Samsung has a reputation for not backing down. The South Korean firm's two-year legal battle with Apple over smartphone technology patents is a case in point.
So it has surprised some wind industry onlookers to hear that the conglomerate’s offshore wind arm, Samsung Heavy Industries, is poised to exit European offshore wind. If the firm is happy to go toe-to-toe with Apple then why not go into battle with a dominant turbine maker like Siemens?
But this talk of an exit from European offshore wind looks premature.
The company confirmed it is carrying out a review of its operations in the sector, and we will see the results of this review in the next couple of months. It has also said that reports that it has decided to pull back from European offshore are “not true”, and it is simply reviewing its future plans. This is something we would expect good companies to be doing in all sectors all the time.
Still, let’s say it decides to exit European offshore. What impact would that have?
The firm’s operations in European offshore are limited to two areas.
The first strand is that it has installed a prototype 7MW turbine at Energy Park Fifeoff the coast of Methil, eastern Scotland. Commissioning was delayed until March because of a damaged blade. This is the world’s largest installed turbine and the best-known prototype installed by an Asian manufacturer in European waters.
The second strand is that the company has been shortlisted as supplier for the EDPR-led 1.1GW Moray Firth project planned in Scottish waters. It is in competition with MHI Vestas, which is the joint venture between Mitsubishi Heavy Industries and Vestas, but no deal has yet been done.
And that, pretty much, is that.
Yes, the company said two years ago that it would set up a £100m manufacturing plant in Fife, but that hasn’t yet happened. The upshot is that, actually, it would not have a huge immediate impact if the firm did decide to scale back its commitments in Europe. It would be good news for MHI Vestas because it would take away the competition in the race at 1.1GW Moray Firth. But let's see what happens.
All this speculation about Samsung’s future highlights a danger of going over-the-top when a business installs a prototype. Yes, prototypes may be exciting, but we can only say a firm has made a big commitment to a market when it has made or received big orders. At present, Samsung doesn’t meet this basic criteria.
We can also see why an Asian manufacturer would want to set up a prototype in Europe, to gain knowledge it can then apply in its local market. It will be easier to make an impact in a fledgling Asian market than in Siemens-dominated Europe. In short, it would make sense for Samsung to focus on offshore elsewhere.
But that isn’t to say we don’t want to see Samsung in Europe. If it can establish itself then this could bring competition and innovation that can only help the sector.
It wouldn’t be easy — but neither is going into a legal battle with Apple.
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Wind Watch
Spending money can be hard work. It takes time and effort.
It's even tougher when you set the parameters that the cash has do two things – back ‘green projects’ and maintain strong, commercial terms.
That is the situation facing the UK’s government-backed Green Investment Bank, which this week revealed its first set of full-year results. It has made a strong start and the results paint a pretty picture of what amounts to a busy 18 months.
So far, the bank has invested £1.3bn in 26 projects and leveraged £3.5bn of private investment. Half of this is in offshore wind, with deals at projects including Westermost Rough, Gwynt y Mor and London Array. This also bolsters the status of the UK as an offshore wind development hub. And, given the increasingly global ambitions of this area of the market, that is good news.
But arguably the most exciting announcement was the bank's plan for a £1bn offshore wind fund, where it is aiming to raise money from long-term investors to buy equity stakes in operational projects.
On paper, the fund has the makings of another cunning plan. Shaun Kingsbury, the bank’s chief executive, confirmed that the thinking is to crowd in additional capital. That’s similar to how the bank operates when making direct investments.
Under this approach, the bank can pool investments at the beginning of the process and then take control of the capital deployment – something that Kingsbury now feels his team has the track record and credibility to do.
Certainly the bank has built its reputation over the last 18 months, and the UK offshore wind sector has established itself as a world leader. Therefore it follows that we expect the £1bn fund to attract interest from institutions including pension funds who want exposure to a growth market.
There are plenty of reasons why they would want to. UK offshore is not beset by the same political uncertainty as the onshore sector.
And don’t forget, there’s already an interest that’s been expressed by investors. Masdar Energy injected capital into London Array and Marubeni Corporation took a stake in Gwynt y Môr. Meanwhile the likes of Balfour Beatty, Macquarie Capital and Mitsubishi have invested in offshore transmission.
Investors should also like the idea of investing in wind farms that are already generating power – and by proxy, revenue.
However, at the same time, the sector is experiencing growing pains. Projects are getting further out to sea, which increases building risks and costs, and consenting bodies are cautious – partly because they are seeing their budgets slashed. As such, one issue for this fund is whether there will be enough schemes to invest in.
Let’s not forget that we have recently seen a planned extension of London Array axed because of birds; the planned 1.8GW Argyll Array scrapped because of basking sharks; and RWE handed back the rights to the 1.2GW Atlantic Array.
These all show that we must ask very serious questions about the state of the market when we look beyond 2020.
A lack of new developments entering the pipeline would mean a limited pool of new projects for the fund to invest in. And that would make it tough to attract risk-averse institutions that want to spread their risk and see future fund growth.
There’s no denying that the GIB has a track record of delivery. Irrespective, long-term, the health of this fund relies on the health of the sector.
Spending money can be hard work. It takes time and effort.
It's even tougher when you set the parameters that the cash has do two things – back ‘green projects’ and maintain strong, commercial terms.
That is the situation facing the UK’s government-backed Green Investment Bank, which this week revealed its first set of full-year results. It has made a strong start and the results paint a pretty picture of what amounts to a busy 18 months.
So far, the bank has invested £1.3bn in 26 projects and leveraged £3.5bn of private investment. Half of this is in offshore wind, with deals at projects including Westermost Rough, Gwynt y Mor and London Array. This also bolsters the status of the UK as an offshore wind development hub. And, given the increasingly global ambitions of this area of the market, that is good news.
But arguably the most exciting announcement was the bank's plan for a £1bn offshore wind fund, where it is aiming to raise money from long-term investors to buy equity stakes in operational projects.
On paper, the fund has the makings of another cunning plan. Shaun Kingsbury, the bank’s chief executive, confirmed that the thinking is to crowd in additional capital. That’s similar to how the bank operates when making direct investments.
Under this approach, the bank can pool investments at the beginning of the process and then take control of the capital deployment – something that Kingsbury now feels his team has the track record and credibility to do.
Certainly the bank has built its reputation over the last 18 months, and the UK offshore wind sector has established itself as a world leader. Therefore it follows that we expect the £1bn fund to attract interest from institutions including pension funds who want exposure to a growth market.
There are plenty of reasons why they would want to. UK offshore is not beset by the same political uncertainty as the onshore sector.
And don’t forget, there’s already an interest that’s been expressed by investors. Masdar Energy injected capital into London Array and Marubeni Corporation took a stake in Gwynt y Môr. Meanwhile the likes of Balfour Beatty, Macquarie Capital and Mitsubishi have invested in offshore transmission.
Investors should also like the idea of investing in wind farms that are already generating power – and by proxy, revenue.
However, at the same time, the sector is experiencing growing pains. Projects are getting further out to sea, which increases building risks and costs, and consenting bodies are cautious – partly because they are seeing their budgets slashed. As such, one issue for this fund is whether there will be enough schemes to invest in.
Let’s not forget that we have recently seen a planned extension of London Array axed because of birds; the planned 1.8GW Argyll Array scrapped because of basking sharks; and RWE handed back the rights to the 1.2GW Atlantic Array.
These all show that we must ask very serious questions about the state of the market when we look beyond 2020.
