UKERC: “Offshore wind costs have peaked, but remain high”

While dramatic cost increases in the offshore wind energy sector may have peaked, a new report from the UK Energy Research Centre (UKERC) does not forecast any significant cost reductions in the period to 2015.

According to the report, “Great Expectations: the cost of offshore wind in UK waters – understanding the past and projecting the future”, costs have increased in part due to currency and commodity price movements but also because of supply chain shortages and bottlenecks. Planning delays have also added to developers’ budgets and have undermined supply chain confidence.

The UK’s ambitions for offshore wind reflect the size of the potential resource and difficulties associated with public opposition to onshore wind, stated the report. They also reflect a widespread expectation in the late 1990s and early 2000s that costs would fall as deployment expands.

However, in the last five years costs have escalated dramatically, with capital costs doubling from approximately £1.5m/MW to over £3.0m/MW in 2009. As of June 2010, the industry consensus is that capital and energy costs are approximately £3.0m/MW and £150/MWh respectively.

The Centre highlighted that the industry is today importing 80% of equipment and services from abroad. There is therefore a substantial opportunity to bolster the UK’s manufacturing industry.

However, UKERC’s report points out that UK offshore wind is a technology that is still at an early stage of its development. Offshore wind currently only generates about as much power as a small conventional power station; the report emphasises that many developing technologies go through a period where costs rise before they begin to decrease.

The report from the Centre, which is described as the hub of UK energy research and the gateway between the UK and the international energy research communities, suggests that policies could do more both to bear down on costs and support a UK-based industry. It is also important for policy to continue to support innovation, reduce problems with planning and grid connection and support the development of the UK supply chain.

Thanet offshore farm inaugurated

The world’s largest offshore wind farm – the 300 MW Thanet Offshore Wind Farm- has been officially opened by Swedish energy company Vattenfall.

Situated off England’s south east coast, the wind farm has 100 turbines and took just over two years to be built. The company Vattenfall – which spent £780 million on the array – reportedly refused to share how long it will take for the farm to pay for itself.

The Thanet project is located approximately 12km off Foreness Point, the most eastern part of Kent.

The wind farm is expected to operate for at least 25 years. Each turbine is up to 115 metres tall at its highest point. The wind farm covers an area of 35 square kilometres.

The connection of Thanet’s 300MW of capacity in 2010 will boost U.K.’s offshore wind capacity by more than 30%. It will take UK installed wind power capacity across the 5,000MW line.

With the opening of the farm, Vattenfall expects to double its wind power electricity generation between 2009 and 2011 and is constructing nine wind farms in six countries.

Global wind capacity to reach 200 GW in 2010, says GWEC

Strong growth in China and stability in the European markets will drive wind energy growth this year across the globe with the world’s installed wind power capacity is expected to reach close to 200 GW by the end of 2010, says the Global Wind Energy Council (GWEC).

With around 40 GW of new capacity added this year alone, the GWEC, in its five-year market outlook, said that global wind power will double between 2010 and 2014, reaching more than 400GW.

This increase will continue to be driven by growth in China, the US and Europe, but new countries are also entering the global wind map.

“We do expect the US market to be down this year as the low level of orders we saw during the financial crisis work their way through the system,” said Steve Sawyer, Secretary General, GWEC.

A longer-term outlook for global wind power growth will be presented by GWEC in October. This new edition of the ‘Global Wind Energy Outlook 2010’ will present three scenarios for the development of wind energy, showing how 1,000 GW of installed capacity could be operating world-wide by 2020, and as much as 2,300 GW by 2030.

Suncor, Teck collaborate on Alberta wind power project

Canada's largest oil company Suncor Energy and Teck Resources have joined forces to develop an 88 MW wind power project in Alberta.

As part of a Joint Venture agreement to develop the Wintering Hills Wind Power Project, Suncor will own a 70% interest and operate the project and Teck will own the remaining 30%.

The project, which received regulatory approval from the Alberta Utilities Commission (AUC) in June, will consist of 55 General Electric 1.6 MW turbines. Construction on the project began in July and is expected to be complete by the end of 2011.

Reuters reported that Teck expects its total investment in the project will be about C$66 million (US$64 million).

Suzlon surpasses 5,000 MW of wind power installations in India

India’s largest wind turbine manufacturer, Suzlon Energy has crossed 5,000 MW of cumulative installations in India for over 1,500 customers in the country across 40 sites in eight states.

