Tag Archives: wind

Illinois: Where Gas and Wind are Killing Coal – 6/24/16

If you need an explanation for why no one wants to build coal power plants anymore, then look no further than Illinois.

Power companies in the state recently announced that they will be closing coal plants equal to more than 10% of the state’s generating capacity. After imports of cheap wind power from neighboring states surged 400%, competition low-cost natural gas grew substantially during the shale boom, and electricity demand fell for its fourth year, many power plants began operating at a loss. Now, operators are asking for bail outs to help recoup losses on their now unprofitable assets and prevent further job cuts.

All across the country, deregulated electricity markets are facing an unprecedented influx of cheap energy that is toppling aging generators. Since 2008, the average wholesale power price of electricity has dropped by around 50%. As cheap as coal has become, natural gas is still too cheap to beat with major shale-gas deposits being opened up by fracking and excess wind power coming in at a discount from nearby states only twists the knife. And generators in Illinois are facing disruption from inside and out of the state with no hope of a rebound as renewables are set to continue declining in price.

Natural gas prices dropped 85% over the past seven years while wind power has increased from about 2% of total electricity on the Midwest power grid in 2012 to over 10% in 2015.I In addition, several regulations related to coal pollutants have survived court challenges increasing the burden on older coal burning power plants.

Although some officials are open to making utilities buy credits struggling nuclear, U.S. regulators are proving unreliable allies. After a long era of coal lobbyists arguing against government support for renewables on the grounds that they were not economically viable, those same lobbyists will have a hard time convincing regulators that coal deserves a respite from the ruthlessness of market forces.

New York’s Offshore Wind Experiment – 6/23/16

New York State is stepping up efforts to reduce the cost of offshore wind farms by developing a 127-square-mile site in the Atlantic Ocean and guaranteeing a buyer for electricity generated.

As of the first quarter of 2015, the U.S. had less than a 1 MW of offshore wind capacity compared to 5000 MW for the United Kingdom. The vast difference in capacity has a straightforward answer: the U.S. has a lot more substitute sources of clean energy. Difficulty acquiring cheap, viable land made offshore wind power popular in the U.K., but most states in the U.S. are not so densely packed that they cannot use land-based turbines or solar panels. As a result, offshore wind proponents are focusing on the crowded Eastern seaboard where conditions are most favorable.

New York State’s Energy Research and Development Authority is bidding on the site because New York officials are aiming to have the state draw 50% of its power from renewable sources by 2030.

“This is a resource that has to be, and will be, developed,” John B. Rhodes, president and chief executive of the New York State authority, said in an interview Friday. “It is our job to do it as surefootedly and cost efficiently as possible.”

If New York officials are able to line up a buyer in advance, developers would be would not have the risk of utilities refusing their output. And if the project succeeds it would set a good precedent for future projects driving down the costs of everything from financing to legal risks.

The U.S. Bureau of Ocean Energy Management plans to auction off the site by the end of the year. The area is large enough to accommodate 900 MW worth of turbines and is located 11 miles off the coast of Long Island.

The first wind farm in U.S. waters, a 30 MW project off the coast of Rhode Island, is scheduled to come online by the end of the year.


Siemens and Gamesa Combine Turbine Manufacturing – 6/22/16

In wind energy news, Siemens AG and Gamesa Corp. Tecnologica SA agreed to combine their wind-turbine manufacturing businesses.

The agreement comes at a time when worldwide installations are booming, but margins for making turbines are narrowing on increased competition. Xinjiang Goldwind Science & Technology Co. of China took the largest market share in manufacturing of wind power related machinery last year.

After Goldwind took the place as top supplier by market share last year after beating out Vestas and GE, the global rankings of suppliers were already shown to be fluid. Now Siemens and Gamesa, each having 5.3% of total installations last year will have a combined 10.6% share. At just that share, the new entity would only be surpassed by Goldwind and Vestas. Time will tell if the whole does better or worse than its parts.

