Funds managed by Blackstone Infrastructure Partners have made an additional $1bn investment in US renewables developer and operator Invenergy.
This investment follows Blackstone's combined $3bn investments in Invenergy in 2021 and 2022. Invenergy is owned by Blackstone, la Caisse de Dépôt et Placement du Québec (CDPQ), and its management team.
The Investment Management Corporation of Ontario (IMCO) is to invest $400 million in sustainable battery cell manufacturer Northvolt.
The funds will enable Northvolt's “planned expansion, aligned with IMCO and the company's commitment to a deeply sustainable battery supply chain”, a statement said.
Northvolt's first gigafactory, located in northern Sweden, has begun producing batteries for energy storage systems and electric vehicles using fossil-free electricity.
Future gigafactory additions will support Northvolt's goal of delivering 150 GWh of annual production capacity by 2030.
Portuguese firm Galp Energia and French oil giant TotalEnergies have formed a joint venture to explore development opportunities in offshore wind in Portugal.
The companies are looking to take advantage of the Portuguese government's plan to tender 10GW of offshore wind capacity by 2030.
A group led by South Korean steelmaker POSCO Group has won a deal to build a $6.7bn green hydrogen plant in Duqm, Oman.
The consortium is made up of POSCO, Engie, Samsung Engineering, PTT Exploration & Production, and two Korean state utilities. The group aim to use hydrogen from the plant to produce carbon-neutral steel, which a pilot project at Pohang steel factory due to start in 2026.
ACWA Power has ordered Envision turbines for the 1GW Bash & Dzhankeldy wind complex in Uzbekistan.
The projects are being funded by institutions including the Asian Development Bank, the European Bank for Reconstruction & Development, DEG, the OPEC Fund and Proparco. Uzbekistan has a goal of installing 5GW of wind energy by 2030.
BP and Ørsted have resolved a dispute about a 110 square kilometre area of the North Sea that was being included in the plans for two competing projects.
The UK granted preliminary licenses more than a decade ago for Ørsted's 1GW Hornsea 4 and the BP-led Endurance carbon capture project in the North Sea, when the technologies were not expected to interfere with each other. However, the dispute arose over the risk of vessels for the Endurance project colliding with offshore wind turbines fixed from Hornsea 4.
The companies have now confirmed that the dispute has been resolved. The UK government is due to make a planning decision about Hornsea 4 on 12th July.
The Norwegian Climate Investment Fund and Norwegian pension fund giant KLP have backed a 168MW wind farm developed by Enel Green Power in India.
Norfund, which manages the Norwegian Climate Investment Fund, and KLP have committed a combined €27.2m equity and €45.5m guarantees for the unnamed project in Indian state Gujarat. The project is already operational and is due to produce around 700GWh of electricity per year.
EDP Renewables North America has signed a 20-year deal to supply the electricity from the 198MW Carpenter wind farm to North Indiana Public Service Company.
EDPR North America is due to commission the Carpenter project in 2025. This is the fifth renewables project in Indiana where EDPR has partnered with NIPSCO.
Finnish firms Gasgrid Finland, Helen, Neste and Vantaa Energy have joined forces to develop infrastructure for green hydrogen production in Finland's Uusimaa region.
The companies have started preliminary studies on a hydrogen 'valley' project to support the development of green hydrogen for industrial uses. They said developing green hydrogen infrastructure, storage and transmission would support the Finnish government's goal to develop its hydrogen economy.
Iberdrola has signed a 15-year 50MW power purchase agreement to supply steelmaker Stahl Holding with electricity from the 476MW Baltic Eagle offshore wind farm.
The utility's German arm is set to supply power that will enable Stahl to improve the environmental credentials of its steel production, as well as the operations of its subsidiaries Saarstahl and Dillinger. The deal is due to cover annual consumption of 200GWh.
The companies are also exploring opportunities for further cooperation in onshore wind, offshore wind and green hydrogen production.
