U.S. Wind Industry Boasts Strongest Start In Years
With the installation of 908 utility-scale turbines in the first quarter of 2017, the U.S. wind industry is boasting its strongest start in eight years, according to the American Wind Energy Association’s (AWEA) U.S. Wind Industry First Quarter 2017 Market Report.
New wind turbine installations in the first quarter totaled 2 GW of capacity and spanned the U.S. – from Rhode Island and North Carolina to Oregon and Hawaii. Great Plains states Texas (724 MW) and Kansas (481 MW) led the pack, says AWEA.
According to AWEA, the early burst of activity reflects how 500 factories in America’s wind power supply chain and over 100,000 wind workers are putting stable, multiyear federal policy to work: The industry is now in year three of a five-year phase-down of the production tax credit.
The report says Texas continues as the overall national leader for wind power capacity with 21 GW installed – which is enough to power more than 5 million average homes.
Notably, North Carolina became the 41st state to harness wind power when it brought online the first wind farm to be built in the Southeast in 12 years: Avangrid Renewables’ Amazon Wind Farm US East.
Horace Pritchard, one of nearly 60 landowners associated with the North Carolina project, explains what it means to him and his neighbors:
“Farms have been growing corn, soybeans and wheat for a long time here, and the wind farm revenue means a lot of families are protected from pricing swings, floods or droughts going forward. We’re just adding another locally grown crop to our fields, with very little ground taken out of production, and the improved roads really help with access. So it’s a great fit here.”
AWEA notes that expanding wind farms continue to benefit rural America, considering over 99% of wind projects are built in rural communities. According to AWEA’s recently released 2016 Annual Market Report, wind now pays over $245 million per year in land-lease payments to local landowners – many of them being farmers and ranchers.
Further, American wind manufacturing facilities remained busy in the first quarter. With 4,466 MW in new construction and advanced development announcements recorded in the first quarter, the near-term pipeline has reached 20,977 MW of wind capacity; that’s about as much as the entire Texas wind fleet’s existing capacity, AWEA points out.
Additionally, demand remained strong in the first quarter, the report says. There was 1,781 MW of wind power signed in long-term contracts, representing the most in a first quarter since 2013. Utilities and Fortune 500 companies frequently sign these power purchase agreements (PPAs), and in the first quarter, Home Depot and Intuit – the maker of TurboTax – joined a host of Fortune 500 companies, such as GM, Walmart and Microsoft, that purchase wind power.
AWEA says wind is also supplying a growing number of cities, universities and other organizations, including the U.S. Department of Defense. Notably, in the first quarter, a Texas wind farm came online to supply a PPA with the U.S. Army.
“We switched on more megawatts in the first quarter than in the first three quarters of last year combined,” states Tom Kiernan, CEO of AWEA. “Each new modern wind turbine supports 44 years of full-time employment over its life span, so the turbines we installed in just these three months represent nearly 40,000 job years for American workers.”
Avangrid, Vineyard Wind Form Offshore JV
Avangrid is acquiring a 50% ownership interest in Vineyard Wind, an offshore wind energy developer that is part of the Copenhagen Infrastructure Partners (CIP) portfolio.
Avangrid is a subsidiary of AVANGRID Inc. Iberdrola S.A., a worldwide leader in the energy industry with significant offshore wind holdings in Europe, and owns 81.5% of the outstanding shares of AVANGRID common stock.
Last summer, Massachusetts required utilities to procure 1,600 MW of offshore wind energy within the next decade, setting off an intense competition among offshore wind developers in the region. Three companies to date have acquired lease rights to build projects off the coast, including Vineyard Wind. Vineyard Wind’s project area is about 15 miles south of Martha’s Vineyard.
Iberdrola holds offshore wind projects under development or construction in England, Germany and France. Avangrid recently won its first offshore wind lease auction in the U.S. off the coast of North Carolina. CIP is providing investment and management for projects under construction in Germany and Scotland. Executives with extensive offshore wind experience from these European projects will now be joining Vineyard Wind’s local development team, based in New Bedford, Mass.