Suzlon accounts for nearly half of the country’s total wind installations. In the key states of Tamil Nadu, Maharashtra and Gujarat, Suzlon’s installation base is over 1,000 MW each

Crompton Greaves installs offshore wind farm

Crompton Greaves Limited (CG) Holdings Belgium has installed its first offshore wind generation project, Belwind, located in the North Sea, about 50 km from the Belgian shoreline.

Belwind is being built in two stages of 55 turbines each, with a total capacity of 330 MW.

To connect the first stage of the Belwind off-shore windpark, a complete high voltage substation 200 MVA 150/33 kV will be built on a monopile foundation and this offshore substation will be connected with a 150 kV electrical submarine cable to a newly built 150 kV booster substation onshore.

According to CG Systems Division, the substation was installed on its offshore seabed foundation three weeks ahead of the contractual deadline. This milestone was attributed to joint efforts of three Belgian companies (CG, Fabricom and Iemants) in the framework of the temporary commercial association BOSS (Belgian Offshore Substation Solution).

CG Systems Division in Belgium recently developed a new design for the transport of electrical energy at high voltage levels from the offshore wind farm Belwind and to connect it to the existing electrical transmission grid on-shore.

According to the company, the patent pending concept of CG allows smooth switching on the transmission grid and it minimises the off-shore maintenance activities by locating all controls of the main off-shore equipment to the shore.

Contrary to the traditional set-up, some of the maintenance-critical electrical infrastructure is installed on land, instead of offshore, explained the company.

Gaelectric raises US$18m for transmission capacity

Renewable energy and energy storage group, Gaelectric, has raised $18 million to book 960 MW of transmission capacity for its wind energy developments in Montana, USA. 

The funds have been placed on deposit with transmission system operators, Bonneville Power Administration (BPA) and NorthWestern Energy (NWE), to book transmission capacity on their networks with power expected to flow in the period 2014 - 2016.

The US$18 million funds have been raised from European private equity sources in the form of a hybrid debt/equity instrument.

Offshore Marine Management bags contract

Subsea cable specialist Offshore Marine Management (OMM) has been sub-contracted by Norway's Draka Norsk Kabel AS (DNK) to carry out cable work for the Walney 2 offshore wind farm, according to a report filed by newenergyfocus.

DNK was awarded the inter-array cabling contract for the 183.6MW wind scheme in May. OMM will do the termination and testing of the three-core submarine cables and accessories for the inter-array cables in 2011. It follows a turbine foundation contract for Walney 2, which was awarded to Dutch construction company Ballast Nedam Offshore in June.

During the years 2010 to 2011, Walney (UK) Offshore Windfarms  plans to construct phase I and II of the Walney Offshore Windfarm, located approximately 15km off Walney Island, Cumbria, in the Irish Sea in the UK.

The project will be constructed in two phases. Each phase comprises 51 turbines with a total capacity of 367.2MW. The development includes foundations, turbines, export- and array cables, offshore substations and onshore connection to grid.

Finland to introduce feed-in-tariffs from Jan 2011

In an attempt to promote renewable energy with fixed prices for wind and biogas power to encourage producers to meet emission targets set by the European Union, feed-in tariffs, a set price guaranteed to producers will come into force on January 1 in Finland.

The feed-in tariffs will increase wind power in Finland to 6 TWh by 2020 and will last for 12 years, reported Bloomberg.

The proposed level of the tariff will be 83.5 €/MWh for 12 years.

There is a kick-off bonus for those projects that will start producing energy during the first two years after the beginning of the law. The level of the kick-off-tariff is 105.3 €/MWh for three years, said the Finnish Wind Power Association in a statement.

After three years the project will receive the regular tariff level for 9 years.

The target of the Finnish Government is to have 6 TWh worth of wind energy annually by 2020. This means 2000 MW worth of installed capacity in near shore, offshore or onshore or 3000 MW worth of capacity inland.

Total installed wind power capacity in Finland is 170 MW, 125 wind turbines (September, 2010). At the end of 2009 the installed capacity was 147 MW. At the end of 2008 the installed capacity was 143 MW. Wind power production in 2008 was 275 GWh, which is about 0.3 % of the Finnish electricity consumption.