WindInsider IWEF Special Issue 2018 by SolarQuarter

India Wind Energy Forum Special Issue

www.windinsider.com

 Special Issue  November 2018

Wind Market Forecast

2018-2022 Market Forecast 2018-2022 Page 10

Offshore Innovation Widens Renewable Energy Options Page 15

Rise Of A Competitive Giant - Offshore Wind Page 12

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Solar Quarter • October 2018 2

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Solar Quarter â&#x20AC;¢ October 2018 3

INDEX

NEWS

IN CONVERSATION

India News.................................................................................................Page 6 World News...............................................................................................Page 7 PUBLISHING:

Company News.......................................................................................Page 17

FirstView Media Ventures Pvt Ltd EDITING: Varun Gulati Ekta Pujari CONTENT:

Page 8

INDUSTRY INSIGHTS Surging Capacity As Costs Fall And Experience Grows....................Page 11 Rise Of A Competitive Giant - Offshore Wind..................................Page 12

Mr. V.S.Mohan, Country Manager, Alfanar Energy

Offshore Wind Market Worth $55.11 Billion By 2022.....................Page 13

Page 9

Sanjana Kamble Anusharon Nair

Mr. Knut Aanstad, Business Developer New Energy Solution, Equinor

Neha Barangali DESIGNING: Neha Barangali ADVERTISING Vipul Gulati

Recommendations To G7 Policy. .......................................................Page 14 Offshore Innovation Widens Renewable Energy Options..............Page 15

Dr. M.A. Atmanand, Director, National Institute of Ocean Technology

Innovation, Standardisation & Co-Operation To Accelerate Growth........

Page 10

Surabhi Kaushal Smriti Singh Meghna Sharma CIRCULATION:

...............................................................................................................Page 16 Mr. Rajnikanth Umakanthan, Managing Director, Vaisala

MARKET INSIGHTS

Chandan Gupta Kunal Verma PRINTING:

Global Status Of Wind Power........................................................Page 18-19

Page 11

Market Forecast 2018-2022...........................................................Page 20-21

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Solar Quarter • October WindInsier• IWEF Special Issue 2018 2018 44

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Solar Quarter â&#x20AC;˘ October 2018 5

INDIA NEWS

ECI justifies low-ceiling tariff as hybrid auction postponed again

ndia’s wind energy capacity addition to grow 76 per cent to 3,000 Mw in current fiscal

The Solar Energy Corporation of India (SECI) has postponed its first major hybrid tender

India’s wind energy capacity addition is set to grow by up to 76 per cent to 3,000 Megawatt

for 1200MW – where developers are required to set up a solar and a wind generating

(Mw) in the current financial year (2018-19) from around 1,700 Mw added last fiscal.

plant at the same site – for the fifth time.

“The project awards so far are expected to increase the capacity addition to about 2.5-3

The main reason was poor response from developers, who claimed to have stayed away

GW in FY2019 from 1.7 GW in FY2018. As for the increase in bid tariffs, it is partly because

mainly because SECI had set a tariff ceiling for the auction at Rs 2.60 per unit, which they

of some increase in wind turbine equipment pricing, additional evacuation cost and rising

felt was too low.

cost of funding,” said Girishkumar Kadam, vice-president at ratings agency ICRA.

SECI Managing Director J. N. Swain denied the ceiling was unrealistic. “We do not feel

He, however, added the ability of the nodal agencies to achieve the target wind project

the ceiling price we set is low,” he said. “If developers set up solar and wind projects at

awards of 10 Gw each in Financial Year 2019 and 2020 remains a challenge in view of the

the best sites in a 50:50 ratio, a tariff of Rs 2.60 per unit is definitely feasible.” He was also

difficulties being faced by developers in securing connectivity and open access to inter-

not very perturbed by the lukewarm response. “This is the first time we are trying out a

state transmission network.

hybrid tender so some delays are to be expected,” he said. “Developers who specialize

The wind energy sector has witnessed project awards of 10 Gw between February 2017

only in one kind of renewable energy, either wind or solar, are having to tie up with those who have the other specialisation and all this is taking time. We have been taking valid suggestions from developers and modifying bid conditions accordingly.” The hybrid tender was first announced in May this year for 2500MW, but was since scaled down, along with postponements, to 1200MW.

ndia’s renewable energy sector to get EUR 600 million booster shot

Months after committing a line of credit amounting to 150 million euros for 15 years to fund solar energy and solar solutions in the country, the European Investment Bank (EIB) now seeks to extend four times the credit to expand offshore wind initiatives in India. A fund of close to EUR 600 million has been earmarked by the European funding agency for this purpose. In India, the EIB would be joining hands with State Bank of India and YES Bank. EIB, the largest funding agency on renewable energy globally, said in a statement on Friday that it will increase the support for onshore wind investment through expansion of an existing lending programme with the State Bank of India, has approved a new credit line with Yes Bank to accelerate private investment in wind and solar projects, and expects to work closely with Indian partners to support offshore wind projects. The clean

and September 2018 by central nodal agencies Solar Energy Corporation of India Limited (SECI) and NTPC Ltd (NTPC) as well as state distribution utilities. This has provided a visibility for substantial wind-based capacity addition in 2018-19 and 2019-20.

ndia’s top gas utility is said to mull buying IL&FS wind assets

India’s biggest gas utility is considering acquiring all of the wind energy assets held by a subsidiary of a troubled shadow bank, according to people familiar with the matter. GAIL India Ltd. is looking to buy 775 megawatts of wind energy assets from IL&FS Energy Development NSE -2.24 % Co., a unit of Infrastructure Leasing & Financial Services Ltd., and has approached investment bankers to advise on a possible deal, the people said, asking not to be named as the talks are private. The discussions are at a preliminary stage and a decision to bid hasn’t been made, they said. A deal will give the state-run company an opportunity to add to its existing renewable energy portfolio of 129 megawatts and help offset emissions. For IL&FS, the asset sales are key to revive the beleaguered shadow lender whose payment defaults have sparked fears of a contagion across the financial system in India.

energy financing was confirmed by EIB officials at the inaugural of an offshore energy

An IL&FS spokesman declined to comment, while GAIL’s spokeswoman didn’t immediately

investment conference, organised by the agency, in New Delhi. “We look forward to

respond to emailed queries.

broadening cooperation with Indian partners to support new renewable energy projects

GAIL had 32.4 billion rupees ($451 million) of cash, cash equivalents and short-term

in the months ahead and enabling offshore wind to contribute to clean power generation

investments as of March 31, according to data compiled by Bloomberg. The wind energy

in the country,” said Andrew McDowell, vice president of the EIB.

assets held by the IL&FS unit are about 2 percent of the country’s installed capacity in the

eghalaya Issues Regulations for Deviation Settlement of Solar and Wind Projects

The Meghalaya State Electricity Regulatory Commission (MSERC) has issued new regulations for the forecasting, scheduling, and deviation settlement for solar and wind

segment.

NRE releases Amendment in National Wind-Solar Hybrid Policy

An amendment was made to the National Wind-Solar Hybrid Policy on 13th August 2018.

energy generation in the state.

The highlight of this change is “To broaden the definition of storage the word ‘battery’ is

The commercial arrangements specified in these regulations and the related provisions

removed from relevant clauses (1.6 and 5.4).” The policy amendment is as follows:

regarding deviation charges and penalties will come into effect six months after the

The undersigned is directed to refer to National Wind-Solar Hybrid Policy issued by this

publication of the regulations in the official gazette.

Ministry vide OM dated 14-05-2018 and the issue of ‘storage’ in said Policy, wherein

According to the new regulations, MSERC would impose the deviation charges on project

storage was defined in terms of battery storage only. This restricted usage of other forms

developers and procurers for under as well as over injection of power into the grid. The

of storage such as pumped hydro, compressed air, flywheel, etc., under the Hybrid Policy.

regulations would apply to all the wind and solar energy generators having a minimum

To broaden the definition of storage the word ‘battery’ is removed from relevant clauses

capacity of 1 MW connected to the intra-state transmission system.

(1.6 and 5.4). The clauses 1.6 and 5.4 of the said policy may be read as follows: Clause

This would also apply to those who are connected through pooling sub-stations and are using the power generated for self-consumption or sale within or outside the state of Meghalaya.

nvest India wins top UN award for promoting renewable energy investment

1.6 “To smoothen the wind solar hybrid power further, appropriate capacity of storage may also be added to the project.” Clause 5.4 “Storage: Storage may be added to the hybrid project (i) to reduce the variability of output power from wind solar hybrid plant; (ii) providing higher energy output for a given capacity (bid/ sanctioned capacity) at delivery point, by installing additional capacity of wind and solar power in a wind solar hybrid plant; and (iii) ensuring availability ot firm power for a particular period. Bidding factors for wind solar hybrid plants with storage may include minimum firm power output throughout the

Invest India has received the top UN Investment Promotion Award in recognition of its

day or for defined hours during the day, extent of variability allowed in output power, unit

efforts to boost investments in the renewable energy sector in India.

price of electricity, etc.”

The award was presented by Armenian President Armen Sarkissian to Deepak Bagla, the CEO of Invest India, on Monday in Geneva at the inaugurations of the World Investment Forum organised by the UN Convention on Trade and Development (UNCTAD).

ndustry pressing for removal of tariff cap for 1.2 GW hybrid tender

A non-profit venture of the Department of Industrial Policy and Promotion, Invest India

Solar Power Developers Association (SPDA) is pressing for removal of Rs 2.6 per unit tariff

promotes sustainable investment. UNCTAD said that award recognizes “the excellence in

cap to generate adequate response for 1,200 MW hybrid auction. The auction scheduled

boosting investment into sectors that will have social and economic benefits and help

for October 26 was postponed till November 14. The successful bidder would set up solar

countries meet the Sustainable Development Goals (SDGs)”.

and wind capacities of 1,200 MW together.

It added that judges gave Invest India the award for its “excellence in servicing and

“The industry’s demand is to remove the tariff cap and let the tariffs be discovered through

supporting a major global wind turbines company in the establishment of a blade

auction process based on market conditions,” an SPDA spokesperson told .

manufacturing plant in India while committing to train local staff and produce 1 gigawatt

“The industry wanted the tariff cap to be removed completely. The demand seems

of renewable energy. Implementation of the project is expected to reduce India’s wind energy cost significantly”.

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logical for ministry of new and renewable energy to consider it after last couple of bids experienced zero participation due to tariff cap,” he further added.

Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 66

WORLD NEWS

IND ENERGY TO BEAT 2030 TARGET Wind energy is set overtake coal, nuclear and gas to become the EU’s largest

power source well before 2030. This is according to the International Energy Agency’s (IEA)

N has great potential for wind power development A project called “Support to the Up-Scaling of Wind Power in Việt Nam” has played

an important role in promoting wind power investments in Việt Nam. Martin Hoppe,

2018 World Energy Outlook released in November. According to the IEA’s projections,

head of Economic Cooperation and Development for the German Embassy, spoke on the

wind energy will become the EU’s largest power source in 2027, overtaking coal, nuclear

project at its closing ceremony in Hà Nội on Friday. German development co-operation

and then gas in the process. This is compared to the IEA’s last projection made in its 2017

on wind power in Việt Nam started in 2009, with the first wind tariff being issued by

World Energy Outlook, where it said this would happen “soon after 2030”.

the Government in 2011. Given the success of this co-operation, a follow-up project was

According to the IEA, wind electricity generation in the EU will more than triple to 1,100

agreed upon to be carried out by the end of 2018. Within the project’s framework, the

TWh by 2040. WindEurope CEO Giles Dickson said: “This is a resounding vote of confidence

German International Development Agency (GIZ) co-ordinated closely with the Electricity

in the further expansion of wind power in Europe. We’ve long been saying that more wind

and Renewable Energy Authority (EREA) under the Ministry of Industry and Trade (MoIT)

makes economic sense, as we’re the cheapest form of new power. It’s great that the IEA

to propose mechanisms for supporting wind power to the Government. They were also

now sees wind being the no. 1 source of electricity in Europe in less than ten years. That’ll

charged with improving capacity for investors and consulting companies, commercial

mean new wind farms and modernisation of existing ones, all of which will bring jobs,

banks, research institutes, local and national Government agencies and investors.

growth and revenues to local communities.

OWI Expands in US Offshore Wind Energy In a major developement, international consulting group COWI announced it plan to

merica’s Wind Farms Are Ready to Go It Alone A coming-of-age moment is bearing down on the U.S. wind power industry, and

proponents say it’s ready—well, mostly ready. For a quarter-century, the industry has been supported by federal tax credits that helped it attract $250 billion in investments and create 100,000 jobs, according to the American Wind Energy Association. That support ends next year, but analysts and executives say the credits have done what they were supposed to do: make the industry competitive. Established supply chains, taller towers, bigger rotor blades, and the use of artificial intelligence to boost efficiency have made wind power cheaper than coal and on a par with natural gas. And soon enough, offshore wind farms could expand the renewable energy source’s influence beyond rural states such as Texas and Kansas to the highpopulation corridors along the East and West coasts. “Wind has matured now,” says Chuck Grassley, the Republican senator from Iowa who first championed the tax credits in 1992. “It’s ready to compete.”

ind power capacity addition to improve in near term: ICRA

Wind energy sector’s capacity addition will improve in near term, while the bid power tariffs in the recent wind power auctions inched upwards, an ICRA report said. The wind energy sector has witnessed project awards of 10 GW between February 2017 and September 2018 by central nodal agencies like the Solar Energy Corporation of India Limited (SECI) and NTPC Limited (NTPC) as well as state distribution utilities, providing a visibility for substantial wind-based capacity addition in FY2019 and FY2020, the ICRA said in a statement. Bid tariffs discovered in the recent wind power auctions increased slightly from the low of Rs. 2.43 per unit to Rs. 2.77 per unit discovered during August-September 2018, though continuing to remain less than Rs 3 per unit, according to an ICRA note.

increase its presence in the USA significantly with the consultancy contract with Vineyard Wind in Massachusetts – the first major US offshore wind energy project. The Denmark-based specialist in engineering, environmental science and economics said in a release that the project is part of a masterplan to construct 10 GW offshore wind farms. The next seven years will see 10 GW offshore wind farms be developed on the northern East Coast – including Massachusetts, New York State, Connecticut, New Jersey and Maryland. The first major offshore wind farm project is the Vineyard Wind project, which in phase 1 will generate 800 MW for Massachusetts. Vineyard Wind awarded COWI the consultancy contract for parts of the project. Consequently, COWI is expanding its competencies in Boston by extending its current premises and increasing the staff. The extension aims to support the Vineyard Wind project and to meet the demand for renewable energy on the US market. COWI expects to increase the staff from the current two employees at the Boston office to expected 80 -100 specialists within wind energy within approx. 3 years.

.S. Wind In Q3: Bigger Turbines And Non-Utility Deals Galore

With 612 MW installed in the third quarter of this year, U.S. wind farms now represent a total 90,550 MW of electricity generating capacity, according to the American Wind Energy Association’s (AWEA) U.S. Wind Industry Third Quarter 2018 Market Report. Comparatively, the U.S. wind industry installed 626 MW during the second quarter. According to AWEA, the more than 54,000 wind turbines operating in 41 states plus Guam and Puerto Rico represent enough capacity to power 27 million average U.S. homes. Notably, seven states now have enough wind projects under construction or in advanced stages of development to more than double their current wind capacity. Those include heartland states with land-based wind under development – Arkansas, Nebraska, New Mexico, South Dakota and Wyoming – as well as coastal states Maryland and Massachusetts, where offshore wind is poised to scale up, the report says. As the industry expands, wind turbines themselves are growing much more powerful and efficient at delivering energy to American homes and businesses, the report points out. Longer blades are helping turbines capture more wind, and new wind farms are leveraging big data and machine learning

On the flip side, though the wind energy bid tariff levels are still competitive vis-a-vis

to improve power output and reduce downtime by anticipating maintenance problems

conventional energy sources, the viability of such tariffs depends upon the developer’s

before they arise. These advances drive down costs and translate into major efficiency

ability to identify locations with high generation potential, availability of long-tenure debt

gains, AWEA explains.

at cost competitive rates and capital cost, it said.

enewable energy: Bids would add 350 megawatts of offshore wind

anhattan Makes Deal to Get Half of Its Power From Wind The Manhattan City Commission has approved a plan to convert half of its energy

use to wind power. The Mercury reports that the commission Tuesday backed a 20-

State has tripled its supply of renewable energy in the last two years.

year agreement with Westar Energy for the 300-megawatt Soldier Creek Wind Farm in

Rhode Island electric customers are already using power from the first offshore wind

northeast Kansas, a project that will be complete in the fourth quarter of 2020. The city has

farm in the nation, a 30-megawatt project off Block Island — and plans are in place to buy another 400 megawatts of offshore wind. Now, developers are proposing to sell an

paid Westar about $2.6 million a year for the past five years. Officials say the agreement with Westar will save the city $50,000 a year for the next 20 years. Kansas State University

additional 350 megawatts of offshore wind power to the Ocean State.

has entered the same agreement with Westar.

Among the 11 companies that responded to the state’s latest request for proposals

for renewable energy are Deepwater Wind — which, after a merger, is now Orsted U.S. Offshore Wind — and Vineyard Wind, which both hold leases to federal waters in or near Rhode Island Sound. Deepwater, which submitted its bid before the name change took

tudying Wind Behavior and Terrain to Improve Wind Forecasts

New research on wind behavior in complex terrain, led by NOAA and the U.S. Department

effect, is proposing two options: a 100-megawatt project or a 350-megawatt alternative.

of Energy, will improve wind forecasts for the entire country. Forecasts for wind energy firms

Vineyard, too, has put forward a choice, between a 200-megawatt project and one of 350

may improve by 15-25 percent, according to the study. The Wind Forecast Improvement

megawatts. The proposals were among a total of 41 bids that were made in response to

Project 2, or WFIP2, focused on improving NOAA’s short-term weather forecasts of wind

the RFP for 400 megawatts of new renewable energy that was released by the state in

speeds in areas such as mountains, canyons, and coastlines, landforms often associated

September as part of Gov. Gina Raimondo’s push to increase the supply of power from

with abundant wind energy potential. The project was based in the windswept Columbia

wind, solar and the like to 1,000 megawatts by 2020.

River Gorge in Washington and Oregon, where wind farms can generate as much power as five 800-megawatt nuclear power plants.

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Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 77

In Conversation

“We’re taking our decades of offshore experience and combining known technologies in new ways to make wind energy possible in deep waters worldwide..” Mr. Knut Aanstad, Business Developer New Energy Solution, Equinor

Can you tell us a little bit about Equinor – what you do, when you began, etc.? Equinor received our first licence on the Norwegian Continental Shelf (NCS) in the 1970s, at that time the nam,e of the company was Statoil. We acquired our first operatorships in the 1980s—and thereafter gradually broadened our footprint. Today we are a broad energy company delivering oil, gas and wind power to energize the lives of more than 170 million people, enabling them to cook, create, work and travel. We produce high-value and low carbon intensity oil and gas that the world needs, at the same time as we are building a material industrial position within profitable renewable energy. The strong growth in renewable markets represent interesting opportunities for value creation, and we approach these opportunities based on our competitive advantages. We expect 15-20% of our investments to be towards new energy solutions by 2030, provided we get access to competitive and profitable projects. Today Equinor is present in more than 30 countries around the world, including several

disappointed to find that the recent European cost will not be easy to match. This can also be the case for India, where the offshore wind supply chain is not developed, and also because of the fact that wind conditions are not as good as in Europe. The implication might be that the government will have to accept that the cost of the first projects may be higher than they had hoped for.

What developments would you like to see in the wind industry over the next ten years? We believe that the technological development will accelerate with bigger turbine on offshore wind, for the European market deployment of more wind farms will contribute to an even more matured supply chain, and hence this will contribute to even lower cost.

Can you tell us a bit more about your views on integrating insights from other industries to develop wind energy?

of the world’s most important oil and gas provinces. We operate in North and South

We’re taking our decades of offshore experience and combining known technologies

America, Africa, Asia, Europe, Oceania and Norway. We have over 20.000 employees

in new ways to make wind energy possible in deep waters worldwide. We have been

worldwide.

developing resources beneath the seabed with the help of floating installations. Now, our intention is to capitalise on these advantages when developing large-scale offshore wind farms, safely and efficiently.

What is your Success Story?

Equinor is the world’s largest offshore operator, with more than 45 years of project

We have been pushing the boundaries of imagination and technology, solving

experience in developing and operating large and complex oil and gas structures.

challenges in the oil and gas industry. That quest has taken us to greater depths,

Hywind’s floating foundation, or substructure, bears a close resemblance to oil and

deeper waters and new frontiers.

gas spar platforms — for instance, the new Aasta Hansteen gas field in Norway.

