From The Editor
elcome to the third edition of WWEA's Quarterly Bulletin!
This edition has a special focus on the outcomes of the 11th World
Wind Energy Conference which took place at beginning of July in Bonn. 500 participants from more than 40 countries on all continents gather together to discuss in particular the main theme of the conference "Community Power -
- The WWEC2012 Resolution was adopted by the conference delegates and identified the main
points of discussion, the main barriers for community power and recommends which action to take in order to implement more such approaches. - A group of WWEC2012 summarized the outcomes of the WWEC2012 from their viewpoint and has developed very interesting proposals. - During the IRENA workshop, the main focus was on wind power costs and on business models, in particular related to wind power in developing countries. - The World Wind Energy Award 2012 went to the Hepburn Community Wind Farm, the first of its kind on the Australian continent. - The US wind markets has been suffering since long time from the insecurity regarding future support schemes. This situation has also a very detrimental impact on community wind farms which so far represent only a rather small share of the installed wind capacity in the USA. - The Hepburn Community Wind Farm in Australia has become a pilot project for many similar projects on the continent. - Also in Japan, pioneer projects play a very important role in the dissemination of community wind and renewable energy in general. Especially after the Fukushima accident a new social movement can be observed, strongly opposing nuclear energy and supporting renewable energy. - Finally, another article reflects the importance of operation & maintenance, in particular related to the cost structure of wind power. Again I wish that this new edition of the WWEA Quarterly Bulletin may be interesting for you to read and also useful for your work! With best wishes Stefan Gs채nger Secretary General of WWEA
Contents ISSUE 3 September 2012
Published by World Wind Energy Association (WWEA) Produced by Chinese Wind Energy Association (CWEA)
Editorial Committee Editor-in-Chief: Stefan Gsänger Associate Editor-in-Chief: Shi Pengfei Paul Gipe Jami Hossain Editors: Frank Rehmet Yu Guiyong Visual Design: Jing Ying
01 From the Editor
News Analysis 04 WWEC2012 CONFERENCE RESOLUTION 06 WWEC2012: A BIRD’S - EYE VIEW OF COMMUNITY RENEWABLE ENERGY ACROSS
12 IRENA’S SIDE-EVENT AT THE WWEC2012:
Tel. +49-228-369 40-80
WIND POWER ECONOMICS AND BUSINESS
Fax +49-228-369 40-84
WWEA Head Office
16 WORLD WIND ENERGY AWARD 2012 GOES
Charles-de-Gaulle-Str. 5, 53113 Bonn, Germany
TO THE HEPBURN COMMUNITY WIND FARM
A detailed supplier listing and
other information can be found at
18 COMMUNITY WIND IN THE UNITED STATES
Yu Guiyong email@example.com Tel. +86-10-5979 6665
22 COMMUNITY WIND: THE AUSTRALIAN CONTEXT 26 ENERGY POLICY REFORM AND COMMUNITY POWER IN JAPAN
Fax +86-10-6422 8215
30 WWEA BACKGROUND PAPER: OPERATIONS
28 N. 3rd Ring Road E., Beijing, P. R. China
AND MAINTENANCE FOR ONSHORE WIND
A detailed supplier listing and
other information can be found at www.cwea.org.cn
ISSUE 3 September 2012
WWEC2012 CONFERENCE RESOLUTION 11th WORLD WIND ENERGY CONFERENCE “COMMUNITY POWER – CITIZENS’ POWER” BONN, Germany, 3-5 JULY 2012
he World Wind Energy Association and the German Wind Energy Association welcome the presence of those 500 participants from 45 countries attending this conference, from wind and all other renewable energy technologies. The conference took place at a time which has brought “Energiewende” – the
transformation of the energy system towards renewable energy – on the top of the
political agenda and in the focus of public attention.
The conference covered all aspects of wind utilisation, related policies, manufacturing,
development, operation as well as economic and social issues, with a special focus on how to involve citizens in renewable energy and mobilise them as active beneficiaries.
The conference underlines that the “Energiewende” has actually started on the community
level more than two decades ago, in countries such as Denmark or Germany.
The conference appreciates the support of the governments and governmental organisations,
especially of the City of Bonn, the Government of North Rhine-Westphalia including the Ministries for Climate Protection, Environment, Agriculture, Nature Conservation and Consumer Protection, as well as for Federal Affairs, Europe and the Media, the German Federal Ministry for the
Environment, Nature Conservation & Nuclear Safety, the German Federal Ministry for Economic Cooperation and Development, the European Union, GIZ, the Foundation for International
Dialogue of the Savings Bank in Bonn, the International Renewable Energy Alliance, REN21 and all organisations and individuals enhancing the Conference. 4
ISSUE 3 September 2012
The conference welcomes in particular the strong commitment and important contributions of the International
Renewable Energy Agency IRENA to the event.
The conference applauds the scientifically substantiated statements made that a 100 % renewable energy supply can
be reached worldwide in the foreseeable future, and specifically welcomes the decision by the German state of RhinelandPalatinate to achieve a 100 % renewable electricity supply by the year 2020.
The Conference appreciates that the Hepburn Community Wind Farm (Victoria, Australia) and its initiators have been
awarded with the World Wind Energy Award 2012 for establishing the first and groundbreaking community initiative in Australia that led to a community owned wind farm, an excellent answer in particular in order to increase social understanding, distribution of benefits and acceptance of wind power.
The Conference urges especially the German Government and the European Union to continue the successful policy
frameworks like in particular the feed-in legislation and to develop a comprehensive long-term strategy that includes
community power and local integration of renewable energies as key components. Recent decisions have lead to uncertainty amongst potential investors, and may have detrimental impact especially on community based investments.
The Conference welcomes that the concept of Community Power receives more and more common support worldwide,
as also reflected in the very broad participation in this conference, by communities from all over the world. The conference
encourages communities around the world to become renewable energy champions by harvesting the renewable energies in their environment. Governments are called upon to support these communities with dedicated policies.
The conference recognises that training and education have to be key elements of a strategy that aims at mainstreaming
In addition the Conference supports the following objectives, policies and actions to:
1. remove gradually all subsidies and introduce the internalisation of all externalities to achieve a level playing field; 2. pursue compensatory regulatory frameworks such as sufficient and effective feed-in tariffs that encourage
renewable energy developments until this is achieved, and that provide sufficient financial security to promote long-term investment, especially for smaller and community based investors;
3. focus on the integration of wind power into existing power systems also on the local and community level, create
smart grids and enhance decentralised synergies between the various renewable energy solutions in order to achieve an integrated 100 % renewable energy supply in the foreseeable future;
4. intensify the close cooperation with IRENA on the implementation of its work programme and contribute to its
5. raise the political and social awareness on all levels of society and in particular amongst local communities and
enable them to obtain access to the necessary knowledge and technologies;
6. create a stronger focus on community power in existing governmental, international, education, research and
7. reduce overall costs for energy supply by an increasing share of renewable energy power and by a stronger focus
on least-cost decentralised options for 100 % renewable energy;
8. develop and expand national, regional and international financing mechanisms for renewable energy, especially
making use of funds provided as part of the international climate change negotiations, and ensure that the Global Green Climate Fund gives priority to renewable energy and community based projects;
9. support communities especially in developing countries in obtaining easier access to technology and finance;
10. encourage all wind energy stakeholders to participate in the next World Wind Energy Conference which will be
held in Havana, Cuba, 3 to 5 June 2013.
Bonn, 5 July 2012 5
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WWEC2012 A BIRD’S - EYE VIEW OF COMMUNITY RENEWABLE ENERGY ACROSS THE WORLD ■ Anna Harnmeijer / SCENE, Scotland ■ Judith Lipp / TREC, Canada ■ Holle Linnea Wlokas / Energy Research Centre, South Africa ■ Jarra Hicks / Community Power Agency, Australia ■ Tore Wizelius / Vindform AB, Sweden ■ Hans Soerensen / Spok ApS Consult, Denmark
he World Wind Energy
energy sector is broadly on the rise, with
an impressive blend of
state of community power. In many countries,
Conference 2012 in
Bonn brought together
organizations and people, with
presentation topics ranging from futuristic wind machines to wind development at
extreme altitudes. The focus and presentations on community power suggested that support and investment in the community renewable 6
representatives from no less than twenty one countries across the world presenting on the
these organizations are still relatively isolated in their mission to make the community
renewable energy sector a significant player in local and national energy markets. There was
therefore a sense of surprise that this is indeed a worldwide movement; that one could find
ISSUE 3 September 2012
and exchange experiences with organizations
energy sector (Germany, Denmark, Sweden).
of the world.
resistance from existing institutional and
that share this mission and implement virtually analogous solutions operating at the other side The community power sector adopts a
colourful array of legal and project finance
models both within and between countries, making creative use of country-specific
institutional forms, capital sources and tax
regulations to provide local communities, local government and interest groups with a stake in electricity generation. A case in point is
the Yansa Group (Mexico) directed by Sergio Oceransky, who negotiates subordinate debt
and bank loans for investment in a subsidiary owned by the Yansa Ixtepec Community 1
Interest Company . Profits remaining after
debt servicing are divided on a 50 percent
basis between local social community-based development, and the promotion of further
wind farm projects under the same scheme in other communities2. The foundation advises
the communities on the use of earnings from wind energy sales, with a view to empower
the community to build-up long-term assets that remain after the end of the project.
