Tuesday, 20 June 2017

Denmark's COP to lead development of Newfoundland array by Richard A. Kessler, Recharge News 20 June 2017

Copenhagen Offshore Partners (COP) says it has won a contract to lead both early and late-stage development for what could become Canada’s first offshore wind project – a 180MW array in St. Georges Bay west of Newfoundland.
COP did not release terms of the deal awarded by Danish fund manager Copenhagen Investment Partners (CIP), which last September announced it would invest all capital required to build the facility in partnership with Beothuk Energy, based in the provincial capital of St. John’s.
COP says it will oversee development jointly with Beothuk until finalisation of a power purchase agreement, and then lead the project to financial close and through the construction phase in cooperation with the local company. It was not immediately clear when construction would begin.
Beothuk has talked with potential buyers for the electricity in several Canadian provinces and New England region in the US. It has not set a deadline for completing a power off-take arrangement.
St. George’s Bay could take advantage of Emera’s Maritime Link, a high-voltage subsea transmission project under construction that will connect Newfoundland for the first time with Nova Scotia, New Brunswick and the six-state ISO New England market. It will enable export of 500MW of renewable power.
Beothuk has eyed the US state of Massachusetts as a possible market, which now has a legal mandate to procure 1.6GW of offshore wind energy by 2027. Later this month, electric utilities there are expected to release an offshore wind request for proposals for as much as 800MW of initial capacity, with winners to be announced next year.
CIP, however, is expected to submit supply bids itself after acquiring a strategically located 1GW zone facing the Massachusetts coast last year. In May, it sold a 50% stake in the Vineyard Wind project to Avangrid Renewables.
Beothuk says St. George’s Bay will supply electricity to more than 150,000 households, create more than 500 jobs during the construction phase and establish a new industry in Atlantic Canada.
Beothuk, which has been developing the project since 2011, has held talks with Siemens for supply of unspecified turbines, but no firm contracts have been signed. It lists Siemens as a “strategic partner” on its website.

Canadian pension fund PSP to buy largest stake in Pattern Energy by Karl-Erik Stromsta , Recharge News, 19 June 2017

Canada’s Public Sector Pension Investment Board will acquire nearly 10% of the shares of Pattern Energy, becoming the wind-focused US yieldco’s largest shareholder, in a deal Pattern says underscores growing investor confidence in the renewables sector.
PSP Investments, among Canada’s largest pension investment managers, will acquire 8.7 million shares of Pattern Energy from its privately held sponsor company, worth $206m at their closing price of $23.69 on Friday.
PSP Investments will also co-invest $500m in projects being acquired by Pattern Energy, including stakes in the recently completed Meikle wind farm in British Columbia and the Mont Sainte-Marguerite project in Quebec due for completion later this year.
PSP is part of a growing body of Canadian investment funds and energy companies moving aggressively into renewables. San Francisco-based Pattern, whose shares are listed in both the US and Canada, is a sizeable player in the wind markets of both countries.
Pattern Energy was the 11 th largest owner of US wind capacity at the end of 2016, with 1.8GW, according to data compiled by the American Wind Energy Association. The yieldco owns 2.6GW of renewables capacity overall, and has targeted 5GW by 2020.
“This relationship grants us access to a portfolio of projects and a source of new assets in renewables, and we believe it will provide good and stable returns for our contributors and beneficiaries,” says Patrick Samson, PSP Investment’s managing director for infrastructure investments, noting that renewables are “the fastest growing market of power generation”.
Shares of Pattern Energy rose 3.4% in early trading Monday on the news, to $24.50, their highest point since mid-2015.
For much of the past two years, Pattern's shares have traded below their 2013 initial public offering price of $22, amid persistent investor concerns about renewables yieldcos in the wake of SunEdison's bankruptcy.
But the tides have been turning for yieldcos this year, with Pattern’s shares up more than 28% in 2017.
Pattern Energy invests in Pattern Development 2.0
PSP’s investment comes as part of a flurry of deals and reshuffling within the Pattern family of companies, which includes the publicly listed yieldco Pattern Energy and two privately held developers – Pattern Development 1.0 and Pattern Development 2.0, which are owned by US private-equity firm Riverstone Holdings.
Late last year a single development company – Pattern Development, known as Pattern Energy's "sponsor" – was split into two companies: Pattern Development 1.0 and Pattern Development 2.0.
Pattern Development 2.0 owns the bulk of the early- and mid-stage renewables projects in the development portfolio, while Pattern Development 1.0 has held the controlling stake in Pattern Energy and most of the late-stage projects expected to be sold – or “dropped down” – to the yieldco.
The thinking behind separating Pattern Development 2.0 into its own early-stage development company was that it would be easier to raise capital for new projects and expand the development pipeline.
Since the creation of the separate development companies, Pattern Energy has signaled the likelihood that it would invest directly in Pattern Development 2.0.
On Monday Pattern Energy confirmed it will make an “initial” $60m investment into Pattern Development 2.0 – giving it a 20% stake – with an option to invest up to $300m and acquire the entire company. In doing so, Pattern would tie together the early-stage development and project operations activities into a single publicly-listed company.
As a result of the transaction, PSP will indirectly become an owner of Pattern Development 2.0 through its stake in Pattern Energy.
Meanwhile, Pattern Development 1.0 will "gradually wind up its business", selling its remaining projects to Pattern Energy over time, the company says.
“Pattern Energy’s investment in the development business allows us to improve our margins and secure access to a tremendous pipeline of new projects,” says chief executive Mike Garland, chief executive of both Pattern Energy and the development companies.
Pattern Energy’s direct investment in Pattern Development 2.0 comes alongside a $724m package of long-term capital commitments announced for the developer from an entity managed by Riverstone, which includes money from pension, sovereign wealth, endowments, family office, and investment funds.
Pattern Development 2.0 says it has expanded its project pipeline to 10GW, encompassing wind, solar, transmission and storage projects in the US, Canada and Mexico.

