THE ENERGY INDUSTRY March 2012 • Volume 5 • No 1 • Published monthly • ISSN 1757-7365 www.teitimes.com TIMES

Renewable pursuits Smart response Final Word Minister Dr Farooq Abdullah The Energy Efficiency Directive can Junior Isles talks of explains why India’s renewable promote demand side management wind pains. targets are achievable. and help realise the smart grid. Page 13 Page 14 Page 16

News In Brief China faces import tariffs The trade dispute between China and the USA heats up as the US US wind industry government’s investigation draws to a conclusion. Page 4

NTPC ruling throws lifeline to flagging five-year plan India’s faltering 12th Five-Year threatened by Plan was given a boost after the National Thermal Power Company won a court order against a lawsuit challenging its tendering process. Page 6 tax credit French nuclear industry needs massive investment France will have to spend billions of euros to bring its nuclear energy fleet Martha Wyrsch urged up to tough new standards. an extension of the Page 8 withdrawal Production Tax Credit Germany accelerates FITs cuts Uncertainty surrounding support for With the withdrawal of a tax credit, the US wind industry is looking at a dramatic slowdown in renewable energy continued after the German government 2013. Junior Isles announced changes to its feed-in tariff scheme. The withdrawal of a tax credit for wind wind turbines. Vestas officials have power credit on behalf of Vestas “Wind energy has grown dramati- Page 9 power production at the end of the year been seeking a multi-year extension of American Wind Technology, which cally in the past several years, creating could result in massive layoffs and a the tax credit as a way to ensure future has four wind turbine plants in a manufacturing renaissance in the UNEP calls for sustainable delay or abandoning of projects. sales, but Congress has been authoris- Colorado. US, and the PTC has been a significant energy boost in Africa The move is expected to have major ing the credit year to year. It is esti- In December Martha Wyrsch, driver in that growth. The jobs at stake, The United Nations Environment ramifications in states such as Illinois, mated to cost the treasury about $3.5 president of Vestas American Wind which include 20 000 people in the US Programme has called on where 13 892 MW of wind projects are billion a year. Technology, Inc., gave testimony to wind industry’s manufacturing sector governments in Africa to open up awaiting connection to the grid. It was thought there would be little the U.S. Senate Finance Subcommittee and technical jobs throughout rural their energy sectors to private sector Illinois, which benefits from strong opposition to continuing the tax credit on Energy, Natural Resources & America, are skilled-labour positions investment in order to unlock its midwestern winds, is home to more and the decision by a House and Senate Infrastructure to urge an immediate with competitive wages and medical massive renewable energy potential. than 150 companies that support the conference committee to leave the tax extension of the Production Tax Credit and retirement benefits.” Page 9 wind industry. At least 67 of those bill out came as a surprise. (PTC). Wyrsch warned that if the PTC is not companies make turbines or The outcome left a Colorado “An extension of the PTC is neces- extended, hundreds wind industry Fuel Watch: Algeria to boost components for wind farms. congressional delegation scrambling sary for the continued employment of suppliers in the US employing The wind power credit provides a 2.2 for a new strategy – along with a new the 80 000 people working in the U.S. gas production with Repsol Continued on Page 2 deal per cent tax credit for the purchasers of legislative vehicle to carry the wind wind industry,” said Wyrsch. Algeria is allowing Spain’s Repsol to proceed with the development of the North Reggane project. Page 12 Path cleared for offshore wind Technology: A leap forward The completion of a study examining companies to specify which tracts they study under President Obama’s “all- right places, where the wind energy for solar thermal panels how offshore wind development might want to lease. of-the-above” energy strategy, outlined potential is significant and where A new, high-vacuum flat collector at would affect the US Mid-Atlantic Unlike Europe, which is experiencing during January’s State of the Union environmental effects and conflicts Masdar City could change the solar Coast essentially clears the way for huge growth in offshore wind instal- address. “When it comes to powering with other uses can be minimised and industry. wind farm lease sales off the coasts of lations, especially in the UK, the US our nation’s homes, businesses and managed.” Page 15 Delaware, Maryland, New Jersey and has made no progress in establishing economy, we need to take an all-of- Since the new environmental study Virginia. offshore projects. It expects this to the-above approach to safely and was broad, he said the BOEM will A recent study by the Interior change soon. Cape Wind – a 420 MW responsibly developing our domestic conduct further site- and project- Department concludes that it threatens project with 130 turbines in energy resources,” Salazar said. specific analysis before issuing “no significant environmental and Massachusetts’ Nantucket Sound – Obama’s plan involves 10 GW of permits. socio-economic impacts” and says has already received federal approval, offshore wind generating capacity by Deputy Interior Secretary David Advertise lease sales could begin by the end of and construction could begin this 2020, and 54 GW by 2030. Hayes described the Mid-Atlantic as a [email protected] this year. year. Bureau of Ocean Energy Management “sweet spot” for tapping offshore “Offshore wind holds incredible Meanwhile, construction of a smaller (BOEM) Director Tommy Beaudreau winds and called the latest potential for our country, and we’re project in Rhode Island – Deepwater said at the beginning of February: “We announcement an early step in build- Subscribe moving full-steam ahead to accelerate Wind’s 30 MW Block Island project are moving toward commercial-scale ing “a world-class offshore wind [email protected] the siting, leasing and construction of – is planned to begin in 2013 or 2014. offshore wind energy leasing in the industry”. new projects,” Interior Secretary Ken Other companies, including Apex mid-Atlantic and adding the necessary This was echoed by the American or call +44 208 523 2573 Salazar said in a statement. Wind Energy and Fisherman’s Energy, tools to offer those leases. Wind Energy Association, which On top of unveiling the environ- are also jockeying for space on the “We considered public input and called the move “a significant mile- mental assessment, the department Mid-Atlantic Coast. conducted a thorough analysis to stone in efforts to launch a vital new also formally asked wind power Salazar announced the results of the ensure future projects are sited in the American offshore wind industry”.

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: [email protected] THE ENERGY INDUSTRY TIMES - MARCH 2012 2 Headline News

Continued from Page 1 thousands of people also would be affected. That warning was drafted into a delegation letter that was sent to the House and Senate conferees Vogtle approval underlines in January. There is still a possibility the extension for wind power tax credits could come through as a stand-alone bill or tied to other “importance” of nuclear legislation. Reacting to the setback, The approval of two reactors at the Vogtle plant demonstrates the continued Democratic Sen. Michael Bennet drafted a wind power amendment importance of nuclear in the US future energy mix. he wants the Senate to attach to a transportation bill that is currently pending in the House. Sen. Mark Udall, also a Democrat, Junior Isles Construction and Operating License the plant despite objections from the claiming that Southern Company is drafted a letter to both Democratic (COL) for Plant Vogtle units 3 and 4, Nuclear Regulatory Commission keeping US taxpayers in the dark by and Republican leaders in the US Department of Energy Secretary the first such license for a US nuclear chairman, who cited safety concerns covering up details of 12 sizeable Senate, urging them to support a Dr. Steven Chu says that nuclear power plant. resulting from Japan’s 2011 Fukushima construction “change order” requests vote on the wind power amend- will continue to be an important part of Commenting on the approval, Georgia disaster. that are expected to add major delays ment when the transportation bill the energy mix in the United States and Power’s CEO W. Paul Bowers said: NRC Chairman Gregory Jaczko said: and cost overruns. arrives. around the world. “Not only will the addition of units 3 “I cannot support issuing this license The groups are calling on the DOE to However, Washington insiders Following the approval of two new and 4 provide our customers with as if Fukushima never happened. I insist on full disclosure of the Vogtle say it is unlikely that anything will reactors at Vogtle – the first in the US clean, safe, reliable and affordable believe it requires some type of delays and cost overruns before the in 30 years – Chu told workers at electricity, but this project is putting binding commitment that the federal agency moves ahead with a Southern Company subsidiary Georgia people to work. The Vogtle investment Fukushima enhancements that are cur- $8.33 billion taxpayer-backed federal Power’s Plant Vogtle that nuclear is expected to create 25 000 direct and rently projected and currently planned loan guarantee that has been offered to power is “an important part” of indirect jobs, including 4000 to 5000 to be made would be made before the Southern and its partners as an incentive. President Obama’s energy blueprint. jobs on site during peak construction, operation of the facility.” Thomas Fanning, Southern Co.’s chief Secretary Chu said: “In his State of and 800 permanent jobs once the units Nuclear industry officials say they executive Officer said he expects the the Union address, President Obama are in operation.” expect five new reactors to enter service DOE to finalise the loan in the second outlined a blueprint for an American Georgia Power expects Unit 3 to begin by 2020 – Southern’s two Vogtle quarter of 2012. economy that is built to last and develops operating in 2016 and Unit 4 in 2017. reactors, two at Summer in South n The Next Generation Nuclear Plant every available source of American Southern Nuclear, a subsidiary of Carolina and one at Watts Bar in (NGNP) Industry Alliance LLC in the energy. Nuclear power is an important Southern Company, will operate the two Tennessee, to be built by the federally US has selected Areva’s prismatic part of that blueprint. The work being new 1100 MW Westinghouse AP1000 owned Tennessee Valley Authority. core, 625 MW thermal, steam cycle done in Georgia and at research units for Georgia Power and co-owners At the beginning of February, TVA modular high temperature gas-cooled organisations like Oak Ridge National Oglethorpe Power Corporation, the said the Watts Bar unit was behind reactor (SC-HTGR), AREVA’s HTGR Laboratory is helping restore American Municipal Electric Authority of Georgia schedule and that costs would Generation IV reactor, as the reactor leadership in the global race for the and Dalton Utilities. Georgia Power “significantly exceed” a previous build- design concept to provide high nuclear energy jobs of tomorrow.” owns 45.7 per cent of the new units, ing cost estimate of $2.5 billion. Some temperature process steam for Udall: urging support for Last month the Nuclear Regulatory with a certified cost of $6.1 billion. organisations are concerned that there industrial applications and electricity wind power amendment Commission issued the Combined US regulators approved plans to build will also be cost overruns at Vogtle, production. happen before the election in November. By then, the wind industry says it Pakistan and will be too late to avoid massive layoffs and project delays since China mull wind projects slated for 2013 should be moving down the supply chain now. nuclear deal “The development cycle for wind ETS debate The Pakistan Atomic Energy Com- power begins more than a year in mission (PAEC) says it is in the final advance of operation,” Wyrsch said stage of negotiations with China for in December. “Many of our a deal to set up at least six nuclear customers have already announced power plants at different sites to be they will not place orders for any commissioned by 2023. new turbines until the PTC is Under the proposed deal, four extended. The industry needs escalates plants would be set up in Karachi, predictable, long-term tax and A debate is brewing in Brussels about Pakistan’s largest city and the capital energy policies to ensure continued how to fix the European Emissions of Singh province, one would be at investment.” Trading Scheme (ETS), Europe’s main Sukkur in the interior of Sindh, and The tax credit does not expire until tool for cutting carbon dioxide at least one more would be at Chashma the end of this year but in order for emissions. in southern Punjab province, the developers to receive it, they must One side of the debate is calling for Associated Press (AP) reported. have their turbines up and running the European Commission to step in According to AP a PAEC official before the end of the year. and prop up prices, while the other is said: “We have firm plans to set up The looming deadline may see against intervention. additional nuclear power plants with 2012 become a bumper year for In one of the strongest public Teyssen: total capacity of 4345 MW by 2023. wind power as developers race to statements to date, last month Johannes “start fixing the ETS” The reports follow an earlier complete projects. However, few Teyssen, CEO of German energy group caution by Germany on the risks of projects are slated for 2013. E.On, stunned an audience in Brussels nuclear power generation. Dr Tilo Developers say they either pushed when he proclaimed the market was Teyssen and the coalition of companies behind it. Some see it as moving the Klinner, Consul General of the projects back to 2012, or stalled broken. want the introduction of a minimum goalposts. Trevor Sikorski, director of Federal Republic of Germany, those slated for 2013 because of the “Ladies and gentlemen, let’s talk real: price to give investors greater carbon markets at Barclays Capital told advised Pakistan to avoid pursuing uncertainty over the tax credit. the ETS is bust, it’s dead,” he said. The certainty. the Financial Times: “Low prices are nuclear power generation as it has Industry consultants say new call from Teyssen to “start fixing the “Fix it or abate it,” Teyssen said during not indicative of a broken market both security and other environ- capacity is likely to return to lows ETS” comes after EU carbon prices the conference on the Energy Roadmap anymore than high prices.” He pointed mental threats. the country has not seen since 2004. tumbled to a four-year low in January 2050, a strategy paper by the European to the dramatic swing in oil prices over “A lot of risk is involved in Competition from cheap natural gas because of the economic crisis and Commission to map the way to low- the last decade. electricity generation from nuclear and weak demand for power as the concerns that planned new energy carbon goals in the energy industry. The Commission is considering a technology. Not only security threat economic recovery struggles to efficiency measures will further curb “Don’t continue to deliver Sunday plan to set aside millions of permits to is involved, but the nuclear waste is recover will contribute to the bleak demand for emission permits. speeches on this great backbone of help stabilise prices. “To preserve this also a big problem,” he said at a outlook for 2013. “Does the price give any signal for energy transformation which is not truly European and cost-effective meeting with members of the Karachi “We simply have not seen that new investments? No. None,” Teyssen even an efficient means to collect taxes policy tool, we have to consider, and Chamber of Commerce and Industry strong demand for new power said. “I don’t know a single person in anymore,” he said. “If you look at are considering how to strengthen the (KCCI). generation,” said Daniel Shreve, the world that would invest a dime national budgets, what the governments ETS,” said Connie Hedegaard the EU The German consul general was director and partner of MAKE based on ETS signals.” expected in 2013, money is gone. Not Climate Commissioner. replying to KCCI President Mian Consulting, a US wind energy Teyssen and a coalition of companies even the money collection happens The carbon cap-and-trade pro- Abrar Ahmed’s proposal that consultancy. “In the last four to five that have invested in low carbon anymore.” gramme can “co-exist” with rules to Germany should support Pakistan years, despite the fact that you technologies such as carbon capture However, steelmakers and other boost energy efficiency and the towards advancement of civil haven’t seen tremendous load and storage (CCS) have done so under heavy industries argue that if the commission is following closely a nuclear use. Dr Klinner admitted that growth, new power generation is the assumption that carbon prices system was created to introduce market debate in the European Parliament on energy is the biggest issue in Pakistan, being added. Reserve margins have would exceed €30 per tonne. Currently incentives, meddling with prices under- the draft energy savings law, she told which caused immense damage to grown. We’re oversubscribed.” it is less than €10/tonne. mines the fundamental reasoning the conference. the country’s economy. THE ENERGY INDUSTRY TIMES - MARCH 2012

