Weekly Intelligence Brief: 26 January – 2 February 2015
US wind energy sector gained momentum in 2014
Companies mentioned include: American Wind Energy Association, SunEdison, TerraForm Power, US Interior Department’s Bureau of Ocean Energy Management, NV Energy, Merrimack Energy Group, Burbo Bank Extension, Dong Energy, Pattern Energy Group, Green Power Investment, VBMS, Gemini Offshore Wind Farm
By Ritesh Gupta
Weekly Intelligence Brief: 26 January – 2 February 2015
US wind energy sector gained momentum in 2014
The US wind energy industry witnessed the completion of 4,854 MW in generating capacity in 2014, according to the American Wind Energy Association (AWEA).
According to AWEA’s fourth quarter 2014 wind energy industry report, the market gained momentum in 2014, with over four times more new wind energy coming online than in 2013. The market has now cumulative installed capacity of 65,879 MW, increasing by 8%.
The industry still needs to sort out uncertainty over federal policy. The renewable energy Production Tax Credit was only extended for two weeks at the end of last year, and has now expired again. The amount installed in 2014 fell short of the record 13,000 MW that the US wind energy industry was able to complete during 2012.
According the report, wind projects were completed in 19 states last year. Similar to the start of 2014, the industry continues to see near-record levels of under construction activity, with over 12,700 MW of wind under construction as 2015 began. Construction activity is currently ongoing in 22 states. New construction starts in the fourth quarter totalled approximately 2,800 MW.
Also, utilities continue to sign some of the lowest cost long-term contracts ever seen for wind energy. Since the beginning of 2014, there have been more than 3,300 MW of power purchase agreements (PPAs) for wind power signed across 14 states. In total, over 12,000 MW of long-term contracts for wind power have been signed since the start of 2013.
Wind installations in Texas led the way in 2014 with over 1,800 MW of new capacity. Rounding out the top five states adding new capacity in 2014 are Oklahoma, Iowa, Washington and Colorado.
Acquisition of First Wind completed
Renewable energy developer SunEdison and TerraForm Power last week completed their acquisition of First Wind Holdings.
As for wind energy, TerraForm Power purchased 500 MW of operating wind power plants from First Wind. According to an official release, the portfolio has an average counterparty credit rating of A- and brings the weighted average remaining PPA life to 16 years for the entire TerraForm fleet. The portfolio is expected to add $73m of cash available for distribution (CAFD) in 2015.
SunEdison purchased the equity interests of First Wind and certain of its subsidiaries, thereby acquiring a leading wind development and asset management platform. The acquisition provides SunEdison with an additional 8 GW of development-stage projects, of which 1.0 GW consists of PTC-eligible wind project pipeline and backlog.
US offshore auction process continues
The US Interior Department’s Bureau of Ocean Energy Management (BOEM) last week conducted its fourth competitive lease sale for renewable energy in federal waters offshore Massachusetts for potential wind energy development.
The auction consisted of two rounds before determining RES America Developments and Offshore MW as the provisional winners of Lease Area OCS-A 0500 (187,523 acres) and OCS-A 0501 (166,886 acres), respectively. Winning bids totalled $448,171 in high bids.
The total acreage of these two areas nearly doubles the amount of acreage leased for wind energy through competitive sales.
The department shared that Lease OCS-A 0502 (248,015 acres) and Lease OCS-A 0503 (140,554 acres) did not receive bids.
According to an analysis prepared by the US Department of Energy’s National Renewable Energy Laboratory, if fully developed, the area leased could support approximately 2GW of commercial wind generation.
With this auction, competitive lease sales have generated more than $14.5m in high bids for more than 700,000 acres in federal waters. BOEM expects to hold another competitive lease sale offshore New Jersey later this year.
NV Energy gears up for 100 MW of new renewable energy
NV Energy is seeking proposals to secure an additional 100 MW of renewable energy resources for Southern Nevada customers as part of its 2015 Request for Proposals (RFP) for renewable energy resources.
The 2015 RFP will be combined with the previously issued 2014 renewable energy RFP for a total of up to 200 MW of new renewable energy resources.
The company had issued a 100-MW Renewable Energy RFP in October last year, with plans to issue an additional 100 MW RFP in late 2015. However, in response to comments raised by the Public Utilities Commission of Nevada and interested stakeholders regarding the ability to develop additional renewable energy resources prior to the expiration of certain federal energy tax credits and other public-interest benefits, the Commission recently issued an order that requested NV Energy to accelerate issuance of the 2015 RFP and combine it with the previously-issued 2014 RFP for evaluation and negotiations with winning bidders.
Bidders in the original 2014 RFP will be provided an opportunity to refresh their original proposals.
The last day bids can be revised or submitted is Feb.16, 2015, and the company anticipates finalising a shortlist for each of the 2014 and 2015 RFPs by April 16, 2015.
Merrimack Energy Group will continue to serve as the independent evaluator for the RFPs.
Dong Energy signs deal for Burbo Bank Extension
Danish utility Dong Energy has signed a contract for the supply of foundations for the Burbo Bank Extension offshore wind farm.
The company shared that a pact has been signed with EEW SPC. It covers the supply of 32 monopile foundations and the associated transition pieces for the 258MW wind farm project to be built in Liverpool Bay.
A high proportion of the transition pieces will be manufactured at the Teesside plant by Offshore Structures (Britain). The joint venture business was set up by EEW SPC and Bladt Industries. Monopile foundations for the wind farm will be fabricated at EEW SPC's facility in Rostock, Germany, while the transition pieces will be produced partly at the Teesside plant on the British east coast and partly in Aalborg, Denmark at Bladt Industries’ facility.
The Burbo Bank Extension wind farm will feature 32 MHI Vestas Offshore Wind 8 MW turbines.
Pattern Development opts for majority stake in GPI
Pattern Energy Group (Pattern Development) has acquired a majority stake in Green Power Investment (GP).
The group has expanded its list of potential ROFO (right of first offer) projects post this deal with Tokyo, Japan-based GPI. The group, a specialist in developing renewable energy and transmission assets, shared that with this move it has added up to 1,000 MW of near and longer term projects in development.
Pattern Development owns approximately 35% of Pattern Energy, which has the right of first offer (ROFO) to acquire projects developed by Pattern Development. Pattern Energy maintains a list of identified ROFO projects, which represent near-term acquisition opportunities.
VBMS bags export cabling contract
Cabling specialist VBMS has been awarded a contract to assist dredging and marine contractor Van Oord with the export cable installation for the Gemini Offshore Wind Farm.
The scope of work for VBMS includes the installation of two cable sections with a total length of 11 km in the transition area between the shallow and deep water sections on the route.
The project will be built in the Dutch part of the North Sea.
The company highlighted that cable-laying vessel Stemat Spirit is suited for this particular task as it has the capabilities of working on anchors in the shallow part of the route as well as transforming to dynamic positioning for operations further offshore. VBMS will mobilise Stemat Spirit in mid-March 2015.