Crisis and opportunity: 18 months of explosive growth for renewables

à‚ 

Elisa Wood takes a comprehensive look at the major developments in technology, policy and regulation that have taken place in the global renewable energy arena.

à‚ 

Elisa Wood

In an odd way, the economic slowdown of 2009 turned out to be a good thing for renewable energy. The world needed jobs, quickly, and the renewable energy industry stood ready to not only boost employment, but also offer a range of other benefits: greenhouse gas reduction, freedom from over-reliance on petroleum, and greater energy security.

So, when stalled credit markets began to drag renewable energy development down last year, governments in America, Asia and Europe pushed it back up with an infusion of stimulus money.

The renewable energy industry sizzled with record-breaking growth, even as energy use dropped and natural gas prices fell, events that typically slow development of green resources. Some individual companies suffered, and at times new projects slowed because of lack of financing, but overall the industry has thrived over the past 18 months. What should have been a time of doom and gloom for the sector instead was an awakening.

à‚ 

WIND: Bigger, taller and offshore

à‚ 

“In the midst of one of the world’s most significant economic recession, 2009 was nonetheless a record year for wind,” said Robert Hornung, president of the Canadian Wind Energy Association (CanWEA). “More than 39 000 MW of wind capacity was installed worldwide.”

E.ON’s 781.5 MW Roscoe wind farm in Roscoe, Texas – the world’s largest onshore wind farm

As a result, the world saw a 31 per cent increase in wind capacity, according to the Global Wind Energy Council. One-third of that growth occurred in China, which added 13.8 GW. China’s total wind capacity rose to 25.9 GW to make it the world leader for wind installations. At the same time, the USA installed over 10 GW of new wind power, a record for that nation. Europe added more wind than any other form of electricity to its portfolio mix. Even Canada, a relatively small energy consumer, beat its previous records with wind additions totaling 950 MW.

Not only did the world gain more wind farms, but also bigger ones. German company E.ON in October 2009 brought online the world’s largest land-based wind farm, a 781.5 MW facility in Roscoe, Texas. Meanwhile, Spanish giant Iberdrola Renewables made plans to build an even larger facility, a 1500 MW project in Romania.

Finding land for additional large projects, however, grew more difficult, especially in the mature markets in the USA and Europe. It became apparent that developers had secured many of the ideal wind sites, those with large swaths of land, welcoming communities and strong winds near transmission lines. Some companies began proposing small wind farms or started infilling those already built with additional turbines. The industry also reached higher for the wind, building taller towers and redesigned blades to harness wind more efficiently.

In addition, developers in Europe and North America increasingly turned seawards in search of opportunity. Europe, in particular, made new strides in offshore wind, with the UK leading the way, notching a world record in April 2010 with 1 GW in operation. By the end of 2009, Europe had more than 800 offshore turbines generating over 2000 MW in total. The European Wind Energy Association predicted the completion of another 1000 MW in 2010 and progress on construction of facilities totalling 3500 MW.

The EU proceeded towards a goal to build 40 GW of offshore wind by 2020 and a pan-European ‘supergrid’ to transmit the power.

Denmark became home to the world’s largest offshore wind farm in September 2009 with the opening of the 209 MW Horns Rev 2, built in the North Sea by DONG Energy. Meanwhile, Britain pressed forward with its aggressive offshore wind initiative to build 32 GW by 2020. Included in that plan is the 1 GW London Array, proposed by E.ON, DONG Energy and Masdar. The developers in early 2010 signed their final major construction contracts to build the first 630 MW phase.

“The reason for the growth in these projects is principally because it is only these large-scale projects that can significantly contribute to delivering the energy required (driven by energy security concerns) and the carbon reductions committed to,” said Michelle Thomas, a partner with Eversheds and head of its Clean Energy and Sustainability Group. “Couple this with the difficulty of getting onshore projects developed because of consenting and grid restrictions,” she added.

North America had yet to see any offshore wind farm construction in 2009. But as of spring 2010 dozens of projects were in planning along the eastern seaboard, in the Great Lakes, and along the Texas coast. The 420 MW Cape Wind came closer to receiving its final major approval.

à‚ 

That proceeding became bogged down before the US Department of the Interior when Native Americans in New England claimed the wind farm would block their view of the sunrise for morning prayer. As Cape Wind awaited final word, it signed a contract to buy 130, 3.6 MW turbines from Siemens, and set to work negotiating a deal to sell the project’s energy to National Grid. The two parties were still in contract talks at the deadline for this publication.

