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Think you've got a busy week ahead? Spare a thought for the Scots. For when voters go to the polls on Thursday, they've got quite a decision to make.

Both the "Yes" and the "No" campaign have been fighting tooth and claw for voters attention for months now and leaders on both sides have been constantly looking for the upper hand.

Each side has been at pains to present their strategy as the answer to future success, prosperity and growth. They've been selling an idea and they're looking to garner widespread public support.

To do so, they've been seeking the confidence and trust of the public and they've been at pains to present a credible strategy for the future. Scottish economic growth may have been strong in recent years but in the future, it's still not a given. And questions remain.

And here's the thing. The answers to those questions are equally as important as the individual delivering the message. In others words, in politics as in business, this is when leadership really matters.

Now contrast the Scottish referendum with wind.

Global capacity is more than six times what it was a decade ago. Markets are opening up in Africa, eastern Europe, the Middle East and South America. And we're seeing investors gain confidence in wind farms as an asset class in it's own right. This is all pretty promising stuff.

And yet wind still accounts for just a small proportion of the energy used around the world; and in many countries is still beholden to friendly subsidies and the whims of politicians. In this respect, Australia, Germany, Spain and the US all show to varying degrees just how quickly things can change.

However, wind energy's growth cannot be measured in pure MW's alone. Rather, perhaps a more accurate measure can perhaps be better gained through taking a closer look at the people working within it.

For - just like in Scotland - it's individuals that steer people through the good and the bad, and it's these individuals that will continue to identify new opportunities to develop — providing the catalysts to act.

In short, it's why leadership really matters - irrespective of whether you're an aspirational nation or a growing part of the energy mix.

So it's because of all this talk of leadership that today, we'll once again begin the research for our annual Top 100 Power People, which we will publish in November. The report is a definitive wind industry who's who.

The concept is simple but it's a herculean task. Assembling an independent panel of experts, reinforced by our own market analysis we'll be ranking nominees based on their industry experience and track record; contacts; leadership; and their financial firepower.

So it's with this in mind, we're asking for your support. Between now and the end of September, we'll be first finalising the long list - working through all possible candidates and arguing the toss on why they ought to merit a listing. And to ensure that we're taking everyone into consideration, we want your view.

If you have nominations for us to consider - please, drop the team a quick note, jotting down your views. We can't promise a response to everyone but we guarantee to read every email nomination you send.

I am slow to agree that Solvency II cannot matter much to the outlook for renewables and infrastructure in general. Here is why.

Institutional money — pensions, insurers, sovereign wealth funds — provides deep pools of capital that get deployed across all asset classes. These guys make the world go round. They have been investing in renewables from the outset through intermediate vehicles, such as utilities, private equity funds or infrastructure funds, who invest in renewables energy projects. They also invest in banks that in turn lend to renewables projects.

These institutions are coming to better understand the renewables sector, and removing intermediate layers of investment vehicles to get closer to the generation assets and cash flows generated by them. This is to remove the fees associated with intermediaries and better fine-tune their portfolios by taking direct control of the assets they want to invest in. They are also encroaching on the senior debt role played by project finance banks, thereby replacing some of the lending capacity that disappeared with the financial crisis.

The industry has long talked about using project finance senior debt to get things built with a flip to the capital markets for the long-term operational phase. It is a good solution. But it looks like that could be stopped in its tracks by a wrongly designed Solvency II.

The use of project finance for the long-term operational phase would be less efficient than direct institutional funding, and result in higher delivered electricity costs. Forty-two percent of life and general insurance assets were in fixed income in 2012. Funds allocated to that bucket could be invested in renewables to capture the lowest risk operational cash flows directly rather than being intermediated through banks. It would be bad if this development was throttled in its infancy.

For equity, things may be more bleak. If insurers are not to be allowed to invest directly in the equity of infrastructure projects, without capital reserving requirements that undermine the economics of investing, then does this mean intermediate vehicles need to be put in place — or returned to, having been abandoned? Do we have investing expenses that deliver a higher cost of using infrastructure and poorer standard of living for pensioners who, in due course, have to live off the returns on their invested pensions?

But Solvency II cannot offer much protection from the perceived perils of infrastructure (that necessitates the high capital reserving against such investments) if its strictures do not require a look through any intermediate vehicle to the cash flows of the underlying assets and interpret the capital reserving requirement on that basis. Otherwise we have a regulatory arbitrage that says investing directly in a road is high risk but in a publicly quoted share in a company that owns the road is lower risk. This will encourage the type of egregious behaviour that caused the crash, which Solvency II is meant to protect us from.

It is unwelcome that current trends that suit the pools of capital and the project sponsors, and deliver efficiencies to electricity consumers through lower cost of capital in a capital-intensive industry, would be stymied by an unintended consequence of new rules. These trends in funding are emerging, and their full force is not yet in view, so it may serve to understate the significance of Solvency II stopping them in their tracks.

This is not just about marginal projects losing out. Rather, it is about whether the sources who have been investing in infrastructure and renewables can still come out to play; or, if so, only on terms that re-introduce inefficiencies by way of fees for multiple intermediary layers that put enough space between the assets and the investors to overwhelm or spuriously comply with ‘protections’ of Solvency II.

The irony is there is overlap between customers of these insurers – households, drivers, pensioners – and the end users of infrastructure and electricity users. They are by and large the same. Efficiency of investment makes us all double winners.

But we will be double losers in our joint capacity if Solvency II does not get a reality check. And who is the winner? The usual advice is: ‘Follow the money’.

Wind Watch

Which are the innovations that are set to revolutionise the wind sector over the next decade? And what needs to be done to boost funding for technology innovation?

We answer both in our new 28-page report, 'Investing in Tech', which is available to all Subscriber Plus readers and Members.

This special report includes our insight and analysis on the tech challenges facing the wind industry, including the move towards 10MW turbines and the hacking risks that increasing amounts of data poses for wind farm investors and operators.

Visit the website, sign in and download your copy now!

On 25 May 1961, US president John F. Kennedy told Congress that the US would put a man on the moon by the end of the 1960s.