A lack of new developments entering the pipeline would mean a limited pool of new projects for the fund to invest in. And that would make it tough to attract risk-averse institutions that want to spread their risk and see future fund growth.
There’s no denying that the GIB has a track record of delivery. Irrespective, long-term, the health of this fund relies on the health of the sector.
UK green bank launches £1bn offshore fund
The UK’s Green Investment Bank is seeking to raise a £1bn fund to encourage private investment in offshore wind farms.
The government-backed bank is seeking long-term investors for a fund that would acquire equity stakes in operational UK offshore wind projects in the UK. The bank has so far invested more than £600m in five offshore wind farms, including Gwynt y Mor and Westermost Rough. In total, it has committed £1.3bn to green projects.
The Green Investment Bank was launched in November 2012 to boost private investment in the renewable energy sector. Today, it is revealing full details of its first set of annual results, for the year to 31 March 2014, at a meeting in London.
The bank revealed yesterday that it made an operating loss of £5.7m in the 2013/14 financial year, but this is because 88% of its investments are under construction. Shaun Kingsbury, chief executive of the bank, said it would reach sustained profitability once its portfolio is operational.
KKR pays €417m for one-third of Acciona arm
US private equity investor Kohlberg Kravis Roberts is to pay €417m for a one-third stake in Spanish energy company Acciona’s international renewable energy arm.
KKR is poised to buy the stake in Acciona Energia International, with the other two-thirds staying in Acciona ownership. The deal is due to complete in 2014. The partners plan to develop one of the world’s largest renewable energy portfolios.
AEI has operational renewable assets totalling 2.3GW, mostly wind farms, in 14 countries including the US, Mexico, Australia, Italy, Portugal and South Africa.
Serbian ministry revokes 145MW permit
Serbia's construction ministry has revoked a building permit, which was granted by a regional authority, for a 145MW wind farm.
Continental Wind Serbia, a subsidiary of US developer Continental Wind, plans to develop the Cibuk wind farm near the town of Kovin. It had been granted a permit for the €300m project, but this has been revoked after an appeal by grid operator Elektromreze Srbije over the ownership of a transformer station.
These transformer stations cannot be owned by a wind farm developer. This dispute will increase uncertainty for projects in Serbia and make it tough for developers to secure loans.
NextEra in race for troubled Energy Future
US clean energy firm NextEra Energy is seeking to acquire a stake in Texas utility Energy Future Holdings, which filed for Chapter 11 bankruptcy protection in April.
Investors Kohlberg Kravis Roberts, TPG Capital and Goldman Sachs Capital Partners took Energy Future Holdings private in a $50bn private leveraged buyout in 2007, one of the largest in history. However, the business has struggled with debts and filed for Chapter 11 earlier this year.
NextEra has proposed a restructuring of Energy Future that involves a $2.2bn loan that could be converted into a majority ownership of the firm’s regulated power unit, Oncor. This has been rejected, and NextEra has since made an alternative proposal. Energy Future favours a $1.9bn plan by another group of investors.
NextEra operates 100 wind farms in 19 US states and Canada, which generate capacity of 10.2GW and make it the largest US producer of wind and solar energy.
Wisconsin Energy to pay $9.1bn for Integrys
US utility Wisconsin Energy Corporation has agreed to buy rival Integrys for $9.1bn, in a deal that would create the US state’s largest wind energy generator.
The combined entity would serve 4.3million gas and electric customers across the states of Wisconsin, Illinois, Michigan and Minnesota. While most of its energy comes from traditional sources, Wisconsin Energy owns wind generating capacity of 308MW; and Integrys subsidiary Wisconsin Public Service owns 108MW.
The deal is due to complete in summer 2015. It needs approval from shareholders at both firms, as well as public bodies including the Federal Energy Regulatory Commission. The new company would be called WEC Energy Group.
Wind Watch
If you’ve got money there will always be strangers willing to take it off your hands.
One could, if so inclined, go to a crowdfunding site right now and put cash into a new vegan cafe, a fantasy board game, and recording sessions for an unheard-of local band. And then invest anything left in a community-based wind project.
Crowdfunding is emerging as a source of funding for new wind developments.
Last week, for instance, crowdfunding platform Trillion Fund and developer E2Energy revealed they are seeking to raise the first £1.25m of a total £5m to invest in community wind schemes. The deal offers a return of 7.25% a year over three years on investments as small as £50.
In theory, this sounds great. Developers can access funding from individuals who want to invest in something that it both ethical and offers healthier returns than the vanilla savings accounts at high street banks. However, we also see issues that should make developers and investors tread carefully.
Now, crowdfunding isn’t new. It has been around in one form or another since the 1700s, when author Jonathan Swift introduced the concept of ‘micro-loans’ with the Irish Loans Fund. But the growth of online banking and social media has made it far more popular.
Companies and individuals around the world are estimated to have raised $2.7bn from the public in 2012, which was up 81% from 2011, according to research firm Massolution. This grew to $5.1bn in 2013 as investors have grown more confident.
So how far will crowdfunding grow as a funding source for the wind sector?
Undoubtedly, some people will be attracted to these investments. The promised return of 7.25% a year over three years in the Trillion Fund and E2Energy fundraising is far better than the 2.7% you could get by tying up your cash in a three-year fixed-rate bond.
But this 7.25% return reflects the fact that there are also big risks with these kinds of deals. It is risky to invest in only one company or scheme and, for investors, it would be wiser to put their money into a fund that invests in a range of schemes.
Crowdfunding also causes headaches for investee companies.
Self-styled punk brewery BrewDog is happy to invite hundreds of its backers to annual general meetings, but most other firms would rather keep their many backers at a distance. There are ways that firms can get around this by bundling all investors into one structure, but it is a hassle that requires upfront planning.
That isn’t to say there is no place for crowdfunding. Since it is a good way for developers to quickly raise cash for projects that are too small for established investors, and there is evidently an appetite to invest. Indeed, the £6.2m raised by 1,300 people for Abundance Generation shows that there are individuals willing to commit to the schemes.
However, micro loans still require micro management. And in a market that continues to expand, that presents a whole new level of financial and operational management that many large-scale commercial developers would rather avoid.
For community engagement, it's a compelling concept. For raising and managing capital for projects deployed at utility-scale, it's quite another.
If you've got money there will always be strangers willing to take it off your hands.
One could, if so inclined, go to a crowdfunding site right now and put cash into a new vegan cafe, a fantasy board game, and recording sessions for an unheard-of local band. And then invest anything left in a community-based wind project.
Crowdfunding is emerging as a source of funding for new wind developments.
Last week, for instance, crowdfunding platform Trillion Fund and developer E2Energy revealed they are seeking to raise the first £1.25m of a total £5m to invest in community wind schemes. The deal offers a return of 7.25% a year over three years on investments as small as £50.
In theory, this sounds great. Developers can access funding from individuals who want to invest in something that it both ethical and offers healthier returns than the vanilla savings accounts at high street banks. However, we also see issues that should make developers and investors tread carefully.
Now, crowdfunding isn’t new. It has been around in one form or another since the 1700s, when author Jonathan Swift introduced the concept of ‘micro-loans’ with the Irish Loans Fund. But the growth of online banking and social media has made it far more popular.
Companies and individuals around the world are estimated to have raised $2.7bn from the public in 2012, which was up 81% from 2011, according to research firm Massolution. This grew to $5.1bn in 2013 as investors have grown more confident.
So how far will crowdfunding grow as a funding source for the wind sector?
