James Montgomery, Associate Editor, RenewableEnergyWorld.com
February 13, 2014 | 9 Comments
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Iberdrola Renewables claims to have more than 500 MW in late-stage development beginning construction, and its 202-MW Baffin Wind Farm in Kenedy County, Texas will be online by year's end, making the complex's combined 606 MW wind power the company's largest renewable energy facility worldwide. Acciona Energy North America, meanwhile, is starting to expand into third-party EPC services and long-term O&M for both wind and solar PV, said Chip Readling, VP of business development and EPC.
MidAmerican’s Highland wind project in O’Brien County, Iowa. Credit: MidAmerican
Concerns over the short-term outlook have morphed into calls to stabilize the longer-term future of U.S. wind energy, minus the boom-bust cycles fed by tax credit expirations and late extensions, so the industry can be confident in committing to invest in the domestic market. When investing hundreds of millions or billions of dollars in the domestic industry, "to continue to invest in the long-term we need some type of certainty," Albenze said. Proposed energy tax reforms laid out by the Senate Finance Committee would streamline the "existing patchwork" of energy tax incentives, but given broader tax reform discussions and the upcoming Congressional elections don't expect much traction maybe until 2015. (One potential side-effect of the PTC's softened language: developers might push off some activity into 2015 to buy time for more funding, suggested Bruce Hamilton, director of Navigant Consulting's energy practice.)
Workers at Iberdrola Renewables’ 202-MW Baffin Wind Farm in Kenedy County, Texas. Credit: Iberdrola Renewables
While acknowledging the PTC as a capital driver, Readling thinks what will truly continue to drive renewables in the U.S. are state renewable portfolio standards (RPS), from states with already strong policies (like California) to others that are up and coming like Michigan, Minnesota, and New York. The proposed tax extender package is "good to see," he said, "we can't lose focus on the long-term benefits of a strong RPS."
Canada: The Future Begins Now
Wind energy in Canada continues to chug along, adding a record 1.6 GW of new capacity in 2013 and bringing total installed capacity to 7.8 GW on a path to 12 GW total installed capacity by 2016, according to the Canadian Wind Energy Association (CanWEA). Ontario and Quebec are by far the two biggest markets, each making up about 2.5 GW of that installed capacity. Ontario could add another 1.5 GW of new wind capacity in 2014, with Quebec on track for nearly 1 GW in 2014 and 2015. Alberta potentially could add ~400 MW this year to its 1.1 GW installed capacity and has a pipeline of over 4 GW, though grid-integration remains a challenge. British Columbia could rise from currently 488 MW of installed capacity to nearly 700 MW by 2016.
Canada’s current installed wind energy capacity. Credit: Canadian Wind Energy Association
Albenze from Siemens sees a "pretty strong pipeline" for Canadian wind projects in 2014-2015, with expectations of new business in Ontario and a recent order in Alberta. Canada's new installations "will remain strong until the project pipeline dries up," said Navigant's Zhao. And that’s the concern: less than 400 MW of contracts were signed in 2012 and likely zero in 2013, according to CanWEA. Long-term energy plans are being drawn up in all four of those major provinces to meet demand in the next decade after 2015, but meeting existing wind energy targets would result in an average of 400-600 MW annually from 2012-2016, barely a third of the pace from the previous five years. Thus, Canada's future in wind energy, the group proclaims, "will be determined in the next 18 months.
Latin America: Brazil, Mexico, and Everyone Else
In five years Brazil has gone from a fledgling wind market to one of the biggest opportunities for growth, with more than twice the amount of grid-connected wind energy capacity than all the other Latin American countries combined. Navigant's Zhao foresees Brazil to stay at 1 GW of new installations in 2014. "We see huge potential in the Brazil market," confirmed Thibault Desclée de Maredsous, product management director for Alstom Wind Business.
Here, too, the rapid pace of development is a challenge to the grid, but likely more of a temporary issue than in other countries (see China below). Siemens is implementing six projects over the next six months, having established facilities there to qualify for strong domestic content requirements -- yet "we're evaluating our position in Brazil after we do these six" to revisit project economics, Albenze said, as they and others did with similar content requirements in Ontario.
The rest of the Latin America wind story is in Mexico, and then a basket of smaller emerging markets: Chile, Uruguay, Venezuela, Puerto Rico, Argentina, through the rest of the decade. Mexico should surpass 500 MW this year, Zhao predicts. Siemens recently received a follow-on order in Peru, and is implementing a project in Chile. Maredsous likewise is bullish on growth opportunities in Uruguay, Peru, and Chile. Such markets often take more time to develop and come to fruition, Albenze said, "but we're investing time and resources down there."
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