Now our industry is experiencing fundamental challenges. From climate change and

For us, this represents a natural and logical connection between our offshore wind

geopolitics to the energy markets, we are facing new realities. Equinor believes this to

developments and our traditional core business, oil and gas. The deep draft design of

be an opportunity. We aim to help drive the important changes the world needs: more

spars makes them less affected by wind, wave and currents. Because of the similarities

climate-efficient oil and gas production and strong growth in profitable renewable

in structure, we can draw on technical and operational synergies.

energy. That’s why we’re looking for new ways to utilise our expertise in the energy industry, exploring opportunities in new energy as well as driving innovation in oil and gas around the world. We know that the future has to be low carbon. Our ambition is to be the world’s most carbon-efficient oil and gas producer, as well as driving innovation in offshore wind and renewables.

“We

believe

that

the

technological

development will accelerate with bigger turbine on offshore wind, for the European market deployment of more wind farms will

Since India announced 30 Gigawatt offshore wind energy target by 2030, what will be your major role in ensuring for a successful implementation of these farms? Equinor has experience from developing offshore windfarms in UK and Scotland and

contribute to an even more matured supply chain, and hence this will contribute to even lower cost.”

we are also maturing and developing projects outside Germany and New York in the US. Currently, our company is investigating opportunities to take part in offshore wind developments in several other countries and regions around the world, and India is one of them. Equinor is intrigued by the Indian Government’s ambitious plans for offshore wind. We have prequalified to participate in the first tender for offshore wind that is currently planned in the state of Gujarat. We have partnered with an experienced Indian developer, ReNew Power.

What challenges you think will be faced by offshore wind industry in India in the initial years? The cost of offshore wind has fallen rapidly in European markets. This cost reduction follows several years of supply chain development, competition and industry maturation, and by now more than 15GW of projects have been installed. Markets

“Equinor is the world’s largest offshore operator, with more than 45 years of project experience in developing and operating large and complex oil and gas structures. Hywind’s floating foundation, or substructure, bears a close resemblance to oil and gas spar platforms — for instance, the new Aasta Hansteen gas field in Norway.”

are now opening up in anticipation of similar cost levels, but many of them will be

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Solar Quarter • October WindInsier• IWEF Special Issue 2018 2018 8

In Conversation

“Alfanar has special tie-ups and arrangements with some OEM’s to bring the latest onshore and offshore wind technologies.” Mr. V.S.Mohan, Country Manager, Alfanar Energy

Can you tell us a little bit about Alfanar – what you do, when you began, etc.?

management. Three strategic move for Alfanar to lead the market front in Renewable

Alfanar Company established in 1976 and currently is the Saudi Arabia’s leading player

technology development and strengthen our R&D centre, Technology transfer and

in the Energy sector, EPC business, design and development and has built a host of

Acquisition

energy development, EPC and Energy Solution provider. Focus areas are Inhouse

facilities in the Middle East and 15 other countries. Its manpower constitutes to 21,000 plus with more than 3,000 engineers, and turnover exceeds $2.15 billion (2016). Alfanar has built up a solid base of technical and engineering know-how in its own design and construction style for large-scale solar PV and Wind facilities. Alfanar’s engineering, procurement, and construction (EPC) team provides bankable, innovative, and reliable renewable energy solutions to customers around the world and are able to provide a complete spectrum of services for projects from viability studies to commissioning. Alfanar company, activity portfolio covers Integrated Development, Engineering,

Where does Alfanar fit in to the wind market today? Alfanar want to be the leader in the Wind energy generation space. We want to set up 3000 MW by 2021, Half of it will be in wind energy. We contemplate to go forward in the forthcoming auctions of SECI and NTPC, as well those of Gujarat, Andhra Pradesh and Tamil Nadu. We have already identified large land sites in windy areas in these states and tied up with some of the landowners.

Construction, Testing & Commissioning, Technical services, Civil works, MEP works,

So far Alfanar Energy, which entered India in 2016, has secured only a single 50 MW

Operation and Maintenance for Power and Water projects and manufacturing of

wind project in Andhra Pradesh with turbines provided by Suzlon. In this year we

power electrical equipment with research and development centres globally.

won 300 MW each at wind auction conducted by Solar Corporation of India (SECI) in Tranche 3 & Tranche 5, totalling our IPP wind portfolio to 650 MW. Our company

Tell us a bit about the recent technology advancements in the wind sector? The recent advancements in Wind Turbine Technology are all focusing on Improving the Efficiency and Reducing the Cost.

Hub height Vs power potential ratio has

increased radically. Other key change area is the “Rotor Size & Capacity factor (CF)”. If you see 10 years back, the turbine was at about 25 % CF. Today, it’s around 55 %. As

currently has renewable energy projects in Spain, Egypt and Bangladesh. Alfanar has special tie-ups and arrangements with some OEM’s to bring the latest onshore and offshore wind technologies to our upcoming India and global projects. We are keeping an eye on the development of FOWPI and the 1GW offshore wind project development in India. .

is lower. Wind turbine reliability has also come a long way since last decade. From

What have been the latest trends in demand for your products & services in India? Where do you see the next demand growth coming from?

80 % to 95% plus. OEM’s understand importance of frugal engineering, design and

India is a dynamic country with unique energy mix , huge & rapidly growing energy

manufacturing.

demand along with thinning spinning reserves. Under these circumstances we see

we’ve improved the capacity factors and lowered the levelized cost of energy (LCOE), that enables developers to go into more and more locations where the wind speed

huge opportunities in the field of Hybrid energy, Energy storage solutions coupled with Conventional and Renewable energy projects. With the onward generation portfolio

Can you tell us a little bit about Alfanar – what you do, when you began, etc.? Alfanar Company established in 1976 and currently is the Saudi Arabia’s leading player in the Energy sector, EPC business, design and development and has built a host of facilities in the Middle East and 15 other countries. Its manpower constitutes to 21,000 plus with more than 3,000 engineers, and turnover exceeds $2.15 billion (2016). Alfanar has built up a solid base of technical and engineering know-how in its own design and construction style for large-scale solar PV and Wind facilities. Alfanar’s engineering,

of Indian government there is the huge investment & development opportunity under the Transmission & Distribution sector. Alfanar is working meticulously to cater to the T&D market and Power generation market (renewables). We are working closely with International technology suppliers in the Battery Energy Storage sector (BESS) to develop the solution for Industrial and utility sector. Automation remains again another interesting sector. Therefore, last year (2017), Alfanar acquired the automation business of ZIV Automation globally including ZIV Automation division of Crompton Greaves in India for around Rs 845 Crore.

procurement, and construction (EPC) team provides bankable, innovative, and reliable renewable energy solutions to customers around the world and are able to provide a complete spectrum of services for projects from viability studies to commissioning. Alfanar company, activity portfolio covers Integrated Development, Engineering, Construction, Testing & Commissioning, Technical services, Civil works, MEP works, Operation and Maintenance for Power and Water projects and manufacturing of power electrical equipment with research and development centres globally.

Do you think India would be able to reach the target of 60 gigawatts (GW) of wind energy capacity by 2022 especially given the stiff competition the segment faces from Solar energy & withdrawal of certain tax benefits for the wind segment? It becomes very difficult in the present scenario where reverse auction and lowest tariff supersedes the interest of Wind project development in wholesome. It is good for the

What are your growth plans for the Indian market? What are the milestones you wish to achieve by the end of this fiscal? In India Alfanar Energy and Alfanar Power are our strategic growth vectors. Both are 100% subsidiary of alfanar company. Alfanar Energy is an IPP arm and Alfanar Power is the EPC arm with focus across the technologies including PV, T&D, CSP, Wind, Biomass, Geothermal, Waste to energy and IWP in the water sector. We are progressing well on the defined targets and by the end of this fiscal we want to close our EPC order book with 1GW of Solar PV projects combined with EPC orders of T&D from major utilities. The year 2019 is very important to our Business plan where we also want to establish our niche into EV charging and Battery energy storage solution to bring integration

short-term but to fulfil the long-term vision of 60 GW wind by 2022, Government should bring in F-i-T as per my own opinion. The key challenge is the availability of good wind sites in terms of evacuation readiness. The government needs to construct evacuation in the better wind areas fast to make sure that Developers offer competitive tariffs. Dynamic F-i-Ts should be based on the sites/zone’s WIND POTTENTIAL and should be instrumented accordingly. Government should also devise the proper mechanism so that RPO’s are implemented in a way that they thrust the Wind project development and the plan to Build 60 GW by 2022. PSUs should be independent and more empowered to form private partnerships to meet the aggressive WIND energy targets..

across various sources of energy (conventional & renewable) under Demand side

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Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 99

In Conversation

“Indian companies are showing a lot of interest in offshore wind development.” Dr. M.A. Atmanand, Director, National Institute of Ocean Technology

What have been some of the recent developments at your organisation? National Institute of Ocean Technology (NIOT) has successfully completed beach restoration project at Puducherry city and a nearby coastal village (Kadalur periyakuppam). Presently we are implementing Low Temperature Thermal Desalination (LTTD) Plants, an ecologically safe technology, at six islands in the Lakshadweep group

though the technology will be costlier in the initial years, with time offshore wind has the potential to be one of the cheapest sources of energy. The incentives for wind energy available at present in India will help the early adopters of offshore wind. On the policy side, the government has been proactive and has already implemented the National Offshore Wind Energy Policy, which lays a strong foundation for the offshore wind energy sector to build on.

of islands.

Tell us a bit about the recent technology advancements in the wind sector?

As per your assessment, where are some of the good sites for offshore wind energy in India?

The turbine capacities are getting bigger and bigger. This is especially true in the

The wind potential along the coast of India has been studied in detail using satellite

offshore wind sector. The technology for offshore wind farms on fixed platforms has

wind data and other sources (wherever available). Based on available data, it was found

matured in Europe and there is an increasing interest in floating wind turbines which

that the southern Tamil Nadu coast (Kanyakumari and Rameshwaram) and the Gujarat

could be the next technological milestone.

coast (Gulf of Kutch and Gulf of Khambhat) have significant potential for developing offshore wind energy. In order to validate these results and to provide bankable data

Since India announced 30 Gigawatt offshore wind energy target by 2030, what will be your major role in ensuring for a successful implementation of these farms?

for setting up offshore wind farms, NIWE and M/s Suzlon, with the help of NIOT, have installed offshore LiDAR platforms at Gulf of Kutch and Gulf of Khambhat respectively. The southern Tamil Nadu coast has also been found to have significant offshore wind potential and this region is being actively explored for the best way to move forward.