Undoubtedly, some people will be attracted to these investments. The promised return of 7.25% a year over three years in the Trillion Fund and E2Energy fundraising is far better than the 2.7% you could get by tying up your cash in a three-year fixed-rate bond.
But this 7.25% return reflects the fact that there are also big risks with these kinds of deals. It is risky to invest in only one company or scheme and, for investors, it would be wiser to put their money into a fund that invests in a range of schemes.
Crowdfunding also causes headaches for investee companies.
Self-styled punk brewery BrewDog is happy to invite hundreds of its backers to annual general meetings, but most other firms would rather keep their many backers at a distance. There are ways that firms can get around this by bundling all investors into one structure, but it is a hassle that requires upfront planning.
That isn’t to say there is no place for crowdfunding. Since it is a good way for developers to quickly raise cash for projects that are too small for established investors, and there is evidently an appetite to invest. Indeed, the £6.2m raised by 1,300 people for Abundance Generation shows that there are individuals willing to commit to the schemes.
However, micro loans still require micro management. And in a market that continues to expand, that presents a whole new level of financial and operational management that many large-scale commercial developers would rather avoid.
For community engagement, it’s a compelling concept. For raising and managing capital for projects deployed at utility-scale, it’s quite another.
If you’ve got money there will always be strangers willing to take it off your hands.
One could, if so inclined, go to a crowdfunding site right now and put cash into a new vegan cafe, a fantasy board game, and recording sessions for an unheard-of local band. And then invest anything left in a community-based wind project.
Crowdfunding is emerging as a source of funding for new wind developments.
Last week, for instance, crowdfunding platform Trillion Fund and developer E2Energy revealed they are seeking to raise the first £1.25m of a total £5m to invest in community wind schemes. The deal offers a return of 7.25% a year over three years on investments as small as £50.
In theory, this sounds great. Developers can access funding from individuals who want to invest in something that it both ethical and offers healthier returns than the vanilla savings accounts at high street banks. However, we also see issues that should make developers and investors tread carefully.
Now, crowdfunding isn’t new. It has been around in one form or another since the 1700s, when author Jonathan Swift introduced the concept of ‘micro-loans’ with the Irish Loans Fund. But the growth of online banking and social media has made it far more popular.
Companies and individuals around the world are estimated to have raised $2.7bn from the public in 2012, which was up 81% from 2011, according to research firm Massolution. This grew to $5.1bn in 2013 as investors have grown more confident.
So how far will crowdfunding grow as a funding source for the wind sector?
Undoubtedly, some people will be attracted to these investments. The promised return of 7.25% a year over three years in the Trillion Fund and E2Energy fundraising is far better than the 2.7% you could get by tying up your cash in a three-year fixed-rate bond.
But this 7.25% return reflects the fact that there are also big risks with these kinds of deals. It is risky to invest in only one company or scheme and, for investors, it would be wiser to put their money into a fund that invests in a range of schemes.
Crowdfunding also causes headaches for investee companies.
Self-styled punk brewery BrewDog is happy to invite hundreds of its backers to annual general meetings, but most other firms would rather keep their many backers at a distance. There are ways that firms can get around this by bundling all investors into one structure, but it is a hassle that requires upfront planning.
That isn’t to say there is no place for crowdfunding. Since it is a good way for developers to quickly raise cash for projects that are too small for established investors, and there is evidently an appetite to invest. Indeed, the £6.2m raised by 1,300 people for Abundance Generation shows that there are individuals willing to commit to the schemes.
However, micro loans still require micro management. And in a market that continues to expand, that presents a whole new level of financial and operational management that many large-scale commercial developers would rather avoid.
For community engagement, it's a compelling concept. For raising and managing capital for projects deployed at utility-scale, it's quite another.
Wind Watch
Whichever way you look at it, China is a wind giant.
Last year, it installed onshore capacity of 16.1GW, which is the same as Europe, North America and South America combined. And it has also set feed-in tariffs to kickstart growth on the offshore sector, which has major growth potential.
And this makes the recent announcement from China Ming Yang Wind Power - the country's fourth-largest manufacturer - all the more curious.
Later this year the firm will enter a detailed agreement to install a prototype of its 6.0MW Super Compact Drive offshore wind turbine generator in the Karmoy demonstration area, off the coast of Norway.
This suggests that Ming Yang is finally ready to step up its investment in overseas markets. But why does it think this is a good time to focus on European offshore when there are still such big opportunities at home?
The company could, for example, concentrate its efforts on growing its market share in China. The company installed turbines totalling 1.3GW in the country last year, which represented a market share of 8%. This trailed Goldwind, which had a 23.3% share; and Guodian United, with 9.3%.
And that is before we even think about the huge potential for the domestic manufacturing base when it comes to offshore expansion closer to home, both within Chinese territorial waters and further afield within Asia.
It seems strange therefore, to go into battle in Europe; where competition for future sites is already intense, having been dominated by Siemens over recent years.
Indeed, other big firms already vying for a slice of the European offshore pie include MHI Vestas Offshore, Senvion, Alstom and Gamesa. Even for the Chinese, that’s some significant manufacturing might.
We also can’t help the feeling that Ming Yang’s overseas growth plans remain stagnant, at best. Overseas expansion played a bit part in its 2014 first quarter results, published last month.
This is despite the fact that, when the company listed on the New York Stock Exchange in 2010, it said this was a move intended to enable the company to rapidly expand in North and South America, India, Australia, eastern Europe, some countries in central Europe, and South Africa. Four years on the fanfare has faded, and Ming Yang remains largely domestic focused.
Indeed, its most significant overseas deal was undertaken back in November 2013 when the firm committed to build a 200MW wind farm in Romania for domestic developer Speranta & Succesul. Interesting, but hardly groundbreaking.
This all means that the Danish demonstrator site remains an interesting move.
Sure, this could present an opportunity to capitalise on local expertise and knowledge to help develop the turbine before introducing it to the Chinese domestic market. However, given the differences that exist between European and Chinese weather patterns and oceanic conditions, there's a natural limit to the technological and commercial gains that can be made.
And remember, Ming Yang isn’t struggling to fill its order book. Currently it is working through a domestic backlog of 3.3GW, which has grown by 671MW in the first quarter of this year. With this, a prototype in Europe sits out on a limb.
Ming Yang has grown quickly and it doesn’t lack the ability or resources for future global growth. But what is missing is a clear and coherent commercial strategy.
Whichever way you look at it, China is a wind giant.
Last year, it installed onshore capacity of 16.1GW, which is the same as Europe, North America and South America combined. And it has also set feed-in tariffs to kickstart growth on the offshore sector, which has major growth potential.
And this makes the recent announcement from China Ming Yang Wind Power - the country's fourth-largest manufacturer - all the more curious.
Later this year the firm will enter a detailed agreement to install a prototype of its 6.0MW Super Compact Drive offshore wind turbine generator in the Karmoy demonstration area, off the coast of Norway.
This suggests that Ming Yang is finally ready to step up its investment in overseas markets. But why does it think this is a good time to focus on European offshore when there are still such big opportunities at home?
The company could, for example, concentrate its efforts on growing its market share in China. The company installed turbines totalling 1.3GW in the country last year, which represented a market share of 8%. This trailed Goldwind, which had a 23.3% share; and Guodian United, with 9.3%.
And that is before we even think about the huge potential for the domestic manufacturing base when it comes to offshore expansion closer to home, both within Chinese territorial waters and further afield within Asia.
It seems strange therefore, to go into battle in Europe; where competition for future sites is already intense, having been dominated by Siemens over recent years.