Tuesday, 13 June 2017

Dong completes transformation with oil & gas disposal, by Andrew Lee, Recharge News, 24 May 2017

Global offshore wind pacesetter Dong Energy hailed its “transformation into a leading pure-play renewables company” after agreeing to sell its oil and gas business for up to $1.3bn.
The Danish group struck a deal with the UK’s Ineos that will see the latter take on Dong E&P when the transaction completes in the third quarter of 2017.
Dong first announced plans to divest its fossil-focused assets last year, and the deal will see it receive $1.05bn unconditionally and another $250m depending on developments at certain assets.
The sale will give Dong more firepower to fund its global offshore wind expansion plans, which have already seen it take the lead in the sector.
The company is on track to have 6.5GW in place off Europe by the end of the decade, and last year flagged an ambition to have stakes in 11-12GW of offshore capacity by 2025.
That will see the group move into new markets such as the US and Taiwan – it already has interests in projects in both nations.
Dong recently signalled a new phase for the offshore wind sector when it lodged ‘zero subsidy’ bids for future plants off Germany.
Dong CEO Henrik Poulsen said: “Since the decision in 2016 to divest our upstream oil and gas business, we’ve actively worked to get the best transaction by selling the business as a whole, getting a good and fair price for it and ensuring the optimal conditions for the long-term development of the oil and gas business. With the agreement with Ineos we’ve obtained just that.”
“The transaction completes the transformation of Dong Energy into a leading, pure play renewables company.”
Danish state-controlled Dong – in which investment giant Goldman Sachs also holds a stake – is the most notable example of a fossil-fuel-based operation pivoting towards clean energy.
Norway’s Statoil and Anglo-Dutch group Shell have also entered the offshore wind sector – although not to anything like the same extent as Dong – while France’s Total is a serious player in the solar industry.

Monday, 12 June 2017

Oil giant Shell calls for 10GW offshore megaprojects by Anamaria Deduleasa, Recharge News, 07 June 2017

Megaprojects in the 10GW range built around “anchor tenant” led development consortia will be needed to make offshore wind a global mainstream energy source, according to Shell New Energies executive vice-president, Mark Gainsborough.
The oil supermajor believes this model — adopted from the retail sector where a prestige brand store is given lower rent to attract other tenants — will be a better means of accelerating and upscaling the build-out of offshore wind farms than the current tender model being employed in certain European countries, which are driven by 2030 national targets.
“Shell believes that instead of organising the next tranche of leases and tenders simply on the basis of meeting national targets in 2030, we would propose that the next phase be thought of as a stepping stone, a de-risking exercise, towards a much bigger offshore wind industry that operates at the scale of the potential resource,” Gainsborough told OWE 2017.
“We believe that a few large, integrated projects up to 10GW, with an anchor tenant who takes the biggest risk for about half the project, need to be developed to ensure we all learn how best to do this.
“Think of the cost savings that could be achieved by constructing several hundred wind turbines continuously, like an offshore assembly line.”
According to Gainsborough, upscaling development would lower cost, create value across the supply chain, and stimulate economic growth.
Shell, which has plans to earmark around $1bn a year for investment in renewable energy sources from 2020, is in the early stages of diversifying its portfolio. In the US, the group is a 50-50 joint venture partner in six operating onshore wind projects, and in Europe, in the Netherlands, together with Mitsubishi, Eneco and Van Oord, it won the 700MW Borssele 3&4 offshore tender in last year.
“A cleaner energy future is both desirable and possible... but this will require action in all sectors of the energy system, and will require scaling up opportunities. Long-term integrated policies on climate, energy and economy will be necessary, along with a power market that sends the right investment signals,” he says.

Statoil to use oil and gas expertise to grow in offshore wind by Anamaria Deduleasa, Recharge News, 09 June 2017

Norway’s Statoil is aiming to play on its oil and gas strengths and expertise to grow its renewable energy business, said executive vice president of new energy solutions, Irene Rummelhoff.
Statoil has already made renewables part of its core activity, after realising that “business as usual was not an option”, said Rummelhoff at Offshore Wind Energy in London this week.
She added that, as the company had a lot of experience in offshore installations, operations, modifications, derived from having worked in the oil and gas industry, the change in direction was an “opportunity”.
“All skills were relevant for the offshore wind industry,” said Rummelhoff. “This was an opportunity rather than a threat for an oil and gas company, because we have an industry with immense growth potential in front of us, where we can play on the competences we have already developed. It’s not often these opportunities comes along.”
“Combining offshore wind and gas is a great opportunity that oil and gas companies can work with, in combination with other technologies, like batteries, and potentially also solar,” she said. “This will be a holistic solution going forward that will play to the strengths of like Statoil and Shell and other companies coming from the oil and gas sector.”
As it moved into the clean energy sector, Statoil acquired a 35% in the Dudgeon wind farm off eastern England, and won an auction for commercial development rights off New York.
The company said it now sees renewables as a “fully integrated part of its strategy”, with “new energy” set to account for around 20% of its capital investments by 2030.
In addition, Statoil’s budget for research projects is on an annual base around £250m. By 2020, 25% of it will be invested in low carbon solutions, says Rummelhoff.

