Last month, Vestas launched its new 7MW offshore wind turbine to great fanfare. At the top of London’s South Bank Centre, accompanied by a flashy video and models of the turbine for every attendee, we were told that this was the future of offshore wind power.
This was an obvious pitch to developers hoping to build under the upcoming third round of leasing of the UK’s seabed for offshore wind farms. The only problem was that the company hadn’t got very far with it – no prototype had been built and no location had been set for its manufacture.
You would think that a cut to future subsidies for solar power in Spain would have minimal impact on northern European wind developers. But renewables execs at a planning meeting for the Power and Renewables Summit 2011 looked almost traumatised by the events of last year.
When asked about the biggest hurdle for investment in capex-intensive projects such as offshore wind farms, all agreed that it was uncertainty in government subsidy regimes. “Look what happened in Spain,” they murmured.
However, what happened in Spain purely affected future contracts. What renewables execs really worry about is retrospective cuts: ones which will damage profits on projects that are already up and running. Was even the mere suggestion that cuts could be applied retrospectively in Spain enough for investors to fret? That’s what these bosses claimed.
In this week’s readers’ Q&A session, Magued Eldaief, the head of GE’s UK energy business, answers your questions.
In the first of two posts, he discusses the future for nuclear power in northern Europe, wind power in the developing world and whether it is better to back small- or large-scale power generation projects.
In the second post, he discusses subsidies for carbon capture and storage, legislation to curb emissions and the future of smart metering.
Next in the hotseat is Iam Simm, chief executive of Impax Asset Management. He will be answering your questions next Friday, January 28th. Send in your questions for consideration by the end of Sunday, January 23rd to firstname.lastname@example.org.
But for now, over to Magued:
Many thanks for all your questions for Jack Gerard, the head of the API. His answers will appear on this site on Friday, January 14th.
Next week, the person in the hotseat will be Magued Eldaief, the managing director of GE’s energy business in the UK.
This is your chance to ask him about anything: from whether Western wind turbine makers can keep up with their Chinese rivals; to the future of smart grids; to whether CCS is a viable commercial enterprise.
Email all your questions to email@example.com by the end of Sunday, January 16th.
The boss of the world’s biggest wind turbine manufacturer, Vestas, has warned that the wind energy sector in Europe remains fairly stagnant, in remarks that deal a blow to governments’ hopes of constructing new industries around renewable technologies.
Answering Energy Source readers’ questions, Ditlev Engel warned of a “lack of momentum in Europe”. He said:
We have, so to speak been holding our breath for a very, very long time in this region – and not by accident.
But today, when almost all countries in the area are struggling to get their economies back together, we must face the fact that uncertainty – even by 2011 – will remain significant around Europe.
After all the bad news we have published today regarding the offshore wind industry, here is some good news.
Just a month after the UK government confirmed it would spend £60m updating the infrastructure at ports to enable bigger and better wind farms to be built, the Scottish government has gone one further and announced a similar £70m fund.
According to Scottish first minister Alex Salmond:
The offshore wind industry is seeking leadership and immediate support from government and the Scottish Government is determined to provide that, as we have done for the last three years. Today I am delighted to announce – and open for business – Scotland’s £70 million National Renewables Infrastructure Fund. The fund covers infrastructure relating to manufacturing and test/demonstration facilities.
The offshore wind industry was delighted last month when the government confirmed it would spend £60m to redevelop Britain’s port infrastructure.
As he announced the decision, David Cameron said:
I want us to be a world leader in offshore wind energy. We are making these investments so that major manufacturers will decide that this is the place they want to come and build their offshore wind turbines. This investment is good for jobs and growth, and good for ensuring we have clean energy.
But as offshore wind becomes a more prominent part of the UK’s energy mix, it suddenly finds itself in competition with giants from the oil and gas industry.
Yesterday’s confirmation that the government would protect £60m of spending on port infrastructure gave an important fillip to the UK offshore wind industry.
But today the industry had much more worrying news from Vestas, the market leader in this area, who have decided to slash 14 per cent from its overall workforce, at a cost of 3,000 jobs. Clare MacCarthy reports from Copenhagen:
Vestas, the world’s largest wind power company, is to cut up to 3,000 jobs – some 14 per cent of its global workforce – because of excess capacity and a cut in order expectations in Europe.
The closures of four production facilities in Denmark and one in Sweden were announced on Tuesday with the Denmark-based group’s third-quarter results. Net profits fell to €126m ($176m) from €165m a year earlier and sales declined 5.1 per cent to €1.72bn.
Ditlev Engel, the CEO, said:
Based on the expectations we have for 2011 in Europe, however, we must now recognise that a higher European level of activity will not be realistic – at least not in the short term.
Far from encouraging words for European offshore wind.
Here’s some news you may have missed overnight. It looks almost certain that the £60m promised by the last UK government to allow the country’s ports to cope with the next generation of offshore wind will be preserved in tomorrow’s spending review.
Energy secretary Chris Huhne has previously dropped big hints that this will be the case, but the clearest came yesterday when he told Lib Dems in the north east to expect “good news” on this front.
Here at the European Future Energy Forum 2010 in London, Maria McCaffery has welcomed the news, saying the “key issue” facing renewable energy providers at the moment is the supply chain.
Interestingly Lord Howell, a minister in the foreign office, did not contradict what is being described here as a “leak”. It seems offshore wind builders may be one of the few groups to be happy with the outcome of tomorrow’s review.
UPDATE: This is why the story is being called a “leak”. The Guardian has the full story.
Want £100,000? All you have to do is come up with a way of getting engineers and equipment out to the wind farms of the future.
Except it’s not quite as simple as that. While wind farms today are located typically less than 20km from the shore, the next generation of farms could be as far out as 300km, where waves can reach three metres high.
In conditions such as those, transporting workers and equipment out to the farms themselves is pretty difficult, and we’re not just talking about the seasickness that traditionally accompanies such trips.