Lithuanian developer Green Genius has picked Nordex to supply 11 5.7MW turbines for the 62.7MW Jurbarkas II wind farm in Lithuania.
The project is due to be commissioned in 2024. Nordex has also won a 25-year servicing agreement at the development.
Energy storage platform provider Powin has signed a 3GWh purchasing agreement with REPT BATTERO, a provider of LFP battery cells that is backed by China’s stainless steel and nickel company Tsingshan Industry.
“After undergoing a rigorous vetting and qualification process, REPT has been validated as a supplier for Powin,” a statement said.
“REPT’s LFP battery cells eliminate the need for cobalt while demonstrating a higher safety and performance profile than other lithium-ion chemistries.”
Long-duration battery storage company Energy Dome has closed a €40 million Series B funding round.
The financing round was co-led by Eni Next, the corporate venture capital arm of Eni, and Neva SGR, the venture capital arm of Intesa Sanpaolo, a European banking group.
Other investors included Barclays’ Sustainable Impact Capital, CDP Venture Capital, Invitalia, Novum Capital Partners and 360 Capital.
Also joining the round is Japan Energy Fund, while another participant was Elemental Excelerator, a US nonprofit investor focused on climate tech.
This financing round brings the total capital invested in Energy Dome to €54 million. Proceeds from this investment will enable Energy Dome to “enter full commercial scaling mode on a global basis”, a statement said.
North Sea nations are planning 300GW of offshore wind paired with green hydrogen production, but the power-to-X sector needs a plan to avoid bottlenecks and other obstacles.
The North Sea will become a green hydrogen production hub by 2050, powered by more than 300GW of offshore wind farms. That was the goal agreed by the leaders of nine European countries and the European Commission at a summit last week.
On Monday 24th April, the leaders of Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, the UK and the European Union met at the North Sea Summit in Belgian port city Ostend. Their goal was to set targets for the buildout of offshore wind and related industries, including power-to-X, and they did: 300GW of offshore wind would be a 12-fold rise from 25GW in operation today.
This capacity would be the foundation needed to build green hydrogen production in the North Sea, and investors in the green hydrogen sector would no doubt welcome the commitments from countries to achieve the ambitious targets.
The summit was also attended by the chief executives of more than 100 companies active in Europe’s offshore wind and green hydrogen sector. They signed an industry declaration where they backed the ambition to turn the North Sea, and other seas in northern Europe, into a powerhouse for renewable energy and green fuel production.
But while the group is supportive, they highlighted there would be major challenges to achieving these goals. Most of the issues discussed in the declaration focus on offshore wind, but any delays there would harm the green hydrogen side too.
1) Manufacturing bottlenecks
The biggest challenge was bottlenecks in the manufacturing process. The industry warned it was not big enough to produce the 20GW of offshore wind turbines that would be needed each year. This will exacerbate challenges with the production of cables, foundations, substations, transformers and vessels. The firms said they need support from governments to unlock investments in grids, ports and the supply chain.
However, the green hydrogen sector is facing challenges of its own. The makers of green hydrogen electrolysers are already experiencing growing pains as they look to expand their production capacity to meet growing demand, and would be forgiven for feeling angst at the huge targets. This part of the supply chain will need support too.
2) ‘Non-price factors’ in auctions
The industry also welcomed the proposal to include ‘non-price factors’ in auctions for offshore wind developments, which is an idea in the EU’s Net Zero Industry Act and the consultation in the UK on the future of Contracts for Difference (CfDs). The firms in the declaration said the factors should not just look at the supply chain, grids and biodiversity, but also cybersecurity, due diligence and projects’ ESG credentials.
For the green hydrogen sector, these ‘non-price factors’ must also look at the extent to which offshore wind could help support the commercialisation of green hydrogen technology. This could unlock further innovation in electrolyser technology, and help developers and investors in projects that have both wind and hydrogen components.