Being a research institute, NIOT will try and bridge the gaps in technical knowledge for implementation of these farms. With respect to offshore wind, NIOT has expertise in oceanographic data collection, oceanographic modelling, design and analysis of offshore structures and wave-structure-soil interaction studies. NIOT is involved in consultancy and research work in all the above fields and hence NIOT has an important contribution to make towards development of offshore wind energy. In pursuance of its role to contribute to offshore wind energy, NIOT has published a research paper on the commercial viability of offshore wind to guide policy makers

How can your organisation help the new players looking to enter offshore wind in India? NIOT has already started helping those organisations which are interested in offshore wind, NIWE and M/s Suzlon being the prime examples. NIOT has also signed MoUs with public as well as private organisations for providing technical support with regard to offshore wind turbines.

and entrepreneurs. NIOT has also provided its technical expertise to National Institute of Wind Energy (NIWE) and M/s Suzlon for installation of offshore LiDAR data collection platforms in the Gulf of Kutch and Gulf of Khambhat respectively. Such LiDAR platforms for collecting bankable offshore wind data, which is mandatory

Are Indian companies technologically ready to execute large-scale offshore wind projects??

before setting up a wind farm, involved significant technological challenges given the harsh environment of the gulf region in Gujarat. This is also the first time such an

Indian companies are showing a lot of interest in offshore wind development.

offshore platform for wind data collection has been implemented in India. NIOT will

Though the technological challenges remain huge, with the right collaboration and

continue its technological contribution in all possible ways to help fulfill India’s goal

partnerships between Indian companies and also with International firms it may be

of 30GW of offshore wind energy by 2030.

possible.

What challenges you think will be faced by offshore wind industry in India in the initial years? There are plenty of challenges facing the offshore wind industry in India. The available coastal and marine infrastructure is not well equipped to handle installation or maintenance operations of an offshore wind farm. NIOT has been studying the gaps in the available infrastructure to suggest feasible solutions. The progress in Government’s ambitious Sagarmala project will definitely help. Vessels for installation have to be brought from either Europe or East Asia. Mobilising these vessels from their origin is a costly affair. NIOT is working on developing installation methodologies to modify the existing marine spread with suitable alterations. The methodology developed by NIOT for installing the offshore LiDAR platforms was not only successful technically but also reduced the project cost by 60 % compared to international market prices. When there is promise of more business, as the case will be in the near future, the private sector is expected to either build new vessels or customize existing ones to

“NIOT has already started helping those organisations which are interested in offshore wind, NIWE and M/s Suzlon being the prime examples. NIOT has also signed MoUs with public as well as private organisations for providing technical support with regard to offshore wind turbines.”

suit the needs of offshore wind turbines. Every new technology will need some time to become comparable in terms of cost with respect to existing technologies. Offshore wind farms are no exception to this fact. The experience in Europe suggests that even

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WindInsier• IWEF Special Issue2018 2018 10 Solar Quarter • October 10

In Conversation

“Vaisala’s 3TIER Services have long been trusted for wind resource assessment.” Mr. Rajnikanth Umakanthan, Managing Director, Vaisala

Tell us a bit about the recent technology advancements in your sector? In addition to the continuing development and support of the Triton Wind Profiler, a SoDAR-based remote sensing system, and the acquisition of the Leosphere line of products, Vaisala continues to develop our 3TIER by Vaisala due diligence service offering. Known and trusted by leading financial institutions, our methodology relies

Let’s begin with a glimpse of your presence and offerings in India? For over 80 years, Vaisala has provided instruments and data services for weathercritical industries such as meteorology, aviation, and roads and rail. In the renewable energy sector, the 3TIER by Vaisala team in Bangalore, India provides wind and solar resource assessment services used to secure project investment from leading financial institutions. Vaisala also offers the Triton SoDAR, used to replace or supplement

on an extensive database of wind time series, as well as the ability to quickly perform

met masts to measure wind at turbine hub heights. Triton is trusted by wind energy

resource assessments using our advanced numerical weather prediction modeling

developers and operators worldwide for use in wind resource assessment, project

platform. Advancements in the technology include continuously validating our

financing, and operations and maintenance applications.

methodology against actual energy production figures, and continuing to improve our programs and processes so that we can deliver resource assessments more quickly.

What have been the latest trends in demand for your products & services in India? Where do you see the next demand growth coming from? Vaisala’s 3TIER Services have long been trusted for wind resource assessment; now we are seeing increased demand for solar resource assessment, as well as interest in using wind and solar data to develop hybrid (wind/solar) plants.

What have been some of the recent developments at your organisation? Recently Vaisala acquired Leosphere SAS, a French company specializing in developing, manufacturing, and servicing turnkey wind lidar (light detection and ranging) instruments for wind energy, aviation, meteorology, and air quality measurements. In the wind energy industry, Leosphere’s Windcube is the leading ground-based LiDAR used for both onshore and offshore wind resource assessment. In operational wind projects, Leosphere’s Wind Iris is mounted temporarily on a turbine’s nacelle to generate accurate data to optimize wind turbine performance..

INDUSTRY INSIGHTS

Surging capacity as costs fall and experience grows. The offshore wind market grew by around 4 GW in 2017 and accounted for around

In the United States, for example, the state of Massachusetts has energy legislation

10% of total wind capacity additions in that year (IRENA, 2018b), while total installed

that calls for 1 600 MW of new offshore wind energy by 2027. As a result, the 800 MW

offshore wind capacity reached around 20 GW in mid-2018. Offshore wind technology

Vineyard Wind project off the coast of southern Massachusetts is scheduled to start

allows countries to exploit the generally high wind resources offshore, while

construction in 2019. Similarly, India’s Ministry of New and Renewable Energy has

developing gigawatt-scale programmes close to densely populated coastal areas. This

announced ambitious plans for 5 GW of offshore wind by 2022 and 30 GW by 2030

makes offshore wind an important addition to the portfolio of technologies available

(MNRE, 2018).

to decarbonise the energy sector of many countries. This potential could see offshore

With this growth the importance and benefits of harmonising international standards

wind grow from around 20 GW today to more than 520 GW by 2050 – accounting for

that adapt to different local conditions is becoming increasingly important. Because

nearly 4% of global electricity generation. If the world is to meet the goals of the Paris

turbine manufacturers and other industry stakeholders operate transnationally, the

Climate Agreement, then the pace of offshore wind power installations will need to

industry is a major promoter of these harmonisation efforts that not only make

grow significantly. IRENA’s analysis of the pathway for transformation of the global

offshore wind farm development easier in new markets, but also provide significant

energy system sees total installed offshore wind capacity rising to 521 GW by 20502,

benefits to local jurisdictions by lowering costs and ensuring that standards are based

or nearly 10% of the total global installed wind capacity in 2050 of 5 444 GW (IRENA,

on proven systems.

2018c). In addition to increases in new offshore wind power installations, in the future developments also will be needed to replace existing wind turbines. This will begin in

Historical and projected total installed capacity of offshore wind, 2000-2050.

earnest in the early 2030s as the earliest projects reach the end of their economic lives and will further accelerate from 2040. As a result, the total yearly capacity addition would reach around 33 GW in 2050, representing a more than eight-fold increase from the 4 GW of capacity addition in 2017. Today 90% of global installed offshore wind capacity is located in the North Sea and nearby Atlantic Ocean (IRENA, 2018b). In early September 2018 the world’s largest operational offshore wind farm officially opened. Located in the Irish Sea, the Walney Extension Offshore Wind Farm has a total capacity of 659 MW and is capable of powering nearly 600 000 homes in the UK. The UK had the largest installed offshore wind capacity worldwide as of the end of 2017, at around 7.5 GW, compared with 5.4 GW in German waters, 2.6 GW in Chinese waters and 1.3 GW in Danish waters (IRENA, 2018b). However, the expansion of offshore wind markets is moving beyond these front runners. Countries such as Australia, Canada, China, India, Japan, the Republic of Korea, Turkey and the United States have ambitious plans to develop their offshore wind markets over the next few years.

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WindInsier• IWEF Special Issue2018 2018 11 11 Solar Quarter • October

INDUSTRYINSIGHTS INSIGHTS INDUSTRY

Rise Of A Competitive Giant Offshore Wind A

dvances in offshore wind turbine technology, wind farm development, and operations

and maintenance are helping to drive down the cost of electricity from offshore wind farms.

Global levelised cost of electricity from offshore wind farms by year of commissioning, 2010-2021

Other factors contributing to this improvement in competitiveness include increasing developer experience (which reduces project development costs and risks), increasing industry maturity (lower cost of capital) and economies of scale across the value chain. From 2010 to 2016 the global weighted average levelised cost of electricity (LCOE) of offshore wind power decreased from USD 0.17/kWh to USD 0.14/kWh (Figure 1). Meanwhile the LCOE for projects that were successful in auctions in 2016-2018 (for projects to be commissioned in 2020-2022) in Europe and North America ranged from around USD 0.06/kWh to USD 0.10/kWh (IRENA, 2018a). These auction results have heralded a step change in competitiveness for projects that will be commissioned in the coming years. Offshore wind is now an attractive proposition to provide clean, low-cost electricity that can compete head-to-head with fossil fuels without financial support. The cost reductions seen for offshore wind farms have been driven by technology improvements that have raised capacity factors1, as well as by declines in total installed costs, operations and maintenance costs, and the cost of capital as project risk has declined.

Total installed costs and capacity of offshore wind farms worldwide, 2000-2018

Improvement in wind turbine technology is helping to drive down costs. Between 2010 and 2022 the weighted average turbine size for newly commissioned offshore wind farms could increase from 2.9 MW to 8.3 MW (Figure 2), an increase of 184%. The growth in turbine size helps to increase wind farm output. These larger turbines with greater swept areas yield higher capacity factors for the same resource quality. As a result, the global weighted average capacity factor of new offshore wind farms could increase by a third between 2010 and 2022, to 51%. Offshore wind turbines deployed at present typically have a rated capacity of about 6 MW, with rotor diameters of around 150 metres, but wind farms with today’s largest commercially available 9.5 MW capacity and 164-metre diameter blades will be installed from 2019 onwards. These technology improvements are set to continue beyond 2022, as GE announced in 2018 that it is developing the 12 MW Haliade-X turbine for offshore applications, with 107-metre-long blades resulting in blade diameters of over 200 metres.