When astronauts Neil Armstrong and Buzz Aldrin finally did so in 1969, it was the result of huge ambition, huge investment and detailed planning of the Apollo space programme.

Now, the UK government’s former chief scientific adviser Sir David King says he wants to do something similar: an 'Apollo programme' for renewable energy technology. King is seeking to set up a global $10bn a year clean tech fund to slash the cost of renewables.

He said he hoped the plan would take a big step forward at the UN Climate Summit in New York on 23 September.

The idea is to get governments around the world to put 0.2% of GDP into a fund for research, development and demonstration of low carbon energy projects. The aim is to ensure that, by 2025, renewable power should be cheaper than coal across the world.

This is not the first time King has raised this idea. In August 2013, he wrote about the idea in an opinion piece in the Financial Times, with a focus on the solar power sector.

Our main concern is that the idea currently only has in place one of the three pillars of the original Apollo mission. Its ambition is laudable, and we would certainly welcome initiatives to get more funding from both private and public sources into research and development in the renewables sector, and wind in particular. Lack of funding is a block to tech innovation.

So it has the huge ambition, but the investment and detailed plans still look some way off.

The investment has not yet been secured. King has visited 26 countries in a bid to secure investment since first proposing the idea of a fund, and he is optimistic that it would gain the support of the US and China — the UN’s two most influential players.

Meanwhile, detailed plans for how the fund would actually operate and drive down costs of renewables are not yet clear, at least outside of King’s negotiations. It is natural that countries would want clarity about these sorts of details before they put any money in.

We also have doubts about whether countries would want to put money into this kind of fund.

If China or the US wanted to set aside money to invest in the development of green energy technology then they could do so themselves. If they gave public money directly to companies within their own national borders then they could reap the benefit of technological innovation without having to share it far and wide.

It will be interesting to see whether King on securing investment at that UN meeting later this month, and what other plans he sets out.

But, even he he doesn't, his plan still has value.

If it opens a debate about public funding for renewable energy research, that would be a good start. If it gets countries to actually invest more, then this Apollo mission would start to take flight.

Like some regulatory behemoth, Solvency II continues to lumber over the horizon.

This European Union directive is set to come into effect on 1 January 2016 and will force insurers to make sure they have enough money set aside so they can cover all of the claims they are likely to receive. The idea is to guarantee that insurers can meet their obligations; and insurers and governments are now making sure they are ready.

But, like most legislation, Solvency II is set to have effects that the lawmakers aren’t expecting. That’s where wind investors come in.

Insurance Europe, which represents the continent’s insurers, has warned that the regulations will mean that insurers have less to invest in long-term infrastructure projects, including wind farms.

These schemes tend to be popular with long-term institutional investors because they usually benefit from stable subsidies; and because countries are struggling to cope with pressures to produce more energy, particularly from renewable sources.

So why would a new piece of regulation affect that appetite?

Well, insurers say they would end up holding inappropriately high levels of capital against their long-term investments. This is set to make it more expensive to invest in growth-stimulating activities, like infrastructure projects including wind farms.

Let’s imagine that Solvency II does make investment in wind farms look less attractive. Clearly, an exodus by the insurance industry from wind sector would clearly be no good thing.

European insurers manage assets worth €8.5trn, including bonds, company shares, and other assets. Insurers are an investment powerhouse that wind could ill afford to lose. However, any prediction of doom for wind farms is still very premature.

We don’t yet know how wind farms are going to be treated under the regime. They may be treated as land and buildings, or they may be treated as infrastructure. We just don’t know.

We also don’t know how national governments will structure their own policies. The UK Treasury, for example, is currently in consultation on the final elements of its Solvency II policies, which is due to close on 19 September. These plans are still in flux.

And even if developers of onshore and offshore schemes do find life a bit tougher after the introduction of Solvency II, we don’t expect anything earth-shattering. Sure, it may be more difficult to get money to fund early stages of schemes. Some may not happen.

In general, though, we feel good schemes will be able to attract investment, and it is only the marginal schemes that would lose out under Solvency II. Developers are an entrepreneurial bunch who are financially inventive enough to make schemes happen.

There are also those who could benefit. Less competition from major institutions surely means more opportunities for the sector’s smaller private investors. This is something that, in theory at least, could foster future growth.

We clearly need to heed wind and insurance industry warnings here but we currently see little evidence that Solvency II will make any huge difference. It may be a bump in the road. Nothing more.

Breaking into foreign markets requires ingenuity. It is rare that deal structures will transfer simply from your home market into somewhere with a different culture and laws.

This is why the 115MW El Arrayan wind farm in Chile is worth a look. It is the largest wind project in this South American nation and officially opened last week. The project is 400km north of Santiago on the coast, and was developed by US firm Pattern Energy.

So far, so unexceptional. Yes, it is Pattern Energy’s first wind farm outside North America, but it is not the first overseas developer to enter this market. Enel Green Power has built the 90MW Talinay wind farm, which started operations in June 2013; and GDF Suez has also developed one. What makes this scheme so interesting?

The reason is that Chile is looking for ways to push down the cost of energy for domestic consumers and businesses; and the way Pattern has structured this deal will help it do so.

El Arrayan is 70% owned by Pattern and 30% by Antofagasta, which is a Chilean copper mining group that also has interests in sectors including transport and water distribution.

Around 70% of the power generated by the project will be sold to the Los Pelambres mine, in which Antofagasta is the controlling party, in a long-term fixed-for-floating hedge.

Los Pelambres is one of the largest copper reserves in Chile, and El Arrayan will provide around 20% of its total energy need. The benefit for Antofagasta is that it helps show that the mining industry in Chile can become greener; and the benefit for Pattern is it reduces the risk of selling all the power on the open market. It only needs to go to the open market to sell the remaining 30%.

The long-term energy purchase agreement meant Pattern was able to reduce the risk associated with the development and therefore get more favourable deals for financing it. It can now sell its energy at competitive prices because it was able to reduce those costs.

This is a model that is set to unlock further wind farms in Chile, and help the government to push down energy costs. The fact the official inauguration was attended by president Michelle Bachelet is a symbol of how significant the government regards the project.