3) Rising costs for developers
The companies warned offshore wind companies have been delaying investments in new offshore wind projects in Europe because their costs have gone up 40% during the last two years, to the extent that they are no longer covered by project revenues.
They added that national interventions in some power markets have further driven up costs for developers, and the green hydrogen sector is not immune to the inflation in costs. The biggest issue we see here for green hydrogen is that investments in this technology need to be supported by investments in green hydrogen pipelines in the North Sea. There will be difficult questions how this infrastructure will be funded.
4) Skills shortages in renewables
Finally, the companies in the industry declaration said the offshore wind workforce in Europe needed to treble in size, from 80,000 people now to 250,000 people in 2030, and policies are needed to ensure the industry is financially viable. These people will be needed to attract the talented new workers to build and maintain projects.
This will be a challenge for green hydrogen developers too. The rapid expansion that is planned in green hydrogen will require massive growth in numbers of people who can develop, operate and maintain schemes. Therefore, any steps taken to fix skills gaps in the offshore wind sector must be matched in green hydrogen too.
These four challenges could de-rail plans to install 300GW of offshore wind in the North Sea by 2050, and any delays there would affect power-to-X too.
But this is a unified industry. Companies building green hydrogen capacity will be exposed to the risks that green power generation is not built on time, while firms in the offshore wind sector will also need to grapple with how to produce and transport fuels too. The ambitions in the North Sea plan need to be backed by policies – and, ultimately, they will only succeed if the private sector gets the support it needs.
Join us at our Financing Wind conference and our members-only Power-to-X Leadership Council meetings to discuss offshore wind and green hydrogen
US energy storage manufacturing has been boosted by the Inflation Reduction Act as the White House looks to close the gap on China
The enactment of the Inflation Reduction Act (IRA) last year has provided a significant boost to the US energy storage industry. New data from the American Clean Power Association shows that, since the IRA came into force on 16 August 2022, plans for a total of 4,415 energy storage-related manufacturing jobs have been announced in the ensuing seven-and-a-half months. To put this in context, this compares to a total of 3,370 wind industry manufacturing jobs (including 870 in offshore wind). In total, 46 new, or expanded, clean energy manufacturing facilities have been announced since the enactment of the IRA – of those, ten have been utility-scale battery storage manufacturing facilities, with another 10 in wind (including 2 focusing on offshore wind). But it is the solar industry that has been the big winner in the period, with 26 solar manufacturing facilities – and 9,895 jobs – announced.
It is unsurprising that the energy storage manufacturing sector has flourished since the arrival of the IRA. While the act extended existing investment tax credits (ITCs) and production tax credits that have driven growth in US wind and solar in recent years, it introduced a new 30 per cent investment tax credit for standalone energy storage projects with a capacity of at least 5KWh.
Upon the announcement of the standalone storage ITC, it was expected that it would drive significant growth in the sector in the same way the solar ITC kickstarted the US solar industry. So much so in fact, that there have been serious concerns in Europe that the attractiveness of the ITC will result in potential storage investors diverting their interest away from Europe towards North America.
It appears that the ITC has indeed given the US storage sector a shot in the arm. Arizona in particular has been a key beneficiary, with the state being seen by some – including Sandra Watson, president & CEO of the Arizona Commerce Authority, the state’s leading economic development organisation – as an “epicentre for battery manufacturing”. Notably, in December last year, American Battery Factory (ABF) announced that Tucson, Arizona had been selected as the site for the first in a planned series of battery cell gigafactories based in the US. The site will act as ABF's official headquarters and, measuring 2 million square feet, will be the country's largest gigafactory for the production of lithium iron phosphate battery cells, providing an estimated $1.2 billion in capital investment and $3.1 billion in “economic impact” to the state. Approximately 300 “high-paying” jobs will be provided in the first phase of the factory's opening, with a view to scaling up to 1,000 jobs.