According to the company, CIP and its executives have developed or invested in some of the biggest offshore wind projects in the world, including the 402 MW Veja Mate project off the coast of Germany and the 588 MW Beatrice project off the coast of Scotland. CIP manages more than $4 billion in assets. It acquired Vineyard Wind in August 2016.
Vineyard Wind plans to begin construction of its project in early 2020 in order to bring the economic development and clean energy benefits of offshore wind to Massachusetts as soon as possible. Vineyard Wind has also worked hard to establish long-term relationships and partnerships with the local community that will provide significant benefits to the project.
Timken Co. Acquires AeroTorque Corp.
North Canton, Ohio-based Timken Co. has acquired AeroTorque Corp., a U.S. manufacturing and engineering firm for torque damping products and torque monitoring for wind turbines. Terms of the deal were not disclosed.
According to AeroTorque, the deal includes the assets of PT Tech, as well as wind torque controls, industrial clutches and brakes.
“Acquiring the AeroTorque business expands our offering in existing and comparable end markets,” says Hans Landin, Timken’s vice president of mechanical power transmission.
Timken engineers, manufactures and markets bearings, gear drive systems, chains, belts, couplings and lubrication delivery systems.
“This acquisition allows us to better serve our customers by offering a broader, more diverse package of products and services,” says Richard G. Kyle, Timken’s president and CEO. The addition of PT Tech will also provide ample growth opportunities as we leverage our portfolio to drive growth across complementary markets around the world.”
Renewable NRG Systems Sold
Hinesburg, Vt.-based Renewable NRG Systems has been sold to St. Louis conglomerate ESCO Technologies. The terms of the transaction were not disclosed.
A manufacturer of filtration and fluid control products for the aviation, space and process markets, ESCO says it sees Renewable NRG Systems as a way to enter the renewable energy market. The company says Renewable NRG Systems will operate inside ESCO’s Utilities Solutions Group with Doble Engineering Co., a service provider in the electric power industry, offering solutions and services to minimize risk, improve operations and optimize electric power infrastructure performance.
Renewable NRG Systems’ capabilities span resource assessment products and wind plant optimization equipment, such as turbine control sensors, LIDAR and condition monitoring systems. The deal is expected to complement Doble’s product line, which includes diagnostic equipment, intelligent software, advanced services, comprehensive support and professional training.
ESCO reports privately held Renewable NRG Systems has annualized sales of approximately $45 million (with nearly half of its sales coming from international markets) and operating margins in the mid-teens.
“Adding NRG to our existing utility segment introduces a unique and exciting growth opportunity for ESCO,” says Vic Richey, chairman and CEO, in a statement. “NRG’s capabilities are a great complement to Doble’s product and solution portfolio, providing an immediate entry point into a large and growing market. Clean, renewable and sustainable energy is a $300-billion-plus-per-year global industry, where approximately 600 GW of new wind capacity and 700 GW of solar PV capacity is expected to be added over the next 10 years. NRG is clearly a market leader with an exceptional brand, reputation and strong management team, and I’m excited to welcome the outstanding and dedicated employees of NRG to our team.”
The news sent shock waves throughout the wind industry.
“Although RNRG complements ESCO’s product line well, they will most likely see more growth in RNRG’s wind plant optimization equipment offering rather than their site assessment products,” notes Bruce Hamilton, energy director at Navigant Consulting. “There is a relatively small and rapidly closing window of opportunity in the U.S. market to develop new greenfield wind projects.”
As site assessments are conducted for at least a year and more commonly and ideally for two years, Hamilton says this is a market where construction and commissioning of wind plants will peak in 2020 and then rapidly drop.
“Therefore, there’s a short window of time for met tower and anemometer demand in [the] U.S. That being said, NRG has been increasingly successful selling to the international market so the downturn in the U.S. will be insulated by growing international sales.”
EDPR Renews Suzlon’s Service Portfolio
Suzlon Wind Energy Corp. (SWECO) has inked a long-term renewal on a wind energy portfolio that consists of four sites in three U.S. states totaling 399 MW of Suzlon’s S88 turbine technology.
According to Suzlon, the operations and maintenance contracts were renewed in January for a period of six years. The customer did not release the names and nameplates for the wind farms.
