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Don’t be fooled.

Despite the recent horse-trading within continental Europe, there’s more beef to the emerging wind energy markets than one might initially expect.

And while the integrity and ethics of economies such as Romania have recently been called into question – inciting a furious backlash from key political figures – it’s the Polish economy that now appears to be falling under the industry’s gaze.

However, much to the relief of Polish food standards industry, this time it’s nothing to do with issues associated with a contaminated supply chain.

No. Rather, on this particular occasion the reason that Poland’s found itself thrust into the spotlight is entirely energy related – as first Dong Energy and then Iberdrola sell off large swathes of their domestic wind farm portfolios.

In the case of Dong, the business has sold off three wind farms and a strong development pipeline, that represented its entire onshore wind energy assets, to PGE and Energa.

While Iberdrola has rapidly offloaded its portfolio, again selling its entire domestic wind base, amounting to five operational wind farms to the same buyers.

Put in pure numbers that means that almost 400MW of operational Polish wind energy has changed hands within less than two weeks.

No wonder it's got people talking.

However, without looking behind the headlines, there's a danger of reading too much into this. And in doing so, putting the Polish market under undue scrutiny at a time when it's quite the opposite that's required.

Put simply, both Dong Energy and Iberdrola's respective divestures have been driven by more than local economics.

In Dong's case, that means eyeing up a possible Danish stock market listing, improving the state if its balance sheet and looking to increase its focus on offshore wind.

For Iberdrola, it's more a case of streamlining existing operations and placing an increasing focus on more pressing market issues, in Spain.

That's all well and good for the two respective businesses but it has presented an interesting political and commercial dynamic for Poland. A market that's already battling with the complexities of grid hook ups and a lack of clear domestic policy for the future.

Whatever the case, it's not stopping due diligence taking place on planned prospective sites and on the ground, momentum continues, albeit at a steady pace.

For many, that's in part because the country offers a good stepping stone into Finland and the rapidly expanding Scandinavian markets, as much as anything else.

Sure, over 400MW may have changed hands. But that's as much an indicator of the ongoing energy evolution, as it is a question mark over Poland.

Securitisation. In the post banking-crisis world of 2008, it’s not a popular term.

But for most industries, securitising assets enables businesses to borrow, invest and raise debt for project finance.

For infrastructure projects, the move has a strong heritage. In the nineteenth century, railway bonds were issued by private US railroad companies to raise funds in order to build new lines. Investors were repaid by revenues generated once the line was operational.

And for renewable energy businesses, it’s not a new concept either. UK developer Ecotricity has issued a number of ‘Ecobonds’ to investors, as has Brazilian developer, Bioenergy, to fund 380MW of wind farm development.

But as yet, it’s not what could be described as an industry wide practice – and that’s for a host of reasons. Some projects are backed entirely on the company balance sheet. Others, by independent power producers, can attract funds from lenders such as the banks or fund community.

However, with the reticence of many financial institutions to lend to the market, there does need to be a consideration by the industry to look at other funding streams.

The issue with securitisation, however, lies with the fact that bonds are backed by assets, meaning that the underlying technology or structure has to be valued.

And this valuation is carried out by the external ratings agencies.

The question is, however, given the ever changing nature of wind energy technology, and the fact that the large scale projects have only just entered operation, the long term risks for wind energy assets are still uncertain.

And if the rating attached to the underlying asset is low, then interest paid on the bond will have to be higher - ultimately making the repayment options less favourable.

Additionally, it’s worth asking more broadly if the ratings agencies are the best arbiters for assessing the underlying value of such assets? For organisations that rated bundles of overvalued US mortgages as triple A grade, can they be expected to be able to provide a fair assesment of wind energy assets?

There is also an argument to say that since bond issuance wouldn't be uniform across the industry, projects could run the risk of developing in a piecemeal fashion depending on the individual attractiveness of each development; something that is avoided with centrally supported schemes.

As with most options on the table for the wind industry, it’s not a perfect solution, but only when wind energy assets have a tradeable value will the sector secure real investor interest.

Last week, a boat hit a lump of metal.

Let’s be a little more specific. On this particular occasion it was a 25-metre tender vessel named Natalia Bekker. A SWATH-designed craft that was named after the former Chief Executive Officer of Bard Holding.

And it’s a vessel that, on the night of 16th February 2013, collided with a wind turbine platform at Bard 1, a 400MW German wind farm, located 100 kilometres northwest of the isle of Borkum.

As incidents go, it was an event significant enough to warrant a brief smattering of media interest and to most likely cause a few red faces for the crew on watch.

Another incident, on another night, incurred while operating in tough conditions in open water. Nothing more, nothing less. Time to move on.

But here’s the thing. This isn’t the first time a vessel has suffered damage at the base of an offshore wind turbine. And it’s unlikely to be the last.

In fact, when you consider that the primary duty of these service transfer vessels is to locate,“hit” and “push against” stationary metal structures, in extreme weather conditions, far out at sea, it’s surprising more damage hasn’t been done.

After all, it’s not what maritime craft have been traditionally designed and built to do. Hitting things was never part and parcel of the seafaring job description.

However, with the rapid expansion of European offshore wind, that’s all changed. And as a result, so too have the vessels and craft configured to support it.

It’s why we see such variability within the early workboat prototypes – with hull design, buoyancy and propulsion all continually adapted and refined as more boats get chartered and hit the water.

It’s also why we see a continual shift and refinement of the configuration of the kit and services offered on board – with each market participant looking for a fresh twist to entice back the construction operatives and engineers they serve.

Combine this period of refinement with long working hours, an all-too often tight working schedule and the exacting demands of the manufacturers, developers and investors and it’s accidents are inevitable.

And like any area of the wind energy market, they form a crucial part of the learning process – helping the market to continue to adapt, adjust and evolve.

However, such evolution is only possible through the ability to collaborate in a wholly constructive manner – avoiding pointing fingers, while being quick to listen and engage.

