Saudi Arabia makes first steps in 10GW renewable energy rollout

Saudi Arabia is inviting bidders to qualify for its first renewable energy tender by 20 March. The world’s top crude exporter is laying the groundwork for a rollout of wind and solar power, which will allow it to reduce the amount of oil used domestically and, it hopes, will stimulate economic development in clean energy. The selected parties will be announced by 10 April and will be able to present their offers for the projects from 17 April to the end of July, according to a statement by the energy ministry. As much as 700MW of wind and solar power will be available in this tender – the first stage of Saudi Arabia’s plan to develop almost 10GW of renewable energy by 2023.

Auctions were also trending in the news in India, after a World Bank-backed auction on 10 February produced a record low bid of 3.30 rupees (5 US cents) a kilowatt-hour for solar PV. The auction for 750MW of power in Madhya Pradesh state included payment guarantees, annual tariff increases and power purchase agreements designed by the International Finance Corporation. All of which helped boost confidence in the projects for developers. The lower electricity tariffs produced by India’s auction will be attractive to the country’s indebted state-run power retailers, and could help them improve their finances, according to BNEF.

The trend for allocating renewable energy capacity through competitive auctions may spur developers to scale up the size of projects in key European markets, according to state lender Norddeutsche Landesbank Girozentrale. In an effort to meet the low tariffs demanded of auction winners, developers and financiers may seek to save on maintenance and grid-connection costs by building bigger wind parks, according to a NordLB spokesman. These tactics may be in evidence in Germany’s auctions for 2.8GW of onshore wind capacity this year, and France’s plans to put 3GW of capacity under the hammer by 2019.

In other wind industry news, Siemens announced that it would close a wind turbine factory in Denmark last week, eliminating 430 jobs in the process. The factory in Engesvang produces smaller turbine blades and hasn’t been able to meet the growing demand for larger blades, including those needed for offshore wind farms. Canadian utility Enbridge is joining up with Germany’s Energie Baden-Wuerttemberg on a EUR 1.8bn ($1.9bn) wind farm under construction in the German North Sea, according to a statement last Friday. EnBW is selling a 49.9% stake in the 497MW Hohe See wind farm to the Calgary-based firm, and the two companies will work on the project together. It is expected to start operations in August 2019.

In other news, climate change could trigger resource and border conflicts and in the worst cases precipitate war, according to top European and United Nations officials who spoke about the military threat of global warming at a world security conference in Munich last weekend. “Climate change is a threat multiplier that leads to social upheaval and possibly even armed conflict,” the UN’s top climate official, Patricia Espinosa Cantellano, said at the conference. Climate change and population growth were named as the two most serious “megatrends” threatening international peace and stability by Secretary General Antonio Guterres. The delicate balance between protecting the Arctic and extracting fossil fuels was discussed at the event, as was the economic threat posed by European renewable energy to Russia’s oil and gas supply.

The question of whether President Donald Trump pulls the US out of the Paris climate accord was also discussed. “The response of the international community will be significant,” in the ultimate decision of whether or not the agreement is abandoned by the US, said US Democratic Senator Sheldon Whitehouse. If no action is taken to tackle global warming, as much as 70% of Alpine snow could disappear by the end of the century, according to new research by the European Geosciences Union. The paper, which used three-dimensional modelling to understand the effects of global warming on mountain snow coverage, said that the Alps would lose about 30% of snow cover by 2100 even if countries limit temperature increases to below 2 degrees Celsius. So it might be time to grab your skis and hit the slopes while you still can.

Q&A of the week

Taiwan sees solar, wind as ‘flagship’ for its new energy mix
Taiwan’s new government led by President Tsai Ing-wen pushed through legislation, in January 2017, to make the island state free of nuclear power. All nuclear generation is to stop by 2025, and will be replaced partly by renewable energy and partly by gas-fired plants. “We would like to move away from fossil fuels, which accounted for 81% of power generation last year: 45% coal, 32% gas and 4% oils. The plan is to reduce coal’s contribution to 30%, increase power from gas to 50% and get the balance 20% from renewables by 2025,” Chung-Hsien Chen, senior specialist at the Bureau of Energy in Taiwan’s Ministry of Economic Affairs, said in an interview.

That would require a four-fold jump in generation from renewables, mainly from solar and wind. The target is to install 20GW of solar power, 3GW of offshore wind plants and more than 1GW of wind onshore by 2025. And there are some near-term goals too. By June 2018, the island nation plans to have about 2.5GW of solar installed, including a large chunk on rooftops. Renewable energy developers are offered 20-year feed-in tariffs. The highest tariff offered in 2017 is for small onshore wind turbines (28 US cents), followed by small-scale solar systems (19.1 US cents) and offshore wind (18.9 US cents).

In January 2017, Dong Energy and Macquarie Capital bought stakes in the 128MW Formosa I offshore wind project in Taiwan from Swancor Renewable. It is expected to be the island’s first commercial-scale offshore wind project. Dong Energy is also developing four offshore wind sites in the Changhua area, totaling 2GW of planned capacity, a statement from the company said. Construction is proposed to be started in 2021-2024. The following is an extract from the Bloomberg Clean Energy and Carbon Brief. Sign up here.

Q: Taiwan targets over 27GW of renewable energy by 2025, which includes solar installations of 20 GW, and 3GW of offshore wind. Are there any near-term goals?

A: We plan to install 1.5GW of solar by June 2018 [starting from July 2016], of which 910MW will be on rooftops. The government intends to promote solar installations on government buildings, schools, state-owned enterprises and public construction. We are planning amendments to central government laws and local government regulations, to boost such installations.

The government will also conduct a ground-mounted PV program by releasing idle lands from the salt industry, severe subsidence areas, contaminated lands and no longer arable lands. The target is to install 610MW. An interim target for wind will soon be finalised.

Q: Could moving away from nuclear power mean more coal plants?

A: The Taiwanese people had concerns about nuclear safety after the Fukushima nuclear disaster. The people are not in favour of new coal plants either…