For Bachelet, the scheme is a signal to foreign investors they they should invest in the country, which has a target of generating 45% of its energy from clean sources by 2025.

The government is also seeking to put in place policies to support the renewable energy sector. Last month, the Chilean energy ministry introduced legislation to overhaul the power auction system, in order to ensure that wind and solar companies can bid for long-term power purchase agreements.

That legislation should help to reduce the cost of energy -- and schemes structured like El Arrayan will also help that cause.

China is seeing an economic slowdown that most nations would love. Its GDP rose by only 7.4% year-on-year in the first half of 2014. Well, it’s low when you’re used to 10% or more.

The slowdown is partly due to weak demand in overseas markets, and partly the structural imbalances in the Chinese economy. The response from China’s rulers has been to focus investment insectors that can keep growth on track. This is good news for wind.

Now, your view on the success of wind power in China relies on how you read the data. In terms of gigawatts it is clearly the world leader, with more than 91GW installed at the end of 2013. That is one-third more than its nearest rival, the US, which had 61GW.

But, when you drill down, you see that wind still only accounts for 3% of the country’s total energy needs, behind coal (80%) and hydro (14%). Wind farm operators continue to face problems with curtailment and transmission as the grid has struggled to keep up with the scale of wind development.

Now the government is stepping up efforts to find solutions. This isn’t just to help the wind sector. It is a key part of China’s bid to ensure stable growth.

We need only look at the half-year financial reports of some major Chinese manufacturers, published over the last two weeks, to see that there are encouraging signs of progress. The best starting point is Goldwind’s review of Chinese policy moves in its half-year results, out last week.

In April, the country’s National Energy Administration (NEA) issued a notice that proposed each region and city should target a steady increase of the ratio of clean energy in their energy mix; and should ensure they prioritise the dispatch and purchase of green energy.

The NEA followed this in May when it published proposed new laws on air pollution, alongside the National Development & Reform Commission (NRDC) and Ministry of Environment Protection of China. It said China must accelerate efforts to control air pollution by building more clean energy; and set a target that China must have 150GW of wind power by 2017.

And, in June, the NRDC published details of feed-in tariffs for offshore wind farms.

The NEA is also proposing to build 12 dedicated trans-regional wind power transmission lines to help increase the purchase of power from remote sources, including wind farms. Meanwhile, the China Electricity Council wants to expedite the fast construction of new transmission lines from areas with lots of wind farms.

There was also interesting reading in Longyuan Power’s half-year results, published last week, which reported that wind farms totalling 4.4GW were added in the first half of 2014; and total power produced by wind grew 12% over the same period.

This shows that there continues to be steady growth in the Chinese wind sector, even with the economy slowing. And, with these new announcements, we expect this to continue to 2017 and beyond.

Wind Watch

China is seeing an economic slowdown that most nations would love. Its GDP rose by only 7.4% year-on-year in the first half of 2014. Well, it’s low when you’re used to 10% or more.

The slowdown is partly due to weak demand in overseas markets, and partly the structural imbalances in the Chinese economy. The response from China’s rulers has been to focus investment in sectors that can keep growth on track. This is good news for wind.

Now, your view on the success of wind power in China relies on how you read the data. In terms of gigawatts it is clearly the world leader, with more than 91GW installed at the end of 2013. That is one-third more than its nearest rival, the US, which had 61GW.

But, when you drill down, you see that wind still only accounts for 3% of the country’s total energy needs, behind coal (80%) and hydro (14%). Wind farm operators continue to face problems with curtailment and transmission as the grid has struggled to keep up with the scale of wind development.

Now the government is stepping up efforts to find solutions. This isn’t just to help the wind sector. It is a key part of China’s bid to ensure stable growth.

We need only look at the half-year financial reports of some major Chinese manufacturers, published over the last two weeks, to see that there are encouraging signs of progress. The best starting point is Goldwind’s review of Chinese policy moves in its half-year results, out last week.

In April, the country’s National Energy Administration (NEA) issued a notice that proposed each region and city should target a steady increase of the ratio of clean energy in their energy mix; and should ensure they prioritise the dispatch and purchase of green energy.

The NEA followed this in May when it published proposed new laws on air pollution, alongside the National Development & Reform Commission (NRDC) and Ministry of Environment Protection of China. It said China must accelerate efforts to control air pollution by building more clean energy; and set a target that China must have 150GW of wind power by 2017.

And, in June, the NRDC published details of feed-in tariffs for offshore wind farms.

The NEA is also proposing to build 12 dedicated trans-regional wind power transmission lines to help increase the purchase of power from remote sources, including wind farms. Meanwhile, the China Electricity Council wants to expedite the fast construction of new transmission lines from areas with lots of wind farms.

There was also interesting reading in Longyuan Power’s half-year results, published last week, which reported that wind farms totalling 4.4GW were added in the first half of 2014; and total power produced by wind grew 12% over the same period.

This shows that there continues to be steady growth in the Chinese wind sector, even with the economy slowing. And, with these new announcements, we expect this to continue to 2017 and beyond.

Wind Watch

Can we buy you a drink? There’s just one week to go until our next Quarterly Drinks, which we will be holding next Thursday in association with DNV GL.

The event will be held on Thursday 4th September from 5.30pm-9.00pm at The Anthologist, 58 Gresham Street, London, EC2V 7BB. There are only a few places left so, if you’d like to attend, don’t delay. Book your place here.

The lost city of Atlantis may inspire excitement among myth-lovers and serious scientists, but we’re more interested in its business namesake.

Developer Atlantis Resources announced last week that it has secured £50m to finance the 86MW pilot phase of a "pioneering" offshore project, called MeyGen, off the north coast of Scotland. The pilot phase involves developing an array of four turbines, which are set to be commissioned next year. Eventually, it wants to build an 398MW array of 269 turbines.

This announcement is likely to provoke two comments among our hardened readers. First, that they’ve never heard of an offshore wind developer called Atlantis; and, second, that it is strange that it plans to use 1.5MW turbines when 4MW machines are now standard. Both are good points.

The reason for any confusion is simple: MeyGen is a tidal scheme — the developer wants it to be the “world’s largest tidal stream project” — and the turbines are set to go on the sea floor. Well, with a developer called Atlantis they couldn’t really go anywhere else.

