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RENEWABLE ENERGY WORLD September–October 2006 Volume 9 Number 5 Why PV in Africa needs a new approach Biomass resources and trade The outlook for solar silicon Netherlands’ first offshore wind farm Building-integrated wind power Financing China’s renewables boom PV in the United States September–October 2006 Volume 9 Number 5 Contents | Zoom in | Zoom out Search Issue | Next Page For navigation instructions please click here Contents | Zoom in | Zoom out Search Issue | Next Page For navigation instructions please click here

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RENEWABLE

ENERGYW

ORLDSeptem

ber–October2006

Volume

9Number5

Why PV in Africa needs a new approach Biomass resourcesand trade The outlook for solar silicon Netherlands’ firstoffshore wind farm Building-integrated wind powerFinancing China’s renewables boom PV in the United States

September–October 2006 Volume 9 Number 5

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ProvenTechnology

investment that pays...

The S88 – 2.1 megawatt wind

turbine is designed for higher

effi ciency and better power quality

with reduced stresses and loads

– technologically superior.

Full-span pitching from -5° to

+88° in 0.1° increments results in

maximum power harnessing

and minimal losses.

The unique Flexi-Slip System®

allows slippage at 16.7%

– the highest in its class.

www.suzlon.com

Australia · China

· Denmark · Germany

· India · Netherlands

· North America

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ContentsRegularsFROM THE EDITOR

NEWSA round-up of news from around theworld

DIARY

ADVERTISERS’ INDEX

Cover photograph The facade ofthe MANCAT building inManchester, UK, displayingbuilding integrated photovoltaicpanels. These act as a rainscreenand generate electricity, and areone of a number of sustainablefeatures on this new buildingDANIEL HOPKINSON

The last wordEnduring freedom – Sweden’splans to wean itself off oilThe Swedish Prime Minister gives hisviews on how, and why, Sweden willend its dependence on oil and createthe world’s first developed oil-freestate By Göran Persson

September-October 2006 Volume 9 Number 5

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13

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168

157

27

33

48

56

FeaturesPV in the US – where is themarket going, and how did it getthere? Despite a booming global PV industry,the US has fallen behind in themanufacturing of solar cells and haslong-since lost its leading position inthe world market. However increasing domestic demand and theemergence of some thin-film leadershas helped improve the outlook for thesectorBy Paula Mints

Small wind rising – is the marketfor building integrated windpower about to pick-up?Interest in micro-generation continuesto increase, particularly in the UK. Thisarticle takes a look at some of themain players in the rooftop turbinefield and provides some interestinginsights into the future of building-mounted wind powerBy Jon Slowe

Urban challenges – new researchon integrating wind energy inbuildingsThis article presents some recentresearch into the performance andpotentials of building-integrated windand hears about some new systemswhich have been designed to model air flows in the urbanenvironmentBy Eize de Vries

News featureOffshore progress – update on theNetherlands’ first offshore windfarmAs the Netherlands’ first offshore windfarm takes shape, Renewable EnergyWorld reviews the latest progress, andspeaks to some of the people behindthe projectBy Eize de Vries

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ContentsSeptember-October 2006 Volume 9 Number 5

Features continued

Silicon shortage – supplyconstraints limit PV growth until2008As the photovoltaic industry continuesits explosive growth, the continuingshortage of silicon threatens to slowexpansion and push up prices. Inresponse, the silicon industry isplanning to ramp up production in thenext few yearsBy Hilary Flynn and Travis Bradford

A bright future – why crystallinesilicon will continue to deliverDespite much talk about siliconshortages and thin film technologies,crystalline silicon will continue to bethe workhorse of the PV industry foryears to comeBy Peter Woditsch

Success on the Horizon – US windcompany goes from strength tostrengthMore and more small wind developersare being taken over by largercompanies or financial institutions.One such developer is Horizon Energy,which made international news whenit was taken over by investment firmGoldman SachsBy Elisa Wood

Keeping cool – solar air-conditioningIn this article we take a look at one ofthe most exciting emerging fields ofrenewable energy, outline some of thenew solar cooling products on themarket, and review several projectscurrently being developedBy Alasdair Cameron

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79

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The interviewBlazing a trail. An interview withConergy’s Hans-Martin Rüter Founded in 1998, Conergy hasemerged as one of the mostsuccessful renewable energy businesses, employing over 1200people in five continents. In thisinterview, its founder and CEOdiscusses business strategy and plansfor the futureBy Jackie Jones

TechnologyfundamentalsTechnology fundamentals –photovoltaic systemsAt a time when so much attention isbeing paid to the PV market, we goback to basics and take a look at theprinciples and processes behind thisexciting technology, covering the physics, different cell and moduletypes and the related equipment usedin photovoltaic generationBy Volker Quaschning

43

143

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Clipper Windpower Plc

2.5MW of beauty...and intelligence.

Meet Liberty.

She’s unique. Much more than a number. Hence, the name.

Her DGEN-Q distributed gearbox and MegaFluxTM permanent

magnet generators will free you from the stresses of today’s

standard wind turbines. At the same time, she’s compact

enough for installation with a crane sized for standard 1.5 MW units.

For more than a year we’ve subjected her to the challenges, trials

and rigors of her Wyoming test site. Despite lightning strikes, extended

periods of extreme winds and frigid temperatures, once installed...she

saw no need for the large crane to return. She remains unscathed...

a truetribute to her design. She’s now in full production in Cedar Rapids,

Iowa. With GL certifi cation to 20 and 30 year fatigue lives, she’s

engineered for the highest reliability. Sleek and classy, she’s

quality through and through.

Beauty, intelligence, and surprisingly low maintenance.

Liberty...she just might be the wind turbine of your dreams.

Learn more about Liberty at www.clipperwind.com._______________

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ContentsSeptember-October 2006 Volume 9 Number 5

A growing role – opportunities,challenges and pitfalls of thebiofuels tradeAs the biofuel and biomass industrygoes from strength to strength,questions are emerging regarding itsavailability and environmentalcredentials. This article provides a rundown of biomass potentials, look atsome of the recent studies onsustainability and examine some of themethods being used to ensure the‘greenness’ of energy production frombiomassBy Martin Junginger, André Faaij,Frank Rosillo-Calle and Jeremy Woods

The business of optimism –Wisconsin’s Midwest RenewableEnergy FairRenewable energy is a business basedon sound technology and the principlesof sustainable living. As such itgenerates levels of enthusiasm andpassion which most industries can onlydream about. Renewable Energy Worldwent to the world’s biggest grass rootsrenewable energy fair to get a feel forthis excitementBy Jeff Decker

103

116

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151

Features continued

Fresh ideas needed – building thePV market in AfricaFor the last twenty years, the donorcommunity has been promoting off-grid PV as an essential part of theAfrican development programme, butwith limited success. Now fresh ideasare needed, including a new way ofthinking from both donors and governments – one that views on-gridbeing as important as off-gridBy Mark Hankins

Finding the money – is China’srenewable energy boom real, andif so, how will it be financed?China is looking to increase the shareof its rapidly growing energy demandthat is derived from renewablesources, but what are the key policiesthat will drive this growth, and are thefinancial instruments in place that willpay for them?By Joseph Jacobelli

Liquid assets – factorscontributing to the development ofsmall hydro in ChinaWith small hydro growing at 4 GW peryear in China, we investigate one of thelargest renewable energy markets in theworld, ask how it got that way, andwhat the Chinese government’s policyis for the futureBy D. Pan

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Some see an endless horizon We see endless potential

At Vestas, it’s never been our ambition to make the world’s biggest turbines – just the most efficient. Take our new V90-3.0 MW. Rather than simply scaling up existing technology, we’ve taken a fresh look at turbine design. By rethinking everything from blade and nacelle technology to tower construction and transport, the V90-3.0 MW delivers more power from a smaller investment. And that makes renewable energy even more competitive. If you’re looking for an efficient route to more power, look no further than the V90-3.0 MW.

www.vestas.com

kWh

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Page 12: REW_20060901_Sep_2006

2MW 60Hz

with Voith WinDrive

DeWind D8.2 with Voith WinDrive Hydrodynamic Gearbox

DeWind

D8.2

Meet EU Energ

y:

BWEA 28 :

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ct 2006)

CANWEA 2006 :

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EU Energy LtdTel: +44 (0) 1908 424 455Fax: +44 (0) 1908 424 [email protected]

Tel: +1 940 455 7450Fax: +1 940 455 [email protected]

EU Energy Canada LtdTel: +1 416 960 9960

[email protected]

Subsidiaries of the CTC group of companies

Synchronous Generator connected directly to the grid

Meets requirements of all grid codes

80 & 90m rotor

Turbine control system with integrated SCADA & Park Control

Cold weather packages

Alternative tower solutions

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ISSN 1462–6381Group Publisher David McConnellPublisher Emeritus Edward MilfordEditor Jackie JonesAssistant Editor Alasdair Cameron Design Danny GillespieProduction Co-ordinator John PerkinsProduction Controller Julie ChallinorSales Managers Ekow Monney, Liam O’Neill

Published by Pennwell Corporation

8–12 Camden High Street, London NW1 0JH, UK

Tel: +44 20 7387 8558

Fax: +44 20 7387 8998

e-mail: [email protected]

A detailed supplier listing and other information can

be found at www.renewable-energy-world.com

Advertising: For information on advertising in

future issues of the magazine, please contact

David McConnell at PennWell on

+44 20 7387 8558, or at [email protected]

© 2006 PennWell Corporation

All rights reserved. No part of this publication may be reproduced in any form or

by any means, whether electronic, mechanical or otherwise including

photocopying, recording or any information storage or retrieval system without

the prior written consent of the Publishers.

While every attempt is made to ensure the accuracy of the information contained

in this magazine, neither the Publishers nor the authors accept any liability for

errors or omissions.

Opinions expressed in this publication are not necessarily those of the Publishers

or Editor.

Subscriptions: Copies of the magazine are circulated free to

qualified professionals who complete one of the printed circulation

forms included in the magazine. Extra copies of these forms may be

obtained from the publishers.

Copies of the magazine may also be obtained on subscription; the

price for one year (six issues) is £60 or US$100 in Europe, £70 or

US$115 elsewhere, including air mail postage. To start a subscription

call Omeda Communications at + 1 847 559 7330.

Renewable Energy World is published 6 times a year by PennWell

Corporation, 8–12 Camden High Street, London NW1 0JH, UK, and

distributed in the USA SPP at 75 Aberdeen Road, Emigsville,

PA 17318-043. Periodicals Postage paid at Emigsville PA.

POSTMASTER: send address changes to Renewable Energy World

c/o P.O. Box 437 Emigsville, PA. 17318.

Reprints: High-quality reprints of any article from this publication are

available. These can be tailored to your requirements to include a

printed cover, logo, advertising or other messages. Minimum order

quantity 50. Please contact the Publishers for details.

Printed: in the UK by Williams Press Ltd.

RENEWABLEENERGYWORLD

September–October 2006 ● RENEWABLE ENERGY WORLD ● 11

FROM THE EDITOR

Member, BPA Worldwide

This is the 50th issue of Renewable Energy World, which we launched back

in 1998 to serve a sector that was just emerging from its adolescence,

determined to be taken seriously. Our message back then, as now, is that

renewables are not an ‘alternative’ for the committed few, but that they had

to become an essential – and significant – part of the energy mix. And we

said REW was for the people who were going to make that change happen.

In the intervening years, the industry has transformed itself. It has matured, grown, and

many more players – some very large indeed – have entered the arena, while others

have moved on. Renewables have become a big business. And yet people in the

renewables sector still have a particular sense of purpose, a particular passion. It’s a

great business to work in.

As REW was launching, so was a Hamburg-based, one-man renewables business.

That business has grown into Conergy, and we interview its founder and CEO on page

43. Hans-Martin Rüter’s personal passion for renewables is unmissable, and he senses

the same engagement amongst his colleagues. He also identified, very early, the need

to give his customers the sense of being part of a solar ‘movement’. Such grassroots

individual enthusiasm for renewable options is explored on page 151 by Jeff Decker,

who joined 18,000 others at the Midwest Renewable Energy Fair in the US. That kind

of human energy continues still to nurture our sector.

Mostly, the years since 1998 have seen renewables on the ‘up’. But lessons have

been learned, too. In an important article on page 103, Mark Hankins looks back on

the history of solar PV in Africa – it’s now time, he says, to do things very differently.

It’s pleasing to look back at the names of the advertisers in the first-ever REW, and see

how many of them are with us still. We thank them for their continued support.

Let’s continue to push forward renewables – and to seeing where we have got to

another 50 issues from now.

Jackie Jones

Editor, Renewable Energy World

P.S. Starting in autumn 2006, REW will have an increased web presence, with many

more features on-line. Remember to check in at www.renewable-energy-world.com_____________________

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Page 14: REW_20060901_Sep_2006

ONE COMPANY BRINGS YOU BOTH.

WIND MEASUREMENT

WINDFARM SCADA

SECOND WIND.THE WIND MEASUREMENT AND SCADA EXPERTS.

Second Wind Inc. 366 Summer Street, Somerville, MA 02144 USA • 617 776-8520 • Fax 617 776-0391 • www.secondwind.com

Instrumentation •• Software •• Communication system design Site assessment •• SCADA •• Complete turnkey installations

Siting a new windfarm?

You can rely on the firm

with over 25 years of

experience fielding

instruments and systems

for wind measurement. 

Second Wind’s NOMAD

family of data logger systems

and software is proven in the

harshest environments

worldwide.

Second Wind’s customers know it’s all

about the data. Whether it’s a wind

site or a windfarm, our systems

give you the information you

need to make the right

decision. Add power,

flexibility, and ease of

use, and you have

the ADMS (Advanced

Distributed Monitoring

System): the industry's

leading SCADA system.

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Page 15: REW_20060901_Sep_2006

XVII of the Energy Policy Act of

2005 (EPAct) that President Bush

signed into law on 8 August 2005.

‘The Energy Policy Act has set the

country on a path forward to

increasing clean energy sources that

will power our robust economy for

generations to come,’ said Secretary

Bodman. ■

BP ALTERNATIVE ENERGYBUYS US WIND COMPANY With its purchase on 15 August of

US-based wind power developer

Greenlight Energy, Inc., BP says it

will be able to accelerate its plans

to develop a leading wind power

business in North America.

Founded in 2000 and based in

Charlottesville,Virginia, the

company has a portfolio of some 39

mature and early stage development

projects across the USA with a

potential total power generating

capacity of 6.5 GW.This portfolio

contains a number of projects

which BP expects to be able to

develop over the next five years.

BP has acquired all the shares of

Greenlight Energy for a

approximately US$98 million,

excluding working capital and tax

adjustments. BP’s US wind power

business is a key part of BP

Alternative Energy, the company’s

low-carbon power generation

business.

‘This purchase gives BP

Alternative Energy immediate access

to a large number of high quality

wind development projects across

the country, including a number of

projects we expect to be able to

develop over the next few years,’

said Steve Westwell, chief executive

of BP Alternative Energy. Matthew

Hantzmon, Managing Director of

Greenlight Energy, said ‘The

strategic mandate of BP Alternative

Energy is a perfect fit to scale up

our business and enable the build-

out of Greenlight’s portfolio.’

In July, BP Alternative Energy

announced it had reached

agreement with the wind project

developer and turbine manufacturer

Clipper Windpower to acquire a

50% stake in a 2 GW wind

development portfolio in the US, as

well as an agreement for the supply

of turbines with a generating

capacity of up to 2.25 GW over the

next five years. ■

SILICON BREAKTHROUGHFROM DOW CORNING Dow Corning Corp. says it has

achieved a milestone in solar energy

technology: a solar-grade (SoG)

silicon derived from metallurgical

silicon that exhibits solar cell

performance characteristics when

blended with traditional polysilicon

feedstock.This new silicon

NEWS

US$2 BILLION FEDERAL LOANGUARANTEE PROGRAMMEUNVEILEDA new programme for new energy

loan guarantees has been unveiled

in the US. On 7 August, US

Department of Energy Secretary

Samuel W. Bodman presented DOE

programme guidelines for a total of

US$2 billion in loan guarantees to

help encourage investment in

projects that employ new energy

technologies.

‘With these loan guarantees we

hope to encourage creativity and

ingenuity that will help us

strengthen our nation’s energy

security,’ said Bodman.‘Projects

eligible to receive loan guarantees

are vast and varied.We hope to spur

investment in new renewable

energy projects like solar and wind,

as well as clean coal technologies

and efforts that can convert

cellulosic biomass into ethanol.’

According to the DOE press

release the solicitation, due to be

issued soon, will govern the first

round of loan guarantee

applications, valued at a total of $2

billion. In addition, over the coming

weeks, DOE will propose draft

regulations for public comment that

will govern future solicitations.The

Department says it views this first

round solicitation as a learning

opportunity that will assist in

building expertise before

permanent regulations are

developed.

Loan guarantees will enable the

Department to share some of the

financial risks of projects that

employ new or significantly

improved energy technologies that

avoid, reduce, or sequester air

pollutants and greenhouse gases.

Projects supported by loan

guarantees will help fulfil

presidential goals to diversify the

US’ energy sources, while reducing

reliance on imported energy

sources and will encourage energy

efficiency.The loan guarantee

programme was authorized in Title

September–October 2006 ● RENEWABLE ENERGY WORLD ● 13

Send your news to Renewable Energy Worlde-mail: [email protected] Fax: +44 20 7387 8998 News

feedstock material, Dow Corning®

PV 1101 SoG Silicon, is the first

commercially available feedstock

produced from such technology

using large-scale manufacturing

processes.

Dow Corning began bulk

production of PV 1101 earlier this

summer, and bulk customer

shipments began in August.

Progressive ramping up of the PV

1101 SoG Silicon production facility

to full speed is currently in

progress.

