Weekly Intelligence Brief 27 July - 2 August

Kahuku Project secures $117m loan guarantee

The US Department of Energy has finalised a $117m loan guarantee for Kahuku Wind Power, the owner and operator of the Kahuku Wind Power project. 

The project, located in Kahuku, Hawaii, includes the development of an innovative 30MW wind power plant.

Boston-based First Wind, an independent U.S.-based wind energy company, held a ceremony recently to commemorate the start of construction of its 30 MW Kahuku Wind project.

The Kahuku wind power plant uses 12 2.5MW Liberty wind turbine generators manufactured by Clipper Windpower of Carpinteria, California and a 10 MW battery energy storage system (BESS) manufactured by Xtreme Power of Kyle, Texas. 

The BESS will modulate and smooth fluctuations in power output caused by changes in wind levels. 

When completed, Kahuku will produce the first-ever combined installation of Clipper wind turbines and Xtreme's battery energy storage system. 

The project will also include a dedicated communication system to connect the wind energy project to Hawaiian Electric Company’s system operations and dispatch centre. 

In early May, Hawaii Public Utilities Commission approved the Power Purchase Agreement (PPA) between Kahuku Wind Power and Hawaiian Electric Company for the utility to purchase renewable energy to be produced by the project.

As part of the PPA, First Wind will sell as-available renewable energy from the project to Hawaiian Electric at pre-determined prices over 20 years. 

First Wind mentioned that the Department of Energy and its Loan Programs Office have played a vital role in advancing this project, which broke ground earlier this month.

The loan guarantee helped First Wind to secure the necessary financing to build this project. 

The project is expected to be the first to meet reliability requirements for wind and solar energy set by Hawaiian Electric Company, the only electric utility operating on Oahu. 

UK Annual Energy Statement favours offshore wind 

In the first ever Annual Energy Statement to Parliament, UK Energy and Climate Change Secretary Chris Huhne set out 32 actions being taken to accelerate the transformation of the energy system and wider economy. 

Huhne mentioned that the UK is blessed with a wealth of renewable energy resources, both onshore and offshore. 

“We are committed to overcoming the real challenges in harnessing those resources.

“We will implement the connect-and-manage regime, and I am giving the go-ahead to a transitional regime for offshore wind farms.

“Both those measures will help to speed up the connection of new generation to the grid,” he said. 

One of the actions, as highlighted in the Annual Energy Statement, refers to offshore wind.

One of the highlights of the Statement is a joint Department of Energy and Climate Change (DECC) /Ofgem Open Letter on an enduring offshore transmission regime for future offshore wind farms. The go ahead has also been given for the transitional regime that will apply for offshore wind farms already operating or being built. 

Initiative has been taken to establish the new offshore transmission regime for transitional offshore generation projects.

This means that the tender process that Ofgem is currently running to appoint new Offshore Transmission Owners for nine such projects can move to conclusion.

The report also refers to approval of new offshore transmission tender regulations which will enable Ofgem to run the next transitional tender round. 

It has been highlighted that these new regulations include greater flexibility than the previous regulations for tender qualification, meaning that more projects will be eligible for the transitional tender and not delayed by the tender process.

A decision has been taken to consult with Ofgem on the enduring regime for offshore transmission to seek views on an additional ‘generator build’ option, on potential changes to the ‘Offshore Transmission Owner build’ option; and how the onshore and offshore networks can be best coordinated to ensure value for money for consumers.

Scotland estimates £223m needed for offshore sites

Stage 2 of the National Renewables Infrastructure Plan (N-RIP) has been published by Scottish Enterprise and Highlands & Islands Enterprise.

The purpose of the report is to support the development of a globally competitive offshore renewables industry based in Scotland. 

The plan outlines the investment required to deliver Scotland’s ambition to become a premier location for the manufacturing and deployment of wind turbine and marine energy devices. 

The report states that a total private and public investment of £223 million would assist the creation of 11 offshore wind manufacturing sites in three regional clusters.

Taken together these sites could support the creation of up to 5,180 jobs and an annual economic impact of up to £294.5 million each year. 

The sites identified in Stage 1 of the N-RIP, published in February, are: Leith, Dundee, Nigg, Energy Park at Methil, Hunterston, Aberdeen, Arnish, Campbeltown/Machrihanish, Ardersier, Kishorn and Peterhead.

This latest report recommends that the sites are developed into three regional manufacturing clusters that would support the fabrication of offshore wind components and tap into the wealth of subsea expertise that already exists in Scotland.

Total investment for all sites of £223m would create a set of clustered port sites which could support an offshore wind sector manufacturing 750 complete offshore wind units a year. 

In Scotland, locations at ports for offshore wind manufacturing fall into three broad geographic clusters and within these there is also potential for installation uses and operations and maintenance:

• Forth/Tay

• Moray Firth

• West Coast

According to the report, in addition a fourth, existing, subsea cluster exists focussed on Aberdeen and Peterhead and these locations amongst others are used by companies which will bring expertise to offshore wind installation and operations and maintenance processes. Some offshore wind manufacturing is also thought possible in this area.

A fifth cluster of sites exists which could service the marine sector supporting the Pentland Firth and Orkney Waters commercial scale leasing round.

It is not envisaged that these will operate as closed groups – rather that concentrations of uses may develop – with components coming from locations outside the group.

What is clear however is that Scotland can offer sites in these five clusters with capacity to act as “industry hot spots”.