“I am exceedingly happy to see EDP Renewables North America renew these key contracts, demonstrating confidence in our ability to provide long-term economic value, along with high performance,” says Andy Cukurs, SWECO’s CEO, in a statement.
“We were pleased to renew these contracts with Suzlon and are looking forward to a continued partnership delivering consistent performance at those projects,” says Gabriel Alonso, EDP Renewables’ CEO.
LCOE Numbers For Wind, Solar Continue To Drop
The global renewable energy industry has grown significantly since 2010, enabling widespread achievement of cost reductions and lowering the levelized cost of electricity (LCOE) for renewable technologies, according to new research from MAKE Consulting.
Although regional variability in LCOE for wind and solar will persist, MAKE notes that the lowering of costs continues to improve the competitiveness of renewable technologies globally relative to fossil fuel-based power generation. As costs have declined for renewables, the added cost of environmental regulations and declining load factors have reduced the cost-effectiveness of fossil fuel technologies despite record-low fuel prices.
The LCOE of wind and solar power in the U.S. is very cost-competitive, according to MAKE. The LCOE for solar in the U.S. on average has dropped to levels achieved for wind due to significant module cost reductions. A low LCOE for wind in the U.S. is due to quality wind resources and advantages of economies of scale in Texas and north to Canada. The deployment of the latest generation of blades and advanced operations and maintenance (O&M) practices allow for lower levels of LCOE. However, further reductions in LCOE are critical for future development opportunities for wind and solar as federal incentives phase out.
Variability in LCOE exists in other regions of the Americas, especially as many markets are still developing.
In Mexico, wind and solar, at least the projects awarded at auction that have yet to be built, are cost-competitive with gas-fired generation. The cost position in Brazil is much higher than in Mexico due to supply-chain dynamics. Moreover, significant currency risk in Brazil has increased the LCOE for wind and solar and may impact it over the long term.
The latest generation of 3 MW+ turbine models positions the German onshore wind energy market well for the auction system of renewables pricing that will replace the feed-in tariff as part of the energy policy restructuring. The solar market in Germany has experienced several rounds of renewable auctions and is nearly cost-competitive with wind energy, the company notes.
As for the global markets, MAKE says the LCOE of onshore wind in China and India will need to be reduced for national targets to be met under evolving market mechanisms. Lastly, MAKE says the European offshore market will experience a significant improvement in LCOE over the next five years due to infrastructure investments in the North Sea, the latest generation of 7 MW+ turbines and optimization of O&M practices.
Vestas Leads Second-Half Global Wind Orders
During the second half of 2016, global wind turbine orders from 11 vendors totaled nearly 15 GW, and leading the pack was Vestas, which reported 6,445.15 MW, according to a new report from Navigant Research.
Navigant Research tracked all publicly announced wind turbine orders between July and December in 24 different countries. The latest version of the firm’s “Wind Turbine Order Tracker” reports a total of 14,743.9 MW of sold capacity.
With its total, Vestas sold nearly 3,000 MW more than it did in the first half of 2016, the report points out.
“Wind farm developers are becoming more willing to explore regions of less-than-ideal wind resources, and wind turbine manufacturers are using larger rotors and higher hub heights to maximize capacity factors in these regions,” says Adam Wilson, research analyst with Navigant Research. “Vestas is a good example of this: The company’s average turbine rating for orders received in the second half of 2016 decreased from 2.96 MW to 2.8 MW, while average rotor diameter actually increased slightly to 114.5 meters from 112.7 meters.”
With 2,011.0 MW of announced orders, Gamesa came in second place behind Vestas, says Navigant. Thanks to four large offshore wind orders, MHI Vestas – a joint venture of Mitsubishi Heavy Industries and Vestas – came in third place.
Regionally, Asia Pacific led the pack: It showed an increase of 1,800 MW over the first half of the year, thanks to strong showings in both India and Australia.
Citing a “strong finish” for the U.S., second-place North America, with 3,688.1 MW, narrowly beat out Europe, which placed in third with 3,522.8 MW of disclosed turbine order capacity. Despite more than doubling its order total from the first half of the year, Latin America came in fourth place. Lastly, the Middle East and Africa took fifth, the report concludes.