Such restraint may not always come naturally to many within the market but nevertheless, this ability to look beyond the hunt for a(nother) scapegoat is critical for everyone – not just those working on the boats.

What’s always quite interesting about the wind energy sector is the way in which the projects undertaken tend to evolve.

Indeed, it’s a sign of the continued development of the industry as a whole that projects can be continually improved upon, with turbines of greater capacity or of an improved design added at a later date.

And as Vattenfall announced that its Kentish Flats project was to be expanded this week, many took it to be a sign that confidence in UK offshore wind remains.

Of course it’s not just offshore where the projects may be expanded. Iberdrola’s UK subsidiary, ScottishPower Renewables, has successfully extended the Whitelee project once already and has applied to do so again. In total, this will see another 230MW of capacity added to the project.

And this is all well and good, but the adding of more turbines is only half the story. The supporting infrastructure provides its own challenges at any stage during the project lifecycle – particularly offshore.

Onshore there is of course the risk of overwhelming the local grid connection. So what may start as a simple extension may turn into a greater investment than originally conceived.

This might seem a small hurdle in the grand scheme of things, but given the alternative of having to power down turbines at times of peak wind flow, the reputational damage done to the wind industry lasts longer than the turbine downtime.

Offshore, the connections run a unique set of risks. With the first phase of some of the major offshore projects marred by some damage to export cables, adding to costs and overruns, connecting these later phases also poses a number of challenges.

We should of course applaud any moves that sensibly increase the capacity of the wind energy market, but we should ensure that they’re made in line with what’s affordable and achievable.

There’s been plenty of talk of late about the need for the wind industry to start learning lessons from other major manufacturing markets.

And increasingly, the automotive industry has been referenced as the most obvious choice.

It’s all perfectly understandable, of course.

For, ever since Sir Henry Ford started to mass-produce the famous Model T, the automotive sector has continually refined the way in which its production, testing, shipping and delivery cycle works.

It’s an evolution that’s taken shape over one hundred years and in the process, it’s created some significant engineering efficiencies.

The Jaguar Land Rover facility in Halewood is a case in point – with over 4,000 staff employed at the site and with production of the Range Rover Evoque having recently switched to run 24 hours, in order to meet demand.

However, that’s not the only thing that this constant period of manufacturing and engineering refinement has produced.

It’s also created some titans of industry. Powerful individuals. People who have learnt the trade from the ground up and that, in many cases, now sit behind some of the world’s most aspirational brands.

And these individuals are interesting. Since many of them are now in the process of looking for a new challenge.

True, the international automotive sector still offers some significant room for growth – with the Asian market in particular continuing to churn out some impressive statistics. Indeed, China’s annual car production has exceeded that of the European Union, or that of both the USA and Japan combined, since 2009.

Similarly, it’s also true that the automotive market has some serious innovating to do – particularly if it is to meet the challenge of rising oil prices and the demands of the cost conscious global consumer.

So in this respect, the potential within the automotive sector remains clear.

It’s just that for many individuals, this market doesn’t always feel like the only place where future manufacturing and engineering potential really lies.

And as major turbine makers look to tackle the combined challenges of expanding their existing range – tackling issues such as low wind speeds, as well as introducing top end technology capable of generating multi megawatts – the parallels to be drawn are difficult to avoid..

Sure, it’s not always particularly sexy stuff.

Nevertheless, the ability to streamline production output, diversify the global manufacturing footprint and reduce the time between factory output and sale is key.

And it’s already starting to play an increasingly important role in safeguarding future manufacturer success. Diversifying the customer base and mitigating against future risk.

Individuals like Dr Felix Ferlemann, Chief Executive Officer of the wind power division of Siemens Energy, have already made the switch. In 2013 many more are surely set to follow.

Being the number one in any industry is almost as much of a curse as a blessing. After all, you can only ever go downwards, and there will always be another competitor snapping at your heels.

So with Vestas finding itself relegated to the number two position in the turbine manufacturing stakes, should it be concerned?

Not really.

Firstly, it has found itself usurped by GE, a global behemoth with an industrial and financial strength of a diversified firm.

And secondly, as with most rankings of any industry, it’s the movers in the lower orders that are much more interesting and tell a bigger story than a change in the top three.

In this particular ranking from BTM Consult - which, it should be noted, is still preliminary and yet to be published in full - Siemens rising up the scale from 9th to 3rd tells a bigger story.

Some may speculate that Siemens is just a bit too wedded to DONG for its order book. Irrespective, it’s providing a range of solutions that readily fit the market from 3.0MW to a new 6.0MW offshore machine, and a whole lot more in between.

This, coupled with the backing of a global business makes the German manufacturer a much more significant competitor.

But back to Vestas. Some seem to be postulating that this is start of a larger malaise for the turbine maker, particularly off the back of a consecutive annual loss.

But businesses in tough times can show enormous reserves of innovation to deal with their predicaments.

The biggest challenge for the firm will be weathering the storm of the next couple of years. There’s a fair likelihood of consolidation amongst the Chinese manufacturers, in the same way the country's domestic solar panel makers went, as the Chinese market slows.

Once this level of competition has been minimised, Vestas can concentrate on keeping up to speed with Siemens and GE and perhaps Gamesa.

The vagaries of the global wind market will continue to provide a number of challenges for all the manufacturers in the coming years. We’re sure to see some further switches amongst the top three.

On Friday, an activist New York-based hedge fund threw down the gauntlet to Apple in a bid to force the world’s most valuable company to unlock its $137bn cash pile.

However, that’s not the only storage challenge that the technology giant is currently battling.

Back in January, Apple Insider reported that the US business had reportedly filed a patent for the “on-demand generation of electricity from stored wind energy”.

The patent submission followed company plans to construct a wind turbine that generates power via the conversion of heat energy, as opposed to rotational energy of the turbine’s blades.

