Spain hits record-low wind tender price; Maryland awards offshore contracts at $132/MWh

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Spanish wind tender hits record-low price of 43 euros/MWh

Spain has allocated 3 GW of new onshore wind power capacity at a price of 43 euros per MWh ($48.2/MWh), the lowest price ever recorded for a wind tender in Europe.

Spain's auction price on May 17 was particularly low as the tender came after a three-year market standstill triggered by the Spanish government's retroactive cuts to feed in tariffs in 2013.

"The tender results show how onshore wind is today the cheapest option for new power generation," industry group WindEurope said in a statement.

"Some may think wind energy no longer needs subsidies. But it was the fact the auction offered a guaranteed minimum income that attracted investors and ensured there were enough bids to deliver the low price," WindEurope said.

Separately, Germany's first onshore wind tender allocated 807 MW of contracts at an average bid price of around 57 euros/MWh.

Some 70 windfarms were allocated contracts in the tender, and community projects made up 93% of the winning bids, Germany's federal network agency said in a statement May 19.

In April, DONG Energy and ENBW became the first offshore wind power developers to acquire offshore wind power concessions at unsubsidized prices, bidding prices of zero euros per MWh to build wind farms in German waters.

DONG Energy starts up first 8 MW offshore turbines

DONG Energy inaugurated May 17 its Burbo Bank Extension wind farm off the coast of Liverpool, England, the first commercial project to use new large-size MHI Vestas V164-8.0 MW wind turbines.

Larger turbines and improved installation practices are cutting the cost of offshore wind power. In 2007, DONG Energy installed 3.6 MW Siemens wind turbines at the original Burbo Bank project.

Last month, DONG Energy and Germany's ENBW became the first offshore wind power developers to acquire offshore wind power concessions at unsubsidized prices, bidding prices of zero euros per MWh to build wind farms in Germany.

DONG Energy plans to complete its German projects by 2024 and expects rising turbine capacity to lower costs. The company predicted turbines of 13 to 15 MW will be on the market by 2024.

                   Average rated capacity of installed offshore turbines

Source: WindEurope.

The Burbo Bank Extension project is also the first offshore wind farm project to use blades manufactured in the U.K.

DONG Energy owns a 50% stake in the project while pension fund group PKA and toy manufacturer LEGO group each hold 25%.

Maryland awards first large-scale offshore wind contracts at $132/MWh

The Maryland Public Service Commission (PSC) has awarded offshore wind renewable energy credits (ORECs) to the 248 MW U.S. Wind and 120 MW Skipjack Offshore Energy projects at a levelized price of $131.93/MWh, Maryland PSC said May 11.

The U.S. Wind and Skipjack projects are expected to be the U.S.' first large-scale offshore windfarms and the credit contracts have a term of 20 years. The U.S. Wind project is expected to be operational by January 2020, while the skipjack project is expected to be completed by November 2022.

Maryland’s Renewable Energy Portfolio Standard (RPS) has a mandate of 25% of electricity purchased from renewable energy resources by 2020 and a law implemented in 2013 created a carveout for offshore wind energy in the RPS, of up to 2.5% of total retail electricity sales.

                            Maryland's first offshore wind projects

                                                           (Click image to enlarge)

Source: Maryland PSC.

The Maryland PSC has set out a number of conditions precedent for the renewable energy credits.

The developers must use port facilities in the greater Baltimore region and Ocean City for construction and operations and maintenance activities. The companies must also invest a total $76 million in a steel fabrication plant in Maryland and together fund at least $39.6 million to support upgrades at the Tradepoint Atlantic shipyard in Baltimore County.

The developers must also "create opportunities for minority-owned companies to participate as investors as well as in the development and construction of the projects," Maryland PSC said.

The offshore wind projects are expected to reduce the volume of renewable credits Maryland suppliers purchase from other U.S. states.

In addition, the developers must locate their projects as far away from the shoreline as is practical, the commission said.

Quinbrook acquires Scout Clean Energy to gain 1.6 GW project pipeline

Quinbrook Infrastructure Partners has acquired Scout Clean Energy, a Colorado-based wind developer with a 1.6 GW U.S. development pipeline, Quinbrook said in a statement May 17.

Scout has already originated, developed and completed nine wind power projects comprising 649 MW of capacity, including the 230 MW Moriah North Project in Texas which started commercial operations at the end of 2016.

The company's development pipeline represents more than $1.7 billion in total capital investment.

Quinbrook is a specialist investor in low carbon renewable energy infrastructure and operational asset management projects in the U.S., U.K. and Australia.

"Quinbrook is taking the deliberate approach of pursuing attractive wind development sites supported by highly experienced teams prosecuting the development of PTC [production tax credit]-qualified projects," Shawn Cumberland, Senior Managing Director of Quinbrook in the U.S., said in the statement.

"In addition to Scout's already significant pipeline of wind development projects, Quinbrook intends to use Scout as a platform for further growth in wind power both organically and through complimentary acquisitions in North America that satisfy Quinbrook's investment criteria," he said.

Total U.S. wind capacity was 82.1 GW at the start of 2017 and wind turbines provide 8% of U.S. generating capacity, more than any other renewable energy source.

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