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Planning refusals are an occupational hazard in a sector like wind. Even so, it is galling for an investor when a scheme it thought was finally on track misses out on the vital consent.

Irish developer Element Power knows how that feels.

This month, it saw its planned €240m Emlagh wind farm in County Meath in the Republic of Ireland refused permission by An Bord Pleanala, the Irish planning body. ABP refused consent for the 140MW scheme due to its impact on the landscape, even though an inspector previously said it should be approved. This should be a concern for investors looking to get into the Irish market.

It has been a battle for Element to get this far. Emlagh was meant to be part of the developer’s planned Greenlink interconnector, which would have enabled Element to export power from Ireland to the UK. Greenlink stalled last year as Ofgem cast doubts on whether it should be allowed to proceed, and a consultation period of more than a year is due to close this September.

Despite this, Element still wanted to push on with Emlagh. But it faced serious local opposition. The 46-turbine scheme was also the subject of a five-week public hearing last summer, as well as a case in Ireland’s High Court. Now ABP has torpedoed the project — and we do not yet know if Element plans to keep battling.

The interesting element here is that the Emlagh refusal appears to be symbolic of a wider antipathy to wind farms from the Irish government. We have spoken to a number of UK developers and investors who are looking to grow in Ireland to escape the hostility of the UK government to wind. Emlagh suggests things are little better over the Irish Sea.

We are well aware of the anger among many in rural Ireland about wind farms, and some of it seems fair. We would not like to see our country ruined to power our neighbour over the Irish Sea. But wind can also play a key role in meeting Ireland’s own energy needs.

The problem for investors is that the Irish government now appears to be siding with those who shout loudly about the damage that wind turbines do to their health and homes. In September, the government revealed new planning guidelines specifying that wind farms could not be built within 600m of private homes, up from the current 500m. It may not look like a big difference but it would still rule out huge swathes of the country from wind developments.

And a row has blown up this month between environment minister Alan Kelly and energy minister Alex White over a plan by Kelly to further increase this setback distance, to 1km.

White says this would have an “adverse impact” on wind, and “probably mean there won’t be any more wind farms”. This is a fundamental argument that investors cannot ignore.

We see the appeal of Ireland for investors. The Irish Wind Energy Association said that Ireland generated 24% of its electricity from indigenous wind farms in 2015, which is the third highest figure globally, and could do so much more.

But this progress has been made with the current rules, and would certainly falter if a 1km setback rule were to be enforced. It is now up to Ireland’s cabinet to decide. It would take a bold developer — or a foolhardy one — to move into Ireland until that is decided.

Oil giant BP is at the sharp end of the oil price rout. The company this month reported its largest ever annual loss — $6.5bn — and said it would cut 7,000 jobs by the end of 2017. If there is anyone who has to think hard about the future of world energy, it is BP.

We feel sorry for people at risk of losing their jobs, but BP's management is as much to blame as the oilmen in Saudi Arabia. BP was once a leader in renewables, but has bet the house on fossil fuels over the last 25 years. We’ll come back to that later.

That is why its 2016 ‘Energy Outlook’ makes more interesting reading than usual. This is BP’s attempt to forecast how the energy landscape might evolve over the next 20 years, including the role of renewable energy. The report identifies three key trends.

First, it says global energy demand will continue to grow. Not much surprise there given that the world population is 7.4 billion now and set to reach around 8.8 billion in 2035; and we are seeing growing demand across Africa, the Americas and Asia. Manufacturers may become more energy efficient, but demand will keep growing.

Second, it says that carbon emissions will grow throughout this period, but at a slower rate than in the last 20 years. BP says this shows that more action is needed to curb emissions on top of pledges made at COP21 talks in Paris, including carbon pricing.

And third, it says that the fuel mix will keep shifting over the next 20 years. BP predicts fossil fuels will remain the dominant sources — well, it would do! — and account for 80% of the world’s total energy supply in 2035, including 60% of the new demand. In contrast, it says all renewables would only supply 9% of all energy in 2035.

But that headline figure hides some relatively bullish predictions for renewables. For one thing, that 9% is three times the current level; and also means that total capacity is set to grow fourfold by 2035.

It says the main driver for this growth will be big cost reductions in renewables, with the cost of onshore wind set to fall 25% over the next 20 years and solar 40%. And it says that renewables will meet one-third of new energy demand over the period.

As BP chief executive Bob Dudley writes: “Renewables are set to grow rapidly, as their costs continue to fall and pledges made in Paris support their widespread adoption.”

The report adds that the big challenge for renewables will be integrating them into the grid. If sources like wind and solar are to provide one-third of power generation in the European Union by 2035 then integrating them into the grid will “become an increasing constraint”. It shows why it is important for wind investors to keep pushing to develop new storage.

It also shows some serious holes in BP’s strategy.

Last year, the Guardian reported that BP slashed its investments in renewables over the last 25 years. In the 1980s and 1990s, the firm invested billions in clean energy projects, including solar power, wave power and energy efficiency; but, in 2015, only a fraction of its investment globally was outside fossil fuels.

That is fine while oil prices remain high but not when they drop sharply, as they have done in the last two years. One of the biggest risks for any business is assuming that things will remain the same. The oil and gas sectors have been reminded that this is not true.

But we have no doubt BP will adapt. It will have to. And who knows, perhaps its positive view on renewables will force it back into a part of the energy sector in which it was once a leader.

Let’s stop waiting for a breakthrough year for energy storage. We didn’t get one in 2015, we won’t get one in 2016, and we won’t get one in 2017. It just won’t happen.

Now hear us out. We know how crucial energy storage is for the wind and solar sectors. One of the last big criticisms of wind farms is that they cannot generate energy when it is needed, and breakthroughs in energy storage will help to fix that. We get that.

Our problem is that a lot of wind investors seem to be waiting for a single ‘big bang’ moment before they start adding storage to their schemes. More of them need to get involved now.

