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A wind power lull in Germany, a battery storage power-up in Australia

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German wind turbines; renewables may be on track to achieve its renewable energy targets

Germany’s slowing market for onshore wind energy and its transition to competitively-priced auctions is the backdrop to Senvion’s decision to reduce its workforce by almost a fifth – or some 780 jobs — which was announced in a statement yesterday. The reduction will allow the German wind turbine maker to save about 40 million euros ($43 million) annually, and to potentially relocate production abroad where costs are lower and growth more promising.

Installations of onshore wind capacity in Germany are set to fall in the next few years, from 4.3 gigawatts this year, to 3.2GW, 2.7GW and 2.8GW in 2018, 2019 and 2020, respectively, according to Bloomberg New Energy Finance estimates.

Wind turbine makers must supply equipment at increasingly low costs in Germany due to auctions that are squeezing prices for developers, and the presence of large competitors like Siemens Wind Power and Vestas Wind Systems that are able to leverage economies of scale.

Argentina is one country with a fast-growing potential in renewable energy, although limited capacity in transmission infrastructure could hamper the outcome of its next clean energy auction. The government of President Mauricio Macri has lined up four energy auctions this year, which are expected to attract some $7 billion in investment. The renewable energy auctions will be held in July or August, and there will also be an auction for transmission capacity to help accommodate the increasing amounts of wind and solar power set to come online over the next few years, according to Energy Minister Juan Jose Aranguren.

Back in Europe, a Scandinavian company founded by a former Tesla executive wants to answer to the growing need for back-up power on grid networks by building a 4 billion-euro lithium-ion battery factory in Sweden. NorthVolt aims to raise 1 billion euros by 2018 and start construction during the second half of that year, said founder Peter Carlsson — Tesla’s former head of sourcing and supply chains. The Stockholm-based firm has raised $14 million to date, including an investment from Vattenfall, and ultimately expects to produce 32 gigawatt-hours of battery capacity per year from its proposed factory.

Energy storage was also the topic of discussion during an hour-long phone call between Australia’s Prime Minister Malcolm Turnbull and Elon Musk last Sunday. The Tesla chief executive had the week before proposed a remedy to South Australia’s frequent power outages in the form of a Tesla battery storage system. He said he could install it in just 100 days during a Twitter conversation with tech billionaire Mike Cannon-Brookes.

Renewables are a contentious topic in Australia, known for its rich resources of coal and gas. However, Turnbull is an advocate of innovation and tweeted after the call that energy storage will “be a priority this year.”

In other news, there were a couple of record-breaking announcements last week. Vietnam approved plans to invest $2.2 billion in what would be the world’s largest solar power plant yet. The 2,000MW project would be located in the Central Highlands province of Dak Lak and would be a big improvement on the country’s current level of solar capacity, which is less than 10MW.

Meanwhile, Brookfield Asset Management agreed to acquire SunEdison yieldcos, TerraForm Power and TerraForm Global in a deal valued at a combined $2.94 billion. The transactions represent “the single biggest transfer of operating wind and solar assets, period,” Nathan Serota, an analyst at Bloomberg New Energy Finance, said after the news was announced last Tuesday. Brookfield currently manages around $30 billion in power assets, but the acquisition would boost its holdings in clean energy by more than a third.

TerraForm Power owns almost 3,000MW of wind and solar power in OECD countries, while TerraForm Global owns 952MW of similar assets in emerging markets. If the deals are approved by the U.S. bankruptcy court, which is managing the aftermath of the SunEdison insolvency, then Brookfield’s renewables portfolio would increase by around 3GW of capacity.

Source: BNEF. Reproduced with permission.  

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  • trackdaze

    Value in the yield cos can be unlocked with the addition of storage.

  • Greg Hudson

    ”Renewables are a contentious topic in Australia”
    This is complete rubbish. There’s nothing contentious about them at all. We may not have too many large scale PV arrays or wind farms, but we have a HUGE amount of residential, and an ever growing amount of business based PV arrays sitting on rooftops. The politicians might be fooled (or bought) by the FF lobbyists, but the ‘people’ have already voted with their own money and installed many hundreds of MW of panels, and now an increasing amount of batteries. Actions speak louder than words.