The thinking – at least, as far as it currently goes – is that in order to mitigate the problem of wind intermittency, Apple aims to convert rotational energy from the turbine into heat, which is then stored in a fluid and that can be subsequently used to generate electricity during times of low wind activity.

Irrespective of whether this particular idea works, it’s pretty innovative stuff and nobody can point the finger at Apple for not trying to add some fresh thinking to the debate.

The bit that raises questions of course is why Apple is even getting involved in the energy storage and intermittency debate in the first place?

And that’s where the interest lies. Since if a company with the manufacturing and financial muscle of Apple starts getting in on the act - irrespective of whether or not it’s for independent energy and cost savings gain - the potential for future industry innovation is huge.

As we already recognise, the complex challenge of balancing the grid is as much about speed and ease of transmission as it is about storage, supply and demand.

It’s something that was a common theme throughout the conference and panel sessions at EWEA 2013 last week.

However, to capitalise on this early-stage momentum requires a common consensus.

And with the likes of Artur Rozycki, Chief Executive of Polish utility ENEA, already cautioning against “one central [electricity] dispatch in Brussels” and questioning the longer term benefits of EU interconnections, the time for discussion and debate is now.

As the wind energy markets begin driving wider discussions regarding the future of EU energy generation, storage and deployment it’s time to set aside differences and engage.

And this emerging issue of storage is just the start.

Something that’s often brought home at the major industry events is the huge amount of pressure that the wind sector finds itself under.

In many respects it sometimes feels miraculous that projects still get built at all.

This week’s EWEA conference in Vienna, whilst showcasing many of the great developments currently taking place, also highlighted the ongoing war of attrition that is required to secure consent, attract the right investment, and construct projects.

The speakers in the opening address all spoke of the challenge that the industry faces, but perhaps none more so than Fatih Birol, the International Energy Agency’s Chief Economist.

Mr Birol, it should be noted, does not have a partisan interest. He is not a developer, a green politician, an industry big-wig, or a financier. He is though, a master of the dismal science – pure and simple economics.

So when he spoke of fossil fuel subsidies as ‘public enemy number one’ – possibly the quote of the conference – people sat up and took note.

It was a salient point that Mr Birol backed up with some striking figures. Worldwide, subsidies for fossil fuels rose by 30% last year, yet oil still resides at a price of $116 per barrel – out of reach to many of the world’s poorest.

The floor price for trading carbon has fallen to a record low $10 - hardly an incentive for investment - and to put things into clear focus, fossil fuel subsidies now weigh-in at $523billion, compared to $88billion for renewables, of which wind accounts for $21billion.

Essentially, this means in many instances that firms are actually incentivised to produce CO2 at a rate of $110 per tonne.

Yet despite this, free market think tank, the Adam Smith Institute, in conjunction with US organisation, the Reason Foundation, rushed out a report that claimed Governments are over-investing in wind power.

The report claims wind power can, at best, provide no more than 10% of renewable energy needs – a figure bested by the UK in December 2011 when wind power provided 12.2% of electricity to the national grid.

It’s a tedious battle for the industry to have to rebuff shaky, non-peer reviewed ‘research’ on such a regular basis. And frankly there are more interesting debates that the wind sector could be addressing.

The wind industry will prove its critics wrong, of course. And the conference did provide a forum for many to highlight that costs are falling, even in offshore, and that the twin challenges of storage and distribution can be addressed.

However, in the short term, ill-judged reports like this simply place an added communications burden on a delicately balanced sector.

To combat this, firms of all shapes and sizes must ensure they are clear and consistent when extolling the value of wind energy, particularly when working with those outside the sector. Moreover, it's yet another reminder that despite the great strides made in the last decade, as an industry we simply can't afford to stand still.

Never underestimate the power of surprise.

That’s certainly a trick that the management team at Arise Windpower have achieved over recent months, as its business continues to boom.

Having continued to steadily sign a series of deals, that have enabled them to quickly expand outside of their core domestic market, it’s evident that confidence and momentum grows.

And it’s with good reason.

In the space of just five years, the Swedish company’s local market investments have helped the firm to consolidate national wind power efforts and in return, build up a healthy portfolio of farms totalling 342MW.

Given this growth, it’s perfectly understandable therefore, to see the listed Scandinavian business begin to look to new markets overseas. It keeps the shareholders happy and it builds on lessons learnt closer to home.

The two January deals are a testament to this – with the firm buying a proposed 130MW Nordic, permit-pending project, together with exclusivity rights to develop and build with Argyll Estates within 24 months on the Scottish coast.

Coming just before the conference doors open for EWEA 2013, the deals speak volumes for where this aspiring Swedish developer places trust when working overseas.

And while eyes may roll for advocates within Eastern Europe who feel that they’ve lost out to such investment, for emerging states it’s not all bad news.

Rather, it’s an ever-present reminder of what developers are looking for when it comes to selecting a site on which to develop, build and invest.

As we discussed on Friday, Scotland has made big bets backing clean energy technology, something that’s helped in part by an eloquent political leader.

Similarly, Norway has recognised the benefits of working together with its neighbours to create s stable platform for investment and its ties with Sweden are now strong.

Combined, these partnerships, the firmly established political platform and the simple geography, make overseas investment less surprising than you’d think.

A salutary tale from an ambitious and aspiring developer, then. Particularly as an expected 10,000 delegates head to Vienna with thought of capitalising on new regions, territories and potential new revenue streams never far from their mind.

‘As I hurtled through space, one thought kept crossing my mind - every part of this rocket was supplied by the lowest bidder.’ ~ John Glenn

When John Glenn took to space in 1962, his comments were symptomatic of an industry under pressure to deliver results with an uncertain future, whilst at the same time trying to keep a lid on costs.

At the Scottish Renewables offshore supply chain event in Aberdeen this week, the triumvirate demands of lower costs, future support and economic growth were brought together as the offshore wind industry met to discuss opportunities for the domestic supply chain.