Canadian province Nova Scotia is set to start offering seabed rights for offshore wind projects in 2024 as it seeks to award 5GW of leases by 2030.
The province has published a roadmap where it commits to offering seabed rights suitable for commercial-scale offshore wind projects in its sole waters from 2024, and in jointly managed waters from 2025. It is looking to use offshore wind to support growth in the green hydrogen sector.
Aura Power has been granted final approval for the construction of a 200MW / 800MWh battery energy storage system just outside of Maddaloni, Italy.
A grid connection was secured for the project in June 2018 and the ministerial decree confirming approval of the project has now been issued.
Construction is anticipated to start in 2025.
Once operational, the 200MW system will provide enough electricity to power over 35,000 homes at times of peak demand.
The project has been supported by Legance and 3eingegneria.
Leyline Renewable Capital has provided US utility-scale battery storage developer Grid Connected Infrastructure (GCI) with a non-dilutive loan facility of up to $22.5 million to launch its greenfield project development process.
Leyline's commitment will enable GCI - which has been operating in energy storage project development since 2013 - to develop large-scale standalone battery energy storage system projects across the US.
GCI will use the funding to “move quickly to acquire key real estate assets and build an expert development team” over the next two years.
GCI will be launching at least six projects over the next six months in tradable markets such as CAISO, NYISO, and ERCOT.
Indian developer Serenetica Renewables has ordered 106 turbines from Envision Energy for a 350MW wind project in Maharashtra, India.
The development is due to be commissioned by December 2024.
Explore the insights from Financing Wind 2023, focusing on onshore wind markets worldwide. Discover the growth opportunities in the Asia Pacific region, network constraints as a bottleneck, and the risks and rewards of investing in the US market. Gain valuable perspectives on long-term profitability, permitting challenges, and potential impacts of political factors.
Wind industry participants see “good opportunities“ for onshore wind in the Asia Pacific. For example, wind development is taking off in Japan, South Korea and Taiwan thanks to offtake arrangements. Further growth markets include Vietnam and Indonesia, while Australia is seen as “very big and growing very fast.”
In the West, some European onshore wind investors are interested in Spain and Portugal, while others are intrigued by Poland. The US and Brazil are also promising.
But some lenders question the ability of sponsors to continue to indefinitely push their onshore wind assets to be more profitable over longer lifetimes. In line with this, they caution against the assumption there will be inexpensive long-term debt that will be available over long offtake tenors. They are wary of continued sponsor bets on a move to merchant while assuming zero-equity IRRs over 20-year CfD agreements.
Network constraints remain a bottleneck to onshore wind farm development internationally. Developers have seen network-and-permitting-related delays to projects they were expecting to sell as ready-to-build not just in the very constrained US, but also in Brazil and Australia.
In Europe and the US, developers see state backlogs delaying both permitting and local consultation timelines, in addition to delays related to networks. In these markets, seven or eight years is the standard time for an onshore wind project development to go from proposal stage to being shovel-ready. Developers say they will invest in wind where legislators create policies dealing these issues: EU, Germany and Californian regulators have proposed fast-tracked wind permitting.
The US market offers wind backers an interesting mix of risk and reward. On the one hand, the Inflation Reduction Act is becoming a major driver for wind development discussions. On the other hand, sophisticated community opposition to wind farm development is increasingly frustrating.
Several observers warned of possible debt default by the US government, which raised the debt ceiling on 1 June to avert an economic tumble. A potential Trump re-election is another risk for the markets activated by the Inflation Reduction Act. One observer commented that a conservative victory could imperil the IRA, despite a conservative politician having been behind the production tax credit that is its primary instrument.
Russia's Rosatom Group has signed an agreement with the Myanmar government to develop wind farms with total headline capacity of 372MW.
The company is developing a 200MW project in Kyaukpadaung and Nyaung-U in the Mandalay region of central Myanmar; and projects totalling 172MW near Magway, also in central Myanmar. That 172MW is split between 116MW in Minhla district and 56MW in Mindon district
Renewables developer TagEnergy has raised €570m from Copenhagen Infrastructure Partners and Singaporean investor GIC through a green bond issue.
