Germany took a big step to addressing the bottleneck in its offshore wind roll-out last week, as Chancellor Angela Merkel’s cabinet backed a new liability regime for grid connection delays. Some of the costs will be passed onto consumers. “We lacked investments in wind parks and grid projects” because it was not clear who would pay for possible delays, minister of economy Philipp Roesler said in Berlin. “With this regulation, the likelihood that liability losses will arise is now minimised.” The bill is likely to be accelerated to ensure its enactment before the year’s end.
There was also good news for offshore wind in the UK, as EDP Renovaveis applied for a permit in Scotland to build a 1.5GW offshore wind farm. That would be the world’s largest. The project is the first to seek planning permission under the UK’s Round Three of offshore wind development, which amounted to 32GW of licences awarded in 2010.
The world’s largest wind turbine maker, Denmark’s Vestas Wind Systems, saw its shares surge 26 per cent last week after it said it is in talks with Mitsubishi Industries over possible “strategic cooperation”. It was the second biggest gainer last week on the WilderHill New Energy Global Innovation Index, or NEX, after Hong Kong LED manufacturer Neo-Neon Holding, which announced a new production process. The NEX ended the week 0.9% down, however, as gains for wind and energy conversion stocks were offset by declines in solar and power storage stocks. First Solar fell 19.3% as it halted deliveries to Agua Caliente, the world’s largest PV project in Arizona. Its explanation was that construction is ahead of schedule, and it needed to slow down to meet contractual milestones.
In the US, President Barack Obama finalised new fuel-efficiency standards for cars and light trucks, doubling them to 54.5 miles per gallon by 2025. The White House said the standards would add around $US1,800 to the average cost of a vehicle by 2025 but lead to fuel savings of more than $US8,000 over its lifetime.
The development became the latest joust in clean energy rhetoric in the US presidential race. A spokesperson for Republican challenger Mitt Romney said, “Governor Romney opposes the extreme standards that President Obama has imposed.” Obama first announced the new standards in July 2011, flanked by representatives of the auto industry. “These fuel standards represent the single most important step we’ve ever taken to reduce our dependence on foreign oil,” he said.
There were a couple of developments last week in the trade tensions involving clean energy. EU customs officials will start registering imports of US bioethanol. This would allow them to impose duties retroactively if the US reinstates a subsidy that has been the subject of an investigation by the European Commission. The EU already has duties in place on US biodiesel, and launched a new investigation on biodiesel from Argentina and Indonesia last week.
German Chancellor Merkel proposed solving the anti-dumping complaint brought by European solar manufacturers against Chinese rivals through talks, so the European Commission would not need to open a case. Meanwhile, Germany’s Q-Cells, once the world’s biggest solar manufacturer but now insolvent, was bought by South Korea’s Hanwha Group. Hanwha fought off a challenge from Spain’s Isofoton to win backing from Q-Cells’ creditors, with a bid made up of as much as USD 50m in cash and taking on debt of around $US272 million.
In Asia, Indonesia raised its feed-in tariff for geothermal power – almost doubling it in some regions – as it seeks to develop around 9.5GW of capacity by 2025, from 1.2GW today. Indonesia has 40 per cent of the world’s geothermal resources but development has been hampered by low returns, regulatory uncertainty and complicated permitting procedures.
EU carbon down on German Power, UN credits sink to record low
European carbon allowances, or EUAs, for December 2012 delivery lost 1.1 per cent last week, under pressure from weaker German power prices. EUAs closed at €8.08/t, compared with €8.17/t at the end of the previous week. EUAs were boosted to a weekly intraday high of €8.46/t on Tuesday by news that Australia and the EU plan to start linking their emissions trading systems from 1 July 2015. But prices fell back after traders and analysts digested the news, concluding that Australian demand for EUAs between 2015 and 2020 will be insignificant compared to the oversupply in the European market. EUAs tracked German power’s losses over the next couple of days, dropping to a weekly intraday nadir of €7.53/t on Thursday. United Nations Certified Emission Reductions, or CERs, for December 2012 tumbled to a record low of €2.50/t on Thursday after the UN issued 3.9m tonnes of credits to HFC-23 projects. CERs closed at €2.80/t on Friday to finish the week 7 per cent down.
World water week in Stockholm lauds Pepsi for water savings
PepsiCo won an honorary industry award at the World Water Week in Stockholm in recognition of its water conservation efforts. The company has improved water efficiency by at least 20 per cent since 2006, saving almost 16 billion litres of water last year compared with its then usage. Meanwhile, the chief executive officer of Nestle, Paul Bulcke, told a seminar at the conference that water should be more highly valued to reflect its worth and to reduce waste. California-based ECC won a USD 400m contract to revamp Ghana’s national water system, a project that is being financed by a US Export-Import Bank loan to the country and will include General Electric technology. In Germany, Veolia Environnement, the world’s largest water company, lost an appeal aimed at blocking RWE from selling its share of their joint stake in Berlin’s water utility to the city government. The Berlin appeals court backed a 30 May ruling by a lower tribunal that had rejected Veolia’s suit.