to enter the construction phase over the next two years. These will be the largest in the country. Endesa owns Canela, currently the largest wind park in Chile, with 9.9 MW of installed capacity. The park is located approximately 300 km north of Santiago. Through its renewable subsidiary, Endesa Eco, the company also plans to build a 60 MW park, Canela II, which will come online in 2009. Fellow Spanish energy group Enhol is also aggressively investing in Chilean wind farms and mini-hydropower. The group will start construction in 2009 on a 500MW (nearly US$1 billion) wind farm in the north of Chile. The wind farm will house 243 turbines, producing 2–3 MW each.

Geothermal energy A high level of volcanic activity makes geothermal energy an attractive renewable source. However, this resource has received very little attention and focus from feasibility studies. The high cost of exploration has kept most potential investors away, according to Corfo. For the Universidad de Chile’s Maldonado, this is one area in which the Government must develop more aggressive measures to fully benefit from available resources. The CNE has identified 115 potential sites for exploration. Almost half of these are in either the far north or extreme south.

Solar Power The Atacama Desert provides Chile with some of the strongest solar radiation on the planet, with rays well over 4,000 Kcal/(m2/

Regional/Chile

Why should foreign firms develop renewable energy projects in Chile? ■ Little corruption and a high level of

■

■

■

■

■

transparency surrounding the issuing of contracts and other Government actions; Unlike some other Latin America countries (Argentina, Venezuela), there is a low risk of private assets being appropriated by the Government; Macroeconomic fundamentals: Procompetition economic policies, low inflation, and low public debt make Chile’s economy one of the most stable in the regions, even in these times of crisis; Stable political environment: Economic policies have been in place despite changing administrations; Modern transportation and communications infrastructure: Excellent highway and telecoms infrastructure makes logistical problems less of a burden; Both an interest and a recognised need for a greater role for renewable energies: A high dependence on imported energy and an abundance of resources provides an opportunity for intrepid foreign investors.

día) common in the Atacama. To date, the Government’s efforts have focused mainly on providing remote locations with solar panels. Due to the small nature of these remote projects, there is more room for smaller companies to operate, but also fewer funding opportunities from Government agencies like Corfo. The mining industry has already shown interest in getting a higher proportion of its energy from solar power. The natural gas supply crisis in Chile has affected the industry deeply, and miners have had to turn to diesel to meet energy needs.

Mini hydropower The vast network of lakes and rivers in Central to Southern Chile makes mini-hydropower projects a promising renewable energy source. According to Corfo, there is a potential for at least 850 MW from more than 290 channels (or small dams owned by agricultural channel management associations).

The largest exporter of copper in the world, Chile’s mining industry has been hard hit from natural gas shortages and unstable fuel prices, causing both government and industry officials to look to renewable energy as a possible solution looking forward (Credit: Colin Bennett).

A recent change in water regulations has relaxed the requirements for hydropower projects, and led to an increased number of mini-hydropower and run-of-river projects. For its part, Corfo is funding more than 50 feasibility studies that could yield more than 300 MW, with an investment of around US$400 million.

Biomass for power Chile’s logging industry and the waste that it generates makes bio-mass an option in the south of the country. Corfo, citing numbers from a study by German development agency GZT, believes that this industry alone could generate up to 470 MW of power. A separate study by the Chilean Government’s Forestry Institute, Infor, estimates the industrial sawmill industry alone could generate up to 900 MW. Biogas projects are already underway with 150MW currently available from landfills and sewage treatment plants. Power generated from biomass projects in Chile are currently added directly to the grid, mainly through electrical co-generation plants that use industrial waste from the pulp and paper industry.

resource has received scant attention. Corfo does have plans to launch a feasibility study in the short term, but as yet there is no solid delivery date or plans to finance projects. Despite this apparent lack of interest from Chilean parties, foreign firms are showing interest in developing wave energy projects. For example, speaking at the conference, Carl Reiff, president of California-based firm Elgen Wave, sees the south of Chile as being a potential source of wave energy due to the high swells that the area experiences on a regular basis. Moreover, investing in Chile is also attractive due to the stable political environment and lack of any developed competition from other wave energy initiatives, Reiff added. The potential for renewable energy to play a crucial role in Chile’s future energy is, as in many countries, wholly apparent. The interest exists and, despite limited progress in the past, the country now appears to be taking its first fledgling steps towards a more renewable future.

Marine sources of energy

About the author:

Chile’s vast coast makes it a prime location for wave generation projects. However, in Chile this

Colin Bennett is based in Santiago, Chile, and is Renewable Energy Focus’ Latin America correspondent.

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Feature article

How to invest in geothermal UNTIL RECENTLY, MOST INVESTORS HAVE LARGELY IGNORED GEOTHERMAL TECHNOLOGY. BUT IN THE PAST TWO TO THREE YEARS, INVESTOR INTEREST IN GEOTHERMAL TECHNOLOGY IS FINALLY CATCHING ON  WITH INCREASED RECOGNITION OF THE HUGE POTENTIAL TO BE TAPPED. KAI SAMETINGER OF FORSEO ASKS WHAT HAS TRIGGERED THIS NEW INTEREST.

In many countries, these translate into stronger policy support for renewable energy. A greater awareness of the benefits inherent in geothermal energy now seems to be helping to remove some of the existing barriers. Most of all, the base-load capacity of geothermal power plants can now be seen as a comparative advantage. A key impulse came from Iceland, when companies like Glitnir Bank or Geysir Green Energy – combining know-how and capital – seized the international market in with concerted effort.

In EGS, also known as Hot Dry Rock or Hot Fractured Rock, wells are drilled, and water is injected under high pressure, which creates an artificial geothermal reservoir at depth. Water is circulated through the reservoir, extracting heat from the rock for use in producing geothermal electric power using a binary power plant. The US Department of Energy (DoE) estimates that the application of EGS technology in the USA is capable of providing at least 100,000 MWe of electricity within 50 years. With a modest R&D investment of US$1 billion over 15 years, the MIT report estimated that 100 GWe of electricity could be installed by 2050 in the USA

It doesn’t come as a surprise that Google’s US$10 million investment in geothermal aims at EGS, sending out another strong signal to those who are still hesitant. Google.org, the philanthropic arm of the search engine company, supports AltaRock Energy Inc, a company developing proprietary technology advancements, designed to lower the cost of EGS electricity generation. After successful completion of an EGS demonstration project, AltaRock hopes to begin commercialisation of EGS beginning 2010. Another beneficiary is Potter Drilling, a developer of deep hard-rock drilling technology.

