Energy Transition in Motion (Week of March 31, 2023): Advancing Projects, Investment

Offshore wind developers are pushing forward with plans to add capacity, part of global efforts to reduce emissions.

Ørsted said March 31 it has taken a final investment decision (FID) on its 920-megawatt (MW) Greater Changhua 2b and 4 wind farms offshore Taiwan.

Tech giant Amazon has partnered with Spain’s Iberdrola to get wind energy from the energy company’s Baltic Eagle and Windanker wind farms being developed offshore Germany.

In the U.S., RWE has teamed up with Entergy to analyze the U.S. Gulf of Mexico (GoM) wind market.

Here’s a look at some of this week’s other renewable energy news.

Hydrogen

Acciona, Nordex Form Green Hydrogen Joint Ventuer

Spain-headquartered engineering firm Acciona and German wind turbine manufacturer Nordex have formed a joint venture (JV) to develop green hydrogen projects globally, the companies said on March 31.

Focus is on areas with abundant resources that lack connection to conventional power grids.

“With a target renewable energy development pipeline of 50 GW [gigawatts], the joint venture’s goal is to develop projects that will produce 0.5 million tons of green hydrogen annually within the next ten years,” Acciona said in a news release. “The aim is to reach ready-to-build stage for the first projects by 2027.”

The JV, half of which is equally owned by Acciona and Acciona Energía with Nordex owning the remaining 50%, has already secured eight sites in the U.S., Latin America and Africa.

Plans are for each project to have at least 1 GW of installed renewable power and be deployed through agreements with other public and private companies and institutions interested in mass consumption or production of green hydrogen, the release stated.

The JV will not operate in Spain and Portugal, where Acciona Energía has an alliance with Plug Power.

Portugal to Launch Europe’s First Auction for Piped Hydrogen

Portugal will launch a pioneering auction in the second half of this year for rights to sell hydrogen for injection into the national gas grid, which some see as a key step in kickstarting Europe’s fledgling hydrogen market.

Under the terms of the auction, Portuguese energy group Galp Energia will contract to buy hydrogen mixed with natural gas from producers and resell it to meet demand, a system designed to boost investment in production by giving suppliers a guaranteed buyer.

Such an arrangement would remove the need for dozens of bilateral contracts between suppliers and consumers.

The first auction for transporting hydrogen to consumers in Europe via pipeline is being scrutinized to see if it can resolve one of the sector’s stickiest conundrums: balancing producers’ need for a demand pickup with clients’ desire for supply and price guarantees before making costly technology switches.

Investors have pledged about $76 billion to build green hydrogen plants, according to the Hydrogen Council and McKinsey & Co., but just $6 billion had reached the final investment decision stage as of May 2022.

The auction is designed to foster the development of hydrogen technology in Portugal, “ensuring that there is a firm offtaker at a time when private demand is still at an early stage,” Portugal Environment Minister Duarte Cordeiro's office said in written responses to Reuters.

Solar

EDP Renewables Taps First Solar for 1.8 GW of Modules

EDP Renewables said on March 30 it has placed a multiyear order for 1.8 GW of First Solar’s advanced thin film photovoltaic (PV) solar modules, scheduled for delivery through 2028.

The modules will be used to power projects developed by EDP Renewables North America (EDPR NA), which plans to add 4.8 GW of solar capacity through 2026.

“Solar is an increasingly important technology in our portfolio,” said EDPR NA CEO Sandhya Ganapathy, “and we are well-positioned to work with innovative and environmentally responsible partners and products that can help us meet our outlined targets and lead the energy transition.”

In early March, EDPR NA’s parent company EDP announced plans to invest $25 billion through 2026. The company aims to boost its deployment of renewables to 4.5 GW per year, adding a total of 18 GW by 2026.

The contract with First Solar, which is also growing its U.S. manufacturing capacity, allows EDPR to derisk its solar pipeline in the U.S. by securing equipment for growth anticipated in the utility and distributed generation segments, it said.

China Energy Plans 1,000-MW Floating Solar Plant in Zimbabwe

China Energy Engineering Corp. has proposed the construction of a 1,000-MW floating solar plant on Zimbabwe’s Kariba dam at a cost of nearly $1 billion, documents showed March 27.

The southern African country is currently generating less than half of its 1,700 MW power needs due to the underperformance of ageing coal-fired plants. Low water levels have also effected generation from its 1,050-MW hydropower plant at Kariba.

Floating solar power stations are becoming an increasingly attractive option as developers seek to avoid using up large onshore spaces with competing land-use interests.

China Energy’s proposal, made to the state-owned Zimbabwe Power Co. and a private consortium of the country’s industrial power consumers, would see about 1.8 million solar panels installed at a cost of $987 million, the documents seen by Reuters show.

“The work scope of the project includes the design, procurement, construction and commissioning of a 1,000 MW AC floating solar farm and 330kV/33kV booster station,” the document says. It would also include a transmission line from the booster station to a sub-station in Kariba.

Wind

Ørsted Green Lights Greater Changhua 2b, 4 Wind Farms Offshore Taiwan

Ørsted said March 31 it has decided to proceed with the 920-MW Greater Changhua 2b and 4 wind farms offshore Taiwan, taking an FID.

Located at water depths between about 23 m and 44 m, the wind farms will span about 185 sq km. Onshore construction will start in 2023 with fabrication of components in 2023 to 2024. The company expects to have offshore construction completed by year-end 2025.