Synergy was a large part of the argument for the deal. The two firms identified cost savings of 230 million euros expected within four years of the deal and hold most of their installations in different parts of the market.

Siemens and Gamesa have 69 GW of turbines installed worldwide, a measure that is typically used to estimate the revenue they may get from servicing machines. Vestas currently claims to have 75 GW of installed turbines.

“The combination of our wind business with Gamesa follows a clear and compelling industrial logic in an attractive growth industry, in which scale is a key to making renewable energy more cost-effective,” Siemens Chief Executive Officer Joe Kaeser said in a statement.

“As a leading wind power player especially in emerging markets, Gamesa is a perfect partner for us,” said Lisa Davis, member of the managing board of Siemens. “Teaming up will enable Siemens and Gamesa to offer a much broader range of products. The move will put Siemens and Gamesa in the best position to shape the industry for lower cost of renewable energy to the consumers.”

Wyoming’s Transition from Coal to Wind – 6/20/16

Wind power is gaining traction in the biggest coal-producer of the United States, Wyoming.

The state’s geography, with its vast plains and prairies, gives Wyoming one of the highest wind power potentials of any state with the only major drawback being a lack of transmission infrastructure to connect far flung population centers. Yet, unlike other states in the Great Plains region that have seen a boom in wind farm construction as associated costs have plummeted, Wyoming has been slow to add new capacity.

In 2015, Wyoming added a relatively inconsequential amount of wind power to its grids compared with states like Oklahoma and Kansas. Wyoming’s government is partly to blame for the lackluster interest in tapping the resource since Wyoming’s regulatory environment has so far been hostile to renewables and it is the only state in the U.S. to tax wind power. Solar City’s exodus from Nevada following some unfavorable legislative changes is good example of how quickly investment can dry up if developers see an unfriendly government is in charge.

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But if uncertainty about future regulation can kill investment in renewables, the same type of uncertainty can kill investment even faster when it comes to coal. Seeing as it doesn’t merit it’s own label on the chart, it is clear that new coal power plants aren’t being built anymore. Be it because of the Clean Power Plan or rulings by the Supreme Court in favor of tighter regulation or the international Paris agreement on climate change or the Department of the Interior has already declared a halt on new coal mining on public lands, coal power is largely dead in the water.

Some officials and coal interests in Wyoming may have fooled themselves into thinking that stifling wind and ignoring climate change could get coal to recover, but those views are fading as coal use continues to decline. Their efforts are more likely to doom an energy rich state to importing neighboring states’ leftover electricity than revive coal. Natural gas is already surpassing coal as the main source of electricity in the U.S. and falling costs of solar and wind farms have made coal investment a losing bet in the long-run. The move from coal is painful, but inevitable so long as it has competition from cheaper, cleaner alternatives.

Although the move away from coal makes sense economically and ecologically, the thousands of coal workers who will lose their jobs are going to find little solace in a cleaner, stronger economy if they don’t have a place in it. New wind jobs will replace only a fraction of the coal jobs lost. Unfortunately, putting up turbines simply doesn’t have the same labor intensity of constantly mining, transporting, and burning fossilized carbon. That said technological advances are almost always accompanied by job loss. And the loss of farm jobs made obsolete by tractors did nothing to stop their usage in the end.

Wyoming’s Republican governor, Matt Mead, an outspoken opponent climate change related regulation has admitted to seeing economic opportunity in wind power.

“We’ve been a dig-and-ship state, exporting energy to the rest of the country,” Mr. Mead said in a recent interview. “With the advances in wind turbines, why shouldn’t we be leading that at the University of Wyoming? Why don’t we do more to bring wind manufacturing to the state?”