Average offshore wind farm turbine size and capacity factors, 2010-2022

The industry is also working on concepts for even larger turbines. The main cost components of offshore wind farms are the turbines (including towers), the foundations and the grid connection to shore. The turbine represents the largest cost component, accounting for around 45% of the total installed cost (IRENA, 2018a). In 2016 the average installed cost for a European offshore wind farm was USD 4 697/kW (Figure 3). Between 2002 and 2015 offshore wind farm projects were increasingly sited farther from the coast and in deeper waters in order to access higher wind speeds (IRENA, 2018a). This led to increasing installed costs up to around 2012/2013 (IRENA, 2018a) as more expensive foundations were required and installation costs were also higher. However, since around 2013 installed costs for commissioned projects have started to fall as the industry has matured, as larger turbines are installed and as project developers have become more experienced. Larger turbines help to amortise installation and foundation costs, while larger projects also have proportionately lower project development costs. At the same time developer experience has streamlined and optimised wind farm project development and design, reducing costs and lead times. Greater economies of scale in supply chains, as well as competition, have reduced costs across the board.

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Solar Quarter • October WindInsier• IWEF Special Issue 2018 2018 12

INDUSTRYINSIGHTS INSIGHTS INDUSTRY

Offshore Wind Market Worth $55.11 Billion By 2022 The report “Offshore Wind Market by Component (Turbine, Substructure, and Electrical

sources and the offshore wind forms an integral part of the renewable based power

Infrastructure), Turbine Module, Substructure Type, Location (Shallow Water, Transitional

generation. Technological advancement and clean energy consumption would further

Water, and Deep Water), and Region - Global Forecast to 2022”, is expected to grow

propel wind power deployment and open up opportunities in the emerging markets of

from an estimated USD 27.02 Billion in 2017 to USD 55.11 Billion by 2022, registering a

Asia-Pacific, especially in countries like China, Japan, and South Korea as they are looking

CAGR of 15.32% from 2017 to 2022. The global market is witnessing a significant growth

for an alternative source of energy to diversify their energy mix to reduce CO2 emissions.

due to rising energy demand coupled with increasing share of renewables in the power

The other major drivers include strict government regulations on energy efficiency.

generation mix, energy efficiency mandates demanding carbon emission reduction, and government incentives supporting renewable energy deployment.

To provide an in-depth understanding of the competitive landscape, the report includes profiles of some of the leading players in the offshore wind market, namely, Siemens AG

Shallow water- the largest offshore wind market by location

(Germany), ABB, Ltd. (Switzerland), MHI Vestas (Denmark), General Electric (U.S.), EEW Group (Germany), A2Sea (Denmark), and Nexans (France) among others. Leading players

Among the three water depth location for offshore wind turbines, shallow water is expected to hold the largest share during the forecast period. The development of shallow

are trying to penetrate the markets in developing economies and are adopting various strategies to increase their market share.

water is generally cost effective due to better weather conditions, whereas, installing wind turbines in deep water becomes

expensive

due

high

maintenance cost. However, offshore wind turbines are getting installed in all three water locations depending on the region, turbine capacity, and wind speed. Shallow water condition mostly prevails in the European countries due to favorable weather conditions. The major players that provide turbines which can be installed in shallow water includes Siemens AG (Germany) and MHI Vestas (Denmark) among others.

The turbine component is expected to be the largest segment for the offshore wind market

The turbines accounts for the maximum cost of the total offshore wind project. It is the most important component of an offshore wind farm. The three components such as nacelle, rotor, and tower comprises the largest share of the capital cost, whereas, the substructure represents comparatively lesser share of the capital expenditure, mainly in shallow water locations. Companies are upgrading and increasing the turbine size due to advanced technologies and to increase energy efficiency. Moreover, larger the wind turbine, the more energy they produce each time the turbines rotate. Therefore, turbine manufacturers are continuously upgrading and expanding their product portfolio to contribute to the ever increasing demand for high capacity wind turbines.

Asia-Pacific:

The

second

largest

market for offshore wind

The market in this region is expected to grow at the second position followed by the market in Europe, due to its growing trends such as increasing urbanization and industrialization which is leading to higher demand in the power sector. The countries are focusing on power generation through renewable energy

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Solar Quarter • October 2018 13 WindInsier• WindInsier•IWEF IWEFSpecial SpecialIssue Issue2018 2018 13 13

INDUSTRYINSIGHTS INSIGHTS INDUSTRY

Recommendations To G7 Policy Makers

ffshore energy technologies can play an important role in providing clean,

offshore renewable energy solutions. Offshore renewable energy including offshore

affordable and secure energy from domestic resources. Offshore energy technologies can

wind and other marine technologies provides a unique opportunity to accelerate the

therefore help governments meet their economic, environmental, development and social

deployment of renewable energy.

goals in an increasingly cost-effective manner. However, the right regulatory, policy and institutional framework settings are essential to unlocking this economic potential and

Offshore wind is a key pillar for renewables deployment in Germany, France and the UK.

the creation of domestic supply chains, value added and jobs. This section identifies key

Significant potentials exist in all other G7 countries. This includes oceanic and inland sea

recommendations to ensure that these benefits are realised.

applications (e.g., in the case of Canada). Offshore wind poses particular challenges, and a dedicated supply chain is needed. Innovation is focused on larger turbines and floating

Central and local governments, as well as other stakeholders, should ensure that the potential of low-cost offshore wind power is facilitated, not hindered. The offshore wind

devices, as well as on clustering and processing of offshore wind electricity (e.g., potentially in the future for the production of hydrogen).

industry is increasingly mature and delivers commercially proven solutions. However, the development of new markets needs to be facilitated by ensuring that: • Clear regulatory and legal frameworks for the development and exploitation of offshore wind farms have been developed in conjunction with other offshore stakeholders. • Supporting infrastructure in terms of grid connections, offshore substations, etc. is planned, and energy synergies with development zones are exploited to reduce costs

R&D support is required for emerging marine energy technologies at an early stage of development. Many innovative marine technologies, such as tidal in-stream and wave energy, are at an early stage of development, and different concepts are at various stages of progress towards commercialisation. Joint efforts are needed to develop technically and economically viable solutions as well as to support a range of pathways to potential commercialisation.

from the sharing of assets where appropriate. IRENA can help the G7 make energy use more sustainable. • Technical specification accounts for weather conditions in the future markets for ocean technologies; e.g., very low temperatures or exposure to hurricanes. Internationally harmonised industry standards and quality control would help the globalisation of such technologies.

The G7 can call on IRENA’s knowledge and network to help accelerate the energy transition globally. With the group’s 2018 president, Canada, becoming a State in Accession to IRENA on 18 September 2018, all G7 countries are now formally engaged with the intergovernmental agency. IRENA stands ready to deepen its support to the G7 as needed.

• Long-term goals and competitive procurement programmes exist for offshore wind. These can provide the certainty to industry to invest in the necessary onshore infrastructure and supply chains to ensure competitive project costs.

There are different models for how to achieve these goals, and countries should share experiences in terms of best practice to learn from one another. Continued public support and public-private partnerships are needed for innovative offshore energy technologies and systems.

The enhancement of R&D of innovative technologies is crucial for the future, recognising that economic growth and protecting the environment can and should be achieved simultaneously. Continued investment in low-carbon technologies remains critical for ensuring future energy security and mitigating risks to sustainable growth of the global economy. G7 countries should play a leading role in facilitating investments in secure and sustainable energy, including strengthening efforts in energy R&D for offshore wind and

“The enhancement of R&D of innovative technologies is crucial for the future, recognising that economic growth and protecting the environment can and should be achieved simultaneously. Continued investment in lowcarbon technologies remains critical for ensuring future energy security and mitigating risks to sustainable growth of the global economy. ”

marine renewable energy technologies.

Mission Innovation (MI) is a key tool to support clean growth and the global transition to a low-carbon economy. G7 countries could consider a joint initiative to further develop

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INDUSTRYINSIGHTS INSIGHTS INDUSTRY

Offshore Innovation Widens Renewable Energy Options

ecent data and research findings confirm the rapid capacity growth, ongoing cost

• Offshore wind power also offers a solution to space and acceptance issues in some

and performance improvements, increasing technological sophistication and continued

markets.

need for international standardisation for new renewables, such as offshore wind power

• This makes offshore wind power a particularly attractive proposition given its ability to

and nascent ocean energy technologies. This brief by the International Renewable Energy Agency (IRENA) provides background and recommendations to policy makers in the G7 on how to step up progress, particularly to broaden the world’s future energy options and meet international climate goals. Offshore wind market status and outlook • Offshore wind energy has recently seen rapid technology cost reductions and substantial uptake in different markets. • Today 90% of global installed offshore wind capacity is in the North Sea and nearby Atlantic Ocean, but capacity is growing elsewhere.

scale and the fact that the decreasing cost of electricity for new offshore wind projects means that new projects can often now compete directly with fossil fuel-fired electricity without financial support. Emerging offshore renewable technology • New technology developments such as floating foundations will increase the economic potential of offshore wind technology by opening up larger areas to development than are currently feasible with fixed-bottom foundations. • Floating wind farms are a new development, with a first 30 MW demonstration project, “Hywind”, now operating successfully in the UK. Hywind’s developers are targeting an

• The offshore wind market grew by around 4 gigawatts (GW) in 2017, accounting for

electricity cost of USD 0.05 to 0.07/kWh by 2030.

around 10% of total wind capacity additions that year. The total investment value for this

• This unleashes the potential of deep-water offshore wind power, relevant for countries

4 GW was around USD 20 billion. • Denmark, Germany and the United Kingdom (UK) were pioneers in the sector and are now established leaders, with China recently emerging as a key player.

with limited continental platform areas, such as Japan. • Other forms of ocean energy are beginning to emerge – such as tidal barrage, tidal current, wave energy and thermal gradient – but they are yet to be deployed commercially

• However, the globalisation of offshore wind must be encouraged to achieve the more

at scale.

than 520 GW of total installed capacity by 2050 outlined in IRENA’s 2050 transformation

• In 2017 cumulative ocean energy capacity (excluding offshore wind and tidal barrage)

roadmap (REmap), up from around 20 GW in mid-2018.

doubled worldwide from less than 12 MW in 2016 to over 25 MW in 2017, led by tidal

• Power generation from the more than 520 GW would account for nearly 4% of global

current and wave energy.

electricity generation in IRENA’s REmap case in 2050.

• Wave energy has significant potential, but so far a robust and economic technology is

• Development is needed of a harmonised and documented global standardisation

missing.

framework that enables countries to access the cost-effective potential of offshore wind.

• Apart from electricity generation, other options such as seawater cooling are already

Offshore wind cost and performance outlook.

successfully deployed around the world.