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Mexico launches renewables initiative A group of senior figures from China faces Mexico’s private sector, civil society and academia have launched a new initiative that aims to boost the uptake of renewable energy in the country. The Mexican Initiative for Renewable Energy (IMERE) was unveiled in Mexico City last month and includes import tariffs a number of proposals and goals for both the private sector and government to consider, including the setting of The trade dispute between China and the ambitious targets for renewable energy. USA heats up as the US government’s It wants easier access to the electric investigation draws to a conclusion. power grid for renewable energy generators and has called for fossil fuel subsidies to be removed, with government spending shifted towards the development of renewables. Although it believes that the Siân Crampsie “After several years of massive If the ITA’s determination is into the limelight when Chinese Vice government needs to set favourable imports of illegally subsidised and confirmed, tariffs would be imposed President Xi Jinping visited the US and policies for renewable energy, it also Chinese solar panel firms could face dumped Chinese solar products, the on all imports of solar goods from met with President Barack Obama. A wants the private sector to take the tariffs on goods exported to the USA US solar manufacturing industry and China, a move that could protect US group of 45 CEOs from solar energy initiative. after the US Commerce Department its workers greatly appreciate the manufacturers but lead to higher companies across the USA urged The backers of IMERE say that made a preliminary determination in a Department of Commerce’s finding prices. President Obama to negotiate with Mexico’s wind energy sector is an trade war triggered last year by US that importers of Chinese products The Coalition for Affordable Solar China over the trade war and “to obvious choice for investors because solar firm SolarWorld. have mounted a massive surge in Energy (CASE), a group set up to discuss the mutual benefits of of the country’s abundant wind The Commerce Department’s Inter- product to evade accountability to US voice opposition to SolarWorld’s renewable energy development”. resources. They warn that greenhouse national Trade Administration (ITA) and international trade law,” said complaint, says that tariffs on Chinese According to a report commissioned gas emissions could rise by 230 per believes that Chinese firms are Gordon Brinser, president of goods would result in major job losses by CASE, a 100 per cent tariff on cent by 2050 because of the country’s receiving illegal subsidies on solar SolarWorld Industries America Inc. in the US solar sector as well as a imported solar PV cells and modules dependence on fossil fuels. products exported to the USA and says “We filed these trade cases as a key deterioration of US-China relations. from China would result in 50 000 net that it has “reasonable basis to believe step to rekindle growth in America’s China has already launched its own job losses in the USA over the next or suspect” that the allegations made renewable energy manufacturing and investigation into the subsidies and three years. Retaliatory tariffs placed by SolarWorld are valid. jobs. supporting policies provided for US on US exports of polysilicon to China The preliminary determination is the “SolarWorld and CASM believe that renewable energy tech firms exporting would put nearly 11 000 more US jobs first step in the ITA’s judgement free trade is free of illegal govern- to China. It is likely to result in tariffs at risk, it says. process but must be confirmed by the mental intervention. Robust and legal on US goods if SolarWorld wins its The ITA is due to reach a final US International Trade Commission international competition, not preda- case. decision on the countervailing and tory pricing that relies on massive and China’s investigation covers solar, anti-dumping allegations in March. In abundance: wind is the before becoming effective. It was welcomed by the Coalition for improper subsidies, will produce the hydropower and wind energy Countervailing and anti-dumping obvious choice for cutting best products and sustainable price equipment. tariffs could be imposed retrospectively greenhouse gas emissions American Solar Manufacturing, a trade group led by SolarWorld. declines over the long term.” Last month the dispute was thrown to December 2011, says the agency. Partnership drives EIA forecasts wind turbine innovation A new public-private partnership is Their work will focus on three key aiming to help the USA to attain its areas: developing new wind turbine target of sourcing 20 per cent of its components and rotors for the US fall in coal electricity needs from wind energy by market; researching and testing the 2030. performance of new control The US Department of Energy’s strategies; and devising models that National Renewable Energy will help advance the development of Laboratory (NREL) has created a offshore wind in US coastal waters, partnership with wind turbine firm and will help to reduce technical Gamesa to study and test a variety of risks. generation components and systems for the next Using Gamesa’s G97 Class IIIA 2.0 generation of wind turbines. MW wind turbine model, NREL and The two organisations say they Gamesa researchers will study the expect to focus on innovations that behaviour of systems and how new will enhance the capabilities and designs, products or equipment can n Gas, renewables rise performance of advanced wind affect performance. This unit is n systems and believe that such specifically designed for low-wind 33 GW of coal closure forecast partnerships will help to ensure sites, a segment that is expected to continued momentum in the US play a key role in onshore wind The share of coal in the US power generation sector, where utilities are projected to grow from 1.4 quadrillion wind energy sector. energy development in the US. generation mix is forecast to fall to preparing to close power generation Btu in 2010 to 3.4 quadrillion Btu in below 40 per cent over the next 25 units in order to keep in line with new 2035, with biomass accounting for 30 years because of increasingly stringent regulations. per cent of the growth and wind 44 per Future generation: environmental regulations and com- The report shows that US natural gas cent. Gamesa will study test petition from cheap natural gas. production will continue to grow over Consumption of solar energy grows systems for the next The US Energy Information the next 25 years, exceeding con- the fastest, but starting from a small generation of turbines Administration (EIA) says that the sumption early in the next decade. base it will account for only a small share of natural gas, renewable energy Demand for natural gas in electricity share of the total in 2035, EIA said. The and nuclear energy in power generation generation will grow from 7.4 trillion report is a positive sign for the re- will rise, but that coal’s share could fall cubic feet (tcf) in 2010 to 8.9 tcf in newable energy sector, which is facing from nearly 50 per cent to 39 per cent 2035, EIA said. an uncertain outlook in the USA. in 2035. “A portion of the growth is attribu- A recent analysis of the wind sector The findings were published in an table to the retirement of 33 GW of by the Global Wind Energy Council early release of the EIA’s 2012 Annual coal-fired capacity over the projection (GWEC) shows that countries in Latin Energy Outlook and are in line with period,” says the report, which also America, Africa and Asia are driving current trends in the USA’s natural gas says that renewable energy con- market growth, rather than OECD industry and the coal-fired power sumption in the electric power sector is countries. THE ENERGY INDUSTRY TIMES - MARCH 2012

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n Court ruling kick-starts equipment orders five-year plan n Conventional power targets may be cut

Syed Ali orders for nine power projects totalling term fuel-supply agreements with target will be fixed following discus- also expected to be coal-based. 5940 MW of capacity. some operational and various up- sions between the ministries of power, Similarly, gas-based capacity is also National Thermal Power Company NTPC, India’s largest power producer coming power projects, will reduce coal and the Planning Commission. being scaled down due to declining (NTPC) Ltd. is preparing to place by installed base, plans to double its the uncertainty on fuel. Indian power “The Planning Commission will take a production from Reliance Industries orders for power generation equipment generation capacity to about 66 GW producers are also facing gas shortages final view after taking everything into Ltd’s D6 block in the Krishna-Godavari worth as much as INR220 billion by March 2017. But, it has been facing due to a decline in local natural gas consideration,” the official was quoted basin, India’s largest gas reservoir. ($4.45 billion) after the state-run several hurdles in its growth plans. output. as saying. “We’re now looking at around 75 000 company won a court order against a Chairman Arup Roy Choudhury told In early February, the government Power minister Sushilkumar Shinde MW from conventional sources of lawsuit challenging its tendering a news conference: “Litigations are said it might lower its power capacity confirmed that the earlier capacity energy such as coal, gas, nuclear and process. The ruling is welcome news also an issue which hurts our expansion addition target for the 12th Plan (2012- addition target was being revisited hydro. In addition, captive power and for the country’s faltering plan to add plans.” Apart from frequent litigations 2017) by as much as 25 000 MW, due to fuel availability issues. “A final other sources would add to a total of 100 000 MW from conventional related to power equipment contracts, making it even less likely that the number is yet to be fixed,” he said. around 93 000 MW,” said the official. generating capacity under the 12th Choudhury said shortage of fuel is country’s long-standing electricity India, primarily dependent on coal for India has a poor track record in adding Five-Year Plan. another issue hindering its projects. shortage will end any time soon. power generation, is facing its worst power generating capacity. It is set to A Supreme Court ruling in February NTPC’s projects with about 16 GW of The target for conventional sources coal shortage. Power generators account miss a revised target of 62 374 MW and upheld NTPC’s decision to disqualify capacity, most of them upcoming, are may be cut from 100 000 MW to 75 000 for 78 per cent of the total domestic coal will only add around 52 000 MW by the local unit of Italian boiler-maker stranded due to coal shortages. MW due to chronic fuel shortages and consumption. Over 55 per cent of the the end of March. The original target Ansaldo Caldaie S.p.A from bidding Choudhury said he is hopeful that resistance to land acquisition. installed generating capacity of 186 654 was 78 577 MW. In the five years to for technical reasons. This clears the the government’s recent move to ask According to reports citing an un- MW is fuelled by coal and much of the 2007, it added 20 950 MW of capacity, way for NTPC to place equipment coal miner Coal India Ltd. to sign long- named government official, a final proposed addition of 100 000MW was against a target of 41 110 MW. Japan, US eye cooperation Australia 2020 post-Fukushima renewable energy Japan and the United States are Japanese government, with no clarity The Fukushima prefectural target at risk considering establishing a bilateral as to who was in charge. government conducted an on-site standing council of high-ranking Last month it was revealed that the inspection at the No. 2 reactor in Low wholesale electricity pricing, Australia to meet the 20 per cent target. government officials to promote Fukushima No. 2 reactor was near February and repeated a request to coupled with the low pricing of RepuTex projects pricing will remain cooperation in the field of nuclear meltdown after being hit by the Tokyo Electric Power Co (Tepco) to Renewable Energy Credits (RECs) at similarly subdued levels over the energy. tsunami caused by a massive earth- decommission the facility. Masuda places Australia at risk of missing its short to medium term, even allowing Officials from both governments quake on March 11, 2011. did not elaborate but said: “At the renewable energy target, according to for the introduction of carbon pricing. said joint studies on reprocessing Plant chief Naohiro Masuda, in moment, I can only say we’ll maintain a new market update from carbon technology for spent nuclear fuel and charge of plant operations since the a state of cold shutdown.” analytics research firm, RepuTex. Renewables only likely to measures to reinforce the safety of crisis, told reporters in Japan, “the No. The plant was declared stable in Australia’s renewable energy target account for 16-17 per cent nuclear power plants are expected to 2 plant almost suffered the same fate December last year but at the calls for 20 per cent of the country’s energy be among the core issues to be taken as No. 1 [which led to a severe beginning of February it was reported electricity to be generated from up by the council. crisis]”. that leaks of radioactive water have renewable sources by the year 2020, The two governments began become more frequent. however RepuTex forecasts that the considering establishing the council The problem underlines the con- actual figure is likely to be based on a letter sent to Japan late last tinuing challenges facing Tepco as it between 16 and 17 per year by US Deputy Secretary of attempts to keep the plant under cent. Energy Daniel Poneman, in which he control. RepuTex’s analysis points called for a new mechanism for n The government recently said it to the reality that a number bilateral dialogue on nuclear coopera- will provide an additional Yen 689.4 of currently scheduled tion in the wake of the nuclear crisis billion ($8.5 billion) to Tepco to cover projects are likely to be delayed at the Fukushima Daiichi power massive compensation payments as a result of subdued prices plant. related to the accident at the power within the Australian renew- A Japanese official said the move plant. The decision will raise the total able energy market, with was prompted by criticism of Japan’s amount of financial aid so far provided wholesale electricity prices and initial handling of the crisis, which Poneman: new mechanism by the state-backed Nuclear Damage renewable incentives presently too saw a US proposal for support at the for bilateral dialogue Liability Facilitation Fund to more low to facilitate the level of start of the crisis passed around the than Yen1.5 trillion. investment in the sector needed for Philippines awarding renewables contracts Philippine Energy Secretary Jose Rene go through various clearances from At the end of the first half of last that are not moving. We are sending applications. D. Almendras says the government is the local government units and they year, some 236 RE contracts had been letters to those that are not complying Almendras said that the DOE would continuing to award renewable energy need to secure other permits like the signed since the DOE started awarding with their work commitments – they push through with the development (RE) service contracts to deserving Environmental Compliance Certificate,” them in 2009. need to explain [the situation] to us. If of local renewable energy sources, as project proponents, with the total Almendras said. Since last year, however, the DOE the excuse is acceptable, we will agree this would help reduce the country’s number of approvals reaching 268 as Based on documents from the has been cancelling contracts in an on a new schedule. If not, the contract heavy dependence on imported energy of January 9 this year. Department of Energy (DOE), the 268 effort to weed out those that were not will be revoked,” he warned. sources. “We have been coming out with existing contracts have the potential to able to comply with their work Meanwhile, data from the DOE Under the government’s National renewable energy contracts. We’re generate some 4763 MW. Hydropower commitments. further showed that the number of Renewable Energy Plan, the DOE pushing for it. Except that, we chose projects made up the bulk of the Almendras said the cancellation of pending applications for RE contracts plans to increase RE-based power not to make public the list of the approvals with 133 contracts, followed non-performing was still ongoing. has been halved to 222 from the capacity from the current 5369 MW to proponents for now as they still need to by wind projects with 52 contracts. “There are a lot of service contracts previous year’s count of 406 as much as 15 236 MW by 2030. THE ENERGY INDUSTRY TIMES - MARCH 2012 Asia News 7 PLN to bid for Ratchaburi Singapore exports reconsidering n Bid will be opened in 2013 for power delivery in 2017 n Auction for Java-Sumatra link to start 3Q 2012 Koh Kong

