What is the Investment case for floating of offshore wind turbines - Essay Example

Unit Lecturer Thesis Wind energy goes on to develop swiftly in markets where supportive s and administration policies offer incentives for venture. "Worldwide wind power production is rising considerably, from 342 TWh (terawatt hours) in 2010 to approximately 2,680 TWh in 2035, pushing up its contribution of total electricity production from 1.6% to 7.3%. Offshore wind ability is growing fast, from 4 GW (gigawatts) in 2011 to 175 GW by 2035, its development being underpinned by administration support," according to the International Energy Agency's 2012 World Energy Outlook report (pages 226-227). This leads us to the question; what is the Investment case for floating of offshore wind turbines and for onshore wind turbines? Introduction This paper is meant to investigate the investment case for floating offshore wind turbines and for onshore wind turbines. Throughout the paper I will discuss various modes of offshore and onshore wind technology and how various nations across the globe have adapted that source of energy .Also throughout the paper I will discuss the various companies in the business of production of wind turbines and their rate of investment in the technology. What is driving the development and deployment of the technology? Global warming is the increase rise in the regular temperature of Earth's ambiance and oceans ever since the late 19th century and its predictable continuance. near the beginning 20th century, Earth's mean surface hotness has rose by about 0.8 °C (1.4 °F), with almost two-thirds of the rise happening from 1980. Warming of the systems climate is unambiguous, and scientists are 95-100% sure that it is mainly resulting from growing concentrations of greenhouses gases emitted by human actions like the smoldering of fossil fuels and deforestation. Climate model projections summarized in the 2007) by the Intergovernmental Panel on Climate Change (IPCC) showed that throughout the 21st century the worldwide surface temperature is likely to go up a more from 1.1 to 2.9 °C (2.0 to 5.2 °F) for their least emissions scenario, in addition, 2.4 to 6.4 °C (4.3 to 11.5 °F) for their optimal. According to the IPCC report, these ranges arise from the use of models with varying sensitivity of conservatory gas concentration. Future climate alteration and connected effects will change from place to place all over the world, according to the IPCC report. The impacts of a growth in worldwide temperature comprise of an increase in the levels of sea and a variation in the quantity and pattern of precipitation, as well as a possible growth of subtropical deserts..One among the many proposed policy responses to global warming is the investment of offshore wind power, according to the 2013 Report of the European Wind Energy Association. Compared to the environmental effects of conventional energy sources, the environmental wind power effect is minor, a bit high than the environmental effect of hydro-water on a life-cycle basis. Different from electricity resulting from fossil fuels and nuclear power firms, wind power consumes no fuel and, emits no air pollution in operation. What is the Role of Fukushima Floating Offshore Wind Turbine Generating power? The Fukushima event played a significant role in this technology of floating offshore by setting up a sub-station, which was the only one of that type in operation. A development to tap the wind power about 20 kilometer off the coast of Fukushima, the region where the March 2011 nuclear disaster took place, started producing power based on operation, according to the report published on Bloomberg.com(http://www.bloomberg.com/news/print/2013-11-11/fukushima-floating-offshore-wind-turbine-starts-generating-power.html) The project that was funded by the government is a sign of Japans interest to develop the technology which has not yet been proved for floating the wind powers off the coast and its aim to change quake-ravaged Fukushima into an outstanding centre for energy production.”Fukushima is gaining ground in wind energy” governor of Fukushima, Yuhei Sato declared during the event.”The offshore floating wind turbine is a symbol of the future” The group’s project which includes 11 members this far has a turbine of 2-megawatts famously known as Mirai Fukushima” A substation which is floating has been set up which was the first of its kind. According to the report published on Bloomberg.com, the group purpose to increase the number of turbines by two, from the Heavy Mitsubishi Industries Ltd each having a capacity of 7 megawatts. “The floating offshore capacity could be expanded to 1000 megawatts,” the Ministry of Economy, Trade and Industry said. “The trade ministry has so far come up with a budget for22 billion yen ($222 million) for the five-year undertakings”, was according to ministry officials. The trade ministry is requesting an extra 31 billion yen for the fiscal year starting April 1. Volcanoes, water, sun, wind are the alternative energy sources at the top of the agenda in Japan as the popularity of nuclear power dwindles. Since 11th march earthquake, tsunami and nuclear disaster, an increased number of projects have been aiming at generating power from alternative, reliable and environmentally friendly resources. The Bloomberg report went on too explain that the last act of the former prime minister Naoto Kan prior to his departure