The issue is a complicated one. National Governments wish to conflate green energy development with economic growth. Green collar jobs is the popular mantra.

But is that realistic?

Is it achievable to ask the supply chain to force down its costs, whilst investing in skills and assets against an industry backdrop of uncertainty?

To many, the argument seems to be to address political certainty, and the other elements will slot into place. It’s one reason why the Scottish Government was quick to announce a 2030 decarbonisation target, commensurate with 50% of energy from renewable sources by 2015.

All well and good, and it’s probably fair to say that the Scottish renewable energy industry is in a better place long term than its counterpart in England and Wales.

But if these longer term securities come with the caveat of forcing down the cost base, then any benefits from such certainty will have less favourable long term effects on the industry.

After all, as and when offshore wind becomes a fully fledged secondaries market and asset class, the supply chain, and the equipment and expertise it has provided, will therefore come under intense amounts of scrutiny in the due diligence process from future investors.

Anything that is suspected to have been built at the lowest possible cost, will, commensurately only ever attract a lower price premium, but will be more expensive to maintain as an asset.

Political obsessions in Westminster with cheapening offshore wind shouldn’t mean that the supply chain bears the brunt of having to provide its goods and services at the lowest possible rate. In the long term nobody benefits – long term industry security or otherwise.

The stake that sticks up gets hammered down.

It’s a literal translation of an old Japanese proverb and its true meaning is far more blunt. Namely – if you stand out, you will be subject to criticism.

Spare a thought then for Premier Shinzo Abe, who has recently reaffirmed his commitment to undertake an all out assault on the domestic economy in a bid to stop its slow and steady slide.

As part of the plan, Abe is really going for broke. By employing a tactic that will see him fight financial malaise on multiple fronts, he’s looking to tackle fiscal, monetary and exchange stimulus and in doing so, shake the country out of its current woes.

A bold and ambitious plan. And something that, when combined with the rising tension and increasingly open hostility shown between Japan and neighbouring China, suggests that the country isn’t going to be out of the international spotlight anytime soon.

Whatever the case, it’s evident that Abe cares little about the international repercussions and in the process is about to undertake a significant gamble.

For the energy markets, and for wind in particular, that’s especially significant.

And rather timely too. Particularly following recently announced plans to build an additional 1GW in offshore power, off the coast of Fukushima.

The plans take advantage of a generous feed in tariff that was introduced back in July 2012 and require utilities to purchase electricity produced from offshore farms at up to Y42 per kWh.

That’s a major incentive for developers and for the supply chain, since it’s over twice the rate of onshore domestic wind farms and is widely considered to be the highest in the world.

However, these ambitious construction plans are still in their infancy and while the incentives are high, so too are the risks.

To date, many within the market have always considered the possibilities locked within the Japanese market to be imminently bankable – a solid and safe bet.

However, right now the international trading markets are more fragile than we’d all like to think and their success or failure can have a direct correlation on any ambitious energy plan. Especially those that involve working in deep water, operating close to one of the world’s most active fault lines.

Yes, the Japanese energy markets needed fresh impetus after decommissioning of a substantial chunk of its domestic nuclear sector and yes, domestic Japanese wind has experienced a lull over recent years. So something needed to be done.

However, given the seismic changes that are currently being played out in the economic markets and as international tensions between two of the world’s major superpowers escalate, the nascent Japanese offshore wind sector needs to be nurtured.

If it’s not, then the ambitions of other emerging Asian energy economies – who are also looking to walk the tightrope of attracting inward investment while fostering future domestic manufacturing growth – might just pip them to the post.

Recent activity emerging in the waters around Korea is a case in point.

While Japanese ambitions within offshore wind should be applauded, let’s hope that, in the process, they’ve not bitten off more than they can chew.

Wind Watch

Sometimes something comes along that doesn’t on the surface seem to warrant any more than the usual attention.

But taking a second look, and it seems apparent that occasionally, a particular development seems to be pushing the industry into a paradigm shift.

On the surface, the signing yesterday of a Memorandum of Understanding between UK Secretary of State for Energy and Climate Change, Ed Davey and his Irish counterpart, Energy and Natural Resources Minister, Pat Rabbitte seemed like the passing of an incidental milestone on the way to another large scale wind project.

But the ultimate aspiration of the project actually demonstrates that the wind industry is reaching a new maturity.

Once constructed, the project, consisting of up to 40 individual wind farms in the Irish Midlands, will export all power to the UK using two interconnections across the Irish Sea, joining the UK grid at Bangor and Pembroke, respectively. The project would comprise between 500 – 700 turbines each at a height of 600ft, to take advantage of the strongest winds in the region.

What really makes this project interesting though, is it demarcates a new leap for the industry on the road to exporting renewable energy across borders and to the ultimate aim of a European supergrid.

When this kind of flexibility is inherent in the industry, then it will have reached a new level of maturity to rival energy generated from fossil fuels. And, in many respects it also starts to circumvent some of the challenges of energy storage, as surplus power can be distributed away from centres of oversupply.

Of course the project still has some way to go, and political cooperation doesn’t by any means guarantee the project’s future, especially given the planning considerations of building on protected peat bogs and the volume of turbines required, but it’s a step in the right direction.

It’s a reminder though that if the industry wants to keep moving forwards then it really needs to keep thinking big.

It’s a long way from here to Timbuktu.

However, for a place famed for it’s extreme inaccessibility, it’s a city that’s felt much closer to home of late, following the French air attacks in Mali and as Islamists subsequently flee the ancient city following a nine-month hostile rule.

But here’s the thing. Previously remote cities like this may well be cropping up on your agenda a little more often in the future. Particularly if the expansion into emerging markets continues at its current pace.

And while that’s potentially good news for the air miles and indeed for the multitude of disparate local economies on the travel itinerary, it brings with it a whole host of new challenges.