TagEnergy is looking to use the funds to support development of its 4GW portfolio of onshore wind, solar and battery storage projects in the UK, Europe and Australia.
China has dominated battery manufacturing, but ethical concerns about the country's lithium mines mean pressure is mounting on energy storage companies and electric vehicle manufacturers to source their batteries elsewhere
On the face of it, manufacturing, and indeed driving, electric cars as well as developing renewable energy projects might sound like vital parts of the strategy for protecting the environment, and indeed they often are. But, given that lithium-ion batteries power electric cars and are often used to store the energy produced by wind and solar projects, it is important for the energy storage and electric vehicle industries to give careful consideration to where exactly in the world the lithium-ion batteries they use are sourced from.
At present, the vast majority of lithium-ion batteries used in the world are made in China. Data shows that, in 2022, China had 893GWh of battery cell manufacturing capacity, representing a massive 77 per cent of the world’s total capacity. To put this in context, the country with the second biggest share was Poland, which had 73GWh of capacity, representing a measly 6 per cent of the world’s total.
Market observers predict that, by 2027, while China’s dominance of the battery cell manufacturing industry will have eroded slightly, it will still be producing the lion’s share – it is expected that, four years from now, China will have 6,197GWh of capacity, or 69 per cent of the world’s total capacity.
But the signs are that, from China’s perspective, this is an overly optimistic projection, especially considering that the Chinese battery manufacturing industry is beginning to encounter some significant headwinds. Earlier this year, it was reported that lithium-ore processing operations in Yichun in China’s Jiangxi province had been shut down due to a government investigation into infringements of environmental laws, including alleged incidents of pollution.
The impact of the shutdown on the Chinese lithium mining industry was significant. It is estimated that Yichun is responsible for around 10 per cent of the world’s lithium supply – as a result, the closure of mines due to the investigation was expected to cut the global supply of lithium by as much as 13 per cent in the month of February. It would be foolish to rule out further shutdowns in future – China’s president has said that the country must speed up green initiatives to “ensure the ecology and the environment are fundamentally improved by 2035”. Consequently, it seems highly likely that the lithium mining industry could face further scrutiny and closures as the Chinese government seeks to clean up its environmental reputation.
Sharp-eyed energy market observers will know that China’s lithium-ion production has long been tainted. While China scores highly in terms of access to the raw materials needed to manufacture batteries, as well as battery manufacturing facilities and levels of demand – indeed, it ranks first in each of these categories according to BloombergNEF – the country scores alarming poorly when it comes to the ESG [environmental, social and governance] aspects of battery manufacturing [see chart below].
The inexorable rise of China’s battery manufacturing industry is not assured. Questions about the ethics of using lithium-ion batteries manufactured in China for electric vehicles have been raised in the past and there is no sign of such controversy going away soon. For example, a report published in 2021 highlighted a number of ethical concerns with the manufacturing of electric vehicles.
It's also worth considering that, while China may have the upper hand in terms of battery cell manufacturing capacity, when it comes to reserves of critical battery materials, the picture looks different. China only produced 14 per cent of the world’s lithium (around 19,000 tonnes) in 2022, trailing Australia (which produced 61,000 tonnes, or just under 46.9 per cent of the global total) and Chile (which produced 39,000 tonnes, or 30 per cent of the global total). Meanwhile, China is heavily reliant on imports of cobalt for its battery manufacturing industry. In 2021, China was the biggest importer of cobalt in the world – the country was responsible for 77 per cent of the world’s imports.
Given China’s reliance on imported material for its battery manufacturing industry, China would have to give serious consideration to any plan to restrict, or end, the export of batteries to other nations. There have been suggestions that China could take the step of imposing a lithium battery export ban and while this could be possible in theory – and there have been instances of China placing export restrictions on critical minerals such as lithium and cobalt in the past – it’s hard to envisage a complete ban not putting China’s own battery industry’s supply chain at significant risk.