Friday, 2 June 2017

Canada's renewable powerhouses are on the march, by Karl-Erik Stromsta, Recharge News, 19 May 2017

IN DEPTH | With a relatively small wind sector north of the border, Canadian renewables companies are increasingly moving into the US market, where they have been enjoying considerable success.

The US renewables market has long been a stomping ground for European heavyweight developers like Spain’s Iberdrola, Portugal’s EDP and Germany’s E.ON which have amassed multi-gigawatt American wind empires. Lately, however, a new breed of foreign developer has been making a big impact on the US market — and this time they’re coming from the north.
Over the past decade, Canada has quietly reared a formidable crop of homegrown renewables champions, fortified by the country’s stable hydro and vibrant wind markets. In many cases, Canadian renewables developers are in stronger financial shape than their American counterparts, and many are acquiring a taste for the massive — if quirky — electricity market south of the border.
Canadian renewables companies are buying US developers, US projects and even entire portfolios. Some are eyeing the nascent US offshore wind market. They are bringing their well-greased relationships with Canada’s big investment houses with them. And there’s every sign they’re just getting started.
The growing aggressiveness of Canada’s renewables sector was highlighted in March when Brookfield Renewable Partners, a Toronto-based hydro operator, outmanoeuvred rival suitors to take control of the TerraForm Power and TerraForm Global yieldcos from their bankrupt US parent SunEdison — catapulting Brookfield into a position of prominence on the global renewables stage.
Another good example is Algonquin Power & Utilities, a renewables developer and regulated utility company based near Toronto. Founded in the late 1990s with a focus on Canadian hydro, Algonquin diversified into Canadian wind development last decade before acquiring a portfolio of US projects from Spain’s Gamesa.
In 2016, Algonquin finished building two large US wind farms — the 200MW Odell in Wisconsin and the 150MW Deerfield in Michigan’s windy “thumb” — and at the end of the year it spent $75m on turbines that will allow it to build as much as 700MW more US capacity over the next few years, all of it eligible for the full production tax credit (PTC).
Canada was an ideal place for Algonquin to grow up, but “we’ve outgrown the market”, explains Jeff Norman, vice-president for business development at Algonquin Power, the company’s competitive generation arm. “We want to continue to grow, and we need to be in the US market to maintain those aspirations.
“We’re still very happy to participate in the Canadian market and view it as valuable. It’s just not our prime market any more.”
Algonquin’s southward march is being mirrored across Canada’s increasingly dynamic and globalised renewables sector. It’s being seen among independent power producers like Calgary’s Capital Power, which is building the 178MW Bloom wind farm in Kansas. It’s happening among Canadian private-equity firms such as Fengate, which last year made its first-ever investment in the US, buying a stake in the 120MW San Juan Mesa wind farm in New Mexico.
Importantly, it’s also happening among Canada’s massive pension funds, which bring the kind of financial heft that can move the needle even in a market as big as the US.
Caisse de Dépôt et Placement du Québec made an early move in 2014, buying a minority stake in Chicago-based Invenergy, North America’s largest privately owned renewables developer. So far this year, Alberta Investment Management acquired a 50% stake in Utah-based developer sPower, while Ontario Teachers’ Pension Plan agreed to back US transmission developer Anbaric, which has a number of huge renewables-related projects under way.
There’s always been a substantial investment flow between Canada and the US, including in the energy markets. But executives agree the trend in renewables has been especially pronounced over the past few years. A number of factors appear to be driving it.
Ontario Teachers' backs US transmission developer Anbaric
To start with, the Canadian wind market is slowing down, and the landing may be rough. Canada now has the world’s seventh-largest installed wind base, nipping the heels of the UK.
But the outlook for short-term development in Ontario and Quebec, the main Canadian wind markets of the recent past, looks grim. Analyst MAKE Consulting believes Canada’s wind installation rate could drop by nearly half over the coming decade compared to the past ten years.
The brightest spots for the Canadian wind market right now are the western provinces of Alberta and Saskatchewan, both of which have recently initiated processes to procure substantial amounts of new renewables capacity by 2030. But industry sources say those markets will not be enough to absorb the ambitions and financial firepower of Canada’s renewables independent power producers (IPPs).
One Canadian renewables executive points out that there’s now more wind capacity spinning in Texas than there is total generation capacity in Alberta.
Even deals in the secondary market for existing projects in eastern Canada may become scarcer in the coming years.
In February, Fengate closed on an acquisition of three utility-scale solar plants totaling 60MW from Canadian Solar in Sault Ste Marie, Ontario, and it would like to buy more wind and solar assets in the province, says Fengate director Andrew Cogan. But much of the fruits of Ontario’s recent renewables boom has been thoroughly picked over.
“A lot of those assets are now in their second or third hands, and by the time they get there, they tend not to change hands too often,” Cogan tells Recharge. “We’ll keep an eye out. But the growth is going to come, I think, from pushing south.”
The US market is “much larger, it’s very sophisticated and it’s really liquid”, he adds. “We’ve got three or four other projects on the go in the States right now, with another six or seven on the near-term horizon.”
At the same time as opportunities are growing scarcer in eastern Canada, Canadian developers are finally — and grudgingly — getting comfortable with some of the complexities of the US market, particularly the PTC and the attendant need for tax equity.
“For years many large Canadian IPPs stayed away from the US,” says John Carson, chief executive of Alterra Power, the British Columbia-based renewables developer that recently handed Vestas the turbine order for its second US wind project, the 200MW Flat Top in Texas.
“It was mostly because of the tax-equity aspect of it, but also because there were a lot of good Canadian deals they could spend their time on,” Carson tells Recharge. “As those deals have dried up, some of them have begun to look south.” And in the meantime, “they’re finally realising tax equity is not the demon they once thought it was”.
Like a number of Canadian developers, Alterra took steps in late 2016 to qualify future wind capacity for the full PTC — in its case as much as 1.7GW — and the company has plans to open a US office.
Canada’s fossil-fuel giants — which have generally embraced renewables more quickly than their US counterparts — are also pressing into the US renewables market. TransCanada, the company behind the controversial Keystone XL oil trunkline, owns a 132MW wind farm in Maine, and pipelines giant Enbridge has become a substantial wind player in the US — including its recent purchase of the 249MW Chapman project in Texas, due for completion this year.
"Developers like Northland are taking what they’ve learned in Canada and bringing it to bear in markets that are at a higher-growth point in their cycle right"
Mike Crawley, Northland Power
The trend of Canadian companies pushing into the US renewables market is universally expected to continue. Indeed, some Canadian developers with lingering reservations about the PTC may actually accelerate their push into the US as the tax credit phases down over the next few years.
Innergex, the Montreal-based renewables IPP, expects to become more competitive in the US market as the PTC winds down, and recently revealed it is considering buying a developer south of the border.
“I’d be happier without the PTC, and I think a Canadian company can do better without the PTC,” says chief executive Michel Letellier. Without the tax credit in place, Innergex will have “a better angle to attack the US market”, he says. Larger, better established US companies have a clear advantage over their Canadian competitors in attracting low-cost tax equity deals.
The US will no doubt remain the largest foreign target for Canada’s renewables sector, but Canadian players are increasingly flexing their muscles even further afield.
Last year, UK-based Cubico Sustainable Investments, which owns a 2GW portfolio of renewables assets across Latin America and Europe, was acquired by two Canadian pension managers — the Public Sector Pension Investment Board and Ontario Teachers’ Pension Plan.
Montreal-based Boralex, meanwhile, has become the largest independent wind developer in France, and Northland Power, the Toronto-based IPP, has made a major splash in the European offshore wind market, most recently by buying the 252MW Deutsche Bucht project in the German North Sea.
The era of the Canadian renewables powerhouse, it seems, has arrived.
“Developers like Northland are taking what they’ve learned in Canada — the skills, the relationships they’ve built — and bringing them to bear in markets that are at a higher-growth point in their cycle right now,”, Northland’s executive vice-president for business development, Mike Crawley, tells Recharge.
Beyond its plans to build more offshore wind farms in Europe, Northland is developing projects in Taiwan and looking to enter the emerging offshore market in the US Northeast.
“There are still growth opportunities in Canada,” Crawley notes. “But there are significant growth opportunities elsewhere.”