Until now, the solar industry has

largely relied on the supply of

polycrystalline silicon, a high-grade

purity product, originally developed

for the semiconductor industry.This

has meant that the solar industry

has in turn been subject to resource

restraint.The launch of PV 1101,

produced from a very different

route, will alleviate that restraint and

offer a new source of supply as well

as new technical and business

options for the solar industry.

‘PV 1101 is certainly one of the

most innovative technologies to

come along in the solar energy

industry since the manufacture of

the first silicon solar cells,’ said

Marie Eckstein, corporate vice

president and general manager of

Dow Corning’s Advanced

Technologies and Ventures Business.

‘For years now, the solar industry

According to numbers fromthe American Wind EnergyAssociation (AWEA), Texas hasnow officially overtakentraditional leader California asthe US state with the greatestinstalled wind power capacity.

The findings were releasedas part of AWEA’s quarterlyreport, and showed that Texas’cumulative total now standsat 2370 MW, compared withCalifornia’s 2323 MW, thanks

to 375 MW of new capacityinstalled in 2006.

Altogether 822 MW of newwind power have beeninstalled in the US in the firsthalf of 2006, and the countryis on target for another recordyear of growth in wind power.Total installed capacity in theUS now stands at 9971 MW,making it likely that theUnited States will become thethird country in the world to

pass the 10,000 MW mark,after Germany and Spain.

Speaking about the reportAWEA’s Chief ExecutiveRandall Swisher said: ‘Windenergy works, for Amercia’seconomy, environment andenergy security. Continuingthe federal commitment tothis clean energy source [theProduction Tax Credit] willkeep us on the road to asustainable energy future.’

TEXAS OVERTAKES CALIFORNIA AS US’ FIRST WIND STATE

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Page 16: REW_20060901_Sep_2006

been placed with the Vestas Group.

The project, to be located in the

North Sea, 12 nautical miles off the

Dutch coast, will consist of 60 of

the company’s V80 2.0 MW wind

turbines.

The order has been placed by

Windpark Q7 Holding B.V., which is

jointly owned by the Dutch utility

ENECO, the Dutch developer

Econcern BV and the Dutch

investment company Energy

Investments Holding BV. It includes

supply and installation of the wind

turbines as well as a 5-year warranty

and maintenance contract. (The

customer will be responsible for the

supply of foundations and grid

connections through EPC

contracts.) ‘We are very proud that

Windpark Q7 Holding B.V. has

gas emissions in the latest round of

the National Allocation Plans – the

system that sets out how much each

country’s industry can pollute, and

so determines the price of carbon

in Europe.

Of the 25 member states only five

have submitted firm targets

(Germany, Poland, Lithuania, Estonia

and Ireland), while nine others have

submitted only draft reductions

(Belgium, Bulgaria, France, Latvia,

Netherlands, Portugal, Spain, UK and

Italy). Of the targets submitted,

many call for very small reductions

in greenhouse gas emissions over

the current allocations.The UK has

reduced its cap by only 2.9%,

Germany by only 3.4%, while Poland

has increased its cap by 17%.This is

in contrast to the European

Commissions request that average

reductions be around 6%.

The two countries with the

highest reductions are Spain and

Italy, with 16% and 13% respectively.

Furthermore,WWF and others

believe that the scheme is too weak

in any case, as most governments

give away their carbon allocations

for free, favouring the most

polluting industries. Moves are

underway for carbon allocations to

be auctioned off, something which

would help to achieve a more

realistic price for carbon, and

encourage greater reductions in

emissions. So far only the UK has

any serious intentions to auction

part of its allocation.

Since the emissions trading

scheme (ETS) was launched in

2005, the price of carbon has been

volatile, losing 70% of its value in

early summer as it was revealed that

many countries had set the first

round national allocation plans too

high, allowing their industries to

keep polluting and still come in

below their allocations.This caused

an excess of carbon on the market,

causing the price to collapse.The

latest round of allocations is unlikely

to do much to reassure the

emerging carbon industry that they

will not find themselves in a similar

position in the years to come. ■

120 MW NETHERLANDSOFFSHORE ORDER FORVESTAS The turbine order for a new

Netherlands offshore wind farm has

has hoped to be supplied by new

sources of silicon designed and

dedicated to them. PV 1101 is a

major step in that direction. It is a

step that will provide a means of

growth for the solar industry.’

Gaetan Borgers, director of the

Dow Corning Solar Solutions, said

‘We can now offer the burgeoning

solar market two attractive supply

options.Through our majority

position in Hemlock Semiconductor

Corp., the world’s largest supplier of

polycrystalline silicon, we are

continuing to expand production

capacities for polysilicon.And now,

our new breakthrough blend

material is presenting customers

with another proven technology to

meet their material needs.’

The PV 1101 blend material has

already been tested in independent

institutes and at several Dow

Corning Solar Solutions’ customer

production sites worldwide.The

testing showed that the blended

feedstock material exhibits

performance characteristics similar

to polysilicon in terms of solar cell

manufacturing and efficiency.‘The

results are very positive and we

have recorded a high interest for

our product. Orders have already

been placed.’ Borgers continued

PV 1101 SoG Silicon is the first

product manufactured at Dow

Corning Solar Solutions Group’s

new production facility in Santos

Dumont, Brazil.While Dow Corning

has been providing materials to the

photovoltaic industry throughout

the company’s history, it created the

Solar Solutions Group in 2001 to

focus on development and

commercialization of material

solutions that will improve cost

effectiveness, material availability,

durability and performance of

photovoltaic devices. ■

EU STATES ‘WEAK’ ONEMISSIONS TRADINGEnvironmental campaign group

WWF has branded the EU member

states ‘too frail’ on emissions trading,

as many have missed the deadline,

or set embarrassingly low

reductions targets, for greenhouse

14 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com

MCT searches for 10 MW tidalfarm siteBristol-based Marine CurrentTurbines has announced that it isinvestigating a possible site inWales for the construction of a 10 MW tidal farm, following thepublication of the UK government’sEnergy Review and a Welsh AffairsSelect Committee report, both ofwhich called for the greaterdeployment of renewables in theUK.

MCT has already deployed a 300 kW SeaFlow device off thecoast of Devon, and is currentlybuilding a 1 MW SeaGendemonstration project in StrangfordLough in Northern Ireland, due tobe complete by the end of 2006.The Anglesey project would consistof seven tidal energy generatorsand would supply energy to4000–6500 homes on the island,representing 10%–15% of theisland’s electricity demand.

So far the project has received agrant of £700,000 (€1,010,000)from the Welsh Assembly andinvestigations are underway intoobtaining the necessary planningand environmental permits.

Subject to the successfulcompletion of an EnvironmentalImpact Assessment (EIA),construction on the project canmove forward and the wholeproject could be completed by2009.

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Page 17: REW_20060901_Sep_2006

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Page 18: REW_20060901_Sep_2006

renewable energy. It is estimated

that the rooftop mountable wind

turbine will produce 4000 kWh of

electricity a year, saving some 1.6

tonnes of carbon emissions. Its

slow rotation speed is claimed to

make it the quietest wind system

currently available.

The Fire Brigade is already

helping to tackle climate change

through a number of innovative

projects including a photovoltaic

system at Richmond Fire Station.

That project, completed in 2005,

converts daylight into electricity

from its 80 PV rooftop modules

and will produce over 11,000 kWh

of electricity per year – saving

some 4.8 tonnes of carbon

emissions. In January 2005,Tooting

Fire station installed a solar heating

system to produce hot water and

save an estimated 16 tonnes of

carbon a year by heating the hot

water at the station.

‘Energy issues are a key priority

within the Brigade and we already

have a number of schemes in place

to help reduce the impact of our

operations on the environment,’

said Valerie Shawcross, Chair of the

London Fire and Emergency

Planning Authority.’The financial

and environmental benefits to

generating your own clean energy

are clearly numerous and the

turbine’s sustainable design means

it will hopefully become carbon

and energy positive within four

years.’

UK Energy Minister Malcolm

Wicks commennted that:‘We can

chosen Vestas as supplier for their

offshore wind power plant, and we

look forward to continuing our

cooperation through the project

execution. It has taken time to

achieve this goal and we have been

through long and difficult

negotiations, however, both parties

now feel that we have entered a

contract which balances the

offshore risk with reward,’

commented Anders Søe-Jensen,

President of Vestas Offshore A/S.

‘With an accumulated offshore

market share of almost 70%, the Q7

project is a further strengthening of

Vestas’ leading position within this

market segment which is expected

to experience growth rates which at

least are in line with the onshore

market.’

Delivery and installation is

expected to take place during the

second half of 2007, and the wind

power plant will be completed and

handed over during the first quarter

of 2008. ■

ALEO EXPANDS IN SPANISHPV MARKETManufacturer and supplier of solar

modules Aleo is expanding its

business in Spain. Demand is

growing rapidly in the company’s

most important European export

market. During the second week in

August, Gamesa Solar SA, a Madrid-

based renewables business, ordered

from Aleo over 11,000 modules with

a combined capacity of over 2 MW.

Delivery of the first modules starts

in August, with delivery of the entire

order to be completed by the end

of the first quarter of 2007.

‘This order is a signal’, said

Christopher Dunne,Aleo’s new head

of international sales.‘The volume of

orders is increasing’. Since the

passing of the royal decree in 2004,

the Spanish government has been

supporting renewables.‘By co-

operating with established market

players we shall quickly get the

brand known in Spain’, said Jakobus

Smit of the Aleo board of directors,

who added that the company soon

plans to penetrate other southern

European markets.

At the end of 2006/start of 2007

Aleo will commence manufacture of

‘made in Spain’ modules at its own

plant in Barcelona.With an annual

capacity of 10 MW/year this will be

one of Spain’s largest solar module

manufacturing facilities.‘Customers

will be able to see the production of

high-quality modules here, and we

shall also be able to offer speedy

service.We plan to significantly

increase our sales in Spain in the

coming years,’ said board member

Heiner Willers. ■

HYDROPOWER LEADERS SEEINDUSTRY EMERGING FROMDECADE-LONG HOLDINGPATTERNThe hydropower industry is

emerging from a decade-long

‘holding pattern’, evidenced by

US$10 billion in development

contracts to build hydroelectric

projects around the world,

according to Leslie Eden, chair of

the HydroVision 2006 conference in

Portland, Oregon, USA.

More than 2000 hydropower

experts and interest groups from 47

nations in Portland to discuss new

technologies, evolving energy

policy, as well as the economic,

nvironmental and cultural impacts

of the industry.

Eden said the ‘holding pattern’

was caused in large part ‘by political

actions that took our industry by

surprise … This led to a long period

of reflection and debate among

hydro practitioners, and a careful

examination of industry practices.

As a result, we have made enormous

strides to better address social,

environmental, economic and policy

challenges.This conference seeks to

address a variety of issues to

improve hydropower’s standing in

discussions about our nation’s

energy future.’ ■

FIRST WIND TURBINE FORLONDON FIRE STATION The first ever ‘urban’ wind turbine

of its type has been installed on a

UK fire station, near London (see

photograph).The initiative at Hayes

Fire Station is part of the Brigade’s

ongoing commitment to help

combat climate change, cut carbon

emissions and produce sustainable,

16 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com

in briefStag’s Holt wind farmGerman utility E.ON hasannounced that is has signed anagreement with Vestas for thesupply of nine Vestas V90 2 MWturbines for use in the Stag’s Holtwind farm in Cambridgeshire.

Firefighters from Hayes fire station(Middlesex, UK) with Energy MinisterMalcolm Wicks, Val Shawcross of theLondon Fire and Emergency PlanningAuthority and Station Manager AlanCooper

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all do our bit to help in the fight

against climate change. Rather than

just expecting big institutions like

the G8 or the UN to solve the

problem, it is down to us as

individuals and organizations to

also be part of the solution. So

called microgeneration can make a

real contribution to reducing

carbon emissions across the UK

and it is pleasing to see the fire

service installing their first ever

micro wind turbine. I hope to see

more on other fire stations, as well

as on our schools and on our

homes’. ■

COMPOSITE TECHNOLOGYAGREES TO STRATEGICRELATIONSHIP TO EXPANDITS WIND TURBINE SERVICEBUSINESSComposite Technology Corporation

has agreed to increase the share

capital of its German-based wind

turbine service subsidiary, EU

Energy Service and Maintenance

GmbH by bringing ENERTRAG AG,

an independent German alternative

energy company, into EU Energy

Service as a new shareholder and

partner in the service operations.

This would mean that EU Energy

Service would include the existing

service business of ENERTRAG

Energiedienst GmbH, and the name

of EU Energy Service will be

changed to E Energy Service GmbH

– or ‘E Energy’.

Assuming a final agreement is

completed, joint operations may

begin by 1 October 2006. E Energy

will have approximately 850 wind

turbines under service contracts

and about 126 employees.This will

make E Energy one of the largest

independent wind turbine service

companies in the world, with

experienced teams for new

installations, service and

maintenance of several well known

models of multi-megawatt class

turbines such as GE,Vestas, Nordex,

REpower, including EU Energy’s

DeWind D6 and D8 models.

ENERTRAG also brings experienced

operating teams that have operated

some of the most successful wind

farms in Germany and France.

ENERTRAG AG, an independent

energy company from Dauerthal,

Germany, is one of the world’s

largest wind power producers

operating over 300 wind turbines

with a nominal load of 550 MW and

an annual yield of more than

1 billion kWh of electricity.

ENERTRAG has operations in

Germany, France and the United

Kingdom and has an annual growth

of approximately 25%. ■

CLIPPER WINDPOWER INLAKE ERIE WIND FARM DEALCalifornia-based Clipper Windpower

has recently struck an agreement to

supply 8 of its new 2.5 MW Liberty

turbines for a 20 MW wind farm on

the shores of Lake Erie.

The Steel Winds Wind Farm,

which is being developed by UPC

Wind and BQ Energy, will be located

on the site of an abandoned steel

factory in Buffalo, New York.

In addition to supplying the

turbines, Clipper will conduct the

installation, andwill carry out

operation and maintenance for the

next five years.

Speaking about the development,

Paul Gaynor, President and CEO of

UPC wind said:‘We believe the

industry is moving towards a larger,

more efficient machine; the Clipper

team is ahead of the curve in this

regard.We are pleased to be

investing in some of the industry’s

latest and most promising

technology advancements.’ ■

M+W ZANDER TO BUILD NEWERSOL SOLAR MODULEFACILITY IN ONLY 7 MONTHS The ErSol Group is planning

gradually to increase its

manufacturing capacity for thin-film

modules to 40 MWp yearly output

by 2008. Now M+W Zander of

Stuttgart has been awarded

(18 August) the contract to design

and construct ErSol’s thin-film solar

module facility in Erfurt in Germany,

and is due to hand over the new

plant ready for equipment by the

end of January 2007. By summer,

ErSol is due to have a 6000 m2

production for thin-film silicon

modules up and running. M+W

Zander says the contract is worth ‘a

low double-digit million Euro

figure’.

Ersol Group’s entry into the thin-

film technology opens up an option

for growth that is virtually

independent of the availability of

silicon and unleashes significant cost-

cutting potential. If the market grows

as expected, further expansion at the

35,000 m2 ErSol site in Erfurt remains

an option, says ErSol.

M+W Zander specializes in the

planning and construction of turn-

key photovoltaic module plants. ■

NORDEX AWARDED €14 MILLION CONTRACTFROM EAST ASIANordex AG has been awarded a

contract for the construction of a

21 MW wind farm in East Asia –

believed to be in Japan although the

company is unable confirm the

location. Nordex will be installing

nine of its N90 2.5 MW turbines

during 2007 in conjunction with a

local business partner.The contract

for the delivery of turbines and

rotor blades has a value of around

€14 million. Nordex’s business

partner of will be supplying the

towers and foundations, and also

servicing the wind farm.

On account of the rough weather

conditions at the site, Nordex will

be fitting the turbines with special

lightning conductors: each rotor

blade will have an aluminium tip, as

well as other receptors spread over

the blade.As a further technical

feature, Nordex will be producing a

60 Hz version of the N90 turbines

for the first time in view of the grid

frequency required in this region –

this frequency is used only in parts

of Japan,Taiwan, Korea and the

United States.

18 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com

FIRST HALF OF 2006 WAS WARMEST ONRECORD FOR THE US

According to preliminary data for the first half of the year, 2006 isshaping up to be the warmest on record for the US, according tothe National Oceanic and Atmospheric Administration (NOAA). Theaverage January to June temperature for the continental US was11°C, or 1.8°C above the 20th century (1901–2000) average. Fivestates (Texas, Oklahoma, Kansas, Nebraska and Missouri)experienced record warmth for the period and no state was near,or cooler than, average.

Globally, the year is shaping up to be the sixth warmest year todate (January–June) at 0.5°C above the 20th century mean.

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‘This project is an important

reference for markets in East Asia,

where we have so far primarily

been building smaller turbines.At

the same time, it marks a return to

closer collaboration with our

partner, with whom we have been

working since 1994,’ explained

Carsten Pederson, COO of Sales and

Marketing at Nordex AG.To date,

around 270 Nordex turbines are in

operation in that region. ■

REC SILICON BREAKSGROUND ON A US$600MILLION EXPANSION ‘It’s going to take us a couple years

of construction, but by the time

we’re done, we will have a facility

that has no equal in the world,’Tor

Hartmann, REC Silicon senior vice

president and project manager told

the crowd of community members

and visitors gathered for the ground-

breaking of REC’s new production

facility for granular polysilicon in

Moses Lake,Washington, USA on 15

August.

The new plant is based on the

proprietary technology that REC has

developed for production of

granular solar grade polysilicon

(SOG). It is being built adjacent to

REC’s existing plant where the

production is already focused on

manufacture of solar grade silicon

The new plant will add

approximately 6500 MT to REC’s

polysilicon production capacity,

totalling close to 13,000 Mt.

