12 Responses to April 8 News: Wind now on even playing field with gas; GE to build nation’s largest solar panel factory
Though the U.S. wind industry installed half as much capacity last year as it did in 2009, production streamlining and efficiency improvements mean wind can compete evenly with cheap natural gas, wind industry executives said today.
There was 5,116 megawatts of new capacity installed across the nation in 2010, down sharply from nearly 10,000 MW the year before. But the industry grew by about 15 percent as new equipment manufacturing facilities sprouted in almost every state.
And heated competition has driven prices down much more quickly than anticipated, the American Wind Energy Association (AWEA) told investors at a wind finance workshop now under way.
As a result, wind power generators say they can now offer utilities long-term purchase power agreements (PPAs) at the same price as natural gas-fired power plants….
Projections of future growth in the industry and claims that grid parity with natural gas has largely been achieved have upended earlier fears that record low gas prices would punish the wind sector for years to come.
AWEA figures show that the average wind PPAs are now being priced at about 6 cents per kilowatt-hour, the same price for energy procurements from a combined cycle natural gas plant. The group says wind is actually about 2 cents cheaper than coal-fired electricity, and more projects were financed through debt arrangements than tax equity structures last year, a possible sign that wind deals are winning more mainstream acceptance from Wall Street’s banks….
[AWEA chief economist Elizabeth] Salerno credits the breakthrough in cost to improved turbine design and performance, higher towers and longer blades, which have boosted the reliability and performance of wind power generation. Equipment makers can also deliver products in the same year that they are ordered instead of waiting up to three years as was the case in previous cycles, she said, calling it a sign of a mature supply chain.
Figures suggest the industry could be set to explode in size this year in terms of new installations.
The group estimates that 5,600 MW of new installed capacity is under construction in the United States, more than double the number at this point in 2010. Thirty-five percent of all new power generation built in the United States since 2005 has come from wind, more than new gas and coal plants combined, as power providers are increasingly enticed to wind as a convenient hedge against unpredictable commodity price moves, AWEA said.
Although the industry is still a net importer, the proportion of domestic parts in wind turbines is now at an average 50 percent, up from 25 percent in 2005, the group said. And some manufacturers say they intend to boost that figure to 80 percent or higher in the coming years as shuttered machine shops reopen to supply the growing industry….
Wind makes up large percentages of power generation in some states but still represents a tiny slice of the nation’s entire supply — 2.3 percent, up from 1.8 percent a year ago.
GE is taking aim at the world’s biggest solar company in a bid to expand into a fast-growing renewable energy market.
General Electric Co. announced Thursday that it would spend $600 million to build the nation’s biggest solar panel factory. It would build the same type of so-called thin film solar panels manufactured by First Solar Inc., the biggest producer of solar panels in the world.
GE also announced Thursday that testing by a government laboratory showed that its panels set an efficiency record for this type of thin film panel, made from the elements cadmium and tellurium.
“It’s demonstrated to be the cost leader in the marketplace and we think we can push costs lower, and faster,” said Vic Abate, vice president for GE’s renewable energy business.
The company did not say where the factory would be built. Abate said it would eventually employ 400 people and be producing panels by 2013. The plant would have the capacity to build 400 megawatts worth of panels per year, enough to power about 80,000 homes.
By comparison, First Solar will have 2,300 MW of capacity by the end of this year.
General Electric Co (GE.N) made a big push in solar power, saying it will invest $600 million to build a new factory as it pursues what it thinks could be an up to $3 billion business by 2015.
The largest U.S. conglomerate, which over the last decade has made itself a leader in renewable energy, said it has designed a thin-film solar panel that converts sunlight to electricity more efficiently than rival products today.
The move is likely to ramp up already intense price competition, particularly for First Solar Inc (FSLR.O), which uses the same thin-film technology as GE has focused on.
“Over time, there is going to be a lot of pricing pressure and the margins probably will not be what they are today,” said John Segrich, portfolio manager of the Gabelli SRI Green Fund. “Solar will be a very big market on a megawatt basis, but it’s a question of at what price?”
GE said it is focused on driving prices down.