Take for instance, the recent grim developments at Nigeria’s biggest wind farm. As the team reported earlier in the month, on 19th December, a wind engineer from Vergnet Group was kidnapped in Rimi, in the north.

Although it wasn’t at first clear of the precise circumstances of the event, the Islamist group Ansaru claimed responsibility for the abduction, in which 63 year-old Francis Colump was captured by a reported 30 gunmen. Yes, thirty.

Francis was in the midst of installing a 10MW power project in Katsina and the kidnappers continue to hold the man; claiming that the action has been taken in response to French military action in the region.

All in all it’s a terrible chain of events. And worse still, it’s probably only just the start.

Indeed, as the oil and gas corporations already know all too well, these sorts of occurrences have become increasingly commonplace for engineers and senior personnel working within emerging economies.

And while the rewards from a successful energy initiative can be significant, such ventures are not without a substantial chunk of risk.

It’s precisely why so many of the renewable energy firms that have already been working extensively throughout the Middle East have been doing so with a fair degree of caution.

Since while the Arab Spring has brought with it substantial opportunity, the revolutionary wave of demonstrations and protests can’t easily be dismissed.

That’s not to say that everyone should retreat to the comfort of domestic markets of course. Rather, it’s a timely reminder that while margins can sometimes seem significant, the true cost is often far more difficult to measure.

It seems that sometimes the electricity markets suffer with an issue of perception.

Perhaps it’s because electricity is pretty intangible – we flick a switch and computers, televisions, kitchen appliances spring into life. Yet it’s no different to any other part of the national infrastructure – be it the railways, sewerage systems or road network.

However, when it comes to the question of investment, its development costs always result in opprobrium being heaped upon the sector from somewhere.

This week, it was the turn of the UK’s offshore transmission (OFTO) regime to be brought under the microscope. With the instrument being wielded by no lesser a body than the Parliamentary Public Accounts Committee (PAC) chaired by Labour MP, Margaret Hodge.

The committee’s main criticism was that the OFTO regime had failed to learn the lessons of the Private Finance Initiative and was skewed to providing a better deal for investors than consumers, through Government guarantees.

Whilst the PAC will be reacting with sensitivity to the potential for increasing domestic electricity bills, there is perhaps an argument to say that the bigger picture has been missed.

Firstly, the construction of offshore transmission networks will result in significant subcontracting to a host of different providers, who will contribute to the economy through taxable income earned from the work.

And secondly, whilst these incentives may be considered by the PAC to be overly generous, the liabilities attached to building and operating such an asset are not insignificant, even when supported through a subsidy regime.

In future, these assets may also provide a new investment class for the pension funds of workers UK wide, providing a secure 20-year return that’s not always available in other bonds and equities.

And all this is not withstanding the fact that to have the offshore transmission network sitting on the Government’s balance sheet would be a significant risk.

Something that would place an additional burden on the already stretched public finances.

Ultimately then, consumers would end up paying through their taxes rather than through their energy bills. The latter, at least, is being open to a degree of self-management and regulation.

So it’s because of all this that there’s an inescapable and uncomfortable truth - the cost of large infrastructure projects will increasingly have to be met through the public purse.

Gone are the days of private companies building national scale projects on the balance sheet.

Therefore, the biggest challenge lies in communicating to end users that the cost of electricity has essentially been subsidised for the long term. For the future.

After all, it’s imperative that consumers begin to recognise that security of supply, low carbon generation and a 21st Century National Grid are costs worth paying for.

Here’s a sobering thought. In 2013, coal remains the fastest growing world fuel by volume.

Indeed, in 2011, coal use climbed seven times faster than wind and solar. And three times faster than gas.

Even by the most established of fossil fuel standards, that’s impressive growth.

And moreover, it’s a reminder that despite the inroads that have been made by many, there’s still a long way to go to facilitate a more sustainable energy mix.

Of course, the US - the world’s largest net exporter of the black stuff - doesn’t help matters. Particularly when it’s biggest customer is China.

Nevertheless, with North America suddenly getting all starry-eyed about the opportunities that fracking presents, perhaps we’re about to witness a change of tune.

Something that’d be pretty timely given commitments from China last week – as it looks set to decrease its reliance on overseas fossil fuel imports and raise renewable energy domestic production capacity.

And it’s no surprise. Since what global superpower wouldn’t want to refocus its manufacturing muscle on its own market to help keep things bright?

What has raised eyebrows however, is the sheer scale of the Chinese targets set.

Indeed, over the next twelve months the National Energy Administration has committed to bolster renewable energy capacity by a not insignificant 49GW.

Yes, 49GW.

When you consider that best estimates placed China’s total power capacity exactly twelve months ago at 63.5GW, this’d certainly be an impressive leap.

And a significant win for regional developers and manufacturers, too.

Companies that, when the figures are broken down, are set to benefit from the addition of 21GW of hydroelectric power, 18GW of wind generation and 10GW of solar, according to a statement.

So bad news for western manufacturers, developers and investors then?

Well actually, perhaps not. And potentially, quite the opposite.

For, if China really is going to achieve these goals, it will tie the domestic producers up for months; leaving a significant chunk of the international market to the established European industry stalwarts.

Good news for Vestas then, which has already witnessed a sharp uptick in the value of its shares following analysts’ reassessment of the global turbine price.

For Vestas and for its industry counterparts, let’s hope it’s not just a January blip.

‘The good thing about 2013?’ queried a senior finance executive, when asked what he thought the year might hold for the sector, ‘It’s no longer 2012’.

It’s a view that seems to be echoed across the sector as we pass through the first nervous weeks of January. For many, last year wasn’t an experience to be repeated.

In some countries, political support for renewable energy evaporated - quickly becoming a fierce battleground for green energy lobbyists. Economic austerity measures continued to place downward pressure on the industry in the US and Europe, and the Chinese market began to cool as the industry outpaced its supporting infrastructure.