• From 2020 to 2022 the cost of electricity from newly commissioned offshore wind power projects will range from USD 0.06/kilowatt-hour (kWh) to USD 0.10/kWh based on current trends and the prices awarded in auctions in 2016-2018, a significant decline compared to USD 0.14/kWh in 2017. • Advances in offshore wind turbine technology, wind farm development, and operations and maintenance are helping to drive down the cost of electricity from offshore wind.• Increasing developer experience (which reduces project development costs), increasing industry maturity (lower cost of capital) and economies of scale across the value chain are also helping to lower costs. • The representative installed cost between 2011 and 2016 for an offshore wind farm in European waters was around USD 4 500/kW but declined in 2017 and is anticipated to stay below USD 4 000/kW. • The increase in turbine size helps to increase wind farm output. These larger turbines with larger swept areas yield higher capacity factors for the same resource quality.

“From 2020 to 2022 the cost of electricity from newly commissioned offshore wind power projects will range from USD 0.06/kilowatthour (kWh) to USD 0.10/kWh based on current trends and the prices awarded in auctions in 2016-2018, a significant decline compared to USD 0.14/kWh in 2017.”

• The capacity factors for offshore wind farms are high, with the average of new projects to have 50% capacity factors by 2022 as turbine size grows and the technology improves. Further gains are possible, as 12 megawatt (MW) pilots are in development that are significantly larger than today’s largest 9.5 MW turbine.

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Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 15

INDUSTRYINSIGHTS INSIGHTS INDUSTRY

Innovation, Standardisation & Co-Operation To Accelerate Growth C

ontinuous technology innovation and standards that provide quality assurance

fixed structures, and floating offshore wind turbines have emerged only recently. The

will be integral to the scaling up of ocean energy technologies. The development and

standards for floating offshore wind are only now being developed for new markets such

harmonisation of standards for offshore wind will be crucial to facilitating its more

as Japan and the United States. An added complication is that the natural and climatic

widespread deployment. Lessons learned from the offshore oil and gas sectors offer

conditions in Europe do not reflect the extreme conditions that can be found in other parts

opportunities to reduce effort to develop these standards, but they cannot be applied one-

of the world, leading to the need to adjust standards to address, for example, typhoons,

to-one to develop offshore wind standards. It is also important that quality infrastructure

cyclones, earthquakes and icing. In the case of China, the offshore wind industry started

is put in place to operationalise these standards. Continuous innovation in offshore and

by applying components and equipment used in other industries. As such, the industrial

ocean technologies is an important part of the success of these technologies to date, but

supply chain for offshore wind power is now focusing on technology development of

many more innovations are emerging that either are ready for commercialisation today or

specialised installation equipment (e.g., vessels) and methods tailored for national

could be ready in the near future. For example, innovations in the development of wind

conditions.

farms – such as optimisation of the site layout for better use of wind resources, minimisation of aerodynamic wake effects and optimum use of varying seabed conditions – will enable much more informed and holistic layouts of offshore wind farms that reduce costs and improve performance. Innovation opportunities also exist and are being harnessed rapidly in operations, maintenance and service (OMS). Technology innovation: Floating offshore wind

At the International Electrotechnical Commission, the sub-committee TC 88/PT 61400-3-2 is working on standards for the “Design requirements for floating offshore wind turbines”. The aim of the work is to minimise the technical risks for this technology, facilitating its scale-up. The sub-committee is at present led by the United States and the Republic of Korea. It includes experts from European countries, such as Denmark, France, Germany, the Kingdom of the Netherlands, Norway, Spain and the UK, as well as from other countries with a potential market for this technology, such as China, Japan and South Africa (IRENA, 2018e).

Developments in wind turbine technologies as well as in foundations, installation, access,

Standardisation in marine technologies will be crucial to spur widespread deployment of

operation and system integration have permitted moves into deeper waters, farther

these technologies in the future. Countries require a blueprint, drawing on the experience

from shore, to reach sites with better wind resources. Today, turbines are being routinely

of leading actors, to explore their full offshore wind potential. Development is needed of

installed in water depths of up to 40 metres and as far as 80 kilometres from shore. These

a harmonised and documented global standardisation framework that enables countries

turbines, rooted in the seabed by monopile or jacket foundations, are still restricted to

to access the cost-effective potential of offshore wind. Offshore wind has the potential to

waters less than 50 metres deep. This is a major limitation, as some of the largest potential

be inclusive, cost-effective and game-changing. In this context IRENA provides a global

markets for offshore wind, such as Japan and the United States, have few shallow-water

platform that allows for the cross-pollination of ideas and best practice worldwide. The

sites. Floating wind farms therefore are one of the most exciting developments in ocean

time is now for governments to put in place detailed offshore standardisation and quality

energy technologies. Floating foundations offer the offshore wind industry two important

control strategies to capitalise on what promises to be an exciting future for wind power

opportunities: 1) they allow access to sites with water deeper than 50 metres, and 2)

and other marine technologies as their costs continue to fall.

floating foundations ease turbine set-up, even for mid-depth conditions (30-50 metres) and may in time offer a lower-cost alternative to fixed foundations (IRENA, 2016). The first

Examples of floating foundation designs

full-scale prototypes for floating wind turbines have been in operation for several years with three main designs being tested (Figure 6): spar buoys, spar-submersible and tensionleg platforms. These are just entering the market as commercial projects, with a first 30 MW demonstration project operating successfully in the UK since 2017. The Hywind Scotland Wind Farm has a nominal power capacity of 30 MW, consists of five turbines of 6 MW each and uses a spar buoys design (Equinor, n.d.). After three months of operation, the Hywind farm claimed to have achieved a remarkable average capacity factor of 65% (Equinor, 2018). Based on progress seen in the market, three to five additional foundation designs are expected to be demonstrated at full scale by 2020, and the commercialisation of floating offshore wind could be anticipated between 2020 and 2025. The ability of floating offshore wind turbines to unlock areas of deep water close to shore and large population centres, notably in Japan and the United States, could potentially greatly expand offshore wind deployment. Floating foundations therefore are potentially a “game-changing” technology for offshore wind power. Standards: Facilitating offshore wind uptake in new markets

Illustration by Joshua Bauer, National Renewable Energy Laboratory, US Department of Energy.

Given that the first offshore wind markets emerged in Europe – a region with large areas with relatively shallow waters (particularly in Denmark and Germany) – the focus was on

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Solar Quarter • October WindInsier• IWEF Special Issue 2018 2018 16

COMPANY NEWS

esla’s Latest Battery Is Saving

estas To Install First 4.2

Wind Power in South Dakota

Megawatt Wind Turbines In

Australia

Tesla’s battery technology is saving power from a wind farm in South Dakota. BP Wind Energy announced this week that the company is using Tesla’s batteries to store energy from the Titan 1 Wind Energy site, a 10-turbine farm built in 2009. It’s the latest in a

Danish wind turbine manufacturer Vestas announced this week that it has been selected to supply wind turbines to a wind farm set to be built in Victoria, Australia, the 336 megawatt (MW) Dundonnell Wind Farm, which was the largest successful project out of

series of renewable-focused projects for Tesla, as it leverages its battery technology to

the state’s 928 MW Renewable Energy Auction Scheme.

make clean energy more sustainable.

As has been repeatedly pointed out, Australia’s renewable energy industry is progressing

The project uses a 212-kilowatt or 840 kilowatt-hour storage system to provide energy

much the same as the United States’, relying on state governments and sub-national

when the wind isn’t blowing. Dev Sanyal, chief executive of BP’s global alternative

entities to drive growth and development in place of absent strong national policies.

energy business, said in a statement that “as renewables form a bigger part of the

While not the country’s renewable energy leader — a role currently owned by South

energy mix, storage systems like this one will become increasingly important.

Australia — Victoria is making strong headway of late, and its recent 928 MW Renewable

This project will help us develop new business models around the integration of

Energy Auction Scheme awarded six projects located across the state — including

renewables, battery storage and other forms of energy – and it underscores our commitment to being a part of the transition to a lower-carbon future.” It’s an impressive feat, but it pales in comparison to the world’s largest lithium-ion battery that Tesla completed in South Australia. The project, which started off as a bet with Australian billionaire Mike Cannon-Brookes, offered 129 megawatt-hours of electricity as a means of solving the state’s blackouts. The project was completed in just 54 days. The state government followed up on this by using Tesla batteries in 50,000 homes, creating a

three solar projects and three onshore wind projects. Vestas, one of the world’s leading wind turbine manufacturers, announced on Wednesday, that it had been awarded the contract to supply the largest of these projects, the 336 MW Dundonnell Wind Farm, set to be located in the Western District of Victoria. The project, which is being developed by Tilt Renewables, will feature 80 of Vestas’ V150-4.2 MW wind turbines, the largest in the company’s portfolio, boasting a 114-meter hub height tower designed to maximize performance under the site’s specific wind conditions.

virtual power plant.

orinco to build 160 million-

.ON announces plans to build

euro wind farm in Croatia

large onshore wind farm in

Sweden

Chinese construction company Norinco is investing 160 million euros in a 156 MW wind

German utility E.ON is to build what it describes as one of Europe’s “largest onshore

farm in Croatia.

wind farms.” In an announcement Friday, the business said it had decided to invest in

“I believe that the experience of Norinco in Croatia will be an incentive for other Chinese

the 475-megawatt Nysater wind project in Sweden. The facility will be built jointly with

companies to get to know our market better,” said Croatian Prime Minister Andrej

Credit Suisse Energy Infrastructure Partners (CSEIP).

Plenkovic when announcing the deal. The wind farm, located in Senj, in the north of

Breaking down the deal, E.ON said that a fund advised by CSEIP would have 80 percent

the country, will have 39 turbines and will create at least 100 jobs, with several Croatian

of the joint venture. E.ON is to build and operate the project through a “long-term”

subcontractors set to be used to carry out part of the project.

operations and maintenance agreement, and will retain a 20 percent equity stake in

“Norinco International has recorded a large number of successful projects in the field of

the development. Total investment comes to approximately 500 million euros ($566.4

energy and environmental protection both in China and abroad,” added the Mayor of

million).

Senj Sanjin Rukavina. “This is an opportunity for Senj to build on the renewable projects

“It is part of our strategy to expand our position for onshore wind energy in Europe,”

we have already begun, such as the wind farm at Vjetroelektrana Vrataruša.”

Anja-Isabel Dotzenrath, CEO of E.ON Climate and Renewables, said in a statement.

aturgy Energy breaks ground on 49.5 MW of wind farms in

Spain

PC Finland begins the construction of subsidy-free

wind farm in Isojoki, Finland

Renewables Now reported that Spanish company Naturgy Energy Group SA, formerly

CPC Finland has signed a long-term corporate power purchase agreement for a 50 MW

Gas Natural Fenosa, announced that it has started construction works on 49.5 MW of

wind farm in Isojoki, Finland. 12 Vestas V150-4.2 MW wind turbines will be constructed

wind farms. The plants have a total cost estimated at approximately EUR 45 million

in the wind farm areaof Lakiakangas, Isojoki, located in the Southern Ostrobothnia

(USD 50.88m). Construction works are expected to be completed in the beginning of

region ofFinland. The turbines will be erected in the summer of 2019. The turbine

July 2019.

typerepresents the latest and most efficient wind power technology in the world.