“The biggest challenge today for the mainstream adoption of solar is cost, and the way you move cost is efficiency,” said Victor Abate, vice president of GE’s renewable energy unit. “We see ourselves continuing to push that.”
Google has invested ‚¬3.5 million (roughly $5 million) in a German 18.7-megawatt solar power plant in a small town near Berlin.
It’s Google’s first investment in clean technology outside of the United States, and it’s made the investment with German-based private equity firm Capital Stage.
The solar power plant occupies around 116 acres and can generate enough power for around 5,000 homes. More than 70 percent of the panels installed at the plant are manufactured in Germany.
The search giant has already been pushing clean technology stateside and its investment arm, Google Ventures, has invested in several clean technology companies.
Solar power farms use flat photovoltaic panels that absorb sunlight and convert it to electricity. One photovoltaic cell typically generates around a watt of power. Solar panels that are seen throughout the world are large collections of photovoltaic cells, usually around 6 inches across each.
The US solar power industry seems to be doing well and is on track to have a good year, but it looks like there is more interest in solar panel technology internationally “” particularly in Germany and Japan. That’s because a massive surge in residential solar panels in Germany and Japan fueled consumer demand for small-scale solar power projects, according to a report by Pew.
For their first clean energy investment in Europe, Google has picked a very large solar plant in Germany.
The search marketing giant just dropped ‚¬3.5 million or about $5 million on a solar photovoltaic power plant in Brandenburg an der Havel, a small town near Berlin.
Today’s investment marks Google’s first outside the U.S., and follows over $100 million investments the company has made to support the clean energy sector in the U.S. The company in a blog post said it’s looking to encourage the development and deployment of renewable energy around the world.
“Germany has a strong framework for renewable energy and is home to many leading-edge technology companies in the sector,” Benjamin Kott, Google’s clean energy advocacy manager said in a blog post.
“We’re excited about making our first investment outside of the U.S. in Germany,” he added.
Up until the early 90s, the Soviets used the 116-acre site as a training ground. Today it houses one of the largest solar facilities of its kind in Germany that will be able to provide clean energy to over 5,000 households in the area.
The company joins German private equity firm Capital Stage in investing in the 18.7 megawatt solar plant. Hamburg-based Capital Stage, which bills itself as the largest independent renewable energy producer in Germany, said in a press release that it sold 49% of the power plant to Google, and that the investment still requires regulatory approval.
Google’s investment in Germany follows other local projects. Earlier this year, Google pledged to open an internet institute in Berlin, and it’s also launched an initiative to get the German Mittelstand, or small and medium businesses, online.
It’s a question we ask all the time: when will green energy scale up? After all, renewable power won’t really make a difference until it can provide a bulk of the country’s energy supply. That hasn’t happened yet””while technically renewable sources provide around 20% of U.S. power, nearly all of that is biomass or hydro. Wind and solar provide less than 4% of U.S. energy””statistically, that’s barely a bump.
But as Scott Jacobs, a great McKinsey clean energy analyst, pointed out to me at the Fortune Brainstorm Green conference this week, in one sense green energy is already achieving scale””in new power generation. Solar, as I noted in an earlier post today, is growing faster than any other form of energy, and new statistics from the American Wind Energy Association (AWEA) showed that wind added 5,116 MW of new capacity last year. That’s 26% of all new energy generation added in the U.S. in 2010, second only to natural gas, which supplied 40% of new power. (Shale gas””it is for real.) Since 2007 wind has added an average of 35% of all new capacity””twice the amount of new coal and nuclear combined. “There’s no silver bullet to the energy problem, but we’re part of the silver buckshot,” says Denise Bode, the CEO of AWEA.
Despite that, 2010 wasn’t the best year for the wind industry. Thanks in part to regulatory uncertainty last year and the post-recession collapse of the tax equity market that helps fund many renewable energy projects, just half as much wind was installed in 2010 as in 2009. And the U.S. has fallen behind China as the world’s wind leader””China now has some 45,000 MW of wind installed, compared to 40,000 MW in the U.S. China added 18,900 MW of wind in 2010, nearly four times more than the U.S.
he first UN climate talks for the year entered their final phase on Friday with negotiators still trying to hammer out a deal after familiar feuds between rich and poor nations flared.