You see, we like to view energy storage as a Holy Grail, but it isn’t actually that special. It is like most other sorts of technology. It evolves gradually and we think it is unlikely there will be one moment when the technology leaps ahead and it suddenly makes sense for investors. Even Apple’s groundbreaking iPhone was the result of the company evolving the iPod.

And this is why we need more firms in the wind sector to invest in the technology now. Not all of them will back the best types of storage — but all of them can help us to learn more.

That is why we are happy to see a diverse set of high-profile wind firms looking to invest in storage. In December, Deepwater Wind and GE announced that they are planning an offshore wind farm with storage; E.On and Samsung set up a storage joint venture; and they joined the likes of Enel Green Power and Siemens that are already active in storage. All of this work may look piecemeal, but it should all play a key role in making wind-plus-storage viable.

Wind can also learn from solar, which has a slight lead in the rollout of energy storage.

The main reason that solar-plus-storage is ahead is that the technology now exists to both generate solar power at a domestic level and store it.

Last year, Tesla founder Elon Musk launched his home battery storage system Powerwall, and this enables homeowners with solar panels on their roof to store energy generated by those panels. In fact, last week he teased the launch with a second-gen version of the technology. Making and storing power in the home
is a crucial step to rolling out the systems on larger schemes.

Wind does not have that. Domestic solar has grown far quicker than domestic wind, and that means there are fewer opportunities to pair up storage with small wind schemes. As storage becomes able to deal with larger schemes then wind will surely catch up.

And this is why we need more large wind companies to make high-profile investments in storage.

It will help to develop storage technology that is suitable for wind farms, which is crucial to ensuring the long-term health of the wind sector; and it will help to demolish the arguments of those whose main criticism of wind farms is that they are unreliable.

There will not be a big storage breakthrough in 2016 that proves unequivocally that wind has solved its issues with storage, and investors should not wait for one. Rather, they should support the continual small breakthroughs that are helping edge wind towards the best solutions.

Growth in wind energy in Iran is set to stall before it even starts.

On 17 January, international sanctions against the Middle Eastern nation were lifted after a nuclear watchdog confirmed that the country has scaled back its nuclear programme. The decision has unfrozen $100bn of Iran’s assets and means that it can now export oil. It also means that those living in countries in Europe, Asia and North America are free to invest in Iran and trade with it again.

This has been celebrated in Iran, and the country's president Hassan Rouhani has been in France and Italy trying to drum up business. In the wind sector, the relaxation of sanctions has led to countries including Denmark, Germany and Spain all expressing an interest in supporting the growth of wind energy in Iran, which is looking for 5GW of wind and solar projects by 2018.

Businesses such as Suzlon, among others, have also expressed an interest in the country's promising wind sector.

But here’s the catch. The development of a wind sector in Iran is likely to be slow and may not happen at all. We are already seeing the European Union and US mulling new sanctions.

This means that the current relaxation of sanctions against Iran is not guaranteed to make wind investments in the country safe. Let’s say a wind developer were to start work on a project in the country today. It would still need to gain funding, buy turbines, find external contractors and then sell the completed scheme. At each of these stages it has to complete new deals — but there is no guarantee that sanctions will remain lifted for the next few years.

It would, therefore, take a brave investor to start work on a wind farm in Iran at this time. Will many firms want to take the risk of starting a project in a country only to find that fresh sanctions have made it impossible for them to buy the turbines they want? That affects the viability of the projects, the returns they can get from it, and ultimately how much they can sell it on for.

In short, disruptions like that can turn the financial framework of a new wind farm on its head and jeopardise any future development.

And there is a very real prospect of sanctions being reintroduced. France and the US are concerned about recent missile tests, which critics say show that Iran still harbours plans to build nuclear weapons. Iran said the tests were peaceful — but, even if they are, they are already doing damage to a fragile truce.

The other difficulty for wind developers and investors focused on Iran is that their enthusiasm for the country may not be shared by banks and other financial institutions. Western banks quit Iran after sanctions were imposed in 2012 and it will take time to encourage those businesses back. This will make it harder for developers to secure the debt they need to build schemes.

Likewise, many Western export credit agencies have left the country, and these can be a key source of funds as well as peace of mind for suppliers selling products in emerging markets. The guarantees they provide can make the difference between a supplier going ahead with a deal and deciding to back out.

This is, of course, hugely frustrating for Iranians who hoped that the relaxation of sanctions would end years of isolation and kickstart a golden era of growth in Iran. Sadly for them, years of mistrust will take years to heal — if, indeed, they are to heal at all.

For most wind companies in the sector, we think, Iran will remain a case of ‘wait and see’.

And the world’s undisputed wind turbine manufacturing champion is… well, nobody…

There is a handful of large companies out there, of course. In terms of market share, the likes of GE, Siemens and Vestas are slugging it out at the top. But we could not single out any of them as being the undisputed turbine-making champion.

Now Siemens is looking to step up the fight. It is reportedly working with Deutsche Bank to determine if it could create a manufacturing giant with Gamesa. It is eyeing possibilities including a takeover of the Spanish firm, and is in talks with Gamesa’s largest shareholder, Iberdrola, which owns a 19.7% stake.

Meanwhile, we understand Gamesa is talking to investment banks to advise it about any deal. Both sides will have much to discuss.

So far there has been little by way of official comment from either company. Siemens has declined to comment, while Gamesa said in a regulatory filing that it “regularly analyses the different strategic options that are presented to the group” but has made no decision. Analysts have valued a takeover in the region of €4bn-€5bn.

So there is plenty left to do, but there is a very good chance that the German firm will launch a bid. Talks like this rarely become public unless there is some truth in them.

And there is also a good chance that the pair could reach a deal. We see a lot of parallels here with the €785m acquisition by Nordex of Acciona’s wind arm, which is set to complete in spring. That transaction is subject to approval by competition authorities.

On the most basic level this is also a German company looking to buy a Spanish company. The business cultures may differ between those two countries, but the fact is that paralysis in Spain’s wind market has forced Spanish firms into emerging markets. That makes them good targets for Germans, who have benefited from a strong domestic market but are now looking to diversify further.