The emergence of wave and tidal could raise some significant headaches for those investing in offshore wind — as well as some interesting opportunities.

If tidal technology can be scaled and commercialised then it would be serious competition for offshore wind. Offshore wind farms are, at present, the only serious option for building renewable energy schemes out to sea, but the growth of wave and tidal would change this.

We would expect tidal to find favour with those who complain that offshore wind farms are ugly, unreliable and kill birds. Tidal arrays would have none of those issues, and would be no worse than wind farms in the amount of disruption for underwater species. Wind works, but it is still difficult to make a case for it when politicians are so willing to find fault.

But the wind industry can’t be afraid of such competition. It simply needs to adapt, and there are ways that wind investors can benefit from the growth of this rival technology.

Tim Cornelius, chief executive of Atlantis Resources, has talked in recent years about the potential for developing marine energy farms that are capable of producing both wind and tidal power. Such projects would enable developers and investors to gain more value from the land they control offshore; and continue producing energy when the wind isn’t blowing.

Of course, this won’t work in all cases. Many sites won’t be appropriate for both wind and tidal. New wind farms are being developed further out to sea and in deeper waters, which would clearly make building an array of tidal turbines on the seabed far more challenging. But if it enables some investors to gain more value from sites then it must be good.

Growth in the wave and tidal sector would also open opportunities for businesses who already provide services to the offshore wind sector. From vessel operators and seabed surveyors to manufacturers and cable installers, there are huge opportunities to use their knowledge on tidal projects.

There’s no point trying to hold back the tide.

Wind Watch

The lost city of Atlantis may inspire excitement among myth-lovers and serious scientists, but we’re more interested in its business namesake.

Developer Atlantis Resources announced last week that it has secured £50m to finance the 86MW pilot phase of a "pioneering" offshore project, called MeyGen, off the north coast of Scotland. The pilot phase involves developing an array of four turbines, which are set to be commissioned next year. Eventually, it wants to build an 398MW array of 269 turbines.

This announcement is likely to provoke two comments among our hardened readers. First, that they’ve never heard of an offshore wind developer called Atlantis; and, second, that it is strange that it plans to use 1.5MW turbines when 4MW machines are now standard. Both are good points.

The reason for any confusion is simple: MeyGen is a wave tidal scheme — the developer wants it to be the “world’s largest wave tidal project” — and the turbines are set to go on the sea floor. Well, with a developer called Atlantis they couldn’t really go anywhere else.

The emergence of wave tidal could raise some significant headaches for those investing in offshore wind — as well as some interesting opportunities.

If tidal technology can be scaled and commercialised then it would be serious competition for offshore wind. Offshore wind farms are, at present, the only serious option for building renewable energy schemes out to sea, but the emergence of wave tidal would change this.

We would expect tidal to find favour with those who complain that offshore wind farms are ugly, unreliable and kill birds. Tidal arrays would have none of those issues, and would be no worse than wind farms in the amount of disruption for underwater species. Wind works, but it is still difficult to make a case for it when politicians are so willing to find fault.

But the wind industry can’t be afraid of such competition. It simply needs to adapt, and there are ways that wind investors can benefit from the growth of this rival technology.

Tim Cornelius, chief executive of Atlantis Resources, has talked in recent years about the potential for developing marine energy farms that are capable of producing both wind and tidal power. Such projects would enable developers and investors to gain more value from the land they control offshore; and continue producing energy when the wind isn’t blowing.

Of course, this won’t work in all cases. Many sites won’t be appropriate for both wind and tidal. New wind farms are being developed further out to sea and in deeper waters, which would clearly make building an array of tidal turbines on the seabed far more challenging. But if it enables some investors to gain more value from sites then it must be good.

Growth in the wave tidal sector would also open opportunities for businesses who already provide services to the offshore wind sector. From vessel operators and seabed surveyors to manufacturers and cable installers, there are huge opportunities to use their knowledge on tidal projects.

There’s no point trying to hold back the tide.

What will happen to US wind after 2016? That is the question that lingers unanswered as Republicans and Democrats in Congress fight over the wind production tax credit (PTC).

The wind PTC is a subsidy regime that supports the construction of wind farms. It expired at the end of 2013 and, despite plans from the Democrats to reintroduce it earlier this year as part of a tax extenders bill, this was scuppered by Republicans in Congress.

There is no sign of the Republicans backing down. On 13 August, Kansas Congressman Mike Pompeo led a group of 54 members of Congress in calling for a permanent end of the PTC. It called the PTC one of the “most anti-competitive and economically harmful tax provisions”, and said even a one-year extension would cost US taxpayers around $13.4bn.

This makes the 2013 edition of the US Department of Energy’s 'Wind Technologies Market Report', which was published earlier this week, more interesting than most. For one thing, it shows how split opinion is about what will happen to the PTC and what this would mean.

Consultancies IHS and MAKE respectively forecast that 8.4GW and 5.1GW of extra wind capacity would be added in 2016, with both assuming that the PTC would be extended for 2016. But Bloomberg New Energy Finance and Navigant based their forecasts, of 3.6GW and 2.8GW added respectively, on the assumption that there would be no PTC extension.

In May, we said we expected the PTC to be extended for 2016. Given subsequent battles in Congress we now think this is less likely — although, like those working in the US, we simply don’t know. Uncertainty like this can never be good for the market.

But our overriding feeling from the energy departments 96-page report is that there are actually a lot of reasons to be positive, PTC or no PTC.

The funding of projects held steady in 2013 due to the low level of activity, but has picked up this year. Investors appear confident that sufficient capital will be available to finance projects, and several investors — including NRG, Pattern and NextEra — have spun-off yieldcos as a way to raise capital from public equity markets.

Wind energy is also looking more competitive. The cost of energy in wind PPAs reached an all-time low of $25/MWh nationwide, compared with $70/MWh in 2009. This must be good news for wind as it is in competition with other energy sources including shale gas.

And the cost of turbines has also dropped by around $600/kW since 2009 and 2010, to now around $1,630/kWh, although this was partly due to the limited number of projects that were completed in 2013. Again, this can only help the wind sector to compete.

