March 8 , 2013
RFP: Minnesota Power seeks 200 MW of wind power
The flurry of RFPs continued this week, with the latest solicitation pointing straight to the Production Tax Credit (PTC) extension as a driver.
ALLETE subsidiary Minnesota Power released a request for proposals (RFP) for 200 MW of wind generation deliverable to the utility’s service territory prior to the expiration of the PTC.
In order to qualify to receive the tax credit, projects must start construction by the end of this year.
Minnesota Power said it also intends to consider building its own “wind resource solution” to meet its customers’ needs.
Proposals are due April 2. For more information, go to the RFP.
Around the Industry
American wind power goes back to business, creating U.S. jobs
The U.S. wind power industry is seeing stepped-up hiring and new investment in 2013, following the industry’s strongest year ever, AWEA said this week, pointing to a list of projects moving forward and supply chain activity.
In 2012 wind energy for the first time became the number one source of new U.S. electric power generation, providing some 42 percent of all new generating capacity.
Signs of industry strength that the trade association, which tracks project and other activity, has identified include:
- Siemens’restaffing its wind turbine manufacturing operations in Fort Madison, Iowa, and Hutchinson, Kan., reflecting new “confidence in the American market,” a company spokeswoman said. (Feb. 25, North American Windpower).
- Sempra U.S. Gas & Power and BP Wind Energy’s Awahi Wind facility launching operations on the Hawaiian island of Maui (Feb. 25, Electric Light & Power/POWERGRID International).
- Wind industry projects in Texas, seen as important sources of new engineering jobs. The Houston Chronicle reported, ”Andrew Swift, director, Texas Wind Energy Institute and Texas Tech's wind-degree program, believes two engineering disciplines are in highest demand in the wind-energy sector –mechanical and electrical.” (Feb. 25, Houston Chronicle)
- Vestas Wind Systems A/V’s addition of 100 workers at its tower manufacturing plant in Pueblo, Colo., offsetting a previous reduction in workforce at blade factories in Windsor and Brighton, Colo. (Jan. 16, KOAA.com)
- New wind power installations and manufacturing facilities in the Texas Panhandle, including Cielo Wind Energy’s Spinning Spur “wind ranch” northwest of Vega, Texas, and Alstom’s equipment manufacturing plant in Amarillo. (Jan. 7, Lubbock Avalanche-Journal)
- The 300-MW Pleasant Valley Wind Farm in Mower County, Minn. “It is one of the largest wind farm developments in the state of Minnesota with advanced permitting and [is] ready to build,” RES Americas Vice President of Development Joe DeVito told the press. (Jan. 7, Austin Daily Herald).
- The Prairie Breeze Wind Energy Center near Elgin in northern Nebraska, which represents a $350 million capital investment and could create 300 construction jobs. (Jan. 4, Journal-Star)
- Geronimo Wind Energy’s Courtenay, N.D., wind farm, which could be sized between 100 and 200 MW and range from about 58 to 120 turbines. The total cost of the project would be between $200 million and $350 million. (Jan. 7, Prairie Business)
- Activity at St. Louis-based companies Emerson, electric component maker ABB and carbon fiber manufacturer Zoltek. As the St. Louis Business Journal reported,“Zoltek was already ‘well on the way to a record year in fiscal 2012” thanks to its growth in the wind energy industry, according to chairman and chief executive Zsolt Rumy. The extension of the Production Tax Credit will help Zoltek keep that momentum going in 2013, Rumy said. “This is definitely helpful because investors were holding back on projects to see what would happen.” (Jan. 2, St. Louis Business Journal)
Studies & Reports
LBNL report: low natural gas prices haven't detracted from wind's hedge appeal
Even with recent declines in natural gas prices resulting from the expansion of shale gas production, wind power proves to be beneficial for its ability to give buyers long-term price certainty, a new report from Lawrence Berkeley National Laboratory (LBNL) finds.
Drawing on a sizable sample of long-term power purchase agreements (PPA) between existing wind projects and utilities, the report compares wind power prices that have been contractually locked in for decades to come with a range of long-term natural gas price projections. Data from 287 PPAs totaling 23.5 gigawatts were used.
Some notable quotes from the report:
- “Adding wind power to a portfolio of generating assets will partially hedge or insulate that portfolio against the risk of rising fuel costs over the long term.”
- “In other words, not only do these recent wind PPAs provide ample long-term hedge value, but they are also, on average, competitive natural gas fuel savers in the near-term when compared to reference-case natural gas price projections for the U.S. as a whole.”
