Renewable energy project monitor

Mike Major

September/October: Our monthly column, written by the Energy Industries Council, reports on project development in the renewable energy marketplace.

Interest in renewable energy projects continued to be positive in September. 54 renewable energy projects were added to the EIC project database (EIC DataStream) for that time period, with a total potential investment value of US$24.7 billion.

While most activity continues to be in the wind sector - both onshore and offshore developments - September has also seen significant development of geothermal, solar and hydroelectric power projects.

Kenya leads the news with the announcement that the state-owned Geothermal Development Company (GDC) has received bids from 19 companies to develop the 8, 100MW geothermal power plants at Bogoria-Silali in north western Kenya - with a total potential investment value of US$2 billion.

Major industry players such as Mitsubishi, Toshiba, General Electric and Alstom Power are all bidding for the project. GDC plans to select a different company to build each of the 8 facilities, with the backing of the investors in the project, including the World Bank. Construction of the power plants is expected to start as early as January 2012 and be completed in 2017.

Kenya is Africa’s largest geothermal producer, and is scaling up its search for underground steam deposits with a 10 year, US$2.6 billion plan to sink 566 wells at the Olkaria, Menengai and Bogoria-Silali sites. GDC estimates that Kenya has a geothermal potential of between 7 and 10GW.

The next largest announcement in September was for the US$500 million Iowa Hill hydroelectric pumped storage project, operated by Sacramento Natural Gas Storage in California. The US Department of Energy (DoE) has confirmed that it will award US$6.5 million to the Sacramento Municipal Utility District (SMUD) to conduct feasibility studies for this project, the largest of 16 DoE awards issued this month.

The DoE has approved nearly US$5 million to examine the engineering requirements and the potential electricity that could be generated by building a new reservoir and associated facilities near Placerville, in El Dorado County. The Department also confirmed that it will award nearly US$1.5 million for a small powerhouse at the nearby Slab Creek Reservoir. However, the Iowa Hill project has not yet been licensed, or received SMUD board approval.

In Asia, the Saigon Investment Group (SIG) signed a contract to develop the US$450 million Nam Sum Hydropower project in the Huaphane province of Laos. The project will have a generating capacity of 288MW, and is expected to become operational by 2016 - with 85% of the 1,000GWh annual power generation to be transmitted to Vietnam. The remainder will be used for local power demand in Laos.

The largest solar power project development announced in September was for the Meuro solar park, a 70MW, US$338 million solar PV power plant. It will comprise approximately 306,000 solar modules, and will be located on a 150-hectare site in a former lignite mining strip in the East German city of Meuro. In early September the main contractor, Canadian Solar, completed the installation of all the solar panels on the site.

Meuro solar park is Germany’s largest solar power plant. When complete, it is expected to generate enough energy to supply power to 17,500 homes. With Germany moving to replace its entire nuclear energy capacity with renewable power by 2020, the country continues to be considered a bull market for the renewable energy industry.

In the tidal sector, a new project has been announced in Scotland. Tocardo BV has entered into negotiations with Marine Scotland, over the possibility of siting 20 turbines in the Tay estuary.

The US$322 million project will comprise 20, 2MW turbines, which Tocardo plans to have in the water by 2012, providing electricity to around 2,200 homes. Tocardo says it will import the manufactured turbines from Holland to Dundee, but the foundation, installation and maintenance work is likely to be carried out by a local workforce.
Investment in renewable energy projects is continuing to show an overall upward trend.

The latest EIC Monitor quarterly report that tracks new projects across the global energy supply chain shows a 31% increase in potential investment value in the renewables sector, up from US$85 billion in Q2 2011, to US$111 billion in Q3 2011.

October’s highlights

October saw continued project activity in the renewable energy marketplace, with 54 renewable energy projects added - with a total potential investment value of US$11.6 billion.

Onshore and offshore wind developments represented 36 of the 54 projects. Hydroelectric power was the next largest sector in terms of project numbers with 9 projects added to the database in October.

Desertec to construct first solar farm in Morocco?

The Desertec Industrial Initiative (DII) says Morocco will be the first location for a solar thermal power plant. The project will be part of the €400 billion Desertec project – which will see renewable energy developed in the Middle East and North Africa (MENA) region.