In the prior, community organizations involved in wind developments tend to face broad
governance frameworks, and must overcome issues such as public anti-wind sentiment,
wind vetoâ€™s at all levels of government and
disproportionate planning and EIA legislation (see presentations by Meunsterman, Lane,
Lipp and Daniels 5,6,7,8). With set-backs of 2km,
Australian wind energy policy was shown to be the most hostile environment for community wind development on all counts, underlining the significance of the work carried out by
Embark, Hepburn Wind and the Community Power Agency.
Recent policy changes in Spain and the
USA have caused a slump in world demand for turbines and show how dependent the wind
sector is on a favourable political framework. As demonstrated by Hans Soerensenâ€™s
observations on the effects of changes in Danish ownership regulations in 1995 (and again
in 2008), the community sector is especially
vulnerable to policy changes associated with
wind development9. One can clearly distinguish
Similar schemes are brokered by Just Energy
an axis of evolution for the community power
most commonly implemented association is
game changers such as the Fukushima disaster.
(South Africa) and Sustainable Community 3,4
Energy Network (UK) . On the whole, the
undoubtedly the co-operative, used to channel revenues to mutually defined social, economic and cultural benefits. However, the legal
definition of co-operatives varies per country and in some countries community interest companies or charitable private limited companies fulfil equivalent roles.
The maturity of the community power
sector varies per country, ranging from being a seemingly politically contentious form of activism (Canada, Australia, USA) to being
a serious and widely accepted player in the
sector, framed and shaped by not only the
political and financial landscape, but also by
While unique pilot renewable energy projects
existed in Japan prior to Fukushima, the nuclear disaster has spurred dozens of community power initiatives10.
The degree to which communities
collaborate with local municipalities, local
energy companies, and developers as long-term partners in joint ventures to split capital costs and revenues varies on a case by case basis.
However, pioneer organizations have tended to copy - paste tested models which has in
several countries resulted in the existence of â€˜a 7
ISSUE 3 September 2012
predominant business modelâ€™ for community-
In the UK, after a decade in which the private
wind developments is a fully community-owned
and communities are gradually on the rise19.
based projects. In Sweden for instance, the
predominant business model for community consumer co-operative, spurred by a policy
that provides consumer co-ops with 100% tax 11
returns . Germany has experimented with a
wide range of business models in which local
government often has a more prominent role, while public organizations have generally not
engaged in joint ventures with communities in Scotland. The correlation between ownership
and public acceptance for wind power appears to apply across the globe, and it is not unlikely that a vibrant community-based wind power
sector is a prerequisite for high levels of wind power penetration
Communities seem to enjoy a love-hate
relationship with commercial wind developers.
sector has dominated the wind sector, joint ventures between commercial developers
Community organizations located far from
manufacturing hubs, such as those in Canada and the USA appear to be experiencing a
degree of supply chain dependence: they are dependent on the existence of a commercial
sector for supply of small requisitions of small to medium-scale turbines20.
The challenges of securing local benefits
from commercial wind ventures were
particularly prominent in Holle Wlokasâ€™ presentation on the interface between
local communities and private sector wind
development in South Africa21. Commercial developers bidding in the South African
Independent Power Producer Procurement
ISSUE 3 September 2012
Programme (IPPPP) are evaluated against
There little guidance for developers in
criteria for local content (for instance, local
communities are set to be eligible for multiple
their contribution to economic development
(30%) as well as against price (70%). Next to manufacturing) and job creation, developers are also obliged to commit between 1.5% to 2.1% of their total revenue towards socioeconomic and enterprise development in
communities within 40km radius around the
project site. To the envy of our North American and British counterparts, renewable energy
project developers in South Africa are required to prepare a socio-economic development plan in which they assess the needs of communities surrounding the proposed project site and develop strategies to address these needs.
While this all sounds like a good idea and an opportunity for livelihood improvement, in practice it brings with it several problems.
earmarking funds for achieving local
benefits, nor in demonstrating impacts. Some
benefit obligations, while others are eligible for none, such that there is potential for conflict
as well as migration to more favourable wind areas (â€˜wind nomadsâ€™).
We have learnt much, and there is no
doubt that WWEC2012 was a massive success.
It is interesting though, that there were broadly two streams of people at this conference
which by and large did not converse. The
first were the engineers, project developers,
manufacturers and industry representatives,
the second the social scientists, not-for-profits,
umbrella groups and community organizations. Less than a handful of people seemed to be
active in both these streams; a couple of strays,
ISSUE 3 September 2012
some academics and project developers such as Ostwind with a strong emphasis on civil
participation. Our hope for WWEC2013 is that
these two streams begin to take interest in each other’s issues and engage in serious dialogue. Here we come Cuba. References
1. Oceransky S. (2012). Yansa’s Ixtepec Community Wind Farm in Mexico: nurturing commons and stopping land grabs, WWEC (2012). 2. Ashoka - Innovators for the public, https://www.ashoka.org/ node/5878 3. Just Energy, http://just-energy.org/ 4. Sustainable Community Energy Network, http://scenetwork. co.uk/ensuring-project-success 5. Lane T (2012). The Australian context; Community Power = Community Development, WWEC 2012. 6. Meunstermann I. (2012). Wind Farming in Australia versus the‘Big Carbon’s Plan: Mine coal, sell coal, repeat until rich’, WWEC 2012. 7. Lipp J. (2012). The Untapped Potential of Community Power in Canada: Addressing the challenges, WWEC 2012. 8. Daniels L. (2012). Local, national and regional policies, barriers, incentives to community power in the USA, WWEC 2012. 9. Soerensen H. (2012). Experience from the Danish law about forced involvement of locals in wind projects, WWEC 2012.
Thermal Energy Storage as the Least-cost Retail Energy Option, WWEC 2012 13. Koch HJ (2012). In: Mainstreaming Community Power: Strategies and policies, WWEC 2012. 14. van Uexkull J. (2012). In: Mainstreaming Community Power: Strategies and policies, WWEC 2012. 15. Pesch J (2012). Paradigm shift: on flat and round energy concepts, WWEC 2012. 16. Hvelplund F (2012). Black or green windpower, WWEC 2012. 17. Barteld H.(2012). Example Dardesheim (Germany), communities realizing 100% renewable energy solutions, WWEC 2012. 18. Cowell R. (2012). Promoting Community Renewable Energy in a Corporate Energy World: New policy developments in the UK, WWEC 2012. 19. Harnmeijer A. (2012). The current state of community renewable energy in Scotland, WWEC 2012. 20. LaDuke W. (2012). Native Wind for the Future of our mother Earth, WWEC 2012.
10. Furuya S. et al (2012). Making Community Power Happen:
21. Wlokas H. (2012). How can national mitigation actions foster
The progress report and findings on Japanese Community
community development? The case of low-carbon community
Power, WWEC 2012.
development around wind farm projects in South Africa,
11. Wizelius T. (2012). Windpower ownership models - escape
from the market, WWEC 2012. 12. Maegard P. (2012). Green RE-Heat: Integrating Wind Power and
ISSUE 3 September 2012
ISSUE 3 September 2012
IRENA’S SIDE-EVENT AT THE WWEC2012
WIND POWER ECONOMICS AND BUSINESS MODELS By Michael Taylor / IRENA Innovation and Technology Centre
n 3 July 2012, IRENA’s
and the corresponding rapid decline in costs,
onWind Power Economics
bodies looking to diversify energy sources,
Innovation and Technology Centre held a side-event and Business Models at
the 11 World Wind Energy Conference and Exhibition that was organised by the World
Wind Energy Association in Bonn Germany. The event examined aspects of wind power
economics and recent IRENA analysis of
renewable power generation, the role of small wind turbines in mini-grids and islands, and
business models for wind power development in developing countries.