The Barasoain and Tirapu facilities are being built in the autonomous community of

The civil construction work has already started earlier in July by excavationwork related

Navarra. The former is comprised of 11 wind turbines and has an estimated annual

to the infrastructure of the wind farm. It is likely to be thefirst market based and project

production of 113,000 MWh. Tirapu plant consists of four turbines and should reach

financed wind farm in Finland. The wind farmwill be both owned and operated by CPC

42,000 MWh per year.

Finland. ”We are extremely satisfied to reach agreement on the power purchasecontract.

When these two plants are completed, they should be able to generate enough wind power to meet the annual demand of 62,000 homes and offset around 122,000 tonnes of pollutant and greenhouse emissions annually.

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The contract enables the construction of the new turbines in Isojokicompletely market based, without any state subsidies at all. The windresources in Finland are excellent, and in many areas of the country, windpower is already the most cost-effective form of power generation”, saysErik Trast, Managing Director of CPC Finland.

Solar Quarter • October 2018 WindInsier• IWEF Special Issue 20181717

MARKET INSIGHTS

Global Status Of Wind Power

he global wind power market remained above 50 GW in 2017, with Europe, India and

China, the largest overall market for wind power since 2009, retained the top spot in 2017.

the offshore sector having record years. Chinese installations were down - 19.66 GW - but

Installations in Asia once again led global markets, with Europe in the second spot, and

the rest of the world made up for most of that. Total installations in 2017 were 52,492

North America in third.

MW, bringing the global total to 539,123 MW. The annual market was in fact down 3.8%

Once again in 2017, as has been the case since 2010 (except for 2012), the majority of wind

on 2016’s 54,642 MW; and the cumulative total is up 11% over 2016’s year-end total of 487,279 MW.

The offshore segment had a record year with 4,334 MW of installations, an 87% increase on the 2016 market, bringing total global installations to 18,814 MW, and representing a 30% increase in cumulative capacity. Offshore is still only about 8% of the global annual market, and represents about 3.5% of cumulative installed capacity, but it’s growing quickly.

Beyond the statistics, however, is the fact that wind power is in a rapid transition to becoming a fully commercialized, unsubsidized technology; successfully competing in the marketplace against heavily subsidized fossil and nuclear incumbents. The transition to fully commercial market-based operation has meant that the industry is going through a period of adjustment and consolidation. Also, some governments have left ‘gaps’ in the transition. The global 2017 numbers reflect that, as will installations in 2018. Total new

installations globally were outside the OECD.

By the end of 2017 there were 30 countries with more than 1,000 MW installed: 18 in Europe; 5 in Asia-Pacific (China, India, Japan, South Korea & Australia); 3 in North America (Canada, Mexico, US), 3 in Latin America (Brazil, Chile, Uruguay) and 1 in Africa (South Africa).

Nine countries have more than 10,000 MW of installed capacity, including China, the US, Germany, India, Spain, the UK, France, Brazil and Canada. China will cross the 200,000 MW mark in 2018, adding another milestone to its already exceptional history of renewable energy development since 2005.

Asia: Record Year For India

investment in clean energy rose to US$ 333.5bn (€ 296.8bn1) in 2017, up 3% over 2016, but still lower than the record investment of US$ 348.5bn (€ 324.6bn) in 2015. According to BNEF, China alone accounted for 40% of total investment with US$ 133bn (€ 118.7bn); and the Asia Pacific region as a whole invested US$ 187 billion, over 57% of the total. Total investment in wind amounted to 107 billion US$.

Cratering prices for both onshore and offshore wind continue to surprise. Markets in such diverse locations as Morocco, India, Mexico and Canada range in the area of US$ 0.03/ kWh, with a recent Mexican tender coming in with prices below US$ 0.02. Meanwhile, offshore wind had its first ‘subsidy-free’ bids in a tender in Germany last year, with tenders for more than 1 GW of new offshore capacity receiving no more than the wholesale price of electricity. Overall, offshore prices for projects to be completed in the next 5 years or so are half of what they were for the last five years; and this trend is likely to continue.

The technology continues to improve, opening up many areas for onshore wind development which were previously not commercial. More sophisticated power electronics,

For the ninth year in a row, Asia was the world’s largest regional market for new wind power development, with capacity additions totalling 24.4 GW. China’s wind market reached 188 GW by the end of 2017, reinforcing China’s lead in terms of cumulative installed wind power capacity.

In terms of annual installations China maintained its leadership position, although the annual market dropped about 16% compared to last year, adding 19.7 GW of new capacity. In 2017, wind power generation reached 305.7 TWh, an increase of more than 26% compared with 2016, and accounts for about 4.75% of total Chinese power generation. Curtailment on wind farms in China improved substantially in 2017 according to the National Energy Administration (NEA), averaging 12% across the country for the year, down from 17% in 2015.

On-going curtailment of electricity generation is a challenge for wind power projects.

better planning and overall management have contributed to increased reliability as well as price reductions. Offshore, the size of the machines continues to boggle the mind, and we will have 1X MW machines in the not too distant future. Indeed, on 1 March GE announced its long-awaited next-gen design, the 12 MW Haliade-X, with a rotor diameter of 220 m, which could come into commercial operation as early as 2021. It might not be too far into the next decade before we’re talking about 2X machines for massive floating offshore installations in the deeper waters of the outer continental shelf.

Today, wind is the most competitively priced technology in many if not most markets; and the emergence of wind/solar hybrids, more sophisticated grid management and increasingly affordable storage begin to paint a picture of what a fully commercial fossil-

“The current pipeline indicates that offshore installations will be down a bit in 2018, pick up again in 2019 and then remain stable for the rest of the period, approximately doubling existing offshore installations by the end of 2022.”

free power sector will look like.

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WindInsier• IWEF Special Issue 2018 2018 18 Solar Quarter • October

MARKET INSIGHTS However, the NEA and State Grid are working to solve the transmission bottlenecks and

Wind is a mature technology, with proven reliability and cost competitiveness. It is more

other grid issues, and the situation is improving. India had a record year in 2017, with 4,148

and more often the technology of choice for utilities, and has also dominated the surging

MW being added to the grid, the first time the country has broken 4 GW in a single year,

corporate PPA market, where savvy companies look to both provide a hedge against

cementing its place as the second largest market in Asia, fifth in 2017 installations, and in

potentially wildly fluctuating fossil prices, and at the same time reduce their carbon

solid fourth place in the global cumulative rankings. 2018 will be an off year as the switch

footprint – not to mention ‘greening’ their image with increasingly vigilant consumers.

from the old regime to an auctioning system has left a ‘policy gap’. Wind is making a rapid transition from a technology reliant on ‘support’ in most markets, However, 2019 and beyond are expected to see a dramatic increase in the Indian market,

to one where it stands on its own economically, even without any kind of financial benefit

as the government seeks to meet its targets of 175 GW of renewable capacity by 2022,

for the major rewards society reaps from its deployment in terms of clean air and carbon-

with 60 GW of that coming from wind. With cumulative installations standing at 32,848

dioxide emissions reductions. Hopefully we’ll get there one day. But in the meantime, the

MW at year-end 2017, that will mean an average of about 7 GW/year for the four years

industry will have to struggle with shifting policy regimes and the inevitable gaps that

following 2018. At the end of this period, we should see the beginnings of an offshore

accompany them and do our best to take it to the next level – annual installations of 60,

wind sector emerging in the country.

70, or even 100 GW/year. This will be necessary to meet the Paris targets and secure a sustainable energy future on a planet left habitable for succeeding generations.

As for the rest of Asia, it’s a long way down to third place, occupied by Pakistan with 199 MW. Japan installed 177 MW for cumulative installations of 3,400 MW, while we

2017 saw a concentration of installations in a smaller number of markets in Europe, Africa,

continue to wait for the end to the stranglehold on the grid by the vertically integrated

and Latin America, reversing a trend for a diversification of markets that has marked the

utility monopolies. South Korea added 106 MW, as we wait to see any effect of the

industry’s growth over the last decade. That needs to change, and there are solid signs that

new government’s pledge to dramatically increase the country’s share of renewables

it will in 2018, but we shall see.

in the power mix, with a presumed focus on the offshore sector. Elsewhere, Mongolia commissioned its second 50 MW wind farm, Vietnam added 38 MW, Thailand 24 MW, and Taiwan added just 10 MW as it focuses on its burgeoning offshore sector, which will start to get built out in the next few years.

2017: A Transition Year

There is a still an acute need around the world for new power generation, which is clean, affordable, indigenous, reliable and quick to install. Wind power is leading the charge in the transition away from fossil fuels; and continues to blow away the competition on price, performance and reliability.

In 2017, the global wind industry continued with installations above 50 GW. After five years of essentially flat markets from 2009-2013 due to the global financial crisis, installations crossed the 50 GW mark in 2014 mark, and have stayed over 50 GW for the last four years, with the anomalous Chinese market in 2015 pushing the total over 60 GW. Globally, cumulative installations passed 500 GW in 2017, ending the year at about 540 GW.

“By the end of 2017 there were 30 countries with more than 1,000 MW installed: 18 in Europe; 5 in Asia-Pacific (China, India, Japan,

Wind power is increasingly the most competitive way of adding new power generation to the grid in an increasing number of markets, even competing against heavily subsidized incumbents; and for the first time we can say that this now includes offshore, with ‘subsidyfree’ winning bids in Germany’s offshore auction in 2017, followed by a Dutch ‘subsidyfree’ tender, which has just (20 March) been awarded for two projects to be built out by

South Korea & Australia); 3 in North America (Canada, Mexico, US), 3 in Latin America (Brazil, Chile, Uruguay) and 1 in Africa (South Africa).”

2022.

Credits: GWEC Global Wind Report April 2018

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WindInsier• IWEF Special Issue 2018 2018 19 Solar Quarter • October

INDUSTRY INSIGHTS MARKET INSIGHTS

Market Forecast 2018-2022

he aftermath of the global financial crisis in the previous decade resulted in average

A Market In Transformation

global markets of about 40 GW/annum for the period from 2009 to 2013. Breaking through the 50 GW barrier for the first time in 2014, the industry set a record of more than 60 GW due to anomalously high installations in China in 2015. In 2016 the market returned to the ‘new normal’ of just over 54 GW, and 2017 was in the same general range, which is also what we expect for 2018, before the industry embarks on another growth spurt in the run up to a number of 2020 targets. Several countries set new record high installations last year, as did the offshore sector, which installed more than 4 GW in a single year for the first time. While offshore still represented only about 8% of the global market, and only about 3.5% of global installed capacity, those numbers will increase substantially in the coming five years. It should also be noted that those offshore MW will generate significantly more electricity than their onshore counterparts.