at the end of last month was the passing of a bill to promote renewable energy such as wind, geothermal and solar. The new law will make power utilities to purchase power generated by renewable sources at fixed prices, while allowing them to pass on excess costs to consumers. Solar power tops the list, with a string of newly opened and developing projects, such as Kansai Electric Power Co's new 10 megawatt solar power plant which has just began commercial operations in Sakai City, Osaka, . Does the Volt Gas Volt storage concept have a future? I believe that the Volt Gas Volt does have a future because it offers an absolutely reliable and safe phase-out of fossil fuels and nuclear power, with the possibility of expansion rather than deterioration in life style. Lepage and Bell, in the project VGV, proposed it as the technological conduit for employing renewable energy to “keep the lights on”. According to Lepage and Bell, breakthrough in energy storage allows a continuous flow of electricity, permitting a swift 100% renewable energy sources, solving the main obstacle of intermittent flow of energy. For the first time, excess electricity produced by offshore wind farms then converted into methane can be stored for months in the already existing natural gas grid Lepage goes on to explain that the methane generated through offshore wind energy would then be used to make electricity and district heating, or as a fuel motor. In the discussions associated with biofuels, which took place in the European Parliament, Project VGV indicates that an alternative to first time biofuels for the target of 10% renewable energy in transport exists easily. “We will employ the excess energy from nuclear power which is mostly wasted at night to help substantiate for the exit from nuclear. Then we will use the CO2 produced from waste burning, biomass, from steel mills and cement plants to produce the methane,” explained Professor Bell. "From now on the question of exiting from nuclear while maintaining a continuous and sufficient production of electricity should not be a taboo, but a realistic political choice, one which will determine the employment of tomorrow,” says Corinne Lepage. This clearly indicates that VGV has a future. Does this story require a long-term investment horizon or can it be financed by a short-term market decision? This story requires a long-term investment horizon, according to Robert Bell. Corinne Lepage, Member of the European Parliament, (and former French Minister of the Environment), and Professor Robert Bell of Brooklyn College, are proposing Project Volt Gas Volt (VGV) as a technology means for employing renewable energy to “keep the lights on” on the widest scale. Bell and Cornie goes on to argue that VGV has no disruption proposing a long period of footing the expenses for the developments of the projects. Though they are aiming for a first introduction, France views it as widely applicable. Bell and Lepage goes on to explain that VGV project uses excess electricity produced by offshore wind turbines and nuclear sources to generate hydrogen through electrolysis. The hydrogen is mixed up with CO2 to generate methane, which is pumped and stored in an already existing natural gas grid. It is then used like natural gas in power generation, transportation, other thermal and industrial consumption. The concept is similar to that employed in the Audis e-gas development, which has always been made reference to the VGV proposal. Does this story require a long-term investment or not? Yes there is evidence since Lepage and Bell aims at coming up with a 30-year financing project known as the Green redemption fund to help Frances VGV. The money will also be an aid the industrial development plan. Developing of the money should be a way means for confirming that the project is there to last. Lepage explains further that a sacrifice will be made to develop the investments for some time of like 30 year. Such a sacrifice would be an assurance that the required figures will be met over long-term for the sole aim of ensuring the energy transition through a cross-generational initiative. Some of the different types of financing which are evident that a material number of major funds are taking a long term view based on the IPCC report, which could co-exist as proposed according to Lepage and Bell, for example is a yearly contribution of at least €1 billion from the gas and oil industries in the mode of a reallocation of public subsidies paid until now to the oil sector. This would total to €19 billion as per the Court of Auditors—with the rest assigned to debt reduction. Gas produced by the VGV system would be purchased on this basis. Initially, synthetic methane generated by the VGV project systems will be more expensive than fossil gas, but afterwards it will be less costly. There is evidence of availability of green energy technologies that operate presently since most of the Green Funds contributions/collections have been invested in green energy technologies. “Private Green funds could aid sponsor a global fund. All money will have to be put in development of green energy and that all proceeds will be re-invested in green energy. This could generate a great effect and attract capital into France,” Lepage and bell suggest in their article, “Project Volt Gas Volt”, thus is clear evidence that green energy technologies exists. (http://www.greencarcongress.com/2013/06/vgv-20130602.html) What