Meanwhile, a wind project off the coast of Rhode Island ran into trouble when state regulators decided its power would be too costly. National Grid had proposed buying power from Deepwater Wind’s 28.8 MW project at price of 24.4 cents/kWh, beginning in 2013. But the state regulators deemed the power too expensive, leaving the fate of the project in question.

The Canadian province of Ontario took significant steps towards siting offshore wind in the Great Lakes through its recently introduced feed-in tariff (FiT) programme, begun in 2009 ” the first comprehensive FiT in North America. The award went to the Wolfe Island Shoals wind farm, a 300 MW project that developer Windstream Energy plans to build in four years in Lake Ontario. Several other offshore projects also began vying for approval in that Canadian province: developers had turned in 500 offshore wind applications for projects representing 20 790 MW as of late 2009.

In both Europe and North America, developers continued to look further offshore into deeper waters to construct wind farms. Given the expense of building traditional foundations in water deeper than 30 m to 50 m, the industry began testing floating platform technologies. StatoilHydro and Siemens in June 2009 deployed the world’s first large-scale floating wind platform in Norway, 12 km southeast of Karmàƒ¸y in waters 220 m deep.

The industry also pressed forward with larger turbines for offshore use. Clipper Windpower made plans to install 10 MW turbines as part of the Britannia Project near Newcastle in the UK. To that end, the company won a à‚£4.4 million ($5.1 million) grant under the Environmental Transformation Fund’s Offshore Wind Demonstration Call in September 2009.

à‚ 

Solar talks gigawatts

à‚ 

The solar industry, too, achieved new milestones for growth in 2009, increasing worldwide photovoltaic (PV) installations 20 per cent to 7.3 GW and raising over $13.5 billion in equity and debt, according to Marketbuzz 2010, a report by Solarbuzz. Europe continued to lead with 5.6 GW, or 77 per cent of world demand in 2009.

The top three countries in Europe for solar installations were Germany, Italy and Czech Republic, which together accounted for 4.07 GW, said the report.

Italy, meanwhile implemented its second FiT, making the nation strategically important, according to Fotowatio Renewable Ventures, a global independent solar power developer. About 70 000 PV plants will be added to the 165 MW in capacity deployed under the first FiT.

Meanwhile, Mongolia became an epicentre of industry attention with the announcement by American company First Solar and the Chinese government in autumn 2009 of a 2000 MW PV farm in the Mongolian desert. The project, spurred by China’s FiT, is part of the 11 GW green energy demonstration zone planned for Ordos City.

The USA, for years a laggard in solar energy development, took a big leap with 441 MW of new solar capacity and $1.4 billion in venture capital, according to the US-based Solar Energy Industries Association (SEIA). The nation, as SEIA puts it, “is now talking gigawatts, not megawatts for solar”. Rapid additions continue. The US has about 22 GW of solar projects in the pipeline, up from 6.5 GW at this time last year.

Solar farm size changed, as well. Utilities and developers increasingly pursued large, centralized photovoltaic projects. Not so long ago, a 1 MW project drew industry attention; today such proposals are commonplace, as utilities and independent developers build solar farms in the double and triple megawatts, according to the US-based Solar Electric Power Association (SEPA). In one example, Florida Power & Light in October 2009 began operating the largest PV plant in the US, a 25 MW facility in DeSoto County, Florida.

First Solar and the Chinese government agree to build a 2000 MW solar PV farm in the Mongolian desert last autumn

“Traditionally, distributed PV has referred to customer systems connected to the utility’s grid. In 2009, however, several utilities announced or started construction of ‘distributed plants’ that will provide, in aggregate, up to 500 MW each. A large portion of these will be utility-owned and managed as a single project ” hence distributed, but utility-scale,” said SEPA in its report ‘Utility Solar Trends: 2009 in Review’.

California, still the US market leader, approved a plan by utility Pacific Gas & Electric to install 500 MW of projects in the 1 to 20 MW range. Development also continued to spread into states beyond California.

Even the not-so-sunny north-east of the US found itself home to an increasing number of utility-scale solar projects, including distributed generation proposal of up to 800 MW of solar panels proposed by GridSolar in lieu of a 350 mile transmission line that utility Central Maine Power wants to build.