GEOTHERMAL PROJECT DEVELOPMENT

Project phases

Enhanced Geothermal Systems – a key technology

Activities

Costs Invesment by owner/host

Operation & Maintenance

Debt financing or IPP 1,000

COMMISSION

Plant construction

Plant construction Plant manufacture FINANCIAL CLOSURE

New technology development, as demonstrated with the recent success of commercial low temperature power projects in Alaska and Germany, makes geothermal more competitive. A comprehensive report by the Massachusetts Institute of Technology (MIT), released in early 2007 heralding the enormous potential of Enhanced Geothermal Systems (EGS), clearly invigorated the market. Investors took note of a cutting-edge technology that has the potential to access the earth’s vast stored heat resources to help meet the world’s energy needs. 84

renewable energy focus

Resource development

Establish plant contract Development / Prod. drilling Permitting Commercial negotiations Preliminary Design

100

10

GO/NO GO

Feasibility

Feasibility study Exploration drilling Infrastructure Permitting

Pre-feasibility

Pre-feasibility study Geophysics

1

GO/NO GO

GO/NO GO

Site identification

Geology and geochemistry Project development

high

Risk of failure low 0

1

2

3

4

5

Time [years]

Figure 1: Geothermal project phases and their related costs and risks on a timeline. Example from a 100 MWe plant in the Philippines (source – Randle, 2001, modified),

January/February 2009

Cumulative costs [millions US$]

With geothermal, as with other alternative energy technologies, there have been plenty of drivers: accelerated global demand for energy, extraordinary increases in the price of oil and a growing awareness of the need for carbon-free energy sources.

Geothermal/investment

The colour of money: closeup of thermophiles in the heated waters of Yellowstone National Park

Specialised drilling companies play a key role in further advancement, as drilling is an essential part of geothermal exploration, development, and utilisation. The objective of advanced drilling technology is to promote ways to reduce the costs and to access hard to come by geothermal resources. Furthermore, the design of drill heads capable of withstanding very high temperatures is a challenge. The international Iceland Deep Drilling Project (IDDP) aims at electricity production from so far untapped geothermal resources, so-called supercritical hydrous fluids from drillable depths. Production will require the drilling of wells at temperatures of 450-600°C. Supercritical geothermal systems could potentially produce up to 10 times more electricity than the geothermal wells typically in service around the world today. While the IDDP is exploring new dimensions of tapping geothermal, EGS technology has been successfully demonstrated by a European research project in Soultz sous Forêts (France). After 20 years of research, electricity production of the world’s first Hot Dry Rock plant started in

June 2008. This success is important in proving the technological feasibility, yet there are questions as to the economic viability, as the research project was financed entirely by public funds. The answer might come from the other side of the globe: Australian companies are leading the way with major investments in EGS technology and the first commercial power plants are expected to be online soon.

How to close the financing gaps Investors’ increased interest is vitally important for the geothermal industry, as the lack of capital available to geothermal projects, especially during early development stages, stifled the growth of geothermal technology worldwide and continues to pose a major challenge for the sector. Yet, while market confidence is growing, geothermal projects still have to bear multiple risks and investors are well-advised to act with prudence. It can be very difficult to determine which geothermal developers will succeed and which will fail as some might depend too heavily on the fate of single projects. Thus

knowledge and experience are needed in any geothermal development. That applies not only to the developer but also to financial institutions and investors. Most geothermal power projects take five to 7 years to be completely operational, depending on permits and other licensing issues. Each geothermal project phase, from site identification to operation and maintenance, has its own scheme, its own set of activities and requires different equity and financing solutions with very different risk profiles. For economic success, it is important to understand that the subdivision in project phases reduces the risk because go/no go decisions can be made at the end of each phase (see figure 1). Financial applications depend greatly on the success of drilling, which is ultimately determined by the volume, temperature and pressure of the fluids discovered. Drilling is a very expensive part of any geothermal project, representing up to 60%–70% of the overall geothermal project cost in Germany and 30%–40% of the overall project cost in the USA.

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GEOTHERMAL PROJECT DEVELOPMENT

Geothermal comes to East Africa

Time [years] 0

1

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Start-up Site identification Pre-feasibility Feasibility Resource development Plant construction O&M

Equity Perspective Venture Capital

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Developers IPPs (Development Pipeline) Resource Speculators Venture Capitalists

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Private Equity Public Markets Financial Partners

Private Equity Strategic Partners

Tax Equity Financial Players Large IPPs with ability to monetize PTCs

Figure 2: Typical project timeline and financing options of a high enthalpy project in the USA (source – Glitnir, 2008, modified).

While the percentage varies greatly for other regions, in all cases the potential for unsuccessful drilling represents a high risk factor. Given this high risk factor, traditional debt is usually not available in the early stages of a geothermal project – not until the resource has been successfully proven. In some cases, Government support and subsidies are helping projects to get off the ground. Public support schemes, however, differ from nation to nation and are never able to completely cover costs. In the end, all projects depend heavily on the open market for their financing needs. Figure 2 shows financing options from an equity and banking perspective through the project’s development stages. While options have been limited in the past and the risk reward balance has prohibited developers from accessing most traditional sources of equity, there is evidence that the tide may be turning. In 2007 private equity firms invested more than US$400 million in geothermal energy, and US$3 billion was invested in disclosed deals, an increase of 183% from 2006 (Source: New Energy Finance). Large energy and utility companies are now moving into the industry, expanding collateral options for investors. In addition, specialised financial institutions have started developing alternative financing instruments to bridge the financing gaps. One example is Icelandic Bank Glitnir’s ‘resource verification loan,’ a hybrid mezzanine vehicle that was used to cover the cost of drilling and testing the two initial production wells for a geothermal power plant in California.