Ratchaburi Electricity Generating proceeded. Holding, of Thailand, is conducting a Meanwhile, Ratchaburi is still feasibility study on whether to invest hopeful that the coal-fired power plant The Batam subsidiary of state another country, whose supply of raw grid to Bintan Island. We will supply in an 1800 MW coal-fired power plant in Burma’s Dawei, on which it is jointly electricity company PLN says it has materials depends on us. We hope we electricity to Bintan at a cheaper price in Koh Kong, western Cambodia, after conducting a feasibility study with received an invitation to bid for a are going to be able to export electricity compared to Batam. As for Singapore, the project was frozen during the Italian-Thai Development, will not be contract to supply power to Singapore’s to Singapore. We will do our best to we will build a separate power plant. conflict between Cambodia and scrapped. Energy Market Authority (EMA). win.” “The Malaysian power plant uses Thailand. Ratchaburi has earmarked some PLN will be competing with a PLN Batam technical director Fahmi coal that is supplied from Indonesia. Ratchaburi chief executive officer Baht8 billion ($263.5 million) for Malaysian power utility that also El Amruzi said that the company Numerically, we are going to be more Noppol Milinthanggoon said it was investments this year, of which roughly received an offer to bid on the tender, would establish a separate power plant competitive than that country,” he reviewing the study to construct the Baht3 billion will go for new projects which will be opened in 2013 for to supply electricity to Singapore so added. plant if the Cambodian government and mergers and acquisitions. delivery in 2017. there would be no disruptions to the Meanwhile, PLN said it plans to begin opens it up to investment again, which Dadan Koerniadipoera, the president existing plants that served Batam and an auction on a planned undersea cable is likely. director of PLN subsidiary PT Bintan, Riau Islands. According to a project that will connect Sumatra and Ratchaburi together with Electricity Pelayanan Listrik Batam (PLN preliminary feasibility study, it would Java. The auction on the 3000 MW link, Generating and Italian Power, a Batam), said the company had an cost Rp12 trillion ($1.34 billion) to which would span 700 km from subsidiary of Italian-Thai Develop- excellent chance to win the tender, build a 1000 MW plant that would be Bangko Tengah, South Sumatra to ment, conducted a feasibility study for given its competitive advantage over used for this purpose. Bogor, West Java, will be conducted in a 3660 MW coal-fired power plant in its potential Malaysian competitor. He PLN Batam currently can produce the third quarter of this year, PLN Koh Kong in 2008. The project was said in addition to gas, Indonesia also 314 MW against a maximum demand Construction Director Nasri Sebayang frozen mainly because of the border has coal to produce the electricity. “We of 264 MW, leaving it with a 50 MW said. conflict between the two countries. are going to export electricity to reserve. With electricity supply in The project is expected to commence Ratchaburi’s renewed interest in the Singapore. As of now, we only export Batam growing at 12.1 per cent a year, in 2013 and be finished in February Koh Kong project comes amid raw materials to that country,” he PLN Batam’s is currently building a 2016. Costing about $2 billion, the uncertainty over the plan to construct said. 2x55 MW Tanjung Kasam coal-fired project would mostly be financed by a 4000 MW power plant in Dawei. The Dadan added: “We expect support power plant (PLTU), which comes a $1.7 billion from Japan International Burmese government recently from all relevant stakeholders so that online in June. Cooperation Agency (JICA). “The announced that it would halt the Eyes on coal: Ratchaburi is we, as the ones who have all the needed Fahmi said: “[The] electricity surplus remaining funds would be provided by project, saying that it wanted to study still hopeful that its plans will resources, will not be defeated by will be distributed through the power PLN’s internal cash,” Nasri said. the environmental impact before it not be scrapped THE ENERGY INDUSTRY www.teitimes.com TIMES

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Keeping a grip Shedding light on Final Word on investment? solar PV Junior Isles analyses Policy paralysis threatens Rapid solar PV growth in Europe SSE’s batting strategy. India’s investment potential. could bear consequences. Page 18 Page 14 Page 16

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Urge to end fuel subsidies affecting The IFC’s Rachel Kyte is calling for “pragmatic investment action” on climate finance Sinovel files counterclaim Private investors are hoping that the upcoming negotiations in Durban will deliver clear details on future climate change policy. Junior Isles As a paid subsciber you will gain full access to our online news desk. The current uncertainty surrounding moving toward in Durban,” she said. In its draft report to COP, the Clean and the Investors Group on Climate the shape of any future climate change Instead, Figueres said, governments Development Mechanism (CDM) Change in Australia and New Zealand Technology: Keeping data agreement is having a negative impact will be looking at the possibility of Executive Board says that delaying the said: “Current levels of investments under lock and key on investment in the sector. a second commitment period of the decision on a second Kyoto Protocol in low-carbon technology and Ahead of climate change negotiations Kyoto Protocol – the first expires at the commitment period is damaging infrastructure are substantially lower at the 17th meeting of the Conference end of 2012 – as well as elaborating on confidence in the CDM. than the $500 billion per year deemed of the Parties (COP17) in Durban, new emissions reduction targets made In preparation for Durban, 285 necessary by the International Energy South Africa, beginning at the end under the auspices of the UNFCCC. investors managing $20 trillion in Agency (IEA).” of this month, Christiana Figueres, Then, she said, they could look at assets produced a ‘global investor While the messages in the statement the executive secretary of the UN “how they would start a process statement on climate change’, are similar to previous years, this Advertise Framework Convention on Climate toward a comprehensive agreement setting out recommendations for year’s statement is accompanied by You will also no longer have to wait for the printed edition; receive it by PDF “hot off the press” or download it online. Change (UNFCCC) said a legally- that they would work on over the next “investment-grade climate change a report, commissioned by the three binding post-2012 climate agreement years”. and clean energy policy”. groups and the UN Environment Subscribe is achievable but not this year. Some argue that deliberating over The investors, mobilised by the US- Programme Finance Initiative, which “I certainly think that a legally- the future of the Kyoto Protocol has based Investor Network on Climate seeks to provide more “granular binding agreement is achievable, caused the private sector to abandon Risk, the European Institutional but that is not what governments are climate financing. Investors Group on Climate Change UK CCS proponents remain positive UK proponents of carbon capture and the technology. “CCS is a key tech- project by no means signals the end how to do CCS and we are much In early October a report from the storage (CCS) remain positive despite nology for the UK’s long term energy of the technology in the UK. further advanced in the process of Global CCS Institute said the world the scrapping of the proposed project strategy. A billion pounds is enough Professor Dermot Roddy Science City getting a genuine deployment of is likely to have 20 large-scale CCS at Longannet. to demonstrate this vital new technol- Professor of Energy at Newcastle commercial scale CCS plant. We’ve projects operating by 2020. The The project, which was to be ogy in the UK, but it’s got to be spent University, in the UK commented: had a clear expression of interest from institute has identified eight large- To subscribe, email [email protected] or visit www.teitimes.com supported by £1 billion in funding in the most effective way. “Government support funding for the SSE about their Peterhead project and scale integrated projects already from the British government, was “Despite everyone working extremely first CCS plant is secure, and money a view that we can do that clearly operating and a further six under to be the first of four demonstration hard, we’ve not been able to reach raised through Electricity Market within budget. I’m determined that construction. projects being planned as part of a a satisfactory deal for a project at Reform (EMR) along with EU funding we will lose no time over this to do This, however, is far fewer than government competition. Longannet at this time, so we’ve taken will be used to support the next three. just that. the 100 projects the IEA says will be The Longannet power station in the decision to pursue alternative The references to Peterhead suggest “That may mean aligning what we needed by 2020 to cut greenhouse Scotland has a capacity of 2400 MW projects.” that the [technology] competition do with the European Commission’s gas emissions by 50 per cent by 2050 and is Britain’s second-largest coal- The government is now looking at field is open again since that project timetable for the New Entrant compared to 2005 levels. fired power plant. Secretary of State implementing CCS at the Peterhead is not post-combustion capture: it is Reserve. Those projects have to be up The Institute also notes that since for Energy and Climate Change Chris gas fired power station owned by based on reforming natural gas to and running by 2016, which would be its report last year, 11 large-scale Huhne said the CCS project would not Scottish and Southern Electricity hydrogen and CO followed by pre- neatly in line with the UK timescale for integrated projects have been put go ahead due to the particular cost of (SSE), a subsidiary of Spanish utility, combustion capture.” the switch to contracts for difference on hold or cancelled – eight in the piping the CO over large distances. Iberdrola. Huhne said: “From the negotiations for low-carbon generation at the back- US and three in Europe. This was Huhne, however, reiterated the gov- Some industry experts say the and the FEED studies for Longannet end of the decade. It would mean CCS mainly because they were deemed ernment’s commitment to developing decision to scrap the Longannet we learned an amazing amount about is a runner.” uneconomic. To guarantee receiving your monthly copy of the award- winning newspaper, you need to subscribe today THE ENERGY INDUSTRY TIMES - MARCH 2012 8 Europe News Germany accelerates FITs cuts Concerns over investor confidence in the renewable energy sector deepen as Germany becomes the latest country to alter its subsidy scheme.