Meanwhile, last month LG Energy Solution announced it will invest approximately $5.5 billion to construct a battery manufacturing complex in Queen Creek, Arizona. The complex will consist of two manufacturing facilities – one for cylindrical batteries for electric vehicles and another for lithium iron phosphate pouch-type batteries for energy storage systems. It represents the largest single investment ever for a stand-alone battery manufacturing facility in North America. The reason for LG’s investment was that there is a rising demand from EV makers in the US for locally manufactured batteries. This is due to the need to satisfy the criteria for the IRA’s EV tax credits, which include requirements related to final assembly in North America – the objective being to promote the development of local supply chains.
South Carolina has been another major winner in the US’ recent energy storage manufacturing boom. This is unsurprising given the state is seen in some quarters as the number one US state for manufacturing. Location advisory services provider Site Selection Group says among the benefits of South Carolina are its infrastructure – for example, five interstate highways run through the state, including I-95 which runs North to South, all the way from Maine down to Florida. I-95 is considered the busiest highway in the US for truckers and spans 15 states (therefore crossing through more states than any other highway). In addition, South Carolina now boasts the deepest port on the US east coast – the Port of Charleston is now 52 feet deep and can be utilised at any time and at any tide. Completed in 2022, the port spans 40 miles from the ocean through the inner harbour to connect three container terminals. Its turning basins have been widened so ships can pass each other or turn around more easily.
The appeal of South Carolina was not lost on energy storage sector manufacturers. Last month, Albemarle Corporation announced plans to locate its lithium hydroxide Mega-Flex facility in Chester County, South Carolina with the creation of 300 jobs. Plans for the facility include an initial investment of at least $1.3 billion to “help meet the surging demand for domestic and international electric vehicles and lithium-ion batteries”. Albemarle expects the facility to annually produce approximately 50,000 metric tonnes of battery-grade lithium hydroxide, with the potential to expand up to 100,000 metric tonnes. Albemarle said the site would support the objectives of the Inflation Reduction Act, specifically incentivising the “localisation of critical minerals in North America”. Meanwhile, in December last year, Pomega Energy Storage Technologies announced plans to build a 3GWh-capacity lithium-ion battery factory in Colleton County. The $279 million facility will exclusively target the grid-scale energy storage market and create approximately 575 new jobs. Located in the Colleton Industrial Campus, near Walterboro, Pomega Energy Storage Technologies’ new facility will not only manufacture lithium-ion battery cells, but will also produce the modules and other elements of the company’s containerised energy storage solutions.
There can be no doubt that the US is serious about scaling up its battery manufacturing capacity. As the White House has highlighted, the IRA, combined with the Bipartisan Infrastructure Law (which seeks to invest in the US’ infrastructure and economy), and the CHIPS & Science Act (which aims to catalyse investments in domestic semiconductor manufacturing capacity) will invest more than $135 billion to “build America’s electric vehicle future, including critical minerals sourcing and processing and battery manufacturing”.
By the end of the current decade, the US will have made a significant step towards closing the gap on China when it comes to lithium-ion battery manufacturing. This a key concern of the US government – the White House has lamented the fact that China currently controls much of the critical mineral supply chain, while the lack of mining, processing, and recycling capacity in the US “could hinder electric vehicle development and adoption, leaving the US dependent on unreliable foreign supply chains.” Projections from S&P Global show that in 2030 the US’ lithium-ion battery capacity will have grown to 620GWh – by way of comparison, in 2021, it stood at 38GWh. This means that, by 2030, the US’ lithium-ion battery capacity will be around one fifth that of China, which is expected to hit 3,448GWh by the end of the decade.
In 2030, China will certainly still be the dominant force, but considering that, in 2021, China’s lithium-ion battery capacity (685GWh) was around 18 times bigger than that of the US (38GWh), the signs are that, by the end of the decade, the US will have increased its share of the market considerably.
Trafigura-backed developer PASH Global and renewables investor ERIH Holdings have formed a 50:50 joint venture to develop 5GW of green hydrogen and ammonia projects.
