Windbiz

Xcel-ing Wind: Show Us the Turbines

Xcel's announced it's adding another 775 MW of wind onto its Colorado system, to become the country's largest wind energy user.  To put this in perspective, my colleague just put out an excellent study of the North American market. Xcel has ramped up its wind purchasing big time to become second in the US over the past two years, behind Southern California Edison. 

But, despite the big wind announcement (actually outweighed by its 1,300 MW of CCGT capacity planned through 2012), Xcel has had to stall one of its own developments this year due to climbing turbine prices despite booming demand for its retail wind power offering.  The firm is heavily reliant on development partners like Invenergy, Cielo and Padoma to get that capacity up and running - do these guys all have turbines lined up?  Looks like Invenergy will come through in 2006 with 60 MW at least, though reaching 775 MW by 2007 will be challenging - as Xcel mentions with a heavy disclaimer at the end of the press release. 

Still, hats off to Xcel for putting wind at the center of its supply strategy next to gas, and reaping its value on the retail side.  These are the type of utility moves that fulfill state RPS quotas and keep up momentum for a long term PTC. 

Argentina - First Wind, then Hydrogen

Despite a virtually non-existent wind power industry, there was a fair amount of hype a few years ago about Patagonia harnessing its massive wind resource to produce hydrogen, and now it is being revived.  Hundreds of miles from any major demand center, and with no proper transport lines, producing hydrogen may be a way to store significant amounts of electricity from nearly 20,000 MW of potential.  So things are moving forward down in Pico Truncado, where a town of 15,000 residents has four turbines covering around half of its consumption--and the excess production is used to crack water. 

While I am thrilled for the people of Pico Truncado and support the R&D efforts, my feeling is the cart is going before the horse here.  More attention should be paid to getting Argentina's wind industry running:  basically nothing has been installed for the past five years (the country has a total of 27 MW).  First let's get conventional wind projects consistently on-line as the economy recovers, which will help build a strong platform to fully tap Patagonia and store hydrogen.  Then, when developers have the money and experience, they will be ready to implement wind to hydrogen technology.  Otherwise, wind to hydrogen in Pico Truncado will be just another hyped-up pilot, rather than the evolution of a viable energy alternative.            

Horizon Stockpiles Turbines

With all the talk of turbine shortages from the US market boom, it seems Horizon Wind has quickly picked up on the trend.  The clever folks at Goldman Sachs have snapped up 1,400 MW of turbine capacity through 2008 from Gamesa and Vestas.  Horizon is not the largest player in the market, and bigger players probably should have bought up more turbines when they could, as the market looks sold out through 2007. 

I counted a good 2,000 MW pipeline on Horizon's website - figuring half of that goes through, they might be sitting on 200-400 MW of turbines in late 2007 with the clock ticking on the PTC.  I haven't heard of reselling turbines from one developer to another, although it definitely puts them in a strong position as other projects move faster and may scramble for machines.    

Goldwind Scores Big in China

What did I tell you...here comes a big Chinese turbine supplier.  This is REpower's subsidiary Goldwind scoring 300 MW in Jiangsu and Gansu.  With Vestas, Gamesa, GE, Ingetur and others present there - it looks like REpower's got a pretty strong partner.  They've also got some range from 600kW - 1200 kW.  Nonetheless, let's see how order books shape up after the big five close the year (Vestas, GE, Enercon, Gamesa, Siemens). China's gunning to overtake India within 5 years or so -- and healthy turbine supplier competition will be an important part of that.   

Acciona Energía Getting into Korea

In a big crunch these last few days before the holiday - as we all are.  Nonetheless, the deals keep flowing and Acciona keeps extending its reach. Doing over 100 MW in Korea will be a nice credential to round out the Asian portfolio - putting them in three countries of the region including Australia and China.  Now can they leverage Ingetur into these markets, as I suggested earlier?   

2005 Ends with Ka-Ching! December Deals top €1bn

Another big deal in the final weeks of December, by another investment player.  The question is - who's next?  In Portugal, Finerge and Tecneira were already bought this year.  There are probably a few more €400-€500mln targets in Spain like CESA or Molinos del Ebro, and perhaps more foreign utilities will divest like Energi E2 or RWE Harpen.  Italy's other independent players like Fri-El and Sanseverino are still small at under 100 MW apiece - but next year there will surely be another round taking a look at these guys.      

What the Hellas Going On

As many have probably thought, wind energy in Greece is pretty much a no-brainer: excellent winds (+8 m/s nearly everywhere), hundreds of unconnected islands, and a lack of local fossil fuel resources.  Easier said than done - Greece has been infamous for byzantine permitting processes and tough resistance from the grid.

After much lobbying, there seems to be a glimmer of hope here.  The idea is to create development zones, kind of like France, that will facilitate permitting.  This policy puts development more in the hands of local planning councils, which may lead to varying degrees of transparency. 

There's big money going into Greek wind from several foreign players like Iberdrola, EDF, DONG and CESA-ERG.  These types of players put the pressure on PPC and the administration to make the market work, though grid upgrades will be key.  With the European Wind Conference lined up in Athens this February, you can bet they'll put some kind of new regulation together that will re-launch the market then. 

Underdog Greece won the European Cup in football in 2004, then hosted the Olympics a month later, behind construction schedule, with no problems. They'll have to pull through in the clutch again to get Greece's wind market camera-ready for the big show.   

Italian Wind Project? Show Them the Money

They've already got their meathooks into UK and German wind - now Italy's delivering deals for Europe's big wind investment players. Two worth mentioning have happened in the space of two weeks.  One is Trinergy's acquisition of IVPC4 - good for over 300 MW.  Two is Alllianz's buying up a 72 MW farm from WKN.  These types of players want to put a portfolio together that would look something like this.  Between utilities, IPPs, and these finance players competing for deals, developers selling projects are riding high.      

Barrow Turbines Erected at '04 Prices

DONG and Centrica are now erecting turbines for the 30 x 3 MW project offshore at Barrow. One assumes they locked in Vestas at acceptable prices, as the price tag in the article suggests €1.73 mln/MW installed - about what Scroby Sands and North Hoyle cost.

Aside from the news capsule, check out the comment below on the same Evening Mail article.  A. Gearanch of Scotland assumes a 24% capacity factor on this offshore farm - rather absurd considering most offshore farms are at 35% and above (North Hoyle: 38%).  Also thanks to Gearanch for underlining the evil subsidies to wind, because, um, there are no subsidies to coal, nuclear, or oil.  So anyway, since wind's not going to do anything to control climate change, the UK should accept nice, clear skies like this.  More champagne anyone?      

Big Boys Moving in on French Wind

So now Total and RWE are building a wind farm as part of France's tender allowing projects over 12 MW.  With Areva's acquisition of REpower, and EDF's looking more aggressive with a handful of projects this year, France is starting to shape up like a professional, more consolidated market.  As luck would have it, this is coinciding with the country's shift to zoning for wind projects in 2007. It's interesting that with all the chatter about bringing in more nuclear power around Europe, Europe's biggest nuclear country is quickly growing its wind market, at over 100% this year.