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Vestas announces highest order backlog ever

May 6th, 2015

Good news for Vestas as the world’s largest wind turbine manufacturer announced strong Q1 results with increases in revenue and what it described as a "highest order backlog ever" for orders and services worth €15bn.
Vestas CEO Anders Runevad said the company has posted revenues of €1.5 billion, an 18 per cent increase for Q1 2014, helped by strong performance in Europe and the Americas.

This helped the company bank €79m, an increase of €39m. Looking ahead, Vestas' revenue is expected to be minimum €7.5 billion (compared to minimum €6.5 billion previously).

In terms of sales, Vestas said orders were at 1.75 GW in the first quarter of 2015, worth €7.5 billion at 31 March.

GE faces Commission obstacle to Alstom deal in June

May 1st, 2015

GE’s acquisition of Alstom is to face another test as early next month when the European Commission puts forward a statement of objections over its $13.9 billion bid.

The deal risks being blocked unless GE offers adequate remedies, insiders have disclosed to Bloomberg.

GE wants to stick to its original merger terms as it says competition rules are not being contravened by the deal.
GE Alstom
“We have a constructive dialog with the commission and we continue to work toward a positive outcome,” Seth Martin, a GE spokesman, said by e-mail.

The timing of the statement of objections would give GE and Alstom, based in the Paris suburb of Levallois-Perret, at least two months to reach a compromise with the EU ahead of its August 6th deadline to rule on the deal.

While the companies will seek to address EU concerns relating to the sale and servicing of heavy-duty gas turbines, GE has said it disagrees with the regulators’ initial assessment and the company has not indicated it plans to sell any assets to win clearance for the deal.

The EU has previously said the purchase may leave only Siemens AG as GE’s main rival in Europe, probably stifling innovation in the region and leading to price rises.


Natural gas genset sector to be worth $146bn says report

April 30th, 2015

Annual natural gas generator set installations are expected to reach 27.2 GW by 2024 and generate $146.8 bn in cumulative revenue according to new data.

The report from research company Navigant states that natural gas gensets are “poised for rapid growth, particularly in markets where inexpensive natural gas is widely available, such as North America”.

It adds that economic growth in the developing world is increasing the demand for reliable backup power and natural gas gensets are increasingly the technology of choice.Natural gas genset

It predicts that annual installations of natural gas gensets will grow from 12.9 GW this year to more than 27.1 GW in 2024.

Navigant Research analyst Taylor Embury said: “The reciprocating engines used in natural gas gensets represent a widespread and mature technology used for all types of power generation, from small portable gensets to larger industrial engines that power generators of several megawatts.”

“These engines also come in a variety of configurations that can serve multiple applications.”

Navigant states that while historically the higher capital costs and fuel delivery infrastructure requirements of natural gas gensets have been a disadvantage when compared to diesel gensets, “today the line between natural gas and diesel gensets is becoming blurred with the increasing popularity of dual-fuel gensets”.

US diplomat named new deputy chief of IEA

April 30th, 2015

The International Energy Agency has appointed US diplomat Paul Simons as its new Deputy Executive Director.

Simons has a background in energy and economic policy and will take up his position in July.Paul Simons IEA

IEA Executive Director Maria van der Hoeven said that Simons “brings a range of diplomatic and management skills that will be valuable to the agency, especially as we work to deepen relationships with countries beyond the current IEA membership”.

Simons will support van der Hoeven in providing leadership and strategic direction to the IEA, including advancing the global engagement strategy, strengthening cooperation with non-member countries as well as initiatives with key partner countries.

He will have overall responsibility for coordinating internal operations, including the Energy Data Centre, communications and budget activities.

Simons joins the IEA from the Inter American Drug Abuse Control Commission (CICAD), which coordinates drug policy and criminal justice reform initiatives.

He was US Ambassador to Chile from 2007 to 2010 and prior to that was Deputy Assistant Secretary of State for Energy and Sanctions.

RWE chief economist – transparency the key to capitalising on energy efficiency

April 30th, 2015

The chief economist at RWE told an audience of power industry professionals this week that clarity in terms of statistics is vital for utilities keen to capitalise on the transformation to an energy-efficient Europe.

Graham Weale spoke at Platts European Power Summit on the theme, Energy Efficiency – Challenges and Opportunities for electric utilities.
Graham Weale of RWE
In his presentation Germany-based Weale pointed to the UK as an example of the ideal in terms of facilitating utilities wishing to grow their efforts in energy efficiency. “The way the British government is going about it – in terms of transparency and statistics is to be welcomed.”

Pointing to the comprehensive nature of statistics compiled in the UK with regard to insulation, boiler improvement, double glazing, and central heating systems, he said, “If you want to catch the low hanging fruit statistics are of the utmost importance.”