Mitigating Risks All geothermal projects have to bear multiple risks until the resource has been proven: reservoir-related risks, risks from natural hazards, production-related risks, technical risks, financial risks and legal risks – and each has different probabilities and impacts. As exploration and drilling constitute major upfront investment 86

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components, reservoir risk is a real hurdle for an investor in a geothermal project. This is especially true for low-temperature projects in case the necessary flow rate cannot be reached, resulting in high economic risk – i.e. a total failure of the project. Insurance exists for some of the risks but not for all, and not in all countries. As Ken MacLeod, ceo of Western GeoPower, notes, proper risk assessment is key: “There is no exploration insurance available in the US – a good and experienced team and thorough knowledge of the resource is our insurance.” Yet, reservoir-risk transfer can be a viable instrument to mitigate the risk of lower than expected heat extraction. The insurance industry has, albeit faint-heartedly, responded to the challenge by offering coverage for reservoir risks at locations that are geologically well-defined. Reservoir-risk insurance reduces the need for equity through partial coverage of costs should the project become uneconomical. According to Marcel Stäheli, director of Weather and Energy Underwriting at Swiss Re: “Germany is currently the most mature insurance market for deep geothermal reservoir risks. With reservoir-risk transfer demand increasing (outside Germany), the insurance industry is further challenged to quantitatively assess the risks of lower than expected heat extraction in areas with little empirical data as geologically diverse as the East African Rift Valley or the Chilean Andes.” Reservoir-risk insurance might be one vehicle that will further accelerate worldwide geothermal development. More and more, the huge geothermal energy potential in many regions of Asia, Africa and Latin America is starting to outweigh the prevailing risks, in large part due to an increasing number of Governments helping to bring foreign investors into the picture, particularly for renewable energy businesses. Geothermal energy development and investment is clearly picking up

January/February 2009

Geothermal energy generation in Africa could take a leap forward in 2009 after exploratory studies in Kenya “exceeded all expectations”, according to the United Nations Environment Programme (UNEP) and the Global Environment Facility (GEF). A new enterprise – the African Rift Geothermal Development Facility (ARGeo) – will drive forward the plan to harvest the steam locked among the rocks under East Africa. UNEP and GEF made their announcement at the UN Climate Change Conference, in Poznan, Poland recently. “Geothermal is 100% indigenous, environmentally friendly and a technology that has been under utilised for too long,” said Achim Steiner, executive director of UNEP. “Combating climate change while simultaneously getting energy to the two billion people without access to it are among the central challenges of this generation,” he added. Over the last three years, GEF has funded a US$1m (£670,000) project in Kenya to identify promising new drilling sites. Although there are already two geothermal sites near Nairobi, Kenya, the main challenge to expansion in the country, and elsewhere along the Rift, has been the risk associated with drilling and the high costs if steam is not found. The project harnessed new technologies to locate promising sites. Steiner said that the Rift Valley is now thought to have the potential to generate at least 4,000 MW of electricity. “We have shown that geothermal electricity generation is not only technologically viable but also costeffective,” said Monique Barbut, chief executive officer of GEF. Participating countries will include Eritrea, Ethiopia, Tanzania and Uganda. KenGen (a Kenyan company), and Germany and Iceland will also be involved.

pace and has gained the momentum it needed. Glitnir forecasts considerable consolidation in the coming years as cash-poor smaller players get absorbed.

About the author Kai Sametinger is project manager at forseo GmbH. To obtain “The Investor’s Guide to Geothermal Energy”. contact: forseo GmbH: info@forseo.de

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Feature article

Obama: prospects for alternative energy FEW EXPECTED AN UNKNOWN FIRSTTERM SENATOR TO BECOME A US PRESIDENTIAL CANDIDATE, MUCH LESS BE ELECTED IN NOVEMBER 2008. DESPITE THIS REMARKABLE ACHIEVEMENT, MANY WONDER WHETHER WINNING WAS THE EASY PART. DON C SMITH, US POLICY CORRESPONDENT FOR RENEWABLE ENERGY FOCUS, CONSIDERS BARACK OBAMA’S ELECTION AND LOOKS IN DEPTH AT WHAT THE NEW ADMINISTRATION MAY MEAN FOR THE ALTERNATIVE ENERGY SECTOR. What will happen under the administration of Barack Obama, a US Senator from Illinois, who defied long odds to become the 44th president of the US? Of course, undertaking a successful political campaign is not the same as governing. And yet policy positions staked out in a campaign often provide valuable insight into the way in which, once elected, an official may govern.

provisions designed to create incentives for wind and other renewable energy industries. “This stimulus package is a critical down payment on long-term policies to enhance energy security, encourage new economic investment in jobs, and address climate change,” said Greg Wetstone, AWEA’s senior director for governmental affairs.

The Democratic-controlled Senate voted 61-37 to approve the measure, with few Republicans opting to back it.

The Senate-passed bill includes a US$7 billion renewable energy loan guarantee program (an amount that is $1 billion less than the level provided in the House version of the bill), a 3-year extension of the federal production tax credit (PTC), an additional year of bonus depreciation for 2009, elimination of the cost caps for the small wind investment tax credit, and targeted provisions to encourage construction of new transmission lines to deliver electricity generated from renewables.

Tough negotiations are now expected in order to reconcile the Senate bill with the House of Representatives’s version, with Obama having set a date of February 16 for a final version. So by the time you’re reading this, in all likelihood the package will have been finalised (we will keep readers up to date with the news on our website – www.renewableenergyfocus.com).

Wetstone noted that the industry would be pushing for inclusion in the final legislation of a Department of Energy (DOE) grant program included in the House bill. “The House DOE grant program is absolutely essential to continuing the growth of wind power and other renewable energy sources through the down economy,” he commented.

The American Wind Energy Association (AWEA) hailed Senate approval, which includes several

Solar enthusiasts, still pleased with the recent 8-year extension of the Investment Tax Credit

Obama has certainly set off at pace. As we go to press, the US Senate has already agreed a US$838 billion stimulus package, which, though different to the House version agreed several weeks or so earlier, gives considerable support for renewables.

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(ITC), were also happy, though also state they’ll be lobbying hard in the coming days for a renewable energy grant program (an alternative to tax credits that are tricky in the current economic climate); an extension to Federal long-term power purchase agreements from 10 to 30 years; subsidised energy financing; a loan guarantee program and a manufacturing investment credit. So, if, as Wetstone commented, this stimulus package is a down payment on long term policies, what might we expect as we move forward into the 100 days of Obama’s Presidency and beyond? This much is clear: in America, the energyrelated proposals that Obama campaigned on include some of the most far-reaching and significant ideas ever put forth by a mainstream American presidential candidate. As described in his campaign, America faces “one of the great challenges of our time: confronting our dependence on foreign oil, addressing the moral, economic and environmental challenge of global climate change, and building a clean energy future that benefits all Americans.” The contrast of these sentiments with those heard from the White House during the last eight years is, in a word, stark.