Siân Crampsie Monthly tariff reductions will begin in May, while the maximum size of PV Uncertainty surrounding government plant that can receive a tariff has been support for renewable energy in Europe cut. continued last month after the German The changes are necessary in order to government announced controversial curb the ‘boom’ that the current subsidy changes to its pioneering feed-in tariff scheme has created and to keep (FIT) scheme. subsidies in line with the falling costs that said that plans to cut FITs for group and one of the world’s largest with development of the proposed 290 Environment Minister Norbert of technology, said Roettgen. solar PV installations were unlawful. renewable energy companies, has come MW Selby power station because the Roettgen has unveiled a scheme to Germany has installed 7.5 GW of PV Like Germany, the UK government out in favour of the changes. government is likely to cut RO support accelerate planned cuts to the level of capacity per year over the last two years believes that the rate of PV system Ignacio Galán, chairman of Iberdrola, for such plants from 2016. support given to solar photovoltaic and the government expects that the installation is currently unsustainable said in an interview with the Financial The UK government is currently (PV) projects through FITs. The new rates will reduce this to 2.5-3 GW and should be tempered by reductions Times last month that Spain’s subsidy reviewing levels of RO support for all announcement has prompted protests in 2012 and 2013. to FIT levels. However three organi- freeze was a sensible move that would renewable energy technologies and is in Germany from the solar industry, The initial cut proposed for March sations – Friends of the Earth, help to curb the country’s €24 billion due to publish its findings in the coming which is concerned about the impact of would be around 20-30 per cent and Solarcentury and HomeSun – success- ‘tariff deficit’. weeks. the new policy on businesses and would be followed by monthly cuts of fully challenged the government’s “It makes no sense,” Galán told the RO support for co-firing biomass is investor confidence. €0.15/kWh. Installations over 10 MW plans in court at the end of last year. newspaper. “Spain is installing the most likely to remain the same, but more Germany’s announcement follows in size will no longer be eligible for They believe that the government’s expensive technologies in Europe support would be available for similar moves made recently by Spain, FITs. plans to cut solar FITs would harm the instead of looking for those which are ‘enhanced’ co-firing, i.e., 15 per cent which has imposed a freeze on The drastic scale of the cuts has UK’s growing solar industry, and cheapest,” he said. biomass or more, under government renewable energy subsidies, and the angered the solar industry, which, as argued that the plans were premature In the UK, further proposed changes proposals. UK, which is currently embroiled in a TEITimes went to press, was hoping for and unplanned and did not give the to the Renewables Obligation (RO), the Meanwhile, the government has legal battle over its plans to cut solar changes to be made to the proposals as solar industry enough time to adjust. country’s main renewable energy proposed a slight cut in RO support for energy FITs. they went through parliament. Some There are concerns across Europe support mechanism, have prompted dedicated biomass power plants from Estonia has also announced pro- political parties are opposed to the that the constant changes being made Drax to scrap plans for a new dedicated 2016. posals to make retroactive cuts to its plans, while others have called for to renewable energy support mecha- biomass-fired power plant. n RWE npower is assessing the damage renewable energy support schemes. deeper cuts. nisms will cause long-term harm to the While the company, which is the to its biomass-fired power station in The German government has given The debate over renewable energy industry as a whole, with investors now UK’s largest coal fired power genera- Tilbury, UK, after a fire broke out in a the solar industry little notice of its support schemes has also continued in viewing government policy as a key tor, says that it will go ahead with a £50 fuel handling area on 27 February. The plans because it is applying a one-off the UK, where the government has risk. million investment to increase co- company reported that no one was hurt cut to subsidies this month [March]. lodged an appeal against a court ruling Only Iberdrola, the Spanish energy firing, it has decided not to go ahead in the incident.

France, UK enhance Japanese start Malaga cooperation smart city demo

Mitsubishi Corporation, Mitsubishi Heavy Industries (MHI) and Hitachi Ltd. are to install smart grid technology France and the UK have asserted their has another EPR in the pipeline at in the Spanish city of Malaga in a bid support for a nuclear future by signing Penly.” to demonstrate the use of electric an agreement on energy cooperation Last month France’s Energy 2050 vehicles (EVs). that will enhance industrial ties Commission said that the country The three companies are embarking between the two countries. could not afford to close its nuclear on a ‘smart city’ demonstration project The agreement has highlighted the reactors for administrative reasons, that will use advanced energy and IT similarities between the countries, with and that it should extend the life of its technologies to investigate how EVs the UK preparing to embark on a new reactors as long as it is safe to do so. can be integrated into the electric grid. nuclear build campaign and France Around 22 of the country’s 58 The project is being conducted under examining its options for both new nuclear reactors will hit the 40-year the Japan Spain Innovation Programme build and life extension in its own mark within the next decade and the and is due to run until 2016. nuclear energy sector. government is examining its options In the project, Mitsubishi Heavy The deal also contains a number of for securing electricity supplies. Industries will supply 200 EVs, in- commercial deals involving Areva, Up to 16 GW of new nuclear capa- vehicle units and high-speed EV EDF, Rolls-Royce and other com- city is planned for the UK. chargers, and Hitachi will provide the panies that will help to secure jobs as Included in the cooperation agree- demand-side management system, well as much needed energy sector ment is a deal between Rolls-Royce which is coupled with ICT platforms, investment in both countries. and Areva to extend their global high-speed EV chargers and the power “The agreement between Britain and cooperation. It also calls for Rolls- management system. France to work together on civil Royce to supply Areva with £100 Trading house Mitsubishi will create nuclear energy secures their stronger million worth of equipment and a package integrating business ele- commitment towards building safer, technical and engineering services for Plugging into Malaga: a ‘smart ments and services and study options city’ project will investigate secure next generation plants,” said the first EPR reactor in the UK, for global expansion, while verifying Frost & Sullivan analyst Neha Vikash. planned to be built at Hinkley Point how EVs can be integrated the commercial viability of solutions into the grid “It also paves the way for EDF and by EDF. business. other utilities to secure funding, and Areva also signed a memorandum n New research from Frost & Sullivan the market is being driven by legis- supply chain agreements for the eight of understanding with EDF relating indicates that the smart meter market lation and renewable energy uptake. sites across the UK, earmarked for to the delivery of the nuclear steam in Europe is set to grow from $318.4 Competition between vendors is likely new nuclear capacity. France, already supply system and all central million in 2010 to $1.93 billion in to increase in the next few years, with building its European Pressurised instrumentation and control systems 2017 – a compound annual growth rate companies from China and other parts Reactor (EPR) at Flammanville, also for the Hinkley Point C project. (CAGR) of 29.3 per cent. Growth in of Asia entering the market. THE ENERGY INDUSTRY TIMES - MARCH 2012 International News 9 Jordan UNEP calls for sustainable selects energy boost in Africa reactor site Replacing traditional fuels with small-scale renewable energy systems is a cost-effective means of improving access to energy in rural Africa, according to a new report.

Siân Crampsie run-up to the Rio+20 summit in Brazil While much of this could be harnessed 2008 that has incentivised 1300 MW later this year. by tapping Africa’s renewable energy of new capacity, while Uganda has The United Nations Environment “Accelerating and scaling-up sus- resources, barriers to investment are developed an institutional infra- Programme has called on governments tainable energy for all will be key to preventing development. structure for managing the Clean in Africa to open up their energy realising a transition to a low carbon, Major barriers to investment include Development Mechanism. sectors to private sector investment in resource efficient ‘inclusive’ Green the relatively high cost of renewable UNEP is also urging governments to order to unlock the region’s massive Economy,” said Steiner. “Some 1.3 energy compared with traditional forms reform their energy sectors to improve renewable energy potential. billion people worldwide have no of energy, structural inadequacies of access for new energy producers and In a new report examining the access to electricity – and 45 per cent energy markets in sub-Saharan Africa, encourage innovation. The risks Nuclear ambitions: Jordan has barriers to investing in clean energy in of those live in Africa. and the political, regulatory and associated with investment in sub- taken a major step forward sub-Saharan Africa, UNEP says that “Yet the Continent has abundant commercial risks in many sub-Saharan Saharan Africa can be reduced by The Jordan Atomic Energy the provision of modern energy renewable resources that, with the countries. increased use of risk mitigation Commission (JAEC) has selected a services through renewable energy right kind of public policies in place, But the report shows that a number measures already in place. preferred site for the country’s first development would lift millions of can unlock a new development future of countries have significant re- Countries in sub-Saharan Africa nuclear power plant, marking a major people out of poverty and help the and light up the lives and the liveli- newable energy potential – including will also benefit from earlier step forward in its nuclear energy continent to realise its development hoods of millions of people.” Cape Verde, Madagascar, Sudan and developments in industrialised programme. potential. Only between two and five per cent Chad – while countries such as Kenya countries, says UNEP. “Industrialised JAEC has selected a site in Mafraq The report was released last month of people in rural sub-Sahara are and Uganda have already implement- countries must accelerate the tran- governate, 40 km northeast of the in Nairobi, Kenya, to mark the Africa connected to the electricity grid and ed dedicated renewable energy sition to low emission technologies. capital, Amman, and has sent its launch of the United Nations Year of currently rely on traditional fuels for policies. Development in these Developing countries, many of them decision to the government for Sustainable Energy for All, an initiative household energy needs. Using countries would bring opportunities growing rapidly and at large scale, approval. It is hoping to be able to start that is aiming to boost levels of access renewable energy in the form of mini- for both improving energy security have the opportunity to leapfrog an environmental impact assessment to clean, modern and efficient energy wind, bio-energy and solar systems and creating regional markets, says conventional energy options and move as soon as the site is finalised, according sources around the world. would be an effective way of im- UNEP. directly to cleaner energy alternatives to local reports. UN Under-Secretary-General and proving energy access, says UNEP. UNEP believes that cost barriers that will enhance economic and social Residents in Mafraq are reported to UNEP Executive Director Achim According to the report, Africa needs could be overcome by the development,” said Kandeh Yumkella, have protested against the site Steiner said that access to sustainable to install around 7000 MW of implementation of policy incentives Director-General of the United Nations selection. energy should be a priority for generating capacity per year in order such as feed-in tariffs. Kenya Industrial Development Organisation JAEC wants construction of the governments and policymakers in the to meet growing energy demand. introduced a feed-in tariff scheme in (UNIDO) and Chair of UN Energy. reactor to start in 2013. It has short- listed reactor designs from three vendors – the Atmea-1 from Areva- MHI, the AECL EC6, and the AES-92 from Atomstroyexport – and is also seeking strategic investors for the Slovakia aims to South Korea 1000 MW project. JAEC is expected to make a decision on bids early this year and sign an EPC enhance energy continues talks contract in mid-2012. security in Turkey ABB boosts South African Slovakia has made energy security a efficiency but warning of the perils of top priority and is planning to improve poor energy security. regional energy integration in order to “Energy security is a top priority in solar reduce its reliance on energy imports the Slovak Republic’s energy policy The development of a new con- from Russia, says the IEA. agenda,” said IEA Executive Director centrating solar power (CSP) plant in The Paris-based energy agency has Maria van der Hoeven. “Enhancing South Africa will help the country to published a review of Slovak energy regional co-operation, particularly in boost its renewable energy capacity policies, praising the country for the development of gas and electricity and diversify its energy mix, say its making improvements in energy interconnections, is an essential step developers. towards meeting the dual policy South Korea is Independent power producer FG Energy security is a top objectives of enhancing energy hoping to play a part Emvelo and ABB have signed an priority says Van der security and market competition.” in Turkey’s nuclear agreement to build the plant at Hoeven Slovakia has already coupled its programme Karoshoek Solar Valley in Northern electricity market with the Czech Cape province. It will be built on a 340 Republic and supports the development km2 site recently acquired by FG of a new gas pipeline linking planned Emvelo, a joint venture between LNG terminals in Croatia and Poland. Germany’s FG.de and Johannesburg- The country currently imports virtually based Emvelo Projects. all of its crude oil and gas from Russia South Korea is still hoping to play a French firms Areva, EDF and GDF The new plant will use linear Fresnel and suffered severe supply disruptions part in Turkey’s nuclear develop- Suez have also expressed their technology supplied by Novatec Solar, in 2009 during a dispute between ment programme. interest in building nuclear capacity a German company in which ABB Russia and Ukraine. South Korean Knowledge at Sinop on the Black Sea. recently acquired a 35 per cent stake. The IEA says that in spite of great Economy Minister Hong Suk-woo South Korea and Turkey are keen The technology reduces the need for improvements in energy efficiency, the said in Ankara last month that talks to enhance trade and are likely to land and water compared with other Slovak Republic remains a greenhouse between the two countries on the sign a free trade agreement this year, CSP technologies. gas-intensive economy by OECD construction of a nuclear power plant according to reports. South Korean standards. “The country must continue at Sinop could continue this year. firm SK Group last month signed a to implement policies that ease the South Korean firm Kepco held memorandum of understanding Karoshoek Solar Valley transition to a low-carbon economy,” talks on the project in 2010 but an with EUAS to refurbish a four-unit Van der Hoeven said, indicating that agreement with Turkey’s EUAS thermal power plant in Afsin- nuclear power and renewable energy foundered over electricity sales Elbistan, Turkey. could play crucial roles in the Slovak guarantees. Japan then entered talks, Turkey’s first nuclear power plant Republic’s efforts to decarbonise its but pulled out last year following the is to be built by Russian firm Rosatom electricity production. Fukushima disaster. at Akkuyu near the port of Mersin. THE ENERGY INDUSTRY TIMES - MARCH 2012 10 Companies