- “To summarize, with gas prices as low as they are, and with gas price risk heavily skewed to the upside, it should theoretically be an opportune time to hedge.”
An accompanying slide deck released with the report also provides some insights from companies buying wind power. Said Ken Davies of Google, “We see value in getting a long-term embedded hedge. We want to lock in the current electricity price for 20 years. We are making capital investment decisions [regarding data centers] on the order of 15 to 20 years. We would like to lock in our costs over the same period. Electricity is our number one operating expense after head count.”
And from Kurtis Haeger of Public Service Co. of Colorado: “We typically don’t have a lot of long-term natural gas contracts…especially ones that go out 25 years. So this [i.e., a PPA associated with the Limon 2 wind farm] is basically providing a long-term fuel contract or energy contract at known prices.”
The report and accompanying slide deck is available online. In addition, LBNL will host a webinar on Thursday, March 14 at 1 p.m. EDT, during which report author Mark Bolinger will present the research and answer questions. Those interested in attending will need to pre-register online.
Around the Industry
Pew report finds U.S. companies achieve $1.6B clean-energy trade surplus with China in 2011
A new report from the Pew Charitable Trusts showing a U.S. surplus in clean-energy trade with China underscores the importance of America taking a leadership role in the sector in order to reap the economic benefits.
That was one conclusion reached by the clean-energy experts at Pew, which released the report this week.
But first, the numbers: According to the report (“Advantage America: The U.S.-China Clean Energy Trade Relationship in 2011”), the U.S. and China traded more than $8.5 billion worth of clean energy goods and services in 2011, the latest year for which data are available. U.S. companies enjoyed a $1.63 billion sales advantage over their Chinese counterparts, the report found.
Wind energy was a part of the mix that netted the surplus. Overall, more than $923 million worth of wind energy goods and services were exchanged between the two countries in 2011. The report noted that, as with solar, the U.S. wind industry excels in sales of relatively high-margin specialty materials (e.g., fiberglass) and sensitive electronic and other control systems. China's largest sales were in turbine towers and rotors. Overall, U.S. firms held a net trade surplus in wind power of just over $146 million.
Solar, meanwhile, comprised the largest component of clean energy trade for both countries. Combined, firms based in the two nations traded more than $6.5 billion worth of products and services in 2011. Chinese firms sell large quantities of finished solar cells and modules to the U.S., which led in sales of high value-added goods and services, such as polysilicon and wafers, as well as the high-tech materials and equipment needed in solar manufacturing. On a net basis, the U.S. enjoyed a $913 million surplus in the solar sector.
The report concludes that America's clean energy trade strength is derived from leadership in innovation and entrepreneurship, as well as the global presence of U.S. companies, while China's clean energy industry excels in large-scale manufacturing and high-volume assembly of certain clean energy products. (On a related note, the large components required in the wind power industry has led to the development here in the U.S. of a strong domestic manufacturing supply chain for wind turbines going to American projects.)
Perhaps what’s most notable, though, is that the authors draw a conclusion, based on their hard evidence, that mirrors what the wind industry has long said: wind power must have sound, stable policy in order to maintain its leadership position and to keep growing the associated economic benefits.
"The report findings underscore the long-term economic potential for U.S. leadership in the clean energy sector," said Phyllis Cuttino, director of Pew's clean energy program. "Advantage America demonstrates the payoff for our leadership in wind, solar, and energy smart technology innovation. U.S. companies are tapping into the growing worldwide demand for clean energy goods and services.”
But, Cuttino said, strong policy remains imperative going forward. She continued, “[T]o maintain our competitive edge, it is essential that policymakers recognize and enhance domestic policies that help position U.S. companies for success—investing in research and development, encouraging domestic demand, and supporting overseas sales."
Suzlon Group crosses 4,300 MW of installations
Suzlon Group set a company milestone in 2012 with record installations in North America that brought its total installed wind power capacity at the end of the year to 4,373 MW in the region. The company’s installations for 2012 exceeded 1,170 MW—a total of 570 turbines—a company record for annual installations in one market.
The Suzlon Group consists of two turbine brands and units: Suzlon and REpower. Last year construction and commissioning staff from the two units installed 193 turbines in Canada and 379 machines in the U.S. for a total of 1,177 MW of capacity. The Suzlon Group employs over 500 people in North America and has installations across 22 states in the U.S. and three provinces of Canada.