Cost of Wind Power While leading wind experts and
economists discussed issues ranging from
costing and competitiveness of wind power,
small wind turbines for mini-grids and islands, wind costs and deployment in Central and
South America and business models for minigrids and large wind project development in developing countries a single theme
permeated the event: a renewable revolution is underway. Due to the rapid deployment of 12
renewable power generation technologies
renewable energy has become an economically viable option for both private and government
meet energy and climate goals, accelerate rural electrification and reduce the costs of running isolated grids. Wind turbine prices appear
to have peaked and the installed cost wind is
expected to fall in 2012 and, in all probability,
out to 2015. The rest of this article will discuss the core messages explored at the side-event. Thanks to data collected by IRENA over
the course of 2011 several conclusions were
highlighted and expanded on during the event. The first and perhaps most significant is
that almost half of all new power generation
capacity additions are from renewable sources. This share has doubled in the last five years. Renewable power generation systems are
today the most economically viable solution for off-grid electrification, mini-grids and
many grid extension projects in developing
countries. IRENA has estimated that if current
trends continue, by 2030 half of total installed generation capacity could be renewable.
The event opened with the question of
whether the recent decline in wind costs was likely to be sustained in the coming years.
ISSUE 3 September 2012
Conclusions drawn at the conference suggested
and certification in order to accelerate
increasingly competitive and has attained
Wind Power in the Developing World
that this trend was likely to continue due
in part to increased competition. PV is also
grid-parity against residential tariffs where
installed costs are competitive and resources
deployment and reduce barriers.
Having addressed the role of wind
good. Supporting this downward trend is the
energy in the developed world the conference
costs are falling quickly, but the growth in
around the competitiveness of wind today in
effect low-cost manufacturers are having on equipment prices. In the solar PV market,
market share of low-cost manufacturers has resulted in even more rapid cost reductions having important implications for the costs of hybrid PV-wind mini-grids. If this trend
of emerging market manufacturers pushing
down prices in established markets, similar to
experience in PV, eventuates for wind turbines, then costs could fall significantly. Finally, the
trend towards larger wind turbines is allowing
capacity factors to increase and is reducing the
Levelized Cost Of Electricity (LCOE) from wind.
The Future of Small Wind Having discussed the competitive
position of wind, the side-event moved on to discuss the role of small wind turbines in the future energy market and asked
how policy may be improved. Participants agreed that small (<100 kW) and medium sized (100-500 kW) wind turbines are
playing an increasing role in markets where large wind turbines are less suited, such as in energy access projects and on islands.
However, Chinaâ€™s strong presence in the wind industry, with 0.5 million small-scale wind turbines in operation in Inner Mongolia, demonstrates that small wind energy is
also becoming a mainstream technology. As wind turbine technology becomes cheaper
IRENA emphasised the need to deepen our knowledge of cost and quality of turbines
and develop harmonised technical standards
turned to the role of wind technology in the
developing world. Issues addressed revolved Central and South America, the outlook for wind turbine and total installed costs and
current wind project development barriers. Wind is receiving increasing attention in
Central and South America; however, despite
an improving competitive position relative to
hydropower and shorter significantly shorter lead times significant barriers have slowed
wind deployment on the continent below its undoubted potential.
Business Models for Minigrides The conference turned to the economists
to address the critical questions of how to
develop business models for wind based mini-
grids or hybrid mini-grids. In all cases, the need for a viable business model was emphasized but differences drawn based on project size.
For mini-grids a community based approach
was highlighted as often best to gain local buy-
in to ensure the success of the project (reliable
payments and continued O&M). The economics and viability of projects is closely tied to
issues of ownership, electricity price setting, recuperation of dues, costs for transmission (if applicable), distribution and connection.
Critically, various types of financing models, including microfinance, require attention if wind in mini-grids is to see rapid growth.
Similarly, creative payment models are often
required, as although the willingness to pay for
electricity can be high, consumers in developing 13
ISSUE 3 September 2012
countries are often constrained to making very
costs still vary greatly between projects and
of wind will increase. This is an emerging issue
small, sometimes irregular payments as income is often only earned daily or weekly on an
Examples of small wind turbine projects
in Fiji, New Caledonia, Guadeloupe, Martinique, Mauritius and Dongfushan Island were
presented demonstrating the suitability of
micro-grids and hybrid grids for islands. Under these circumstances the technical solutions to manage micro-grids are available and
often the major hurdle is overcoming the pre-
conceived ideas of existing grid operators and
familiarising them the different requirements of managing these systems. Larger-scale systems
are also being developed with community input around the world, including in South Africa,
where JUST Energy has two projects in South
Africa, one at ST Helena Bay with the Seeland
Development Trust (30 MW) and the Riverbank project in the Eastern Cape (66 MW) with the UncedoLwethuFarmers Cooperative.
Community Wind in Developing Countries Unfortunately despite increased interest
in wind from non-OECD countries, large-scale projects remain limited relative to potentials, although many countries either have or will soon introduce more favourable regulatory
regimes for wind, so opportunities for growth are emerging. Challenges highlighted revolve
around the cost of infrastructure, the need for imported equipment and high transportation
costs, and higher financing costs tied to smaller market size.
Other obstacles highlighted focused on
high operations and maintenance costs in some markets and inadequate data on O&M costs, difficulties of measuring policy success and
securing funding and securing reliable electric supply. Operation and maintenance (O&M) 14
countries. As capital costs decline, unless O&M
costs also decline, their share in the total LCOE that IRENA plans to address in more detail in conjunction with WWEA and others.
A crucial issue if a sustainable growth in
markets is to be achieved is that policies need to be tailored to each stage of a technologyâ€™s
deployment and appropriate business models
need to be developed for each stage. Although technology is an important part of a business model, side-event participants noted that
investment in stakeholder and local community relations, as well as utilising proven tariff
and billing models are critical to success. One
part of the solution to help facilitate the latter component can be the emergence of cheap
smart meters that allow pre-payment, load and energy limits, and demand-side management
in one. An appropriate institutional framework with a profitable and scalable tariff, and
regulatory/licensing system is also crucial. Private investors also face several
key challenges in rural electrification: to
create economic growth through reliable
electricity supply with modular expansion
potential, with special attention to be paid to
optimising operation procedures and lifetime performance.
Conclusions In an attempt to address some of these
obstacles the conference made several
recommendations. The need for additional
research and development into the design of
small wind turbines was highlighted with the aim of optimising hybrid systems in order to
minimise diesel and operation and maintenance costs, as well as improving the reliability of turbines and reducing their costs.
Financial considerations must be taken
ISSUE 3 September 2012
into account under the business model.
development money or impact investors are
well as understanding the investment needs
original capital for new projects which, with
Large investments are required and it is
imperative to find the right local partners, as in complementary local infrastructure. This said, financial aid exists in the form of aid
banks, and strong local business partners. An
important barrier is that smaller projects will
often struggle to secure financing as the sums
involved donâ€™t justify the transaction costs from a banks perspective. The pooling of funding
for smaller projects, or the use of seed funding which can be recycled into new projects were offered as potential solutions.
Cost reduction strategies include the
maximisation of low-cost local manufacturing, while good policy design can help spur the development of larger local markets with
improved cost competitiveness. For instance,
switching telecoms towers power supply from diesel to renewables often makes economic
sense today on a standalone basis, but policies to encourage or require analysis of the
expansion of this type of project to consider the opportunities for rural for local electrification
at the same time can offer significant synergies and cost reductions.
Finally, tips where given on how to
structure the business model. Participants
highlighted the need to structure models in a way that helps facilitate securing investment capital, particularly by ensuring that a
reasonable financial return to investors can be achieved. This requires sustainable cost
recovery at end-user level. Building in a clear element of cost recovery, event in donor-
funded projects maintains an expectation to
involved, cost recovery can slowly increase to
cover the full cost of the project, freeing up the the experience of successful cost recovery, will attract a lower risk premium.
And last, but not least, the conference
reviewed next steps. Participants highlighted the importance of the ongoing effort create a standard certification and labelling
framework for small wind turbines in order
to reduce uncertainty and simplify banks risk
assessments. In an effort to highlight the role of
wind energy in rural electrification, the Alliance for Rural Electrification has published a best
practices publication. Similar publications on the uses and lessons learned of hybrid minigrids have been published to assist policy-
makers and practitioners. The work of IRENA on standards, the global wind resource atlas, capacity building in developing countries
and on costing was acknowledged as making an important contribution to accelerating deployment.