Indeed, other big firms already vying for a slice of the European offshore pie include MHI Vestas Offshore, Senvion, Alstom and Gamesa. Even for the Chinese, that’s some significant manufacturing might.
We also can’t help the feeling that Ming Yang’s overseas growth plans remain stagnant, at best. Overseas expansion played a bit part in its 2014 first quarter results, published last month.
This is despite the fact that, when the company listed on the New York Stock Exchange in 2010, it said this was a move intended to enable the company to rapidly expand in North and South America, India, Australia, eastern Europe, some countries in central Europe, and South Africa. Four years on the fanfare has faded, and Ming Yang remains largely domestic focused.
Indeed, its most significant overseas deal was undertaken back in November 2013 when the firm committed to build a 200MW wind farm in Romania for domestic developer Speranta & Succesul. Interesting, but hardly groundbreaking.
This all means that the Danish demonstrator site remains an interesting move.
Sure, this could present an opportunity to capitalise on local expertise and knowledge to help develop the turbine before introducing it to the Chinese domestic market. However, given the differences that exist between European and Chinese weather patterns and oceanic conditions, there's a natural limit to the technological and commercial gains that can be made.
And remember, Ming Yang isn’t struggling to fill its order book. Currently it is working through a domestic backlog of 3.3GW, which has grown by 671MW in the first quarter of this year. With this, a prototype in Europe sits out on a limb.
Ming Yang has grown quickly and it doesn’t lack the ability or resources for future global growth. But what is missing is a clear and coherent commercial strategy.
Whichever way you look at it, China is a wind giant.
Last year, it installed onshore capacity of 16.1GW, which is the same as Europe, North America and South America combined. And it has also set feed-in tariffs to kickstart growth on the offshore sector, which has major growth potential.
And this makes the recent announcement from China Ming Yang Wind Power – the country’s fourth-largest manufacturer - all the more curious.
Later this year the firm will enter a detailed agreement to install a prototype of its 6.0MW Super Compact Drive offshore wind turbine generator in the Karmoy demonstration area, off the coast of Norway.
This suggests that Ming Yang is finally ready to step up its investment in overseas markets. But why does it think this is a good time to focus on European offshore when there are still such big opportunities at home?
The company could, for example, concentrate its efforts on growing its market share in China. The company installed turbines totalling 1.3GW in the country last year, which represented a market share of 8%. This trailed Goldwind, which had a 23.3% share; and Guodian United, with 9.3%.
And that is before we even think about the huge potential for the domestic manufacturing base when it comes to offshore expansion closer to home, both within Chinese territorial waters and further afield within Asia.
It seems strange therefore, to go into battle in Europe; where competition for future sites is already intense, having been dominated by Siemens over recent years.
Indeed, other big firms already vying for a slice of the European offshore pie include MHI Vestas Offshore, Senvion, Alstom and Gamesa. Even for the Chinese, that’s some significant manufacturing might.
We also can’t help the feeling that Ming Yang’s overseas growth plans remain stagnant, at best. Overseas expansion played a bit part in its 2014 first quarter results, published last month.
This is despite the fact that, when the company listed on the New York Stock Exchange in 2010, it said this was a move intended to enable the company to rapidly expand in North and South America, India, Australia, eastern Europe, some countries in central Europe, and South Africa. Four years on the fanfare has faded, and Ming Yang remains largely domestic focused.
Indeed, its most significant overseas deal was undertaken back in November 2013 when the firm committed to build a 200MW wind farm in Romania for domestic developer Speranta & Succesul. Interesting, but hardly groundbreaking.
This all means that the Danish demonstrator site remains an interesting move.
Sure, this could present an opportunity to capitalise on local expertise and knowledge to help develop the turbine before introducing it to the Chinese domestic market. However, given the differences that exist between European and Chinese weather patterns and oceanic conditions, there’s a natural limit to the technological and commercial gains that can be made.
And remember, Ming Yang isn’t struggling to fill its order book. Currently it is working through a domestic backlog of 3.3GW, which has grown by 671MW in the first quarter of this year. With this, a prototype in Europe sits out on a limb.
Ming Yang has grown quickly and it doesn’t lack the ability or resources for future global growth. But what is missing is a clear and coherent commercial strategy.
Whichever way you look at it, China is a wind giant.
Last year, it installed onshore capacity of 16.1GW, which is the same as Europe, North America and South America combined. And it has also set feed-in tariffs to kickstart growth on the offshore sector, which has major growth potential.
And this makes the recent announcement from China Ming Yang Wind Power - the country's fourth-largest manufacturer - all the more curious.
Later this year the firm will enter a detailed agreement to install a prototype of its 6.0MW Super Compact Drive offshore wind turbine generator in the Karmoy demonstration area, off the coast of Norway.
This suggests that Ming Yang is finally ready to step up its investment in overseas markets. But why does it think this is a good time to focus on European offshore when there are still such big opportunities at home?
The company could, for example, concentrate its efforts on growing its market share in China. The company installed turbines totalling 1.3GW in the country last year, which represented a market share of 8%. This trailed Goldwind, which had a 23.3% share; and Guodian United, with 9.3%.
And that is before we even think about the huge potential for the domestic manufacturing base when it comes to offshore expansion closer to home, both within Chinese territorial waters and further afield within Asia.
It seems strange therefore, to go into battle in Europe; where competition for future sites is already intense, having been dominated by Siemens over recent years.
Indeed, other big firms already vying for a slice of the European offshore pie include MHI Vestas Offshore, Senvion, Alstom and Gamesa. Even for the Chinese, that’s some significant manufacturing might.
We also can’t help the feeling that Ming Yang’s overseas growth plans remain stagnant, at best. Overseas expansion played a bit part in its 2014 first quarter results, published last month.
This is despite the fact that, when the company listed on the New York Stock Exchange in 2010, it said this was a move intended to enable the company to rapidly expand in North and South America, India, Australia, eastern Europe, some countries in central Europe, and South Africa. Four years on the fanfare has faded, and Ming Yang remains largely domestic focused.
Indeed, its most significant overseas deal was undertaken back in November 2013 when the firm committed to build a 200MW wind farm in Romania for domestic developer Speranta & Succesul. Interesting, but hardly groundbreaking.
This all means that the Danish demonstrator site remains an interesting move.
Sure, this could present an opportunity to capitalise on local expertise and knowledge to help develop the turbine before introducing it to the Chinese domestic market. However, given the differences that exist between European and Chinese weather patterns and oceanic conditions, there's a natural limit to the technological and commercial gains that can be made.
And remember, Ming Yang isn’t struggling to fill its order book. Currently it is working through a domestic backlog of 3.3GW, which has grown by 671MW in the first quarter of this year. With this, a prototype in Europe sits out on a limb.
Ming Yang has grown quickly and it doesn’t lack the ability or resources for future global growth. But what is missing is a clear and coherent commercial strategy.
UK approves 1.2GW offshore giant
The UK government has given permission to Scottish Power Renewables and Vattenfall to build one of the world’s largest offshore wind farms.
The Department of Energy and Climate Change granted consent yesterday for the £520m 1.2GW East Anglia One project off the coast of Suffolk. The project is a 50:50 joint venture between Scottish Power Renewables and Vattenfall.
The project is planned to be almost double the size of the world’s current largest offshore wind farm, the 630MW London Array. Construction on the 240-turbine scheme is due to start in 2017 and generation is scheduled to start in 2019.