For example, Gamesa would give Siemens a strong foothold in markets like Latin America, where the potential for wind in some countries is good despite the region’s wider slowdown. Gamesa is also in India, and the largest overseas turbine supplier in China. This would help the German firm's existing overseas moves.

There is also a good fit in terms of sectors. Both companies are active onshore, though it is offshore where we see most intrigue.

Siemens is the market leader offshore despite a strong recent showing by MHI Vestas. If the German giant were to buy into Gamesa then it would also get a stake in Adwen, the offshore tie-up between Areva and Gamesa. That should bolster Siemens in the nascent French offshore sector and the market as a whole.

A challenge for Siemens would be making sure it does the deal at the right price. The recent buyout by Centerbridge of Senvion suggests a price of at least €4bn, but Siemens may end up going closer to €5bn if it is to convince its target’s existing investors.

Now, let’s assume an offer is made imminently and accepted. Our big question then is how long it takes to get approval from all of the competition authorities. If Siemens bought Gamesa then it would give the firm a 15% market share, compared to GE’s 11% and Vestas’s 10%. That would certainly give competition authorities food for thought, and so we think it is unlikely that any deal would close before the first quarter of 2017.

Plenty to consider, then. Now we need Siemens and Gamesa to show their hands.

Why is a big nuclear decision a lead story in A Word About Wind? It is a fair question. Not a question that anyone has actually asked us, mind you, but a fair one nonetheless, so let's pre-empt it.

On Wednesday, we reported that French utility EDF has again delayed making a decision on whether to build the £18bn Hinkley Point C nuclear power station in the UK. Investors and unions have raised concerns that it would put EDF’s survival in danger.

There is no doubt that this is a huge story for the energy market. EDF brands itself as the world’s biggest energy generator, with 38.5million customers and annual sales of €73bn, which means that any existential threat is serious. But still, why is it a wind story?

The short answer is ‘EDF Energies Nouvelles’, which EDF says is the largest producer of renewable power in Europe. Clearly, EDF EN’s future is closely tied with that of its parent.

And now for the long answer...

EDF EN has a 7.9GW portfolio of wind and solar projects globally, and it operates in Europe and North America with further activities in key emerging markets including Brazil, India and South Africa. It is in 18 countries in total, and this week grew its presence in India by signing a deal to form a 50:50 joint venture with Sitac Group. This joint venture is set to be EDF EN’s subsidiary in India and it plans to install 142MW by the end of 2016.

All this makes EDF EN a major player in renewables, but it is also a small part of the EDF business. Overall, 77% of EDF’s energy mix is nuclear, with 8% fossil fuels, 7% hydro and 6% combined cycle and cogeneration. The last 2% is wind and solar. If its board goes ahead with Hinkley Point C then it shows nuclear is a cornerstone for years to come, and makes it more likely that EDF could retrench from other sectors if financial problems come along.

And the funding worries are real. EDF is reportedly struggling to raise the money it needs to build Hinkley, and has a construction schedule of nine years for a scheme that would usually take 10-15 years. Any delay would incur fines, so there is a big chance it could end up in a deep financial hole — and this raises the likelihood of it looking to sell off its subsidiaries to balance the books.

If there are problems with Hinkley then EDF would surely consider its options for EDF EN, of which we see three.

The first option would be selling out completely. If EDF EN came to the market today then it would surely attract interest from investors for all or parts of it, including the likes of E.On and RWE. There will always be those looking to grow their portfolios at the right price.

The second option would be a joint venture. This is a method favoured in the wind sector by other French firms. Areva has formed its joint venture Adwen with Spain’s Gamesa, and Alstom has formed a wind joint venture with GE as part of the sale of its energy assets that was concluded in November 2015. Following a similar model would help EDF raise funds by selling a stake in EDF EN while still giving it a foothold in renewables.

In fact, EDF EN chief executive Antoine Cahuzac has hinted that he would like a tie-up with GE-Alstom.

And the third option would be a management buyout, although we could only say that this is a serious contender when we know who is running EDF EN at the time of reckoning, if that time comes.

For now, this is speculative of course, but it shows that there are wider risks for EDF's renewables arm if it goes ahead with Hinkley.

The EDF board will get its next chance to decide on whether to proceed with the £18bn project on 16 February. They will not want to commit to a project that would send EDF into a death spiral.

It has been a tough six months for US renewables giant SunEdison.

It has been a tough six months for US renewables giant SunEdison.

The company started 2015 by making a big push into wind by completing a $2.4bn buyout of US developer First Wind. It followed up by announcing a series of acquisitions across the world so it could grow in wind in emerging markets. But it has since pulled out of most of these deals after investors expressed concerns about its plans, and shareholder interest in US yieldcos has fallen.

And now another deal is in doubt.

Last July, SunEdison announced it had signed a memorandum of understanding with Spanish firm Gamesa to work together on wind farms totalling 1GW by 2019, with a contracts due to be signed by the end of last year. The idea was that SunEdison would finance the projects and then one of its yieldcos would buy the finished wind farms, with Gamesa providing turbines and building expertise.

But that deadline has passed with no deal, and now a Gamesa spokeswoman has confirmed that “negotiations with SunEdison have not advanced”. Given that SunEdison is seeing major pressure on its finances and its yieldcos are not on the acquisition trail, this is of no surprise. It would be no great shock to us if this plan was allowed to wither and die. But with what effect on the companies?

From SunEdison’s perspective it would make sense if this deal didn’t happen. The business is retrenching from wind in emerging market to focus on wind and solar in established markets. A major tie-up with Gamesa for projects in Mexico and India does not fit neatly into its new plans.

And this could be the best result for Gamesa too. The spokeswoman has said that the company has not included the planned joint venture in its 2015-2017 strategic plan and, while questions remain about SunEdison’s strategy, we do not expect Gamesa to push for anything to complete. This is a deal that could well look like more trouble than it is worth for the Spanish business.