Currently, says REC, 20%–25% of all

solar cells in the world are primarily

made from the company’s

polysilicon.

The new plant will be extremely

energy conservative, says REC: the

solar cells made from the

polysilicon coming out of the new

plant will – each year the cells are

in operation (at least 20–25 years) –

generate eight times more

electricity than REC Silicon

consumed in producing the raw

material. ■

Q- CELLS’ HALF-YEARREPORT: SALES UP 108%AND NET INCOME FOR THEPERIOD UP 153%Q-Cells AG of Germany, the world’s

second largest solar cell producer,

revealed in its half-year report

(14 August) that it had increased

production for the first six months

of 2006 to 112.6 MWp from

66.6 MWp a year earlier.This reflects

growth of approximately 69%.

Sales, earnings before interest and

tax (EBIT) and net income for the

period rose all significantly in the

20 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com

in briefSuntech Power acquires MSK Suntech Power Holdings Co., Ltdof Wuxi, China, is to acquire MSKCorporation of Japan in a two-step transaction. The acquisitionwill give Suntech extensive PVmodule sales and distributionnetwork in the key Japanesemarket. ‘While Japan is theworld’s largest single market forPV modules, it is also one of themost difficult markets forforeign players to enter,’ said Dr.Zhengrong Shi, Suntech’sChairman and CEO. ‘Weanticipate that this acquisitionwill give Suntech the advantageof MSK’s nationwide sales andmarketing platform in Japan,which we expect to leverage togrow our market share in thisimportant market.’

PHOTO: COLUMBIA BASIN HERALD

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first half. Sales increased 108% to

€243.1 million from €116.7 million

in the prior-year period. EBIT and

net income grew at rates of 138%

and 153%, respectively, to €55.9

million (previously € 23.5 million)

and €37.4 million (€14.8 million).

Q-Cells AG has raised its forecast

for fiscal year 2006.The company

continues to expect production to

increase to approximately 255 MWp

(compared with 165.7 MWp in

2005). Q-Cells now anticipates sales

of approximately €525 million for

fiscal 2006 (compared with €299.4

million in 2005), EBIT of

approximately €115 million (€63.2

million in 2005) and net income of

approximately €75 million (€39.9

million in 2005).

In the first half, Q-Cells AG

generated 49.1% of its sales outside

of Germany.This ratio was only

35.4% in the same period of 2005.

In view of the continued growth in

export demand, the company

expects to increase this share to

60% by the end of 2007.

As of the end of the first half of

2006, the company had an annual

production capacity of 280 MWp at

its Thalheim location (equal to a

nominal capacity of 350 MWp). By

the end of 2006, production

capacity is to increase by 56 MWp

to 336 MWp (corresponding to a

nominal capacity of 420 MWp)

based on conversion, expansion and

optimization of the existing lines

I-IV. By the end of 2007, production

capacity will be increased to 432

MWp (corresponding to a nominal

capacity of 540 MWp) based on the

completion of the first two

expansion stages of production line V.

Q-Cells AG now anticipates

production in its core business will

reach 330 MWp for 2007

(previously 316 MWp).To ensure

further growth in the core business

beyond 2007, the company has

finalized additional supply contracts

for silicon and silicon wafers with a

total capacity of 430 MWp, with

priority for the period 2009–2018.■

STEORN SEEKS CYNICALSCIENTISTS TO TEST ‘FREEENERGY’ TECHNOLOGYIn an advertisement placed in The

Economist of 18 August, Steorn, an

Irish technology development

company, has challenged the global

scientific community to test what it

calls its ‘free energy technology’ and

to publish the findings. Steorn’s

technology is based on the

interaction of magnetic fields and

allows the production of clean, free

and constant energy.The technology

can, claims the company, be applied

to virtually all devices requiring

energy, from cellphones to cars.

Steorn wants its advertisement to

attract the attention of the world’s

leading scientists working in the

field of experimental physics. From

all the scientists who accept

Steorn’s challenge, 12 will be invited

to take part in a rigorous testing

exercise to prove that Steorn’s

technology creates free energy.The

results will be published worldwide.

Sean McCarthy, CEO of Steorn,

commented:‘During the years of its

development, our technology has

been validated by various

independent scientists and

engineers.We are now seeking 12 of

the most qualified and most cynical

from the world’s scientific

community to form an independent

jury, test the technology in

independent laboratories and

publish their findings.’

September–October 2006 ● RENEWABLE ENERGY WORLD ● 21

NEWSA round-up of news from around the world

He added:‘We are under no

illusions that there will be a lot of

cynicism out there about our

proposition, as it challenges one of

the basic principles of physics.

However, the implications of our

technology go far beyond scientific

curiosity: it addresses many urgent

global needs including security of

energy supply and zero emission

energy production. In order for

these benefits to be achieved, we

in briefEuropean Technology Platformfor Wind Energy The Advisory Council of theEuropean Technology Platformfor Wind Energy – TPWind – hasopened its call for applicationsfor membership of the SteeringCommittee, which will leadsector technology and policyR&D strategy into the future.Applicants should visitwww.windplatform.eu for fullinformation and the applicationform. The deadline forsubmissions is midnight,15 September 2006.

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need the public validation and

endorsement of the scientific

community.We’re playing our part

in making that happen by throwing

down the gauntlet with today’s

announcement – now it’s over to

the scientists to ensure that the real

potential and benefits of our

technology can be realized.’

Following the validation process,

Steorn intends to license its

technology to organizations within

the energy sector. It will allow use of

its technology royalty-free for certain

purposes including water and rural

electrification projects in developing

countries, details to be announced

later.

Steorn was founded in 2000 and

has developed cutting edge

technologies for third parties,

including optical disc forensic

analysis and plastic card fraud

prevention technologies. It is now

focused on the commercialization of

its energy technology. Further

information at www.steorn.com ■

SHARP AND CURRYS TOBRING SOLAR TECHNOLOGYTO UK HIGH STREET STORESSharp Electronics, the world's

leading manufacturer of solar

panels, has joined forces with a UK

leading electrical retailer, Currys, to

offer a range of solar energy

solutions for the home. Customers

opting for solar power can expect

to reduce their electricity bill by up

to 50% and could cut down their

home's carbon dioxide emissions by

up to two tonnes per year.

The 1.366 kW systems will

initially be on sale in three Currys

stores in southe-east England, and

information will also be available

online.After a detailed in-store

consultation with a trained adviser,

customers with suitable houses will

be offered a home assessment free

of charge. Purchasers should qualify

for financial support through the

UK Low Carbon Buildings

Programme.

Peter Keenan, managing director

for Currys, comments,‘Our

customers are becoming more

environmentally aware all the time.

But this is far more than a “green

solution” for the home. It is also a

perfect way of safeguarding against

the inevitable energy price rises.We

have selected Sharp as our supplier

because, as clear market leaders in

solar panel technology, they can

help us bring the best products and

the best service to our customers.’

This is the first time that solar

panels for the home have been

available from a major retailer in the

UK. ■

UK’S FIRST COMBINED PVAND WIND TURBINE SYSTEMTO BE INSTALLED IN CENTRALLONDON London’s Climate Change Agency

has been granted planning

permission for the UK’s first

combined PV and wind turbine

system.The generators will be on

the roof of the new Palestra

building, designed by architect Will

Alsop on Blackfriars Road.Three

floors of the building will become

the new headquarters of the

London Development Agency and

the London Climate Change Agency

starting in September 2006.The

renewable energy generated by the

system will provide renewable

electricity to these floors.

The £436,000 (€640,000) rooftop

project comprises – a combination

of 63 kWp of PV modules and

21 kW of 14 building-integrated

wind turbines.The combined

renewable energy system will

generate 3,397,000 kWh of

renewable electricity and reduce

CO2

emissions by 3300 tonnes

during its lifetime.The project is

being funded and implemented by

the London Climate Change Agency

which was set up by the Mayor of

London last year to tackle climate

change through promoting

renewable and sustainable energy.

Mayor Ken Livingstonnee, said

‘This innovative renewable energy

scheme will provide clean, green

electricity for the new headquarters

of the London Development Agency

and the London Climate Change

Agency. It demonstrates my

commitment for the Greater London

Authority organizations to lead the

way in taking measures to tackle

climate change through reducing

carbon emissions.‘

A feasibility study for a fuel cell

trigeneration system is also under

way for the building.This, together

with the renewable energy, would

supply the entire building’s

electricity, heating and cooling

needs. ■

WIND POWER REACHES NEWHEIGHTSIn Colorado’s ski heartland,Vail

Resorts, Inc. has announced that it

22 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com____________________________________

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will offset 100% of its energy use by

purchasing nearly 152 million kWh

of wind energy.This is sufficient to

meet the needs of five mountain

resorts,Vail’s lodging properties

including RockResorts and Grand

Teton Lodge Co., all of its 125 retail

locations (operated through Specialty

Sports Venture), and its new

corporate headquarters in

Broomfield, Colorado. By purchasing

renewable energy credits (RECs)

equal to Vail’s entire electricity use, it

becomes the second largest purchaser

of wind power of all corporations in

the US, according to the company and

the US Environmental Protection

Agency (EPA).

To purchase the RECs, which are

credits created when producers

generate electricity using wind

turbines,Vail will work with Boulder-

based Renewable Choice Energy as

its wind power provider.Vail

announced the initiative as part of its

ongoing environmental efforts.The

purchase, the company says, is the

equivalent of cutting over 211 million

pounds (96 million kg) of carbon

dioxide emissions every year – the

same as taking 18,000 cars off the

road or planting over 27,000 acres of

trees, according to EPA.

‘By embracing wind power as a

clean and renewable source for 100%

of our company-wide electricity use,

we want to reinforce our

commitment to the natural

environment in which we operate

and be a leader on this critical effort

within the travel industry,’ said Vail

CEO Rob Katz.

Vail is also asking its employees

and guests to join in its renewable

energy efforts by launching a ‘Ski

with the Wind’ promotion. Under the

new promotion,Vail Resorts is

offering a free one-day ski lift ticket,

valid at any of its five mountain

resorts, to US residents who purchase

wind power for their home for one

year with Renewable Choice Energy.

The company also announced that

each of its executives has personally

signed up to purchase wind power

for their homes. More details about

the Ski with the Wind promotion,

including applicable restrictions, and

Vail Resorts’ wind power purchase

program can be found at

http://www.snow.com/. ■

UK FALLING BEHIND ONTRANSPORT EMISSIONSThe government of the United

Kingdom has been attacked by MPs

on the Environmental Audit

Committee (EAC) for failing to tackle

the rising greenhouse gas emissions

from the transport sector.

In a recent release, the MPs said

that an element of fatalism has crept

into the Department of Transport, and

that there were sections which felt

that rising emissions were an

indicator of a healthy economy.

Between 1990 and 2004,overall

carbon emissions from the UK fell by

5.6%,but within this, emissions from

transport have risen by 10% and

emissions from air travel by over

111%.

Speaking to on-line environmental

news service Edie,Tim Yeo, chair of

the EAC said he would like to see the

UK government set emissions targets

sector by sector, rather than having a

single target for transport.This would

make it easier to target industries that

were failing to perform.

One of the proposals suggested by

the committee was for flights to be

taxed on the basis of how fuel

efficient the aircraft are, not simply

by how many passengers they can

carry.They also suggested that

measures be introduced to cut the

amount of air freight, and in

particular food miles (the practice of

flying food around the world to

guarantee supplies of out-of-season or

exotic food.

The EAC also had proposals for

land and sea transport.The tax paid

on vehicles should be more closely

tied to their emissions, they said, with

the gap between high-polluting and

low-polluting cars widened to act as a

greater incentive.They also called for

some system of levies to be placed

on ships arriving in UK harbours, as

shipping is not currently covered by

the Kyoto Protocol or other climate

change treaties. ■

DECENTRALIZED SOLAR ‘THEANSWER TO SUMMER LOADPEAKS’Decentralized, solar-generated

electricity could be answer to

growth in European electricity

demand in summer, particularly to

deal with consumption peaks caused

by weather conditions, which in turn

cause supply interruptions –

according to Dr Winfried Hoffmann,

President of the European

Photovoltaic Industry Association

(EPIA).

Writing in the EPIA monthly

newsletter, Dr Hoffmann says:

‘Electricity demand in summer is

September–October 2006 ● RENEWABLE ENERGY WORLD ● 23

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Page 26: REW_20060901_Sep_2006

constantly increasing years after year.

But the current electricity networks,

highly centralized, are not adapted to

face strong consumption peaks. Solar

electricity can very well be the

answer to this growth in electricity

demand in summer.Actually, the

output from photovoltaic (PV)

systems exactly corresponds to the

time when stronger demand is

observed due to the air conditioning

consumption.’

As a decentralized source of

energy, photovoltaic energy is

therefore close to end users’ needs,

adds Hoffmann.This avoids network

transmission problems, especially

during periods of peak consumption.

In addition, solar generators produce

more electricity as the intensity of

light increases, particularly around

noon.‘With PV systems designed to

face needs at peak power times, and

good energy planning in urban areas,

solar electricity can very well

support disruptions on electricity

networks,’ adds Hoffmann.

However, even with peak power

prices, solar electricity may not

become price-competitive until

around 2015, according to EPIA

projections. But solar electricity is an

ideal complementary source of

energy, being both very flexible and

absolutely decentralized, so should

be promoted, adds Hoffmann. ■

CHINA’S POWER SECTORREFORMS – WHERE TO NEXT? ‘With its rapid rate of expansion,

China’s power sector is unique.At the

same time, it shares many challenges

that other countries have long

grappled with: how to reflect the full

costs of generating electricity in

prices to consumers while increasing

access to this essential commodity?

And how to reduce the

environmental burdens of generating

power?’ So said Claude Mandil,

Executive Director of the

International Energy Agency (IEA) at

the launch of: China’s Power Sector

Reforms:Where to Next?

This new IEA study is published at

a time when China is deliberating on

a new comprehensive energy law, as

well as revisions to its electricity law.

Since China first embarked on an

effort to gradually liberalize its power

sector, great progress has been made:

separating generation from

transmission and improving

distribution systems, experiments

with wholesale markets are getting

off the ground, and an increasingly

independent regulator has taken its

place in the Chinese administration.

‘China should be congratulated for

this’, Mandil said, stressing, however,

that ‘important challenges remain.Too

much electricity is wasted by

consumers and by networks, so too

many power plants are being built to

meet this demand.Too much fuel is

wasted in generating power, and too

much pollution is released as a result.’

The report assesses ways to

mitigate the tensions between rapid

economic expansion and protection

of the environment, and the

promotion of greater equity.While

keeping an eye on the long-term

goals for the power sector, it

contributes mainly to the debate on

actions to take in the next few years.

‘While no country has yet found a

perfect solution, there is already clear

evidence of the benefits that can be

derived from competitive power

markets, and this should remain the

long-term goal’, Mandil said.

Several near-term actions stand

out as priorities. China needs first to

strengthen its institutional and

governance framework. In addition

to clarifying legal structures, it should

further define the roles of

government agencies, for instance,

clearly defining the State Electricity

Regulatory Commission’s (SERC)

mandate and enforcement powers

regarding pricing and oversight of

generators, the grid companies, and

system dispatch and security.

These activities should all be

taken with a view to tackling the

environmental consequences of coal,

which fuels 70% of China’s

electricity. China has the opportunity

to leapfrog reformed systems

elsewhere by integrating energy

efficiency and environmental goals

into its regulatory framework for

competitive power markets.At least

in the near term, direct support for

efficiency is important, including

demand side management

programmes that reduce barriers to

adoption of better technologies, says

the IEA. Steps can also be taken

quickly to make power prices more

reflective of actual costs – sending

strong signals to investors to choose

more efficient equipment and fuels,

and to consumers to use electricity

more wisely. Cleaner power plants

also need to be used – generation

performance standards and higher

pollution fees would increase the

likelihood of cleaner plants being

built. ■

NEW BIOENERGY CHP PLANTFOR GERMANYPoyry's Energy business group has

been awarded an owner's

engineering contract by Fernwärme

Ulm GmbH of Germany, for the

design and construction support of a

new bioenergy CHP plant.The total

value of the contract is €1.5 million.

The project site is in the city of

Ulm in the state of Baden-

Wurttemberg, about 100 km south-

east of Stuttgart.The construction

phase is estimated to last over two

and a half years.The commissioning

of the bioenergy plant is envisaged

to take place in winter 2008–2009. ■

SHENZHEN GOES SOLARFrom 1 November 2006, the Chinese

city of Shenzhen is making it a legal

requirement that all new residential

buildings incorporate solar thermal

heating, in an attempt to cut down on

the city’s spiralling energy demand.

The new law (the first of its kind

in China), will apply to all residential

buildings under 12 stories tall. Failure

to comply with the regulations could

lead to developers and builders being

fined up to US$62,500. However,

exemptions will be available if it can

be proved that it is not possible to

implement the technology in a

particular building. In addition,

buildings over 12 stories tall are

exempt, in recognition of the

technical limitations of using solar

thermal in tall, high density buildings.