We don’t believe the US wind sector is in the midst of a boom, but this report also shows that it isn’t all doom and gloom.

Wind Watch

What will happen to US wind after 2016? That is the question that lingers unanswered as Republicans and Democrats in Congress fight over the wind production tax credit (PTC).

The wind PTC is a subsidy regime that supports the construction of wind farms. It expired at the end of 2013 and, despite plans from the Democrats to reintroduce it earlier this year as part of a tax extenders bill, this was scuppered by Republicans in Congress.

There is no sign of the Republicans backing down. On 13 August, Kansas Congressman Mike Pompeo led a group of 54 members of Congress in calling for a permanent end of the PTC. It called the PTC one of the “most anti-competitive and economically harmful tax provisions”, and said even a one-year extension would cost US taxpayers around $13.4bn.

This makes the 2013 edition of the US Department of Energy’s 'Wind Technologies Market Report', which was published earlier this week, more interesting than most. For one thing, it shows how split opinion is about what will happen to the PTC and what this would mean.

Consultancies IHS and MAKE respectively forecast that 8.4GW and 5.1GW of extra wind capacity would be added in 2016, with both assuming that the PTC would be extended for 2016. But Bloomberg New Energy Finance and Navigant based their forecasts, of 3.6GW and 2.8GW added respectively, on the assumption that there would be no PTC extension.

In May, we said we expected the PTC to be extended for 2016. Given subsequent battles in Congress we now think this is less likely — although, like those working in the US, we simply don’t know. Uncertainty like this can never be good for the market.

But our overriding feeling from the energy departments 96-page report is that there are actually a lot of reasons to be positive, PTC or no PTC.

The funding of projects held steady in 2013 due to the low level of activity, but has picked up this year. Investors appear confident that sufficient capital will be available to finance projects, and several investors — including NRG, Pattern and NextEra — have spun-off yieldcos as a way to raise capital from public equity markets.

Wind energy is also looking more competitive. The cost of energy in wind PPAs reached an all-time low of $25/MWh nationwide, compared with $70/MWh in 2009. This must be good news for wind as it is in competition with other energy sources including shale gas.

And the cost of turbines has also dropped by around $600/kW since 2009 and 2010, to now around $1,630/kWh, although this was partly due to the limited number of projects that were completed in 2013. Again, this can only help the wind sector to compete.

We don’t believe the US wind sector is in the midst of a boom, but this report also shows that it isn’t all doom and gloom.

Wind Watch

Our next special report, called 'Investing in Tech', will be published on Wednesday 10th September.

This will focus on some of the key technology trends that are set to shape wind over the next 5-10 years, and the funding challenges facing the industry.

The editorial team is already working hard behind the scenes, and it’s great to see it all taking shape. As part of this, we also have a limited number advertising slots available to members of our community and, as always, we’d love for you to benefit from this.

To find out more about the advertising opportunities on offer and for further information about the report, please drop me a line and get in touch.

Wind Watch

Rival firms working on projects that benefit the whole industry. It’s a great idea, but rarely happens as people get caught in the cut-and-thrust of running a business.

It is in this cynical spirit that we received the news that the UK Government’s Offshore Renewable Energy Catapult had formed a group of eight major offshore wind operators to look at how to improve maintenance and reliability of offshore wind farms. The eight firms are Centrica, Dong Energy, EDF Energy, E.On, RWE, Scottish Power, SSE and Vattenfall.

This will look at major issues including cable damage and blade corrosion.

Now don’t get us wrong, the idea is good. The Catapult wants to cut the costs of running offshore wind farms, which makes up one-third of their lifetime cost. This could reduce the cost of energy from offshore projects by a third, from £150/MWh now to under £100/MWh.

If the costs and headaches of running offshore wind farms are reduced then it stands to reason that developers will be more keen to build them, investors will want to invest, and governments will want to push them through the planning system. That would be ideal.

But we have to be cautious because this group gives us deja vu.

The Carbon Trust has its Offshore Wind Accelerator (OWA), which is a group of nine major players that was set up in 2008 to focus on reducing the cost of offshore wind to less than £100/MWh. Six of these — Dong, E.On, RWE, Scottish Power, SEE and Vattenfall — are also in the Catapult group, along with Mainstream Renewable Power, Statkraft and Statoil.

The OWA is conducting interesting research and is backing small firms with grants to build out their ideas, which it says has put it on track to cut 10% from the cost of offshore wind energy since 2008. That would be a decent contribution but it has taken six years to get there, and the ORE Catapult’s group must work quickly if it is to make an impact by 2020.

So can the Catapult make that happen?

It has the facilities. Since its merger with the National Renewable Energy Centre in April, it has access to Narec’s technology testing centre in Blyth, Northumberland.

It has senior expertise and industry knowledge, as well as links in to government.

And we have no doubt that the major players around its table will have good ideas about how to improve offshore performance and reliability.

However, if the group is to succeed, then the Catapult needs to give those major players the incentive to engage and act.

For instance, they may decide to set up a cable repair club to
quickly fix future cable problems; but will the Catapult be able to convince operators that they should focus on future challenges rather than those they are experiencing today?

It will have to do so if it is to make a major dent in offshore wind energy costs.

Rival firms working on projects that benefit the whole industry. It’s a great idea, but rarely happens as people get caught in the cut-and-thrust of running a business.

It is in this cynical spirit that we received the news that the UK Government’s Offshore Renewable Energy Catapult had formed a group of eight major offshore wind operators to look at how to improve maintenance and reliability of offshore wind farms. The eight firms are Centrica, Dong Energy, EDF Energy, E.On, RWE, Scottish Power, SSE and Vattenfall.

This will look at major issues including cable damage and blade corrosion.

Now don’t get us wrong, the idea is good. The Catapult wants to cut the costs of running offshore wind farms, which makes up one-third of their lifetime cost. This could reduce the cost of energy from offshore projects by a third, from £150/MWh now to under £100/MWh.

If the costs and headaches of running offshore wind farms are reduced then it stands to reason that developers will be more keen to build them, investors will want to invest, and governments will want to push them through the planning system. That would be ideal.