After all, there is no sense building projects for a yieldco that might not be able to buy them.
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For more on SunEdison’s plans for wind, check out our special report Finance 2015

The UK's prime minister David Cameron has a track record of mismanaging big votes.

It may sound strange to say this of a leader that has delivered his Conservative Party the largest share of the popular vote in two general elections, but hear us out. Labour did not provide much in the way of a credible alternative in either election.

However, when faced with a strong opposition as in the Scottish independence vote of 2014, he was far less assured.

And yes, Cameron did get the result he wanted in that Scottish devolution referendum, but it came after a panicky flurry of last-minute promises. This is what we have to look forward to when the UK votes on membership of the EU in either 2016 or 2017.

This is what makes the UK referendum on membership of the European Union such a high-stakes game for the wind sector.

If the UK votes to leave — the so-called ‘Brexit’ — it would free the country from EU renewable energy targets and mean that the UK government can make much deeper cuts to subsidies for wind and solar. It has already shown that it prefers nuclear and fracking to wind or solar, and has only offered conditional support to the offshore wind sector in which the UK is a global leader.

The result of a Brexit decision could be devastating for those working in the UK wind sector. The UK has its own climate change act, introduced in 2008, so it would still need to cut emissions, but we would expect to see less priority on renewables including wind as the way to achieve this. Moving out of the EU could also weaken London’s role as a world financial centre.

And the effects would extend to those working in other European nations. If the UK left the EU then it would have to renegotiate international power trade deals with nations including France, the Netherlands and Norway. A Brexit decision may also lead to changes in the EU’s other ‘green’ policies and targets, although the focus on renewables including wind would remain.

Currently, this rests on David Cameron, who is in a tougher position than he was with the Scottish vote back in 2014.

Cameron wants to stay in the EU, but he has to fan just enough anti-EU sentiment so he can use the threat of ‘Brexit’ to win concessions from the EU. He wants to campaign to stay in the EU, but he also has to let anti-EU voices in his cabinet campaign to leave. He has to criticise the EU now, but then ask people to vote to stay in at a referendum in either 2016 or 2017.

And the campaign to leave will be formidable. The eurozone crisis, the migrant crisis and the other ways the EU affects people’s lives — both in real and imagined ways — will fuel the ‘out’ campaign. The anti-EU campaign should also find it easier to mobilise voters.

We are still confident that the UK people will vote to stay in the European Union, but it will be one hell of a close vote, and will tell us if Cameron is a highly-skilled political operator, or just lucky.

If he is not the former then wind could get caught in the crossfire.

Saudi Arabia is in a hole deeper than most of its oil wells.

Over the last year, the Middle Eastern oil giant has kept up high levels of production even though demand has been slowing in key markets such as China. This has driven down oil prices to around $30 a barrel, which has enabled it to put significant pressure on political rivals such as Iran and Russia as well as other energy sources, including the US fracking industry.

The problem is that these low prices are also unsustainable for Saudi Arabia, which has a budget deficit of $100bn. In response, it is looking at measures including cutting subsidies that keep water, electricity and petrol prices very low; and has also confirmed it is looking to list part of state-owned oil company Aramco, which is the largest company in the world and valued at anywhere between $1trn and £3trn. This is one of Saudi’s crown jewels.

But the problems that Saudi Arabia is facing is also opening the door for the introduction of clean energy projects in the country.

Historically, Saudi Arabia has kept renewable energy at a distance, which is hardly surprising for a nation that is so dependent on fossil fuels. The government established the King Abdullah City for Atomic & Renewable Energy in 2010 to develop alternatives to fossil fuels, and in 2013 it revealed plans to develop 54GW of renewable energy projects by 2032, including 9GW of wind.

Last January, the nation said it was pushing back this target by eight years to 2040; and then, in February, Saudi’s incoming ruler King Salaman announced he was disbanding the group overseeing K.A.CARE as part of a government reshuffle. This threw its renewables plans into doubt. In the end, K.A.CARE survived but it is now focusing on nuclear power rather than renewables.

And yet the 2040 targets survive, and there are hints that the government is taking wind and other renewables more seriously.

For example, ACWA Power president and chief executive Paddy Padmanathan has said in an interview that the government is looking to roll out renewables because they offer cost-effective ways of filling its $100bn budget gap. Yes, wind is beginning to be seen as a low-subsidy option by the Saudi government.

Currently, fossil fuels used domestically in Saudi Arabia require high subsidies, so there is certainly a case that renewables would be cheaper. If the government can use low-cost sources like wind and solar to produce energy then it means it can sell more of its oil overseas, which is important when oil is at such low levels.

And it is even signing commercial deals with renewables firms. This month it has signed a contract with solar developer Al-Afandi Solar to set up a factory that could make solar panels totalling 120MW each year. It is set to be up-and-running in late 2016.

This does not directly benefit wind, of course, and we have not seen Saudi leaders make any new commitments to wind.

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Abu Dhabi bank makes $10bn RE pledge

The National Bank of Abu Dhabi has pledged to invest $10bn in clean energy projects over the next ten years.

The bank is set to invest in projects worth over $100m in the West-East corridor, which is a region stretching from Africa, through the Middle East, to Asia. The pledge is in response to the ‘Financing the Future of Energy’ report, which the bank published last year.

The report claimed that $48trn of investment was required over the next 20 years to meet global energy demand, half of which should be in clean energy projects.

Japan’s NEDO backs 270MW offshore

Japanese government-backed firm NEDO has announced plans to support 270MW of offshore projects in northern Japan.

The New Energy and Industrial Technology Development Organisation, which is an industrial R&D firm, plans to subsidise project costs for two wind farms: a 170MW project off the port of Noshiro in northern Akita, which Marubeni and Obayashi are developing; and a 100MW project off the northern island of Hokkaido, which Green Power Investment has undertaken.

NEDO is also set to help assess project costs, evaluate wind resources and conduct environment impact assessments for the projects in an effort “to accelerate the commercialisation of offshore wind power” in Japan.