In addition to synthesising the results for
wind power, biomass, solar PV, concentrating solar power and hydropower, IRENA also
drew attention to its research on the costs
of renewable options for transportation and
plans in 2013 to look at the costs of renewable
technologies and energy sources for stationary applications. IRENA continues its work on
capacity building, energy planning, energy
scenarios, renewable readiness assessments and technology transfer.
For more information on the Wind Power Economics and Business
pay which protects will help ensure supply
Models conference and renewable energy please visit IRENAâ€™s website at
that can reduce a funders perceived assessment
over the lifetime of the project is maintained, while it will also provide concrete examples of project risk and therefore help secure
funding on more reasonable turns. Where
www.irena.org. To download for free the five power generation costing reports got to For further information contact Michael Taylor firstname.lastname@example.org
ISSUE 3 September 2012
WORLD WIND ENERGY AWARD 2012 GOES TO THE HEPBURN COMMUNITY WIND FARM IN AUSTRALIA
launching Australia's first and groundbreaking community initiative that led to a 4.1 MW
community owned wind farm, an excellent
answer in particular in order to increase social understanding and acceptance of wind power. ↑Peter Rae hands over the World Wind Energy Award 2012 to Tary Lane from Hepburn Community Wind, in presence of Prof. He Dexin and Paul Gipe.
Seen from outside of Australia, the project
n the occasion of the
11th World Wind Energy
Conference 2012 in Bonn, Germany, the Board of
the World Wind Energy
Association has decided to give the World
Wind Energy Award 2012 to the Hepburn
Community Wind Farm in Victoria/Australia and its initiators.
The WWEA Board wants to recognize
the Hepburn Community Wind Farm’s
contribution to the introduction of community wind power on a large scale. The award is
given to the initiators of the wind farm for 16
may appear small. However, the Hepburn
Community Wind Farm stands for a social
movement outside the strong fossil lobby in Australia, aiming at a fundamental energy
transformation that is driven by Australia’s
citizens. As the first initiative for a community wind farm on the Australian continent being
started in 2004/2005, the time when WWEA
held its WWEC in Melbourne, the wind farm has become an example and important reference project in Australia and has inspired many
similar initiatives around Australia and beyond. WWEA appreciates in particular that
other communities and initiatives in Australia are now using the ‘Hepburn Model’ in order to develop their own community power
ISSUE 3 September 2012
projects and WWEA hopes and expects that
community power assistance centre Embark
energy sector, such achievements and
many of these initiatives will materialize in the future. The establishment of the interlinked
adds materially to the ongoing impact of the groundbreaking Hepburn project. WWEA
would like to express its willingness to work closely with the Australian wind and in
particular the community wind sector and to extend its full support and cooperation
in fostering the transformation of Australia towards 100 % renewable energy and a
strengthened understanding of the importance
Taking into consideration the important
role that Australia plays in the international
ambitions have also far-reaching international implications and will contribute to speeding
up the global energy transformation. With the
award, WWEA would also like to encourage the government of Victoria and Australia as well
as governments around the world to support communities in their efforts to harvest clean and inexhaustible wind power, for their own benefit and for the benefit of our planet.
The World Wind Energy Award – previous winners: • 2011: the Egyptian wind turbine manufacturer Sewedy Wind Energy Group SWEG under the leadership of Ahmed El Sewedy • 2010: the Founding Member States of the International Renewable Energy Agency IRENA • 2009: the Hon. George Smitherman, Deputy Premier and Minister of Energy and Infrastructure of Ontario • 2008 jointly to: Ms. Jane Kruse, and Dr. Preben Maegaard, Denmark, Paul Gipe, USA • 2007 jointly to: the Hon. Ms. Dilma Vana Rousseff, today President of Brazil, former Chief of Staff Minister of Brazil and former Minister for Mines and Energy, Ms Laura Porto, Director of the Department of Renewable Energy of the Ministry of Mines and Energy, Mr. Valter Luiz Cardeal, Director of Engineering and interim President of Eletrobrás, Dr. Sebastião Florentino da Silva, Coordinator of the Proinfa Programme at Eletrobrás • 2006: the Chinese wind turbine manufacturer Goldwind under the leadership of Mr. Wu Gang • 2005 jointly to: Hon. Vilas Muttemwar, Indian Minister for Non-Conventional Energy Sources, and Dr. Pramod Deo, Chairman of the Maharashtra Electricity Regulatory Commission • 2004 jointly to: the German Minister for the Environment, Hon. Jürgen Trittin, and the German Parliamentarian Dr. Hermann Scheer • 2003: the Indian wind turbine manufacturer Suzlon under the leadership of Mr. Tulsi Tanti • 2002: Prof. Dr. Amin Mobarak, Chairman of the Industry and Energy Committee of the Egyptian Parliament
ISSUE 3 September 2012
COMMUNITY WIND IN THE UNITED STATES By Lisa Daniels / Executive Director of Windustry, U. S. A.
In order to understand Community Wind
it is helpful to first look at the overall US wind industry. Currently the US wind industry is facing an unprecedented confluence of
unfortunate events that all equal one thing, a great amount of uncertainty.
• This is an extremely difficult political
time. We are in the midst of a major election cycle for the US president and a high
percentage of seats in US Congress along
with significant numbers of seats at state
legislatures. For the past few years, the politics in Washington have been terribly caustic and
unproductive, with 2011 being noteworthy as the least productive Congress in memory. In
this political setting, with no one getting along or willing to work across party lines to pass
legislation, the renewable energy incentives for US are expiring.
• The major incentive, the Federal
Production Tax Credit (PTC), is set to expire at
the end of December. Today we are in the boom
part of the boom/bust cycle. No one can predict what will happen in 2013 or 2014 which is
when this gap in legislation will be felt. This
policy has a 20 year history of being on again, 18
off again policy, but with the economy and other circumstances as detailed below, the industry is finding it extremely hard to float through
this period of uncertainty. The slack is gone, and companies are laying off large numbers
of employees, narrowing their US operations, going out of business or consolidating.
• Federal support for community wind
comes primarily through the USDA Farm Bill which is in the process of being rewritten,
but as of the writing of this article, it is not
complete and the current law expires at the end of September. The Farm Bill must be
temporarily extended while Congress is on
leave to campaign for elections. Starting in the 2002 Farm Bill, wind energy is classified as a
farm product. The USDA REAP (Rural Energy for America program) is hugely popular and
fully subscribed with proposals for renewable
energy and energy efficiency upgrades in every round of funding. There are other supportive programs in Rural Development, Rural Utility Service and Natural Resource Conservation
ISSUE 3 September 2012
Service. Congress has been debating what
goal of energy independence by 2050. There
every year. It is yet to be determined how this
programs will get mandatory funding and
which have to be specifically appropriated story goes forward.
•The US economy continues to be
lacking in terms of manufacturing, jobs and production. In many areas of the country,
electricity use significantly decreased in 2009 with the financial meltdown and it has not
recovered or resumed its growth trajectory. With the economic downturn, utilities and
energy companies are not signing many new contracts for wind generation. And in states
where there are Renewable Energy Standards
for a percentage of the electricity to come from renewable resources, it is much easier to reach compliance with overall electric use down.
• A great deal of new attention to natural
gas and its current amazingly low prices – at about $2/MMbtu. This is having a huge
impact on the electricity markets in the US. It is impacting other fossil fuels such as coal as well as renewables. There are new deposit
discoveries and new controversial methods
of extraction with the hydraulic fracturing or
“fracking”. In the absence of federal regulation of fracking, it is up to the states to figure it out. And they are just getting up to speed on the impacts.
• The European debt crisis is contributing
to the lack of investment in wind in the US as
European energy companies have always had a big role in the US wind market.
There is no overall national energy policy
in the US. We had our hopes up for the Obama administration but they took on healthcare
rather than energy in the first term. If Obama is re-elected to a second term, there would
be a great opportunity to set national goals
and renewable energy standards. For now we can only watch with envy and celebrate the
progress being made in Germany with their
is plenty of work for all of us to make progress in whatever way we can for the health of the On a brighter note, where the federal
government doesn’t have an overall energy
policy, on a state by state basis there are several different policy approaches that support
getting community wind projects in place.
Working your way through the policy puzzle to find the right combination of federal and state incentives is what makes a community wind project viable.