More and more Republican politicians and donors like the governor are supporting renewables. In fact, Philip Anschutz, a Colorado billionaire and major Republican donor, is one of the major benefactors of Wyoming’s transition to wind power. The Anschutz Corporation’s Carbon County wind farm, when completed, will be the largest wind power producer in North America, and a complementary project the TransWest Express, a 730-mile power line, is set to take Wyoming’s excess output to electricity hungry Las Vegas and California. The scale of the project is estimated to be large enough to make wind as cheap, if not cheaper, than coal power.

Merkel’s Push for Renewable Energy – 6/9/16

In a milestone for renewable energy, clean power supplied almost all of Germany’s power demand for the first time. The event marks a victory for Chancellor Angela Merkel’s “Energiewende” policy aimed at boosting renewables while phasing out nuclear and fossil fuels. Yet, there are still many issues to be resolved when it comes to making renewable energy Germany’s primary source of electricity.

Germany 100% renew

Renewables were only able to meet demand because of Germany’s strong export capability, said Monne Depraetere, an analyst for Bloomberg New Energy Finance.

“Events like this highlight that eventually we may need to start curtailing because of market-wide oversupply,” said the analyst. “In the long-run, that may provide a case to build technologies that can manage this oversupply — for example more interconnectors or energy storage.”

Germany already wastes a small portion of its wind energy even though, by law, renewable sources have priority access to the grid over traditional sources like coal.

Germany curtail renew

Renewable electricity generation in Germany represented 31% of the country’s gross electricity generation in 2015, an increase of 19% from 2014. Germany has tripled its electricity generated from renewable sources in the past 10 years.

Germany energy sources

If Energiewende goals are met, the share of power generated from renewable sources is set to increase to about 40% by 2025 and to more than 80% by 2050. In addition to phasing out fossil fuel and nuclear power generation, Energiewende goals include reducing energy import dependence and lowering carbon emissions.

Costs associated with Germany’s shift to clean energy are being passed on, at least partly, to consumers. The German government policy of supporting renewable electricity growth by guaranteeing a fixed, above-market price for solar and wind energy is likely culpable in rising electricity rates. Along with Denmark, Germany has among the highest residential electricity prices in Europe.

As a net electricity exporter, Germany’s rapid growth in electricity production has created problems domestically and for its neighbors. The variability of clean energy flows puts pressure on local grids as they struggle to keep up increasing renewable energy supplies. Lacking the infrastructure needed to distribute or store all electricity produced domestically, German power flows to nations such as Poland, often creating power surges. Infrastructure proposals for new transmission lines that would help transfer the electricity from producers in the North to populous Southern cities have been met with resistance from municipalities and citizens.

Grid problems in Germany reflect a larger problem for renewable energy. As clean power takes a larger share of the nation’s energy mix, Germany has made several changes to its energy policies already to control costs such as the implementation of auctions and the decreasing of feed-in tariff incentives in years following years when clean power targets are exceeded. Germany should serve an example to other nations looking to grow their renewable energy industries.

Wind Rises, Carbon Falls – 6/8/16

Investors are beginning to talk with their feet as they shift money from fossil fuels to renewables. As wind rises on a tide of money from European investors looking to take advantage of the change, carbon falls under the weight of increased competition and regulatory risks.

The GWEC recently launched its Global Wind Report: Annual Market Update. The report shows the wind power industry set new records across the world last year in capacity installation as wind power installations broke through the 50 GW barrier for the first time in a single year in 2014 and annual installations topped 63 GW in 2015.

At the start of 2016, there was near 433 GW of wind power installations around the globe, a 17% increase over last year, according to the International Energy Agency. China alone added 30 GW in 2015 and now has more than 146 GW installed. China’s new Five Year Plan covering the period from 2016-2020 has increased the 2020 target for wind to 250 GW likely due to air pollution and energy security concerns.

European installations were led by Germany’s 6 GW of installations, more than 2 GW of which came from offshore wind. In non-China Asia, India became the nation with the fourth highest amount of cumulative installations as it surpassed Spain in global rankings.