Energy efficiency initiatives are being planned at EU, city and company levels and Weale pointed to the work being done by the European Covenant of Mayors in terms of cities taking the lead on policy action throughout Europe as one such key to understanding where opportunities exist.

“These network of European cities are committing to reducing energy – reducing emission targets – exceeding the EU 20 per cent objective. Very large cities aim to reduce emissions by 40 per cent versus 2005.

“The mayors of 30 large cities have unveiled plans for joint public procurement to intensify efforts ahead of COP21.”

Weale said, what he called the ‘Green DNA’ of a company had increased in importance and made a direct contribution to company bottom lines, and added that utilities should look more to technologies such as condensing boilers, CCGT, combined heat and power, heat pumps and electric vehicles as the entire sector attempts to ‘recalibrate its models.’

The housing market is not, at least initially for heat pumps, where opportunities lie as there is a limited number of new buildings and gas prices are also detrimental.

If per annum reduction continues in power consumption, he said there may well be great potential for investment in electric vehicles, with power utilities in line to benefit.

“If 1.5 PA reduction continues – and by 2030 there is 20 per cent less energy consumption, the message is that half the loss could be compensated by electric vehicles and heat pumps. That would amount to 3 million sales of heat pumps per year and Electric Vehicles (EVs) accounting for 20 per cent of the car fleet.”

Weale also mentioned the results of recent analysis by the Dutch Association of Engineers, which looked at what changes would need to occur for energy demand to be halved.

In terms of where electricity demand was forecast to increase it was in the 100 per cent electrification of light transport, low temperature heat and the extensive use of combined heat and power.

“A plethora of legislation is working its way into the market with tentacles everywhere including directives to reduce emissions by building performance, eco design and energy labelling.”

“Some countries are doing better than others but it’s all starting to work and that is why energy demand is going downhill even as recession effects level off.”

Weale concluded his presentation by reinforcing the importance of access to comprehensive statistics. He said it would enable money to be spent more effectively through accurate monitoring and subsequent cost-benefit analyses.

He also had a warning for the political classes, in terms of fair and coherent taxation.

“Taxation of energy carriers has to be coherent with policy and provide the basis for the cheapest long term decarbonisation. So far taxation of different fuels is, to my mind, arbitrary.”

“Taxation of energy carriers need to be analysed root and branch to make sure of coherence with overall objectives. Electricity should not be prevented from playing its correct role in energy transformation.”


Coal-fired power tops share of UK winter power generation

April 29th, 2015

One third of Britain’s electricity was provided by the coal-fired power sector over the last six months, despite the loss of 5 GW of coal plants over the last two years.

In the October 2014 to end of March 2015 period, coal provided 33 per cent of total power generation, compared to gas at 25 per cent and nuclear at 18 per cent.

Paul Verrill, director of energy data specialists EnAppSys, told Power Engineering International:Coal-fired power stations continued to provide the bulk of power generation for the GB electricity market during winter 2014-15.
Coal digging
“This position was impacted by gas price increases towards the beginning of Q4 2014 that were driven by the increased demand for heating, and followed a summer period in which gas plants were highly competitive against coal-fired plants. The dominance of the coal-fired fleet came despite the loss of some coal capacity in recent times.”

“In hindsight, fears of blackouts going into the winter period seem to have been exaggerated, as gas plants saw overall levels of power output at just over a quarter of their installed capability. In fact a number of gas plants failed to achieve sufficient run hours to forestall closures in 2015.”

Meanwhile there was good news for wind power, but at the expense of gas generation.

Wind farms saw load factors of around 38 per cent - above those for gas-fired plants – enabling wind to provide 11 per cent of overall generation.

Verrill told PEi, “This growth of the wind fleet meant that a quarter of total power requirements were satisfied by either interconnector supply from other countries or from renewable sources, which, coupled with falling demand, squeezed the requirements for generation from thermal (coal or gas) power sources."

The total power mix for the period is:

  • Coal: 12,768MW; 33 per cent.
  • Gas: 9,577MW; 25 per cent.
  • Nuclear: 6,926MW; 18 per cent.
  • Wind: 4,459MW; 11 per cent.
  • Interconnectors: 2,186MW; 6 per cent.
  • Biomass: 1,810MW; 5 per cent.
  • Hydro: 987MW; 3 per cent.
  • Solar: 215MW; 1 per cent.


New partnership aims to develop 400 MW of UK onshore wind

April 29th, 2015

Irish power company ESB has announced a new partnership with British wind power project developer Coriolis Energy to develop nine UK onshore wind projects totalling 400 MW.

The projects, with a total capital investment of £600m ($919m), are to be largely located in Scotland, but “opportunities for new wind farm developments will be pursued throughout the UK”, the firms said, adding that a “significant” number of projects are already in the partnership’s pipeline, with the first project planned to be operational by 2019.