Siemens backs tidal technologies SeaGen array of marine turbines

Siân Crampsie The move indicates Siemens’ based on axial turbines that harvest potential for tidal power generation is UK government’s plans to support confidence in MCT’s products and in energy from tidal streams. It has been around 800 TWh per year. tidal energy schemes by awarding Siemens says its renewable energy the future of tidal power in general. operating a 1.2 MW commercial-scale MCT’s Strangford Lough demon- them 5 ROCs (renewables obligation business has taken “an important step “We will continue to drive the demonstration project in Strangford stration has so far fed more than certificates) per MWh. forward” with the acquisition of commercialisation of this promising Lough, Northern Ireland, since 2008 3 GWh of electricity into the grid. It n Siemens has opened a new Marine Current Turbines (MCT), a technology which harvests energy and has larger projects in the pipeline. is planning an 8 MW project in Kyle manufacturing plant in Goa, India, UK-based tidal power systems firm. from highly predictable tidal streams,” According to Siemens, the demand Rhea, Scotland, and a 10 MW project producing network automation The German energy firm already said Ted Scheidegger, CEO of the for reliable marine current power in Algelsey, Wales. components. The company will ini- owns 45 per cent of MCT and it has Solar & Hydro Division of Siemens generation systems will increase as The Angelsey Skerries project is tially manufacture products such as announced plans to buy the remainder Energy. “Our target is to secure a global carbon reduction commitments backed by RWE npower renewables. test switches and over-current of the shares in the company, which is leading position in this future increase. It is expecting double-digit In February MCT launched the project protection devices for the Indian currently demonstrating its technology business.” annual growth rates for the sector up information prospectuses for this and market, later expanding it to serve the in Ireland. MCT’s SeaGen tidal generators are to 2020 and says that the global the Kyle Rhea project and praised the global market. Vestas results make GDF strong bleak reading in difficult n Results prompt Chairman Bent Erik Carlsen board shake-up will not seek re-election n Project delays continue climate Vestas has warned of a continued tough n Revenues rise, profits fall trading environment for wind turbine manufacturers as it reported its first loss n International markets underpin results since 2005. The Danish wind turbine manu- GDF Suez says it is on track to meet Mestrallet said he is “confident” the facturer has suffered in the last 12 operational targets after posting a company has the right strategy “to months from problems at its production rise in revenues in its annual results address the coming challenges of the facilities, project postponements as for 2011. world economy successfully and to well as the adverse economic con- The France-based utility’s annual deliver sustained growth with focus on ditions. Its annual results were worse results for 2011 show that strong profitability in the coming years”, than expected, prompting the resigna- performances from its activities in according to a statement. tion of its Chief Financial Officer and Asia, Latin America and North GDF Suez has set targets for a further board shake-up. America as well as from its LNG increasing its installed power gene- Vestas reported an operating loss for activities helped it to maintain its rating capacity to 150 GW by 2016, 2011 of €60 million, down from a profit the expected 0 per cent. Vestas retains a 25 per cent share of the Last year also saw Vestas announce global wind turbine market. In 2011 it financial strength in spite of the with 90 GW outside Europe, and to of €310 million in 2010. Revenues were economic conditions. increase its installed renewable energy €5836 million, down from €6920 over 2000 redundancies in an attempt took firm and unconditional orders of to shave costs. The company says that 7397 MW with a value of €7.3 billion. However the company set cautious capacity by 50 per cent above 2009 million in 2010. targets for 2012 due to economic levels by 2015. It is expecting an improvement in further redundancies should be expect- It expects revenues in 2012 to reach ed at its US factories if the production €6500-8000 million but warned that uncertainties, but reaffirmed the In Europe, GDF Suez is planning to revenues for 2012 and retains a healthy operational targets set for the next merge its gas supply, power pro- order backlog of 9552 MW, its highest tax credit scheme is not renewed. project delays due to factors such as Over the course of the year Vestas was delayed grid connections and bad three to four years. It has also duction, energy management and level ever. announced plans to reorganise its trading, and energy sales and market- Vestas is the world’s largest wind forced to postpone deliveries worth weather could again affect its business around €1.2 billion of business because this year. energy operations in Europe. ing functions into a single group turbine maker and had originally Company revenues for 2011 stood business line in order to adapt to forecast full year revenues of €7 billion projects were delayed. It also Chairman of the Board Bent Erik experienced commissioning problems Carlsen and Vice-Chairman Torsten at €90.7 billion, up from €84.5 changing market conditions. and an EBIT margin of seven per cent. billion the previous year. Core “The ambitious international growth Trading conditions forced the company at a generator factory, the company Erik Rasmussen have announced that said. they will not seek re-election to their earnings before interest, tax, of GDF Suez does not exclude to issue two profit warnings over the depreciation and amortisation expansion in Europe, its home base, course of 2011 and margins for 2011 In spite of strong competition from posts at Vestas’ annual meeting this other wind turbine manufacturers, month. (EBITDA) rose 9.5 per cent to which remains at the heart of the were reported as -0.7 per cent, below €16.5 billion last year. group’s strategy,” said Mestrallet. Net profits fell to €4 billion from “The Energy Europe business line, €4.6 billion in 2010, partly due to its 30 000 employees, and the diversity mild weather conditions and a tariff of its talents and cultures will play a freeze in France. crucial role in the group of Shell shifts to shale oil for profits GDF Suez Chief Executive Gerard tomorrow.” The sharp downturn in natural gas cent to $4.85 billion, slightly lower gas to more profitable tight oil ventures. prices in the USA has caused oil giant than analysts’ forecasts. The drop in natural gas prices in the Shell to post disappointing fourth “Our fourth quarter results were region – caused by an oversupply of Asian performance: activities in regions such as Asia have helped quarter results and announce a change impacted by a sharp downturn in gas resulting from the shale gas ‘boom’ GDF Suez maintain its financial strength in its growth strategy. industry refining margins and North – has already caused several companies Shell said its fourth-quarter earnings American natural gas prices,” to cut production. on a current cost of supplies (CCS) commented Shell’s Chief Executive Shell says it will refocus on liquid- basis, a measure that strips out the Officer, Peter Voser. “The global econ- rich shales containing oil rather than losses or gains from oil and gas omy and energy markets are likely to gas. The company has already targeted inventory, were $6.45 billion, up see continued high volatility.” fields in North America as well as 13 per cent on the same period the The company said that it would shift Oman, Germany and Argentina for year before. CCS earnings rose 18 per its focus from North American shale production. THE ENERGY INDUSTRY TIMES - MARCH 2012 Tenders, Bids & Contracts 11

Americas bidders, it said, would soon be invited MW power wins Tampere was awarded a more than $1 billion to submit pre-qualification as sole contract contract by Samsung E&T. Hydro One replaces developer or as a consortium. The 4000 MW plant will be one of The tender is part of efforts in Metso-Wärtsilä joint venture MW the largest power plants of its kind in substations Malaysia to bring new generating Power is to supply a pellet-fired heating the world and will supply enough Canadian transmission utility Hydro capacity on line by 2016 as first- plant to Tampereen Energiantuotanto energy to meet around one-tenth of One Networks has placed an order with generation power purchase agree- Oy in the city of Tampere, Finland. Saudi Arabia’s current electricity ABB for the supply of substation ments expired. Firms bidding for the The delivery will comprise a full- demand. Siemens’ scope of supply equipment to replace an ageing contracts include TNB, Tanjong scope turnkey boiler plant solution, encompasses a total of 12 SGT6- installation on its Ontario network. Energy Holdings, YTL Power, Sime including all the necessary equipment 5000F gas turbines, 18 generators of Under the contract, ABB will supply Darby Energy, Marubeni, Samsung and commissioning. The plant will be the SGEN6-1000A series and six an indoor gas-insulated switchgear C&T, Siemens Project Ventures and Finland’s largest pellet-fired plant, SST6-4000 steam turbines together substation, an outdoor switchyard with Mitsubishi Corp. based on a technological solution that with associated electrical systems. air-insulated switchgear and associated is the first of its kind in Finland. Commissioning of the plant’s six transmission infrastructure. Alstom, HydroChina The heating plant will be used as a blocks is scheduled for 2014. Siemens The new substations will connect the peak load and backup plant and will will also provide the long term existing Portlands Energy Center team up replace some of the capacity of maintenance for the major equipment generation station and enhance grid Alstom and HydroChina Huadong existing oil- and gas-fuelled power in the Qurayyah plant. reliability in the Toronto area. Engineering Corporation have con- plants. The plant will be fired with ABB’s scope of supply includes 115 cluded a contract with Electricity of wood pellets and its heat input will be Alstom to reinforce kV gas-insulated and air-insulated Vietnam (EVN) to provide hydro- around 33 MW. switchgear, surge arresters, trans- power equipment and technical Tajikistan network formers, and cables. services for the Song Bung 4 power Offshore substation Alstom Grid has been awarded a As part of the turnkey contract, ABB station. contract worth more than €30 million is responsible for the system studies, Under the €18 million contract awarded to Alstom JV with the Tajikistan National Utility design, engineering, supply and instal- Alstom and HydroChina will provide A joint venture between Alstom Grid Barki Tajik, to design and deliver a lation of the substations, including two 78 MW mixed flow hydro turbine and SIAG Nordseewerke GmbH has 500 kV switchyard reconstruction civil works. generator units and associated electro- been awarded a turnkey contract by project to the Nurek hydroelectric The project is scheduled for mechanical equipment. The contract Nordsee Offshore MEG 1 to deliver an power plant. completion by 2013. also covers equipment design, pro- offshore substation in the German The project will be the first in duction, installation and debugging. North Sea. Central Asia to use 500 kV gas insu- Toshiba wins US contract Nordsee Offshore is a subsidiary of lated switchgear technology and will Europe Windreich AG and is building the 400 improve the reliability of electricity Toshiba Corp says that it has signed a MW MEG1 offshore wind farm. supplies in Tajikistan. deal with Fluor Enterprises to supply Lunds Energi selects Alstom Grid and SIAG Nordseewerke Alstom Grid will replace an existing the steam turbine and generator for a will supply and install a 33/155 kV 500 kV air insulated substation that is new natural gas fired combined cycle FW boiler floating offshore substation that at risk because of geological con- power plant in Texas, USA. Swedish energy supplier Lunds Energi connects the wind farm to the German ditions. It will build a 500 kV GIS on The new power plant will replace the has awarded a contract for the design, high voltage network. a more stable site. Thomas C. Ferguson power plant and supply and erection of a biomass-fired The wind farm is scheduled to start The 3 GW Nurek plant is the largest is expected to come on line in 2014. boiler island of a new combined heat operating by the end of 2014. hydropower plant in Central Asia and and power (CHP) plant to Foster produces over 75 per cent of Wheeler. Tajikistan’s electricity. Areva selected for CSP Foster Wheeler will design and International booster supply the steam generator and Tuscon Electric Power (TEP) is to auxiliary equipment, and will carry Solaer to build Israel plant Ming Yang ships wind partner with Areva Solar on an out the erection and commissioning of Spain’s Solaer has announced that the turbines innovative project to boost the output the boiler island. The steam generator authorities in Israel have approved its of a dual fuel power station in Arizona, will be designed to burn 100 per cent plans to build a grid-connected 35 MW China Ming Yang Wind Power Group USA, using concentrated solar power bio fuel with up to 50 per cent solar power plant in the municipality has shipped the first batch of wind (CSP) technology. demolition wood. of Ramat Hovav. turbine generators for a 125 MW Areva is to install its Compact Lunds Energi is building the CHP Solaer subsidiary Sol Proyecto is to project in Bulgaria. Linear Fresnel Reflector solar steam plant to replace existing old equipment lease 48.5 ha of land, on which will be The Chinese firm is supplying its generators at the H. Wilson Sundt operating on fossil fuels. built the largest solar power array in MY1.5MW units to the project, which power plant to boost its capacity by 5 Israel. is being developed in Somovit by W. MW. The project is part of TEP’s Power, a wind power project plans to increase its solar power Energinet.dk awards Little developer specialising in Eastern capacity by 200 MW by the end of Bell contract Ormat wins Kenya tender European markets. 2014. Energinet.dk has selected ABB to Ormat International is to build a well- Ming Yang signed an engineering, Construction of the Sundt Solar Boost supply a high voltage submarine and head geothermal power plant in Kenya procurement and construction (EPC) is scheduled to begin in the spring of underground cable for the Little Bell after winning an international tender contract with W. Power for the project 2012, and the project is expected to be Strait in Denmark. for the 6 MW project. in December 2011. It will initially operational by early 2013. The cable project is part of a The company has been awarded a build a 4.5 MW pilot phase by July government initiative to replace high contract for the design, manufacturing, 2012, followed by a 120 MW phase voltage overhead lines in environ- procurement, construction and com- that will start construction in the Asia-Pacific mentally sensitive areas with under- missioning of the project by second half of 2012. Gasification demonstration ground and submarine cables. When Geothermal Development Company completed in 2013, this cable system (GDC), a firm set up by the Kenyan Siemens secures Africa planned for China will be the most powerful three-core government to accelerate the develop- Pratt & Whitney Rocketdyne has alternating current submarine power ment of geothermal resources. It will wind turbine order signed a negotiation framework cable in the world. develop the project on a build-own- Siemens Energy has secured its first agreement with two energy industry ABB will supply single-core 420 kV transfer basis in the Menengai order for wind turbines in Africa. leaders to design, construct and underground cables with a total length geothermal field. The German technology firm has operate a commercial-scale advanced of 30 km and two, three-core 420 kV signed a contract with Nareva Holding gasification demonstration plant in submarine cables with a total length of FCVS contract for Cern for the delivery of 44 wind turbines China’s central eastern Henan 15 km. GE secures Turkey contract for the Haouma and Foum El Oued Province. The three-core 420 kV submarine wind power plants in Morocco. The Under the framework, Zhongyuan cable will be laid instead of three Akenerji has awarded GE Energy a scope of supply includes the delivery, Da Hua Group Company Ltd. and separate single-core cables to reduce contract to supply equipment and installation and commissioning of the East China Engineering Science & costs and reduce the cable’s footprint services to a major new combined cycle wind turbines, as well as a five-year Technology Company will share so that it has a lower impact on the plant under development in Turkey. service contract for each project. development costs for construction seabed. ABB will manufacture the The Turkish firm is building the 900 Both wind power plants are expected and operation of a demonstration plant submarine cable in a single continuous MW Egemer Elektrik Uretim A.S.- to commence commercial operation with Pratt & Whitney Rocketdyne, length, without factory joints. Erzin gas-fired power plant, which by summer 2013. subject to the terms of a formal will generate around 2.6 per cent of agreement currently being negotiated Turkey’s electricity needs when it Jordan selects international between the parties. Nordex turbines for starts up in late 2014. GE will supply Barbers two Frame 9FB gas turbines and three consortium German wind turbine manufacturer generators. A consortium consisting of Korea Malaysia selects CCGT Nordex is to build a 30 MW wind farm GE has also secured a 12-year Electric Power Corporation, Mitsubishi bidders in Catalonia, Spain, using 12 of its service agreement that covers the Corporation and Wärtsilä Corporation The Malaysian Energy Commission N90/2500 wind turbine units. equipment for planned and unplanned has been selected by National Electric has unveiled a list of 47 prospective The contract is based on a maintenance services. Power Company of Jordan (NEPCO) bidders for the development of new framework agreement signed by to build and operate IPP3, an combined cycle power plants in the Nordex and Eolia Ronovables, the Siemens to supply Saudi independent power project in Jordan. country. developer of the project. Eolia’s co- The bid consortium intends to sign a The commission said on its website investor is Elecnor Group. Nordex project turnkey contract for the project with a that the names of the prospective will install the first turbines in April Siemens is to supply key components separate EPC consortium, led by bidders were subject to further and the wind farm will be operational for the Qurayyah combined cycle Wärtsilä. The total output of the power verification process. The prospective by the summer of 2012. power plant in Saudi Arabia after it plant will be approximately 600 MW. THE ENERGY INDUSTRY TIMES - MARCH 2012 12 Fuel Watch