The Community Wind map for the US
indicates that most states with commercial
scale wind development have Community wind. This map is as of Dec 2011. (see attached)
The American Wind Energy Association
has the 2011 total wind installed capacity at 6816MW and Community wind at 457MW.
In 2010, the total wind installed is 5214 MW
and the Community wind tally is 292MW. So Community wind grew 57% from 2010 to
2011. Clearly this is a small specialized area of the market but it is seeing significant growth even in these hard times.
States adopt their own energy policies
to get renewable energy in place. Where Renewable Portfolio Standards are the
primary market creation mechanism often
this translates into large commercial scale and utility scale projects. As I mentioned earlier,
many of the targets have been met for now in many places up through 2020.
Other leading state policies include net
metering which can be quite effective in helping get community wind projects of various sizes and shapes in place. Other important state
policies include: interconnection policies, loan programs, property tax incentives, sales tax incentives.
Also there is a small array of effective
financial mechanisms that we have seen in
ISSUE 3 September 2012
some states including: 3rd Party PPA policies, clean energy funds, feed-in tariffs or CLEAN contracts and PACE.
With all of the current events putting
pressure on energy and renewable markets in
the US, there will have to be changes, whether or not the PTC is renewed; whether or not
the REAP program survives the rewrite of the
Farm Bill. This is a good time to embrace more diverse approaches to building renewable
energy in the US. We are working to promote business models that increase the number of people involved, expand the types of policy,
and explore more community-based business
models. Diverse policy means diverse business models. In times of chaos, there are gaps
where innovation can happen. With a slow
down of building larger wind projects, it may be an opportune time for turbine, crane and
construction crew availability. Getting the local communities and small businesses involved in wind project development can only be a good thing for the local economy and the
environment. Natural gas and other fuels have supply chains that are all about big energy
business. Renewable energy on the other hand
is, by its very nature, more accessible and more dispersed. There is plenty of opportunity for
smaller more distributed wind generation to fit in.
This is a defining moment for communities
to work together, share their experience and
grow the market for locally owned renewable energy.
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4th World Summit for Small Wind WSSW2013 "Small Wind Certification - Status, Barriers, Prospects" Husum, Germany, 21 & 22 March 2013
CALL FOR PAPERS WWEA and New Energy
Husum are pleased to invite you
cordially to the 4th World Summit fo r S m a l l W i n d W S S W 2 0 1 3 , taking place in Husum/Germany
on 21 and 22 March 2013, during the New Energy 2013 trade fair.
The World Summit for Small
Wind is an annual opportunity to discuss the most important
issues affecting the domestic and foreign small-scale wind industry and to present news
from a variety of countries. It
is the perfect meeting place f o r e x p e r t s , p o l i c y m a ke r s , interested individuals, providers,
manufacturers and supply industries from the small-scale
wind turbine sector from all over the world.
The World Summit for Small
Wind will be held on the first two days of the New Energy Husum trade fair (21- 24 March 2012).
New Energy Husum is a trade
fair for all types of renewable energy, and is the leading trade fair for small-scale wind turbine technology, and as such is the
ideal platform for a congress of such international importance.
A gain top in tern at ion al
small wind experts and
participants from all over the world will discuss latest
power. Papers are invited on the following topics: ●
Safety and quality
National and international
certification schemes ●
National policies for small
National markets for small
Off grid applications and
hybrid systems ● ●
Manufacturing of small
developments and achievements
the special topic "Small Wind
of the small wind sector.
WSSW2013 will feature
Certification - Status, Barriers, Prospects" and will comprise a two-day program covering all
important aspects of small wind
Key components: blades,
generators, controllers & ●
S m a l l w i n d fo r wa t e r
Financing small wind
Abstracts format: The abstract should be concise and clearly state results, objectives or key components of the paper. They
should not exceed 500 words and should contain a list of key words. Please submit and electronic copy (in
doc format) of your abstract (not exceeding 2 A4 pages) by 15 December 2012 to Mr. Thomas Seifried (Messe Husum & Congress)
Phone: +49 4841 902 492
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COMMUNITY WIND: THE AUSTRALIAN CONTEXT By Taryn Lane / Hepburn Wind & Embark, Australia
ustralia is embarking on a
nation, the community-ownership model will
Australian landscape is the
movement across Australia is emerging.
long journey to a clean energy future. Pioneering in the
Hepburn Community Wind
Farm – Australia’s first community-owned and operated wind farm.
Located in the central highlands of Victoria,
Hepburn Wind has brought a community closer
to the source of its electrical energy – educating it about how to take control of its energy
future and bringing them along on the journey of transition from fossil fuels to renewable 22
energy. If successfully emulated across the
see the broad acceptance of renewable energy sources by the public. The community energy
The Hepburn Wind Story Hepburn Wind represents a long struggle
supported tirelessly by volunteers who held to the vision that they could build a wind farm,
providing a localised renewable energy supply for the benefit of the community.
Two key people in developing the project
were Per Bernard – the visionary behind it and Founding Chair Simon Holmes à Court, who
ISSUE 3 September 2012
has overseen the delivery of the inspirational
expectations of non-return benefits, generally
executives have included a dynamic of highly
a high requirement for communication and a
project over the past five years. As a shire with an active transition movement, the board and
skilled and passionate people and a readiness to ‘just get on with’ the vision of living
sustainably. This rendered conditions right
for the project to find its feet in this region of
rural Australia and to be developed as a model project for other communities.
Six years after the formation of the co-
operative, obtaining planning permits, capital
raising, engaging the community, undertaking research, analysis and finally construction, the two turbines are now generating clean
energy. The community of the co-operative now numbers 2000 members who raised almost $10 million to build the turbines. The two
2.05 MW REpower turbines are expected to
generate enough energy per annum to power
2300 homes, more than required by the homes of the nearby town of Daylesford.
Hepburn Wind has many dimensions
of benefits. One is via returning profits to
the community through a community grants
process. This has the potential to underwrite the sustainability movement across the local
area for at least the next 25 years. Furthermore, once dividends begin to be paid out to
shareholders, a large proportion of this will
likely remain within the region with over half the shareholders local to the region.
A number of Hepburn Wind investors
are sophisticated investors with self-managed superannuation funds, but in the course of establishing this project, Hepburn Wind
found that there was an emerging class of
investors who will invest in local infrastructure projects due to the benefits to the local area – the community investor. Hepburn Wind characterises the community investor as
having modest return expectations, increased
modest sums to invest, low appetite for risk, no appetite for capital loss, high levels of patience, high expectation of transparency.
A recent member survey highlighted the
level of satisfaction members have with the project - with 97% stating their pride and contentment. However, the socio-political
landscape has not been an easy one to navigate in this process. Whilst Hepburn Wind enjoys
overwhelming support within its community, it is not universal support. When the project
went into the planning phase, there were 325
letters of support and 18 objections and whilst the latter number has dropped, Hepburn Wind continues to seek engagement with those who oppose the wind farm.
As a beacon for community power and
community acceptance of wind energy within
Australia, Hepburn Wind has valued celebration and accessibility by the community to their
wind farm. In March this year, 300 supporters sat atop Leonards Hill as Hepburn Wind set
up marquees and held a ‘turbine raising picnic day’ to watch the erection of the first turbine. Then, in early November, the wind farm was
officially launched with over 750 supporters in attendance. Both events attracted nationwide
media and Prime Minister Julia Gillard wrote a
letter recognising the importance of the project. Dozens of members donated to publish this
letter in regional newspapers after the event. Hepburn Wind has been recognised on
a local, regional, national and global level,
receiving the 2010 Climate Alliance Award, 2011 Premiers Sustainability Award, 2011
Banksia Award and most recently, this year the 2012 WWEA Award. 2012 is the UN’s International Year of Co-operative and in
Australia, Hepburn Wind has been selected
as a standout social enterprise to be profiled 23
ISSUE 3 September 2012
throughout the international year of co-
to their own requirements. Embark aims
viable model capable of attracting large-scale
This message of community
empowerment and energy democracy has
resonated across other Australian communities. Founding Chair of Hepburn Wind Simon
Holmes à Court, saw the need for communities
to be supported to start the community energy journey themselves, and established a NFP called Embark.
Since launching in October 2010, Embark
has been contacted by over 60 communities who are interested in developing their own
renewable energy initiatives across a range of geographic locations and technologies,
including wind, solar and mini-hydro. Embark is building on the lessons learned by Hepburn
Wind so that communities around the country can extend and adapt the Hepburn Model
to shift the community energy sector into
the mainstream as a proven and financially investment.