Wednesday, 22 March 2017

Back Renewables to Hit Climate Goals with GDP Growth, by Andrew Lee, Recharge News, March 20, 2017

The world’s energy sector could slash carbon emissions by 70% by 2050 and eliminate them altogether a decade later – while simultaneously boosting the global economy, according to a new study from the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA).

The organisations said wider deployment of renewables and energy efficiency measures – allied with large-scale greening of sectors such as transport and buildings – could by 2050 limit warming to no more than two degrees above pre-industrial temperatures.

They estimate the decarbonisation push will need an extra $29 trillion of investment by that date, equivalent to about 0.4% of global GDP.

But the same programme would also deliver a 0.8% increase to global GDP by mid-century, with new renewable-focused jobs "more than offsetting" employment losses in fossil sectors, says the report Investment Needs for a Low-Carbon Energy Transition, which was co-financed by the German government.

By 2060 energy-related CO2 emissions could be totally eliminated, it reckons.

But the study – released to mark the start of the Berlin Energy Transition Dialogue event in the German capital – warns that time is of the essence, with delay translating directly into an increase in the cost of achieving decarbonisation.

“The energy transition has long ceased to be a national project. It is a global task and a mission for all of us, as well as a way to ensure a future of prosperity and stability,” said German foreign minister Sigmar Gabriel, who hosts the Berlin Energy Transition Dialogue.

IRENA director-general Adnan Amin said: “The Paris Agreement reflected an unprecedented international determination to act on climate. The focus must be on the decarbonisation of the global energy system as it accounts for almost two-thirds of greenhouse gas emissions.

“Critically, the economic case for the energy transition has never been stronger,” added Amin. “Today around the world, new renewable power plants are being built that will generate electricity for less cost than fossil-fuel power plants. And through 2050, the decarbonisation can fuel sustainable economic growth and create more new jobs in renewables.”

The study says emissions will need to fall to 9.5 gigatonnes of energy-related CO2 by 2050 if the twodegree target is to be met, down from 32Gt in 2015. It estimates that “90% of this energy CO2 emission reduction can be achieved through expanding renewable energy deployment and improving energy efficiency”.

Renewables need to account for 80% of power generation and 65% of primary energy supply by the middle of the century, up from 24% and 16% now.

The report also sets out a list of other advances needed, ranging from a huge expansion in electric vehicles – which need to be “the predominant car type in 2050” – to high-efficiency electric buildings becoming “the norm”.

 IEA renewable energy head Paolo Frankl told Recharge in an exclusive interview that a wide range of up-and-coming technologies will need to be deployed alongside wind and solar if global climate objectives are to be achieved.

Monday, 27 February 2017

Pattern's Meikle likely to be last B.C. wind farm built for years, by Karl-Erik Stromsta, Recharge News, Feb 27, 2017

Pattern Development has completed its 184.6MW Meikle wind farm in British Columbia, in what is likely to be the last big wind project to come online in the western Canadian province for many years.