The first phase of the US$2 billion, 500 MW solar thermal power plant could see construction start as early as next year. The first phase of the complex will be a 150 MW facility costing up to €600 million, and taking two to four years to build.

According to English newspaper the Guardian, the location of the solar thermal project is predicted to be the desert city of Ouarzazate, Morocco, where parabolic mirrors will cover an area of 12 km2.

The DII is also already in talks with Tunisia about renewable energy projects, and Algeria is expected to follow. From 2020, the initiative expects countries such as Libya, Egypt, Turkey, Syria and Saudi Arabia to join.

Major project announcements included the US$800 million Flat Ridge II wind farm in the U.S. This 419MW onshore wind farm will comprise 262 GE turbines on 66,000 acres located 43 miles south west of Wichita, Kansas. The project will be 100% owned and operated by BP Wind Energy.

The construction of the project is projected to start by the end of 2011, subject to necessary permits, while the commissioning is anticipated by the last quarter of 2012. The project is expected to employ as many as 500 people at its peak of construction. BP Wind Energy is reportedly set to pay more than US$1 million a year for 20 years to the 200 land owners hosting the turbines - and a similar amount to local Government.

It has signed a long-term purchase agreement with wholesale power provider Associated Electric Cooperative Inc., for 314 MW of the energy capacity from Flat Ridge II. BP Wind Energy is trying to find buyers for the rest of the power in the Midwest.

In Scotland, five offshore renewable energy sites have been awarded conditional agreements for lease, providing the potential to deliver 5GW in Scottish territorial waters. The projects are Argyll Array, Islay, Beatrice, Inch Cape and Neart na Gaoithe, which together represent a potential investment value of over US$21 billion. The agreement for leases provides an option for the developers to take a seabed lease in the future, and builds on existing exclusivity agreements for the developers to scope out prospective sites. With these agreements in place, the developers are now able to start making critical project decisions - as they prepare applications for consent.

In Russia, construction of the US$380 million Nizhne-Suyansky hydropower plant in Bashkortostan looks set to go ahead. It is understood that RusHydro is ready to finance around 50% of the project’s costs, primarily the erection of dams and the station itself. Construction is expected to take five to 6 years, following the development of the plant’s design in 2012.

The Nizhne-Suyansky plant is expected to have a capacity of between 300MW and 600MW. However, it is most likely to be around 400MW, as the tail of the resulting reservoir would cross into the Sverdlovsk region if it was 600MW.

The largest solar project development in October was the US$346 million Ningxia Yanchi solar power plant in China, which broke ground on 12 October 2011. The integrated solar combined cycle (ISCC) trough solar CSP power plant is located in Gaoshawo town, Yanchi county, Ningxia, and is the first ISCC trough solar demonstration project in Asia.

The plant is being financed by Hanas New Energy Group, and constructed in collaboration with North China Power Engineering and Siemens. It will have a generating capacity of 92.5 MW, and is due to be operational by October 2013.

The power station represents an alternative to traditional trough solar power generation, as it uses storage facilities, and includes combustion turbines. The project will serve as an important model for the design, construction, operation and management of solar thermal power projects in China.

A key development in the quest for greener energy was the announcement made by the Belgian Government that a conditional agreement has been reached to shut down the country’s two remaining nuclear power stations. Belgium plans to make a complete exit from nuclear power by 2025, providing it can find enough energy from alternative sources to replace 5,860 MW of power and prevent any shortages.

This announcement comes on the back of Japan’s Fukushima nuclear disaster in March, which prompted Germany to renounce nuclear energy by 2022.

About the author: Mike Major is chief executive of The EIC (Energy Industries Council)

About EIC DataStream: EIC DataStream tracks over 8,800 of the most significant projects across the global energy industry. 917 are active renewable energy projects, and a further 998 projects are proposed for future development. Of course it is important to note that there will always be a proportion of proposed projects that do not gain planning consent, as well as the requisite finance.

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Bioenergy  •  Energy efficiency  •  Energy infrastructure  •  Energy storage including Fuel cells  •  Geothermal  •  Green building  •  Other marine energy and hydropower  •  Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity  •  Solar heating and cooling  •  Wave and tidal energy  •  Wind power  •  World Future Energy Summit



jrfloyd said

12 December 2011
Are the Argyll Array, Islay, Beatrice, Inch Cape and Neart na Gaoithe projects in Scotland WEC or tidal projects?

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