US/Elections

Getting the job done – the tasks awaiting Obama ■ The new Administration will have to invest

■

■

■

■

quickly in the modernisation of the electricity grid. Hundreds of megawatts of new renewable generation could be moved into the national grid, but only if the creaking current grid is restructured and made more flexible; Obama will need to carefully address an “innovation investment” approach that accelerates market take up of renewables. Today less than one percent of the nation’s electricity comes from wind power. Consequently, there is an immediate need to take steps to make renewables more prominent in the nation’s energy portfolio. Investment is needed to develop a new “green” workforce. This effort is likely to gain quick support as a way to offset the enormous job losses of the past 12 months; There is an enormous need for one Federal office to co-ordinate the efforts of all Federal agencies. Obama has talked about establishing a “National Energy Council” as part of his White House operation. The efficiencies achieved in such an effort would probably be considerable since Federal agencies are currently all over the map in terms of their responses to and involvement with alternative forms of energy; And as the linchpin to the success of his overall effort, Obama must address the matter of a rational energy-pricing

This was confirmed in a speech of 8 January, in which he made it clear that renewables would play an important part in “saving” the US economy. Outlining his American Recovery and Reinvestment Plan, which could see spending of up to US$775 billion and the creation or saving of three million jobs, Obama promised that energy is one of his priorities. As well as using “clean energy” as a job creation tool, he addressed the need to upgrade the American transmission system pledging to start building a new smart grid. According to a report from consultancy KEMA, an investment of US$16 billion in smart grid incentives over the next four years could work as a catalyst in driving associated smart grid projects worth up to US$64 billion. It also predicts that by the end of 2009, over 150,000 of the 280,000 new direct jobs will have been created. In short, what Obama has proposed represents a monumental shift in direction from the energy plan crafted by America’s outgoing

scheme. Put another way, energy generation must account for the amount of carbon emitted in the generating process. In this regard, the new president will seek Congressional approval of a cap-and-trade system. This will no doubt raise questions among some that the plan will make American business less competitive. But the reality is that it makes no sense to enact the other measures unless the market fully accounts for the cost of pollution, a matter that has received no attention from the Bush Administration. ■ Among some of the key issues that prominent renewables organisation ACORE have highlighted include: how to integrate what some States are already doing with what the Federal Government might do (this involves constitutional questions regarding the separation of powers between the Federal and State Governments; will there be cap and trade … or interestingly … some kind of other tax?; what to do about the thorny issue of biofuels – will the money aimed at this effort be diverted to Detroit to make more fuel efficient cars, for example?; energy efficiency – should the US aim to replicate what the EU has already done in terms of high standards for new buildings?; transmission issues – historically the state public utilities commissions have handled much of the transmission matters, but how will the new Administration propose to work with the States on this?

president, George W Bush. A snapshot of Obama ’s plan reflects the sea change that America is about to undertake: ■ Implementation of an economy-wide cap-

and-trade system to reduce greenhouse gas emissions by 80% by 2050; ■ Ensure that 10% or even 15% of the country’s electricity comes from renewable sources by 2010-2012, increasing to 25% by 2025 (currently more than half the States have a mandated renewable portfolio standard, but none exists at the federal level as the result of Bush Administration opposition); ■ Put one million American-built plug-in hybrid cars on the road by 2015; ■ Help create five million new jobs by strategically investing US$150 billion over the next 10 years to catalyse private efforts to build towards a clean energy future. Obama’s campaign statements also reveal his energy philosophy. Perhaps, in some

instances, he may regret that in his quest to win the Presidency he made such aggressive statements, but they do serve to underscore his likely approach to governing. For example, last year he said, according to The San Francisco Chronicle, that “electricity rates would necessarily skyrocket” under the cap-and-trade programme he envisions. He has also voiced strong support for investing in the necessary infrastructure to enable alternative energies to be more viable. “One of…the most important infrastructure projects that we need is a whole new electricity grid. Because if we’re going to be serious about renewable energy, I want to be able to get wind power from North Dakota to population centres like Chicago.” This was said on TV network MSNBC. And in respect to a different challenge, three weeks before the election, Obama said, “we can’t drill our way out of the [imported oil] problem. That’s why I’ve focused on putting resources into solar, wind, biodiesal, geothermal. It is absolutely critical that we develop a highly fuel-efficient car that’s built not in Japan and not in South Korea, but here in the USA.” And a few days after his election, Obama , in a taped speech, told American Governors that his presidency “will make a new chapter in America’s leadership on climate change.” So far so good, many may think, and if a stimulus Bill is on Obama’s desk this month, there could be real grounds for optimism. But with the US, and the rest of the world for that matter, facing the most significant financial and economic crisis in nearly 75 years, what are the prospects that the new president can actually carry through all of his ambitious plans? There is not much time for legislators in Washington to reach agreement, as the budget has to be ready by mid-February, and the road will be bumpy. According to the Associated Press, Republicans warn against increased spending and both parties say they want their stamp on the economic recovery effort. The one thing they all agree on, is the need for action. The worry is about the deficit, which according to the Congressional Budget Office (CBO), could reach US$1.2 trillion in 2009, and as the Economist puts it: “Mr Obama faces three sceptical constituencies: Republicans, fiscal conservatives in his own party, and the markets.”

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Obama’s green dream team President-elect Barack Obama has now announced key members of his energy and environment team, which has been enthusiastically greeted by environmental groups: ■ Dr. Steven Chu, Secretary of Energy –

Chu is director of Lawrence Berkeley National Lab, and professor of physics and molecular and cellular biology at University of California, Berkeley. Winner of the Nobel Prize for physics in 1997, Dr. Chu served on the technical staff at AT&T Bell Labs (1978 –1987) and was a professor in the Physics and Applied Physics Departments at Stanford University (1987 – 2004). He has a deep interest in climate change issues and is an expert in renewable energy; ■ Lisa Jackson, Environmental Protection

Agency (EPA) Administrator – Jackson became the head of New Jersey’s Department of Environmental Protection (DEP) in 2006, where she helped develop the Northeastern states Regional Greenhouse Gas Initiative (RGGI); ■ Nancy Sutley, Chair of the White House

Council on Environmental Quality (CEQ) – Sutley currently serves as the Deputy Mayor for Energy and Environment for the City of Los Angeles, and is also Mayor Villaraigosa’s appointment to the Board of Directors for the Metropolitan Water District of Southern California; ■ Carol Browner, Assistant to the

So, in short, Obama’s key to success will be his ability to link three separate but related objectives:

The three phases of Obama’s blueprint

he must reinvigorate an ailing economy; ■ Second, he needs to address America’s energy security challenges; ■ And finally, he has committed his administration to addressing climate change.