Meikle is the largest wind farm ever built in British Columbia, single-handedly boosting the province’s installed wind capacity by 37%, to nearly 674MW. But with electricity demand stagnant in British Columbia even as the 1.1GW Site C hydroelectric project advances, the renewables industry is not counting on much in the way of new opportunities there for the foreseeable future.

The Canadian Wind Energy Association reportedly pulled its regional director out of British Columbia last year, with the intention of focusing on the more obvious near-term opportunities blossoming in Alberta and Saskatchewan.

The government in B.C. has said the controversial Site C will be the last major hydro project built in the province and future demand will be met by wind and solar. But barring a major new source of electricity demand, contracts for new wind farms are unlikely to be awarded any time soon, and perhaps not for a decade or more.

New wind opportunities are also on the decline in Ontario and Quebec, historically the two largest provincial wind markets.

Meikle, completed 33km north of Tumbler Ridge, near British Columbia’s border with Alberta, was built using two types of General Electric turbines, and designed to work with the site’s unique ridgelines in an area that has seen heavy forestry activity. The wind farm sells its power to state-owned utility BC Hydro.

Pattern acquired the project from local developer Finavera in 2013.

Conscious of the economic challenges in the remote area where Meikle was built, San Franciscobased Pattern Development – parent of the US-based renewables yieldco Pattern Energy – spent more than 30% of the value of its construction-related contracts with First Nations-affiliated contractors and other regional firms.

Sixteen O&M personnel will stay on to maintain the C$393m ($301m) project.

“Located in a mountainous region, this project was unique for its construction, design and weather challenges, as well as for our discovery of rare dinosaur tracks during construction, which we donated to the Tumbler Ridge Museum,” says Mike Garland, chief executive of both Pattern Development and Pattern Energy.

Pattern Energy, which is listed in both New York and Toronto, has the right of first offer on Meikle, and is expected to acquire the project at some point.

Roughly one-fifth of Pattern Energy’s 2.6GW of installed capacity is spread across its investments in five wind farms in the Canadian provinces of Ontario and Manitoba.

Thursday, 16 February 2017

Colombian bank gears up for renewables with green bond issue, by Alexandre Spatuzza, Recharge News, Feb 16, 2017

 As Colombia’s energy regulator CREG finalises rules for renewable energy tenders, local finance house Bancolombia is ready to lend around $55m to clean-energy projects with money raised via Latin America’s first international green bond issue by a commercial bank.

“We have started disbursing the money and by May we will...announce the projects financed,” Bancolombia’s finance chief Jose Humberto Acosta told Recharge.

Bancolombia finalised the issue of 350bn Colombian pesos ($115m) in January. The bonds were all bought by the World Bank’s International Finance Corporation (IFC) as part of a programme to bolster green bond issues worldwide and help Colombia meet its greenhouse gas reduction target of 20% by 2020.

“About 50% of the issue will be directed to renewable energy,” said Acosta without giving details. The rest will go to other green industries in fields such as construction and sanitation, he added.

The green bond issue comes ahead of the implementation of Colombia’s revamped renewable energy policies, expected to be finalised this year. The country’s power agents, government officials and the energy regulator CREG have until the end of February to conclude a public consultation process to finalise tender rules to contract renewables under 15-year PPAs

Colombia’s Caribbean Sea region of La Guarija has huge wind and solar power potential, but the lack of clear regulations in the 2014 renewable energy bill and the absence of grid connection in the region have delayed the country’s entry onto the global renewable energy scene.

The country has 19MW of wind installed – out of a 16GW of total capacity – but has more than 2GW of wind projects in place, according to the newly-created Colombian Renewable Energy Association (SER). At the same time the government’s 2030 power expansion plan points to around 1GW of wind to be installed and some 300MW of solar.

For Bancolombia, the green bond issue and the partnership with IFC aim to get its clients ready for a growing green technology market.

“For our clients it’s a learning curve and the bank together with IFC will advise its clients on how meet compliance requirements for green projects,” said Acosta.

Another aim of the issue is to mitigate foreign exchange risks for renewable energy projects since the lending will be done in Colombian pesos. Although the government wants renewable energy tenders to be in pesos, energy market players prefer US dollar-denominated auctions.

Even so, Acosta said that the finance will not be significantly cheaper than other loans in Colombia.

For the IFC, Bancolombia’s green bond issue is part of the institution’s programme to support renewable energy and green technology financing in Latin America. Since 2010, the IFC has issued $5.6bn in green bonds worldwide.

The IFC’s manager for the Andean region, Carlos Leiria Pinto, said at the time of the issue that “by investing in the first green bond issued by Bancolombia, we hope to pave the way for other issuers and investors and contribute to the development of the green bond market in Colombia”.

Acosta agreed: “Other banks will follow our footsteps and we ourselves could hold another issue in three years.

Wednesday, 1 February 2017

Renewables a must-have as shadows lengthen over Big Oil: ONES TO WATCH 2017 | The world's oil giants are all too aware that the tide is turning so expect more activity in wind and solar this year, writes Darius Snieckus, Recharge News, Jan. 10, 2017

Expectations that Big Oil will increasingly move into renewables have been growing as crude prices continue to stagnate and 2017 will see more “old” energy developers begin to detail their play books for wind, solar and storage.

Many eyes will be on Shell this year. The Dutch-Anglo petroleum giant has been angling to bring its offshore oil and gas project nous – and capital (in the ‘crisis’ of 2015, it still had revenues of $265bn) – to bear on offshore wind. After failing at the first attempt it now has a chance to wet its head on a lead-off project: the 680MW Borssele 3&4 zone off the Netherlands, which it won with a low bid of €54.50/MWh ($57.85/MWh).