CWEA: China installed 30.5GW in 2015

The Chinese Wind Energy Association has released preliminary statistics showing China installed 30.5GW of wind farms in 2015.

This annual figure is up 31.5% from the 23.2GW added in 2014. It is based on installation numbers provided by turbine manufacturers operating in China, and does not include offshore data.

Developers in China were under pressure to install turbines before the feed-in tariff rate was reduced on January 1 2016, and China's installed capacity, if figures are correct, is now around 145GW.

RWE freezes £800m UK investment

RWE Innogy has put 12 UK projects on hold as it waits to hear whether they will be able to secure subsidies for them.

RWE Innogy, the renewables arm of German utility RWE, scrapped nine UK projects in October, after the government announced plans to reduce subsidies and restrict planning permission for wind projects. Twelve projects in Wales and Scotland, representing a total of 400MW and £800m of investment, are now on hold too.

Hans Bünting, chief executive of RWE Innogy, said it had "stopped all further investment" into the UK and frozen its development pipeline in the country as it awaits an announcement from the Department of Energy & Climate Change.

BNDES to end Alstom suspension

Brazil’s National Development Bank has announced that Alstom will regain its local content accreditation status in March.

BNDES suspended French firm Alstom from its list of turbine makers eligible for financing from the bank in October, because one of its turbines failed to meet local content requirements.

GE, which took over Alstom’s operations after a €12.4bn deal in November, is one of four manufacturers including Vestas, Enercon and Alstom seeking to acquire local content accreditation status from BNDES. Vestas officially opened its hub and nacelle plant at Aquiráz in the Brazilian state of Ceará on Monday.

RWE eyes US and MENA expansion

RWE plans to grow its 2GW onshore wind portfolio by developing projects in North America and the Middle East, North Africa.

The German utility revealed the plan in its 2015 results last week, and also said it was looking to build onshore wind farms in the Republic of Ireland and Turkey. Hans Bünting, chief executive of the firm’s renewables arm RWE Innogy, said this would be a key pillar of Innogy’s growth over the next five years.

It is also looking to grow its existing portfolios in offshore wind and hydro; and plans to set up a new division for large solar schemes, with a particular focus on the Middle East.

Vattenfall: Subsidy-free offshore by 2025

Vattenfall has said it expects to be able to develop offshore wind farms without government subsidies by 2025.

The Swedish utility’s head of strategic projects in wind, Michael Simmelsgaard, has said that it should be possible to build onshore wind farms without subsidies by 2020, and offshore wind farms without subsidies in 2025. The company plans to grow its 1.8GW wind portfolio to 4GW in 2020 and 7GW in 2025.

In February 2015, Vattenfall won the right to develop the 400MW Horns Rev 3 in Danish waters, which is expected to produce the world’s cheapest offshore wind power.

John Laing opts for Nordex in Ireland

John Laing Investments has ordered Nordex turbines for its planned 35MW Glencabry wind farm in the Republic of Ireland.

The UK investor is set to install 12 of the German manufacturer’s turbines — seven N100/3300s and five N90/2500s — at its project near Hollyford in County Tipperary. Delivery is scheduled to start in October ahead of commissioning in early 2017.

Nordex has also secured a 15-year service deal at the scheme.

India NuPower eyes $300m raise

Indian wind developer NuPower is looking to raise $300m in two tranches to develop 1GW of wind farms over six years.

NuPower has 200MW of working wind farms and 500MW planned. Its managing director Deepak Kochhar says the firm is seeking investment from pension funds in Australia, Canada and the US; and is on track to secure $150m by the end of September.

Its existing backers include Accion Capital Management, Axis Bank, Central Bank of India and Punjab National Bank. It plans to develop 500MW in India by the end of 2018, and the other 500MW by the end of 2021.

Salesforce agrees 24MW Texas PPA

US cloud computing firm Salesforce has agreed a 24MW power purchase deal with EDF Renewable Energy in US state Texas.

Salesforce has signed a 12-year deal with the EDF subsidiary for power from the 150MW Salt Fork wind farm, which is due to complete early this year. EDF bought the scheme from Clelo Wind Power in June 2015 for an undisclosed sum.

This is Salesforce’s second wind power purchase agreement following the 40MW 12-year deal it agreed in December for power from a project in West Virginia.

The European Union wants a transparency revolution.

This year, it expects member states to implement laws that force firms with 500 employees or more to disclose detailed non-financial information in their financial reports. This aims to make it easier to judge firms on everything, from any environmental damage they do to their approach to human rights. This is on top of the financial and non-financial information that they already give.

This looks like it will be good for wind developers and investors.

We saw a host of large firms make high-profile commitments to renewables, including wind, around last month’s United Nations climate talks in Paris, but we have little faith that many will follow through. Perhaps we are too cynical. But if they are forced to be more transparent about their environmental impact, including green energy use, then that should mean more take-up for wind power.

That should mean more direct investment in wind farms, similar to the deals we have seen tech giants like Apple making in wind to power large new data centres. That should mean more lucrative power purchase agreements that make new schemes viable, which is good news for developers and investors. And that should make it harder for those who say they are embracing renewables to hide and obfuscate when they are challenged on their records.

All of those benefits would outweigh the hassles of extra reporting obligations for wind’s top firms.

The main reason the EU is seeking to bring in these rules is to give shareholders a clear idea of the ethics of the companies they are investing in. It wants shareholders to have a clear picture of the risks of their investments, including any assets in fossil fuels that could be rendered obsolete. The oil price crash shows just how quickly big changes can happen.

And the other reason that companies should do this is because it is what institutional investors want.

A report from global financial services adviser Ernst & Young, out in October, said investors are increasingly looking at a company’s environmental performance could affect shareholder returns. It also said that most company reports were still falling far short.

The report included research by Institutional Investor Research, which surveyed a group of 200 institutions about their views.

Of those, 80% said they thought mandatory board oversight of non-financial performance was important, compared to 64% in 2014; and 62% said they considered non-financial information relevant in all sectors, compared to 34% in 2014.