First Flight shrinks 600MW Irish Sea plan
First Flight Wind has scaled back capacity at its proposed 600MW wind farm off the coast of Northern Ireland to between 300MW and 400MW.
First Flight, a consortium of B9 Energy, Dong Energy and Renewable Energy Systems (RES), has cut the size of the project to reduce the impact on shipping and fisheries. The development is planned in the Irish Sea, near County Down.
The partners are conducting environmental, technical and engineering studies until the end of 2015 and win consent during 2016. Construction is scheduled to start in 2018 and reach completion by the end of 2020.
Continuum orders 170MW from Inox
Continuum Wind Energy has ordered 170MW of turbines from Inox Wind for a project in the Ratlam and Mandsaur districts in the state of Madhya Pradesh.
The Singapore-based investor, which is indirectly majority-owned by Morgan Stanley Infrastructure Partners, ordered 85 turbines from Inox, which is a subsidiary of Gujarat Fluorochemicals.
The deal for the 2MW turbines is worth an estimated $150m. Continuum has not yet revealed any further details about the project.
Santander funds 118MW for Rame in Chile
Santander is to provide $69m of equity financing for Rame Energy’s next four projects in Chile, which are intended to have a total capacity of 118MW.
The UK-based energy consultant announced that it has signed an exclusive framework agreement with the Spanish bank, but it did not give further details about the four projects. This builds on Santander’s previous agreement to co-finance Rame’s first two wind projects in Chile, with a total capacity of 15MW.
In this agreement, Santander would acquire each project for an agreed price per MW, and provide between 80% and 90% of required equity capital for them. Rame will contribute the rest of the equity and Santander will structure debt packages.
Siemens and MHI confirm joint Alstom offer
Siemens and Mitsubishi Heavy Industries (MHI) have confirmed that their bid for Alstom’s energy assets does not include the French firm’s wind and renewables.
The pair submitted a joint bid for some of Alstom’s assets on Monday. It would involve the sale of Alstom’s gas assets to Siemens, and an alliance between MHI and Alstom. MHI formally set up a joint venture with Denmark's Vestas in April.
Siemens and MHI said their plan was superior to the existing bid by US giant General Electric (GE), which also does not include Alstom’s wind assets. The French government has said it wanted French firm Areva to buy Alstom’s wind assets if GE’s bid is successful.
GE has given Alstom until Monday to decide whether to accept its offer.
Will Uruguay’s free-scoring and free-biting Luis Suarez play against England?
The South American nation punches above its weight in football terms — it came fourth in the last World Cup with a population of just 3.4million — but it will need Suarez fit if it it to make a similar impact this time. Remember, we will be showing the match at our Quarterly Drinks this Thursday.
But it is not just football where Uruguay is outperforming larger rivals. The country has quietly built a renewable energy market with plenty to interest foreign investors and manufacturers. Prospects are exciting for the next few years if it can deliver on its ambitions, but less certain after that.
One reason that Uruguay should interest foreign investors is political and economic stability, which makes the country a more stable investment prospect than most other South American nations.
Its energy policies are also stable. Last Wednesday, in an interview on the government’s website, energy minister Ramon Mendez reaffirmed the country’s commitment to getting 90% of its energy from renewable sources by 2015, including 20% from wind farms.
These figures would look unrealistic for most countries, but Uruguay is an exception. Mendez says 84% of the country’s energy came from renewable sources in 2013, which is not surprising seeing as 45% of its power comes from hydropower and the country also has biomass and solar.
And this is the year that wind will finally become a major part of the mix. Capacity is due to grow from 50MW at the end of 2013 to 500MW at the end of this year, with a target of more than 1.3GW by 2015. The government wants wind to become the stable base of its energy network.
Uruguayan policymakers have also recognised that the country is too small to support its own wind manufacturing industry. It doesn’t have any interest in setting rules about locally-made parts, which means the market is an open goal for overseas manufacturers. And overseas firms should also be aware that foreign investment has, since 1998, been treated the same as national investment.
Businesses such as Gamesa are already taking advantage. Last week, utility Usinas y Trasmiones Electricas (UTE) ordered 70MW of Gamesa turbines for the Valentines project in the south of the country, which would be one of Uruguay’s largest. The deal depends on UTE securing funding.
The Spanish manufacturer also gained financial backing last week from bank China Minsheng to build turbines for the 50MW Talas de Maciel II project, which is due to complete later this year. There is no reason why other developers, investors and manufacturers can’t get involved too.
But it is unlikely to be a long-term play for investors. Yes, Uruguay’s economy is growing, and so is the demand for electricity. However, we should not forget that the country has a population of just 3.4million and so it would not take long for the country to reach saturation point.
It’s more likely to be a quick win — which either team would accept on Thursday!
Will Uruguay’s free-scoring and free-biting Luis Suarez play against England?
The South American nation punches above its weight in football terms — it came fourth in the last World Cup with a population of just 3.4million — but it will need Suarez fit if it it to make a similar impact this time. Remember, we will be showing the match at our Quarterly Drinks this Thursday.
But it is not just football where Uruguay is outperforming larger rivals. The country has quietly built a renewable energy market with plenty to interest foreign investors and manufacturers. Prospects are exciting for the next few years if it can deliver on its ambitions, but less certain after that.
One reason that Uruguay should interest foreign investors is political and economic stability, which makes the country a more stable investment prospect than most other South American nations.
Its energy policies are also stable. Last Wednesday, in an interview on the government’s website, energy minister Ramon Mendez reaffirmed the country’s commitment to getting 90% of its energy from renewable sources by 2015, including 20% from wind farms.
These figures would look unrealistic for most countries, but Uruguay is an exception. Mendez says 84% of the country’s energy came from renewable sources in 2013, which is not surprising seeing as 45% of its power comes from hydropower and the country also has biomass and solar.
And this is the year that wind will finally become a major part of the mix. Capacity is due to grow from 50MW at the end of 2013 to 500MW at the end of this year, with a target of more than 1.3GW by 2015. The government wants wind to become the stable base of its energy network.
Uruguayan policymakers have also recognised that the country is too small to support its own wind manufacturing industry. It doesn’t have any interest in setting rules about locally-made parts, which means the market is an open goal for overseas manufacturers. And overseas firms should also be aware that foreign investment has, since 1998, been treated the same as national investment.
Businesses such as Gamesa are already taking advantage. Last week, utility Usinas y Trasmiones Electricas (UTE) ordered 70MW of Gamesa turbines for the Valentines project in the south of the country, which would be one of Uruguay’s largest. The deal depends on UTE securing funding.
The Spanish manufacturer also gained financial backing last week from bank China Minsheng to build turbines for the 50MW Talas de Maciel II project, which is due to complete later this year. There is no reason why other developers, investors and manufacturers can’t get involved too.
But it is unlikely to be a long-term play for investors. Yes, Uruguay’s economy is growing, and so is the demand for electricity. However, we should not forget that the country has a population of just 3.4million and so it would not take long for the country to reach saturation point.
It’s more likely to be a quick win — which either team would accept on Thursday!
Wind Watch
Will Uruguay’s free-scoring and free-biting Luis Suarez play against England?
The South American nation punches above its weight in football terms — it came fourth in the last World Cup with a population of just 3.4million — but it will need Suarez fit if it it to make a similar impact this time. Remember, we will be showing the match at our Quarterly Drinks this Thursday (see details, right).
But it is not just football where Uruguay is outperforming larger rivals. The country has quietly built a renewable energy market with plenty to interest foreign investors and manufacturers. Prospects are exciting for the next few years if it can deliver on its ambitions, but less certain after that.
