RECAI: Latest developments
Brazil backs solar. Brazil will hold its first national solar-only auction in late 2014, after above-average solar prices in a 2013 multi-technology reverse auction prevented any capacity awards, despite more than 2GW of applications. This follows the success of the first state-level solar auction in December. The unveiling of a US$5.1b aid package to help utilities respond to record-high power prices as droughts reduce hydroelectric output are also likely to boost efforts to diversify Brazil’s energy mix. Wind needs little encouragement, though, with over 12GW of capacity shortlisted for a June auction.
Kenya strikes big. The 300MW Lake Turkana wind project, expected to generate almost 20% of Kenya’s power, has secured US$870m from 12 investors based in at least eight countries, making it Africa’s largest wind asset financing deal and biggest clean energy project. It has faced significant delays and challenges, but represents a milestone for large-scale projects in the region. The Government’s denial that it has suspended the issuing of licenses for new wind and solar projects until 2017 is also welcome, following late 2013 reports of a moratorium.
South Africa keeps going. Competitive pricing has prompted the South African Government to award additional capacity under Round 3 of its national renewable energy procurement program after allocating 1.5GW to 17 projects in late 2013, though specific details are yet to be released. The Government has also closed bidding for 200MW of CSP capacity available under Round 3.5 of the program. March saw state utility Eskom begin emergency rolling blackouts as heavy rains disrupted coal supplies, increasing the imperative for alternative energy supplies.
Ireland stalls. The apparent collapse of a trade agreement to export wind power to the UK has prompted developers to cancel or postpone around 10GW of Irish wind projects. While the mutually beneficial deal — exploiting some of Europe’s best and cheapest wind power — could become more likely after 2020, this deals a major blow in the short term. The absence of specific 2030 and 2050 carbon emissions reduction targets in recently published highlights of Ireland’s climate action bill also caused disappointment. Find out more
Poland pushes coal. While April’s release of draft legislation proposing to award renewable energy projects with fixed-price tariffs for 15 years via auction provides some clarity, the Polish Prime Minister’s call on Europe for to tap into Poland’s coalfields in order to lower energy costs and reduce reliance on Russian gas imports makes it unlikely Poland will diversify its energy mix soon. Vocal in its pursuit of shale gas and nuclear power, Poland has been one of the staunchest critics of the EU’s proposed 2030 carbon and energy targets.
UK solar woes. Another government consultation on financial support for UK solar projects has left the sector again facing uncertainty, at a time when solar is fast becoming one of the UK’s cheapest, cleanest and most popular forms of energy. The proposals would make projects larger than 5MW ineligible for renewable obligation certificates (ROCs) from April 2015, two years earlier than planned. Confirmation that solar will compete directly with other technologies for contract for difference (CfD) FITs when applications open in October 2014 adds further pressure.
Q1 2014: New worldwide clean energy investment
New investment in clean energy increased 10% on Q1 2013 to US$47.7b, largely due to a 42% increase in small-scale solar investment (totaling US$21.2b) and the opening up of new markets. While the Q1 2014 figure represented a drop on Q4 2013’s total investment of US$58.1b, a rush to meet year-end incentive deadlines can often distort final quarter figures. Europe and the Americas (excluding the US and Brazil) saw a fall in investment on the same quarter last year while all other regions saw an increase.