Chief executive Ben van Beurden last year admitted regret at having pulled out from its earlier position in offshore wind – apart from a share in the 108MW Egmond aan Zeewind farm commissioned in 2006 in the Dutch North Sea – and Shell’s chief energy advisor Wim Thomas told Recharge “the penny has now dropped that this is the new business space [to be committed to]”.

So anticipate more forward strides from Shell in offshore wind in 2017 – and not just on conventional projects. Shell also has stakes in WindFloat, the floating wind power unit now edging towards a first array off Portugal, and even a high-altitude wind energy outfit called KPS, which has a technology development timeline that will see its kite-driven concept flying offshore by the end of the decade.

Total, the French oil company, has shown a commitment to industrial-scale renewables since buying a majority stake in SunPower in 2011. But it was its fell-swoop takeover of battery maker Saft as its “spearhead in electricity storage” that has nailed its solar-plus-storage colours to the mast.

Total chief executive Patrick Pouyanné has made no secret of its renewables ambitions: a top-three solar player within 20 years.

Total is paying the price for its faith. On top of the $1bn deal for Saft, it has had to ride to the rescue of SunPower – after a doubling of the solar giant’s 2016 net loss guidance – with a first aid package that included a cash up-front order for 150MW of PV panels, and “discussions” to buy stakes in SunPower projects in Japan, South Africa, and France.

Total has also developed a venture capital-fuelled technology scouting programme, under the banner of Total Energy Ventures. Look to see more investment in start-ups in 2017, such as US wind leasing specialist United wind, and AutoGrid, a California-based digital grid management solution developer.

The Petroleum Age is ending and Big Oil knows it: investment in renewables has eclipsed that going into oil and gas for the second year running, fuelled by the latest $310bn spend.

Some oil and gas majors are already on their way. Danish state oil and gas company Dong has begun divesting petro-assets in favour of wind and now has a pace-setting 4.4GW under construction off Europe, and virgin acreage off the US – and no interest in the tail-end of North Sea’s black gold bonanza.

Its Norwegian counterpart Statoil will witness a watershed year for its renewable energy business as its second conventional offshore North Sea wind farm, the 402MW Dudgeon, comes online as does its 30MW Buchan Deep project – the world’s first floating array. It will also start work on its recently won 1GW zone off New York state.

Statoil's' own venture capital arm will in the meantime get to grips with its flagship solar power investment, part of an $8m package backing commercialisation of Oxford Photovoltaics ultrahighefficiency perovskite-based PV technology.

Even Italy's Eni – a company that until now had shown little interest in renewables, bar a partnership in a floating wind scheme designed to pump more oil and gas out of offshore fields – has wheels turning on plans to jointly develop large-scale renewables with US industrial giant GE under a framework agreement that encompasses onshore and offshore wind, as well as solar.

The shadow of stranded assets may be growing ever-longer, but for Big Oil investment prospects are also getting darker by the day. Fitch Ratings pointedly warned last year that failing to diversify into renewables could damage access to capital as global demand for petroleum slows.

Renewables are no longer a "nice to have", they are a existential need.

Friday, 27 January 2017

BP ups renewable growth forecast as cost reductions 'surprise' by Anamaria Deduleasa, Recharge News, Jan 27, 2017

Renewables will grow faster than expected as wind and solar "continue to surprise" with their costreduction trajectory, according to oil and gas supermajor BP.

The fossil giant’s latest Energy Outlook – which makes projections on energy supply and demand over the next two decades – admits its previous forecasts on renewables were too low.

According to BP’s 2035 Outlook, renewables will grow by 7.1% per year, more than “quadrupling” over the period, with their share of primary energy increasing to 10% by 2035, up from 3% in 2015.

This compares to predictions from BP last year suggesting renewables will grow by around 6.6% annually, with their share of the energy mix reaching 9% by 2035.

The revision was by far the biggest jump made by any energy source in the latest outlook from BP “as the prospective path for costs continue to surprise”, admitted the group. “As a result, the use of both coal and gas in the power sector has been revised down,” said BP.

Over the outlook period, renewables continue to grow rapidly with the weight of growth shifting towards Asia.

“The EU continues to lead the way in terms of the penetration of renewables, with the share of renewables within the EU power sector doubling over the outlook to reach almost 40% by 2035,” said BP.

“China is the largest source of growth over the next 20 years, adding more renewable power than the EU and US combined,” it added.

The strong growth in renewable energy is underpinned by the view that the competitiveness of both wind and solar power improves significantly in the period up to 2035.

“The cost of solar is expected to continue to fall, although the pace of that reduction slows, as the rapidly-declining PV modules costs account for a decreasing share of the total installed costs,” said BP.

In contrast, wind power costs are assumed to fall “materially” throughout the outlook, reflecting the view that there is considerable scope to improve the performance of wind turbines.

BP’s analysis suggests that onshore wind will remain more competitive that solar in both the US and China.

"The global energy landscape is changing. Traditional centres of demand are being overtaken by fast-growing emerging markets. The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs," said BP’s chief executive Bob Dudley.

BP claims to have the largest renewable energy business of any of the global oil majors, thanks to its bioenergy interests and US onshore wind operations, where it owns a net 1.56GW. However, it left the solar sector in 2012 and has shown no inclination to follow fellow European oil major Shell into the offshore wind market.