The four days of talks had an apparently modest main goal of sorting out an agenda for the rest of the year’s negotiations that would lay the foundations for agreements at an annual UN climate summit in South Africa in November.
But delegates said the agenda had still not been decided by early Friday, with one key point of dispute an insistence by many poorer countries for a greater focus on actions developed countries must take to fight global warming.
“Everybody is a bit surprised, we did not expect the agenda to stall the talks for this long,” France’s ambassador for climate change negotiations, Serge Lepeltier, told AFP.
Delegates said a compromise could still be reached by the end of the talks on Friday evening that would set a path towards the end-of-year summit in Durban.
But they said the spirit of cooperation between developed and developing countries that led to breakthroughs at the last annual summit in the Mexican resort city of Cancun in December was not nearly as strong in Bangkok.
“This year will be more difficult and Durban will be more difficult than Cancun,” Lepeltier said.
“The power struggle is back.”
Clean energy investment that totaled $243 billion last year is at risk of slowing as talks on curbing greenhouse gas emissions bog down, said the United Nations official in charge of promoting industrial development.
Kandeh Yumkella, director general of the UN Industrial Development Organization, said $40 billion a year is needed through 2030 to bring basic energy to 3 billion people, and part of those funds are linked to the outcome of 192-nation negotiations on global warming that hit a roadblock in Bangkok this week.
The talks are aiming to unlock $100 billion a year in aid for developing nations to cope with rising sea levels and more volatile weather, which scientists say are caused by damage to the atmosphere from burning fossil fuels.
“We want to keep that pressure up because we have a feeling that pledges can be made but the cash doesn’t move,” Yumkella said in an interview at a UN conference in New York today. “If there’s a continued slowdown in investment in clean energy it takes longer to build them up again.”
In the strongest criticism yet of the UN talks, Todd Stern, the lead U.S. climate negotiator, said yesterday that a binding treaty is “unnecessary” and may not be “doable.” His remarks limit the chances of a breakthrough this year and underscore the rift between rich nations and developing ones including China, India and Brazil.
Scientists confirmed on Thursday that they have discovered oil on dead dolphins found along the U.S. Gulf Coast, raising fresh concerns about the effects of last year’s BP oil spill on sea life.
Fifteen of the 406 dolphins that have washed ashore in the last 14 months had oil on their bodies, National Oceanic and Atmospheric Administration scientists said during a conference call with reporters.
The oil found on eight of those dolphins has been linked to the April 2010 BP oil spill in the Gulf of Mexico, scientists said.
“It is significant that even a year after the oil spill we are finding oil on the dolphins, the latest just two weeks ago,” said Blair Mase, southeast marine mammal stranding coordinator for NOAA Fisheries.
Since mid-March, 87 dead sea turtles have also been found, although no visible traces of oil have been discovered on the carcasses, said Barbara Schroeder, NOAA Fisheries national sea turtle coordinator.
“But we do not have very much information about how oil products find their way into turtles,” she added.
The Gulf is home to five species of sea turtles, all of which are considered at risk of extinction.
Pennsylvania environmental regulators said Wednesday that they were calling for waste treatment plants and drinking water facilities to increase testing for radioactive pollutants and other contaminants, to see whether they are ending up in rivers because of the growth of natural gas drilling in the state.
The move follows a March 7 letter that the federal Environmental Protection Agency sent to the state, instructing it to perform testing for radioactivity within 30 days and to review the permits of state treatment plants handling the wastewater.
“Over the past three years, we have taken the actions necessary to protect the environment and public health without stifling the growth of the natural gas industry,” said Michael Krancer, acting secretary of the Pennsylvania Department of Environmental Protection.
He added that his office had sent letters requiring new testing to 14 public water authorities. It also contacted 25 wastewater plants, requesting that those with older permits “voluntarily” begin testing for radium, uranium and other pollutants.
The letters from federal and state regulators follow reports in The New York Times about gas industry wastewater with high levels of radioactivity being discharged into rivers and streams by sewage treatment plants that were not designed to remove radioactive materials.