U.S. states in the Plains region have had lower prices for wind power than most for a while now, but an uncertain regulatory environment has hampered the development of the U.S. market. The catalyst for the rise in U.S. investment in wind came from the unexpected extension of tax credits for wind and solar projects in late 2015.

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In contrast to the boom wind is experiencing, fossil fuel assets are being eyed with suspicion by U.S. insurers who see many energy-related investments at risk of becoming stranded assets due to climate change concerns.

European fossil-fuel companies in particular are seeing their value decline as countries shift their focus to renewable energy. Sovereign wealth funds and European insurers including France’s Axa SA and Germany’s Allianz SE committed to exiting some coal-related holdings as global leaders commit to fighting climate change.

In the U.S., California Insurance Commissioner Dave Jones urged insurers to voluntarily divest from thermal coal, and is requiring annual disclosure of carbon-based investments.

“If the international community, nations, states and local governments adopt the policies necessary to limit global warming to 2 degrees Celsius, then the value of holdings in the carbon economy will diminish dramatically if not drop to zero,” Jones said in an interview.

Renewable Energy: Explosive Growth, Tricky Integration – 6/6/16

Renewable energy use around the world has grown explosively over the last decade with a six-fold increase from 85 GW to 657 GW in non-hydro renewables.

Last year’s investment in renewable technologies was of $285.9 billion. It was the first year investment in developing countries was higher than in developed ones with three of the world’s most populous nations, China, India and Brazil accounting for more than half ($156 billion) of all investment.

Falling costs have driven the widespread adoption where traditional concerns over energy security, climate change, and air pollution could not. Between 2009 and 2014, prices for solar modules fell 75% which outpaced most expectations with similar cost reductions for wind. Those cost reductions are primarily technology-based (i.e. permenant improvements to cost-effectiveness) putting increasing pressure on fossil-fuels.

Jarring swings in fossil-fuel prices and the falling cost of renewable energy substitutes have encouraged electricity sectors to use resources less susceptible to the volatility of commodity pricing. Many companies and governments continue shifting capital away from coal power plants to avoid holding stranded assets. Coal-based electric generating capacity additions have dropped off sharply in the last few years, none are planned for 2016.

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The rise of renewable energy comes with a new set of challenges.

Variability in supply caused by large amounts of wind energy additions to the grid can cause system-balancing issues often dealt with by curtailing wind generation, which means wasting wind power unless power grids are expanded or upgraded. The problem may also be solved by battery storage if costs keep falling faster than expected thanks to economies of scale prompted by increased demand from electric car manufacturers.

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In addition, the decentralized nature of residential PV panels threatens to upend the business models of traditional utilities as they reduce revenue streams used to account for large fixed costs related to building infrastructure. Net-metering policies, where utility customers can sell the excess electricity to the grid, in particular are raising concerns about how utilities are going to deal with the rise of residential solar. The balance between cost and benefit among customers involved in net-metering and those who aren’t is becoming both harder to maintain and more important to consider as solar panels are installed in greater numbers.

Renewables and Coal, Japan and Poland – 5/30/16

Poland and Japan: Two very different countries and with very different approaches to coal and renewable energy.

Environmental groups urged the Japanese government to announce a shift away from fossil-fuel financing ahead of the G-7 meeting to no avail.

“As the President of the G7, Japan has an obligation to be a leader, not a laggard on climate,” the environmentalists said in a petition. “First, Japan must stop subsidizing fossil fuels overseas. On the home front, it is time for Japan to reject the fossil fuel and nuclear technologies of last century and instead embrace a clean and sustainable energy future.”

Japan’s energy policy is under close scrutiny from environmentalists because of its reliance on and support for coal. The country has plans for 49 new coal-fired power projects even as some developed countries are shifting away from coal to reduce emissions and health risks. While resource-poor Japan has been trying to diversify its energy sources, the country’s leadership have held fast to the idea that coal would make up 26% of the nation’s power output in 2030 due to the closure of Japan’s nuclear capacity following the Fukushima disaster.