The first two fuel projects are set to be located in Italy and Turkey. The venture's green hydrogen and ammonia production projects would be backed by 10GW of solar, wind and geothermal electricity generation in Italy, Spain, Turkey, Greece, Serbia and Colombia.
Lithium-ion battery cell manufacturer ElevenEs has opened what it says is Europe's “first LFP [lithium iron phosphate] battery cell manufacturing facility" in Serbia.
The production site, located in Subotica, will specialise in producing LFP prismatic cells which are shipped to customers for sample A and B testing across a variety of applications, including electric cars, buses, trucks and energy storage systems.
The industrial facility will expand to become the company’s Mega-Factory in 2024, producing 500MWh.
ElevenEs plans to eventually open two gigafactories: Giga-I producing 8GWh by 2026 and Giga-II producing 40GWh by the end of 2027.
Poland plans to hold 12GW of offshore wind auctions for sites in the Baltic Sea between 2025 and 2031, a government minister said yesterday.
Anna Łukaszewska-Trzeciakowska, undersecretary of state for climate and environment in the Polish Government, today the WindEurope conference in Copenhagen that Poland wanted to grow offshore wind in its waters to 18GW.
She said the country was planning 4GW auctions in 2025 and 2027, and 2GW auctions in 2029 and 2031. This would be in addition to almost 6GW already tendered.
Ocean Winds, Sumitomo Corporation and la Banque des Territoires have achieved a €2.7bn financial close at the 496MW Dieppe le Tréport project in French waters.
The firms announced that they have taken a final investment decision to build the offshore wind farm, which is due to be commissioned in the second half of 2026 in the English Channel. Siemens Gamesa is supplying the turbines.
German energy storage provider INTILION has received a 58 MWh order from PASM Power and Air Condition Solution Management GmbH (PASM), a fully owned subsidiary of Deutsche Telekom.
INTILION ‘scalecube’ large-scale storage units are to be used at three locations for frequency balancing and balancing services. The installation will be front-of-the-meter.
Energy storage systems with a capacity of around 26 MWh are to be installed at locations in Hanover and Bamberg, and a further 6 MWh at a site in Münster. Trial operations will start in the third quarter of 2023 and will transition to regular operations by the end of 2023.
Commissioning is planned to take place by the end of 2023.
Colorado-based virtual power plant developer Maplewell Energy and rechargeable zinc battery manufacturer Urban Electric Power have agreed a strategic partnership with the goal of providing commercial and industrial customers with a turnkey battery energy storage system combined with Maplewell’s ‘JANiiT’ energy management system.
“The solution will deliver demand charge management, demand response, and other grid services with load shifting, shedding, and modulation,” a statement said.
Maplewell says JANiiT provides “real-time demand charge management and demand response” for commercial and industrial buildings up to 250,000 square feet in size.
Urban Electric Power says its zinc manganese-dioxide batteries are rechargeable for “ten years or more”.
US-headquartered Standard Solar has acquired the Knox Solar + Storage project from developer EDF Renewables North America.
The project consists of 1.5MW of solar and 2MWh of battery storage. It will directly supply the Acton Water District’s microfiltration treatment plant in Massachusetts.
The system is expected to generate approximately 1,872 MWh of clean energy each year, enough to power nearly 200 Massachusetts homes for one year and offset the carbon dioxide equivalent of burning more than 700 tons of coal in one year.
This project is the second solar installation Standard Solar owns and operates for the Acton Water District. The first is the 4.7 MW solar and 4 MWh storage Lawsbrook Project, also developed by EDF Renewables. The system was constructed on land owned by the Acton Water District, previously disturbed from gravel extraction and part of the W.R. Grace Superfund Site.
US company HIF Global has secured a key environmental permit for its planned Matagorda e-fuels production facility in Matagorda County, Texas.