Wind energy represents 2.5% of UK power

The percentage of electricity on the grid from wind power has increased by 31.1% last year compared to 2008.

As per the latest statistics, published by DECC as part of The Digest of UK Energy Statistics (DUKES) 2010, between 2008 and 2009 the amount of electricity generated from renewable sources overall grew by 20% from 5.6% to 6.7% and the proportion of all UK electricity produced by wind power now stands at 2.5%.

Generation from wind (both onshore and offshore) was the largest renewables technology in output terms in 2009, with 37% of the electricity generated by renewable sources being from wind.

The UK offshore wind industry is now the largest in the world.

As at the end of 2009, 12 offshore wind farms have been built around the UK coastline, equating to 941 MW of installed capacity.

The operational projects are Barrow (90MW), Blyth (4MW), Burbo Bank (90MW), Gunfleet Sands I&II (173MW), Kentish Flats (90MW) Lynn and Inner Dowsing (194MW), North Hoyle (60MW), Rhyl Flats (90MW), Robin Rigg I&II (180MW) and Scroby Sands (60MW).

In addition, Beatrice (10 MW) provides electricity to the neighbouring offshore oil platform although its capacity and generation are not included in the UK figures. 

In January 2010, The Crown Estate announced the successful bidders for each of the nine new Round 3 offshore wind zones, potentially totalling 32GW in capacity. 

Rhode Island and Massachusetts sign agreement

Rhode Island Governor, Donald L. Carcieri, and Massachusetts Governor, Deval Patrick, have decided to coordinate and collaborate in the permitting and development of offshore wind projects in a designated area of mutual interest (AMI) in federal waters in Rhode Island Sound. 

The two states have signed a memorandum of understanding. It commits these two states to coordinate and collaborate in potential development of offshore wind energy in a 400 square mile “area of mutual interest” beginning 12 miles southwest of Martha’s Vineyard and extending 20 miles westward into Rhode Island Sound.

The Special Area Mapping Plan (SAMP), developed and executed by the Rhode Island Coastal Resources Management Council (CRMC), shall serve as the planning and assessment guide upon which the two states shall proceed to complete the federal Mineral Management Service (MMS) renewable energy leasing process and develop operating wind energy facilities.

The U.S. Department of Energy estimates wind energy potential off the Atlantic coast at approximately 620,000 MW. 

The SAMP will serve as a federally recognised coastal management and regulatory tool, and will help determine the ideal locations for offshore wind projects in state and federal waters. 

Under the terms of the MoU, Rhode Island recognises Massachusetts as a formal stakeholder, on equal terms, of the SAMP process, allowing Massachusetts to provide input into and utilise the results of the SAMP in identifying the location of a possible offshore wind project for the state in the AMI, upon agreement by both states.

In addition, the two states will develop an economic development study to identify the costs and benefits of offshore wind development in the AMI.

Calder Engineering bags offshore wind contract

Engineering company Calder Engineering has secured a deal to provide offshore cabins for the 315MW Sheringham Shoal offshore wind farm project, 10 miles off the Norfolk coastline.

The development marks Calder’s foray into the offshore wind industry.

For this project, Calder Engineering delivered design, engineering and manufacture of two complete suites of custom built transportable modular units fully outfitted to customer’s specifications.

The company has been working in the oil and gas supply chain for over 10 years and broke into this new market with specialist support through Highlands and Islands Enterprise’s account management model. 

Located off the coast of Sheringham, North Norfolk, England, the wind farm will comprise 88 turbines, two offshore substations, two 132 kV submarine export cables of about 22km each as well as a 21.6km onshore cable and new inland substation. The turbines will be positioned less than a kilometre apart and will be supported by foundations secured to the seabed.

Neptune Wind finalises its preferred site

Utility scale offshore wind energy project developer, Neptune Wind, has finalised its preferred site for development off the coast of Massachusetts.

The company mentioned that in federal waters near Nantucket Island, Massachusetts, the site is large enough to accommodate 1.5 GW of offshore wind production.

Further details were not made public.

“The sandy depths are such that a combination of monopile and jacket structured-polypod foundations can be used with a richer mix of lower cost monopile.

“The distance from land is great enough that viewshed and tribal concerns will be nonexistent,” stated the company. 

“Fishing interests ought to be happy that the site is not on top of rich fishing grounds”.

Once the Department of Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement issues a Request for Interest for this area Neptune Wind and other developers can submit their applications. 

$10m approved for UMaine Offshore Wind Energy Work

U.S. Senator Susan Collins has announced that a subcommittee of the Senate Appropriations Committee has given an initial approval of a $10m appropriation to support a University of Maine (UMaine) deepwater offshore wind energy research and development.

Collins, a member of the Senate Appropriations Committee, requested the funding.

It was approved by the Subcommittee on Energy and Water. 

Collins has supported this work since the beginning, already having helped secure $25m in federal funding as UMaine works toward developing and testing this technology.

Plans call for the first one-third scale floating wind turbine to be deployed off Maine for testing in 2012. 

The additional funding will be used to build, deploy and test a full-scale prototype of a 5MW floating wind turbine, using Maine companies and Maine labour.

The State of Maine Ocean Energy Task Force has set a goal of developing 5,000 MW of deepwater offshore wind farms by 2030. These farms would be placed approximately 20 miles – 50 miles offshore.