One reason that Uruguay should interest foreign investors is political and economic stability, which makes the country a more stable investment prospect than most other South American nations.
Its energy policies are also stable. Last Wednesday, in an interview on the government’s website, energy minister Ramon Mendez reaffirmed the country’s commitment to getting 90% of its energy from renewable sources by 2015, including 20% from wind farms.
These figures would look unrealistic for most countries, but Uruguay is an exception. Mendez says 84% of the country’s energy came from renewable sources in 2013, which is not surprising seeing as 45% of its power comes from hydropower and the country also has biomass and solar.
And this is the year that wind will finally become a major part of the mix. Capacity is due to grow from 50MW at the end of 2013 to 500MW at the end of this year, with a target of more than 1.3GW by 2015. The government wants wind to become the stable base of its energy network.
Uruguayan policymakers have also recognised that the country is too small to support its own wind manufacturing industry. It doesn’t have any interest in setting rules about locally-made parts, which means the market is an open goal for overseas manufacturers. And overseas firms should also be aware that foreign investment has, since 1998, been treated the same as national investment.
Businesses such as Gamesa are already taking advantage. Last week, utility Usinas y Trasmiones Electricas (UTE) ordered 70MW of Gamesa turbines for the Valentines project in the south of the country, which would be one of Uruguay’s largest. The deal depends on UTE securing funding.
The Spanish manufacturer also gained financial backing last week from bank China Minsheng to build turbines for the 50MW Talas de Maciel II project, which is due to complete later this year. There is no reason why other developers, investors and manufacturers can’t get involved too.
But it is unlikely to be a long-term play for investors. Yes, Uruguay’s economy is growing, and so is the demand for electricity. However, we should not forget that the country has a population of just 3.4million and so it would not take long for the country to reach saturation point.
It’s more likely to be a quick win — which either team would accept on Thursday!
This week's Global Offshore Wind has been dominated by big talk about the UK.
The Government says it wants a major programme of offshore wind developmentbetween now and 2020. It wants this to drive down the costs of building offshore.
Meanwhile, the Crown Estate says the UK is on course to double offshore wind capacity to 10GW or more by 2020. If this happened then the sector would generate 10% of UK energy.
And let’s not forget that the UK is still the world leader in offshore wind.
But we should not let such positive talk hide the underlying challenges facing offshore wind. If the industry is to make big strides by 2020 then we need most of these schemes to gain consent over the next three years. Unfortunately, the current consenting system makes this difficult.
Dr Steve Freeman, director of environment at TUV SUD PMSS, explained some of these issues in a talk yesterday about the consenting process. He argues the current system produces unrealistic assessments about potential impacts of schemes, and this makes them less likely to win consent. It also means more financial risk for the investors and developers who back the schemes.
This problem stems from EU rules about the habitats of birds and sea mammals.
It is clearly right for developers to do what they can to mitigate the impact of schemes on birds and sea mammals, but the current system does not realistically assess the scale of these risks. This is because developers have to use theRochdale Envelope method.
Essentially, the Rochdale Envelope is an approach to assessing a project’s potential environmental impact. This takes into account the worst-case scenario impacts on wildlife and the different types of technology that the developer could use, among other factors. The tool is designed to work out a realistic worst-case scenario impact of a scheme. It is failing to do so.
Freeman argues that adding up different worst-case scenarios makes schemes look unrealistically risky, and allows risk-averse consenting bodies to throw out perfectly good proposals.
This is surely the worst-case scenario for an investor, closely followed by long delays and costly fight to win permission. So what should developers do to mitigate these financial risks?
First, don’t blame consenting bodies that don’t have the time or resources to analyse projects. The Government has cut their resources and they have to make their decisions within six months.
Rather, the onus must be on developers to take the tough decisions that can reduce the worst-case scenarios in the Rochdale Envelope. Making early decisions about what technology to use, and choosing technology that reduces the impact on wildlife, can increase this certainty.
This may require tough conversations with finance teams. It may also mean projects cost more in the short-term. But it makes it more likely that they will be built without long and costly delays.
This can only bring benefits. There’s no profit in a scheme that never happens.
Wind Watch
This week's Global Offshore Wind has been dominated by big talk about the UK.
The Government says it wants a major programme of offshore wind developmentbetween now and 2020. It wants this to drive down the costs of building offshore.
Meanwhile, the Crown Estate says the UK is on course to double offshore wind capacity to 10GW or more by 2020. If this happened then the sector would generate 10% of UK energy.
And let’s not forget that the UK is still the world leader in offshore wind.
But we should not let such positive talk hide the underlying challenges facing offshore wind. If the industry is to make big strides by 2020 then we need most of these schemes to gain consent over the next three years. Unfortunately, the current consenting system makes this difficult.
Dr Steve Freeman, director of environment at TUV SUD PMSS, explained some of these issues in a talk yesterday about the consenting process. He argues the current system produces unrealistic assessments about potential impacts of schemes, and this makes them less likely to win consent. It also means more financial risk for the investors and developers who back the schemes.
This problem stems from EU rules about the habitats of birds and sea mammals.
It is clearly right for developers to do what they can to mitigate the impact of schemes on birds and sea mammals, but the current system does not realistically assess the scale of these risks. This is because developers have to use theRochdale Envelope method.
Essentially, the Rochdale Envelope is an approach to assessing a project’s potential environmental impact. This takes into account the worst-case scenario impacts on wildlife and the different types of technology that the developer could use, among other factors. The tool is designed to work out a realistic worst-case scenario impact of a scheme. It is failing to do so.
Freeman argues that adding up different worst-case scenarios makes schemes look unrealistically risky, and allows risk-averse consenting bodies to throw out perfectly good proposals.
This is surely the worst-case scenario for an investor, closely followed by long delays and costly fight to win permission. So what should developers do to mitigate these financial risks?
First, don’t blame consenting bodies that don’t have the time or resources to analyse projects. The Government has cut their resources and they have to make their decisions within six months.
Rather, the onus must be on developers to take the tough decisions that can reduce the worst-case scenarios in the Rochdale Envelope. Making early decisions about what technology to use, and choosing technology that reduces the impact on wildlife, can increase this certainty.
This may require tough conversations with finance teams. It may also mean projects cost more in the short-term. But it makes it more likely that they will be built without long and costly delays.
This can only bring benefits. There’s no profit in a scheme that never happens.
Buffett makes $30bn green power pledge
Berkshire Hathaway chairman and chief executive Warren Buffett has pledged to double the firm’s investment in wind and solar projects to $30bn.
The US investor has committed $15bn in these sectors, and Buffett told a conference in Las Vegas on Monday that he plans to invest a further $15bn.
Berkshire Hathaway is the fifth-largest public company in the world, and its energy arm has assets totalling $70bn generating 34GW of energy for 8.4million customers. Wind and other renewables account for around one quarter of this capacity.
Spanish law confirms subsidies axe
The Spanish government yesterday passed the decree that confirms major cuts to existing green power schemes including wind farms.
The government, led by the right-wing People’s Party, has confirmed that wind farms that became operational before 2005 have been stripped of all subsidies, despite the promise of the Spanish government that these incentives would be maintained for 20 years.
New wind farms will also receive no subsidies, while subsidies for projects completed between 2005 and 2013 have been significantly cut. The government passed a law in July 2014 to end renewables production incentives, and this decree was drafted in February.