Embarks first project was to create an
online best-practise information ‘wiki’ for
communities. Creating this information portal kick-started the organisation and has enabled Embark to assist many communities in the
early stages of developing their own renewable energy projects. To ensure that the next
activities and projects of the community energy movement grow strong within this landscape, community groups are supported by Embark to seek opportunities to enable locally scaled clean energy transitions.
The Socio-political Landscape In 2011, Hepburn Wind was awarded the
Premier’s Sustainability Award for Community Engagement and the prestigious Banksia
Award for harmonious manmade landscapes. Under the new state government planning
policy, however, the wind farm would not have been built due to a requirement that a project
receives unanimous support from all residents living within 2 kilometres of any new wind farm developments.
This new planning policy has very
significantly constrained new wind
development within Victoria and includes the strictest wind farm planning regulations in
the world. What is of deep concern is that they
apply only to wind energy, but not to any other energy producing infrastructure.
Across the same regional area as Hepburn
Wind, groups have been advocating for an
allowance in the planning guidelines exempting small-scale community projects from these
ISSUE 3 September 2012
restrictions. In particular, the Macedon Ranges
The Next Generation
owned wind farms. They are still forging ahead
projects that are embarking on a clean energy
to be considered.
(MACW) in Victoria, have launched the project
wind turbines. Much has been written on the
over 300 supporters signed up.
and Mount Alexander communities, who were
in process of developing their own communityin the belief that the show of people power in
support of these projects will eventually have One of the lively protests occurring in
Australia concerns the health ramifications of political and sociogenic dimensions of these
There are a number of community wind
future across the nation: •
Mt Alexander Community Wind
to their local community and made great
progress on their community engagement with •
WISE Community Wind in Victoria,
claims and the effect of the groups driving
have been monitoring wind speeds with a real-
the largely-held medical diagnosis is that the
possibility of the wind farm more tangible.
them. With no reported health effects on people perceived to be ‘benefiting’ from wind farms, perceived symptoms of those suffering from
time display which is linked to the mast has
been installed at a local newsagent to make the •
Denmark Community Wind Farm in
them are caused by their annoyance with the
Western Australia celebrated their ‘turning of
Social Licence to Operate
will consist of two 800 kW turbines which are
On the Australian landscape, to navigate
these challenges, the issue of having a social license to operate is of great importance.
Significant transformations are by nature
disruptive, especially where these expose communities to change, and often change without consent.
As the first community-owned energy
project, Hepburn Wind has clearly shown that given the right conditions, host communities can accept renewable energy projects. The emergent community energy sector will
play a keystone role in ushering in the broad
the sod’ on the 7 of March 2012. The project is scheduled for completion in late 2012. It
expected to supply about 40% of Denmark's domestic demand annually. •
Island Energy in South Australia has
completed the initial feasibility study to build
a renewable energy company that is expected to meet up to one third of the island’s energy needs.
The New England Wind Cooperative
(NEW) in New South Wales is formed and will
now lead and coordinate the final site selection
and raising the early stage capital to allow them to move into the development phase.
There are a number of developer-
acceptance of renewable energy nationwide. To
community partnerships evolving as larger
Through this engagement, community energy
farms. Community Power Agency is another
build future projects, a high level of engagement is therefore invited from the community.
projects then have the potential to influence
behavioural change within their communities.
developers see the clear benefits and
necessity in community acceptance of wind organisation supporting the emergent community energy sector.
Further information hepburnwind.com.au embark.com.au
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ENERGY POLICY REFORM AND COMMUNITY POWER IN JAPAN Shota Furuya / Institute for Sustainable Energy Policies, Japan
Transitional Energy Policy Landscape after 3.11 in Japan The triple disaster, earthquake, tsunami
and nuclear accident, on March 11th 2011
revealed the vulnerability of the centralized Japanese energy system towards massive
natural disaster. And Fukushima showed the
unreversible impact of nuclear accident when the nuclear risk becomes reality.
Needless to say, this situation forced not
only the Japanese government but also the broader society to reconsider the national
energy policy and system. The former Prime
Minister, Naoto Kan, took the initiative for the fundamental reform of the national energy
policy without any bias of the vested interests. Then dozens of energy policy committe have
been organized such as on reconsideration of nuclear power policy, energy system reform and renewable energy policy.
Among them, the focal point of the policy
reform is the Energy and Environment Council in the National Policy Unit of the Cabinet,
where the new national energy strategy will be decided. In order to provide the draft of
the new national energy strategy, the Ministry of Economy, Trade and Industry (METI)
organized the Basic Issue Committee under the Agency for Natural Resources and Energy. The committee consists of 25 committee members
from the representatives of the broader society such as business and industrial leaders,
engineers, scientists, consumers' associations, sustainability NGOs and so on. The committee
met 27 times from October 2011 to June 2012, and the committee members discussed the
possibility and difficulty for the nuclear phase
out fiercely, and finally the committe submitted the three scenarios regarding to the share of 26
ISSUE 3 September 2012
nuclear energy at the time of 2030: (1) 0%,
(2) 15% and (3) 20-25% (graphic 1). Based on these three scenarios, the National Policy Unit has developed a information database in July and conducted a public hearing, deliberative polling and solicitation of public comments
in August, and based on the series of national public debate, the government will formulate the New Strategic Energy Plan of Japan soon. In fact, though the point of departure of
the policy reform was "reduction of nuclear dependency", scenarios (2) and (3) include
new addtional construction of nuclear power plants. On the other hand, most of the public
opinion polls show that more than half of the
public support the nuclear reduction. Therefore it is obvious that there is a gap between the
formal policy reform arena and the public, and this symbolically shows the political difficulty of Japanese nuclear phase out.
However, out of the formal policy reform
arena, several new initiatives for nuclear phase out have been emerged. For example, some
business leaders from the economic circles of small and medium sized enterprises started
to ornganize a new network called "Network of Business Leaders and Entrepreurs for a
Sustainable Business and Energy Future". And the Global Conference for a Nuclear Power
Free World held in Yokohama in January 2012 triggered the formation of "the Mayors for a Nuclear Power Free Japan Network" which
has more than 70 mayor members around the country.
most of the demonstrations are organized by
union's activists in Japan, however, the weekly
demonstrations are not like that. Mostly people come to join the demonstrations voluntarily by connecting social media such as Twitter
and Facebook, and they are ordinary citizen thinking that they must take actions for the
nuclear phase out. The weekly demonstrations have been called "the Hydrangea Revolution"
named after the Japanese seasonal flower and the Jasmin Revolution in Tunisia (picture 1).
It is Japanese societal challenge that this kind of activities will connect to the formal policy
reform arena and lead to political decision for nuclear phase out.
Triggering Energy Transition: Feed-in Tariffs It was a historical coincidence that
And one of the most fundamental
Japanese government agreed on the Feed-
the nuclear power plants. A group of citizens
policy reform discussion, the basic frame
transformation of the Japanese society is the
active demonstrations against the restarting of has initiated demonstrations which take place every Friday evening at the Prime Minister's office since March 2012. The number of
people has increased steadily and has been
estimated to reach 150'000 in June. Usually
in Tariffs in the morning of March 11th
2011. Then, in the course of the energy
of FIT was formulated and passed the Diet on 26 August 2011. In order to design the details of the system, METI organized a committee to calculate the price of FIT.
The committee conducted open hearings
ISSUE 3 September 2012
including representatives of each renewable
connection issue, regulatory issue, social
formulated the detail design of FIT in June
energy sector (wind, solar, small and medium hydro, geothermal and biomass), and finally 2012. Japan started FIT on 1 July 2012.
The price setting of the FIT is shown in
the table 1. Compared with other countries, Japanese FIT, especially solar PV, looks
generous. This is partly because the provision
that the FIT will trigger Japan to start "the
The Second Stage of Japanese Community Power Looking at the local or grass-roots level of
of the FIT law includes the special promotion
renewable energy development, Japan comes
wind, it seems reasonable and the system will
pioneer community power projects in Japan
of renewable energy for the first three years. Regarding to other renewables including
promote the steady increase of renewable energy in Japan in coming years.
There are still challenges for the
substantial energy transition, such as grid
acceptance issue and so on. However, it is sure
into the second stage of Community Power. As shown in the graphic 2, there have been some since 2001. The first community wind farm
in Hokkaido was initiated by a local NPO, and this became the model of the citizen-owned renewable energy project. Then, following
ISSUE 3 September 2012
this model, several community wind projects
start it within three years.
applied to distributed community solar PV
candidates to make a secure business plan.
have developed around the country, and this
community based business scheme has been project in 2005, community biomass project
in 2006, and community small hydro project in 2011. Even though there was poor policy support and severe market condition, the
pioneer leaders have realized these community power projects with tremendous efforts and
stakeholders' cooperation. We may be able to call these community power activities as "the first stage of Japanese Community Power".