Obama’s plan will most likely be implemented over three time periods. The first period will run from 20 January 2009, the day he takes office, through to the first of May 2009. Arguably in this first 100 days in office his political power will be the greatest. During this period his actions will focus on executive-level decisions that he can make without the involvement of Congress.

While no small tasks by any measure, there are indications that America’s financial problems will open enormous opportunities for Obama to drive ahead with his energy plans. While the incoming Administration has not, of course, welcomed the economic crisis, it must now attempt to find the best in a bad situation.

Among other things, observers should look to see how his energy team interacts with his economic stimulus team. To be sure, all signs point to a close working relationship since John Podesta, the former chief of staff to President Bill Clinton, has played a key role in Obama ’s transition efforts and understands the need for such a partnership.

■ First,

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President for Energy and Climate Change – Browner is Principal of The Albright Group LLC, where she provides strategic counsel in the critical areas of environmental protection, climate change, and energy conservation and security. Prior to her current position, she served as Administrator of the U.S. Environmental Protection Agency, a Cabinet-level position she held for eight years; ■ Heather Zichal, Deputy Assistant to the

President for Energy and Climate Change – Zichal currently serves as the co-chair for the Energy and Environment Policy Team for the Obama Transition Team.

Podesta, a well-regarded Washington insider, has called for an energy policy overhaul that takes account of alternative forms of energy. Moreover, despite the economic downturn, the

US/Elections

from powerful organisations such as the US Chamber of Commerce, which argues that a new energy plan such as that envisioned by Obama will hurt American competitiveness. And while Democrats will control both houses of Congress, it bears mentioning that some of these individuals are considerably more conservative when it comes to reforming energy policy than Obama. But perhaps his greatest challenge will be overly high expectations. In the wake of 8 years of indifference, neglect, and error on the part of the Bush Administration, the new man will need to manage the expectations of those – particularly environmentalists – who will see anything less than 100% success as somehow a failure.

Analysis – what to watch out for post January 2009 The first 100 days in office for the new Administration offers both opportunities… as well as risks. Opportunities to create momentum for change, but risks of not being perceived to be changing things quickly enough. So analysts talk in terms of “low hanging fruit” – changes that will be easier to make, as well as very visible. Obama’s first priority has been the Economic Stimulus Bill. This legislation includes some money for infrastructure (such as smart grids) and also some additional tax credits. In order to demonstrate the mantra of “change” in Washington, the team will probably look to put in place a series of other popular Bills, and that could include some kind of renewable energy Bill, to focus more directly on things like a federal RPS, more funding for renewables and energy efficiency research etc. From the sounds of it, these two bills will be pushed hard during the first 100 days. Cap and trade will probably come a bit later, but not too much later. Because of the complexity of the energy issues, there are multiple Congressional Committees that will be handling bits and pieces of the entire package. For example, the underlying policy issues will be handled by the Senate Energy Committee (Sen. Jeff Bingaman from NM) and the House Commerce Committee (Rep. Henry Waxman of Cal). The legal/regulatory issues will be handled by the Judiciary Committees in both chambers. The tax-related issues will be handled by the Senate Finance and House Ways and Means Committees. Finally the cap and trade revenues (that is to say the money generated from cap and trade through the auctions) will be handled by the Senate and House Appropriations Committees. So this will be a real legislative puzzle to figure out. Energy policy will likely be handled at White House level by former EPA Administrator Carol Browner. She will co-ordinate the policy-making work of the following agencies: Department of Interior, Department of Energy, EPA, and the Council of Environmental Quality. She is heading Obama’s transition team in looking at these agencies and she’ll be named to this new position which will be called the “National Energy Council” which will be similar in structure to the president’s “National Security Council.”

new president seems poised to ask for at least US$1.5 billion in alternative energy research and development funds as a “down payment” on his campaign pledge to invest US$150 billion in this sector over 10 years. Finally, his economic stim-

However, to the degree he is able to link the energy plan efforts with the economic stimulus package, Obama may find the level of opposition considerably muted. He can point out that the current energy policy, such as it is, has left the county in an extremely compromised position from both economic and security standpoints.

The contrast of [Obama’s]

The road ahead

sentiments with those heard from the White House during the last eight years is, in a word, stark. ulus package is likely to include significant levels of funding for his “green jobs” commitment. The second phase will run from May 2009 through the mid-term elections of November 2010. During this period Obama will seek legislative action to implement his plan. Key components to watch for are a cap-and-trade system for carbon emissions as well as investment in a smart grid. The Obama Administration must be careful, however, to manage the public’s expectations about policies that in the short term might result in some economic dislocation. The third phase will begin in January 2011. At this point Obama will face re-election in just over 20 months, ie, November 2012, and he will be faced with shoring up already enacted legislation that needs fine-tuning as well as looking at the horizon to see what challenges are in place at that moment. Of course, not everyone agrees that the new Administration is taking the right approach. The new President will face opposition

Several weeks after his election, and with the country reeling from months of bad economic news, Obama reflected on the road ahead. “We’ll put people back to work…building wind farms [and] fuel-efficient cars,” adding that investments in alternative energy projects are “long term investments in our economic future.” Without doubt, it will be difficult to implement a new energy plan that takes account of the economic challenges on one hand and the environmental and security ones on the other. And, of course, unforeseen events can and will put the new administration to the test. But Obama has travelled this road before in his quest to be elected president. Indeed, he may be able to turn the nation’s formidable challenges into opportunities and in the process strengthen his reputation as a transformational political figure. And with the stimulus Bill already nearing his desk, he is certainly showing his desire to bang heads together on both sides of the political spectrum.

