A week of industrial-scale initiatives in wind and solar had as its highlight Chinese turbine manufacturer Sinovel’s capture of a deal to supply 1GW of turbines to Ireland. The transaction will be by far the largest coup for a Chinese wind turbine maker in Europe so far, and will create some anxiety in countries such as Germany, Spain and Denmark that have established turbine assembly industries.
Sinovel will supply the machines for €1.5 billion ($US2.2 billion) worth of wind farms under development over the next five years by Irish company Mainstream Renewable Power.
Mainstream, headed by Eddie O’Connor, the entrepreneur behind Airtricity, one of the most active wind farm developers of the last decade, says it will get debt finance for the new projects from China Development Bank, the state-owned lender.
The deal between Mainstream and Sinovel will shine a spotlight on the dilemma facing political leaders in Europe and North America over the supply of renewable energy technology. China produces many of the cheapest wind turbines and solar panels in the world, providing the opportunity for countries to install low-cost renewable power. On the other hand, importing Chinese hardware will not create the “green jobs” that politicians crave.
Sinovel is attempting to assuage this concern by raising the prospect of inward investment in Ireland, or nearby. Lecheng Li, the company’s senior vice president, said: “As we gain certainty on project execution schedules, we will review our plans for localising operation and maintenance activities as well as possible component manufacturing.”
Ireland is not the first European country to see the prospect of the installation of Chinese-made turbines. In April, Sinovel agreed to team up with Athens-based Public Power Corporation to develop wind farms in Greece.
And the US has been the scene of a number of deals involving Chinese turbine makers in the last two years. Mainstream is developing a 106.5-megawatt project in Illinois with China’s Xinjiang Goldwind Science & Technology, and Goldwind also has projects in Minnesota, Ohio and Rhode Island.
Elsewhere in the clean energy sector last week, many of the big moves also involved large-scale use of established technology.
GP Joule, a German developer of solar plants, said it is about to complete the largest photovoltaic project in its home country for €140 million ($US203 million). The project, located on an old open-cast mining site in eastern Germany, will comprise 300,000 solar panels and 2,555 inverters.
The company will deliver the 70MW plant in Meuro in the eastern state of Brandenburg to Berlin-based Unlimited Energy in the next few weeks, it said in a statement. Debt for the project was provided by HSH Nordbank.
Even bigger deals last week saw Danish project developer Dong Energy sign a long-term supply contract with Bladt Industries for 600 offshore wind turbine foundations, enough to support 2.2GW to 3.6GW of capacity – and US thin-film module maker First Solar secure USD 4.5bn in loan guarantees from its government for three projects totalling 1.3GW it is developing in California.
Last week’s crop of large-scale deployment deals may have contributed to a slightly brighter performance by clean energy stocks. The WilderHill New Energy Global Innovation Index, or NEX, which tracks the performance of 98 stocks worldwide, rallied from 198.42 at the close of the previous week to 207.07 on Friday 1 July.
However the NEX remains well below its 2011 high of 237.33 reached in early April, and less than half its all-time high of 468.75, established in November 2007.
Worries about future subsidy support for renewable energy, and about fierce competition between manufacturers – evidenced by Sinovel’s deal in Ireland – have combined to make investors wary of buying clean energy stocks.
The background international diplomacy on measures to tackle climate change is not doing much to boost appetite for clean energy shares either.
Last week, the debate continued to rage between Europe and international airlines over the European Union’s plan to include air travel in its Emission Trading Scheme from next year. Meanwhile, figures from Brazil showed that deforestation in the Amazon region doubled in June as farmers gambled on an amnesty for illegal logging.