But we have to be cautious because this group gives us deja vu.

The Carbon Trust has its Offshore Wind Accelerator (OWA), which is a group of nine major players that was set up in 2008 to focus on reducing the cost of offshore wind to less than £100/MWh. Six of these — Dong, E.On, RWE, Scottish Power, SEE and Vattenfall — are also in the Catapult group, along with Mainstream Renewable Power, Statkraft and Statoil.

The OWA is conducting interesting research and is backing small firms with grants to build out their ideas, which it says has put it on track to cut 10% from the cost of offshore wind energy since 2008. That would be a decent contribution but it has taken six years to get there, and the ORE Catapult’s group must work quickly if it is to make an impact by 2020.

So can the Catapult make that happen?

It has the facilities. Since its merger with the National Renewable Energy Centre in April, it has access to Narec’s technology testing centre in Blyth, Northumberland.

It has senior expertise and industry knowledge, as well as links in to government.

And we have no doubt that the major players around its table will have good ideas about how to improve offshore performance and reliability.

However, if the group is to succeed, then the Catapult needs to give those major players the incentive to engage and act.

For instance, they may decide to set up a cable repair club to quickly fix future cable problems; but will the Catapult be able to convince operators that they should focus on future challenges rather than those they are experiencing today?

It will have to do so if it is to make a major dent in offshore wind energy costs.

Cheap. Fast. Good. The adage goes that customers can get two but not all three.

This also applies to fracking. It may be a fast and cheap source of energy, but the potential harm to the environment means it isn’t good. It is used in regions such as Australia, North America and South Africa, but its impacts aren’t yet well-known.

Now, it is easy for wind investors to worry about fracking. If countries are looking for new sources of energy then the thinking goes that only wind or fracking can win, not both. But this doesn’t appear to be the case.

For example, Australia and North America have developed both industries at the same time, and South Africa is starting to roll out wind power too. Countries under pressure to grow energy resources will rarely stick to just one source. That doesn’t mean we like fracking. We just don’t think most countries see it as ‘either/or’.

There are also plenty of barriers for fracking. Pro-fracking countries see regular protests, and the likes of Bulgaria and France have banned to use of the method. Politicians around the world want to make sure they get re-elected, and fracking is no vote-winner. It will not be easy to roll it out in the face of such public opposition.

Of course, fracking fans say these risks are overstated, but they are yet to prove it.

For instance, a paper in US journal Frontiers in Ecology and the Environment this week said there was “surprisingly little research” on fracking's effects on water, air, land or wildlife. Opposition will not abate until evidence like this is produced.

And, while there are still so many unknowns about the risks of fracking, we don’t see that it will grow in popularity at the expense of wind farm projects. There is also the added irony, of course, that if fracking is proved to be safe and clean then it would open up the sector to clean energy investors. We won't hold our breath.

Fracking fans will still point to the unreliability of wind farms, health ‘risks’, and their up front capital cost. The first point is being addressed with new storage technology, software and weather modelling; the second id largely disproved; and, as for the third, we believe people will pay higher bills for greater perceived safety.

We also see a major information gap here. Pro-frackers need to provide data that fracking is safe but in doing so, they are providing misinformation too.

For example, the UK Onshore Oil & Gas group has claimed that 57% of people in Britain back shale gas production, with 16% opposed. This only shows the power of providing one-sided evidence and asking a leading question; and contradicts an official Department of Energy & Climate Climate Change report that showed only 24% of people back fracking, with 47% neither in favour or against it.

The fracking lobby must produce evidence to settle the argument about whether it is clean or not. If it can’t then its long-term impact on European wind will be limited.

Wind Watch

Cheap. Fast. Good. The adage goes that customers can get two but not all three.

This also applies to fracking. It may be a fast and cheap source of energy, but the potential harm to the environment means it isn’t good. It is used in regions such as Australia, North America and South Africa, but its impacts aren’t yet well-known.

Now, it is easy for wind investors to worry about fracking. If countries are looking for new sources of energy then the thinking goes that only wind or fracking can win, not both. But this doesn’t appear to be the case.

For example, Australia and North America have developed both industries at the same time, and South Africa is starting to roll out wind power too. Countries under pressure to grow energy resources will rarely stick to just one source. That doesn’t mean we like fracking. We just don’t think most countries see it as ‘either/or’.

There are also plenty of barriers for fracking. Pro-fracking countries see regular protests, and the likes of Bulgaria and France have banned to use of the method. Politicians around the world want to make sure they get re-elected, and fracking is no vote-winner. It will not be easy to roll it out in the face of such public opposition.

Of course, fracking fans say these risks are overstated, but they are yet to prove it.

For instance, a paper in US journal Frontiers in Ecology and the Environment this week said there was “surprisingly little research” on fracking's effects on water, air, land or wildlife. Opposition will not abate until evidence like this is produced.

And, while there are still so many unknowns about the risks of fracking, we don’t see that it will grow in popularity at the expense of wind farm projects. There is also the added irony, of course, that if fracking is proved to be safe and clean then it would open up the sector to clean energy investors. We won't hold our breath.

Fracking fans will still point to the unreliability of wind farms, health ‘risks’, and their up front capital cost. The first point is being addressed with new storage technology, software and weather modelling; the second id largely disproved; and, as for the third, we believe people will pay higher bills for greater perceived safety.

We also see a major information gap here. Pro-frackers need to provide data that fracking is safe but in doing so, they are providing misinformation too.

For example, the UK Onshore Oil & Gas group has claimed that 57% of people in Britain back shale gas production, with 16% opposed. This only shows the power of providing one-sided evidence and asking a leading question; and contradicts an official Department of Energy & Climate Climate Change report that showed only24% of people back fracking, with 47% neither in favour or against it.

The fracking lobby must produce evidence to settle the argument about whether it is clean or not. If it can’t then its long-term impact on European wind will be limited.

Wind Watch

Where will you be on Thursday 4th September? We'll be hosting the next Quarterly Drinks that very evening and naturally, we'd be delighted if you could join us.

To register your place - and for all the details - simply register, today.