About the author: Don C. Smith is renewable energy focus’ US correspondent. He serves as Director of the Environmental and Natural Resources Law & Policy graduate programme at the University of Denver Sturm College of Law, and as Editor in Chief of Utilities Policy, a peer-reviewed journal focusing on the performance and regulation of utilities. He can be reached at dcsmith@law.du.edu or on +1-303-8871-6052.

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Wind OFFshore Slip Ring Assemblies

Solar Thermal Thermal Collectors

Fortis Wind Energy

Carbone Lorraine Applications Electriques 10 rue Roger Dumoulin – F-80084 Amiens Cedex 02 - France Tel: +33 (0) 3 22 54 45 35 Fax: +33 (0) 3 22 54 44 03 Email: clae.be-infos@carbonelorraine.com Website: www.elec.carbonelorraine.com

Wind ONshore

Balthasar Klimbie Geerboogerd 11 2611 WZ Delft The Netherlands Tel+31 (0) 15 21 90 512 Fax: +31 (0) 84 71 65 618 Email: klimbie@fortiswindenergy.com Website: www.fortiswindenergy.com

Wind Diesel Hybrid Systems PitchWind The Wind Hybrid Power Sytems Company

Slip Ring Assemblies Carbone Lorraine Applications Electriques

NEP Solar

Unit 21/14 Jubilee Avenue Warriewood NSW 2102 Australia Tel: +61 2 9998 4700 Fax: +61 2 9999 2077 Email: contact@nep-solar.com Website: www.nep-solar.com

Carbone Lorraine Applications Electriques 10 rue Roger Dumoulin – F-80084 Amiens Cedex 02 - France Tel: +33 (0) 3 22 54 45 35 Fax: +33 (0) 3 22 54 44 03 Email: clae.be-infos@carbonelorraine.com Website: www.elec.carbonelorraine.com

Wind Software Software for Wind Prediction & Power Production

Carbone Lorraine Applications Electriques

Valentin Energy Software

Stralauer Platz 34, D-10243 Berlin, Germany Tel: +49 30 588 439 0 Fax: +49 30 588 439 11 Email: info@valentin.de Website: www.valentin.de Solar Thermal and PV Systems planning – download the free DEMOS and TUTORIALS from our website!

Small Scale Turbines

Industrial 20-100 kW Wind Diesel Hybrid Power Systems For autonomus grids in remote locations 80% wind penetration at production sites! Pitchwind Systems AB Box 89 SE-44322 Lerum Sweden Tel:+46 302 519 10 Fax:+46 302 519 11 Email: info@pitchwind.se Web:site www.pitchwind.se

Riso DTU

National Laboratory for Sustainable Energy Wind Energy Department P.O Box 49, Building VEA-118 DK-4000, Roskilde Denmark Contact: Jakob Mann www.dtu.co.uk Tel: +45 4677 5000 Fax: +45 4677 5970 Email: wasp@risoe.dk Website: www.wasp.dk A part of DTU WasP is a PC program for predicting wind climates and power productions, from wind turbines and wind farms. The predictions are based on wind data measured at meteorological stations, in the same region. The program includes a complex terrain flow model, a roughness change model, a model for sheltering obstacles and a wake model for wind farms. More than 2100 users in over 100 countries and territories use WAsP for: Wind farm production, wind resource mapping, wind farm efficiency, wind climate estimation, micro-siting of wind turbines, wind atlas generation, power production calculations & wind data analysis. WAsP 9.0 is the latest version of the WAsP program and you may download a free demo version from the WAsP download page www.wasp.dk

# ! ! " ! &($ $ ' # & % ' " ! " ! ' ! ! " ! & ' " & ! ! " ! ' $ !! ! ! ! # & $ *Publishers predicted ďŹ gures for 2007

For more information, please contact Naomi Reeves on +44 (0)1865 843271 or by email on n.reeves@elsevier.com

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Events

Upcoming events 3-5 March 2009

17-19 March 2009

Ecobuild & Futurebuild 2009 London, UK www.ecobuild.co.uk

Middle East Waste Summit ’09 Dubai, UAE www.wastesummit.com

4 March 2009

17-19 March 2009

California Wind Energy Forum 2009 Davis, California, USA cwec.ucdavis.edu/forum2009

RIO9 -World Climate and Energy Event, & LAREF 2009 -Latin American Renewable Energy Fair Rio de Janeiro, Brazil www.rio9.com

4 March 2009 Nano4Energy 2009 Nottingham, UK www.nano4energy.net

9-10 March 2009 2nd International Workshop on Concentrating Photovoltaic Power Plants: Optical Design and Grid Connection Darmstadt, Germany concentrating-pv.org/index.html

10-12 March 2009

17-19 March 2009 Transmission and Distribution Europe 2009 Barcelona, Spain www.td-europe.eu

19-20 March 2009 CleanEquity Monaco 2009 Monte Carlo , Monaco www.cleanequitymonaco.com

23-24 March 2009

2009 Canadian Renewable Energy Workshop Regina, Saskatchewan, Canada www.crew2009.com

Palm Oil - The Sustainable 21st Century Oil London, UK www.soci.org/SCI/events/

10-12 March 2009

24-25 March 2009

Renewable Energy World Conference & Expo North America Las Vegas, Nevada, USA rewna09.events.pennnet.com/fl/index. cfm

24-25 March 2009

11-12 March 2009 IGNITION09 - The UK Wood Fuel Expo Gateshead, UK www.ignition09.co.uk

12-15 March 2009 New Energy Husum Husum, Germany www.new-energy.de

Geothermal Innovation & Investment San Francisco, California, USA www.greenpowerconferences.com

Refining, Biofuels and Market Outlook in 2009 San Antonio, Texas, USA www.hartenergyconferences.com

Advertisers’ index January/February 2009 Campbell Scientific, Inc European Wind Energy Association

25 27

Helioakni S.A

9

IOWA Department of Economic Development

7

NRG Systems Inc

45

Power Pioneer Group Inc 11 REpower Systems AG

41

ReflecTech

69

Renewable Energy Systems Ltd 5

Suzlon

2

Tobias Renz Fair

96

TSC Publishing

IFC

WPD Wind Project Development GmbH & Co. KG 43 Yorkshire Forward

15

13-15 April 2009 6th International Solar PV Exhibition Shanghai, China www.ch-solar.com