Per Mejnert Kristensen, president of Ørsted Asia Pacific, called the FID “a major step forward for our mission to accelerate Asia Pacific’s decarbonization journey.”

In addition to capital from the Ørsted Group, the projects will be funded with debt capital sourced from the domestic Taiwanese market – backed by an Ørsted A/S parent company guarantee, the company said.

Ørsted did not say how much it would invest in the wind farms.

The company was awarded the project in June 2018 as part of Taiwan’s first competitive price-based auction. It locked in revenue with a corporate power purchase agreement in July 2020 with Taiwan Semiconductor Manufacturing Co. Ltd.

RWE, Entergy Partner to Assess GoM Wind Market

Germany-based offshore wind developer RWE has partnered with electric utility Entergy to analyze the U.S. GoM wind market, RWE said in a March 30 news release.

The companies signed a memorandum of understanding to jointly evaluate delivering offshore wind energy to industrial customers in Texas and Louisiana. Plans are to assess market demand for Entergy Louisiana, Entergy New Orleans and Entergy Texas customers; resource economics; transmission analysis; economic impacts, including job creation; and workforce preparation curricula, according to the release.

“The existing Gulf of Mexico oil and gas supply chain, workforce, and port infrastructure represent unique advantages to a potential offshore wind hub,” said Sam Eaton, CEO of RWE Offshore Holdings, LLC. “Working together with a local partner like Entergy can deepen our understanding of the next steps to strengthen these valuable assets and support a new, regional industry.”

The partnership was formed as the U.S. works to increase its offshore wind capacity to 30 GW by 2030. The Bureau of Ocean Energy Management proposed in February its first wind lease sale for the GoM, opening one area offshore Lake Charles, La., and two areas offshore Galveston for wind development. Combined, the areas could power nearly 1.3 million homes with clean energy, according to the U.S. Interior Department. A date for the lease sale has not been announced yet.

Iberdrola, Amazon Collaborate on Renewable Projects

Amazon.com Inc. will obtain 1.1 terawatt-hours of clean energy produced from the Iberdrola-operated Baltic Eagle and Windanker wind farms offshore Germany as the tech giant pushes to power all of its operations with renewables by 2025.

The arrangement is part of an agreement in which the two companies will collaborate on new wind and solar capacity by signing power purchase agreements for projects in Europe, the U.S. and Asia-Pacific, according to a March 29 news release.

The 476-MW Baltic Eagle wind farm is expected to be complete in 2024, while the 300-MW Windanker wind farm is scheduled for completion in 2026. Both farms are located in the Baltic Sea.

Amazon Web Services has also been selected as Iberdrola’s preferred cloud provider.

“The challenge of electrifying our energy system to increase our autonomy and reduce emissions requires partnerships between leaders like Iberdrola and Amazon,” said Aitor Moso, director of Iberdrola’s retail business. “The agreement today, combining sun, wind, and cloud, will enable new renewable generation capacity around the world and accelerate the digital revolution in the energy sector.

Salamander JV to Demonstrate Commercial-scale 100-MW Offshore Wind Project

The Salamander Project, a JV between Ørsted, Simply Blue Group and Subsea7, was offered an exclusivity agreement as part of Crown Estate Scotland’s Innovation and Targeted Oil and Gas (INTOG) leasing round, the results of which were released by the Crown Estate Scotland on March 24.

Located on Scotland’s East Coast, the 100-MW Salamander project will feature floating wind technology suitable for wind farms in water depths of about 100 m, which is too deep for traditional fixed-bottom turbine foundations. The project is intended to prepare the region for the roll out of utility-scale projects such as the ScotWind leases.

The project has a strong focus on supply chain development and will be a gateway for de-risking floating wind technologies for future commercial projects in Scotland, according to Salamander.

INTOG offered exclusivity agreements to 13 out of 19 applications in this first round, five for IN and eight for TOG. Salamander was selected in the IN category. The other successful project applicants include Bluefloat Energy/Renantis Partnership, BP Alternative Energy Investments, ESB Asset Development U.K., Flotation Energy, Cerulean Winds, TotalEnergies and Harbour Energy. The projects have proposed capacities of up to 499 MW in the IN category and over 5 gigawatts (GW) in TOG.

Salamander is currently undergoing an environmental impact assessment submitted to Marine Scotland and Aberdeenshire Council, which have since passed it to statutory and non-statutory consultees. The project has a grid connection agreement with National Grid for project delivery by 2030 and to contribute to the U.K.’s 5-GW floating wind target.

Crown Estate Scotland expects option agreements to be offered in 2024.

Mammoet Secures Contract for Two US Offshore Wind Projects

Heavy lift and transport specialist Mammoet said March 28 that it has landed two contracts for two large wind projects set to start in 2023 offshore the U.S.

Work covered by the contract include the load-in, load-out, handling and temporary storage of XXL monopiles plus the pre-assembly of turbines in a U.S. marshalling port, Mammoet said in a news release.

“Offshore wind in the United States has been a long time coming. Our Mammoet colleagues have been executing these projects globally for some time, so this is an exciting opportunity to leverage the combination of our technical experience with our local market experience,” said Rick Bohne, Jr., director of sales & marketing for Mammoet in the USA & Mexico.

The company said it most recently carried out load-in, load-out and transport of jacket structures for the Seagreen wind farm offshore Scotland.

Hart Energy staff and Reuters contributed to this article.