Despite what many ‘future gazers’ will tell you about the next twelve months, it is of course too early to tell. However, the past seven days have seen a couple of developments that, on one hand, set a good portent for the remainder of the year. And now require careful examination before attracting too much hubris.

In the US, legislative measures to prevent the arrival of a ‘fiscal cliff’ included the extension of the Production Tax Credit. Good news on its own, of course, but in a further industry encouragement, the Bureau of Ocean Energy Management (BOEM) issued a formal request to gauge whether there would be any commercial interest in the development of a 350MW project off the coast of New York.

With many predicting only light construction for US wind in 2013, the announcement served as a small fillip in a market that many have already written off. Importantly, it was a reminder that, despite being somewhat embryonic, US offshore wind still has big ambitions and dismissing it entirely may be premature.

Contrast these US developments with an announcement from the Bulgarian Government, clarifying its intentions to secure 16% of domestic energy from renewables, though, and its evident that the international market is still unclear as to which countries to bet heavily on, and back.

When Bulgaria initially embarked on a course towards developing commercial wind energy in 2010, it was greeted with the same optimism that has been held for its near neighbour, Romania.

Yet this changed overnight late last June, when the Government reneged on existing tariff rates; cutting wind energy subsidies immediately by 22%.

And looking at the small print tied up in this week's development, it’s clear that much of this 16% is expected to come from hydro-power, with wind energy only slated for just 1.4GW.

Despite this, many developers, independent power producers and manufacturers are still treating ‘Eastern Europe’ as a market packed with potential. A sometimes overly optimistic outlook that could all too easily dismiss the complexities of differing political regimes that underpin specific green energy policies, out of hand.

Bulgaria may turn out to be a strong market, but the industry is naïve if it thinks it can secure investors overnight following the shock of last year.

Perhaps the message for 2013 then, is that the wind industry needs to think carefully about the ability to pick winners – and losers. The facts aren’t always what they seem.

For many, a new year isn’t just a time for reflection. It’s also a time for change.

That’s certainly the case for the 17,000+ staff that now find themselves working for a new entity, called DNV GL Group.

It’s an entirely new company that merges DNV and GL and that only came into being on 20th December 2012.

That was the date when Erik van der Noordaa, Chief Executive, GL Group and Henrik Madsen, Chief Executive, DNV Group stood side by side and shared their collective ambition for quality, innovation and growth.

It was also the date when many others within the market were caught napping – as, in an instant, the two former competitors created a top three global certification, testing and consultancy powerhouse.

It goes without saying then, that as far as mergers go, this was/is a big deal.

And, while the transaction still requires the approval from the competition authorities, it’s certainly no mean feat to have gotten it all wrapped up before the Christmas break.

Crucially though, for those working on the inside, the real legwork has only just begun.

Henrik Madsen, the newly emerged group Chief Executive, has already set out a vision to target 2013 sales of about $3.6 billion – a 10% uptick on combined company sales achieved in the past twelve months alone.

What’s more, it’s an annual growth trajectory that he’s expecting to repeat throughout 2014 and 2015, without even breaking sweat.

All in all, it’s a confident pitch. And certainly one that capitalises on a growing demand for international testing and certification services within shipping, oil and gas, and perhaps most pertinently, within renewables. Something that sets the firm on solid ground as the new energy revolution really begins to boom.

However, as many within the market return to work and as the New Year really gets underway, it’d be easy to underestimate the complexity of the integration.

And of the work required by both firms in order to make this vision achievable, during the weeks and months ahead.

After all, it’s no secret that competition between the firms and their respective divisions has always run high.

And that for many investors (particularly those working within renewable energy), it was only ever either one of these two former firms that were ever really considered bankable. Much to the chagrin of others.

This deal then, upsets the apple cart.

And, while it’s driven by market consolidation, increasingly competitive pricing and the need to establish a truly global capability and presence, there’s no denying that, if it works, the new firm will be an innovative and imminently capable force.

Time then, for some smart leadership, some clarity of vision and some dynamic, creative thinking. Over 17,000 staff are now signed up and ready to get back to work.

And work, they must. With some increasingly ambitious specialised sector upstarts still rising steadily through the ranks, the success or failure of the DNV GL Group’s workforce will ultimately dictate just how much can be achieved.

Driving down the French autoroutes over the New Year break to spend some time away with friends, the surrounding countryside gave the impression that France has raced ahead with installed capacity for onshore wind.

French wind projects have proliferated along major road networks, where planning policy has decreed that if the land has already been used for a major, highly visible, infrastructure project, turbines cannot be said to be having any impact on views.

In many ways, it’s quite a sensible policy. Particularly since it seeks a middle ground between polarised national opinions on wind development that characterises many Western European countries views on renewable energy.

Indeed looking at these developments it seems hard to believe that France, a country with the third largest wind resource in Europe, only produced 6.6GW of wind energy in 2011.

But to the foreign driver on French roads, the story is misleading. France’s domestic wind energy production is too often hampered by an overly complex permitting process, which in extreme cases can require approval by up to 25 legislative offices.

US offshore looks almost laissez faire in comparison.

Which made Iberdola’s exit from the market this week an interesting case in point.

The Spanish energy utility has sold 32 onshore wind farms to General Electric, Meag – the asset manager for Munich Re – and French utility EDF.

The French sell off isn’t the only divestiture that the firm is intending to make – Iberdrola developments in Germany and Poland are also reportedly up for grabs – as it looks to reduce its debt in 2013.

But given the challenges of gaining a foothold in the French market, the decision to remove its operations is one that might not be easy to go back on.

Most in the industry know that 2013 could be quite a tough year in the Western European markets, and Iberdrola is perhaps preparing for the storm to continue by ensuring its balance sheet is in the best possible health.