The facility is set to produce carbon neutral transport fuel by combining green hydrogen with recycled carbon dioxide. HIF said the Matagorda facility would be able to produce around 200,000million gallons of 'green' fuels annually from 2027.
Developer CWP Europe has teamed up with Power China Resources to develop the 300MW Vetrozelena wind farm in Serbia.
The companies are due to complete the 48-turbine project in 2025. It is due to be Serbia's largest wind farm.
Norway's energy regulator NVE has unveiled plans for 20 areas off its coast that could accommodate up to 30GW of offshore wind capacity.
This announcement provides further clarity on how the Norwegian government intends to achieve 30GW of installed offshore wind in the country's waters by 2030. Last month, the government kicked off tenders for its first utility-scale offshore wind farms
European countries are poised to use Contracts for Difference as the default way they award support for new renewables projects, but policymakers must also learn lessons from the UK experience.
Governments in Europe will have to use Contracts for Difference (CfDs) to support new renewables projects. That was one of the main headlines when the European Commission last month set out planned changes to Europe’s electricity market.
The Commission wants to replicate the success of the UK, which has used CfDs to support growth in offshore wind capacity from 3.7GW in 2013 to over 13.7GW now.
CfDs are a revenue stabilisation mechanism where developers agree a strike price with government, usually via auction, for electricity generated at their projects. If the price of electricity on the open market is lower than the strike price, the owner of the project receives a ‘top up’ payment from government. When the price of electricity on the open market is higher than the strike price, the owner pays back the difference to government. This has given developers financial certainty at their projects.
However, the news that the EU is going ‘all in’ on CfDs comes at an interesting time. Last Monday, the UK Government announced it was considering changes to CfDs so they do not judge projects solely on the strike price, but other ‘non-price factors’ too: support for the supply chain, fixing skills gaps, energy security, and so on.
This is a timely review. CfDs have done well at getting offshore wind built in the UK, but they have not attracted universal acclaim. European policymakers have already been looking at how they can add 'non-price factors' into the CfD process in the recently-proposed EU Net Zero Industry Act. But they would do well to follow the results of the ongoing consultation, which closes on 22nd May. This should give a good gauge of industry sentiment on CfDs.
CfDs have encouraged competition in the offshore wind industry that has helped it to achieve commercial maturity and go global. But there have been criticisms too.
The main one is that CfDs have encouraged a “race to the bottom”. Developers have won at lower strike prices and have had to pass on those cost reductions, leading to pressure through the value chain. It is no surprise that offshore turbine makers have been struggling financially in recent years while grappling with this pressure.
This fixation on low prices has led to business failures too. For example, in late 2020, Scottish engineering firm BiFab entered administration because it argued it had been unable to win work at UK offshore wind farms due to overseas competition.
This is not solely a CfD problem. It would be an issue for any mechanism that gives support to whoever can deliver projects the cheapest. Even so, it is an issue that we have been talking about for the last five years. A major review is long overdue.
The volatile economic situation in the last 18 months has highlighted another issue with CfDs. Developers and governments agree a strike price in an environment that may be very different than when the project gets built. Both sides can suffer.
In early 2022, the issue in the UK was of developers delaying the start of their CfDs so they could benefit from high power prices on the open market. This has not yet been matched by inflation, and the UK Government urged them to act “fairly”.
However, this year, the script has flipped and now the developers are complaining. Power prices are still high, but the cost of building offshore wind projects has been rising fast too. Their CfDs have been inflation-linked, but this has prompted firms to argue that they need more government financial support to make projects viable.
The most notable example is Ørsted’s 2.9GW Hornsea 3 project. This project won a CfD in July 2022 following a process that started in December 2021, but Ørsted says this does not match the current market reality. This UK may not be able to fix this: will always be a gap between when CfDs are signed and when the contract starts. Even so, picking winners solely based on price can only exacerbate the pressure.