Shenzhen is situated in Guangdong

Province in southern China, and

enjoys over 2000 hours of sunshine a

year (compared to around 1400 in

the UK). Since 1980 its population

has increased from about 300,000 to

over 10 million, due to massive

migration from the countryside and

other parts of China.This has led to

an explosion in energy demand,

placing great strain on the local

environment and forcing the

municipal government to push for

greater use of renewables and energy

efficiency.With its sunny climate, the

local authorities have ambitious plans

for solar, and are calling for 50% of

the cities buildings to use solar

thermal by 2010, and 20% to use

photovoltaics. ■

24 ● RENEWABLE ENERGY WORLD ● September–October 2006

NEWS renewable-energy-world.com____________________________________

______________

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Page 27: REW_20060901_Sep_2006

5th INTERNATIONALEXHIBITIONON EFFICIENTAND SUSTAINABLE ENERGY

5th INTERNATIONALCONFERENCE ON EFFICIENTAND SUSTAINABLE ENERGY

20-22 September/2006ZARAGOZA, SPAIN

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5th INTERNATIONALEXHIBITIONON EFFICIENTAND SUSTAINABLE ENERGY

5th INTERNATIONALCONFERENCE ON EFFICIENTAND SUSTAINABLE ENERGY

Organised by Conference Coordinator Main Sponsor Sponsors

GOBIERNODE ARAGÓN

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Page 28: REW_20060901_Sep_2006

Lust DriveTronics GmbHHeinrich-Hertz-Straße 1859423 UnnaGERMANYTel + 49 (0) 2303 779-0Fax + 49 (0) 2303 [email protected]

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Page 29: REW_20060901_Sep_2006

Just off the coast of the Netherlands, Europe’s latest offshore wind farm, isstarting to take shape at Egmond aan Zee. Eize de Vries talked to ShellWindEnergy’s NoordzeeWind director Huub den Rooijen about project challengesand his company’s future plans for the fast-growing global wind energy market.

Thanks to excellent weather, by 28 July 2006, all thirty-sixmonopiles of the 108 MW Egmond aan Zee offshore windfarm had been successfully installed, 10–18 km off the DutchNorth Sea coast. Located in 18 metre deep water and madeup of 36 Vestas V90-3 MW turbines, this is the first offshore

wind farm ever to be built in the Netherlands. Due to becomeoperational by the end of 2006, it has a projected annual energy yieldof at least 330 million kWh, capable of supplying around 100,000homes per year.

Egmond aan Zee is being developed by NoordzeeWind, a 50:50joint venture between multinational oil and gas giant Royal Dutch Shelland leading Dutch energy utility Nuon. Plans for the project, initiatedby the Dutch government and originally known as the 100 MW Near-Shore Windpark (NSW), date back to the mid-nineties, while afeasibility study had already been completed by 1997. In October 2001the government issued a tender that was won by Shell/Nuon early in2002. In 2005 the financial go-ahead was given for the €200 millionproject by the boards of both companies. With a gap of only four yearsfrom start of development to the start of construction, Den Rooijenspeaks of this as a fast-track project – from the corporate perspectiveof both companies. While happy with current progress he is also of theopinion that the Dutch government should do more to facilitate privateparties interested in carrying out future offshore projects in thecountry. In this respect he believes that there is still ample room for

improvement, and especially feels that improving market confidence inthe private sector is an essential instrument in speeding up offshorewind developments in the Netherlands.

CONSTRUCTION AND MAINTENANCE

VOF Bouwcombinatie Egmond has been contracted to build theEgmond aan Zee wind farm. This group comprises Dutch civil

engineering and offshore contractor Ballast Nedam and wind turbinesupplier Vestas of Denmark. The same combination is alsoresponsible for wind farm operation and maintenance (O&M). Forwind farm maintenance the partners chose to go for boat landingsand wind turbine access by ladder. Den Rooijen: ‘During the period1998–1999 Shell put a number of small unmanned North sea gasplatforms in service. We evaluated several O&M installation accessmethods, but straightforward boat access proved at the end thesimplest and safest solution. A similar method is adopted for thecurrent project, where a dedicated offshore turbine service vessel iscurrently being built. It features the well known ‘soft bow’ structure.When accessing a turbine the vessel moves with the soft bowagainst two additional purpose-designed pillars attached to themonopile. The vessel is firmly held to the pillars by giving full enginethrottle, a stable ‘passage’ condition that permits service personnelto step onto a ladder fitted to the support structure and from therethey climb to safety inside the turbine.’

In the middle of April 2006, Ballast Nedam’s giant floatinginstallation barge Svanen rammed the first monopile in the seabed.This 103 metre long and 90 metres wide self-propelled heavy liftbarge installs piles and the so-called transition pieces on top of each

Update on the Netherlands’ first offshore wind farm Offshore progress

RENEWABLE ENERGY WORLD ● September–October 2006 ● 27

Offshore progress NEWS FEATURE

€100 million is a large strategic investmentfor Shell Renewables

View from a Vestas V90 3 MW turbine installed at Kentish Flats in the UK; the sameturbines are being used in Egmond aan Zee ELSAM

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pile. These jacket type tubular steel pieces are meant to alleviateslight pile misalignments (< 0.5 degrees) and feature a top flange forlevel tower mounting. The Svanen is composed of twointerconnected catamaran type hulls with a fixed-position 80-metrehigh superstructure capable to hoist loads up to 8100 tonnes. Thishuge lift capacity will be more than sufficient to install proposed 5–10MW offshore wind turbines (even completed ones including nacelleand tower) or heavy large-diameter gravity-based concretefoundations each weighing thousands of tonnes. Prior to picking upand ramming in a new monopile, the Svanen is manoeuvred into thecorrect position by means of cables attached to multiple heavy-dutysea anchors. A jack-up type vessel, by contrast, is temporarily fixedto the seabed by means of expandable legs during monopileramming and/or wind turbine. Den Rooijen: ‘Thanks to theprofessionalism of the Ballast Nedam crew, the innovative monopileinstallation method especially developed for the Svanen experienced

28 ● RENEWABLE ENERGY WORLD ● September–October 2006

a steep learning curve and became faster with each new pile.’ Ballast Nedam and Vestas did not choose the Svanen for the

actual wind turbine installation (nacelle + tower), A2SEA instead hasbecome subcontractor for this specialist job for which it employs theSea Energy vessel. Other subcontractors include IHC (hammer),Ocean Team PU (sea cable laying), Royal Boskalis (foundation rockprotection works), Fugro (foundation positioning), and GB Diving(diving jobs).

The V90-3 MW wind turbines employed at Egmond are largelysimilar to the units operating at Kentish Flats (a 90 MW UK offshorewind farm constructed in 2005), says Den Rooijen: ‘From a power-engineering point of view the wind farm layout comprises threeseparate and electrically independent groups (strings) of twelveturbines. Electric power from each individual string is fed to a land-based transformer station build onshore at Velsen-Noord near theCorus steel mills by a separate 34 kV sea cable. This wind farm

layout is the outcome of an economic optimization. An alternativesolution comprising an offshore transformer station and a 150 kV seacable feeding the power to shore would have had a slightly higherelectrical efficiency (cable losses), but is also more costly.’

According to the plans, the first string of twelve turbines will betested and feed power into the grid by the end of summer.

Den Rooijen: ‘With the development of the Egmond aan Zeeoffshore wind farm, Shell and Nuon take on the challenge to provethat offshore wind energy works. Also that it is a worthwhileinvestment and a valuable contribution to a more sustainable Dutch

NEWS FEATURE Offshore progress

ABOVE With its maximum load of 8000 tonnes the Svanen can easily handle even the largest monopile foundations SHELL / NUON CENTRE Turbine blades lined up, ready for installationSHELL / NUON RIGHT The Svanen in dock in the Netherlands SHELL / NUON

‘The strategy of purchasing existing windfarms from third parties is becoming

increasingly less significant’

TABLE 1. Egmond aan Zee monopile foundation specifications Source: Ballast Nedam, 2006PileDiameter 4600 mm

Length 42.5 metres

Average mass 230 tonnes

Average soil penetration depth 26 metres

Transition pieceDiameter 4200 mm (internal fitting)

Length 27 metres

Mass 150 tonnes_____________________________________

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30 ● RENEWABLE ENERGY WORLD ● September–October 2006

energy supply mix in future. For Shell the success of this first Dutchproject is of key importance for more than one reason. It representsa yardstick for our company to show how we deal with safe andeffective working procedures during offshore installation activities aswell as O&M visits. And the fast-track learning experience willprepare Shell WindEnergy for undertaking even larger offshore windprojects in future. An example is the 1000 MW London Array projectin the outer Thames Estuary that we plan to build in the next yearstogether with two international partners.’

SHELL CUTTING EMISSIONS?

With regard to the €100 million investment from Shell in the Egmondaan Zee project, Den Rooijen says that the amount is smallcompared with the total Shell Group’s 2006 investment of US$19billion (and a proposed $20 billion sum for next year). At the sametime the €100 million is a large strategic investment for Shell

Renewables, Hydrogen and CO2, a new Shell business group thatcomprises Renewables (Shell Solar and Shell WindEnergy), CO2, andShell Hydrogen. Den Rooijen explains that curbing growing CO2

emissions has been given a key priority in Shell’s long-term businessstrategy. He also views it as a major problem for the entire world,requiring urgent attention and maximum effort to find appropriatesolutions: ‘Shell like all other competing oil and gas companies isfaced with the fact that exploration of crude oil and gas becomesincreasingly difficult. In addition, the emission of CO2 duringextraction and refining per unit ready oil product continues to go up.Shell, as a huge company with worldwide presence, is also a largeenergy consumer. To meet part of our global electricity demand weoperate conventional power generation with a total installed capacityof close to 10,000 MW, which will grow further over the next coupleof years, (by comparison the Netherlands, with a population of morethan 16 million, has 20,000 MW of installed capacity). In generalShell management sees it as a key obligation to help our customersto bring down their CO2 emissions, and simultaneously substantiallyreduce Shell’s own internal CO2 emission. We are on track to reduceour own greenhouse gas emissions in 2010 by 5% compared to1990 levels.’

With regard to wind power, Den Rooijen says that ShellWindEnergy focuses on value creation through developing andoperating wind farms worldwide. China is one of the upcoming windcountries where Shell is active as a project developer. The initialstrategy of purchasing existing wind farms in the US from thirdparties is becoming increasingly less significant as our developmentportfolio grows. Den Rooijen: ‘It is also not our intention to purchasean existing wind turbine manufacturer. However, we still keep a keeneye on wind technology development as we look for opportunities toaccelerate the introduction of technologies which will drive down thecost price per kWh electricity. Innovation is essential to achieve thisgoal but this is not simply a matter of making bigger turbines, butalso to increase product reliability and reduce the need formaintenance. With our experience in operating all kinds of rotatingequipment under all sorts of difficult climatic conditions, Shell iscertainly in a position to assist wind manufacturers by increasing thereliability of their wind turbine equipment.’

Eize de Vries is wind technology correspondent for Renewable [email protected]

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

NEWS FEATURE Offshore progress

Somerset County Council – SomersetWind Energy Initiative

The Contracting Authority is giving interested parties the opportunity to leaseCouncil owned land for the commercial development of wind turbines togenerate renewable electricity as part of its initiative to promote the developmentof renewable energy resources in the County and to meet regional targets forimplementation of renewable electricity generating capacity. The term of theleases will be 26 years. The concessionaire will be responsible, at its own cost, for carrying outfeasibility studies into suitable sites for the location of wind turbines, obtainingall relevant consents, installing, operating and maintaining the wind turbines, andat the end of the lease, decommissioning the sites. The Contracting Authority willnegotiate an annual income from the concessionaire based on a percentage of thegross of the electricity sales, inclusive of income generated from the sale ofRenewables Obligation Certificates.It is anticipated that the maximum capacity of the wind turbines for the wholeproject will be 12 MW across a number of sites.Enterprises selected to submit a bid should not assume that their selectionimplies any recognition or acceptance of their suitability to undertake thecontract.The Council may wish to take into account social and environmentalconsiderations in the contract.The Council reserves the right not to proceed with the process of selecting acontractor at any time during the process, which shall include the right not toaward the contract. The Council is a Public Authority under the Freedom of Information Act 2000and all information received will be dealt with in accordance with the Act.

Expressions of Interest:To express an interest in providing these services, a Pre-QualificationQuestionnaire must be completed and returned to the addressbelow by 12.00 noon UK time on Friday 29th September2006. Copies of the Pre-Qualification Questionnaire can beobtained by contacting Alan Palmer at the address below.Alan Palmer, Senior Procurement OfficerCorporate Procurement Unit,Somerset County Council, County Hall, Somerset TA1 4DY UKTelephone: 01823 358186 E-mail: [email protected]

ABOVE The twin hulled Svanen floating barge SHELL / NUON CENTRE By July 2006 all 36 monopiles had been successfully installed SHELL / NUON RIGHT Installing the nacelles fromA2SEA’s specialized Sea Energy vessel SHELL / NUON

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PV in the US PHOTOVOLTAICS

As the global PV industry continues its impressive growth,manufacturing is still dominated by Japanese and European companies.How did the US lose its once leading position in PV manufacturing, andwhat can be done bring it back to the top. Paula Mints writes this report.

These are exuberant times for the PV industry, withworldwide demand exploding and investmentpouring into companies in a fashion slightlyreminiscent of the dot com era. It’s taken the PVindustry over twenty years to experience profitability,

and the prospect of speedy returns is attractive to start-uptalent coming in from other industries

The comparative ease with which one can gaininvestment these days is good news for an industry whichrequires millions of dollars to get from the research anddevelopment stage to pilot production to commercialization,not to mention the investment in time and effort required for

success. In the US, several thin film technology start-ups areconcentrating their efforts in the Bay Area. But some of thisexuberance should be approached cautiously. In this regard,some famous words of caution posed by former Federal

Reserve Chairman Alan Greenspan come to mind: ‘But howdo we know when irrational exuberance has undulyescalated asset values which then become subject tounexpected and prolonged contractions.’

From 2000–2005 the five year compound annual growthrate for global PV was 41%, a significant achievement for anyindustry. Strong industry growth is leading to some highlyoptimistic estimates of the future, and it may well be thatindustry growth is on an upward trajectory that will not slow,even in the face of supply constraints and rising system prices.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 33

It is good to remember that demand forphotovoltaic products exists because of

subsidies, and would not exist without them

PV in the USWhere is the market going and howwill it get there?

While it lags somewhat in crystalline PV manufacture, the US, and California inparticular, has the potential to become a world leader in thin-film technology

SOLAR INTEGRATED TECHNOLOGIES

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However, during these heady times it is good to rememberthat demand for photovoltaic products exists because ofsubsidies, and would not exist without them.

Germany’s highly successful feed-in tariff law is thecurrent driver for PV industry growth, creating the largestmarket in the world for PV products. A host of similarprogrammes in Europe are expected to stimulate demand inthe near term, among them programmes in Spain, Portugal,France and Italy. In 2005, 47% of all PV modules sold went toGermany.

Once upon a time, the US was the shipment leader for

the photovoltaic industry, but not anymore. Its position haschanged for several reasons, the most important of which isgovernment support for both its manufacturing and itsmarket. Whereas other regions (most notably Japan) haveprovided support for their manufacturing sectors, the US hasnot. And while countries in Europe have learned from andemulated Germany, the US remains confused about what sortof programme will stimulate demand across 50 disparatestates.

US MANUFACTURING WEAKENS

The US, once the shipment leader, has experienced a slowingof its manufacturing strength. Though, in economic termsthere is balance – the US has about a 10% demand share forPV products, and a 9% share of global shipments, demand forPV products has yet to meet the potential of a vast countrywith huge energy use. In 2005, US demand in megawatts wasalmost precisely equal to its shipments in megawatts(shipments 133.6 MWp, demand 137.2 MWp)

Figure 1 provides an overview of regional shipmentgrowth for four global regions, the US, Europe, Japan and theROW (rest of the world). The US was the global shipmentleader until 1995, when it lost that position to Japan. In 2002,the US slipped from second place to third, in terms ofshipments, behind Europe, and in 2005, growingmanufacturing strength in the ROW region pushed the USinto fourth place. From 2000–2005 the US had a compoundannual growth rate of 12%, far behind growth rates for theother three regions. For the same time period, Europe andthe ROW grew by 47%, while Japan grew by 50%.

WHAT HAPPENED TO US PV MANUFACTURING?

If the US was once the global PV manufacturing leader, whathappened and how did that leadership evaporate? Theexplanation is fairly simple, first demand in the US markethas slowed, and manufacturing tends to follow demand.Second, the US has not invested sufficiently in encouragingPV manufacturers to locate there.Third, manufacturing costsare significantly cheaper in Asia, where much of newmanufacturing is currently locating.

In contrast, Japan has invested heavily in itsmanufacturing sector to the degree that manufacturing costs(due to government subsidies) are lower, and system pricestend to be lower too. Germany is also offering incentives fortechnology manufacturers to locate there. China, viewing itsdomestic solar industry as a potential revenue source, isproviding incentives to domestic and foreign manufacturers,which, coupled with the significantly lower cost of labourand the potential of a vast market, provides a strong incentiveto locate manufacturing facilities in that country. The US

34 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS PV in the US

If the US was once the global PVmanufacturing leader, how did that leadership

evaporate?

0

100

200

300

400

500

600

700

800

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Regi

onal

PVsh

ipm

ents

(MW

p)

US ROW Europe Japan

Year

FIGURE 1. Shipment growth by region 1995–2005

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__________________________

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simply has not competed with other regions of the world onthese terms. Moreover, its solar research and developmentbudget has gone through years of semi-feast and almost-famine based on the political agenda of the times.

The US controlled over 40% of worldwide sales until1998, when strong government support in Japan allowedthat country to gain share. By 1999, the US had settled intosecond place. Figure 1 provides an outline of regional

shipments from 1998 through 2005, and clearly shows theslow erosion of US manufacturing strength.

From 1998 through 2005, US manufacturing grew at acompound annual rate of 15%, compared with 47% forEurope, 53% for Japan, and 34% for the rest of the world(ROW). Led by Suntech in China, Motech in Taiwan andSunpower in the Philippines, the ROW region will likelysurpass Europe in manufacturing strength by 2008, and mayeventually threaten Japan’s number one market shareposition. The US, by contrast, will likely continue to lagbecause of fewer subsidies on the demand side, fewerincentives for manufacturers, and higher manufacturingcosts. Though there are currently several thin film

technology start-ups with marketingand sales divisions located in the US,these companies are stronglyconsidering locating manufacturingelsewhere in the world. And – perhapsthe most important factor – demandcontinues to expand in Europe andJapan, while markets in the Rest of theWorld (ROW) are showing promise.Meanwhile, the US has not found theproper formula to stimulate a vibrantmarket for solar products in itsdomestic market.