SSE rues objection to 160MW Strathy South
SSE has said it is committed to winning planning consent for its 160MW Strathy South scheme in Scotland despite objections from Highland Council.
The Scottish council’s planning committee said yesterday that it objected to the proposed 47-turbine project in Sutherland because of the potential impact on local birds. SSE has said it considers the advice from Scottish Natural Heritage about the impact on birds to be “neither correct nor reliable”.
The utility said it wanted to resolving these issues at the next stage of the planning process. The council’s objection is likely to trigger a public enquiry.
Ofgem: OFTO regime saves UK up to £400m
Ofgem has claimed that competitive tendering under the UK’s offshore transmission owner (OFTO) regime has saved consumers up to £400m.
The UK energy regulator said the figure is from a forthcoming independent report on the progress of the OFTO regime. Ofgem and the Department of Energy and Climate Change set up OFTOs to attract institutional funding into offshore transmission assets from wind farms.
It revealed the figure on Tuesday to coincide with the full implementation of the laws that support the regime. It has so far attracted £1.4bn of investment into offshore transmission.
Read more about OFTOs in our special report, Tackling Transmission
Iberdrola to invest €3.7bn in Mexico
Iberdrola has committed to invest €3.7bn in Mexico in the six years to 2018, of which projects worth €1.5bn are already under construction.
The Spanish utility is investing in wind farms and natural gas plants in the country, and is also seeking to invest in solar and gas pipelines.
Chairman Ignacio Sanchez Galan said on Monday that the company wants to take advantage of changes in the Mexican energy market, where new laws in December ended the state-run energy monopoly. Earlier this year, Mexico’s president Enrique Pena Nieto said there would be no limits on inbound renewable energy investors following these changes in the energy market.
What will devolution mean for Scottish offshore wind?
It’s an important question – and one that’s being asked ahead of this week’s Global Offshore Wind. Keynote speeches are due from Michael Fallon and Fergus Ewing, energy ministers in the UK and Scotland respectively.
The Scottish independence vote is getting close. Scots will head to the polls on 18th September to decide whether Scotland should become an independent country.
The outcome remains difficult to predict. Nevertheless, let’s gaze into the crystal ball and pretend the Scots do un-hook from the UK.
If this happens it would raise major questions about whether Scotland can support the current level of activity in offshore wind; and would cast doubt on its investment appeal.
So far, there are only two offshore wind projects operational in Scottish waters: the 180MW Robin Rigg scheme and Beatrice, a 10MW demonstrator project. The full 664MW Beatrice scheme was selected for subsidy support in April under the UK Contracts for Difference regime. However, that UK support would surely disappear, in the case of independence.
But subsidies are not the only reason that independence could have negative ramifications for Scottish offshore wind. You see, both the UK and Scottish governments have already been talking tough over energy policy.
Scottish first minister Alex Salmond said independence would not harm renewables. He argues that the UK buys one-third of its renewable power from Scotland, and it would have to continue to do so in the case of independence.
Not so, says the UK government. Energy secretary Ed Davey has warned there will be no guarantees that the UK would buy wind energy from an independent Scotland. He argues that the UK could buy wind energy from Ireland or other energy from other sources.
The end result is unlikely to be as polarised as either politician suggests.
The UK would not completely stop buying renewable energy from Scotland. However, it is reasonable to expect that Scotland would face more competition from other nations, and that the current subsidised prices paid Scottish wind energy would weaken. There will be a deal to be done but it is likely that the Scots would be compromised.
More broadly however, the real problem for a devolved Scotland would be that all future subsidy support would need to be provided direct from its own pocket.
The UK said that an independent Scotland pursuing its current green energy goals — 100% energy from renewable sources by 2020 — would add £139 to Scottish energy bills.
Salmond has denounced this as pure scaremongering but nevertheless the question remains – given an increasing pressure on subsidy support and the bottom line, would there be an appetite to support large-scale offshore wind in an independent Scotland?
In truth, at this stage nobody knows. But whatever the case, when the industry gathers in Glasgow this week, politicians from both sides will be keen to talk up the market.
Wind Watch
What will devolution mean for Scottish offshore wind?
It’s an important question – and one that’s being asked ahead of this week’s Global Offshore Wind. Keynote speeches are due from Michael Fallon and Fergus Ewing, energy ministers in the UK and Scotland respectively.
The Scottish independence vote is getting close. Scots will head to the polls on 18th September to decide whether Scotland should become an independent country.
The outcome remains difficult to predict. Nevertheless, let’s gaze into the crystal ball and pretend the Scots do un-hook from the UK.
If this happens it would raise major questions about whether Scotland can support the current level of activity in offshore wind; and would cast doubt on its investment appeal.
So far, there are only two offshore wind projects operational in Scottish waters: the 180MW Robin Rigg scheme and Beatrice, a 10MW demonstrator project. The full 664MW Beatrice scheme was selected for subsidy support in April under the UK Contracts for Difference regime. However, that UK support would surely disappear, in the case of independence.
But subsidies are not the only reason that independence could have negative ramifications for Scottish offshore wind. You see, both the UK and Scottish governments have already been talking tough over energy policy.
Scottish first minister Alex Salmond said independence would not harm renewables. He argues that the UK buys one-third of its renewable power from Scotland, and it would have to continue to do so in the case of independence.
Not so, says the UK government. Energy secretary Ed Davey has warned there will be no guarantees that the UK would buy wind energy from an independent Scotland. He argues that the UK could buy wind energy from Ireland or other energy from other sources.
The end result is unlikely to be as polarised as either politician suggests.
The UK would not completely stop buying renewable energy from Scotland. However, it is reasonable to expect that Scotland would face more competition from other nations, and that the current subsidised prices paid Scottish wind energy would weaken. There will be a deal to be done but it is likely that the Scots would be compromised.
More broadly however, the real problem for a devolved Scotland would be that all future subsidy support would need to be provided direct from its own pocket.
The UK said that an independent Scotland pursuing its current green energy goals — 100% energy from renewable sources by 2020 — would add £139 to Scottish energy bills,
Salmond has denounced this as pure scaremongering but nevertheless the question remains – given an increasing pressure on subsidy support and the bottom line, would there be an appetite to support large-scale offshore wind in an independent Scotland?
In truth, at this stage nobody knows. But whatever the case, when the industry gathers in Glasgow this week, politicians from both sides will be keen to talk up the market.
In an instant, President Obama has re-established leadership of the global warming debate at a time of significant drift.
This is good news. And not just for the green brigade. Who in the past have gotten excited about such talk, only to have their hopes dashed.
No, this time there’s far more promise and substance to the discussion. And for the industry and for entrepreneurial types, that’s hugely important.
Obama’s commitment is not, as many of his critics have been quick to claim, something that is going to kill jobs and raise the price of electricity.
And also it's not something that's going to kill off the 600 coal-fired power stations that are currently in operation, either.
At least, it's not going to kill off those generators that are quick to implement carbon capture and storage programmes and develop new mechanisms to reduce their emissions and extend the life of the plants.
You see, the reality is that with Obama having regained the upper hand in the international emissions debate, he's broken a significant industry deadlock.
A deadlock that has in recent years seen India and China proceed with their own domestic plans and that left the 2009 global summit in Copenhagen floundering, before the discussion had even began.
Yet, five years on, breaking that deadlock remains vitally important.
Because the fact remains that tightening the regulatory framework can still have a positive impact. We only need look at the toughening of vehicle emissions standards, for example, to see just how effective this can really be.
Yes, it's true, too much political interference can create a burden as opposed to a benefit. But right now, that political engagement is sorely needed.
