Wind Power Shines as Solar has a Spell in the Shade
The newsmaker last week was the wind energy sector in Brazil, where developers quoted sell-prices that were lower than power from conventional energy sources. This provided confirmation of the estimates that were already coming from Bloomberg New Energy Finance’s models - that new-build wind is cost competitive with conventional energy in some markets.
In a government-organised auction, developers of 44 wind farms in Brazil bid to deliver power to utilities at an average of BRL 99.58 (USD 61.93) per MWh. This was lower than the average price of BRL 103.26 for contracts signed for power from two natural gas plants and BRL 102 for power from a hydroelectric plant.
Brazilian construction and chemical conglomerate Odebrecht was awarded contracts for selling power from wind farms with a total capacity of 116MW at BRL 99.50 (USD 62.21) per MWh while Bioenergy signed the contract at BRL 100.07 (USD 62.55) per MWh.
These low bids were made possible by the sliding prices of wind turbines - accentuated by a stronger Brazilian currency - as well as their increased efficiencies. However there do remain some concerns about the ultimate viability of these projects. The details of Brazilian renewable energy policy - like those for many other leading countries - are tracked closely in Bloomberg New Energy Finance’s Low-Carbon Policies database, available to clients on this link.
The offshore wind sector was also in the news as three companies - Centrica, Siemens and Dong - began work to sign up commercial banks for a GBP 1bn (USD 1.7bn) financing of their 270MW Lincs wind project off the shores of England. The companies’ decision to use a combination of their own loans and ones from commercial banks, instead of relying heavily on development bank finance, marks a first in the sector.
Renewable energy also got a leg-up in Japan. Tokyo is set to approve legislation to adopt a system of feed-in-tariffs, as the country moves away from nuclear power, which contributed about a third of the power supply before the March earthquake and tsunami. The new law would make it mandatory for utilities to buy power generated from geothermal, solar and wind at the tariff rates announced.
The solar power sector, which is still digesting the news of the bankruptcy of the US module maker Evergreen Solar, suffered another setback last week when the promoters of the 1GW Blythe solar thermal plant in California - the world’s largest - decided to switch technologies and forgo the US government’s USD 2.1bn loan guarantee. Shares in Germany’s Solar Millennium - the lead promoter - slid sharply as it announced its intention to build the first 500MW of its plant using photovoltaic panels. “At the moment the California market favours PV technology,” Christoph Wolff, chief executive officer, said in a statement, raising concerns about other solar thermal projects in the pipeline.
The WilderHill New Energy Global Innovation Index or NEX - which tracks the shares of 99 companies active in the clean energy sector - tumbled 6.6% in the trading week ended 19 August, taking its decline to more than 26% in the year to date. Solar companies were the index’s worst performers in the week and Solar Millennium was the biggest loser. From the start of 2011 to the end of last week, the Nasdaq was down 11.7% while the S&P 500 was down 10.7%.
Bloomberg New Energy Finance’s Solar Spot Price Index for August shows some signs of stabilisation in the price of monocrystalline and multicrystalline solar PV cells, though the price of modules continues to decline and producers remain under pressure. China’s LDK Solar fell 30% to USD 5.06 per share in Friday trading after it announced a cut in its forecast revenue and volume shipped for the quarter and the year, as well as a USD 55m-60m write down in inventory. JA Solar also reported a wider-than-expected loss during the quarter due to inventory provisions and subdued demand.
There were two large buy-outs in the clean energy sector last week. In a USD 440m deal, Norway’s SN Power bought 41% of Brazil’s Desenvix to expand its operations in the South American country; and Cree, a maker of energy-efficient lighting products, purchased Ruud Lighting for USD 525m.
In a government-organised auction, developers of 44 wind farms in Brazil bid to deliver power to utilities at an average of BRL 99.58 (USD 61.93) per MWh. This was lower than the average price of BRL 103.26 for contracts signed for power from two natural gas plants and BRL 102 for power from a hydroelectric plant.
Brazilian construction and chemical conglomerate Odebrecht was awarded contracts for selling power from wind farms with a total capacity of 116MW at BRL 99.50 (USD 62.21) per MWh while Bioenergy signed the contract at BRL 100.07 (USD 62.55) per MWh.
These low bids were made possible by the sliding prices of wind turbines - accentuated by a stronger Brazilian currency - as well as their increased efficiencies. However there do remain some concerns about the ultimate viability of these projects. The details of Brazilian renewable energy policy - like those for many other leading countries - are tracked closely in Bloomberg New Energy Finance’s Low-Carbon Policies database, available to clients on this link.
The offshore wind sector was also in the news as three companies - Centrica, Siemens and Dong - began work to sign up commercial banks for a GBP 1bn (USD 1.7bn) financing of their 270MW Lincs wind project off the shores of England. The companies’ decision to use a combination of their own loans and ones from commercial banks, instead of relying heavily on development bank finance, marks a first in the sector.
Renewable energy also got a leg-up in Japan. Tokyo is set to approve legislation to adopt a system of feed-in-tariffs, as the country moves away from nuclear power, which contributed about a third of the power supply before the March earthquake and tsunami. The new law would make it mandatory for utilities to buy power generated from geothermal, solar and wind at the tariff rates announced.
The solar power sector, which is still digesting the news of the bankruptcy of the US module maker Evergreen Solar, suffered another setback last week when the promoters of the 1GW Blythe solar thermal plant in California - the world’s largest - decided to switch technologies and forgo the US government’s USD 2.1bn loan guarantee. Shares in Germany’s Solar Millennium - the lead promoter - slid sharply as it announced its intention to build the first 500MW of its plant using photovoltaic panels. “At the moment the California market favours PV technology,” Christoph Wolff, chief executive officer, said in a statement, raising concerns about other solar thermal projects in the pipeline.
The WilderHill New Energy Global Innovation Index or NEX - which tracks the shares of 99 companies active in the clean energy sector - tumbled 6.6% in the trading week ended 19 August, taking its decline to more than 26% in the year to date. Solar companies were the index’s worst performers in the week and Solar Millennium was the biggest loser. From the start of 2011 to the end of last week, the Nasdaq was down 11.7% while the S&P 500 was down 10.7%.
Bloomberg New Energy Finance’s Solar Spot Price Index for August shows some signs of stabilisation in the price of monocrystalline and multicrystalline solar PV cells, though the price of modules continues to decline and producers remain under pressure. China’s LDK Solar fell 30% to USD 5.06 per share in Friday trading after it announced a cut in its forecast revenue and volume shipped for the quarter and the year, as well as a USD 55m-60m write down in inventory. JA Solar also reported a wider-than-expected loss during the quarter due to inventory provisions and subdued demand.
There were two large buy-outs in the clean energy sector last week. In a USD 440m deal, Norway’s SN Power bought 41% of Brazil’s Desenvix to expand its operations in the South American country; and Cree, a maker of energy-efficient lighting products, purchased Ruud Lighting for USD 525m.
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