It will be interesting to see whether having freed up some extra cash, the firm increases its investments in Eastern Europe – building on its early stage operations in Romania and Hungary.

December is always a month for milestones. And last week was no exception.

In the space of just 24 hours, the Czech energy utility, CEZ, announced the completion of the Fantanele wind farm in Romania. Shortly followed by news from the London Array that it has successfully installed the 175th (and final) turbine at its east UK coast site.

The milestones meant that in an instant, Fantanele became the world’s largest fully operational onshore wind farm, while the London Array team now lays claim to the largest offshore install base.

Naturally, the numbers behind each of the projects speak for themselves and are often a great way of giving a true sense of just how far each of the projects has come.

Particularly in such a relatively short space of time.

Fantanele, for instance, now has 240 2.5MW GE units fully hooked up and connected to the grid; with the final turbine plugged into the grid in November. Impressive stuff for the project that only received planning permission back in 2007, at a time when Romania had just 14MW of installed domestic capacity.

And it’s an equally notable story at the London Array. Here, the initial investment was only agreed in March 2009, with construction starting just two years later. Power from the 3.6MW Siemens turbines started shortly after.

And yet, there’s more to it than numbers alone. And with the constant bombardment of statistics, forecasts and trends, it can be easy to become a little numb to what all this really means.

Far better then, to think of it in terms of the achievements (collective and individual) of those people working directly on the projects – either on the coal face or at the top (and often), behind the scenes.

Viewed in this light, figures such as Mike Winkel, Chief Executive, E.ON Climate & Renewables (and ranked 27th in our report) proved instrumental in realising the aspirations of the London Array. As did Ron Heyselaar, Managing Director, Masdar, (ranked 28th) and of course, many of the key executives at this particular turbine manufacturer, including Dr Wolfgang Bischoff, Head of Structured Finance at Siemens Financial Services (ranked 21st).

And taking it one step further, perhaps it’s the success of these individuals and the teams that have been working with them, that these milestones really need to celebrate?

After all, in an age where public policy and government ambition around the world is littered with ifs, buts and maybes, perhaps the real certainty lies with the individual ambitions and aspirations of the people themselves.

I hope you enjoy reading our Top 100 Power People report. It’s intended to stir debate, so do let us know what you think.

Is bigger always better?

Most of the manufacturers certainly hope so. Vestas included. As it was at pains to remind us of earlier in the week.

In an update to a previous commercial agreement that it had signed with Danish utility Dong Energy, Vestas confirmed plans to push ahead with early-stage testing of its V164 8MW machine.

Shifting the testing onshore, rather than pursuing plans to operate it at Frederikshavn, as previously envisaged, Vestas confirmed that its partner would gain access to key operating data at an earlier stage and was quite naturally keen to emphasis its ambitions to pursue future commercial collaboration.

And well it might.

After all, Siemens Energy has significantly increased its dominance in the market over the past twelve months and the company has already begun field-testing of its 154-metre 6MW machine.

Quite apart from the recent lay off of 615 of its 1,650 strong US workforce, signalling further caution within North America, Siemens has moved quickly to consolidate its position within the European market. As such, for any competitor worth their salt, early-stage developer collaboration and exposure to research and development, and new technology, will prove key.

However, the rush towards multi-megawatt machines isn’t only the preserve of the Europeans. Something that Samsung Heavy Industries have been consistently demonstrating through the evolution and future deployment of its own 7MW machine.

While its twelve-turbine test project located off the coast of Jeju Island is still under construction, the successful operation of the site could provide a fresh twist to the evolution of the wider international market.

A twist that - for Europe, at least - would no doubt benefit from the early stage UK involvement of David Brown, a company that has designed the gearboxes for the mammoth, Korean-made machines.

A race to the to the top then? And with it, a return to more familiar ground?

Possibly. Although let’s not forget that the memories of Clipper’s failed 10MW ambitions are still pretty raw and that for many, the challenge of using smaller turbines to capitalise on lower wind speeds still presents significant room for future growth.

What’s more, with the likes of Mitsubishi Heavy Industries continuing to be linked with Vestas and with the Japanese company having made no secret of the fact that it’s looking for a multi-MW European growth, when it comes to future manufacturer ambition, there’s often more to early-stage testing than meets the eye.

Articulating the nature of the UK’s future energy mix is still proving to be a headache.

The Autumn statement from the Chancellor, George Osborne, provided gas investors and developers with some further clarity as he confirmed that the Government would approve the construction of up to 30 gas-fired power stations, with the ultimate aim of providing 26GW, or more, of capacity.

It was an interesting contrast to a report for Greenpeace and WWF-UK from Cambridge Econometrics, which argued that substantial investment in offshore wind by 2030 would see far more economic benefits than pursuing conventional and unconventional (shale) gas extraction.

According to the research, up to 70,000 more jobs would be created with additional offshore wind deployment, and GDP would be £20billion (0.8%) higher.

Taking the figures at face value then, if the Chancellor wishes to see growth from large infrastructure projects, offshore wind should be the clear winner.

Except politics, yet again, gets in the way.

But one thing that can be drawn from this is that the anti-wind lobby will increasingly find it difficult to argue against the cost of wind, which continues to fall.

Many say that wind is a false market, only existing because of Government subsidies. But let’s not forget that the nuclear industry was, and still is, subsidised. Indeed, not only in the UK, but also in Europe, the costs for pursuing nuclear energy continue to escalate.

Likewise, the exploration of oil and gas.

In fact, if we’re brutally honest, it’s very difficult to find an energy resource that doesn’t require subsidy. Coal is probably the cheapest, but if you’ve an eye on climate change and emissions, then it really shouldn’t be part of the equation.

The biggest threat to UK wind, then, comes not from economics, but from political inertia.

Without a commitment to decarbonise the energy sector by 2030, it’s very easy for the energy contribution from gas to be hiked up at the detriment to renewables – and wind in particular.