Among the projects at which the company’s turbines were deployed: the Canadian Hills Wind facility owned by Atlantic Power. The wind farm, located outside Oklahoma City, features 73 MM92–2.05 MW turbines. Ridgeline Energy, a subsidiary of Atlantic Power, is also the owner of 57 Suzlon S97–2.1 MW turbines installed at Meadow Creek Wind Farm, located outside of Idaho Falls, Idaho.
“We extend our sincere appreciation to the incredible work completed by our customers, joint construction, projects and commissioning teams in helping Suzlon Group achieve an important milestone for the company,” said Duncan Koerbel, global head of OMS for Suzlon Group and CEO of Suzlon Wind Energy Corp. in North America. “It took a total team effort to meet the 2012 PTC [Production Tax Credit] deadline. As an industry, we are grateful to see that the PTC has now been extended.”
“This is a remarkable achievement for the Group,” said Andreas Nauen, CEO of REpower Systems SE. “Especially towards the end of the year our service teams gave everything to get all these turbines connected to the grid before 31 December. They did an excellent job.”
California next for wind production record; follows Texas, Colorado, Pacific Northwest
California and the Bonneville Power Administration (BPA) utility system, which covers much of the Pacific Northwest, have seen new wind generation records set in recent days.
The California Independent System Operator (CAISO) reported that wind generation on its system reached a new high of 3,934 MW at 12:38 a.m. PST yesterday (March 4). For the full day, wind generated nearly 6 percent of the electricity on system.
The BPA record came February 22, when wind generation there peaked at 4,512 MW at 10:45 p.m. PST.
The BPA’s previous record, 4,402 MW, came just days before, on February 16. Wind-generated electricity output has hit new highs in several parts of the country in recent weeks, as the new wind farms built during last year's record wind project construction boom begin adding their production to the nation's electricity supply. Records have also recently fallen in Colorado and Texas.
Each new record underscores wind power's ability to generate clean electricity reliably and in increasingly large quantities.
Supply Chain Connections
GL certifies Siemens 6-MW turbine for testing at U.K. offshore project
Siemens Wind Power has received offshore prototype certification from GL Renewables Certification (GL RC) for testing its new 6-MW offshore wind turbine at DONG Energy's Gunfleet Sands III demonstration project in the UK. This will be the first offshore test of the new offshore wind turbine.
The Prototype Certificate confirms the wind turbine design's compliance with the requirements of the GL Guideline for offshore wind turbines.
Siemens developed the SWT-6.0 specifically for the demanding conditions in offshore locations. The first unit was installed in 2011 at the Høvsøre test site in Denmark with a 120-meter rotor. It has now operated there for well over a year, setting new production records during the testing, according to GL. The second 6-MW-prototype, which as a 154-meter rotor, was installed in 2012 at the new national test center at Østerild, Denmark. In January 2013, Siemens installed two additional SWT-6.0 prototypes in the British offshore wind power plant at DONG Energy`s demonstration project Gunfleet Sands III. Both machines for the project are equipped with the 120-meter rotor.
GL RC has also been contracted to carry out the type certification of the offshore turbine and is currently involved in the design evaluation process. Type certification is required in many countries around the world and is often a condition to apply for international wind power plant tenders.
Engage in WINDPOWER 2013 dialogue on LinkedIn
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Call for Abstracts: AWEA Wind Resource & Assessment Seminar
Be a part of the AWEA Wind Resource & Project Energy Assessment Seminar (Dec. 10-11, Las Vegas, Nev.), the only event dedicated to wind energy's unique resource assessment issues. This year’s seminar will bring together the leading owners, project developers, and wind assessors as they share the latest scientific methodologies, state-of-the-art techniques and technologies, and challenges facing the wind resource assessment community.
AWEA is looking for high quality abstracts to create an exciting, highly-educational seminar program. AWEA would like to receive an array of abstracts centered around a set of encouraged topics (see below) and that present case studies, offer strategies to best manage wind projects assets, and maximize the bottom line.
Abstracts are encouraged to address, but are not limited to, the following topics:
Complex terrain and complex meteorology
- Operational performance of turbines
- Remote sensing of operational projects
- Turbine wakes in pre-construction and operational projects
- Wind flow modeling
- Wind resource assessment and wind farm financing
- Wind turbine site selection and suitability
- General topics in wind resource and energy yield estimation for pre-construction and operational projects
Abstract deadline: April 3, 8:00 p.m. ET
Visit the submission page for more information and to submit your proposal.
Volume 29, Issue 1523
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