BP's latest Energy Outlook said that while technological improvements and environmental concerns will change the mix of primary energy demand, oil and gas, together with coal, are still predicted to remain the main source of energy in the period up to 2035.

BP said fossil fuels are set to account for more than 75% of total energy supply in 2035, compared with 86% in 2015.

This forecast prompted environmental groups to call BP’s outlook a “fantasy”.

Charlie Kronick, senior climate advisor for Greenpeace UK, said: "BP forecasts a fantasy future where the world fails to act on climate change, their desire to make money from accelerating history’s greatest disaster remains sacrosanct and growing supplies of low cost oil guarantee their blue chip status, forever. Nobody should be fooled."

Trump team's infrastructure short list is long on renewables, Karl-Erik Stromsta, Recharge News, Jan. 26, 2017

A list of near-term infrastructure priorities for the Trump administration that emerged this week includes several massive renewables-related projects, suggesting Trump’s team may be more open to the job-creating power of renewables than previously realised. 

Throughout the presidential campaign and his first days in the White House, Trump has emphatically promised to make heavy investments into the country’s crumbling infrastructure without seeming to appreciate the potential for renewables to aid that vision and create jobs. 

But this week the McClatchy news group published a list of near-term infrastructure priorities reportedly compiled by Trump’s transition team after receiving input from governors around the country. In what may come as a surprise to many in the industry, the list is long on projects that would help the country add huge amounts of renewables, particularly wind, in addition to more predictable projects involving bridges, highways and airports. 

Also notable is the list’s use of positive language to describe renewable energy, using phrases like “cheap, clean wind power”. Trump himself has mainly said negative—and often untrue—things about wind and solar power. 

The White House was quick to state that the list is not an official document, and congressional sources describe it as a work in progress. The list was drawn up in late 2016, after Trump's election.

Still, it offers a first glimpse into the specific infrastructure projects Trump's team is considering backing. And it suggests that renewables may not be left on the sidelines after all as the Trump administration begins its massive infrastructure push, a push many political observers expect Democrats to get behind. 

Among the 50 projects on the list are:

The Anschutz Corp.’s $5bn Chokecherry and Sierra Madre (CCSM) wind project in Wyoming and the associated $3bn TransWest Express Transmission line. Just last week the 3GW CCSM, which would be the largest onshore wind farm in the world, received several key approvals from the government for its first 1.5GW phase. 
Clean Line Energy Partners’ $2.5bn Plains and Eastern Transmission line, which would flow 4GW of wind from the Oklahoma panhandle to utilities in the mid-South region, including Tennessee and Arkansas. 
The $2.2bn Champlain Hudson Power Express transmission project, being developed by Blackstone-owned Transmission Developers Inc., which will deliver 1GW of mainly hydro power from Canada to the New York City metro region. 

In a statement sent to Recharge, Michael Skelly, president of Texas-based Clean Line Energy, said: "Clean Line is pleased to be part of the discussion around high priority infrastructure projects ... and excited that building next-generation infrastructure and a modern electric grid are a key part of the Trump Administration’s agenda to create local jobs and give Americans access to more American energy resources." 

A spokesperson for CCSM and TransWest said: "We are very confident that these projects can advance under this Administration, which recognizes the value of large infrastructure development, and we anticipate learning more about this infrastructure program as it may move forward." 

While it's not entirely clear what sort of support the government would lend the clean-energy projects, the fact that they are being carefully studied by Trump's team is a positive sign. The list notes that all of the above projects intend to use private funding, although the government could offer help in other ways. 

Many of the other projects on the list would be funded entirely or primarily by public money. All of the projects on the list are deemed “shovel ready” and critical to national security, and all are expected to contribute to US manufacturing. "

Work is already underway at factories in Arkansas and Oklahoma where the glass insulators and steel poles required for the project will be manufactured," Skelly says. 

Also included on the list is a sweeping effort to build energy storage and modern grid infrastructure in California to help bring more renewables into the system, and an initiative to modernise the huge fleet of US Army Corps-operated hydroelectric plants, with the aim of lifting their operational efficiency from 80% today to the industry average of around 99%. 

In contrast to the strong showing by renewables-related projects on the list, there are relatively few projects directly related to fossil fuels. 

Thursday, 12 January 2017

Record 126.5GW of solar and wind installed in 2016: BNEF, by Karl-Eric Stromsta, Recharge News, January 11, 2017

The world installed a record 70GW of solar and a near-record 56.5GW of wind in 2016, with acquisition activity also hitting a new high amid surging corporate M&A, says Bloomberg New Energy Finance.

Offshore wind represented “the brightest spot” for new investment, BNEF says, with capital spending commitments for offshore wind farms soaring 40% to $29.9bn thanks to a vibrant European market.

The record figure includes Dong Energy’s $5.7bn final investment decision on the 1.2GW Hornsea 1 array in UK waters, in addition to 14 other offshore projects larger than 100MW that received the go ahead last year off the coast of the UK, Germany, Belgium, Denmark and China.

 The offshore investment boom comes as developers are taking advantage of rapidly improving economics in the sector, as turbines get larger and construction operators get smarter, BNEF notes. The seven largest clean-energy financing deals globally last year all went to offshore wind projects in Europe.

“The offshore wind record last year shows that this technology has made huge strides in terms of cost-effectiveness, and in proving its reliability and performance,” says BNEF chief executive Jon Moore.

“Europe saw $25.8bn of offshore wind investment, but there was also $4.1bn in China, and new markets are set to open up in North America and Taiwan.”