The idea of judging projects on ‘non-price factors’ is not totally new. Bidders in the ScotWind seabed leasing auction had to include details of investments they would make in the local supply chain, and it may be the UK Government looks to follow a similar approach in CfDs. This is a sensible step, even if it creates more admin.
However, our big reservation so far is about the government’s motivation.
We want to be optimistic. We want to believe the UK Government is seeking to end the myopic focus on cheapness, so it can support a healthy wind supply chain. This would return economic benefits to communities and boost support for offshore wind.
But the pessimist in us can’t help but wonder whether this review is simply a way to keep strike prices down, while getting already-stretched offshore wind companies to make additional commitments to investment that would further raise costs.
For now, though, let’s be optimistic. We’ll keep a close eye on the consultation, and no doubt this will excite a lot of discussion at our Financing Wind event next month.
Eneco and Shell joint venture CrossWind has picked Oceans of Energy to install a floating solar farm at its 759MW Hollandse Kust Noord offshore wind project.
The offshore wind project in the Dutch North Sea is due to be operational by the end of 2023, and floating solar capacity is due to be commissioned in 2025. CrossWind said this would be the first project to trial the use of floating solar in harsh sea conditions.
Jilin Electric Power has picked Longi Hydrogen as electrolyser supplier for a major green ammonia demonstration project in China.
Longi Hydrogen is set to supply its electrolyser technology for the Da'an Wind & Solar Green Hydrogen Synthesis Ammonia Integration Demonstration Project at the Clean Energy Chemical Industry Park in Western Jilin, northeast China.
The Da'an project is set to include 800MW of wind and solar capacity; 40MW/80MWh of energy storage; and a green ammonia with the capacity to produce 180,000 tonnes of green hydrogen each year. The project will use both alkaline and PEM electrolysers.
Corio Generation and Norwegian firm Å Energi have formed a joint venture called Nordvegen Vind to develop an up-to-1.5GW offshore wind farm in Norway.
The companies have formed Nordvegen to develop a utility-scale offshore wind farm in the Utsira Nord area off the southwest coast of Norway. The country's government has opened to licensing applications for up to 1.5GW of offshore wind capacity in the area.
Hibiki Wind Energy has ordered Vestas turbines for the 238MW Kitakyushu-Hibikinada offshore wind project in Japan's Fukuoka prefecture.
The order includes the supply and installation of 25 9.5MW turbines, and a long-term service agreement. The project is due to be commissioned in 2025.
Scottish energy storage technology company Verlume has secured a total of £7.2million in fund its expansion.
Verlume’s flagship product Halo is a subsea battery storage system which stores power generated from intermittent renewable energy sources like wind power.
Verlume has identified offshore wind as a significant opportunity for growth.
The Scottish National Investment Bank provided £6.6million of the funding. An additional £600,000 was raised via an offer to existing Verlume investors to boost their equity stake - this was managed by Edinburgh-based venture capital firm Par Equity.
Swedish developer Eolus Wind has sold a 5% stake in its 1GW Västvind offshore wind development in Sweden to the Gothenburg Port Authority.
Eolus has retained a 95% stake in the project and is set to apply for permits in 2023. Construction is due to start in 2027 with commissioning planned in 2029.
Cleantech integrator Ameresco and energy project developer Sunel Group have joined forces to bid for more than 1.5GWp of solar and energy storage projects in the UK, Greece, Italy, Spain and Romania.
The projects, which are currently in the bidding phase are expected to exceed $500M in contract value.
Ameresco and Sunel Group have established Ameresco Sunel Energy S.A., which has already been selected by European solar energy developer Cero Generation as the contractor for “Delfini”, a 100MWp solar photovoltaic (PV) project in Greece, currently in the construction phase.
German utility RWE has formed a joint venture with UK energy infrastructure company Kellas Midstream to develop green hydrogen projects in the UK.
The companies have signed a memorandum of understanding to co-develop major green hydrogen production facilities in Teesside in the northeast UK. RWE is looking to develop 2GW of green hydrogen projects in its core markets by 2030.