After 3.11, Japanese people have become
more and more aware of renewable energy with the safe and distributed energy supply in mind, and dozens of community based renewable
energy initiatives have emerged around the
country. Then, Ministry of Environment (MoE)
started the support program for the community based renewable energy development, and
called for applications in early 2011. There
were 68 applications, and seven applications were formally selected as the community
power candidates (graphic 3). They have to
organize local renewable energy Consultation processes in order to build social consensus, and to appoint several coordinators to make
actual community power business plans and to
Fortunately the FIT started on July 1st
2012 and this enabled these community power And it was also fortunate that the support program offered several opportunities for
the candidates to meet and consult with the
community power pioneer leaders, so that they were able to share the pioneers' community power models and experience. One of such interactive opportunities was the Japan
Community Power Conference held on March 8, 2012 in Tokyo in cooperation with WWEA ( http://goo.gl/khrZK ). Three international
speakers, community power pioneer leaders and candidates discussed the significance,
possibility and barriers of community power in Japan. Then we may be able to call these
interactive community power activities as "the second stage of Japanese Community Power". As described above, Japan is exactly in
the transitional time of both national energy
policy and local project development. There are still many challenges to realize a massive and
substantial energy transition in Japan, however, as shown in the Hydrangea Revolution, the societal energy transition is real, and the
Japanese citizens' active community power engagement will make it substantial.
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WWEA BACKGROUND PAPER: OPERATIONS AND MAINTENANCE FOR ONSHORE WIND ENERGY SYSTEMS By Wesley Lien, Stefan Gs채nger, Everaldo Feitosa and Jami Hossain
ind energy today
approaches to turbine maintenance, the current
with fossil fuel
The paper focuses primarily on onshore wind
has reached a costcompetitive level sources in many
parts of the world, and in some countries has become a key pillar of electricity generation. This report seeks to explain the importance
of operations and maintenance, as well as the
developments that seek to lower overall costs. turbines, as offshore turbines face completely different challenges and the O&M conditions require completely different approaches.
I. Operations and Maintenance
current status of the wind energy operations
General Importance of O & M
be reduced. We will discuss the importance
a critical component of wind energy systems.
and maintenance market. It will also try to
elaborate on whether/how these costs can of O&M and cost characteristics, three 30
market structure, and recent turbine design
Operations and maintenance (O&M) is
Wind energy remains quite capital-intensive,
ISSUE 3 September 2012
due to the fact that wind power utilization
expense for equipment represents the main
O&M as it may give us better insight as to the
cost component. As such, adequate O&M is
operational for the expected lifetime. Good
variable costs. Fixed costs include insurance,
downtime or extending their lifetime.
Replacement parts and materials, maintenance
does not require expenses for fuel; the
required to protect these assets and keep them O&M practices can optimize returns from a wind farm investment by reducing turbine
O & M and Marginal Costs
Approximately 75%-80% of the total
cost of onshore wind projects is capital and
investment costs, while O&M typically accounts for 20 to 25%, depending on where the project 
is located . (There are indications that in
China, the share of O&M costs is significantly higher and may reach 40 % of the lifetime
costs, due to the lower initial investment cost per kW.)
The predominating cost structure results
in relatively high risk for investors. Once a
wind turbine is installed, its efficiency cannot be easily changed, nor can energy production be easily altered; the investment costs are
fixed. Thus, wind operators have very limited possibilities to reduce generation costs
during the lifetime of a project by influencing operations and maintenance.
Hence O&M is the predominant method by
which operators can influence their marginal
costs. As these marginal costs are much lower
than the breakeven prices for wind investment, it is easy to understand that wind power
simply cannot compete on the spot market
for electricity. The price at which electricity is sold would be close to the marginal cost;
however, this would be insufficient to cover the capital cost. Thus, investors would refrain from investing in wind farms.
Therefore, it is important to understand
basic economics of wind power investment. O&M can be divided into fixed and
administration, fixed grid access fees, and
service contracts for scheduled maintenance. not covered by contracts, and other labour
costs fall under variable costs. One must also
consider costs associated with losses in energy
production during non-scheduled maintenance. There are no fuel costs under fixed O & M.
The cost of O&M varies depending on
several aspects. O&M costs differ by region and nation based on wind speeds, geographical
location, labour costs, etc. O&M also tends to be higher for offshore wind systems than onshore ones. This is attributable to the difficulty and
logistics of maintaining wind turbines in harsh marine environments.
In addition, O & M becomes more
expensive as turbines age; the chances of
failure increase as machine parts experience
prolonged wear and tear. Finally, O&M depends on the extent of the maintenance contract.
Some services will only maintain wind turbines, whereas others may broaden their scope to
include access roads, transmission lines, etc.
The aforementioned variables, as well as
other factors (turbine capacity, model, project lifetime), make O&M cost comparisons fairly challenging. Estimates have, however, been
calculated for wind energy projects in different countries. For instance, the International Renewable Energy Agency (IRENA)
approximates that wind O&M costs are lowest in the United States, with service costs for
onshore projects at around 0.01 USD/kWh of energy produced .
ISSUE 3 September 2012
Table 1 Variable and total costs of onshore wind energy operations and maintenance in different countries. Country
Variable O&M cost (USD/kWh)
Total O&M cost (USD/kWh)
Source: IRENA, IEA Wind, Liu, Wallasch et al., Hossain
*Estimated cost. Converted from RMB/kWh using US dollar exchange rate as of 13 Sept. 2012. **Converted from Euro/kWh using US dollar exchange rate as of 12 Sept. 2012.
***Converted from INR/kWh using US dollar exchange rate as of 13 Sept. 2012.
European countries seem to have higher
service costs. As an example, O&M for onshore projects in Germany ranges from 0,0219 to
0,0249 Eurocents/kWh (approximately 0.0282 to 0.0321 USD/kWh) .
IRENA additionally released a working
paper on wind energy that gives estimates for the variable costs of onshore wind
turbine service in various countries (see 
Table 1) . Once again, such figures are only
approximations and should not be taken at face value. Nevertheless, these approximations can
Reactive maintenance involves waiting
for the system to run to failure, and completely replacing parts or even the entire turbine. This method is considered to be the least effective
and most costly in the long run, especially when considering the losses in energy production and the infrastructure necessary for such
replacements. Hence it is not common practice.
Preventive maintenance is time-based,
give us a general sense of current O&M costs
meaning maintenance inspections are carried
II. Three Approaches to Maintenance
should at the very least follow the turbine
around the world.
There are generally three approaches to
wind turbine maintenance: reactive, preventive, 
and predictive . Nowadays the O&M industry primarily uses preventive maintenance, but a
growing number of companies are beginning to adopt predictive maintenance strategies. 32
out at regular time intervals (typically
six months) . This form of maintenance
manufacturerâ€™s manual and instructions
regarding how often components should
be checked. The effectiveness of preventive maintenance can be enhanced by feedback obtained from coordinated maintenance
activities, such as those carried out by different companies on different time schedules. Some of these activities can even be reduced in
ISSUE 3 September 2012
frequency based on test results from predictive
maintenance, which constitutes approximately
Coordinating Committee in the United States
Predictive maintenance (also referred to
as condition monitoring) involves continuous equipment tests through the use of installed
online and offline sensors . Turbine parts are
constantly monitored, and data is collected and analyzed at an off-site computer. Impending faults or failures are detected if there is a
noticeable deviation in data trends, such as for gear vibration or oil particle characteristics. Because condition monitoring detects
problems well in advance of actual failure, operators have ample time to order parts, schedule maintenance on days of low
wind conditions, and coordinate repairs or
refurbishment. It also minimizes unplanned turbine outages and downtime, maximizing energy output and revenue generation.
Predictive maintenance additionally allows
operators to lower inventory costs, since parts can be ordered as required instead of kept in a large backup inventory.
Analysis of previous faults and
breakdowns is an equally important component of predictive maintenance. Often this kind of
analysis can enable the operator to arrive at the root cause of particular component or machine faults, which when addressed, completely
eliminates said faults. Also secondary damages can be avoided and the general turbine
health can be improved. All of these benefits
ultimately result in reduced O&M costs for the operator.