What we are seeing across the globe is a transformation of markets for wind power away from the support schemes that gave birth to the industry, with wind taking its place as a pure commercial technology, increasingly operating without subsidies or support mechanisms. Competing, one might add, with incumbents which are heavily subsidized to the tune of hundreds of billions (low estimate) to trillions of dollars per year, depending on what is included. But that is a discussion for another time. The point is that the phrase ‘renewables are too expensive’ can now disappear forever. Whatever ideologues might have to say about it, the marketplace has spoken and we are in the process of adjustment to a direct market-driven competition for the future of the energy system. Policy will also play a role, and it should play a stronger role if we are to avoid the worst ravages of climate change. Regardless, we are in a time when it makes extraordinary sense to invest

Germany, the UK, France, Belgium and Ireland all set new records, as did India, breaking the

in renewables, and it makes little sense to invest in anything else.

4 GW barrier for the first time. China, still very much the global leader, dropped below 20 GW for the first time since 2013. We expect the annual market to remain at roughly 2017’s level for 2018 due to anticipated decreases in Germany, the UK and India. This will be balanced by increases in North America, the Middle East and Africa and Latin America. The annual market will return to growth in 2019 and 2020, breaching the 60 GW barrier once again and continue to grow, albeit at a slower pace, in the beginning of the new decade. We expect to

This transformation is taking its toll on the annual market size. ‘Policy gaps’ between the new and old systems mean that some markets were on something of a bumpy ride in 2016 and 2017 and that will continue for another year or two (longer in a few markets, including the world’s largest, in China) until the kinks are worked out of the new systems.

see total cumulative installations reach 840 GW by the end of 2022. The Future

Major Trends In 2017 Alongside the cratering prices for wind, solar and other technologies, other aspects of Prices Continue To Drop

the transformation are proceeding apace. The dramatic uptake in EVs is one of them. Although it is as of yet limited to just a few markets, the rate of increase is beyond the wildest projections of just a couple of years ago. Likewise, the precipitous drop in the

“How much lower can it go?” is the question we are often asked. While we don’t have a definitive answer, it is clear that the downward trend will continue for both wind and solar in the coming years, although at a slower pace than we’ve seen over the past five years or so. In late 2017 we saw tender prices in Canada (Alberta) go well below € 0.025/ kWh mark, and in Mexico below € 0.015/kWh. While these are outliers at present, they are also harbingers

price of battery storage is another game-changer. One result of that is what has been talked about for many years, but which is only now appearing in reality: wind/solar hybrid plants with battery storage. We have examples under construction in Australia and India, and we will see much more in the coming years, with the combination enabling power delivery 24/7 for most of the year.

of things to come in more and more markets, where wind (and increasingly solar) are far and away the cheapest way to add new generation capacity to the grid.

What does all this mean for wind markets in 2018-2022? Well, from where we sit at the end of March 2018, it will mean a more or less flat market for 2018, a return to rapid

Late in 2017 the Dutch government announced its fi rst ‘subsidy free’ offshore tender, which was in fact concluded earlier this year. The winner of the 700 MW Hollandse Kust project will build the project by 2022 and will receive nothing more than the wholesale price of electricity. This follows on from the fi rst ‘zero bids’ for more than 1 GW of offshore wind in Germany last year, although these projects will not be built out until about 2024. In both cases, the costs of building the transmission connections will be borne by the government. These developments have created a dramatic increase in the appetite for offshore outside its home base in Europe (and China) in places as diverse as the United States, Taiwan, Korea, Japan, India, Australia and now even Brazil.

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Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 20

MARKET INSIGHTS growth in 2019 and 2020, and tapering off a bit after that, following the rush to install

expecting Mexico to start to fulfill its promise over the next few years. Despite the fact that

prior to the various deadlines coming up in key markets in 2020. Will there be unforeseen

Brazil’s political and economic woes have abated somewhat, we will feel the effect of the

surprises? Probably. Will Russia and Saudi Arabia finally begin to reach their potential

lack of auctions for most of the last two years over the next three years. Argentina is one

and provide rapidly growing major new markets for the industry? Perhaps. What about

of the brightest spots in the wind universe at the moment, and Chile will continue to grow,

Vietnam, the Philippines and the rest of the Southeast Asia? The only thing that we can

as will some of the smaller Latin American markets. As of this writing it appears that the

say for certain is that the increase in the rate of change in energy markets will continue to

South African hiatus is over, and there should be significant installations in North Africa in

accelerate in the coming years.

the coming years. Australia will continue to be the only significant market in the Pacific for the coming years as the fulfilment of the MRET proceeds apace.

Regional Market Development Asia The Asia market continues to dominate and will do so for the foreseeable future. While China continues to be by far the largest market globally, the days of dramatic annual market

With 228.7 GW of installed capacity, the Asia region is the undisputed driver of the global

increase are probably over, at least for the next few years. India will play a much stronger

industry. It is led by China of course, but with India growing rapidly in the coming years.

role, although the 2018 market will disappoint. Europe is unlikely to repeat the record

The emergence of a number of new markets, albeit smaller, will add to the world-leading

installation levels in 2017, but we’ve been looking for a downturn in Europe for the last five

annual market. While falling back from its record breaking 30GW market in 2015, China’s

years at least, but it hasn’t come yet, although there has been a worrying concentration in

19.7 GW of installations led all markets by far. We expect China to remain at about that

fewer and fewer markets. North America looks pretty stable for the near future, and we’re

level for the coming years, with perhaps a bump in 2020. This means that the last FiveYear Energy Plan target of 210 GW of wind power by 2020 will be met at least one year ahead of time. Curtailment in China decreased from 17% to 12% last year, which is still not good, but represents a substantial step in the right direction, resulting in increasing capacity factors across the country. The Chinese offshore market had its first 1,000 MW+ year in 2017, and we expect that segment to pick up substantially over the next few years. Further, electricity market reform, the introduction of an RPS system and the replacement of the FIT with an auction system remain at the discussion stage, but one or more of them may come quickly as China’s energy transition gathers momentum. India set another new record in 2017, but 2018 is likely to disappoint due to the ‘policy gap’ in the transition period away from the ld market incentives towards an auction-based system. However, the government seems committed to meeting its aggressive targets for 2022, which includes 60 GW of wind, up from 2017’s fi nal number of just under 33 GW. Elsewhere in Asia, Japan and Korea will continue to grow slowly, but are being surpassed in terms of annual installations by Pakistan, in addition to an impending surge in the Philippines and Thailand, a new offshore market in Taiwan, the beginnings of a market in Indonesia, and the expectation that Vietnam will fi nally take off at some point in the next few years. Overall, we expect the Asian market to add 142 GW in the next five years, for a total of 370 GW by the end of 2022.

“We expect the annual market to remain at roughly 2017’s level for 2018 due to anticipated decreases in Germany, the UK and India. This will be balanced by increases in North America, the Middle East and Africa and Latin America.” Credits: GWEC Global Wind Report April 2018

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Solar Quarter • October WindInsier• IWEF Special Issue2018 2018 21

Annual Event Calendar

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WindInsier• IWEF Special Issue2018 2018 22 Solar Quarter • October

World learder in wind Lidar

Market Leading Windcube Vertical Profiler

The most extensive Lidar product range with more than 1300 lidars in the field

Windcube Vertical Profiler Lidar

Windcube Scanning Lidar

w w w . s o l a r q u a r t e r . c o m

Wind Iris Turbine Mounted Lidar

www.leosphere.com

Wind Iris Turbine Control Lidar

Solar Quarter â&#x20AC;˘ October 2018 23

HELPING OPTIMISE TURBINE EFFICIENCY AND REDUCE TOTAL COST OF OWNERSHIP SHELL OMALA S5 WIND MANAGING WIND TURBINE DOWNTIME IS A MAJOR INDUSTRY CHALLENGE

Damage to gears including micro-pitting is a top concern for wind farm managers1

Gearbox failures result in the highest amount (21%) of turbine downtime2

Of all wind turbine failures:

67%

are bearing failures2

25% are from gears2

FOR WIND TURBINE GEAR OILS, BALANCED PERFORMANCE IS CRITICAL

Suitability for wide range of operating temperatures

Protection for bearings even when contaminated with water

Foaming control, with rapid air release

SHELL OMALA S5 WIND 320 CAN HELP REDUCE DOWNTIME AND LOWER MAINTENANCE COSTS Protects the gearbox to help ¡¡ extend equipment life

Faster start-up for better ¡¡ speed to grid

Helps improve ¡¡

turbine availability

Compatibility with seals and paints

Protection for gears

Long oil life in service

Cleanliness control and fine filterability

Helps enable performance ¡¡ in extreme temperatures

Helps maintain ¡¡ clean systems

Longer oil drain intervals ¡¡ BEHIND SHELL OMALA S5 WIND 320 LONG OIL LIFE 2.5 times better oxidation stability than best-performing competitor3 ¡¡ Helps limit gearbox sludge formation ¡¡

STRONG WEAR AND CORROSION PROTECTION High scuffing resistance even at low speeds5 ¡¡ High micropitting resistance ¡¡ Excellent resistance to corrosion even in salt water6 ¡¡

OUTSTANDING LOW TEMPERATURE CHARACTERISTICS Low pour point and excellent low temperature fluidity4 Faster start-up in cold climates ¡¡ Protects the gearbox in a range of temperatures ¡¡ SUPERIOR FILTERABILITY* AND STRONG FOAM PREVENTION Fast air release7 ¡¡ Minimal foam even after 50,000 cycles8 ¡¡ Low maintenance and operational costs ¡¡

1. Data from Shell Wind Webinars customer poll, June 2015. 2. National Renewable Energy Laboratory Gearbox Reliability Collaborative Failure Database. 3. ASTM D2893B (modified) – 48 days. 4. ASTM D2983 – Brookfield viscosity results. 5. FZG = Forschungsstelle für Zahnräder und Getriebebau, SO 14635-1 (DIN 51354-2). 6. SKF EMCOR test – ISO 11007 *Compared to competitor oils. 7. Air release test results, IP 313. 8. Hydac = filter manufacturer multipass HN 30-08.

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Solar Quarter • October 2018 24