This shows how vital this information is becoming in investment decisions: 36% said they had reduced holdings in a company due to the risk of stranded assets.

It also said that businesses in Australia and Europe were ahead of the pack reporting on environmental issues, while firms in Asia-Pacific and Latin America lag. Still, moved for more transparency in the EU should filter out to large firms in other regions.

And ultimately, this must be good for wind. If investors can scrutinise companies’ ‘green’ pledges then it should force more to look at alternatives to fossil fuels, predominantly renewables.

Vive la transparency!

Wind Watch

“Why do you need a phone to carry around? You’ve got a landline.”

When we are young we spend ages enthusing to our elders about the latest gadgets. Then we grow up and become the ones having gadgets enthused about to us. The challenge for parents is to work out which of these gadgets are useful, and which are shiny fads.

And it isn’t always easy. I’m sure the sentiment in the opening line will be familiar to many.

There is a parallel here with energy companies. Most established utilities are well aware of the types of renewables out there, but they want to take time before they take the plunge. It is often left to their subsidiaries to take the risks and make the business case.

And that, in a roundabout way, brings us to Italian utility Enel.

This Monday, Enel Green Power's shareholders voted to back the €3.1bn reintegration of the subsidiary into the parent firm. Enel wants to give renewables a prominent role in its future growth.

Indeed, in our interview with Enel Green Power chief executive Francesco Venturini in our Finance 2016 report on Tuesday, he said that he saw the deal as a reverse takeover rather than a merger, acquisition or reintegration. He said that Enel was looking to grow spending on renewables as well as seeking to copy the entrepreneurial spirit in Enel Green Power.

You can read the full interview in our Finance 2016 report now.

It would be easy to dismiss Venturini here. We expect smaller parties in a deal like this to talk themselves up. It is only natural when they have to justify their decisions to shareholders.

But, in this case, there is a lot to support what he is saying.

First, we know Enel chief executive Francesco Starace likes wind and other renewables. He was central to the establishment of Enel Green Power, and was green energy a starring role. Enel is looking for renewables to account for 50% of new growth capex by 2019.

And second, Enel Green Power has proved its strategy of investing in emerging markets. Enel set up the subsidiary in 2008; sold 30% of it for around €2.3bn in 2010; and watched it grow a portfolio of 738 schemes totalling 10.4GW in 17 countries. It makes sense to give Enel Green Power a key role now its model is established.

It also looks like a good deal for the subsidiary’s shareholders, who are due to swap each of their shares for 0.486 of a share in the parent group. The deal is due to close in March.

Enel has played a smart game here. Like a sceptical parent, it did not splurge like crazy when it first heard about renewables. Rather, it waited to see that green energy was not a fad and that it made business sense. Now it is ready to dive in.

US small wind business United Wind last week secured $200m backing from Canadian investment firm Forum Equity Partners. This is the largest deal of its kind in a distributed wind company and, says United, is set to make small turbines mainstream.

United Wind chief executive Russell Tencer says there is a strong precedent for its business model, which is similar to the leasing idea behind companies such as SolarCity and Sunrun. This leasing model has led to major growth in the US small solar market.

Here is the idea. United Wind agrees a 20-year deal with a homeowner or small business owner to install an up-to-100kW on their property. The customer does not pay the up-front cost of installing the turbine, but does then pay a regular fee to United over the lifespan of the deal. The customer then gets between 50% and 100% of their property’s energy need covered by the turbine, and the saving they make mitigates the cost of the lease payment.

In theory, everyone wins. The customer gets cheaper energy for 20 years and United gets a strong long-term income stream.

The problem is that this requires a lot of investment up-front from United to buy and install the technology, and that is where Forum Equity comes in. The Forum investment should allow United to install a further 1,000 projects and secure first-mover advantage in what Tencer expects to be a multi-billion-dollar market.

And Forum will also have confidence in the track record of the company that it is investing in. United Wind has only done 26 projects since it was set up in 2013, but it was set up by small turbines manufacturer Talco, which was founded in 2000, and Wind Analytics, which has been around since 2009. It also secured $13.5m backing from New York’s Green Bank and US banking group Bancorp two months ago, which is a strong show of support.

But this investment only really makes sense if United achieves the growth it wants quickly. Forum will want significant growth over the next five years so it can make a profitable exit. It is not investing its $200m now for lease payments over the medium- to long-term.

In this regard, though, we are actually relatively positive.

United Wind is based in New York and targeting the US northeast and midwest US, so it does not look to be stretching itself too thin.

It is starting by focusing on farms and rural homes, where property owners should be keen on off-grid solutions and not beset by neighbours who hate wind turbines.

And, fundamentally, the idea look like it makes good sense. The up-front cost of installing a wind turbine — or, indeed, solar panels — can be too expensive for a homeowner or small business owner with other financial priorities, and United’s proposition removes that cost. The leasing model helped make small solar mainstream and it can do so with wind too.

The big challenge to United’s growth comes not from the initial idea, but the fact that it will not be able to keep the idea to itself. Rivals with similar propositions will emerge in the next few months, and United needs to step up its expansion plans if it is to survive in any possible feeding frenzy. Growing quickly is key if United is to keep its investor happy. The $200m gives it a great platform.

Sometimes you just have to take the deal on the table.

Now, don’t get us wrong. The five-year extension of the US wind production tax credit last month was as exciting for the wind sector as it was surprising. But, when you look closer at the negotiations surrounding this deal, it is clear that oil was an even bigger winner.

The deal that saw the PTC reinstated also involved lifting a 40-year ban on US oil exports. This is great for the US oil and gas sector.

It is likely to lead to major growth in US oil production, and will only increase the importance of oil exports to the US economy when prices start rising again. One estimate is that lifting this ban could lead to the production of an extra 500,000 barrels of oil a day. This is hardly the pro-renewables policy we expect of a nation that signed the COP21 global climate deal in Paris last month.