Oil

Crude Oil Prices - 2012 2012 Settlement Prices For Benchmark Crudes ($/B) Nymex WTI ICE Brent DME Oman ICE Dubai OPEC Basket Price/Barrel Iran debacle $200.00 $190.00

$180.00

$170.00 increases crude $160.00 $150.00

$140.00

$130.00

$120.00 prices $110.00

$100.00

$90.00 n High crude prices acting as brake on economic growth $80.00 n Opec facing production uncertainties in 2012 Date 23Jan 26Jan 30Jan 1 Feb 6 Feb 9 Feb 13 Feb 15 Feb 22 Feb 2012 2012 2012 2012 2012 2012 2012 2012 2012

David Gregory International Energy Agency (IEA) as Continuing rising prices has 500 000 b/d from the market. All are Hemisphere may possibly be offset by saying that high crude oil prices were prompted the question of whether the non-Opec producers. political disruptions to supply in Africa Crude oil prices, which rose to $125/b already acting as a brake on economic US and Europe would opt to release Meanwhile, Opec leader Saudi and the Middle East – such as Syria, in the last week of February, could growth. It also quoted economist stocks from their strategic reserves, but Arabia is reported to have increased Yemen and South Sudan – and the threaten the global economic recovery, James Hamilton from the University as yet that does not look like a its production to 9 million b/d in order North Sea. just when it appears that the economy of California as saying that “all but possibility. As the release of stocks last to offset the latest shortfall in supply, It added that Opec is facing some is improving in the US and while one of the 11 post-war recessions [in year during the Libyan civil war failed but according to the new monthly oil production uncertainties during 2012. Europe has yet to get a firm grip on its the US] were associated with an to have a lasting impact on reducing report by the IEA, growth in crude oil It noted that Libyan output is returning sovereign debt problems. increase in the price of oil, the single prices, it is doubtful that strategic stocks demand has fallen by 300 000 b/d to the market quickly and that new While the crisis in the eurozone is exception being the recession of would be released without a genuine from its last projection in February. export capacity may be expected from having its own impact on the oil 1960.” disruption in supply. The IEA said “the economic growth Iraq, Nigeria and Angola. But it added market, fears that the debacle with Writing in Weekly Oil Data Review Besides the threat of disruption of rate that underpins the global oil that Iran’s output remains in question. Iran will lead to oil supply disruption published by Barclays Capital on 23 supply from the Persian Gulf and the demand outlook has been reduced to The GCES said those producers with and higher crude prices are creating February, senior analyst Paul Horsnell planned embargo against Iranian 3.3 per cent from 4.0 per cent extra production capacity “may need new problems for Greece, Italy, Spain said of the oil market and the situation crude, politics in the Arab world has previously.” Demand for crude in to show an unusual degree of flexibility and much of the rest of the world. with Iran that “there is a relatively led already to the disappearance of 2012 is expected to average 89.9 in matching their exports to changes in As the international community high and growing probability to a some oil from the international million b/d, a rise of only 800 000 b/d the world’s need for their oil if we are attempts to isolate Iran with an scenario in which there is no resolution market. over 2011. to avoid raised price volatility this embargo on purchases of its crude oil in 2012, in which oil prices grind The growing unrest in Syria and The London-based Centre for Global year.” due to go into effect this summer, Iran higher along with gradual escalation Yemen have led to cuts in exports Energy Studies (GCES) said in its In short, those crude oil producers has threatened to close the Strait of in tension, including proxy and covert from those countries, and South February report that non-Opec supply are going to have to produce all out if Hormuz. wars. Under such circumstances, the Sudan’s decision to halt oil production may not amount to projected volumes the world is to avoid prices in a range The Financial Times on February 24 optimal use of strategic reserves would because of its dispute with Sudan over this year. It said growth in crude output that could threaten the global economy reported Didier Houssein of the be a difficult art.” tariffs has removed in total more than from several producers in the Western and send it again into crisis. Gas Algeria to boost gas production with Algeria is looking to give its hydrocarbon sector a boost, beginning with Repsol deal state approval allowing Spain’s Repsol to proceed with the development of the North Reggane project.

Mark Goetz and natural gas production is designed Algeria. The pipeline is to connect with a target production of 9 bcm/y. from 23 bcm/y in 2005 to 30 bcm/y to reach a stable output of 2.9 billion with that used by BP at the 9 bcm/y In Algeria supplies Europe with about last year. Approval of the North Reggane project cubic metres per year (bcm/y), during Saleh field and the key gas hub at 20 per cent of its gas supplies through The new gas production projects in signals a re-start to some degree of the first 12 years of operation. Hassi R’Mel in central Algeria. pipelines that run across the the south, the proposed Galsi pipeline expansion plans made by Algeria Production is to run for 25 years. The Repsol said its investments in Algeria Mediterranean to Sicily and Italy and to Italy and new LNG trains at Skikda before a corruption scandal involving project is estimated to require an had exceeded €400 million between to Spain. Algerian LNG is also (4 million tons/year) and Arzew (4.5 state-owned oil and gas company investment of €2.225 billion (about $3 2005-08 and that between 2008-12 it delivered to Europe. Spain relies on million tons/year), which are due to Sonatrach erupted in 2010. It also billion). Shareholders in North had invested some €450 million in the Algeria for about 38 per cent of the 36 come into operation in 2013 and 2014 comes at a time when the country’s own Reggane include Sonatrach (40 per North Reggane project. The company bcm of natural gas supplies that it respectively, will raise Algeria’s export energy demand is expanding. cent), Repsol (29.25 per cent), is also involved in Algeria’s Issaouane requires annually, practically all of capacity and maintain the country’s On February 14, Spain’s Repsol Germany’s RWE Dea AG (19.5 per and Tin Fouye Tabankort projects. which is imported. role as a major global gas supplier. announced that Algeria’s state hydro- cent) and Italy’s Edison (11.25 per Algeria accounts for 1.9 per cent of Several years ago, Sonatrach had Revenues from high market prices carbon agency ALNAFT had granted cent). Repsol’s total reserves and 2.4 per been looking to increase its gas for crude oil and gas are providing authorisation for the development of The development plan for North cent of its production. Repsol also production substantially but that state-run Sonatrach with funds that the North Reggane project, which has Reggane was approved in November holds 60 per cent in the delayed Gassi scenario has not played out and it now will enable it to boost investment in been delayed by several years and was 2011. Repsol said that basic front-end Touil project, which is being developed looks to maintain gas exports at around the country’s hydrocarbon sector. originally due to start up in 2014. engineering and design (FEED), to supply gas to the Arzew LNG 60 bcm/y. However, actual exports are Spending is slated to rise to $15.8 The project involves the develop- topographic and geotechnical studies plant. reported to have fallen from 65 bcm/y billion during 2012, compared to $12 ment of six gas fields located 1500 km as well as 3D seismic surveying will The decision to move ahead with in 2005 to around 50 bcm/y in recent billion in 2011. Of the $15.8 billion, from Algiers in southwestern Algeria: get under way in the coming months. North Reggane will likely bring years. $11.1 billion will go towards the the Reggane, Azrafil Southeast, Repsol said in a statement that the development of the Touat field, where Commercial gas production was upstream sector. The investment is Kahlouche, South Kahlouche, Tioliline project would develop wells, surface Gaz de France is to produce 4.5 bcm/y calculated at 88 bcm in 2005, according seen as an effort to shake off the and Sali fields, all of which lie in facilities and infrastructure, including and the Timimoun field, which will be the BP Statistical Review, but stagnation that has hampered the Blocks 351c and 352c. a gas treatment plant, a gas operated by Total and target production registered 80 bcm for 2011. Domestic country for the last two years. Production from the North Reggane accumulation system and a new gas at 1.6 bcm/y. Production from the demand has surged in recent years, Sonatrach has budgeted some $68.2 project is scheduled to begin in mid- pipeline that would carry production three projects will comprise eating into production earmarked for billion for energy development and 2016. Some 104 wells are to be drilled to processing facilities in northern Sonatrach’s Southwest Gas Project export. Domestic demand for gas went maintenance during 2012-16. THE ENERGY INDUSTRY TIMES - MARCH 2012 Industry Perspective 13 Energy Efficiency: demanding a response

