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Three renewable energy auctions to look out for

Three renewable energy auctions to look out for


Three countries provided details of upcoming auctions for renewable energy last week. The French Environment and Energy Ministry said it would invite proposals for 3GW of onshore wind parks over three years, with the first tender planned for November, while Saudi Arabia said that in September it would award its first tender for building 700MW of solar and wind energy. These are proposed to be built at the lowest cost in the world. “The terms on renewable contracts will be motivating so that the cost of generating power from these renewable sources will be the lowest in the world,” Saudi Arabian energy minister Khalid Al-Falih Al-Falih said at a press conference in Riyadh. Requests to qualify for bidding will be issued 20 February and bids have to be made on 17 April.

In the third competitive contest mentioned last week, Qatar Electricity and Water Company and Qatar Petroleum are planning a 500MW solar plant, for which tenders will be sought this year. The project will start generating power by 2020. US President Donald Trump moved ahead with his plan to aid the coal industry by working towards the repeal of several rules from the Obama era. As the US backtracked on climate, the European Union said it was ready to take the lead on the fight against climate change. “Some of the actions that have been announced” in the US “might lead to the situation where Europe would have to assume—and we are ready for that—global leadership in the fight against climate change,” said Maros Sefcovic, European Commission vice-president for Energy Union.

Sefcovic was speaking at the Commission’s publication of a report to the European Parliament and EU member countries on progress toward the bloc’s decarbonisation goals. According to the report, EU greenhouse gas emissions in 2015 were down 22% from 1990 compared to a legally binding target to reduce emissions by 20% by 2020. The EU also is on track to beat 2020 targets for renewable sources to provide 20% of final energy consumption and a 20% energy efficiency gain. The UK, which has decided to exit the EU, has seen a jump in trading volumes in the three London-listed UK solar funds. “Brexit is of course not so good in general, but it’s good for solar,” said Michael Bonte-Friedheim, founding partner and chief executive officer of NextEnergy Solar Fund. “With the low interest rates, investors searching for returns come to us.”

The pound has dropped almost a fifth since a majority of voters chose on 23 June to leave the EU. The currency depreciation has fueled rising power prices and, in turn, lifted the amount revenue generated by funds holding solar assets. The Bank of England’s decision last year to cut rates in an effort to boost the UK economy in anticipation of Brexit-related issues has also benefited solar funds. Elsewhere in Europe, Areva approved plans to hold two capital increases totaling EUR 5bn ($5.4bn) this year to bail out the near-bankrupt state-controlled atomic-reactor maker. Areva has raked up losses in recent years because of delays and cost overruns at a nuclear plant it’s building in Finland, and as demand for nuclear-fuel and services slumped after the Fukushima catastrophe in 2011.

Dong Energy announced that it was ready to get out of coal, after profit rose to a record on the back of expanded renewable energy. The Danish utility, which is the world’s largest installer of offshore wind farms, set a deadline to exit coal by 2023 at its power stations. “Everything has its time, and now we think it’s a good time to say goodbye to coal,” Thomas Dalsgaard, head of Dong’s bioenergy and thermal power unit, said in an interview. “In today’s environment, not many companies contemplate building new coal-fired stations, you would look into offshore wind and other renewables because of the cost,” said Dalsgaard. Dong’s coal use will drop to zero from 46% after it converts two power stations to run on biomass, in addition to the five that have already been converted or are currently being retrofitted.

Private equity company Demeter Partners said it will purchase a 49% stake in an operational wind park in France developed by H2air Group. The Les Eoliennes du Coquelicot 2 park near Amiens in northern France was completed last year and comprises eight 2.3MW turbines from Enercon. H2air will retain a 51% holding in the project. In the US, 8minutenergy Renewables won a contract to supply the Los Angeles Department of Water & Power with solar energy for $52 a megawatt-hour, matching the average lifetime cost of a natural gas plant. The closely held developer expects to begin construction on the 115MW Springbok 3 solar farm in California, in late 2017. It is expected to be completed next year. Meanwhile, output was up at the 377MW Ivanpah thermal solar plant in Southern California, a giant installation that uses 170,000 mirrors. California utility owner PG&E struck a deal with plant owner NRG Energy to pay less for power after the plant struggled to meet supply commitments.

Japanese trading company Mitsui acquired the commercial and industrial division of SunEdison to enter the distributed solar-power generation market. The principal assets and employees of the division will form part of Forefront Power, a newly established company set up and wholly owned by Mitsui. Regulators in several markets are introducing financial mechanisms that reward utilities for contracting distributed energy resources. Further details can be found in the Research Note from Bloomberg New Energy Finance. In China, a trial for trading renewable energy certificates is set to start later this year. The certificates, which will act as proof that non-hydro renewable energy is being generated or consumed, will be verified and issued by China’s Renewable Energy Information Management Center, according to a statement from the National Development and Reform Commission. The agency has asked that the subscription price not be any higher than the subsidies the government would normally pay for clean energy. Wind or solar generators that sell the certificates will no longer receive subsidies for their projects, the NDRC said. Trading of the certificates will be voluntary starting from 1 July and will become mandatory at an appropriate time from 2018, the NDRC said.

Anand Gupta Editor - EQ Int'l Media Network


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