Predictive maintenance and condition
monitoring are generally considered the
cheapest and most effective form of wind
turbine maintenance. This method virtually eliminates the need for unscheduled
75% of total wind turbine maintenance costs, according to a report from the National Wind 
. Moreover, there have been a number of case
studies supporting the cost-effectiveness of condition monitoring.
Just to give one example, operators of
a particular wind farm installed a vibration
spectrum analyzer and magnetically mounted accelerometer onto a turbine’s electric motor. The generated data indicated that one of the turbine’s gears had sustained some tooth
damage; inspection of the gearbox proved this analysis to be accurate. Due to this early fault detection, the operators saved 9’000 USD,
compared to a potential loss of 200’000 USD
had the faulty gear caused secondary damage to the entire gearbox.
Condition monitoring is recognized by
many to be the most effective maintenance
strategy, especially in the eyes of banks and
insurers. As such, some insurance companies are beginning to offer premium discounts
for wind farms with condition monitoring technologies installed .
While predictive maintenance promises
clear savings in O&M costs, it is unclear
whether or not the necessary sensor equipment and software will translate to higher capital costs. Furthermore, condition monitoring
requires skilled and knowledgeable operators who can interpret the data and accurately
predict part failures; staffing costs will still exist. Nevertheless, as far as maintenance
strategies go, predictive maintenance seems to show the most promise.
Another promising approach is power
performance monitoring. It utilizes historical wind turbine data to predict wind turbine performance parameters such as desired
ISSUE 3 September 2012
power output through the modelling of the
a recent study .
artificial intelligence are methods currently
service providers. On the one hand are original
wind turbine power curve. Data mining
algorithm, evolutionary computation and used for modelling wind turbine power curves
. The constructed models are used
as reference profile of the power curve in
order to detect performance deterioration and early indications of failures of an operational
wind turbine. Unexpected deviations from the desired values are promptly detected by the performance monitoring algorithm and the
nature of change in shape of the power curve
related to this deviation will indicate the type of malfunction. The operator can then implement corrective measures respectively to maximize energy yield.
III. Market Structure The service market for wind energy is
projected to grow substantially in coming years. In the European market alone, its net value is
expected to increase from 2,3 billion Euros in
2011 to 4,5 billion Euros by 2020, according to
Todayâ€™s wind energy O&M market
consists largely of two different types of
equipment manufacturers (OEMs) that are
able to provide both turbines and full-service
contracts. On the other are independent service providers (ISPs) that tend to specialize in
specific or outdated makes of turbines. Both types of service providers have their own
strengths and their own drawbacks. Of course, some major wind farm operators such as
utilities may conduct O&M services on their own.
Full Service with Original Equipment Manufacturers Many wind turbine manufacturers today
exhibit a large enough degree of vertical
integration that they can offer full service
contracts as well as actual turbines . While
this makes sense for them economically, it also makes sense technically. Original equipment manufacturers are the ones who best
understand the technical specifications of their
ISSUE 3 September 2012
turbine designs. Some manufacturers even offer full service packages that go beyond purely
technical O&M service, covering financial risks related to O&M as well.
Smaller wind farm operators especially
seem to prefer this kind of service. OEMs
and full service offer one-stop maintenance, which may save time. This also seems to
be the preferred service method for banks 
and insurance companies . These financial
institutions desire stable costs, minimal risk,
performance guarantees, and certified staff to
carry out maintenance and repairs, aspects fullservice contracts can cover more easily. Two thirds of all operators in Germany have fullservice contracts with OEMs.
Specialization with Independent Service Providers Like on every other market, competition
may reduce prices and lead to more efficiency.
In this sense independent service providers can play a substantial role in bringing down wind power costs. Independent service providers may cater to a broader range of turbine
designs, so their services could be interesting for wind farms with turbines from different manufacturers.
ISPs may also specialize in specific or
outdated wind turbine designs, which could be especially beneficial to any operator
owning models no longer sold on the market. Smaller service providers usually repair
components instead of replacing them, which results in cost savings and much less hassle
if these components are no longer available. In addition, ISPs can offer customer service
adjusted to the specific requirements of the
clients. They may be able to offer rapid, more personalized service for wind farms.
ISPs seem to be favoured by operators
with many different turbine models. Some operators elect to hold off on signing full-
service contracts; instead, they cover parts of their required maintenance themselves and
leave the rest to specialists . Thus, while the market appears to be leaning toward OEMs
and full service, ISPs still have many benefits to offer.
Both types of service offer their own
advantages. OEMs and full service can
potentially provide more plant capacity and
preventive maintenance, repairs that are not delayed by tendering procedures, and less
responsibility for the operator . This also
seems to be the preferred strategy of banks
and insurance providers. ISPs may offer cost savings, more control and influence for the
operator, and more scope for comparing costs and quality.
At least in Europe, the wind energy service
market is traditionally dominated by OEMs . However, with the impending expiration of a
growing number of first guarantee contracts, there may be more opportunities for ISPs to
further penetrate the market in the near future.
IV. New Designs Thanks to the efforts of wind energy
research and development, wind turbine
technology has seen continuous improvements,
in particular over the past two decades. Further improvements can be expected, which may reduce O&M costs or the need for O&M in general.
One of the key focuses for new wind
turbines is improved design, e.g. through
less parts and more simplicity. To that end, turbines with no gearbox, termed direct
ISSUE 3 September 2012
drive technology, are being implemented by a growing number of companies. The result
could be turbines with a reduced number of moving parts and hence lower maintenance requirements.
Wind turbine technology is constantly
progressing, and the potential for reducing
costs is still substantial. Like the automobile, which after 125 years still sees continuous improvements and innovation, it is only a
matter of time before the next generation of
wind turbines appears on the market, offering
Wallasch. "Vorbereitung und Begleitung der Erstellung des Erfahrungsberichtes 2011 gemäß§ 65 EEG." Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011. 3. Barber, Steve and P. Golbeck.“The benefits of a pro-active approach using preventive and predictive maintenance tools and strategies - actual examples and case studies.” WindRisk, n.d. 4. WWEA. Operation and Maintenance. 2006. World Wind Energy Association. August 2012 <http://www.wwindea.org/ technology/ch03/estructura-en.htm>. 5. Kusiak, A., Zheng, H., & Song, Z. (2009). On-line monitoring of power curves. Renewable Energy, 34(6), 1487-1493. 6. Marvuglia, A., & Messineo, A. (2012). Monitoring of wind
even greater reliability, improved efficiencies, and lowered costs across the board.
7. Garus, Katharina.“Service market is growing.”Sun & Wind
8. German Wind Energy Association.“Two thirds of all
farms’power curves using machine learning techniques. Applied Energy, 98, 574-583. Energy, September 3, 2012. operators have full-service contracts.”Wind Energy Market:
While wind energy seems to be sufficiently
cost-competitive with fossil fuel sources,
optimizing O&M is still a priority for wind farm operators. Therefore, a firm understanding
of the current conditions of the wind energy O&M market is crucial. The importance and
Yaerbook Service, Technology & Markets 2012, 22nd ed.: 84-91. 9. -.“Competing for top service.”Wind Energy Market: Yearbook Service, Technology & Markets 2012, 22nd ed.: 68-83.
Table 1 References
cost structure of O&M, the various approaches
1. IRENA Secretariat.“Wind Power.”Working paper.
be considered in order for wind operators
3. Liu, Jasmine.“Re: Re: O&M cost data for WWEA report.”
to maintenance, different service providers, and new emerging technologies must all
worldwide to reach best practice levels in operations and maintenance. References
1. IRENA Secretariat.“Wind Power.”Working paper. International Renewable Energy Agency, 2012. 2. Wallasch, Anna-Kathrin, Knud Rehfeldt and Jan
International Renewable Energy Agency, 2012. 2. IEA Wind. "2011 Annual Report." Annual report. International Energy Association, 2012. Email to Wesley Lien. September 2012. 4. Wallasch, Anna-Kathrin, Knud Rehfeldt and Jan Wallasch.“Vorbereitung und Begleitung der Erstellung des Erfahrungsberichtes 2011 gemäß § 65 EEG.”Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011. 5. Hossain, Jami.“Re: O&M cost data for WWEA report.” Email to Wesley Lien. September 2012.
On 18 September, WWEA, in partnership with IRENA, BWE and SVIF, held a half day congress during HUSUM WindEnergy 2012. This paper is a summary of the congress and reflects the main scope of the discussions. The proceedings can be ordered from WWEA.
WWEA bulletin issue 3