ENREG ENERGIA REGENERABILA Arad, Romania www.enreg-expo.com

30 March - 1 April 2009

7-8 April 2009

26-28 March 2009

16-19 March 2009

30 March - 3 April 2009

European Wind Energy Conference & Exhibition (EWEC 2009) Marseille, France www.ewec2009.info

NHA Conference and Hydrogen Expo Columbia, South Carolina, USA www.hydrogenconference.org

3rd China (Shanghai) International Wind Energy Exhibition & Conference 2009 Shanghai, China www.1exhibition.com

17-19 March 2009

Platts European Renewable Energy Berlin, Germany www.platts.com/Events

2-3 April 2009

2-5 April 2009 Bios Energie 2009 Lons le Saunier, France www.boisenergie.com

renewable energy focus

Wuxi Suntech Power Co. ltd 61

5th International Congress & Exhibition on Energy Efficiency & Renewable Energy Sources for South-East Europe Sofia, Bulgaria www.viaexpo.com/congress-ee-vei/ eng/congress.php

Carbon TradeEx America Washington, DC, USA www.carbontradeexamerica.com

94

Solar Promotion GmbH 21 and 65

6-8 April 2009

World Biofuels Markets Brussels, Belgium www.worldbiofuelsmarkets.com

AMERICANA Montreal, QC, Canada www.americana.org

OBC

Riso National Laboratory 13

2009 4th Asia Solar Photovoltaic Exhibition Shanghai, China www.asiasolarexpo.com

16-18 March 2009

Siemens Windpower A/S

January/February 2009

8-10 April 2009

8-10 April 2009 International Green Energy EXPO 2009 Daegu, South Korea www.energyexpo.co.kr/eng

14-15 April 2009 Surviving the Shakeout - Greentech Media’s 2009 Solar Industry Summit Phoenix, Arizona, USA www.greentechmedia.com

16-18 April 2009 RENEXPO Central Europe Budapest, Hungary www.renexpo-budapest.com

20-24 April 2009 4th CLEAN MOVES Conference & Expo Hannover, Germany www.cleanmoves.com

20-24 April 2009 15th Group Exhibit Hydrogen + Fuel Cells (at Hannover Messe 2009) Hannover, Germany www.fair-pr.com

Events 20-24 April 2009

7-9 May 2009

31 May - 3 June 2009

8-10 July 2009

Hannover Messe 2009 (includes wind) Hannover, Germany www.hannovermesse.de/energy_e

Greenbuilding 2009 Verona, Italy www.greenbuildingexpo.eu

Wind Power Asia Beijing, China www.windpowerasia.com

20-24 April 2009

11-13 May 2009

Hydrogen + Fuel Cells 2009: International Conference and Trade Show (HFC2009) Vancouver, British Columbia, Canada www.hfc2009.com

Power & Electricity World Africa Johannesburg, South Africa www.terrapinn.com/2009/powerza

4th Renewable Energy Finance Forum - China Beijing, China www.euromoney.com

21-24 April 2009 PV Tech Expo China Shanghai, China www.nepconchina.com

21-25 April 2009 3rd International Exhibition on Renewable Energies & Environment in Africa Dakar, Senegal www.sinergie-afrique.com

22-23 April 2009 International Small Wind Conference 2009 Watford, UK www.iswc2009.com

22-23 April 2009 REXchange 2009 Copenhagen, Denmark www.reexchange.eu

23-25 April 2009 China EPower 2009 Shanghai, China www.china-epower.com

27-28 April 2009 2nd Renewable Energy Finance Forum Latin America Rio de Janeiro, Brazil www.reff-latam.com

27-29 April 2009 Energy Efficiency Global Forum & Exhibition Paris, France www.eeglobalforum.org

27-29 April 2009 Implementation of Renewable Energy in the Emerging Markets of Africa, Latin America, and the Caribbean San Francisco, California, USA www.reem09.net

28-30 April 2009 Cleantech Forum XXII Copenhagen Copenhagen, Denmark www.cleantech.com/copenhagenforum

30 April 2009 BWEA Wave & Tidal 2009 Bath, UK www.bwea.com/marine/ conference2009.html

4-7 May 2009

11-15 May 2009 ACHEMA 2009 - 29th International Exhibition-Congress on Chemical Engineering, Environmental Protection and Biotechnology Frankfurt am Main, Germany www.achema.de/en/ACHEMA.html

12-14 May 2009 Genera: Energy & Environment International Trade Fair Madrid, Spain www.ifema.es

12-16 May 2009 SOLAR 2009 New York , USA www.ases.org

17-19 May 2009 Second Annual Waste-to-Fuels Conference San Diego, California, USA www.waste-to-fuels.org

19-20 May 2009 Greener by Design 2009 San Francisco, California, USA www.greenerdesign.com/ greenerbydesign

19-21 May 2009 Sustainabilitylive! 2009 Birmingham, UK www.sustainabilitylive.com

19-22 May 2009 World Renewable Energy Congress WREC 2009 - Asia Bangkok, Thailand www.thai-exhibition.com/wrec2009asia/

20-21 May 2009 All-energy’09 & H2O9 Aberdeen, UK www.all-energy.co.uk

25-26 May 2009 4th European Solar Thermal Energy Conference Munich, Germany www.estec2009.org

25-26 May 2009 5th PV Industry Forum 2009 Munich, Germany www.pvindustry.de

WINDPOWER 2009 Conference & Exhibition Chicago, Illinois, USA www.windpowerexpo.org

27-28 May 2009

6-8 May 2009

27-29 May 2009

PV Power Expo 2009 Shanghai, China www.snec.org.cn/indexe.asp

Intersolar 2009 Munich, Germany www.intersolar.de

7-9 May 2009

27-30 May 2009

10th Solarexpo: International Exhibition & Conference on Renewable Energy & Distributed Generation Verona, Italy www.solarexpo.com

EnerSolar+ Milan, Italy www.enersolarplus.com

Biofuels International Expo & Conference Amsterdam, the Netherlands www.biofuelsinternationalexpo.com

3-4 June 2009 Energy Harvesting & Storage Cambridge, UK www.idtechex.com/EH

7-12 June 2009 34th IEEE Photovoltaic Specialists Conference Philadelphia, Pennsylvania, USA www.34pvsc.org

