Africa's solar surge adds another 3GW

The week in clean energy saw offshore wind gain traction, while solar prospects brightened up for Africa as grid-connected power remains relatively expensive.

Bloomberg New Energy Finance

From windy seas to sunny African markets, renewable energy developers last week looked at breaking new ground for projects.  

France announced last week that GDF Suez and its partners won a contract for two 500MW wind projects off the country’s northwestern coast, beating a group led by EDF. The nation’s Energy Ministry said GDF and partners EDP Renovaveis, Neoen Marine and Areva will build installations near Le Treport on the Channel coast south of Calais and between the Noirmoutier and Yeu islands on the Atlantic coast north of La Rochelle.

France – a nation without any operating sea-based wind farms – is looking to boost its offshore and onshore capacity, as the country scales back nuclear energy. 

However, Bloomberg New Energy Finance’s 28 April 2014 note French wind – bridging the gap in support finds the country is likely to miss its 2020 installation targets. The country envisions 19GW of onshore capacity and 6GW of offshore capacity by the end of the decade. Based on Bloomberg New Energy Finance’s current forecast, France will fall short of its onshore target. Delays make it likely that only around 1GW of offshore will be commissioned in time. The French government has stalled development to wait for costs in the sector to come down.

In other waters, the US Energy Department said last week it will award as much as USD 47m each to developers planning modest-sized offshore wind projects off the coasts of Oregon, Virginia and New Jersey. 

The projects have a total of 67MW of capacity and are expected to be connected to the grid by 2017, the agency said in a statement on its website. The companies will use new technologies that may make offshore wind more economical. The cost of power from sea-based turbines is more than that for systems on land, one of the reasons there are no commercial wind farms in US waters – yet.

Deepwater Wind is developing the 30MW WindFloat Pacific project off the Oregon coast. A Dominion Resources unit is planning a 12MW wind farm off Virginia Beach. Fisherman’s Energy plans to install five 5MW turbines about three miles off the coast of Atlantic City, New Jersey. The three companies will receive the funds over four years. They were selected from seven demonstration projects that each won USD 4m in backing from the Energy Department in 2012. 

Elsewhere, SkyPower, a Canadian renewables developer, and Saudi retailer Fawaz Abdulaziz Alhokair & Co won support from Nigeria to build 3,000MW of solar parks.

They will partner with federal and Delta State governments to complete the projects in five years, Toronto-based Skypower said in a statement. Shareholders, and development and commercial banks, will provide the USD 5bn needed. FAS Energy will work with authorities to plan, finance and build projects that start providing power to the national grid next year. 

Bloomberg New Energy Finance believes there are reasons to be optimistic about the prospects for utility-scale PV in Africa, leaving aside South Africa, which is already a fast moving market. Most African countries are sunny, and have rapidly growing economies. The demand for power is rising with continued economic growth and the electrification of rural areas. Meanwhile, grid-connected power is relatively expensive on average. 

Still, Bloomberg New Energy Finance finds in its 28 January 2014 note, Is PV ready to light up Africa, that system costs there can be quite high compared to the global average for non-tracking, utility-scale PV systems. This probably reflects the need for one-off designs and the additional costs for experienced companies to build in remote and sometimes politically fragile locations.

EU carbon

Carbon allowances advanced 1.1% during a week of light trading.

European Union Allowances (EUAs) for December 2014, the benchmark contract, finished Friday’s session on London’s ICE Futures Europe exchange at €5.30/t, compared with €5.24/t at the close of the previous week.

Front-year EUAs were trading as high as €5.41/t on Tuesday afternoon. Only 11.9Mt of December 2014 EUAs exchanged hands that day, compared with the 15-day moving average of 16.9Mt. EUA market activity was relatively light on most days as traders may still have been away from their desks due to a UK public holiday on 5 May.

UN Certified Emission Reduction credits (CERs) for December 2014 lost €0.03/t last week to end at €0.12/t. 

German power for delivery in 2015 ended the week 0.7% down at €34.50/MWh.

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