Yet, Japan’s program to encourage more clean sources of energy is starting to show some promising results, with the latest government data showing that the nation produced 45% more electricity from renewables like solar and wind for the fiscal year ending in March compared with a year earlier. Clean energy output, excluding hydro power, increased to 39.2 TW-hours in the 12 months ended March 31, according to data released by the Ministry of Economy, Trade and Industry. Solar outpaced other renewable sources, increasing 61 % to 31.3 TW-hours while wind rose 7% to 5.4 TW-hours. The Fukushima nuclear plant produced 29.3 TW-hours in 2010 before the disaster, according to the International Atomic Energy Agency.

Japan derived 4.7% of its electricity from renewables last fiscal year when hydro isn’t included, according to the Federation of Electric Power Companies of Japan. The government aims bring that number up to 14% by 2030.

In contrast, Poland’s controversial parliament approved a bill that introduces extra requirements for building wind parks as it aims to curb its booming wind industry that is hastening the demise of its loss-making coal industry.

The bill, put forward by the governing Law & Justice party, forces new turbines to be located further away from homes and would halt some new projects after a record expansion of wind energy last year. Poland, Europe’s top coal producer, notched up the continent’s second-highest number of wind-power installations last year with 1.26 GW of new capacity installed. The country now has 5.6 GW of installed wind capacity.

“We want to eliminate the import of used, outdated turbines from western countries,” Deputy Energy Minister Andrzej Piotrowski said in parliament on May 18.

The amended law, which now will be discussed in the Senate and has to be signed into law by the president, included a proposal envisaging potential jail terms for using wind farms without permission that was eventually scrapped.

The country’s six-month old cabinet says that Poland, which generates some 85% of its electricity from coal, has been too quick to support wind generation over its coal power plants. Prime Minister Beata Szydlo, a miner’s daughter from southern Poland, pledged to keep the country of 38 million dependent on coal for decades to come.

The ruling party surprised the industry in December when it suspended the introduction of a new law regulating subsidies for renewable energy. The government also plans to rework an earlier plan to introduce renewable energy auctions in an attempt to reduce support for wind and solar power.

The regulatory uncertainty “is spooking investors and banks,” according to Giles Dickson, chief executive officer of the European Wind Power Association, a lobby group. Investors eager to secure debt funding for wind investments at Polish banks are charged from 9% to 10%, compared with 4% in neighboring Germany, he said on May 18.

Green Energy News in the U.S. – 5/26/16

In green energy news, the American Wind Energy Association (AWEA) WINDPOWER 2016 tradeshow, Casino giants switching to clean power, and Silicon Valley energy activism.

A key theme at the AWEA-sponsored tradeshow was the transition of people, companies, and products from oil and gas into the wind industry.

The downturn in oil prices prompted many to move from one energy industry to another since the stability of the wind industry contrasts sharply with the “boom and bust” nature of oil markets. With the Production Tax Credit (PTC) for wind power extended through 2021, wind companies need only to keep bringing down costs at current rates to ensure steady growth into 2030. It also doesn’t hurt that some states, like Texas, have rapidly growing wind energy sectors within spitting distance of large oil and gas regions.

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Meanwhile, Casino giants MGM Resorts International and Wynn Resorts Ltd. are moving forward with plans to stop buying electricity from the NV Energy utility in Nevada, according to filings with the Nevada Public Utilities Commission.

“It is our objective to reduce MGM’s environmental impact by decreasing the use of energy and aggressively pursuing renewable energy sources,” MGM Executive Vice President John McManus said in a letter included in the filing to state regulators.

Last year, three of Las Vegas’s largest casino operators including MGM, Las Vegas Sands Corp. and Wynn Las Vegas won approval from state regulators to stop buying power from NV Energy if they paid combined exit fees of almost $127 million.