Wind Watch

What’s happening with renewable energy on El Hierro is enough to raise eyebrows on a couple of counts.

First, there’s the fact that the island, in the Canary Islands, Spain, is set to cover 80% of its energy needs with a combination of wind power and pumped hydro.

The plan is to use this as a stepping stone to 100% renewable energy coverage, adding battery storage from electric cars into the mix. That’s a serious step. Islanders are rightly proud of having got this far.

But what’s perhaps just as interesting to those of us in the renewable energy sector is the funding structure behind El Hierro’s renewable venture. Gorona del Viento, as the project developer is called, is 60% owned by the island council.

Endesa, the local utility, has a further 30% stake. And the Canary Islands Technology Institute owns 10%. That’s it. No venture capital. No institutional investors. No banks. No funds. How come? It's all down to the business case.

The price of electricity in El Hierro (as in the rest of Spain) is fixed by law, but the cost of producing it through traditional means (in this case, diesel generation) is high. And the island’s 10,100-strong population uses barely more than half of the power produced. The rest is needed to desalinate water and pump it across the island’s mountainous terrain for irrigation. That’s a big cost to the council.

Therefore, it makes sense for the government to invest in a project that will greatly reduce the expense. Endesa stands to win as well. By taking a stake in Gorona del Viento, it secures its place in El Hierro’s energy future and gets to pocket a share of the generation savings that will arise.

All parties also hope to benefit from exporting the Gorona del Viento concept to other markets. Talks are already underway not just with other Canary Island councils but also representatives of island chains such as the Azores and even nations such as Indonesia.

That’s all well and good. But what’s the opportunity here for the private sector?

Well, let’s step back a bit and consider the wider Spanish market. ‘Paralysed’ would not be an overstatement. Only one turbine has been installed across the whole country in the last six months. The government is determined not to shell out cash to support renewables.

So that means project developers have to find opportunities where wind energy makes sense without subsidies. Gorona del Viento is a clear example of this. And such a concept doesn’t have to be government-backed.

In fact, there could be significant attractions in the private sector planning, developing and operating such projects on a turnkey basis. Gorona del Viento, as it happens, is a fully commercial enterprise despite its public-sector ownership.

As subsidy support falls away in a growing number of markets, developers are going to have to pay increasing heed to such opportunities. In places such as Spain, they are now about all there is to go on.

What’s happening with renewable energy on El Hierro is enough to raise eyebrows on a couple of counts.

First, there’s the fact that the island, in the Canary Islands, Spain, is set to cover 80% of its energy needs with a combination of wind power and pumped hydro.

The plan is to use this as a stepping stone to 100% renewable energy coverage, adding battery storage from electric cars into the mix. That’s a serious step. Islanders are rightly proud of having got this far.

But what’s perhaps just as interesting to those of us in the renewable energy sector is the funding structure behind El Hierro’s renewable venture. Gorona del Viento, as the project developer is called, is 60% owned by the island council.

Endesa, the local utility, has a further 30% stake. And the Canary Islands Technology Institute owns 10%. That’s it. No venture capital. No institutional investors. No banks. No funds. How come? It's all down to the business case.

The price of electricity in El Hierro (as in the rest of Spain) is fixed by law, but the cost of producing it through traditional means (in this case, diesel generation) is high. And the island’s 10,100-strong population uses barely more than half of the power produced. The rest is needed to desalinate water and pump it across the island’s mountainous terrain for irrigation. That’s a big cost to the council.

Therefore, it makes sense for the government to invest in a project that will greatly reduce the expense. Endesa stands to win as well. By taking a stake in Gorona del Viento, it secures its place in El Hierro’s energy future and gets to pocket a share of the generation savings that will arise.

All parties also hope to benefit from exporting the Gorona del Viento concept to other markets. Talks are already underway not just with other Canary Island councils but also representatives of island chains such as the Azores and even nations such as Indonesia.

That’s all well and good. But what’s the opportunity here for the private sector?

Well, let’s step back a bit and consider the wider Spanish market. ‘Paralysed’ would not be an overstatement. Only one turbine has been installed across the whole country in the last six months. The government is determined not to shell out cash to support renewables.

So that means project developers have to find opportunities where wind energy makes sense without subsidies. Gorona del Viento is a clear example of this. And such a concept doesn’t have to be government-backed.

In fact, there could be significant attractions in the private sector planning, developing and operating such projects on a turnkey basis. Gorona del Viento, as it happens, is a fully commercial enterprise despite its public-sector ownership.

As subsidy support falls away in a growing number of markets, developers are going to have to pay increasing heed to such opportunities. In places such as Spain, they are now about all there is to go on.

Losing in the World Cup final is nothing to be happy about. But, for Argentina, the loss to Germany last month did help distract people from its economic woes.

The south American nation has one of the world’s highest inflation rates; its economy is set to shrink this year; and, last week, the country defaulted on sovereign debts for the second time in 13 years, and the eighth time in its 200-year history. It is clear that all is not well.

For wind investors, this should act as reminder of the perils of emerging markets. Potential for high returns is little help if the government simply ignores its obligations to businesses.

Let’s look quickly at this saga. In 2001, the country defaulted on $95bn of sovereign debt and US funds moved in to buy Argentinian government bonds at knock-down prices. The country has since restructured most of these debts, by agreeing it would pay one-third of the bonds’ value to creditors. Ninety-three percent of bonds have been restructured.

However, the remaining 7% of bondholders have refused to accept this deal and want the total value of their bonds repaid ($15bn). The Argentinian government is refusing as it would mean that it needs to treat the other 93% the same, which could lead to claims of over $120bn.

This has been the subject of a long-running legal battle and, on 30 July, the US courts ordered Argentina to repay the full value of the bonds to that remaining 7%. Argentina didn’t and is now in default. There is little sign of any resolution.

Now, this case does not directly affect wind investors, but it does highlight risks of doing deals with governments that try to wriggle out of their obligations. It can be lucrative to put money into emerging markets, but only if you know the support is going to remain there. In other words, would you base your wind farm investment plan on a subsidy deal with the Argentinian government?

If you know its attitude to sovereign debt then the answer is: highly unlikely.