US DEMAND – UNREALIZED POTENTIAL

So, why hasn’t the US realized its potential as a strong marketfor PV products? After all, the US has a significantly strongersun resource than Germany and Japan. There is a fairlysimple explanation, solar is expensive and the subsidyprogrammes necessary to stimulate demand are alsoexpensive and in some cases, barely adequate. From theconsumer side, given an average residential price of$9.00/Wp DC, and an average system size of 3.5 kWp, for anestimated system price of $31,500 – many consumers needto consider this purchase in the context of buying a morefuel efficient car (in these days of rising oil prices), putting achild or children through college, among other things. AtSolar Power 2005 in Washington DC one solar expert askeda room full of other solar experts how many had PV roofs on

September–October 2006 ● RENEWABLE ENERGY WORLD ● 37

PV in the US PHOTOVOLTAICS

Japanese companies continue to dominate PV manufacture, often manufacturing solarcells in Japan and shipping these to other regions (such as this factory in the UK) forassembly SHARP SOLAR

1997 global demand = 114 MWp

US21%

Germany20%

ROW24%

Japan35%

2002 global demand = 505 MWp

US12%

Japan35%

ROW27%

Germany26%

2005 global demand = 1408 MWp

US10%

Japan28%

ROW18%

Germany44%

FIGURE 2. Global share of PV demand 1997, 2002, 2005

The US simply has not competed with otherregions of the world on these terms. By 1999,

the US had settled into second place

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their houses. When relatively few hands went up, therhetorical question becomes, if we cannot sell to ourselves,just how do we sell solar to other customers?

Incentives (tax and rebate programmes), net-meteringprogrammes, and feed-in tariffs are necessary along withfinancing mechanisms (low-interest loans) to stimulatedemand in any market, in any country, and in all regions ofthe world. No subsidies, no market, it is as simple as that. Inthe United States, lack of co-ordination (among otherproblems) in what should be a robust market for PVthreatens to keep PV from recognizing its potential. InGermany, the EEG (the law that spawned the feed-in tariff)has created jobs and a strong domestic industry, but it is alsoexpensive to maintain and has its foes.

In the US, the solar industry struggles with finding thebest way to motivate its state and federal governments tocreate programmes that will finally stimulate strong,sustained demand. This is even given California and New

Jersey’s commitment to their solar subsidies. In 2006, onlyseven US states have over ten financial incentiveprogrammes for PV – California, Washington, Pennsylvania,Massachusetts, New York, Oregon and Montana. Hawaii, astate with high electricity rates and a good sun resource, hasno subsidy at this time. California and New Jersey have thebest subsidies and the strongest markets. Washington state

and Colorado show promise, and hopefully, the strong sunresources in Nevada and Arizona will be met with strongsubsidy programmes in the near future.

Over time, US demand has weakened, though at 10% ofglobal demand in 2006, it remains significant. Figure 2 offersa view of the US demand share in 1997, 2002 and 2005. In1997, the US had a 21% share, five years later in 2002, it hada 12% share, and three years later in 2005 the US demandshare had slipped to 10%. Again, referring to manufacturingstrength, is it any wonder that technology manufacturers arechoosing to locate elsewhere?

If the US market had a personality, it would be describedas grumpy, often intractable and seemingly irrational. It is adifficult market to traverse and members of the PV selling

38 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS PV in the US

TABLE 1. Global demand and supply 2000–2005 Region 2000 2001 2002 2003 2004 2005 CAGRUS Shipments 76.2 96.7 107.8 91.5 140.6 133.6 12%

US Demand 34.7 43.8 60.8 76 101.8 137.3 32%

Japan Shipments 95.3 145 233.8 350.6 547 714 50%

Japan Demand 77.9 109.8 176.2 243.8 295.9 392.4 38%

Europe Shipments 58.5 85.4 123.4 173.1 272.9 406.9 47%

Europe Demand 74.1 120 172.6 232.6 472.4 676.1 56%

ROW Shipments 22 25.8 39.9 60 89.2 153.2 47%

ROW Demand 65.3 79.2 95.3 122.9 179.7 202 25%

*Columns and rows may not add due to rounding

In the United States, lack of co-ordinationthreatens to keep PV from recognizing its

potential

The German feed-in tariff remains the driving force behind the global PV market, andsimilar programmes have been adopted by several other European countries PHOTOWATT

_______

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THE POWER OF SOLAR

ENERGYThe ErSol Group produces and markets high-quality photovoltaics products, thus helping to reduce global warming every day. We use the sun’s unlimited supply of energy to make possible environmentally friendly applications for generating power. Our actions contri-bute to keeping the environment intact for future generations. For more information on ErSol Group activities, see www.ersol.de

VISIT US AT21st EUROPEANPV SOLAR ENERGY

IN DRESDEN/GERMANYSTAND NO. 42/HALL 3

CONFERENCE & EXHIBITION

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channel from other regions in the world where incentivesare more robust find it hard going here. (The PV sellingchannel consists of distributors, system integrators,installers, retailers and dealers.) Table 1 shows bothshipments and demand for the US, Europe, Japan and theROW from 2000 through 2005. From this table the USposition can only be seen as weakening in terms of bothdemand creation, and supply.

The data in Table 1 indicate that demand from all regionshas increased and is strong, including demand in the US.Demand in Europe, particularly from Germany, hasexperienced the strongest compound annual growth, at 56%.Shipments from Europe have increased by a CAGR of 47% forthe same period. In Japan, shipments have increased by 50%(again, the government in Japan provides financial incentivesfor its manufacturing sector),while demand is slower at 38%.

Focusing on the US, though demand is healthy at acompound annual growth rate of 32%, the CAGR forshipments from 2000 through 2005 is 12%. In the US, again,there are not sufficient incentives for manufacturers tolocate there either in terms of demand (10% of theworldwide total), or in terms of financial motivation.

WHAT CAN BE DONE?

There is no simple answer to fixing the demand and supplysides of the US market, there are just too many differentfacets to the problem, not to mention suggested approaches.Some suggestions, however, can be posed.

First, technology manufacturers must be offered goodincentives to locate their facilities in the US. In this regardthe US has the opportunity to become the thin filmtechnology leader. At this time there are several thin film

40 ● RENEWABLE ENERGY WORLD ● September–October 2006

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US PV shipments could be boosted by increased domestic demand, particularly in statessuch as California where new incentives are being introduced LA DEPARTMENT OF WATER AND

POWER

There is no simple answer to fixing thedemand and supply sides of the US market,

there too many different facets to the problem

____________________

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start-ups currently developing CIGS, CIS, a-Si and CdTetechnologies in the US.These companies are at various stagesin the development process, from white board to pilot line.Before they decide to locate manufacturing elsewhere, whynot offer them a reason to stay? A strong PV manufacturingsector in the US means jobs, tax revenue,consumer spendingand technological leadership. As a plus, thin filmtechnologies are making significant inroads.

Second, continue the federal and personal tax credits andoffer subsidies or rebates in more states that provideincentives to consumers to buy. These programmes areexpensive, but, they are absolutely necessary to stimulate themarket for PV products. These programmes must, however,be transparent (easy to understand), easy to track, and thesubsidy must slowly decrease over time, so that the marketdoes not disappear rapidly. California has made a good startwith its ten year commitment to its solar market, but itsprogramme remains difficult to understand and is notfinalized.

Third, as in Japan, the US state and federal governmentsshould deliver a consistent message about renewables ingeneral, and solar, so that energy consumers begin to viewsolar as a reasonable, rational and desirable answer to theirenergy needs.

The US can recover its manufacturing strength – butmanufacturers need a reason to invest, and consumers needmotivation to buy.These are not easy problems to solve, butas the solar market continues to grow, there is evidence fromother regions and countries that finding an answer to the USriddle is a worthwhile exercise.

Paula Mints is Associate Director with Navigant [email protected]

■ To comment on this article or to see related features from ourarchive, go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 41

PV in the US PHOTOVOLTAICS

To encourage widespread domestic growth, the US needs to deliver a consistentmessage in support of solar energy, and renewables in general, at both the state andfederal level OREGON DEPRTMENT OF ENERGY

_____________________

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Hans-Martin Rüter leads one of the world’s most successful renewablesbusinesses, which he founded in 1998. Conergy is now active in fivecontinents, has 1200 staff and an expected 2006 turnover of €800million. He told Jackie Jones about his vision and company strategy.

As Germany’s largest seaport, the cityof Hamburg has for centuries been acentre of mercantile entreprise and agateway to the wider world. So itshould come as no surprise that

Hamburg is home to one of the mostdynamic businesses in renewables. Startedby Rüter as recently as 1998 ‘in my livingroom!’ the business now has a worldwidepresence. Its CEO’s own sense ofexcitement about the enterprise is obvious –and he says the same is true for members ofstaff: ‘The employees are passionate aboutthe technologies and our brand. That iswhere our success is – it’s not the strategy,it’s the people’

All the same, the strategy is certainlyinteresting.

WHERE IS THE RENEWABLESMARKET GOING?

Rüter cites Jeff Immelt of GE, who hasestimated that the renewable energy marketwill be worth US $300 billion by 2015, builton the central technologies of wind power,biomass, PV, solar thermal and geothermal,he says.

But the market stands on three different‘pillars’, too. First there are power-plant scaleinstallations, ones with an investment volumeof over €20 million – their customers aremostly professional or utility companies. In10 years, Conergy expects over 40% of totalvolume of renewables to be in that sector.

Then there are the individual, or ‘solitaire’installations – such as solar installations thatindividual homeowners might put on a

rooftop. They expect this sector to accountfor 15%–25% of the market in 10 years.Finally, there are networks systems – onesthat use a combination of systems such as

PV, heat pumps and pellets heating, or(offgrid) a combination of PV with small wind,for instance. This network sector is expectedto make up about 35% of the market.

‘If you really want to play a role in the$300 billion market you need to have astrong balance sheet and to be present in allthree pillars’, says Rüter. ‘If we are tocompete, then for us it is important now tobe involved in power plants.’ And Conergy iswell placed to do this – many of the largemultinationals that have become involved inrenewables are in the production process –such as GE or Siemens in wind, BP and Shellin solar. ‘We are their customer’ explainsRüter ‘But we are the ones who have directaccess to institutional investors. We havebuilt up packages worth more than €400million a year with just one institutionalinvestor. With this we have the financialpower to go into a region and say we candeliver whatever renewable technology thecustomer wants.’

INTO NEW MARKETS

The renewables sector is only just emergingfrom its infancy – it is still dependent on a

September–October 2006 ● RENEWABLE ENERGY WORLD ● 43

Blazing a trail INTERVIEW

handful of key markets with supportivepolicy in place. ‘At present, Germany has amarket share of 50%–55% of the PV market,and we are the strongest player on the

system integration side. But I believe that in5 years Germany’s share of that marketmight be just 25%.’

Expanding into new markets is essentialall round, and Conergy wants to reduce itsdependency on the German market andmove into others ahead of the game. Hans-Martin Rüter mentions several other Germancompanies who entered the Spanish PVmarket last year ‘but they are having hugeproblems in meeting large orders at areasonable price. We want to be in the newmarkets ahead of the wave, so we can growwith the market.’

From a firm foothold in Germany,Conergy has already set up offices acrossEurope, in Australia, Mexico and the US.Regional heads are now preparing furtherexpansion in North and South America, theMediterranean, Asia and Australia.

‘Our strategy has two parts. The firstpart of the strategy is to go to the customers– in new regions. The second is to give thecustomers the best solution for them’. Thecompany’s approach is to identify regionsthat will have good potential, and spend timeanalysing those markets. ‘We analyse themarkets in terms of some very key figures.

An interview with Conergy’s Hans-Martin RüterBlazing a trail

‘If you really want to play a role in the $300 billionmarket you need to have a strong balance sheet’

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We look at the overall environment, thegrowth in energy demand, and the potentialfor cross-selling synergies. If we see that ithas the potential to grow, we make adecision about whether to enter into thatmarket in system integration, projectdevelopment or on the product side – wehave the choice.’

At that stage Conergy acquires localknowledge. ‘We hire experienced teams, weacquire companies in those regions with agood track record, who understand those

markets and know everything about thatmarket and the customers in it.’

And Conergy is able to go into a newmarket with the right economies of scale toensure speedy profits. In a market like SouthKorea, for instance, he says: ‘If we go intothe market with 1 or 2 MW, we immediatelyhave the largest market share. We can helpthe teams to be the most successful in theregion, and are profitable directly, as wehave low purchasing prices’ he explains.‘This is how we are profitable in each of thenew regions within 12 months. But it stilltakes 2–3 years to become a sustainablebusiness that is growing month by month.It’s a good strategy for us, not just becausewe earn money but because the businessbecomes more independent of [the marketconditions in] any one region.’

‘This is how it worked for us in Spain, inMexico, and in the US. In the US we nowhave more than a 10% share of the PVmarket, and in Spain more than 20% of thePV market’. ‘Spain’s feed-in tariff makes itvery attractive for us to sell there’, he adds.

WHAT DO CUSTOMERS WANT?SELLING THE HOLISTIC SOLUTION

‘Customer-oriented’ is a phrase Conergyuses a lot. Rüter says it has been anessential element of their approach since hisfirst days in the business. Then he startedleafleting households in the districts ofHamburg which he thought held mostpromise for selling solar roofs – and sold thefirst systems: ‘I was very proud … but it wasan important learning curve. You learn howsensitive you have to be in listening tocustomers’ requirements. If you put the

is state-driven, technologically speaking.’ What does this mean for a company like

Conergy? ‘You need to be a very powerfulpartner for utilities and governments – andyou need to offer a wide range oftechnologies. You can’t achieve this with onetechnology and one small customer group.’

A NEW TIE WITH THE SHIRT, SIR?

Any good business benefits from cross-selling – selling another product to anexisting customer. And customers arepleased to buy more – from a company theyare satisfied with. This is one of the reasonssome of the multinationals are inrenewables. Rüter explains that a utility inMelbourne, Australia, might one day belooking to invest in a coal plant. And the nextday it might be looking to invest €100 millionin a large PV plant – so that’s an opportunityfor a company like GE, for instance, whichcan offer both. Conergy’s strategy is havinga whole range of renewables solutions forcustomers within specific markets.

‘We have a checklist for PV, wind power,bioenergy. Along with that we have thefinancial power to go into the regions andoffer wind, solar thermal power or whateverthe customer wants’, says Rüter.

Cross-selling has worked well inGermany, where the main customers arefarmers. ‘We sell them solar and bioenergy –the same sales team. And at the momentSunTechnics (a Conergy business) is beingvery successful in selling heat pumps to ourexisting customers.’ This cross-selling effecthelps protect the company from theseasonal market fluctuations, to do with badweather or silicon shortages, or price. ‘If wedon’t have success with PV in one quarter,we sell solar thermal, heat pumps, orbioenergy systems.’

MOVING INTO THE UNITED STATES

Conergy moved into the US in 2005, throughthe acquisition of Dankoff Solar, a veteran ofthe US renewables market. Was it goodstrategically? ‘Absolutely – that’s a goodteam, driven by Paul Benson. We’ve doubledthe number of employees. We have a lot offun together. They have good experience ofthe market, and good strategic knowledge.We can work with them to analyse whichparts of the US market expect growingdemand for renewables. We’ll expand themarket step by step, first to become thestrongest player in the US market in PV, thenmoving for example into bioenergy, windpower, solar thermal power.’

44 ● RENEWABLE ENERGY WORLD ● September–October 2006

INTERVIEW Blazing a trail

wrong sentence, or make things sound tootechnical it can put them off. You have tomake high-tech sound very convenient, notsay too much about technology. Theapproach needs to be very professional, andthe customer needs to feel part of thecomplete movement for using solartechnology. That’s what I learned in thosefirst years. I no longer see the customersevery day – unfortunately – but it’s always inmy mind, and I ask my sales teams whatthey are seeing.’

In new or existing markets, it’s importantto start with the customer’s needs andprovide the right solutions. ‘The technologyis very important, but just looking at how weimprove the efficiency of something it is notenough.’

Being aware of a customer’s fears andconcerns matters. ‘For instance, we mayneed to make bigger efforts in the guarantee,insurance, maintenance and so on to helphim with the finance - rather than improvingthe efficiency of our PV system by anotherfraction of a percent.’ He quickly adds thatConergy’s own PV systems perform betterthan the prognosis ‘but that’s only part of theprocess. We have to sell the holisticsolution.’

WHY SOLAR PV IS NOT ENOUGH

Rüter the scientist believes in PV technology– 100%. ‘At university I was doing researchinto PV for space systems, for satellites. Forme it became clear that it is so easy toproduce electricity … this technology hasthe potential to be the most widely installedtechnology. There is a resource of 120 W ofsolar energy on each square metre of theearth’s surface. It’s only 2 W/m2 for wind, 1W/m2 for bioenergy, and 0.5 W/m2 for coal.You can make solar so, so, so cheap that noother technology has a chance – we justhave to make it more efficient.’

Rüter the businessman needs a shorter-term, more pragmatic strategy. ‘After a fewyears I learned it will not be a purely solarmarket … We need to focus on all therenewables. I came to understand themechanisms of the energy market, which isnot really a free market – in many countries it

‘The first part of the strategy is to go to thecustomers – in new regions. The second is to givethe customers the best solution for them’

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Has the California Solar Initiative givenHans-Martin Rüter more confidence in theUS market? ‘Yes – from my point of view infive years the US market will be thestrongest worldwide. That’s why we areinvesting a lot, we have a strategic eye onthis market.’