8-10 June 2009 7th International Fuel Cell Science, Engineering & Technology Conference Newport Beach, California, USA www.asmeconferences.org/fuelcell09/

9-11 June 2009 European Future Energy Forum 09 Bilbao, Spain www.europeanfutureenergyforum.com

10-12 June 2009 R-Energy (Buenos Aires) Buenos Aires, Argentina www.r-energy.info

15 June 2009 Solar Energy - A Window to the Future Penang, Malaysia www.mbipv.net.my

16-18 June 2009 EnergyOcean 2009 Rockport, Maine, USA www.energyocean.com

17-19 June 2009

14-16 July 2009 Intersolar North America San Francisco, California, USA www.intersolar.us

16 July 2009 BWEA Cymru 2009 Cardiff, Wales, UK www.bwea.com/wales/index.html

10-12 August 2009 3rd Renewable Energy India 2009 Expo New Delhi, India www.renewableenergyindiaexpo.com

14-16 September 2009 4th Risoe International Energy Conference 2009 Risoe, Denmark www.risoe.dtu.dk/Conferences/ energyconf09.aspx

14-16 September 2009 European Offshore Wind 2009 Conference & Exhibition Stockholm, Sweden www.eow2009.info

15-18 September 2009 SolarPACES 2009 Berlin, Germany www.solarpaces2009.org

16-18 September 2009 Clean Energy Expo Asia Singapore www.cleanenergyexpoasia.com

16-18 September 2009

R-Energy (Sao Paulo) Sao Paulo, Brazil www.r-energy.info

Coasts, Marine Structures and Breakwaters 2009 Scotland, UK www.ice-breakwaters.com

23-25 June 2009

21-25 September 2009

8th World Wind Energy Conference 2009: Wind Power for Islands - Offshore and Onshore Jeju Island, South Korea www.2009wwec.com

24th EUPVSEC Hamburg, Germany www.photovoltaic-conference.com

24-25 June 2009 BWEA Offshore 2009 Westminster, UK www.bwea.com/offshore/index.html

28 June - 3 July 2009 Lucerne Fuel Cell Forum 2009 Lucerne, Switzerland www.efcf.com

29 June - 3 July 2009 17th European Biomass Conference & Exhibition Hamburg, Germany www.conference-biomass.com

22-24 September 2009 Grove Fuel Cell Symposium London, UK www.grovefuelcell.com

30 September - 2 October 2009 3rd International Conference on Solar Air-Conditioning Palermo, Italy www.otti.de

30 September - 3 October 2009 5th Dubrovnik Conference on Sustainable Development of Energy, Water and Environment Systems Dubrovnik, Croatia www.sdewes.fsb.hr

8-10 October 2009

2-3 July 2009 DENEX 2009 Wiesbaden, Germany www.denex.info

European Bioenergy Expo & Conference (EBEC) Stoneleigh Park, Warwickshire, UK www.ebec.co.uk

8-10 July 2009

10-14 October 2009

Clean Energy Expo China Beijing, China www.cleanenergyexpochina.com

WEFTEC 2009 Orlando, Florida , USA www.weftec.com

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Events 11-14 October 2009

11-13 November 2009

17-19 January 2010

21-25 September 2010

ISES Solar World Congress 2009 Johannesburg, South Africa www.swc2009.co.za

2009 Greenbuild International Conference and Expo Phoeniz, Arizona, USA www.greenbuildexpo.org

World Future Energy Summit Abu Dhabi , UAE www.worldfutureenergysummit.com

HUSUM WindEnergy Husum, Germany www.husumwindenergy.com

16-20 November 2009

16-20 February 2010

2-6 October 2010

BWEA 31: BWEA’s 31st annual conference and exhibition Liverpool, UK www.bwea.com/events/index.html

Solar Energy 2010 Berlin, Germany www.messen-profair.de

WEFTEC 2010 New Orleans, Louisiana, USA www.weftec.com

21-23 October 2009

26-28 November 2009

23-27 March 2010

12-14 October 2010

China WindPower 2009 Beijing, China www.globalwind.org.cn

RENEXPO Austria Salzburg, Austria www.renexpo-austria.com

MCE Expo 2010 Milano, Italy www.mcexpocomfort.it

Solar Power International 2010 Los Angeles, California, USA www.solarpowerconference.com

27-29 October 2009

30 November - 11 December 2009

5-6 May 2010

18-20 October 2010

Waste to Energy 2010 Bremen, Germany www.wte-expo.com

2010 Fuel Cell Seminar & Exposition San Antonio, Texas, USA www.fuelcellseminar.com

20-22 October 2009

Solar Power International 2009 Anaheim, California , USA www.solarpowerconference.com

27-29 October 2009 Windpower Shanghai 2009 Shanghai, China www.71www.cn/english/index.aspx

3-5 November 2009 RENEXPO Eastern Europe Kiev, Ukraine www.energie-server.de

Fuel Cell Seminar 2009 Palm Springs, California, USA www.fuelcellseminar.com

COP15 Copenhagen 2009 - United Nations Climate Change Conference Copenhagen, Denmark www.cop15.dk

12-15 December 2009 Electricx Power 2009 Cairo, Egypt www.electricx-egypt.com

14-16 January 2010 InterSOLUTION Gent, Belgium www.intersolution.be

16-19 May 2010 WINDPOWER 2010 Conference & Exhibition Salt Lake City, Utah, USA www.awea.org/events

September 2010 13-17 September 2010 IFAT 2010 Munich, Germany www.ifat.de

For a full list of events, please go to: http://www.renewableenergyfocus.com/events/index.html

HANNOVER MESSE 2009 April 20 – 24

Tobias Renz FAIR-PR

Join Europe‘s largest and most important H2/FC exhibition! The Group Exhibit H2/FC offers an international community for hydrogen and fuel cell-related companies, inside the world’s largest energy expo – the HANNOVER MESSE. 150 H2/FC exhibitors including Ballard Power, Dana, Plug Power, Hydrogenics, MTU Onsite Energy, SFC Smart Fuel Cell and many more will participate. Profit from 6000 total exhibitors in Energy, Wind, Power Plant Technology, Micro Technology, Automation and Research & Technology as well as 200,000 visitors at the HANNOVER MESSE! For info about exhibiting or visiting, contact Megan McCool at megan@fair-pr.com or visit us at www.fair-pr.com.

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