Of course, at this stage such talk is largely hypothetical because Argentina simply doesn’t offer the same opportunities as countries like Brazil, Chile, Mexico and Uruguay. In theory, Argentina looks to be progressing well. It added 76MW of capacity in 2013 to take its total to 218MW, and has a pipeline of over 2GW.

But these statistics don’t tell the story of a country that has big barriers for wind investors, including a lack of incentives and laws restricting imports. It isn’t feasible for Argentinian companies to build turbine parts when they have no track record.

The main hope for wind is in next year’s presidential election, when Cristina Fernandez de Kirchner cannot stand for a third term. She is on her way out, but wind will only start to benefit if her protectionist financial policies go too.

Wind Watch

Losing in the World Cup final is nothing to be happy about. But, for Argentina, the loss to Germany last month did help distract people from its economic woes.

The south American nation has one of the world’s highest inflation rates; its economy is set to shrink this year; and, last week, the country defaulted on sovereign debts for the second time in 13 years, and the eighth time in its 200-year history. It is clear that all is not well.

For wind investors, this should act as reminder of the perils of emerging markets. Potential for high returns is little help if the government simply ignores its obligations to businesses.

Let’s look quickly at this saga. In 2001, the country defaulted on $95bn of sovereign debt and US funds moved in to buy Argentinian government bonds at knock-down prices. The country has since restructured most of these debts, by agreeing it would pay one-third of the bonds’ value to creditors. Ninety-three percent of bonds have been restructured.

However, the remaining 7% of bondholders have refused to accept this deal and want the total value of their bonds repaid ($15bn). The Argentinian government is refusing as it would mean that it needs to treat the other 93% the same, which could lead to claims of over $120bn.

This has been the subject of a long-running legal battle and, on 30 July, the US courts ordered Argentina to repay the full value of the bonds to that remaining 7%. Argentina didn’t and is now in default. There is little sign of any resolution.

Now, this case does not directly affect wind investors, but it does highlight risks of doing deals with governments that try to wriggle out of their obligations. It can be lucrative to put money into emerging markets, but only if you know the support is going to remain there. In other words, would you base your wind farm investment plan on a subsidy deal with the Argentinian government?

If you know its attitude to sovereign debt then the answer is: highly unlikely.

Of course, at this stage such talk is largely hypothetical because Argentina simply doesn’t offer the same opportunities as countries like Brazil, Chile, Mexico and Uruguay. In theory, Argentina looks to be progressing well. It added 76MW of capacity in 2013 to take its total to 218MW, and has a pipeline of over 2GW.

But these statistics don’t tell the story of a country that has big barriers for wind investors, including a lack of incentives and laws restricting imports. It isn’t feasible for Argentinian companies to build turbine parts when they have no track record.

The main hope for wind is in next year’s presidential election, when Cristina Fernandez de Kirchner cannot stand for a third term. She is on her way out, but wind will only start to benefit if her protectionist financial policies go too.

UK mulls subsidies for overseas schemes

The UK government is considering giving subsidies to projects outside the UK under its contracts for difference (CFD) regime.

On Monday, the UK's Department of Energy and Climate Change (DECC) published a policy paper, called “Contracts for Difference for non-UK Renewable Energy Projects”, which sets out options for the future of CFDs.

The government is considering offering CFDs to schemes outside the UK but linked into the UK electricity grid. This could open up the potential for cross-border energy subsidies between the UK and Ireland or mainland Europe.

Under a CFD, DECC pays an energy producer the difference between the estimated market price for the energy from their scheme and a higher ‘strike price’ that enables the producer to invest in a given renewable technology. These are due to come into force in April 2015.

Pioneer sells 200MW Logan’s Gap in Texas

Pioneer Green Energy has sold its 200MW Logan’s Gap project in Comanche County, Texas, to Pattern Energy for an undisclosed sum.

US renewable energy company Pioneer started preliminary work on the site last year, but main building work has not yet started. Pattern said it expected to secure financing and begin full construction by the end of this year, with completion scheduled in late 2015.

Pioneer sold the site with a ten-year power purchase agreement with retail giant Wal-Mart, which has agreed to buy around 60% of the project’s output.

China drop hits AMSC results

US wind technology developer AMSC has seen first-quarter sales halve to $11.7m after slower sales in China and its grid division.

The business saw sales in the three months to 30 June 2014 drop to $11.7m from $23.1m in the equivalent period last year. It also reported an operating loss of $13.5m in the first quarter of 2014/15, compared with a $10.5m loss in the same period last year.

AMSC’s wind division saw sales drop to $7.7m in the first quarter of 2014/15 from $14.7m last year; and made an operating loss of $3.5m in the period, up from £1.8m year-on-year.

Judge declares Impsa arm wind bankrupt

Brazilian judge Rafael Jose de Menezes has declared bankrupt Wind Power Energy, part of turbine maker Industrias Metalurgicas Pescarmona (Impsa).

The judge declared the Argentinian firm's’s Brazilian subsidiary in bankruptcy following requests from port operator Libra Group, which said Wind Power Energy had not paid debts of $4.7m. Impsa has not commented on the ruling.

The decision by Pernambuco state judge Menezes gives Wind Power Energy 15 days to appeal the ruling. The ruling comes as Impsa is looking to sell assets to boost its finances, and is reportedly in talks to sell a significant part of its 810MW Brazilian portfolio, worth an estimated $2.2bn.

Bulgaria rules 20% green tax unconstitutional

Bulgaria’s Constitutional Court has scrapped the country’s 20% tax on the income from wind and solar schemes after ruling it was unconstitutional.

The tax hike was passed last year as part of the 2014 Budget, with 116 of 182 Bulgarian MPs voting in favour of it. However, the country’s president Rosen Plevneliev lodged the legal challenge arguing the rate would put off investors, damage the business environment, and contravened free enterprise principles. Ten of the court’s 12 judges backed the challenge.

The Bulgarian Wind Energy Association (BGWEA) has welcomed the ruling. It argued that the 20% tax was discriminatory about wind and solar firm; and contravened the European Union’s aim of increasing the proportion of renewable energy in the continent’s energy mix.