He expects to see good growth ratesamong the non-wind technologies in the USin the coming years ‘but not a boom. Aboom needs better supporting structuresthan we have today, something more like afeed-in structure. It is hard to set up a goodfinancing structure for systems. And youneed the infrastructure – companies are notprepared to double the number ofemployees, etc.’

He continues: ‘In the US, companies arein the same position as they were in Spainmaybe two years ago, as Germancompanies six years ago, and Japanesecompanies eight years ago.’

What about solar hot water in the US?‘The market is too low level – though there

are over a million square metres of solarcollector, over 900,000 are swimming poolcollectors, but you can’t earn money fromthose. A solar company can only earn moneyfrom flat (glazed) collectors. We expectthings to improve as gas prices rise over thenext 2–3 years, and when it booms we shallbe in place. But we shall wait for that to happen.’

And acceptance of renewables amongUS utilities? ‘My feeling is that the Americanutility companies are less experienced thanin Germany or in Spain. They seerenewables as more of a pilot function. Theydon’t see the potential of renewables asrealistic. But in Germany the utilities knowexactly that the potential is there forrenewables to meet 100% of the supply. If Italk with board members of a large utilityabout co-operative strategies of how we cando more renewables, then we strategizetogether. They know that our inverters arestabilizing their grids. They are used toworking with renewables now.’

‘In the US, I would say the utilities are 4or 5 years behind because there are not somany installations. In 2 or 3 years they willcatch up. But they do prefer the quota modelwhich puts them in the driver’s seat, incontrol of the complete process.’

TECHNOLOGIES TO WATCH?

Concentrating solar thermal powerHans-Martin Rüter agrees that solar thermalpower is ‘very interesting’. He wonders whymore systems were not installed in the past,but quickly provides his own answer:‘Parabolic systems need direct solarradiation, the right solar conditions – that’swhy you need to look to Mediterranean, USand so on. But in the past there has been nofeed-in tariff or positive policy in places withthose conditions. The start of the Spanishfeed-in tariff for solar thermal power was theRenaissance for these technologies.’ Heexplains: ‘You need to have an economicbalance sheet – the cost of these projectsrequires the investment of several hundredmillion euros, so for it to be worth investingyou need the right conditions.’

When does he think this technology willbecome competitive? ‘If the fossil pricescontinue to rise, then in some markets withhigh direct solar radiation we will see lowerprices coming from solar thermal powerplants than from fossil. In regions with highdirect radiation we will see an explodingmarket in next 10–15 years – but not in thenext five years!’ Plants built in the next fewyears will be reference systems, he explains.

Conergy itself is working on differentdevelopment stages of solar thermal powerprojects in Spain, the US, North Africa,Turkey, Australia. ‘In the next two years weshall see a lot of projects ... we can sayconfidently that we have the right team onboard to engineer a lot of these power plants– they have come from institutes, fromcompetitors’, says Rüter.

Solar coolingSolar cooling fits well into the Conergy‘cross-selling’ strategy. In Spain, explainsHans-Martin Rüter, ‘they don’t just want hotwater, but cooling. There is a big problemwith power peaking – but using PV togenerate power for air conditioning is tooexpensive. However, to create cool waterdirectly on the rooftop is relatively cheap,and you can feed this very cold waterdirectly into air conditioning. ‘That's how ourthinking is’ explains Rüter. ‘To go to acustomer, find out their requirements – herethey need hot water, there they need cooling.That’s why we invest a lot in technologies.We buy technologies, buy licences andpatents. What do they want? They wantplug-and-play systems in combination withair conditioning systems. And packages areneeded for the less industrialized countries,in particular.’

Does he have a view on the potential ofcooling for the US market? ‘Definitely, weare tracking this with former Dankoff team –and if we find the right solution for solarcooling, could have a huge market. We arestarting with our first installations in Europeso we can get on with them now, but don’thave a US product yet because of thecertificates. Maybe by summer 2007 couldtake a product into the US.’

‘Our teams in the US are trained and arestarting to talk to customers to begin tounderstand their requirements. So when wedecide to roll out cooling in the US they willknow everything about the customer needand will be able to come up with goodholistic systems. We have access to all ofthe fitters and the end customers. We’ll beready.’

Hans-Martin Rüter is CEO and Founder of Conergy.

web: www.conergy.de

Jackie Jones is Editor of Renewable Energy World.

e-mail: [email protected]

■ To comment on this article or to see relatedfeatures from our archive, go towww.renewable-energy-world.com

• Founded in 1998 • Expected turnover in 2006: €800

million• Geographical reach: 22 countries in

five continents• Over 1200 employees• Technologies offered: solar PV,

solar heating and cooling, windpower, bioenergy

• Business units: AET (wholesale)offers support for systemintegrators and installers.SunTechnics offers engineering andservice to private and commercialroof owners. voltwerk AG servesprivate investors in closed funds inthe renewable energies sector. Asan original equipment manufacturer,Conergy is orientated towardsindirect sales and distribution viawholesalers.

• Included in the 2006SustainableBusiness.com list of theworld’s 20 most sustainablecompanies

• Products: Inverters, solar thermalcollectors, mounting systems,Sunreader and Conergy planner.

• Manufacturing: at three plants inGermany: Hamburg, Rangsdorf(near Berlin); Bad Vilbel (nearFrankfurt).

CONERGY IN BRIEF

INTERVIEW Blazing a trail

46 ● RENEWABLE ENERGY WORLD ● September–October 2006

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48 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Small wind rising?

As interest in micro-generation continues to increase, Jon Slowe reviewssome of the main players in the rooftop turbine field, and provides someinteresting insights into the future of the building-mounted wind powermarket.

Micro-wind – small wind turbines rated at fewkilowatts and below – is currently receivingincreasing amounts of attention. In the UKespecially, there is considerable excitement aboutthe potential to mount such products on buildings,

with the lure of mass markets and sales of tens of thousands ofunits a year attracting many developers to the area.

Elsewhere, manufacturers in Japan are bringing out newproducts and targeting sales of several thousand units a year,while in the US, Southwest Windpower has recently raisedUS$8 million to support the launch of its new Skystreamproduct designed for the residential market. However whilethere is definitely interest in small wind in the US and Japan,there is less excitement about mounting micro-wind turbineson buildings than in other regions, particularly in someEuropean countries.

Delta Energy & Environment, a research and consultingcompany specializing in decentralized energy, has recentlycompleted a multi-client study entitled Roof Top WindTurbines: A Product for Mass Markets?, examining thepotential for building-mounted micro-wind turbines. Itidentifies over 20 companies developing or manufacturingmicro-wind products, many of which are targeting building-mounted applications. Including very small products (less than0.5 kW) increases this number to over 35.A number of thesecompanies have been selling products for years (with themajority of activity to date in the US and Japan), although most

of these products have been designed for battery charging andvery few installations have been on buildings.

Will a large market for building-mounted wind turbinesdevelop? Opinions on this are polarized, with some believingthat low wind speeds (amongst other issues) will see thismarket flop on its face, whilst others predict paybacks as lowas five years and see a huge appetite for homeowners andother building owners wanting to generate their ownelectricity.

Two companies – Windsave and Renewable Devices, bothbased in the UK – are amongst those furthest ahead indeveloping products for building-mounted applications. Bothcurrently say they have in the region of one hundred productsinstalled on buildings in the UK.

Both companies are relatively young and small. RenewableDevices,whose product is rated at 1.5 kW was formed in 2001,and has been working on a wind turbine specifically designedfor building-mounted application. Subsequently Scottish & Southern, one of the six major UK utilities, has taken a stakein the company and is distributing its products – currentlyfocusing on selling them to housing developers, the publicsector and commercial building owners rather than targetingthe homeowner market. As of mid-2006, Renewable Devicessaid it had installed over 100 units. Its product has a diameterof 2.1 metres, is rated at 1.5 kW, and has an innovative diffuserring which helps to reduce vibrations as well as potentiallyhelping to concentrate wind flows. Renewable Devices says itexpects to be selling 5000 to 10,000 units a year in the UKwithin a few years.

Windsave has developed a slightly smaller model, with adiameter of 1.75 metres and rated at 1000 W (at 12.5 m/s).Thecompany says that – like Renewable Devices – it has installedover 100 units across the UK.Windsave is looking at multipleroutes to market, including setting up installer networks acrossthe UK. Centrica, the largest electricity and gas supplier in theUK, is conducting a trial of a small number of Windsave

While there is interest in small wind in theUS and Japan, there is less excitement about

mounting turbines on buildings

Small wind rising?Is the market for building-mounted wind powerabout to pick-up?

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September–October 2006 ● RENEWABLE ENERGY WORLD ● 49

Small wind turbines on the roof of an office in London RENEWABLE DEVICES

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Setting the standard

More than 2.500 SLIM® transformers installed inside various onshore andoffshore wind turbines feeding national grids all over the world speak forthemselves - the standard has been set.

SLIM® solutions, from 630 kVA to 4.4 MVA up to 33 kV, are the result ofinnovative transformer design from Pauwels combined with the thermaltechnology of DuPont™ NOMEX® homogeneous high-temperature insulationsystem (according to IEC 60076-14). This smart partnership between twomarket leaders has resulted in effective space management, increasedreliability and first-class performance.

Compact, light, vibration-proof, safe and environmentally friendly, SLIM®

transformers also have low losses, high efficiency and exceptionally low cost of ownership.

That’s why the Pauwels SLIM® transformer is the reference for your windturbine applications.

SLIM® is a registered trademark of Pauwels International N.V.

DuPont™ and NOMEX® are registered trademarks of DuPont or its affiliates.

Pauwels International N.V. - Antwerpsesteenweg 167B-2800 Mechelen - Belgium - Tel. + 32 15 283 486www.pauwels.com - www.nomex.com - [email protected]

Pauwels SLIM® Transformer

The reference for your wind turbine

Pauwels is a wholly-owned subsidiary of Crompton Greaves Ltd.

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products. Windsave is planning a product launch in August2006, and says it will float on the UK’s Alternative InvestmentMarket at a similar time to give it the capital to ramp up sales.It says it expects to sell around 20,000 units after its productlaunch.

In addition to these companies there is a flurry of activityfrom others keen to get into the market. They fall into twocategories. One is established wind turbine manufacturers thathave, to date, mostly installed their product on free-standingpoles; the second is new entrants to the wind turbine industry.

Established micro-wind turbine manufacturers operate in amature market, with applications including yachts, remotetelecommunication sites, both off-grid and grid-connectedhomes, and powering street lights (particularly in Japan).Some manufacturers have already installed a small number oftheir products on buildings, such as two of the marketleaders, Bergey Windpower and Southwest Wind Power.However a number of these companies are wary of noiseand vibration issues, and of the limited wind resourceavailable over rooftops. Two of the establishedmanufacturers which are more bullish about theopportunity for building-mounted systems are UK-basedAmpair, and Japan-based Zephyr. Both are developing modelsand fixings for mounting on buildings. Zephyr has developedan 1 kW wind turbine branded Air Dolphin, which it says issuitable for building mounting.

There are a large number of new entrants to the windturbine business focusing on building-mounted applications,attracted by the potential size of the market. Companies areworking on a variety of designs (vertical axis – both lift anddrag – and horizontal axis machines), with some targetinghouseholds and others targeting larger commercial buildings.One of these companies is Turby,which has installed a numberof its vertical axis turbines on buildings in the Netherlands.

So how big is the opportunity for building-mounted windturbines? Based on the number of buildings and growinginterest in environmental issues from energy users the

potential market is extremely large. But there are severalchallenges for product developers and manufacturers toovercome, and a number of limiting factors that will constrainmarket size.

Critical technical issues that must be addressed includenoise and vibration, fixings and the inverter and controller.Wind turbines will always vibrate, and these vibrations will betransmitted to the building unless steps are taken to minimizevibration and transmission of these vibrations to the building.The fixing of the pole on which the turbine is mounted to thebuilding must be strong enough to resist both static anddynamic forces, and the building must be strong enough toabsorb such forces. Most installations of building-mountedwind turbines in the UK have, to date, been preceded bystructural engineering surveys to examine the impact of thewind turbine on the building.With the wind turbine possiblyjust metres away from bedroom windows,noise from the windturbine must also be controlled to acceptable levels. Productdevelopers have also found an absence of efficient invertersand controllers suitable for connecting the micro-windturbines to the grid, with a number of companies developingtheir own solutions.

The major limiting issue that may constrain market size isthe state of the wind resource over roof tops.There appears to

be little understanding of this resource and the mechanicswind-flows over roof tops. Some commentators believe thatthere will be so little wind, and what wind there is will be soturbulent (affecting horizontal axis but not vertical axismachines) that micro-wind turbines mounted on buildings willgenerate relatively little energy.Others point to the theory thatbuildings can actually enhance wind speeds. (For moreinformation on issues surrounding wind flows in the urbanenvironment, see article by Eize de Vries, page 56.)

Estimates made by manufacturers, developers and others

September–October 2006 ● RENEWABLE ENERGY WORLD ● 51

Small wind rising? WIND

ABOVE The1.5 kW SWIFT wind turbine. The company is also developing a smallerproduct, rated at 1 kW RENEWABLE DEVICES BELOW A micro turbine installed on a rooftop inScotland WINDSAVE

Centrica, the largest electricity and gassupplier in the UK, is conducting a trial of a

small number of products

Developers have found an absence of efficientinverters and controllers suitable for

connecting micro-wind turbines to the grid

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for annual energy production from building-mounted windturbines range from around 800 kWh to 3000 kWh for 1 kWrated products, with the majority of estimates lying in the1000–1500 kWh range. Little data exists for wind speeds overbuildings, and what data is available suggests figures at thelower end of the above ranges. In urban areas the ‘roughness’of the landscape,turbulence and wind shadowing may result inrelatively low levels of energy production.

Planning permission is another limiting factor – although in

the UK the Government is about to review whether planningpermission should still be required for microgeneration(including micro-wind turbines).

The economics of micro-wind depend critically on howmuch energy is produced,together with a number of other keyfactors, with capital costs, installation costs, and maintenancerequirements highly significant.Market research carried out byDelta suggests that a mass market will only develop if paybacksfall to five years or below.However further modelling by Delta,shown in Figure 1, shows that only with very aggressiveassumptions do paybacks fall to five years. Under otherscenarios developed by Delta they are much longer, in somecases well over ten years. Whilst the critical influencers of

economics have been examined in detail by Delta, it is too earlyto say with any certainty what typical paybacks will be,although we doubt that at least in the next few years they willbe sufficiently low to excite the mass market.

There will be, however, a sizeable market of innovators andearly adopters for building-mounted micro-wind productswilling to tolerate longer paybacks. In the UK, housingdevelopers are being increasingly pushed into adoptingrenewable energy technology, although it is not yet clear howwell micro-wind will compete against other options.Amongsthomeowners, there is a segment of the market with strongenvironmental motivations that will tolerate long paybacks andsome forward thinking local authorities and housingassociations are already trialing or about to trial, micro-windproducts on their property. Commercial organizations keen todemonstrate their environmental credentials will also be earlyadopters of these products.

Another area to watch is utility engagement in this sector.Again, UK utilities are pushing ahead most rapidly with micro-wind. Scottish & Southern, one of the six major UK utilities,

52 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Small wind rising?

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www.ampair.com0845 389 0660

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02468

101214161820

800 1200 1600 2000

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Medium caseHigh case

FIGURE 1. Projected pay-back periods for roof mounted wind turbinesSource: Delta Energy & Environment

Rooftop wind turbines on a new building in Bosnia VENEKO / BERGEY WINDPOWER

Estimates for annual energy production frombuilding-mounted wind turbines range from

800 kWh to 3000 kWh for 1 kW products

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Count on Mobil Pegasus gas engine oils for performance that’s proven to extend drain intervals in applications from gas gathering to pipelines to CHP. In Denmark, a CHP plant running around the clock doubled its drain interval from 1,750 to 3,500 hours by switchingto Mobil Pegasus 905. It reduced oil consumption by 18,000 liters over 20,000 hours. Mobil Pegasus lubricants resist breakdown inhigh heat longer than conventional lubricants and provide superior protection, to help your equipment last longer. Mobil. Over fourdecades of gas engine oil innovation, backed by an expert team of engineers. For more information, log on to www.mobil.com.

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Page 56: REW_20060901_Sep_2006

plans to install a few thousand of Renewable Devices’ micro-wind products over the next few years, and three other majorUK utilities (including Centrica) are currently trialingproducts. With their marketing power, utilities have thepotential to give this sector a major push. Outside of the UKthere is little engagement of utilities with building-mountedmicro-wind products.

As mentioned, the UK is currently the centre of building-mounted micro-wind activity. But why is this so, and will othercountries follow? The interest in micro-wind is part of a widerinterest in micro-generation, encompassing residential scalecombined heat and power units (micro-CHP) and other forms oflow carbon heat and electricity generating products. In the lastfew years the micro-generation industry – particularly thoseinvolved with micro-CHP – have successfully pushed forregulatory changes, for example allowing interconnection withthe grid (for pre-certified units) without prior permission fromthe grid operator. Micro-generation has also rapidly risen up thepolitical agenda in the UK, resulting in the Governmentpublishing a Micro-Generation Strategy in April 2006. But thequantity of micro-generation currently installed in the UKremains negligible at present, particularly in comparison to theamount of photovoltaic capacity installed in Germany and Japan.

