LOCATION/TYPE

NEWS HOME

[ exact phrase in "" • results by date ]

[ Google-powered • results by relevance ]



Archive
RSS

Add NWW headlines to your site (click here)

Get weekly updates

WHAT TO DO
when your community is targeted

RSS

RSS feeds and more

Keep Wind Watch online and independent!

Donate via Paypal

Donate via Stripe

Selected Documents

All Documents

Research Links

Alerts

Press Releases

FAQs

Campaign Material

Photos & Graphics

Videos

Allied Groups

Wind Watch is a registered educational charity, founded in 2005.

News Watch Home

Offshore wind industry slowed by birds, bombs, sharks 

Credit:  By Alex Morales | Bloomberg | 2014-02-20 | www.bloomberg.com ~~

Birds, sharks and unexploded bombs from World War II are being blamed for holding up offshore wind farms, raising doubts about the costs of the technology.

Three utilities yesterday scrapped an expansion of the world’s biggest offshore wind farm in the Thames estuary, east of London. That capped three months when each of the six largest U.K. utilities retreated from marine energy projects.

While developer EON SE highlighted concerns about disrupting the wintering grounds of the red-throated diver, the broader threat to the industry is its failure to bring down costs quickly enough in nations that are increasingly concerned about the price of electricity.

“It’s either the cost because of the technical challenges or the environmental issues” that’s thwarting projects, Keith Anderson, chief executive officer of Iberdrola SA’s ScottishPower Renewables unit, said in an interview. “There’s a bit of realism that unless we can deliver these projects for a lower price, then it’s unrealistic to expect to continue to get political and government support.”

The U.K. market is crucial to the industry because it’s the biggest source of new projects and accounts for more than half the global installed capacity. Prime Minister David Cameron’s government has set incentives for offshore wind through 2019, hoping to stimulate clean-energy jobs.

Those ambitions are being chipped away as developers better understand the costs of the projects. Utilities have canceled as much as 5,760 megawatts of planned capacity since Nov. 26, when RWE AG dropped its 1,200 megawatt Atlantic Array.

London Array

About 6,930 megawatts of machines are working worldwide now with 3,689 megawatts of them in Britain, according to Bloomberg New Energy Finance. A thousand megawatts is almost as much as a nuclear reactor produces.

EON, a German utility, along with Dong Energy A/S and Masdar Abu Dhabi Future Energy Co. yesterday abandoned plans to expand the 630-megawatt London Array by as much as 240 megawatts. EON said it couldn’t guarantee progress even if it met requirements for a three-year study of impact on red-throated divers, a fish-eating bird that can swim more than a minute under water.

Cost Goal

The British government has set the industry a goal of reducing its costs to 100 pounds ($167) a megawatt-hour by 2020. New Energy Finance estimates it’s currently as high as $246, or 147 pounds, and is unlikely to meet the target.

“It’s probably not manageable,” said Sophia von Waldow, a BNEF analyst. A cost of just under 110 pounds may be possible by then, she said.

Dong, the biggest offshore wind developer, may be able to cut costs to 100 euros ($137) a megawatt-hour in 2020, according to Benj Sykes, who heads the Danish utility’s U.K. wind unit.

“Cost reductions are essential,” said Aris Karcanias, London-based Managing Director of Renewable Energy at FTI Consulting. “It’s still a nascent technology that has a price curve to go along.”

That’s the theme also for Danish Climate Minister Martin Lidegaard, who said in an interview that policymakers need to “create a legal framework that will drive innovation and bring costs down,” and for U.S. Energy Secretary Ernest Moniz who said in January that “offshore wind remains for us expensive.” The U.S. has no offshore wind farms.

Basking Sharks

In the U.K., Forewind, a consortium that includes SSE Plc, and a venture including Electricite de France SA downsized projects this month. RWE AG canceled one plan and shrunk another in the past three months, while ScottishPower in December cited basking sharks among reasons for scrapping a project.

The U.K. government says offshore wind ambitions remain on track, though the Department of Energy and Climate Change cut its forecast in December. It expects about 10 gigawatts of capacity by 2020, down from a 2011 prediction of 18 gigawatts.

“It is perfectly normal for developers to adjust their plans as they progress,” the energy department said yesterday in an e-mailed statement. “This government is committed to a thriving offshore wind sector.”

Germany, the third-biggest market after Denmark, cut its 2020 target to 6.5 gigawatts from 10 gigawatts. German developers are suffering from slow grid connections and Chancellor Angela Merkel’s decision to retreat from nuclear power, said Henrik Stamer, Chief Executive Officer of K2 Management A/S, a Danish consultant to utilities.

Company Poverty

“Big German companies have lost their cash-cows, because Angela Merkel said they have to close down their nuclear power stations,” Stamer said. “That’s where they earned their money that they could then go off and invest in offshore wind.” He said even reaching 6.5 gigawatts will “take a lot of work.”

Old munitions have also slowed the industry in Germany and Britain. TenneT TSO GmbH two years ago detected several World War II mines as it prepared to lay cables linking the EWE AG’s Riffgat project to the grid. The link was completed last week.

New projects tend to be further from shore and in deeper waters. That means costs are rising, and utilities can no longer afford to shoulder the cost of projects themselves, said Ben Warren, an environmental finance partner at Ernst & Young.

“The utilities’ balance sheets haven’t substantially improved in the last couple of years to enable them to afford to do billion-dollar projects,” he said.

Logistical Challenge

The tougher conditions further out at sea mean “everything becomes logistically more challenging in terms of costs and times,” according to RWE’s Cowling. “You basically need to have offshore hotels out at sea that can enable these things to be built,” he said.

Companies are trying to bring down costs in all areas of the industry. More powerful turbines being tested by manufacturers such as Vestas Wind Systems A/S and Siemens AG mean fewer foundations are needed. RWE and Dong have commissioned specialized vessels to help install turbines, and industry groups evaluating the costs of cabling, servicing and ports.

ScottishPower’s Anderson said his company is focusing on easier projects, such as a collaboration with Vattenfall AB off East Anglia that could eventually reach 7,200 megawatts.

Cost cuts will come along with more installations, said Paul Cowling, offshore wind director at RWE.

“If we build more wind farms and build more wind turbines, the price will come down,” he said. “It’ll be more efficient, more like shelling peas – producing commodities rather than bespoke bits of kit.”

Source:  By Alex Morales | Bloomberg | 2014-02-20 | www.bloomberg.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

Wind Watch relies entirely
on User Funding
   Donate via Paypal
(via Paypal)
Donate via Stripe
(via Stripe)

Share:

e-mail X FB LI TG TG Share


News Watch Home

Get the Facts
CONTACT DONATE PRIVACY ABOUT SEARCH
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.

 Follow:

Wind Watch on X Wind Watch on Facebook

Wind Watch on Linked In Wind Watch on Mastodon