Onshore wind has been a controversial proposition in the UK due to its visual impact, especially in England where residents have lobbied the government to preserve so-called “areas of outstanding natural beauty”.

Kieran O’Neill, media relations manager at ESB, said the majority of the partnership’s proposed sites are located in Scotland due to the “more favourable planning and political context for onshore wind there”, as well as Scotland’s superior wind resource.

Asked whether he believes the potential for onshore wind development in the UK could change after the upcoming general election on 7 May, O’Neill said: “Generally speaking ESB are taking a more strategic, long term view of the sector rather than responding reactively to shorter term political changes.” The firm has targeted the installation of 7 GW of power generation capacity in the UK and Ireland by 2025, he said, from a current installed capacity of 4.8 GW, with 26 per cent of this planned to come from renewable sources (up from 13 per cent currently).

“We will be watching the election outcome closely,” he said, “but it is unlikely to affect our current strategy.” 

Vattenfall to shut down nuclear reactors ahead of schedule

April 28th, 2015

Swedish utility Vattenfall has announced plans to potentially shut down two of its nuclear reactors early, citing declining profitability and increased operating costs.

The Ringhals 1 and 2 reactors, both 865 MW, could be closed between 2018 and 2020 instead of by 2025 as was previously planned, the firm said. However, the ultimate decision will lie with the Ringhals plant’s board of directors and requires agreement between co-owners Vattenfall and German utility E.ON, which has been informed of the plan.

“Vattenfall’s decision is business driven,” said Torbjörn Wahlborg, head of the company’s generation business unit. “It is of course regrettable to close down well-functioning production units but sometimes this is inevitable,” he added.

The two reactors began commercial operation in 1975 and 1976. Their current book value amounts to SEK15.1bn ($1.76bn), of which Vattenfall’s share is 70%. The company said it is investigating the financial impact of the proposed closures.

Vattenfall's five other operating nuclear reactors (Ringhals 3 and 4, and Forsmark 1, 2 and 3) remain on track for an expected 60 years of life, the firm said.

The Ringhals plant’s four units produce around 20 per cent of Sweden’s power.

IFC provides $97m to boost renewables and energy efficiency

April 27th, 2015

The International Finance Corporation is providing a $97m package to increase lending to energy efficiency and renewable power projects in Turkey.

The funding is being pasInternational Finance Corporationsed to Turkish bank ABank and is designed to boost sustainable energy investment in Turkey and support micro, small, and medium enterprises, which the IFC says is essential for economic development and job creation.

The IFC – which is a member of the World Bank Group – will directly lend $50m of this loan from its own resources. The remaining $25m is raised through the IFC-managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio.

The European Fund for Southeast Europe is the parallel lender in the project providing $22m to support the bank’s financing of micro and small enterprises.

ABank general manager Meric Ulusahin said: “We will create innovative products and additional opportunities to develop sustainable energy investment across all industries in Turkey.”

Japan’s $21m microgrid investment boosts renewable sector

April 27th, 2015

Japan could become one of the Asia-Pacific region’s top markets in smart grid development but it has significant hurdles to overcome, according to a new report.

The analysis from research and consulting firm GlobalData says that Japan’s increased focus on smart grid deployment is part of its plans to boost energy efficiency and power generation from renewable sources.

The report states that Japan was among the first countries globally to invest in smart grid research and development in the early 2000s, with the New Energy and Industrial Technology DJapan renewables and microgrid potentialevelopment Organization (NEDO) funding a number of pilot microgrid projects from 2003 onwards.

Last year, the Ministry of Energy initiated a new programme to encourage microgrid development in Japan. With a budget of $7m provided annually for three years, the programme makes funding available for independent demonstration projects, such as electric vehicles for mobility and storage, renewable energy production and storage systems, and energy efficiency optimization.

GlobalData’s senior power analyst Sowmyavadhana Srinivasan said: “Following the Fukushima nuclear disaster in 2011, Japan suffered substantial damage to its grid infrastructure, along with a reduction in its base load generation. Consequently, there are more efforts to increase the country’s energy efficiency and renewable power generation.

“However, the proliferation of renewable power projects in Japan is hindered by numerous difficulties with connecting to the grid, which is currently divided into 10 regions and operated by 10 different utilities. One of the major challenges for developers in 2014 was the requirement for an improved transmission system.”

According to Srinivasan, this is further compounded by the fact that it had previously taken around three to four years for developers to overcome all regulatory hurdles involved in implementing renewable projects.

However, Srinivasan added: “This lengthy approvals process has led the Japanese government to reduce the waiting period to less than two years. Combined with the possible establishment of a centrally-operated grid, this may allow projects to be set up in less time, enabling the renewable sector to become a significant part of the country’s power network.

“Renewable energy accounted for only 10 per cent of Japan’s total installed capacity in 2014, but we expect this to grow to 19 per cent by 2025.”

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