ENERGY, PROCESS & UTILITIES CAPTURING THE POWER
Media reports have called into question the future of the wind energy industry. Alina Bakhareva, program manager for Renewable Energy, Europe, in the Energy and Environment Business Practice at Frost & Sullivan, sees past the naysayers and focuses on the wind energy industry’s successes.
COMPASS: Is the wind energy market growing?
ALINA BAKHAREVA: When you compare 38 gigawatts (GW) produced globally in new installations in 2009 to 45 GW in 2012, you can see the growth. Europe, specifically Germany and Spain, saw tremendous growth in 2005-2009. In developing countries, like China and India, there is an upsurge in installed capacity. With a clear goal for clean-tech development in its Five-Year Plan, China has boosted the global market and become Number One in new green installations in 2011 and 2012. The US has vast potential due to its physical size, but it’s a stop-and-go market. When there is a federal credit in place, the market is booming. But when Congress signs an extension at the last moment, it creates a lag.
Does the market still need government support?
AB: Government policy is the key to any new market uptake. In Germany, the breakthrough development was their renewable energy act, Erneuerbare-Energien-Gesetz (EEG). Since they established feed-in tariffs, introduced by the EEG, they have proven to be the best model to support the industry, entice the investors, and ensure confidence. In every country, there is a critical review of their chosen support mechanism. In the case of Germany and the UK, the government reviews how much support they have given to each type of renewable energy every 1-2 years. They compare the capital cost and operation cost to see how much money they need to budget to make wind energy competitive and attractive to the investors. I believe the balance is right by the mere fact that wind- energy capacity is still growing.
Since wind is intermittent, can it be stored?
AB: Energy storage is the hottest topic at the moment. China, which has by far the most advanced market in grid-code development, is piloting grid-scale energy storage based on lithium-ion (Li-ion) batteries (LiBs). The continual solution is a container filled with LiBs (up to 32 megawatts) in a single unit. Whenever you have really high winds you can store that energy and then release it into the grid later, when the demand is big or when not enough energy is being produced by the power-generation companies.
Tell us about the offshore wind market?
AB: Offshore wind is still at a nascent stage where the costs are still high. But as more wind parks are deployed and the experiences are accumulated within the industry, then installation costs will come down. The offshore wind market has a lot to learn from the offshore oil and gas market. It’s a very established industry with good practices in terms of maintenance and operating safely. What needs to be established is how to transfer that knowledge to other marine industries in a more efficient way.
What are the challenges for manufacturers?
AB: At the moment, the competitive pressure is very high. Most of the big project developers won’t consider buying wind turbines from a manufacturer unless they have X amount of megawatts installed in a specific geography. They want to see it operate and deliver in different wind conditions, according to the technical specification sheet. Otherwise, there is little trust in the equipment. The second challenge is the current economic condition. In order to be cost-competitive with conventional power generation, the manufacturers need to make the equipmentlighter and more efficient so that a wind farm as a unit will be more effective in generating electricity.
What is in the future for wind energy?
AB: Many countries are working on how to make the national grid flexible enough to take on the varying amount of energy from a wind power plant and still deliver the same amountof flexibility, safety, and reliability for every user. In Denmark, it is a very easy situation; all they need to do is ask the Norwegians to alter their hydro-power plants, which can start up at any time. Hydro-pump storage is still the most economical solution at the moment because it’s proven and low maintenance.
However, in Turkey, the government has asked that every wind operator forecast its wind energy output 13 hours in advance so they know how much energy can be put on the grid. They are fined if it’s more or less than the forecasted amount. If they attach a storage solution to their wind farm, then they could control their output and match their prediction, but an energy storage solution adds cost. In China, the conditions and very high wind speeds in the North are conducive to wind power development, but the majority of the energy demand is in the South. The solution: China is building a high-voltage-current network grid linking the North to South.
Frost & Sullivan renewable energy expert Alina Bakhareva has research, consulting, and project management experience across a broad range of energy and power markets. Focusing on energy and environmental business,she has performed market assessments for new products and equipment, researched procurement strategies and best practices, and assessed opportunities along the value chain.