If micro-generation does take off in the UK, we can expectto see other countries learn lessons from its experience andwork to develop micro-generation markets themselves – whichis likely to include building-mounted micro-wind wheresuitable wind resources exist.But the necessary changes to the

regulatory framework, andengagement of utilities, can takeseveral years to happen. TheNetherlands, with a strongbackground in decentralized energy,may be on of the first markets tofollow the UK. A number of micro-wind product developers targetingbuilding-mounted applications arebased in the Netherlands, with mostof these companies are focusing onmounting their products oncommercial buildings.And Japan andthe US already have establishedmicro-wind markets, and theexperience of mounting products onbuildings – if proved to be successful

in the UK – may translate itself to these markets.In Delta’s view, there are a number of key areas of

uncertainty that will affect how micro-wind develops. Marketsfor non-building-mounted systems are expected to growsteadily, with the vast majority of sales in the US and Japan.Whether or not the UK market for building-mounted systemstakes off depends critically on annual energy production,installation costs, maintenance requirements, and capital costs.

There appears to be an attractive market of early adoptersof building-mounted micro-wind products in the UK, likely tobe good for possibly as many as several thousand units a year.Whether or not a larger, mass market will develop is not yetclear. This will likely require relatively high levels of annualenergy production, manufacturers and developers achievingaggressive cost targets, simple and straightforward installation,and the requirement for planning permission being removed.As more units are deployed, the regulatory framework isreformed, and more companies bring product to market, thefuture for building-mounted micro-wind turbines will becomeclearer.We advise utilities and other stakeholders to continueto watch this emerging area closely.

Jon Slowe is a Director at Delta Energy & Environment, a research andconsulting company focusing on decentralized energye-mail: [email protected]

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

54 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Small wind rising?

ABOVE LEFT Small turbines and photovoltaics on a building in the US SOUTHWEST WINDPOWER ABOVE RIGHT The Airdolphin isanother of the new turbines bidding to enter the roof top market ZEPHYR

Catch more with Verteco power converters

www.verteco.com

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_______________

Page 57: REW_20060901_Sep_2006

You can contact us directly or through your insurance broker. For further information, visit our website at www.windpro-insurance.com

Email [email protected]

WindPro is a registered mark of WorldLink Specialty Insurance Services, P.O. Box 2877, Newport Beach, CA 92663. The services and products identified by the mark include insurance underwritten by certain underwriters at Lloyd’s and other insurers. All insurance mediation activities in the UK are carried out byWindPro as a trading name of Lloyd's broker JLT Risk Solutions Limited, 6 Crutched Friars, London EC3N 2PH who are authorised and regulated by the FinancialServices Authority. Photograph: courtesy of enXco

Delivering insurance solutionsto the wind industry

We arrange insurance for over 9,000 megawatts of wind energy worldwideWhat can we do for you?Transit Construction Advance Loss of Profits Operational Business Interruption General Liability

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US ContactsCurt MaloyTel +1 760 836 0417

Visit us at the following events:

Stand 23 at GWEC18-21 September 2006in Adelaide, Australia.

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56 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Urban challenges

In some recent research, Sander Mertens of the Dutchconsultancy DHV investigated urban wind energy, with aspecial emphasis on the ‘concentrator effects of wind’around buildings.The research begins with the assumptionthat decentralized energy production will continue to gain

importance, increasing its contribution to worldwide energydemand, and as an alternative to today’s dominant and largelycentralized power production systems. With the urgent needfor environmentally friendly energy sources, and concerns ofsecurity and supply, in the future various renewable energysources will gradually substitute fossil fuel sources as part of asmart energy mix. According to Mertens, wind energy in thebuilt environment has considerable commercial and economicpotential: ‘With wind power generation in the builtenvironment, the clean energy can be directly utilized in thebuilding or in its vicinity. It can therefore be regarded as asaving on external energy demand, meaning that from afinancial point of view each kWh generated by the wind plantcan be valued at a much higher customer price than otherwisehas to be paid to the power utility.And as the energy becomesavailable close to where it is needed, power transport lossescan be greatly reduced.’

In the study, Mertens identifies three distinct types ofbuilding integrated wind power:

• installations on the roof or at the side of existing buildings• installations between two airfoil-shaped buildings• installations in a duct through a building.

ROOF TOP MOUNTING

The first stage in the urban development of wind power –and the one which is currently starting to be realized – is to

put small wind turbines (~0.1–10 kW) on top of existingbuildings.The Netherlands is one of the pioneer countries inthis type of development, and over the last few years severalsmall companies have developed and installed a limitednumber of turbines on buildings such as schools, offices, andapartment blocks. These turbines comprise a variety ofmodels, such as H-Darrieus type rotors in vertical-axis (i.e.2.5 kW Turby) as well as in lying horizontal-axis position (i.e.modular designed WindWall). In addition some‘conventional’ horizontal-axis wind turbines, featuring ayawing mechanism to redirect the rotor continuously to thewind (i.e. Fortis, Provane, and WES Tulipo) have beeninstalled.

‘Optimized urban wind turbine placement on a buildingroof is not as simple as it sounds’, says Mertens, explaining oneof the complex issues he tackled in his PhD. ‘Average windspeeds in the built environment are relatively low due to amuch larger surface roughness compared to wind conditions isopen rural areas. In cities, buildings and other obstacles slowdown the wind speed and increase overall turbulence, whileon building roofs, obstacles like chimneys and technicalinstallations affect local wind conditions. In other words, roofsare structures with their own individual micro-wind climatethat determines the actual wind speed and overall wind flowpattern.Acceleration of air flow around sharp building cornersis a well known phenomenon.At the leading roof edge facing

Small, building-integrated wind turbines are attracting an increasingamount of attention as a possible source of decentralized renewablepower. Here, Eize de Vries presents some recent research into theperformance and potentials of building-integrated wind, and explainssome new systems which have been designed to model air flows in theurban environment.

Urban challengesNew research on integrating wind energy inbuildings

‘Optimized urban wind turbine placement on abuilding roof is not as simple as it sounds’

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September–October 2006 ● RENEWABLE ENERGY WORLD ● 57

Computer generated image of the proposed world trade centre in Bahrain, one of a number of concept designs for buildingintegrated wind turbines MUHARRAQI STUDIOS / KHALID AL-MUHARRAQI

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the main wind direction flow, separation occurs and a highlyturbulent low wind speed zone close to the roof surface willbe formed.Above this so called separation bubble,a noticeableacceleration in wind speed is introduced (Figure 1). If a windturbine rotor operates within the highly turbulent air bubble,heavily increased material fatigue can cause the installation tophysically disintegrate within a short period.’

Buildings that are higher than surrounding structuresblock the wind and cause the undisturbed wind speed farupwind to accelerate near the building. Mertens:‘One shouldbe aware of the fact that the airflow is not able to follow sharpbuilding contours and the majority of today’s utility and otherbuildings are simple rectangular blocks with sharp edges.Thisphenomenon whereby the air flow is not able to follow asharp contour is called separation and it creates a local lowspeed zone close to the roof of a sharp edged building.’

These findings have influenced some of the designparameters of Turby and WindWall turbines, both specificallydesigned for roof edge placement, and both aimed atbenefiting from the resulting accelerated airflow.Assume, forinstance, that the inclined accelerated air flow over the roofedge increases by 25%, then the power generation potentialincreases by 95% compared to ‘undisturbed’ horizontalairflow.This sharp rise in output occurs because the powerin the wind increases by the wind speed cubed.

By contrast inclined air flow on ‘conventional’ horizontal-axis wind turbine rotors placed on a roof edge is known tosubstantially reduce energy yield. For these turbines, the high-

turbulence environment on building roofs results in continuousrotor yawing movements.This negatively affects power output– due to continuous rotor acceleration and deceleration – andreduces operational life time of the installation.

Another point stressed in Mertens’ work is that windflow on building roofs originates from multiple directions.Based on his research, Mertens favours the use of either H-Darrieus or ‘classic’ Darrieus rotors at roof edges placed invertical-axis mode. He said: ‘WindWall type turbines withfixed horizontal-axis roof mounting can only benefit fromwind blowing perpendicular on the rotor and from only onemain direction.The yield potential per m2 rotor swept area istherefore only 25%–50% compared to an H-Darrieus or"classic" Darrieus rotor with a similar rotor swept area.’

When wind turbines are put on flat-roof buildings,Mertens recommends that the lowest rotor blade tip isalways positioned well above the outer contours of theturbulence ‘bubble’. For example,when the roof width in themain wind direction measures ‘A’ metres, a first indicativerule of thumb is to place the turbine in the middle or at 0.5A. In this position the installation can benefit from windblowing from two opposing (main) directions while

operation in the destructive high-turbulence and low-energyarea is avoided. The vertical distance between the roofsurface to the lowest blade tip should finally be chosen at avalue of minimal 0.5 A.

MIXED RESULTS FOR URBAN WIND

Experiences with roof-mounted urban wind turbines in theNetherlands have so far been mixed at best, says Mertens.‘These turbines have to be custom designed for this specificapplication, and adapted to a high degree of turbulence andrelatively low average wind speeds.Experiences over the pastyears in The Netherlands show that many of these “firstgeneration” urban wind turbines were (for various reasons)not always put on the most suitable buildings or the best roofspots from a potential yield perspective point of view. Thissub-optimized urban wind turbine siting can be attributed toa variety of reasons. These include obstacles in obtainingpermits, building owner preferences and local politicalpressure to do “something good for the environment”. Somebuilding owners also attempt to keep the wind turbine nearlyinvisible to avoid criticism, and there have always beencommercial pressures with (small emerging) equipmentsuppliers to deliver. A second point is that development ofwell performing and reliable urban wind turbines proves, inpractice, to be technically complex, costly and time-consuming process, especially for the small companies.Third,overly optimistic but inexperienced manufacturers morethan once came with totally unrealistic energy yield potentialclaims for their products, often prototypes with little to notrack record.’

58 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Urban challenges

FIGURE 1. Airflow over building roof edge (Computational FluidDynamics calculation). Source: DHV

The windwall turbine is installed at the edge of a building to take advatage of localizedair-flows WINDWALL

Experiences with roof-mounted urban windturbines in the Netherlands have so far been

mixed at best

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According to Mertens this combination of factors hasalready had a negative effect on the reputation of urban windenergy in the Netherlands and he feels that poorly performingturbines, and the practice of putting installations more or lessat random on building roofs are the two key factors to blamefor the current loss of market confidence.

Speaking on this subject Mertens said: ‘At DHV wedeveloped a computerized Computational Fluid Dynamics(CFD) calculation tool, which visualizes the wind flow patternaround a given building as part of its physical environment(buildings and other obstacles). With a CFD calculation, thewind flow pattern on and around a specific building can bevisualized and quantified relatively cheap and fast. It alsoprovides information on the best location to put an urban windturbine.This package includes average wind speed distributionalong the entire building roof edge and over the roof itself.’Mertens goes on, saying that by using the CFD methodology,not only a specific building is examined but also thesurrounding physical environment is included. It is thereforean excellent alternative to the much more costly and timeconsuming practise of testing a building model (scale-model)and its surrounding infrastructure in a wind tunnel. He

concludes:‘With the new method DHV and its partners hopeto greatly improve the process of determining the bestlocations for wind turbines in the built environment. This inturn will boost the technical and economic potential of urbanwind energy projects, and thereby commercial opportunitiesfor emerging equipment suppliers. Our new method has beenput in practice already several times. One recent example is aCFD analysis of a four-storey educational building in Rijswijk,near The Hague.’ (See boxed text below).

BUILDING INTEGRATION

Putting urban wind turbines on roofs is still in an early stage ofdevelopment, says Mertens. In future, buildings might beconstructed with wind turbines integrated into the structure(or in the middle of twin-tower structures). The aim in suchconcept buildings is to benefit from the wind speedacceleration induced by a specific building shape. Suchintegration of wind turbine(s) with buildings is also a muchmore radical and adventurous approach compared to putting awind turbine on a building roof.

60 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Urban challenges

Almost everyone is familiar with the large and frequentchanging wind speeds close to buildings, particularly if youhave lost the odd umbrella as the result of a sudden gustfrom an unexpected direction. The acceleration ofundisturbed wind speed is visualized by results of a CFDbuilding calculation carried out by DHV (ISO-surface with avelocity of 6 m/s. The illustration clearly shows that thebuilding moves high wind velocities downwards).

Apparently, large buildings in the built environment causean acceleration of the low average wind speeds. This windspeed acceleration caused by nearby buildings could intheory be utilized in order to boost energy output of buildingmounted wind turbines.

In the following pictures, the educational building inRijswijk, Netherlands, is shown. This building (shown yellow)is surrounded by other building blocks and some trees(shown as green screens). The two little towers on the roof ofthe educational building represent the elevators, and arelatively large advertising screen is show as a wire screen atthe right site of the long roof section edge.

The influence of the advertising screen is clearly visible onthe CFD results for two opposite wind direction perpendicularto the long roof sites. When the wind comes from the right(picture) the advertising screen poses a major obstacle to thewind flow. In this specific case and also in general relativelysmall local obstacles on a roof apparently do have greatinfluence on prevailing wind velocities.

Mertens: ‘Based on the above figures the energy yield of arooftop wind turbine with moderate dimensions in theNetherlands is in the range of about 100–300 kWh/m2/year.

Average energy yield of large wind turbines in rural areas ofthe Netherlands is by comparison about 1000 kWh/m2/year.But the energy reimbursement of a roof mounted windturbine is typically three times higher. My conclusion istherefore that the economic potential of small rooftop windturbines by assuming an optimized location and well-performing equipment is comparable to that of a large windturbine in open areas.’

CFD CALCULATION EXAMPLE: FOUR-STOREY EDUCATIONAL BUILDING IN RIJSWIJK, NETHERLANDS

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For the majority of wind turbine designers, as well asarchitects and civil engineers, the concept of integrating a windturbine into a building is pretty new. Integrating two different

technologies requires new ways of thinking from allparticipants. This includes developing new competence indealing with complexities in the field of costing in relation tobuilding shape and user functions.A 2002 MSc research projectco-ordinated by Mertens and carried out by Anne Jan Breimer atthe Technical University of Delft looked into structural buildingaspects of the integration of a wind turbine in a building.

Besides generating clean energy, a so-called Wind TurbineBuilding (WTB) might be attractive for organizations interestedin creating a positive image of socially and environmentallysensitive entrepreneurship. Modern high-rise buildings areincreasingly characterized by unusual shapes and strikingdesign features and seem a good target for building integratedwind power.The interaction between the specific image of abuilding and user functions may result in positive added valueeffects and new unexpected wind turbine features and designoptions. On the other hand key functions of a building withintegrated wind power should remain – a cost-effective system(compared with other renewable energies) that is capable of

generating a sizeable proportion of its internal energy use!One of the potential side-effects which needs to be avoided

in WTB is wind turbine induced vibrations on the building.Buildings usually have a frequency in the range between 1.0and 10 Hertz.A 100 metre high rise building on the other handhas a typical eigenfrequency range between 0.5–1.0 Hz, but atthe same time a huge mass moment of inertia.This means inpractice that such a high-rise building is insensitive to windturbine induced vibrations, provided the eigenfrequencies arenot in the same range. That is to say, when only the firsteigenfrequency and high wind speeds are taken into account.Individual construction elements of a building have their ownspecific eigenfrequencies. For many of these elements avibration frequency level below 3–5 Hz is consideredunacceptable from a material fatigue point of view. However,besides the actually measurable vibrations and their potentialimpact on the building structure, vibration perception bypersons working in a WTB should also be taken into accountand is an aspect that certainly should not be underestimated.All these potentially conflicting WTB demands necessitatestructural adjustments or even new construction methods forfuture wind turbine integrated buildings.

CONCLUSIONS

Breimer’s main conclusion was that a technically perfect andaesthetically pleasing integration of a wind turbine into abuilding structure is only feasible when major structural andfunctional modifications are accepted as a given consequence.

He concluded that the findings on subjects covered in theresearch project were in general positive. From a structuralpoint of view the biggest problems with turbine integrationcan be expected to stem from dealing with dynamic loads.Additional research will be needed to show whether theseproblems can be solved and at what costs.

Breimer believes that the first group of potential investorsin WTBs are likely to be those individuals or groups with a keeneye on image-related aspects. Future WTB’s have the potential

62 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Urban challenges

The Tupilo turbine is one of a number of conventional type turbines designed for urbanuse WES

For the majority of wind turbine designers theconcept of integrating a wind turbine into a

building is pretty new

________________

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BWEA28Securing Our Future

Organised by:

Image © Stuart Franklin/MAGNUM PHOTOS

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to have positive impact on the general perception andacceptance of the public regarding renewables and especiallywind energy technology applications. Actual energy outputwill finally depend to a great extend on the actual location.

An essential subject that requires further research is therelationship between investment cost for the wind installationin a WTB, and additional costs for installation upkeep duringthe entire operational lifetime. Other factors to be consideredinclude the loss of valuable floor space, set against envisagedfinancial income from wind energy generation.4

The WTB research views are largely shared by the findingsof a second research group that also worked on wind turbineintegration in buildings. Between 1998 and 2000 fourEuropean organizations worked on this EU Joule III researchproject titled Wind Energy for the Built Environment (WEB).Partners included the Imperial College London, BDSPPartnership also from the UK, Stuttgart University, and Dutchengineering consultancy Mecal Applied Mechanics BV. 5

One of the conclusions was that an urban wind turbinecan induce harmful vibrations in the building structure. Asecond potential risk factor is the (slim) possibility of disaster

as a result of a major calamity with the wind turbine. If forinstance a broken rotor blade hits a car parked near thebuilding and the fuel tank explodes, consequential damagemay be more serious than the single impact of the initialevent.An important question during our research project wastherefore developing a long term strategy on the urbanturbine technology development. Equally important is theembedding into the urban environment, including adetermination of acceptable risks and how to deal with them.The experts also believe that risks attached to operation urbanturbines should be seen in a wider perspective, as also‘conventional’ large wind installations are sometimes builtnear roads and other infrastructural objects.