The loss of electricity-hungry customers leaving the utility is damaging for the Nevada utility which has also been involved in a multi-year fight with rooftop solar developers over policies that allow homeowners who put panels on their roofs to sell power back to the grid.

And finally, Facebook Inc. and Microsoft Corp. are joining forces with environmental groups to promote the development of 60 GW of renewable energy by 2025.

The Renewable Energy Buyers Alliance, as they are calling themselves, was formed to break barriers to carbon emission reduction presented by utilities and regulators, the companies said on a conference call. Large energy consumers such as Facebook and Microsoft are able to buy power directly from renewable energy developers through power purchase agreements, but smaller firms can struggle to find similar agreements. Facebook, Microsoft and more than 60 companies hope to make it easier to access clean energy contracts.

For its own operations, Facebook wants to get half of its electricity from renewable sources by 2018 and eventually meet all of its needs from carbon-free sources, said Bill Weihl, company director of sustainability.

“Access to clean energy is one aspect we look for when we site data centers,” Weihl said. “We’re working together with utilities and regulators to design new products so we can all buy more clean energy.”

Wind and Solar on the East Coast – 5/24/16

Renewable energy is growing in popularity thanks to falling costs and increasing concern over the effects of climate change. As a result, legislators on the East Coast are tackling the issues of how to develop and integrate new sources of power while balancing the interests of constituents, utilities, and developers.

In New York, legislators had an easy pass on what has been a contentious issue in other states after utilities and solar companies worked together to shape net metering policy. The two industries often come into conflict over how owners of rooftop PV panel are compensated for the excess electricity they send back to the grid because of starkly opposing goals: Utilities want to avoid revenue losses from customers installing solar systems and solar companies want the incentive of lower electricity bills to help sell their product. The incompatibility of their interests has led to legislative battles in many states, which makes this show of cooperation all the more surprising.

Under the alternative to the existing net metering policy, utilities would pay less than the retail rate for solar energy, while the solar developers involved would get long-term certainty on compensation. The existing policy would stay in place until 2020 before falling periodically with solar systems guaranteed the payment rate in place at the time of installation for at least 15 years. Certainty with regard to rates is no small benefit since, in December, SolarCity left Nevada after legislators sided with utilities and payments to panel owners were cut.

Meanwhile, the offshore wind industry in the U.S. may see a boom on the Atlantic coast thanks to an energy bill requiring utilities to purchase power from offshore wind farms. The bill is expected to reach the floor of the Massachusetts legislature sometime this year, but there will plenty of debate as to how much power utilities would be forced to buy under the bill. A mandate would be the first of its kind in the U.S. and would give developers the security needed to finance large-scale farms. Of course, the issue of the state’s Republican governor, who has opposed offshore wind in the past, remains.

Offshore boom

Offshore wind energy has boomed in Europe and Asia; however, it has had less success in the U.S. where cheap natural gas and cheap land for traditional wind and solar farms make offshore wind less attractive. Despite falling costs, offshore wind energy remains one of the most expensive sources of electricity. Massachusetts is one of the few places in the U.S. with the right combination of high electricity prices, high ocean wind speeds, and densely packed populations that could make offshore wind viable.

With numerous oil, coal and nuclear power plants to close over the next four years, Massachusetts Governor Charlie Baker (R) has pushed for increased hydro electricity use over wind. The governor previously opposed the Cape Wind project, which is now stalled off of the coast of Cape Cod, as an uneconomical eyesore. The governor’s energy secretary said during a speech in March that any decision would depend on cost projections for Massachusetts offshore wind projects.

A recent study by the University of Delaware, concluded that building costs may decline as much as 55% by 2030, allowing developers to offer rates competitive with market prices if their projects are large enough for economies of scale to take effect. And, for their part, new developers plan to build further away from the coast to ensure the wind farms won’t be visible from land. Still, it’s anyone’s guess how the bill will fare in the end.

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