f all of the EU’s 20-20-20 of a building to interact with the energy Although the Energy targets – that is a 20 per cent network in efficient cooperation as an Efficiency Directive Oshare of renewable energy in element of energy efficiency. The the European energy mix, a 20 per cent definitions are written assuming that has been fiercely reduction in greenhouse gas emissions buildings and end consumers will not and a 20 per cent increase in energy interact with generation to balance a contested, some efficiency through a drop in consump- grid that will, as a result of the inte- tion by the year 2020 – the energy gration of renewables, fluctuate much realise its positive efficiency target is proving to be the more vigorously than today. This is most elusive. insufficient from a smart grids potential. Those In absolute terms, calculated in perspective. million tons of oil equivalent (Mtoe), More positive is Article 8 on metering promoting demand the aim is to reduce consumption by and informative billing. The Article 368 Mtoe in 2020 compared to projected states that ‘Member States shall require side management consumption in that year of 1842 Mtoe. that if final customers request it, This needs to be achieved by the EU as information on their energy billing and have seized the a whole. At the moment, with all the historical consumption is made measures on the EU and national levels available to an energy service provider opportunity to bring in place so far, the Commission designated by the final customer’. It calculates that we would only reach also sets up requirements for daily forward key issues 1678 Mtoe, or 9 per cent of savings. feedback which should be available related to enabling Wanting to encourage progress, the either through a display or on a website. Commission unveiled its Energy Accurate billing and the ability to see demand response Efficiency Plan in March 2011, which price changes for dynamic pricing it then used as the basis for the Energy programmes is also a requirement. programmes and Efficiency Directive unveiled last June. These are essential elements for Unlike the renewables and CO2 enabling smart grid related demand realising the potential emissions targets, the energy efficiency response programmes which are, at target was not legally binding. The present, technically difficult or even of the smart grid. Directive attempts to remedy this by impossible due to the prevailing setting out a number of legally binding regulatory and market structures. Ali Haider measures to save energy. Article 8 also states that the meter Most notably, this includes an should be able to measure electricity obligation for energy distributors or generated through micro-generation retail energy sales companies to save and sold into the system. 1.5 per cent of their annual energy sales, Meanwhile, Article 12 addresses by volume, by implementing energy transmission and distribution. Crucially, efficiency measures such as improving the Article aims to remove disincen- the efficiency of heating systems, tives for network operators to increase installing double-glazed windows or efficiency by ‘ensuring the removal of insulating roofs, among final energy those incentives in transmission and Haider: encouraged to see many in the European Parliament customers. This, along with some of the distribution tariffs that unnecessarily and Council supporting demand response in the context of other measures on the table, has made increase the volume of distributed or the Directive the Directive fiercely contested. transmitted energy’. metering and billing have so far not demand side programmes by handling The intense interest in the Directive It also states that national regulation been always helping end-users to save direct and multi-channel feedback, has resulted in the tabling of 1800 ‘shall in particular ensure that network energy. For example, new electronic dynamic pricing, and building amendments on the European tariffs and regulations provide meters for electricity/gas are often automation. Parliament’s draft report on the incentives for grid operators to offer provided without proper interface (e.g. This links into the third recom- Directive. The legislative process is system services to network users in-home display or via some other type mendation concerning the functional being delayed by the need to reach a permitting them to implement energy of electronic device such as smart requirements necessary for demand compromise within the European efficiency improvement measures in phones, tablets, etc). Also, billing is still response to take place. This means Parliament as well as in the Council of the context of the continuing deploy- often based just on forecasts and not allowing third party access to meter the European Union where Member ment of smart grids’. This is already a actual consumption. data – with the authorisation of the States are likely to make attempts at big step forward towards establishing Aware of these shortcomings, the customer – in cooperation with utilities. further dilution. the types of dynamic pricing tariffs Smart Energy Demand Coalition This can be done via the utility’s back- However, one section of the energy required for demand response pro- (SEDC) – an industry group repre- office or through a secondary com- community has realised the positive grammes to work. senting the requirements of demand munication interface such as a gateway potential of the Directive. Those Above all else, it is commendable that response programmes in order to or a Home-Area Network (HAN). promoting demand side management Fourth, Member States should have seized the opportunity to bring encourage electricity retailers to use forward key issues relating to the “… there are shortcomings in the current technical multi-channel, direct feedback to enabling of demand response pro- specifications of smart meters, and developments on maximise consumer engagement and grammes and raise awareness of support transparent and dynamic the technical and regulatory obstacles individual metering and billing have so far not been pricing tariffs. Finally, consumers that need to be addressed in order to always helping end-users to save energy” should be offered a range of dynamic fully realise the potential of the future pricing tariffs such as critical peak smart grid. pricing and peak time rebates, that Bi-directionality and the active the Commission has realised the in- further the development of the smart communicate swings in wholesale involvement of consumers is a central sufficiency of previous legislation on grid and ensure improved end- prices. This would enable consumers objective of a smart grid. Without fully smart meters. Existing EU legislation consumer benefits – has put forward to save money by shifting consumption functioning demand response pro- on the internal market for electricity five policy recommendations that to cheaper, off-peak times. grammes, smart grids will not fulfil and gas already foresees a roll-out of should empower consumers to better The devil is, as always, in the detail, their purpose of delivering energy smart meters (e.g. at least 80 per cent control their consumption and increase and the Energy Efficiency Directive is savings, reducing GHG emissions and of smart meters for electricity deployed efficiency. no exception to this rule. The SEDC is balancing intermittent renewable by 2020, subject to a positive cost- Firstly, minimum feedback require- very pleased to see the Commission energy. benefit analysis by Member States). ments should be spelled out for supporting the measures proposed by Needless to say, demand side Yet neither the directive on energy informative billing. This should include the SEDC and their push to achieve management is an essential part of end-use efficiency and end services next-day online access to smart meter energy savings through the further energy efficiency. For this reason the nor the electricity and gas directives in data collected the previous day and be empowerment of consumers. It is Directive attempts to address the issue the Third Energy Package define a provided in a standard format on the equally encouraging to see many in the of empowering consumers through smart meter or smart metering when utility’s website. Real-time access to European Parliament and Council enhanced requirements for metering, imposing obligations on the Member smart meter data could also be made supporting demand response in the customer feedback and billing. States to deploy this technology. available subject to a positive cost- context of the Directive. Article 2’s energy efficiency related By the Commission’s own admission benefit analysis. definitions do not include a definition there are shortcomings in the current Second, smart meters’ surrounding Ali Haider is Analyst at VaasaETT of demand response. Furthermore, the technical specifications of smart communication infrastructure should Global Energy Think Tank and Policy Directive does not mention the ability meters, and developments on individual be capable of supporting a variety of Advisor at the SEDC) THE ENERGY INDUSTRY TIMES - MARCH 2012 14 Energy Outlook India: in pursuit of renewables

aced with the challenge of believes it will get easier as banks see further growth in solar and other towards grid parity. India’s decision to meeting increasing energy needs the progress that is being made. renewables. “However,” he said, “what is most while minimising damage to the Domestic production of solar panels, It has introduced solar specific amazing is the capacity of decentral- set up a ministry F which are now being utilised Renewable Purchase Obligations and ised renewable applications to usher environment, renewable energy and clean technologies are important to domestically instead of being exported, tradable Renewable Energy in energy access for all including the devoted to the growth emerging markets such as India. has seen the cost of solar energy fall Certificates but does not rule out the most disadvantaged and the remotest “We in India look at renewable from 33 cents/kWh to about 8 p/kWh possibility of feed-in tariffs in the of our habitations. In its decentralised and development of energy and clean technologies as (13 cents/kWh) over the last two future. “The Certificates were or standalone version, renewable vehicles of sustainable development. years, according to Dr Abdullah, who important to us because we felt that energy is the most appropriate, renewable energy We are now at the verge of a second also says prices will fall still further. this way we were actually assuring the scalable and optimal solution for demonstrates it is transition as far as renewables are This, he says, is giving the banks banks that everything is fine. But providing power to thousands of concerned. We have passed through greater confidence. “In the beginning certainly there could be a move to remote and hilly villages and hamlets. serious about targets the phase of research, development banks did not know whether this feed-in tariffs at some point,” said Dr By providing energy access to the and small scale deployments and now [decrease] was sustainable and were Abdullah. most disadvantaged and remote for the sector. have an installed base of over 22 000 not coming forward with financing. Its policy framework Generation communities, it becomes one the MW renewable based capacity, which Luckily they are now realising this is Based Incentives for wind power biggest drivers of inclusive growth.” Junior Isles asks is around 11 per cent of India’s total possible. Power tariffs are now at a projects, meanwhile, has seen wind Dr Abdullah stressed that the time power generation capacity,” said Dr capacity reach 17 000 MW and with has come for greater international Minister Of New and Farooq Abdullah, Minister Of New cooperation in developing renewable and Renewable Energy. energy and for rich countries to invest Renewable Energy, Indeed the country’s progress in “ There is continuous need to innovate to increase part of their capital in renewable renewables is impressive. India has efficiencies and bring down costs. The challenge projects in countries such as India. Dr Farooq Abdullah, added over 11 GW of capacity in the “India, Norway and Britain joined last five years and plans to add another before us in the renewable energy sector, generally together to set up a £100 000 fund to whether its targets 30 GW in the next five years. Its and in India particularly, is to reduce the per-unit develop renewable energy. These are are realistic and how renewable generation capacity cost of renewable energy” the types of things we need to see represents over 5 per cent of the more of. Rich Arab countries, who they will be achieved. electricity mix – an almost 400 per receive so much revenue from gas and cent increase in the past five years level to enable banks to make a return the larger megawatt machines now on oil, can invest some of this money in alone, elevating it to among the top on loans and it is also compulsory for the market, the country plans to add projects that will benefit them five countries in the world in terms of states to buy this energy.” 3000 MW every year. Dr Abdullah financially and benefit humanity.” renewable energy capacity. Dr Abdullah said India has succeeded said: “We made a new wind atlas with Dr Abdullah says governments have To promote further growth, India has in cutting solar power costs by Denmark which shows there are many a crucial role to play in overcoming taken the unusual step of establishing allotting projects through a tight more sites than we had before. the challenges facing the growth of a separate ministry devoted to the international auction process. For Conservative estimates put potential renewable energy – many of which are growth and development of renewable example, in the latest auction, the capacity at 48 000 MW – there could not unique to India. energy. The most recent initiative – the lowest bid came from French company be three or four times this amount. “There is a continuous need to Jawaharlal Nehru National Solar Solairedirect SA at 7.490 p/kWh. “The next phase of our wind innovate to increase efficiencies and Mission (JNNSM) – envisages a “That’s about 38 per cent below the programme will also see turbines bring down costs. The challenge capacity addition of 20 000 MW of average price in the December auction installed out at sea,” he added. before us in the renewable energy grid solar power by 2022. A similarly (Batch-I) and about 30 per cent Dr Abdullah is confident that sector, generally and in India ambitious undertaking called the cheaper than the global average for renewable energy is “an idea whose particularly, is to reduce the per-unit National Bio-Energy Mission, aims to similar projects,” he noted. time has come” noting that there is an cost of renewable energy. Besides the tap the over 15 GW bio-energy Solar farms are going into diverse unmistakable shift from the use of power generated through renewable potential in the country. locations. In Gujarat, solar panels are conventional energy to renewable energy is usually intermittent and However, it is debatable as to being installed over canals to prevent sources of energy. sometimes difficult to predict. There whether these goals are achievable, water evaporation, thus conserving “While 10 years may be an ambitious are also other challenges like those and many believe the expectation that water while producing energy for the timeframe to aim for a total related to technology and financing. renewable energy can meet the surrounding villages. Elsewhere, solar transformation, the role of renewables Like many other countries, India too is growing energy needs in the next 10- energy centres or “clusters” are being will continue to increase, not only in facing these challenges by encouraging 15 years is unrealistic. set up in the villages of Rajasthan. Dr India but in the entire world. Whether economies of scale, easy transfer of In its first phase, the JNNSM aims to Abdullah explained: “Industries will or not renewable energy completely technology and indigenous research establish 1300 MW of capacity by be established around these clusters. replaces fossil fuel, we must all work and development.” 2013. The plan is that 1000 MW will As well as providing power locally, together to develop renewable energy He summed up: “I see the role of be grid connected and 300 MW will they will also create jobs in the villages to its fullest potential.” governments as active facilitators who be as distributed generation in villages. rather than pulling them into the He pointed out that renewable energy will work to create an enabling Phase II, from 2013 to 2017, has a towns.” has already created its space in grid ecosystem for promoting newer target of 4000 MW. The remaining 14 The Ministry believes that its connected power generation. He said business models, technical as well as 700 MW will be added in Phase III “extremely renewable friendly and wind and small hydro are commercially market innovations, as well as for (2017 to 2022). On average this supportive” policies will promote viable options and that solar is moving promoting basic and applied research.” equates to 2 GW per year for the next 10 years – an unprecedented sum – with almost 3000 MW a year in the last five years. Dr Abdullah: the time has come for Yet Dr Abdullah remains confident. greater international cooperation in “We will learn as we go and by then developing renewable energy technology will improve. By the last phase, much faster progress will be made.” India got its solar industry moving by waiving import duties and giving 10-year tax concessions to developers. Land was provided by the states at discounted prices and grid connections were improved. In mid-January Dr Abdullah said 186 MW of grid-connected solar power projects had been commissioned during the first year of the programme and another 300 MW was likely to be commissioned by March 2012. Nevertheless, there is still a tough road ahead. One of the major challenges will be availability of capital – an issue that Dr Abdullah admits is “ a hard battle”. However, he THE ENERGY INDUSTRY TIMES - MARCH 2012 Technology 15 A leap forward for solar thermal panels