It’s still to early to guess as to what the UK’s energy mix might entail, but let’s not cut renewables out of the picture on the grounds of cost alone.

Renewable energy watchers may have noticed some interesting island action happening in the North Atlantic recently.

As Wind Watch readers will remember, the Faroe Islands have recently unveiled an initiative to integrate large amounts of renewable energy into their power systems.

In a place where 60% of homes are heated with oil and there is an ambition to be fully sustainable by 2050, Dong Energy elected to install highly responsive grid technology that can shift loads in seconds.

The Faroese energy supplier SEV showed this smart-grid approach can handle an immediate 10% drop in power supply, simulating the kind of intermittent supply that would come with a wind-based energy system.

It is not the only way to cope with large amounts of renewable energy on the grid, though, as was recently demonstrated to the South, in the Orkneys. These islands opted for a technology that on the surface looks a lot less high-tech.

The Japanese engineering giant Mitsubishi installed two 40ft containers each holding 2,000 lithium-ion rechargeable batteries, giving a power output of up to 2MW.

These will allow Scottish power provider SSE to store wind power in times of plenty and feed it back into the island grid when the turbines stop turning.

Such efforts are critical to small island communities that currently face major bills for importing fossil fuels. But they are also greatly of interest to countries such as the UK that are betting on renewable energy integration on a much grander scale.

Happily, the North Sea experiments show that both smart grids and energy storage can potentially help overcome the vexing problem of integrating wind power into the grid.

On a larger (say UK-wide) scale, though, it will probably take both rather than one or the other. And that is where the comparison between the Faroe’s smart circuits and the Orkney’s old-fashioned containers is particularly poignant.

Because right now smart grids are all the rage, with massive investments and rollouts happening across Europe. Energy storage, by contrast, is something of a Cinderella sector within the power industry.

It may not remain that way for long, though.

When the liquid-metal battery maker Ambri recently revealed that one of its backers was none other than Bill Gates, it highlighted the fact that smart investors are starting to see a lot of potential in energy storage.

For those already involved in wind power, this potential should be readily apparent.

Intermittency remains one of the industry’s great unresolved challenges, and it is not something you can solve by installing a smart grid on a wind farm. But you can solve it with energy storage.

Adding storage, be it through pumped hydro, flywheels, compressed air energy storage, batteries or any other method, radically changes the name of the game for wind power, suddenly giving it the potential to act as base-load generation.

It is true such options do not currently come cheap. But research is picking up speed, and the opportunity is enormous. This is an area where there is plenty more in store.

We often talk about market confidence in our editorial, as we try and gauge investor sentiment to political renewable energy policy.

Sometimes the situation looks bleak and sometimes it’s more promising. Frequently, however, it’s often very hard to tell in the short term.

This wasn’t the case for Vestas this week, though, as the company announced that it has successfully renegotiated its credit facilities to avoid an impending credit squeeze.

In practice, this meant that the firm replaced a Euro 1.3billion credit line with one worth Euro 900million. This enables the firm to secure a cheaper form of borrowing, although it has committed to repaying Euro 250million of the loan by 2015.

So who are the brave institutions that have chosen to continue their relationship with the business? Well, the Nordic and European investment banks, as well as HSBC, RBS, Commerzbank, Societe Generale, Rabobank and UniCredit to name a few.

It’s an interesting development as it proves, despite many concerns that have been voiced by analysts in light of Vestas’ recent financial results, that there are institutions that are willing to lend to the firm.

Of course this doesn’t mean it’s plain sailing, or indeed that investors see a bright future for the business, although it’s fair to point out that Vestas’ shares rose on the news on Monday.

The firm is still subject to the vagaries of wind energy policy in its core markets. It’s perhaps why Chief Executive Officer, Ditlev Engel, was compelled to write a piece in the UK national newspaper, The Guardian, calling for greater political consensus in the UK wind industry.

He’s right of course, and he’s echoing the calls of many.

His comments as to treating the wind industry holistically – both on and offshore were of note. With Vestas behind Siemens in the European offshore turbine market, and keen to secure a deal with Mitsubishi to strengthen its position, Engel’s thoughts on the dangers of being in favour only of offshore wind looked as though the business was nervously protecting its area of interest.

But sometimes, we all perform best under pressure. Any thoughts of writing off the business would certainly be premature.

At around midday on Friday, on a remote archipelago located halfway between Norway and Iceland, the self-governing Danish islands shut off one engine at a key diesel power plant.

The test simulated a 10% loss of power for the 50,000 islanders and was the sort of event that previously would have created a subsequent blackout.

However, while power interruptions and intermittent frequency have been relatively common occurrences, this time there was no such blip.

Instead – and thanks to a rather smart, smart grid service – the grid was better balanced, shifting the islands energy supply and demand in a matter of seconds.

The results of course, prove significant, despite the small scale.

After all, the Faroe Islands are reliant on their own ability to produce and manage energy supply and demand and they do not benefit from any interconnects or international back up.

They’re also almost entirely dependent on expensive diesel generators that have to provide a constant supply of energy, throughout day and night.

However, that’s all set to change. And what’s more, the implementation of such smart grid technology provides an important milestone for the islands energy framework of the future.

Something that, for the remote community, is critical if it is to decrease its dependence on fluctuating oil prices and gain greater energy security.

And that of course is where wind generation comes in. Over the next two years, the islands have set a target of increasing existing wind power capacity five fold.

A noble ambition. And one that will ultimately prove of benefit to the islanders, to the developers and to the manufacturers, associated with the project.

Perhaps it’s also why Dong Energy has taken such a healthy interest – since while the ability to sell future wind farms will not be far from its mind, ultimately there’s a bigger prize at stake.

Namely, to capitalise on the lessons learnt implementing and rolling out smart grid innovation on a micro scale, before exploring ways in which this isolated case study can be quickly commercialised and scaled, to help solve the wider headache of the European super grid.