is the current state of investment in wind energy? Across the world, wind power added major new capacities among renewable energy in the previous year because of China leading the world in the installations of offshore turbines. Recently the US has covered the growth of offshore wind facilities in the EU. However, recently BP stated that while renewable energy generally will grow worldly over the next few decades. It’s absolute contribution will result only to be around 5% to total energy output, with China and the US being the largest producers for expansion, according to the IEA's World Energy Outlook 2013 Executive Summary and the 2013 Report of the European Wind Energy Association. The reports goes on to explain that during 2012, around 45 GW of offshore wind power capacity started operation, rising global wind capacity by 19% to roughly 283 GW. It was yet another successful year in the development of wind power that added much capacity compared to all other technologies that are renewed, despite the uncertainty of policies in major markets. The topmost 10 countries accounted for above 85% of the world capacity as the year ended, though the market went on to widen. Around 44 countries increased capacity during 2012 with at least 64 having higher capacity of like 10MW being reported as the year came to an end with 24 having more than 1GW functioning, the reports explains further. Since the end of 2007 until the year 2012, rates of yearly increase of the wind capacity cumulative reached 25%.Most of the incoming capacity were developed in the OECD Since 2009 for the first time. However, emerging and developing economies are becoming stable in the development of the technology. The United States together with China accounted for 60% of the global market in 2012, distantly followed by Germany, India, and the United Kingdom in that order. Others added in the capacity in the top 10 were Italy, Brazil, Spain, Canada and Romania, as per IEA's World Energy Outlook 2013 Executive Summary. Come the year 2012, above 550 firms for manufacturing offshore wind turbines components were in operation all over the area of the United States; irrespective of uncertainty in the ongoing policy generated domestically had raised considerably over the past 10 years, lowering costs related to transport and making jobs available. In Europe, industrial activity focused mainly on offshore technologies and development of project in the eastern parts of Europe and other developing markets. As 2012 ended, Brazil had 11 plants in the manufacturing sector with GE having a facility in construction; India had manufacturers numbering 19 with an annual consolidation capacity produce above 9.5GW.74, the summary explains further. Why floating wind turbines? Why not just offshore wind? Floating wind turbines are environment friendly than offshore wind turbines. The floating wind turbines can benefit the people who live close to shoreline. Offshore wind is great in Europe, but turbines are only limited to shallow waters of around 60 meters since the pylons that strengthen them have to be embedded into the seabed. However floating turbines just call for a few cables to keep the floating shaft in a fixed spot, and they can be installed in water of a depth of 700 meters thus the floating wind turbines and not just offshore wind, according to the 2013 Report of the European Wind Energy Association. These offshore wind farms in the near future will be able to gain the benefit of a great average wind speeds as opposed to land-based wind farms. Study has indicated that wind speeds are considerably faster offshore near the sea than on land The Bloomberg report helps explain that a traditional floating offshore wind turbine tower that is constructed upward from the seafloor results to be too expensive to install in waters deeper than 50 meters, and this is a big issue for Japan since a continental shelf varying from 50 to 200 meters deep surrounds its coast. However a floating wind turbine complete together with its substation with steel bars anchoring them to the seafloor can function in those deeper waters hence floating offshore wind turbines. Offshore wind is still more expensive than onshore wind energy Which companies are the main players? The top ten world’s companies which are the main players for producing turbines captured 77% in the year 2011 of the world market. Such turbine producing companies emanated from china, which produced four of those top ten companies, with Europe having 4 turbines producing companies among the ten, India having one company in those top ten, and one from the United States. Denmark’s company known as Vestas was the leading manufacturer since 2000, but it surrendered its position to the GE wind company that was third in 2011, coming ahead because of the robust U.S. market. Siemens Company climbed up to 3 from position 9 which is then followed by Germanys Enercon Company, and Suzlon Group Company, both of which improved by one spot compared to the previous year, 2011.Among the other top companies included Spain’s Company called Gamesa, Chinese companies known as Sinovel and Goldwind, with both Gamesa and Goldwind moving out from top five, according to a report published on Bloomberg blog. I don’t expect them to go on as the top players for the next 10 years since completion is very steep and other new firms are venturing into the technology daily. Why energy storage? On top of the enormous