It seems certain that China’s dominance of lithium-ion battery manufacturing will be eroded, perhaps significantly, in the coming years. Indeed, last year Goldman Sachs forecast that the US and Europe could cut its dependence on China for electric vehicles batteries with more than $164.2 billion of capital expenditure by 2030. Specifically, this would involve the creation of a self-sufficient supply chain by investing $78.2 billion in batteries, $60.4 billion in components, $13.5 billion in the mining of lithium, nickel and cobalt, and $12.1 billion on the refining of such materials.
Which other countries could see an explosion in battery manufacturing capacity as the world seeks to ends its reliance on Chinese batteries? In addition to the US, the countries to watch are Germany, Hungary, Sweden, Poland and Canada. For example, lithium-ion battery cell manufacturer Northvolt – which has operations in Sweden, Germany, Poland and Norway – completed a $1.1 billion capital raise last year, while Hungary has been tipped to become Europe’s leading battery producer with predictions that the world’s top battery makers will invest $13 billion in gigafactories in the country. Meanwhile, in April this year, the Canadian government, in partnership with Volkswagen, outlined plans for a $14.8 billion battery gigafactory in St Thomas, Ontario.
China is undoubtedly the world leader in battery manufacturing at present. But ESG-related concerns surrounding its lithium mining industry mean purchasing batteries from the country could cause reputational damage for vehicle manufacturers and energy storage companies, with the result that these sectors will be increasingly under pressure to source their batteries from elsewhere.
Long-duration iron flow battery energy storage system manufacturer ESS and German energy provider LEAG have entered into an agreement to build a 50 MW / 500 MWh iron flow battery system at the Boxberg Power Plant site in Saxony, Eastern Germany, to be commissioned in 2027.
“The resulting 50 MW/500 MWh module is expected to become a standardised building block in LEAG’s plan to deploy 2-3 GWh of storage in the transformation of the LEAG power plant locations,” a statement said.
LEAG and partners plan to invest €200 million “with further support anticipated from additional investors and stakeholders”, the statement added.
LEAG is an operator of large-scale lignite mining and coal-fired generation in Eastern Germany that aims to transform the coal-dependent region into Germany’s ‘Green Powerhouse’. The company plans to develop 7-14 GW of renewable generation paired with 2-3 GWh of energy storage and 2 GW of green hydrogen production.
Oregon-headquartered energy storage platform provider Powin has entered into a 10GWh supply agreement with battery cell supplier EVE Energy.
The agreement will support a portion of capacity for Powin’s flagship project, the 1,850MWh Waratah Super Battery in Australia.
EVE will supply the LFP battery cells that are integrated into Powin’s ‘Centipede’ platform, and optimised by its proprietary ‘StackOS’ software.
Air Liquide has signed a 200MW deal to use electricity from China Three Gorges to power its gas production operations in China.
The electricity will come from CTG's wind and solar farms. The power purchase agreement is due to start in January 2024.
Indian developer Amplus Solar has picked GE Vernova to supply 40 turbines for a 108MW onshore wind project in India.
The project in Tamil Nadu is due to be commissioned by August 2024.
Commodities trader Vitol has placed a 139MW order with Vestas for 68 turbines for a repowering project in US state Pennsylvania.
Vestas is set to begin delivering the turbines in the second quarter of 2024. The project is due to be commissioned by the end of 2024.
Saudi-headquartered ACWA Power has signed a ‘roadmap agreement’ with the Ministry of Energy of Kazakhstan and Samruk-Kazyna, Kazakhstan's Investment Development Fund and sovereign wealth fund, for a 1GW wind energy and battery storage project within the Central Asian country.
This milestone provides a “clear direction for the formalisation of processes and paving the way for construction”, a statement said.
The project represents ACWA Power's entry into Kazakhstan, and with an investment tag of US$1.5 billion, marks the biggest Saudi investment in Kazakhstan's power sector to date.
Completion is scheduled for 2027.