Another bright spot in 2016 was acquisition activity, with BNEF clocking clean-energy deals worth $117.5bn, up from $97bn in 2015, representing the first time this has surpassed $100bn. While the majority of that is tied to project acquisitions, corporate M&A leapt to $33bn, with stand-out deals including Tesla’s purchase of SolarCity for $4.9bn and Enel’s buy-back of the minority holders in Enel Green Power.

Total new investment into clean energy fell 18% last year, to $287.5bn. BNEF says the drop reflects some gloomy factors, including a “marked cooling” in the Chinese and Japanese renewables markets, but also positive ones like “further sharp” drops in equipment prices.

Justin Wu, head of Asia for BNEF, says: “After years of record-breaking investment driven by some of the world's most generous feed-in tariffs, China and Japan are cutting back on building new large-scale projects and shifting towards digesting the capacity they have already put in place.

"China is facing slowing power demand and growing wind and solar curtailment,” Wu says. “The government is now focused on investing in grids and reforming the power market so that the renewables in place can generate to their full potential.”

Meanwhile, future growth in Japan “will come not from utility-scale projects but from rooftop solar systems installed by consumers attracted by the increasingly favorable economics of self consumption”, he says.

Solar was once again the leading sector for clean-energy investment in 2016, at $116bn, but this was down 32%, due in “large part” to lower installed costs, BNEF says. Wind investment fell 11% to $110.3bn.

Some $41.6bn was invested in smart-energy technologies, followed by biomass ($6.7bn); low-carbon services ($4.3bn); small hydro ($3.4bn); geothermal ($2.7bn); biofuels ($2.2bn); and marine energy ($194m).

While public-market investment into quoted clean-energy companies fell 21% last year, to $12.1bn, several companies raised substantial amounts of money, including Innogy, the renewables offshoot of German utility RWE, and Chinese electric-vehicle maker BYD.

Monday, 9 January 2017

Trump's pick as energy chief offers some hope for wind and solar, by Richard Kessler, Recharge News, Updated January 6, 2016

US President-elect Donald Trump has turned to former Texas governor and political rival Rick Perry to head the Department of Energy (DOE), raising cautious hopes that wind and solar energy may have a voice in his incoming administration.

During Perry's 14 years in office, Texas became a wind energy powerhouse and it now has more installed generation capacity than all but six countries. His “all-of-the-above” approach for energy technologies also encouraged development of large-scale solar there, which is now evolving into an important sector for investment and job creation.

Perry’s familiarity with solar and wind energy could prove helpful for both industries with Trump in the White House, although how much he would advocate for both remains to be seen. As governor, he was also is a firm supporter of natural gas and petroleum, not surprisingly as Texas is the leading producer of both.

Thus far, fossil fuels are emerging as big winners as Trump fills key cabinet and senior executive level positions. Trump himself has made no secret that he believes fossil fuels are the key to the US become energy independent.

Earlier today, he nominated ExxonMobil chief executive Rex Tillerson to be his secretary of state and earlier picked Oklahoma Attorney General Scott Pruitt and climate skeptic as administrator of the US Environmental Protection Agency (EPA).

He reportedly will choose US Representative Cathy McMorris Rodgers, the highest ranking Republican woman in the House of Representatives, to head the Department of the Interior. She is an advocate for increased oil and gas drilling on public lands and opposes EPA efforts to regulate carbon.

The nomination of Perry, which is also subject to confirmation by the US Senate, is ironic in that he wanted to eliminate the agency when he ran for president in 2011.

During a primary debate, he declared he would abolish three federal agencies including the commerce and education departments, but couldn’t remember DOE. “The third one, I can’t. Sorry. Oops.” The gaffe effectively ended his first presidential bid.

He tried again earlier this year but couldn’t compete for the Republican Party’s nomination with outsider Trump. Perry likened Trump to cancer, calling the real estate mogul’s campaign a “toxic mix of demagoguery, mean-spiritedness and nonsense that will lead the Republican Party to perdition if pursued.”

Trump returned the favor by deriding Perry’s campaign as a “barking carnival act.” Nonetheless, last May, Trump won Perry’s endorsement. “He wasn’t my first choice, wasn’t my second choice, but he is the people’s choice.”

DOE’s main responsibilities include the nation’s nuclear weapons program, nuclear reaction production for the US Navy and radioactive waste disposal, including clean up of multiple sites contaminated by military weapons programs in the 1940s through the 1960s. About two-thirds of its $29.6bn went for those activities.

It also sponsors more research in the physical sciences than any other federal agency, the majority of which is conducted through its network of national laboratories.

Under President Barack Obama, DOE has played a major role in his climate agenda and the controversial nuclear deal with Iran that he orchestrated. Trump opposes both. Over the last eight years, DOE issued billions of dollars in loans and loan guarantees for clean energy projects and later took credit for launch of the utility-scale solar industry in the US.

The agency also has been heavily involved in funding research and development of alternative fuels, materials and technologies, and initiatives that aim to improve energy efficiency and storage, and reduce carbon pollution.

It has gone as far as partnering with privately-owned Clean Line Energy Partners to develop a high voltage direct-current transmission line that will carry 3.5GW of wind energy from western Oklahoma to south-central and southeastern states.

Trump has not spelled out his plans for DOE, but conservatives are calling on him to end its role in “picking winners” among energy technologies and to return the agency to focusing on its core, traditional mission. Perry would bring strong executive experience to the job. Texas became the second largest economy during his tenure among the 50 states after California.

Environmentalists slammed the nomination of Perry as inappropriate given his prior low regard for the agency and cited his skepticism over climate change. They also criticized Perry’s record on environmental issues during his tenure and resistance to federal efforts to curb power plant CO2 emissions