advantages that Energy Storage offers as a foundation for Clean Energy technology, great amounts of storage of energy permits present electrical system to operate significantly much efficiently. High efficiency means low pollution, decreased costs and more power that is suitable. Large-scale Energy Storage can be used to respond to fluctuation demands, soaking up excess power when demand decreases, and providing that stored power when demand rises. This will permit today's already established generation facilities to operate constantly at their maximum efficiency, reducing pollution and costs considerably, according t a report published on www.velkess.com/cleanenergy.php. Why not coal, oil, natural gas? The current system of electricity uses natural gas and coal in its generation facilities, of which many of the facilities are operated at a very high level way below their optimum efficiency. Such lack of smooth efficiency of generation of electricity has resulted to increased costs of electricity and greater pollution than it should be. Each power-generating firm has maximum level of possible outcome if it produces power at efficiency levels and by doing that power would be available at cheap prices. If the output of the firm is lowered or raised from that particular maximum level point, the firm’s efficiency decreases considerably. In the prevailing systems of electricity, firms must speedily raise and lower their outcome to meet varying demand for electricity, which means many power firms rarely operate at maximum efficiency unlike coal, oil and natural gas. In such like situations of fluctuations in demand of electricity, large scale Storage of power can be employed to control it. This can be done by producing surplus power if demand fluctuates, and giving up the saved energy in times of rise in demand. Such a move will permit today's already running production firms to operate continuously at their optimum efficiency, decreasing costs and pollution considerably, according to David Bowman, Professor of Environmental Change Biology. The role of fire as a major feedback to global warming has not received required attention in the AR5 report. According to Professor of Environmental Change Biology, David Bowman, natural and anthropogenic forest and bushfires emits 2 to 4 gigatonnes of carbon every year. He says, “Currently all sources of fire (landscape biomass) cause CO2 emissions equal to 50% of those stemming from fossil-fuel, natural gas, oil and coal combustion (2 to 4 PgC year?1 versus 7.2 PgC year?1)”. With increasing temperatures, a difference between “natural” and “anthropogenic” fires is obscured which results to global warming hence great climate change. My view In my view, the best current floating wind turbine technology is the floating offshore wind turbine as opposed to land and offshore wind turbines. This is because floating wind turbines call for a few cables to keep the floating in permanent position and they can be functional in a water of depth of 700 meters. For example, a Blue H floating turbine was deployed70 miles off the coast of Italy in 2007, according to report from their website, www.bluehgroup.com.Also floating offshore wind turbines do not impose direct danger to human beings since they operate inside the sea as opposed to the onshore and land turbine which pose direct threat to human being as they operate on land. Does success in this story depend on some version of a material price on carbon through a carbon tax or carbon trading? I believe success in this technology will depend on o some version of material price of carbon through carbon tax or carbon trading because high imposition of carbon tax will force a shift in focus to wind power which will be relatively cheap since no emissions hence no tax.If the tax is high and the trading expenses relatively high, then this will help push the progress and fast investment in wind technology as an alternative “The projected carbon tax is a considerable development on the greatly compromised emissions trading system settled between the Rudd administration and the resistance under Malcolm Turnbull. Even though there is considerable compensation for emissions-intensive firm, it is momentary and based on historic emissions degree, so that the inducement to decrease emissions is not compromised,” Explained Professor John Quiggin of the School of Economics, University of Queens land. The Professor went on to explain, as the main objective of the package is, correctly, on the imposition of a cost on carbon emissions, there are a variety of supporting actions intended to hearten energy efficiency and novelty such like wind energy. On the whole, these seem more cautiously planned than the measures implemented under preceding administrations, the ABC reported.(www.abc.net/au/news/events) Works cited 1 http://www.iea.org/media/executivesummaries/WEO_2013_ES_English_WEB.pdf 2 http://www.bloomberg.com/news/print/2013-11-11/fukushima-floating-offshore-wind-turbine-starts-generating-power.html 3 http://www.bloomberg.com/news/print/2013-11-12/japan-ex-premier-koizumi-to-speak-against-abe-s-nuclear-policy.html 4.http://www.businessweek.com/news/2013-11-05/renewables-sales-at-record-rate-shows-utilities-in-pain-energy 5.http://www.prweb.com/releases/2013/6/prweb10803362.htm 6.http://www.greencarcongress.com/2013/06/vgv-20130602.html 7.http://www.climatechange2013.org/images/uploads/WGIAR5-SPM_Approved27Sep2013.pdf Read More