Since a tightening of the rules will only help to foster greater industry competitiveness and innovation in the future.
Indeed, if we stick with the example of vehicle emissions, you only need to take a look at the surge of industrial development with hybrid technology and battery powered transport, to recognise the positive commercial impacts it can bring.
For the US President of course, this is good politics – coming during a time when he’s looking to define and shape his second term in office.
However, the ripples of his commitment are already being felt. China has been quick to respond with confirmation of an emissions cap in its next five year plan, kicking off in 2015.
And when leaders gather in Paris in 12 months, there's suddenly so much more potential to securing genuine global commitment, than ever before.
That may now feel a long way removed for the daily operations of a wind operator, developer and investor.
However, be under no illusion; Obama's commitment marks an important milestone for future market investment, innovation and growth.[/private/]
Wind Watch
In an instant, President Obama has re-established leadership of the global warming debate at a time of significant drift.
This is good news. And not just for the green brigade. Who in the past have gotten excited about such talk, only to have their hopes dashed.
No, this time there’s far more promise and substance to the discussion. And for the industry and for entrepreneurial types, that’s hugely important.
Obama’s commitment is not, as many of his critics have been quick to claim, something that is going to kill jobs and raise the price of electricity.
And also it's not something that's going to kill off the 600 coal-fired power stations that are currently in operation, either.
At least, it's not going to kill off those generators that are quick to implement carbon capture and storage programmes and develop new mechanisms to reduce their emissions and extend the life of the plants.
You see, the reality is that with Obama having regained the upper hand in the international emissions debate, he's broken a significant industry deadlock.
A deadlock that has in recent years seen India and China proceed with their own domestic plans and that left the 2009 global summit in Copenhagen floundering, before the discussion had even began.
Yet, five years on, breaking that deadlock remains vitally important.
Because the fact remains that tightening the regulatory framework can still have a positive impact. We only need look at the toughening of vehicle emissions standards, for example, to see just how effective this can really be.
Yes, it's true, too much political interference can create a burden as opposed to a benefit. But right now, that political engagement is sorely needed.
Since a tightening of the rules will only help to foster greater industry competitiveness and innovation in the future.
Indeed, if we stick with the example of vehicle emissions, you only need to take a look at the surge of industrial development with hybrid technology and battery powered transport, to recognise the positive commercial impacts it can bring.
For the US President of course, this is good politics – coming during a time when he’s looking to define and shape his second term in office.
However, the ripples of his commitment are already being felt. China has been quick to respond with confirmation of an emissions cap in its next five year plan, kicking off in 2015.
And when leaders gather in Paris in 12 months, there's suddenly so much more potential to securing genuine global commitment, than ever before.
That may now feel a long way removed for the daily operations of a wind operator, developer and investor.
However, be under no illusion; Obama's commitment marks an important milestone for future market investment, innovation and growth.
Clean energy investments insufficient: IEA
Up to $2.5 trillion a year will be needed to supply the world’s energy needs through 2035, according to a new report published by The International Energy Agency (IEA).
Moreover, the Paris-based agency claims that existing policies and market signals are not strong enough to encourage sufficient investment in low-carbon sources and energy efficiency.
Over the next two decades, the IEA predicts that up to $6 trillion will be invested in renewable energy, while £23 trillion will be invested in fossil fuels.
Israeli investor sows Scandinavian seed
Israeli renewable energy investor Sunflower Sustainable Investments has acquired licenses for the construction of up to five 20-MW wind farms in Finland.
The company signed an agreement for the purchase of the licences, through an 82%-owned subsidiary as part of its efforts to expand operations in the European wind power market.
The total cost of the licences is expected to be up to €5m, since the price of the permits is €50,000 per MW. The construction costs for the Finnish wind projects are estimated at €1.6 million per MW.
Northern Power develops new 3.3MW unit
Northern Power has confirmed plans to develop a 3.3MW turbine alongside its Brazilian manufacturing partner, WEG.
The agreement forms part of a wider research and development programme that will enable both firms to better meet the needs of the Brazilian market. It also marks a significant step change, up from the use of the existing 2MW unit.
The new turbine will be built in the southern Brazilian state of Santa Catarina.
French farms foiled by copper thefts
A sophisticated criminal gang has been targeting an increasing number of French wind sites, stealing up to one tonne of copper in a single turbine raid.
To date approximately twenty units – located in sparsely populated areas – have been targeted, with two successful raids and one foiled attempt having being reported in March alone, according to French paper, Le Figaro.
Security on many high-risk sites has already been significantly increased. On the open market, one tonne of copper is estimated to be worth €4,500.
China commits to CO2 emissions cap
China has confirmed it will set an absolute cap on its CO2 emissions from 2016 just 24 hours after the US announced new targets for its power sector.
The development signals a potential breakthrough in tough UN climate talks and comes ahead of a 190-nation meeting starting in Bonn, Germany, later today.
According to Reuters, He Jiankun, chairman of China's Advisory Committee on Climate Change, outlined the commitment in Beijing, although there are no specifics outlining at what level the cap will be set.
Wind Watch
Talk in the French wind sector is dominated by the future of Alstom.
And yet, while this talk continues, moves are afoot to attract fresh investment into French onshore wind. An interesting situation, since France has an 8GW install base and is not an obvious candidate for what amounts to an industry kick-start.
This week, French energy minister Segolene Royal announced that new feed-in tariffs for the sector would be revealed imminently.
This follows the cancellation on Wednesday of a long-disputed decree about previous tariffs, which the European Union’s Court of Justice ruled was invalid in December because France had not followed EU state aid rules. Uncertainty over tariffs is one factor that has stifled investment in new wind farms since 2011.
Royal said that the new tariff rules would “end a long period of uncertainty that has destabilised the sector”. It is positive, but the end of investor uncertainty? Really?
The fundamentals for investors in France look good. The left-leaning government is trying to shift the country’s energy mix away from nuclear power, and it sees renewables including wind as the way to do this. Sounds good so far.
The country also has big plans to build on that 8GW. It wants 19GW of onshore wind by 2020, with 6GW offshore. It has to get motoring if it wants to achieve this, because it often takes between six and eight years to get a wind farm from first plans to energy production.
The government wants to remove blockages that stifle development. It adopted new measures in its Brottes law in 2013 to simplify the rules about wind projects, including the scrapping of locally-decided ‘development areas of wind energy’.
In theory, moves like this should help to promote investment. It is likely that it will start to reverse falling numbers of installations, which have dropped year-on-year for four years. Still, we won’t get too excited about what it means for the market’s long-term prospects.
Yes, it is good that the French government is seeking to remove blockages. However, for as long as the French government continues to tinker with the legislative framework, chopping and changing its policies as it reduces reliance on nuclear, uncertainty remains.
Moreover, the French government has been very hands on with General Electric’s bid for Alstom. It has not wanted vital French assets to fall into US hands, and it has been courting German giant Siemens for a rival bid.
This is the kind of behaviour that worries investors. And it underscores a long standing truth that energy remains wholly political.
That said, we’ve already seen good levels of deal flow in the secondary market, especially when schemes have secured consent or are already operational.
Velocita for instance, is building out a portfolio of 23 development projects totalling 750MW that it bought from E.On in May 2011; and Iberdrola offloaded a portfolio of 32 completed onshore projects to a group comprising EDF, General Electric and Munich Re. This proves that the French model can and does work for investors, when the certainty is secured.
The difficulty at the moment is getting projects to that stage of certainty.