We should not be too critical of US Democrats for taking the PTC deal that was offered. It was always going to take an almighty trade-off with the anti-wind Republicans to extend the PTC and solar subsidies. We would not have a deal without a big trade-off.

But let’s not pretend that this was the perfect deal for those in the renewable energy sector, or for the planet as a whole. It wasn’t.

Think of it like this. The US wind sector won a five-year extension of the PTC, in which this vital subsidy will be wound up. In contrast, US oil won the right to sell as much ‘black gold’ as it can overseas in perpetuity, with all the environmental damage that brings.

Still, there are positives, and the PTC extension is good for wind. It last lapsed at the end of 2014, and negotiations in the Congress last year gave no indication that it would be extended again. Getting a deal is good. Getting it for five years is even better.

US investors now have certainty that the PTC is to stay at its current level this year before gradual cuts until it is phased out at the end of 2019. This deal means US developers can invest in projects that should make wind power more competitive; turbine manufacturers can invest in their operations; and the cycle of construction boom and bust that has long been a feature of the US wind sector should be consigned to history. That is all positive.

The American Wind Energy Association has said this would help the US wind sector build 19GW of new capacity over the next five years. And, when the PTC runs out, wind should get support under Barack Obama’s Clean Power Plan.

In his final year as US president, we expect to see more plans from Obama as he seeks to cement his ‘green’ credentials. We hope he does not have to give away too much to make them happen.

Welcome back. We hope you enjoyed the festive season and have come back refreshed and ready for business in 2016.

But, before the hard work starts again, let’s take a quick look at the year ahead. Here are our ten predictions for the trends and stories that we expect to shape activity in wind this year:

(1) Chinese slowdown but no disaster: The slowdown in the Chinese economy will act as a drag on the rest of the world, but it looks like we will avoid another global recession. In the wind sector, this slow growth means that developers and manufacturers will keep looking at expanding in emerging markets where energy demand is growing — although opportunities to be first in to a completely untapped wind market are few and far between.

(2) Oil to stay below $50 a barrel: For the oil and gas sector, the oil price slump turned into a full-blown crisis in 2015 with firms cutting their investment plans. Oil prices are currently around $40 a barrel and we expect them to stay below $50 at the end of 2016 as there is no indication that Saudi Arabia wants to slow production. However, despite this turmoil in the global energy market, we see there is still good political and business support for renewables.

(3) New global brands to sign wind PPAs: We have seen the likes of US giants Amazon, Facebook and Google making big commitments to wind and, following the COP21 talks in Paris last month, we expect more household names to do so this year. This is good for developers as it will make some schemes viable as governments overhaul wind subsidies.

(4) Brexit risk unsettles EU but no vote yet: UK prime minister David Cameron has said he is going to hold a referendum on the country’s membership of the European Union, and mooted a vote in June 2016. However, we do not expect a vote until 2017, as Cameron is struggling to win key concessions from the EU and does not want the migrant crisis to fan anti-EU sentiment. This will unsettle the EU — but investors are already pricing in the risk.

(5) Increased activity in North America: In October, pro-renewables Justin Trudeau replaced climate change sceptic Stephen Harper as prime minister of Canada, which is to pave the way for an acceleration in the growth of winding the nation. Meanwhile, in the US, the surprise five-year extension of the wind production tax credit gives the industry long-term certainty to 2020.

(6) Senvion future to lead takeover talk: Manufacturers will keep looking at growth by mergers and acquisitions, but we do not expect to see anything as large as Nordex’s €785m acquisition of Acciona’s wind arm. The big unknown is whether US private equity firm Centerbridge Partners sells German manufacturer Senvion to a trade buyer. We expect all or part of Senvion to change hands, even if via an IPO, and its future will keep tongues wagging.

(7) Confidence erodes in UK offshore: The UK may be the world’s largest offshore wind market, with around 6GW either installed or under construction, but that does not mean its position is assured. The UK government has said it would only support the sector through to 2020 if it can meet unspecified cost cuttings goals. This will eat away at confidence, and mean that markets such as Denmark, France and the Netherlands grow in importance.

(8) Listed US yieldcos go conservative: Listed renewables yieldcos have faced a tough six months as investors have exited over fears that their shares were overpriced. However, we do not think this is the death of the sector. These yieldcos have a future as long as they embrace the more conservative strategies favoured by their European peers.

(9) Wind will prevail in Latin America: Falling prices of commodities contributed to slow economic growth in Latin America in 2015, and we expect more of the same 2016. Despite this, we expect demand for wind energy to remain strong, particularly in Brazil and Chile, as firms including Acciona and Enel Green Power have reaffirmed their plans in the region.

(10) Battery storage pioneers take shape: US firm Invenergy opened a 31.5MW battery storage project, totalling 31.5MW, at a wind farm in May; while Germany’s Enercon and Energiequelle opened Europe’s largest wind farm battery storage project, of 10MW, in September. But such projects are rarities. We expect far more to take shape in 2016; and this will also be the year that a few wind players establish themselves as battery pioneers.

Agree? Disagree? Let us know. We will look back at the end of 2016 to see if we were right, and you can see more analysis on the year ahead in our Finance 2016 report, which is out next week.

No industry can afford to stand still — and nobody could accuse those in wind of slacking in 2015. Here is our month-by-month guide to the biggest stories of the year:

January: The year started with two big corporate takeovers. US solar giant SunEdison moved into wind by completing the $2.4bn acquisition of First Wind; and India’s Suzlon announced a sale of German subsidiary Senvion for €1bn to Centerbridge Partners just weeks after calling “rumours” of a deal “baseless and false”.

February: Industry criticism of the model of US listed renewables yieldcos got louder in February when Francesco Starace, chief executive of Italian utility Enel, said it was like creating a “monster that you have to feed”. The utility did not list its US yieldco, and this was a good decision as the most aggressive US yieldcos saw share prices drop sharpafter summer.