iero Abbate is supremely confi- A new, high-vacuum dent that the technology he flat collector at Ppassionately describes will “change the world”. “We are going to Masdar City could change the solar thermal industry. We are introducing the first panel that can change the solar enable air conditioning in real, daily operating conditions,” exclaimed the industry. chief executive officer of Swiss company TVP Solar at this year’s Junior Isles World Future Energy Summit in Abu The first installation is at Masdar City, Abu Dhabi Dhabi. In January TVP Solar announced that a field of revolutionary solar significant in hot dusty environments the glass panel absorber and conducts cost a bit more. The world is in a panels installed at Masdar City is to such as the Middle East, according to this heat to the internal pipes, which crisis and we have to be honest; no begin an 18-month test programme TVP. in turn heats the fluid used for the end one wants to pay more. This [panel] where it will be compared against Abbate explained: “The sun delivers process. The efficiency of the panel will cost very little to produce. It will concentrating solar thermal collectors 1000 W/m2 no matter where you are depends on the heat lost in transferring compete with fossil fuels.” for a solar cooling application. on the Earth. What differs between heat to the fluid through conduction, The first installation at Masdar City Solar thermal technology has a long the Middle East and northern convection and emissivity. is an important start for the future history and although there is a great countries is the number of hours of “Convection is the real issue,” said deployment of the MT-Power panel. deal of publicity surrounding its use sunlight you get per day. The issue is Abbate. TVP substitutes glass wool “We are so confident of our product, for concentrated solar power (CSP) how much of the sun’s power we can insulation for a high-vacuum to we have put the panels between the electricity generation, the main convert [to heat].” minimise convection losses. Although two best concentrating technologies application is for residential heating Concentrating solar mirrors need to the industry has long realised that a on the market. Over the next six applications such as sanitary hot water track the sun. However, the mech- vacuum is the best form of insulation, months we will demonstrate how and ambient heating. anical moving parts to move the manufacturers have been unable to much better we are,” said Abbate. Abbate pointed out: “This market is 2 mirrors require regular maintenance produce a flat panel design that uses TVP aims to deploy further MT- huge. There are 30 million m of in dusty environments. Further, a high-vacuum. Power solar fields during 2012 for collectors. This corresponds to one concentrator is an optical device TVP has developed and patented an solar air-conditioning applications third of the world’s PV market – just wherein the light has to hit the mirror inorganic and flexible glass-metal seal with a double stage absorption chiller for sanitary water heating. China 2 at precisely 90º. It depends on direct that is the foundation of its high- in a hybrid natural gas/solar system alone has 20 million m of light, and cannot convert energy when vacuum flat solar thermal panels. configuration that will operate on a collectors.” a cloud covers the sun because the Abbate gave a brief history lesson in 24/7 basis, covering peak and base Collectors can generally be seg- light is diffused. explaining the unique glass-metal seal loads. mented into two groups of products: A traditional collector does not invented by Dr. Vittorio Palmieri. “In The company has already started the traditional collectors for applications suffer these drawbacks. No tracking, 1898, Thomas Edison invented how programme to allow volume pro- below 100ºC i.e. predominantly resi- and therefore no maintenance, is to seal glass to metal to keep the duction, which will begin in April dential heating applications; and needed. Secondly, they can capture electrodes inside a vacuum in the light 2013. The first factory will be in the concentrating solar collectors for diffuse light, i.e. light from any angle, bulb. south of Italy. Production in India, applications that require higher which means more sunlight can be Then in 1953, RCA invented the Brazil, the US and the Middle East temperatures e.g. industrial process captured for conversion to heat. “A second glass-to-metal seal for sealing will follow in the next two years. heating or air conditioning/cooling. country like Abu Dhabi receives 1950 the glass canopy to the electron gun With the goal of producing millions TVP Solar has developed MT- kWh/m2 per year from the sun. in the cathode ray tube in televisions. of panels at low cost, TVP says it has Power, what it claims is a unique However, only 1100 kWh/m2 is direct, TVP Solar says it has invented the developed a new manufacturing collector that can achieve tem- the remainder is diffuse. This means third glass-to-metal seal in history. process that allows it to produce the peratures of 325ºC without the use of flat panels are able to capture 45 per “People have been trying to make panels using the same equipment lines mirrors for concentrating the sunlight. cent more energy output from the sun vacuums in a flat plate for 50 years used to produce plasma display Abbate said: “This is the only in Abu Dhabi,” noted Abbate. but no one was able to do it on a panels. technology that can do this. The The ability to capture diffuse light commercial scale,” said Abbate. Abbate said: “Solar PV panels advantage of being able to also means that the panels do not need “When you have a high-vacuum require €100 million in CAPEX consistently operate in any climate regular precision dust cleaning as [inside] it is the same as putting a investment to generate €100 million condition at 200ºC means we can also with concentrating mirrors. pressure of 10 tonnes/m2 on the glass. in revenues. We will invest €10 use it to drive an absorption chiller for “We still capture the light even if the You have to seal in a way that the million in CAPEX to generate the air conditioning/cooling.” panel is covered by dust. Although glass remains fixed to casing. TVP same €100 million in revenues. So we Absorption chillers are typically the dust [particles] change the angle Solar has developed a perimeter seal are not a capital-intensive industry; driven by gas, which is used to heat of the sunlight, we still capture it as all around the panel that seals the we can massively grow with a limited the working fluid to 180ºC. TVP diffuse ligh,” said Abbate. glass panel to the metal casing. This investment.” Solar’s technology, allows the heating Existing traditional collectors, is a radical innovation.” Although power generation is an to be done by solar energy. The MT- however, cannot heat water above The company says that its collectors interesting prospective market, MT- Power panels at Masdar City are 100ºC. There are two types of have several advantages over its Power panels address only designed to provide over 70 per cent traditional collector – flat plates and competitors. With an efficiency of 62 applications requiring heat/steam solar-to-cooling conversion efficiency evacuated or vacuum tubes – but per cent at 180ºC, they operate at a between 100ºC-200ºC. Abbate says According to TVP, the operating at 180ºC to drive double these cannot heat above 100ºC and so much higher efficiency than any other the focus will remain on thermal new panels offer the best effect absorption chillers. are limited to low temperature heating solar thermal collector. TVP will not applications in the short-term. It is performance in any weather The departure from concentrating applications. disclose the cost of the collector until easy to see why. condition for any application mirrors for this application is In a flat panel, the sun’s energy heats October this year but claims they cost He concluded: “In the residential less than any other solar thermal market, lighting is about 25-30 per collector. “It has a similar cost profile cent of the household consumption. to other flat plate panels. A flat plate Air conditioning, ambient heating and costs €150-250/m2. Concentrators cost sanitary hot water heating together €400-700/m2,” noted Abbate. represents more than 60 per cent. In High performance and a compact shopping malls and office buildings layout mean MT-Power has a low etc., air conditioning is the largest cost per watt profile. “We have the source of energy consumption. lowest installation footprint. This is “Cooling is the largest and fastest crucial for roof installations since it growing energy demand application means we can deliver more power in the world and it is a trend that will from fewer square metres,” according continue as there is more building to Abbate. He added: “Its lifetime is insulation. So the issue is to serve expected to exceed 20 years.” thermal applications directly with Abbate believes there are so many thermal energy to have the best things in favour of the technology that economic and energetic efficiency it will change the industry. while maximising emission reduction. “I don’t believe in an industry that The big mistake today is to use says, we are renewable but we will electricity for thermal applications.” THE ENERGY INDUSTRY TIMES - MARCH 2012 Final Word 16 Riding the winds of pain here’s a cold wind blowing, one of wind power licences and had He said E.On plans two other major As manufacturers’ profits feel the that is threatening to bring a lot acquired land for 600 MW of capacity projects after Amrumbank, one in the pinch, the pain will naturally be passed Tof pain to a lot of people. Just through Lanco Wind Power Pvt. Ltd. North Sea and one in the Baltic. “But through to the workforce. Vestas also two years ago, US president Barack It has a current capacity of 3300 MW, given the uncertain grid link, we can’t announced that it will lay-off 2300 Obama said that the renewables and with 6000 MW under construction. It make an investment decision at employees. And the US decision is clean-tech sector would lead the planned to have a total installed present.” likely to increase the pain. Vestas had economy out of recession and create capacity of 15 000 MW by 2015. There has been growing criticism of warned that without the $3.5 billion a Junior Isles new jobs. Like an Obama echo, many Meanwhile, German energy giant delays in building wind farms in the year tax credit, 1600 jobs in the US politicians around the world relayed a E.On warned last month that North Sea and Baltic. In January, the could be at risk because of an expected similar message to their citizens. Germany’s plan for a rapid transition German Transport Ministry provided slump in turbine sales. Two years on, these bold words seem to renewable energy is at risk from figures that showed the scale of the While the expiry of the tax credits at little more than rhetoric. Earlier this delays in connecting offshore wind problem. the end of the year may see a rush of month the US pulled the rug from farms to the grid. The company said it The plan is to have 10 000 wind projects in 2012, 2013 is likely to be under the wind industry when will put two large projects on hold turbines in operation off Germany’s bleak. Competition from cheap natural Washington decided not to renew a tax unless the grid operators speed up the coasts by 2030. It currently only has gas and weak demand for power as the credit for wind production. As the clean construction of power lines. 27. The aim is for the wind farms to economic recovery struggles to gain energy technology that has seen the Mike Winkel, head of the company’s produce 25 000 MW of power – so far, momentum will not help. Industry most growth over the last few years, consultants say new wind capacity in there was unrealistic expectation on the the US is likely to return to lows the wind industry to shoulder the burden “There has been growing criticism of delays in country has not seen since 2004. of economic recovery. building wind farms in the North Sea and Baltic” Fortunately, there will continue to be The decision by a House and Senate bright spots. Growth in the UK has seen conference committee to abandon the the number of people working in the tax credit, as part of an effort to cut Climate & Renewables division, told the figure is just 135 MW. RWE has also UK’s offshore sector rise from 700 federal spending, is a major blow for a the Berliner Zeitung newspaper: “The complained about delays in power line people in 2007, to around 3200 in 2011. sector that is facing tough times. situation is disastrous. The grid construction. One of three scenarios, completed this Globally, the wind power sector has operators aren’t keeping up.” He said In its first quarter results, Siemens’ year by Cambridge Econometrics for struggled with overcapacity, falling grid operator Tennet was 15 months power transmission division reported RenewableUK, estimates the instal- turbine prices, delays with grid con- behind with work on linking the a loss of €145 million for the quarter, lation of 31 GW of offshore wind by nections and reduced support from Amrumbank offshore wind farm, largely due to charges related to grid 2020 would create 42 400 direct full governments because of the economic operated by E.On, to the grid. connections in the German offshore time employees (FTEs) and 25 300 crisis. Potential investors have con- “The grid operators overestimated wind sector. It said that the complex indirect FTEs. Deputy Prime Minister sequently become more wary of the themselves and underestimated the regulatory environment caused project Nick Clegg said the offshore wind sector and its prospects. problems,” Winkel said. “Secondly, delays, and that the continued econo- sector could provide 66 000 jobs in The effects are being felt around the they don’t have sufficient financial mic uncertainty is causing clients to the country by 2020. world in one way or another. India is incentives,” he added, explaining that put off investments. The materialisation of these jobs among the top five countries for wind the regulatory authority does not pay Last month Danish wind-turbine will, however, require consistent generation, with plans to add 3000 MW an especially high return on their manufacturer Vestas also cited project government policy and available per year. Yet in what could be an investments. He said another problem delays as part of the reason for financing for the planned mega indication of looming consolidation, is that suppliers are not manufacturing reporting its first loss since 2005. The offshore wind farms. There will also Lanco Infratech Ltd recently gave the required cables. “Authorities are company’s operating loss for the full- have to be incentives for the designers audit and consulting company Ernst causing major confusion over who is year 2011 was at €60 million, down and manufacturers of big turbines. and Young the mandate for selling its responsible for what, and they’re not from €310 million profit in 2010. It has At the moment, the wind is blowing wind business. Lanco has 5000 MW coordinating among each other.” now abandoned its targets for 2015. in the right direction. At the end of January, Samsung announced a £100 million project in Scotland to develop its new 7 MW offshore turbine at Fife Energy Park, which will employ up to 500 people. Vestas has also submitted an application to build a factory near Sheerness. Although there may be firing in the US, there is likely to be hiring in the UK. Yet Paul Flynn Managing Director of Earthstaff, a UK-based company that specialises in recruitment of energy personnel, warned: “It could go the other way as it did with Clipper in the northeast [of the UK] and not materialise. There has to be consistent positive [political] noise and the capital, and return on capital, has to be there. Even the multi-national companies that are best positioned to make the projects happen need to have the money to do it. If you look at RWE – which has possibly the largest asset base of offshore wind farms planned – they are weighed down by an enormous level of debt.” There will be tough times ahead for wind power as a result of the eurozone crisis and the global recession. And although this will be the case for the entire power generation sector, wind faces the additional hurdle of delays in grid connections. It also now has to cope with the impact of falling subsidies, which will slow growth. This is a natural pro- gression for any industry as it makes the transition to maturity. As the market develops, the weaker players will disappear or be swallowed up, and the economically questionable projects will fail to materialise. In the short term it may get a little bumpy for developers and manu- facturers but eventually the stormy winds will subside and the ride will smoothen out.