The USA and Spain continued to be the major developers of concentrated solar power, although the resource faced setbacks in both nations over the past year. In Spain, the solar industry saw a slowdown when the Spanish government capped solar subsidies.

In the USA, some projects found it hard to weather the economic storm. The Starwood Energy Group canceled a power purchase agreement in late September 2009 with Arizona Public Service for the 290 MW Starwood Solar I project. Starwood and building contractor Lockhead Martin cited unexpectedly high construction costs that made the deal uneconomical.

At the same time, US concentrating solar power (CSP) advocates were carefully watching federal legislation proposed by US Senator Dianne Feinstein in late 2009 that would prohibit projects in large swaths of California’s Mojave desert, an area considered to be a prime location for CSP.

Still, the US CSP industry did experience growth. As of April 2010, the US had 432 MW of CSP in operation and 82 MW under construction, including a 4 MW solar/coal fired hybrid demonstration plant being built by Xcel Energy in Colorado.

The largest CSP plant under construction is in Florida, a 75 MW parabolic trough plant being built by Florida Power & Light. In addition, the US had more than 10 500 MW of CSP in the pipeline, according to SEIA.

Several US projects made major strides. BrightSource Energy won a $1.37 billion loan guarantee from the US government for Ivanpah, a 400 MW project that BrightSource says will be the world’s largest solar energy project when built.

Also in the USA, SolarReserve signed a 25-year power purchase contract with NV Energy for its output from the 100 MW Crescent Dunes Solar Energy Project and a contract with PG&E for output from its 150 MW Rice Solar Energy Project.

Other renewable energy technologies, some established, others emerging, also rode the wave of expansion. On the biomass front, GDF Suez moved forward on what it expects to be the world’s largest wood/agricultural biomass boiler, a 190 MW project in Polaniec power plant in Poland. Foster Wheeler won the contract to build the project, expected to be operating at the end of 2012.

Due to more pressing issues, US President Barack Obama has not made quite as much headway with renewable energy policy as the industry hoped Source: National Grid

Ontario, in its effort to shut down all coal fired power plants by 2014, moved forward with plans to convert some of the plants to 100 per cent biomass fuel.

Meanwhile, the USA continued its pursuit of reducing emissions at coal fired plants, which provide about half the nation’s power, through co-firing coal with biomass.

Cutting-edge technologies, such as marine energy, also pushed forward. A Pike Research report found that ocean energy could generate as much as 200 GW by 2025 if current tidal projects are successful. Already 300 hydrokinetic projects are in the works around the world, according to the report ‘Hydrokinetic and Ocean Energy’.

Energy storage technologies also made headway, with new projects in the US taking on the task of grid regulation. AES set to work on a 20 MW battery project in New York at the site of a retired power plant. The storage system will provide regulation services when called upon by the grid operator, a service usually supplied by generators.

à‚ 

Not all good news

à‚ 

While expansion characterized the industry over the past 12-18 months, not all the news was good. Green energy advocates had hoped that talks would result in a binding climate change agreement during December’s United Nations Climate Change Conference in Copenhagen. But none was forthcoming. The topic will be taken up again in talks scheduled for late 2010 in Cancàƒºn.

In addition, the Obama administration failed to win Congressional approval of energy legislation, which many green energy advocates had hoped would occur during his first year in office. Instead, Congress became bogged down in debate over healthcare legislation. As a result, the USA achieved neither a national carbon cap-and-trade system, nor a national renewable energy standard, two goals Obama had announced early in his presidency.

Nick Stavropoulos, executive vice president at National Grid, said: “Macro policy is vital. A binding international agreement did not emerge from Copenhagen, but an increased focus on the energy and climate change challenges certainly did. This renewed focus has to continue, and the prospect of a federal climate and energy policy in the US is just one example of how we are seeing progress. Hopefully, the challenge will be met head on by our leaders in Cancàƒºn later this year.”

So after a banner 2009 for renewable energy, the question for 2010 becomes: Can the world repeat the performance?

à‚ 

ABOUT THE AUTHOR

à‚ 

Elisa Wood is based in Virginia, USA, and specializes in writing on energy-related issues.

à‚ 

More Powe Engineering International Issue Articles

à‚ 

Powe Engineering International Archives

à‚ 

View Power Generation Articles on PennEnergy.com

No posts to display