March: The offshore turbine market got a lot more crowded in 2015, with MHI Vestas and Siemens going head-to-head in Europe — and, in March, a new player entered the battle. Spain’s Gamesa and France’s Areva signed definitive agreements to form their 50:50 joint venture Adwen, which is eyeing a 20% share of Europe’s offshore turbine market by 2020.

April: The Spanish government has paralysed the wind sector with destructive cuts but, in April, it looked like it wanted to change tack. The Ministry of Industry, Energy & Tourism announced a 500MW wind auction that is scheduled for next month. However, this is well below what the country needs to meet 2020 targets and will not erase the memories of firms hurt by Spain’s policies before.

May: We were unashamedly focused on the UK in May as the Conservative Party won a slim majority after five years in coalition with the pro-renewables Liberal Democrats. Now, freed from the moderating voice of the Lib Dems, the Conservatives have made severe cuts to subsidies for onshore wind, and thrown the UK’s offshore wind sector into doubt.

June: Lord Laidlaw’s Highland Group Holdings reached the €1.9bn financial close on the 400MW offshore wind farm Veja Mate. This was all the more impressive given that he had to put together a hugely-complicated project in nine months, rather than the usual two years, and with no track record in the offshore wind sector.

July: SunEdison continued its march into wind with a $2bn acquisition of a 930MW US portfolio from Invenergy. This followed buyouts in the first half of 2015 including India’s Continuum Wind for $650m, Latin American Power for $700m, and a 16% stake in Brazil’s Renova. However, it has since reined in growth in wind by terminating a series of deals.

August: There were more warnings about listed US renewables yieldcos as David Crane, chief executive of NRG Energy, said the market was “saturated” and that these yieldcos were paying too much for assets. Meanwhile, Dong Energy chief executive Henrik Poulsen said it was considering selling its North Sea oil and gas assets to focus on offshore wind.

September: Wind lost one of its main political bogeymen as Malcolm Turnbull ousted Tony Abbott as prime minister of Australia. Abbott has not been missed, after leading a series of destructive cuts to subsidies and green targets that turned Australia from a world leader in renewables into a laughing stock. Turnbull has since lifted a ban on investing in wind.

October: German manufacturer Nordex surprised the market in October by announcing a €785m acquisition of the wind arm of Spain’s Acciona. The deal is subject to approval from competition authorities and due to complete in the next six months. It should give Nordex more of a presence in the fast-growing emerging markets in which Acciona operates.

November: It took 18 months but, finally, General Electric completed its €12.4bn buyout of French firm Alstom’s energy business. This is set to give GE a foothold in the European market and help it expand offshore through the firms’ 50:50 offshore tie-up. Meanwhile, EWEA’s annual conference in Paris continued just days after devastating terror attacks.

December: The eyes of the world were on United Nations climate change talks, COP21, in Paris as 195 countries agreed a deal to limit global warming, although we remain to be convinced on the short-term benefits for wind. Meanwhile, German utility RWE announced that it plans to follow its rival E.On in splitting its renewables and fossil fuels operations.

And here's to an equally busy 2016!

In our first edition of the year we made 10 predictions on the trends we expected to shape activity in wind in 2015. So, how did we do?

(1) No favours from the world economy: It did not take a genius to predict that firms in the wind sector would continue to face tough economic headwinds in 2015. The risk of Greece exiting the euro hung over Europe for most of 2015, while the slowdown in China is set to affect global installation figures over the next few years.

(2) Consolidation among manufacturers: Bullseye! In October, Nordex announced the €785m acquisition of Acciona’s wind arm. Meanwhile, we also saw the completion of GE’s €12.4bn takeover of Alstom’s energy assets; and Areva and Gamesa officially set up 50:50 offshore wind joint venture Adwen. This will carry on in 2016.

(3) Financial inventiveness: Developers will always have to be creative to fund projects, and the speed with which Highland Group reached financial close on the 400MW Veja Mate offshore wind farm is a great example. We have also seen institutions such as Aviva get more comfortable with investing in wind.

(4) Europe continues to go slow: Europe has indeed continued to see slow and steady growth in wind, and we have seen a rise in activity in the secondary market. Even the boom in the German market, where 9GW has been built onshore in the last two years, is a short-term result of cuts to changes to feed-in tariffs from 2017.

(5) UK election uncertainty: We got this one right, as the only certainty for UK wind since the Conservatives won the election in May is that subsidies will be cuts. Our prediction that UK offshore would be caught in the crossfire is also looking prescient since UK energy secretary Amber Rudd has only offered conditional support.

(6) Firms seek storage to silence critics: We said wind farm developers and investors would look to bring storage technology into schemes to counter concerns about the reliability of wind farms, and many firms are seeking to do so. We have also seen some small projects. However, we are yet to see any take the plunge in a big way, so we cannot claim this was 100% spot on.

(7) Offshore breakthrough outside Europe: Our prediction that the first offshore project outside of Europe would go live was too ambitious, but we could yet see the first turbines at Deepwater Wind’s 30MW Block Island in US waters produce energy next year.

(8) Cuts in the USA: When the US wind Production Tax Credit lapsed in 2012 it led to the loss of 30,000 jobs in the industry in the US, and so when the PTC expired at the end of 2014 we expected similar job cuts this year. Thankfully, we have not seen that level of carnage. This is one prediction we are happy to be wrong on, and the expected extension of the PTC should allay further worries.

(9) Asian manufacturers target world: Half right! Privately-owned Chinese firms such as Envision and Ming Yang have continued expanding overseas, and others could follow suit as the Chinese economy slows. However, pro-wind policies in India means the likes of Suzlon are looking to get stronger in their home market.

(10) Emergence of Africa and Middle East: And again, we were half right. The African wind market has taken off, from Morocco and Egypt in the north to Ghana, Kenya and Senegal in the sub-Saharan region. But continued low oil prices have forced Middle Eastern nations to focus on fossil fuels rather than renewables.

And the result? In our view, it looks like a 7/10. We’ll see if we can beat this when we give our predictions for 2016 in the first Wind Watch of the new year, on 4 January.

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