A more fundamental question raised is whether small urban

64 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Urban challenges

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Testing the aerodynamics of a building integrated wind turbine in a wind tunnel DHV

It should be avoided that owners simply buy aturbine, and integrate it with buildings that

cannot be called energy efficient

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turbines themselves as a phenomenon are practically feasible.For instance it should be avoided that owners simply buy anurban turbine for status reasons, and integrate it with buildingsthat cannot by any standards be called energy efficient. Or asthe WEB co-ordinator put it:‘Our view point is that integrationof wind turbines in buildings can only be effective when it isan integral part of an energy efficient building. In other wordsthere needs to be a realistic and credible ratio between thewind power generated and the energy use of a building.’

A major challenge was integration of shape and functionregarding working and living conditions on the one hand andwind power generation on the other. Popular block typebuildings are not only functional, but also relativelyinexpensive to build. From an energy efficiency point of viewblock type shapes offer a favourable ratio between volume asa measure of usable floor space and energy loss through wallsand building roof. The coordinator again: ‘For optimizedpower generation capacity a building with an air foil shapecan offer certain diffuser type advantages for wind turbineintegration. From a practical building use point of viewhowever, an airfoil is not the first choice as it offerscomparatively little usable floor space for relatively highcosts.And due to the unfavourable volume/wall surface ratioheat loss in winter and climate control in summer are bothmuch harder to control.’

Mertens is in full agreement with these opinions aboutbuilding-integrated wind turbines. He concludes thatalthough DHV is actively involved with the design of morethan one building with integrated wind turbine, the projectstages are just too early for this article.

Eize de Vries is Wind Technology correspondent for Renewable [email protected]

Sander Mertens is an expert on urban wind energy application and a senioradvisor with the leading Dutch engineering consultancy DHV’s ‘SustainableWind’ group (www.windadviseurs.nl) based in The Hague. Mertens recentlycompleted a PhD thesis on urban wind energy applications at the TechnicalUniversity of Delft with a focus on ‘Concentrator Effects of Buildings’.

LITERATURE

1. Mertens, S. Wind energy in the built environment; Concentrator effects of

buildings, Published by Multi-Science (UK), ISBN 090652235 8, September 5,

2006

2. Breimer, AJ. MSc Thesis Part I: Integratie van windturbines met gebouwen

‘Voorstudie naar het ontwerp van een WTG’ [Translation: Integration of wind

turbines in buildings ‘Wind turbine pre-feasibility study’]

3. Breimer, AJ. Thesis Part I: Integratie van windturbines met gebouwen ‘Ontwerp

van een WTG’ [Translation: Integration of wind turbines in buildings ‘Wind

turbine design’]

4. Vries de, E. Urban turbines (Part II): Integrating wind turbines in high rise

buildings. WindStats Newsletter, No. 2/2002

5. Vries de, E. Wind turbines in urban environments. WindStats Newsletter, No.

4/2001

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 65

Urban challenges WIND

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Silicon shortage PHOTOVOLTAICS

As the photovoltaic industry continues its explosive growth, thecontinuing shortage of silicon threatens to slow growth and push upprices. Hilary Flynn and Travis Bradford examine the silicon situation andlook at the industry’s plans to ramp up production in the next few years.

The solar photovoltaic (PV) industry has growntremendously over the past decade,with annual growthrates of 30% or more.The industry’s rapid expansion isdirectly linked to government support programmes, asmore and more governments grasp the critical role that

solar will play in addressing climate change and enhancingenergy security.Future growth,however,will be constrained aslong as refined silicon, the building block of most solar cells,remains scarce and increasingly expensive.

While solar cells can be made with a variety of differentsemiconductor materials, refined silicon, also calledpolycrystalline silicon, served as the primary feedstockmaterial in 94% of the photovoltaic cells produced worldwidelast year. Historically, the electronics industry was the mainpolycrystalline silicon consumer and the PV industry wascontent to take scrap or off-spec material at lower costs. Since2004, unexpectedly strong growth in silicon demand from thePV industry in Japan and Germany – and more recently fromemerging PV markets such as Portugal, Spain, and the State ofCalifornia – has exceeded the scrap supply,as well as exploited

the spare production capacity that polycrystalline siliconmanufacturers carried over from the technology bust of 2001to 2003.Buyers have now drawn down nearly all of the world’savailable inventories of polycrystalline silicon, and as a result,there is little remaining cushion in the supply chain. Currentbulk silicon producers are running at maximum capacity tokeep up with promised deliveries to wafer and cellmanufacturers.Reports of unfulfilled silicon commitments,andof shipments not reaching intended customers, areincreasingly common. At many of the industry’s majorcompanies, some wafer and cell production capacity isreported to be idle. The silicon shortfall, combined with themore than 100% increase in price since 2003, is fundamentallyaltering the PV industry, its prices, and its strategies forcontinued growth.

After an initially slow recognition of the potential supplyshortfall, the silicon producers are finally beginning torespond, as the recent spate of new polycrystalline siliconproject announcements demonstrates. From April to July 2006,more than dozen companies announced over 50,000 tonnes ofpotential additional polycrystalline silicon production capacityset to come on-line over the next four years, almost twice whatwas produced in 2005. While this sounds encouraging, therealistic supply of polycrystalline silicon that is ultimatelybrought online, however, may be very different than whatthese potential supply announcements promise.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 67

Silicon shortageSupply constraints limit PV growth until 2008

After an initially slow recognition of thepotential supply shortfall, the silicon

producers are finally beginning to respondRaw silicon ready to be cast in to polycrystalline silicon ingots WACKER CHEMIE AG

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POLYCRYSTALLINE SILICON PRICES

According to Michael Rogol, a PV industry analyst, prices forsilicon have increased dramatically over the last few years.Theaverage price for solar grade silicon has gone from US$24/kg in2003 to $45/kg in 2005, with prices projected to reach $60/kgin 2007. Jesse Pichel, an analyst at Piper Jaffray who follows thesolar energy industry, estimates that current contract pricescould run even higher.He estimated that in 2005 contract pricesfor silicon, which do not separate solar grade from electronicsgrade because with demand so high the two are fungible,wouldbe $55–65/kg. For 2006 he estimates contract prices at$65–75/kg, and forecasts $70/kg for 2007. In discussions withbuyers and sellers of polycrystalline silicon,we learned that spotmarket prices are markedly higher at $200/kg or more.

A number of companies are attempting to increase theirsupply of polycrystalline silicon in response to rising prices,but silicon processing is a highly capital-intensive endeavorwith long lead times. After several years of uncertainty, theindustry is generally accepting that the silicon supplyconstraint will be nearly (perhaps completely) alleviated bythe end of 2008 through dramatic expansion plans announcedby existing producers (and some new entrants). These are

examined, company by company, below.Whether the plannedcapacity comes online in the time frame indicated remains tobe seen. Meanwhile, concerns remain about the consequencessustained high feedstock prices will have for the cell andmodule producers in the interim.

POLYCRYSTALLINE SILICON SUPPLY – TOP SEVENPRODUCERS

Just seven companies dominate worldwide polycrystallinesilicon capacity; these companies are clustered in threecountries, the United States (54% of production), Japan (24%),and Germany (18%). In 2005,polycrystalline silicon productioncapacity was 31,280 tonnes, 31,150 tonnes of which was fromthe top seven producers (Figure 1).

Hemlock, in the US state of Michigan, captured 25% of theworld market with 7700 tonnes of production capacity. Thecompany plans to increase capacity to 19,000 tonnes by 2010,and is in the process of selecting a location for a newpolycrystalline silicon plant.

Wacker Polysilicon has one polycrystalline siliconproduction facility in Burghausen, Germany. Its 2005production capacity was reportedly 5500 tonnes, which itplans to increase to 6500 tonnes in 2007. Wacker anticipatesfurther expansion to 10,000 tonnes in 2008, and an additional4500 tonnes online by 2010.

The Norwegian Renewable Energy Corporation (REC) has,over the last few years, purchased two polycrystalline siliconproduction facilities, both in the western US. According to acompany representative, the company produced 2800 tonnesof electronic grade silicon (EG) and 2500 tonnes of solar gradesilicon (SoG) in 2005. REC recently announced that it willmove forward with the construction of an industrial-scalefluidized bed reactor (FBR) polycrystalline silicon facility inWashington State.With this new plant,and with small increasesin production at existing facilities, REC will have over 12,000tonnes of capacity by 2010.

Tokuyama, of Japan, had a production capacity of 5200tonnes in 2005. Tokuyama also has a 200 tonne pilot plantusing vapour-to-liquid deposition (VLD) technology,which it is

68 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Silicon shortage

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020

0040

00 6000

8000

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0

12,00

0

14,00

0

16,00

0

18,00

0

20,00

0

Other

ELKEM

Total China

Sumitomo

Mitsubishi

MEMC

Tokuyama

REC

Wacker

Hemlock

2005 2006 2007 2008 2009 2010

Current and projected production capacity (tonnes)

FIGURE 1. Polycrystalline silicon capacity 2005–2010A mere seven companies dominate worldwide

polycrystalline silicon capacity

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perfecting.While the company is reluctant to disclose when itwill be able to move VLD to industrial-scale production, NEDO(New Energy and Industrial Technology DevelopmentOrganization), a collaborator on the VLD project, indicated thatif the process can be fine-tuned,a production capacity of a fewthousand tonnes could be available in 2008.

MEMC currently produces polycrystalline silicon in the USand Italy, but may build a third plant as it increases capacity.Between the two facilities,MEMC had a production capacity of3800 tonnes in 2005, which the company hopes to expand toa total capacity of 8000 tonnes by 2008. MEMC has causedquite a stir in the industry by failing to deliver 52 tonnes under

contract to Evergreen and signing an agreement with Suntechto provide the Chinese cell manufacturer with wafers over a10-year period.

Mitsubishi Materials Corporation owns two polycrystallinesilicon companies, one in the United States (MitsubishiPolycrystalline Silicon America Corporation),with a capacity of1250 tonnes and the other in Japan (Mitsubishi MaterialsPolycrystalline Silicon Co.) with a capacity of 1600 tonnes.Construction of a 300 tonnes expansion project is underwayfor the US company, but Mitsubishi Materials plans noadditional capacity.

According to a company representative, SumitomoTitanium Corporation of Japan caters to the electronicsindustry. It had a production capacity of 800 tonnes in 2005and plans to increase capacity to 900 tonnes in 2006.Sumitomo recently announced that it will add another 400tonnes by 2007.

By 2010, these seven companies expect to have acombined production capacity of over 60,000 tonnes, nearlydouble their 2005 level. Nevertheless, their slow response tothe need for more silicon,coupled with the potential long-termmarket growth and profitability, has prompted othercompanies to enter into the polycrystalline silicon business.

POLYCRYSTALLINE SILICON SUPPLY – EMERGINGPRODUCTION

In addition to the major expansion announcements from manyof the larger polycrystalline silicon producers, several newcompanies are attempting to enter the polycrystalline siliconbusiness with both traditional and new methods ofproduction. The most notable of the new entrants is ElkemSolar, a division of the Norwegian chemical conglomerateElkem, which is currently in pilot scale production but whichwill enjoy 12% of the market in 2010 if its expansion plans arerealized.A company representative anticipates that Elkem willhave 2000–3000 tonnes of SoG silicon production capacity in2007, ramping up to 10,000 tonnes by 2010.The scale of thisproduction expansion rivals the two largest of the existingmajor players, Hemlock and Wacker.

Other, smaller, new entrants such as M.Setek, a Japanesesilicon wafer-maker, are also reportedly entering intopolycrystalline silicon production. M.Setek’s initial product isestimated to be available in 2007, with a target productioncapacity of 3000 tonnes by 2010 (though when we contactedM.Setek the company declined to comment). Also, a jointventure between SolarWorld and Degussa – Joint Solar SiliconGmbH – will move from pilot-scale production to industrialscale silicon production,according to a June press release fromSolarWorld. Large-scale production will begin in 2008 with acapacity of 850 tonnes. JFE Steel Corporation also announcedat the end of July that it has begun construction of a 100 tonnessolar grade polycrystalline silicon facility.

A joint project between Spanish cell-maker Isofotón, theAndalusian government (Department of Innovation, Scienceand Business) and Endesa, a Spanish utility, will result in thefirst Spanish polycrystalline silicon plant, with an anticipatedcapacity of 2500 tonnes. This announcement has excitingimplications for the PV industry, as the consortium will notonly supply much-needed solar grade silicon,but is also locatedin a region poised to be the next big market for solar

70 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Silicon shortage

ABOVE Polycrystalline silicon granules are the starting point for the manufacture of allsilicon PV MEMC RIGHT Silicon granules are melted in a crucible and re-cast in varioustypes of crystalline ingots MEMC

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installations. Endesa’s involvement is particularly interesting,considering the need for large amounts of reliably cheapelectricity to produce polycrystalline silicon.

Another well known cell producer, SunPower, has signed afour-year supply agreement with DC Chemical of Korea for thedelivery of $250 million worth of polycrystalline siliconstarting in 2008. The construction of this 3000 tonne plantmarks DC Chemical’s first venture into the polycrystallinesilicon business, which SunPower will help finance withadvance payments over a 12 month period.

While these new entrants to the polycrystalline siliconmarket will indeed contribute to the feedstock supply, there

are as many examples of projects that, though promising, needto develop further before they can be included inpolycrystalline silicon supply estimates.ARISE Technologies ofCanada has obtained nearly $20 million in funding to build a200 tonne pilot plant based on a new method to produce solargrade silicon. The company hopes to have 2000 tonnes inproduction capacity by 2010. Hoku, a fuel cell company inHawaii, announced plans not to only diversify into the PVindustry by making cells, but also to build its ownpolycrystalline silicon facility.The facility would be located inSingapore and is expected to have a production capacity of1500 tonnes by the second half of 2008. Hoku has yet to firmup its funding sources for this project.

Production of polycrystalline silicon in China over the nextfive years is difficult to quantify with any degree of certainty.Weattended the 3rd Solar Silicon Conference in Munich in April2006, where Professor Deren Yang of Zhejiang Universityprovided insight on the silicon situation in China. He projectsthat up to nine companies combined will produce 5830 tonnesannually by 2010.Since then,there has been a flurry of companypress releases, news stories, and rumours suggesting significantactivity in capacity planning that may generate 20,000 additionaltonnes (or more) within China. The chief uncertainty aboutthese potential Chinese producers is whether their productquality will be high enough to meet the expectations of solar PVOEMs (original equipment manufacturers). In 2005, there wereonly two small polycrystalline silicon companies producing inChina: Emei Semiconductor Material and Luoyang MonocrystalSilicon.Together, these companies produced only 130 tonnes.

China isn’t the only country emerging outside the traditionalpolycrystalline silicon-producing nations. According to Dr Lebedev of Swiss Wafers, Russia and other countries of theFormer Soviet Union (FSU) have the potential to produceupwards of 14,500 tonnes if the necessary investment fundscould be secured. He believes that 3000 tonnes of capacity willbe online in this region by 2009. One example of an FSUcompany with firm expansion plans is Crystal, located inKyrgyzstan. Crystal anticipates 60 tonnes produced this year,ramping up to 1200 tonnes by 2008.

We do not include many of these recent announcementsfrom companies new to the polycrystalline silicon industry in ourcapacity forecast because they lack specific timeframes,established technology,or adequate capital for large-scale roll-out.We will monitor all of these manufacturers’ potential to changethe core silicon processing technology and cost structure, or toincrease the availability of solar grade silicon for the industry.

DEALING WITH THE SHORTAGE OF POLYCRYSTALLINESILICON

As the price of silicon increases and adequate supplies over thenext two to three years remain highly uncertain, producerswithin the PV supply chain are coping with the silicon supply

72 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Silicon shortage

Production of polycrystalline silicon in Chinaover the next five years is difficult to quantify

with any degree of certainty

Although the thin-film sector is growing, crystalline PV still accounts for over 90% of themarket MEMC

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shortage in a number of different ways. First, ingot producersand cell manufacturers are attempting to use silicon moreefficiently. For example, Solaicx, located in California, isdeveloping a continuous Czochralski (CZ) process that thecompany claims is faster and less wasteful than the traditionalmethod for making monocrystalline ingots.

Cell companies, including Evergreen and SunPower, areattempting to lower their silicon requirements per watt.Evergreen, which now relies heavily on Renewable Energy

Corporation for its polycrystalline silicon supply, requires only6g Si/W for its String Ribbon™ cells. SunPower now producescells that require less than 8g Si/W. Both are using significantlyless silicon than the industry standard of 11g Si/W.

Second, more companies are vertically integrating, addingsilicon recycling or production capacity in-house.For example,ErSol of Germany acquired Silicon Recycling Services, arecycler with facilities in California and China, which suppliedthe market with 700 tonnes of polycrystalline silicon in 2005.SolarWorld doubled the capacity of its SolarMaterial Divisionwhich will be able to recycle 1200 tonnes of polycrystallinesilicon annually.Again,companies such as Hoku and ARISE haveannounced plans to build polycrystalline silicon facilities to

supply their emerging cell and module production lines, usinga completely vertically-integrated approach. GiraSolar, a PVcompany in the Netherlands, has recently filed for a patent forits proprietary process for producing polycrystalline silicon.

Third, companies are entering into joint ventures and longterm contracts. A survey of polycrystalline silicon producersrevealed that most,but not all,polycrystalline silicon sales tookplace via short-term and long-term contracts. In fact, long-termcontracts are funding much of the additional capacity beingbuilt over the next few years, through up-front loans andpayments. An example is the recently-announced agreementbetween cell producer Suntech of China and MEMC.

The silicon shortage is undeniably putting pressure on thePV industry, but it is also having a positive impact. In the long-run, having polycrystalline silicon companies dedicated to thesolar industry, using silicon more efficiently, and enhancingrecycling capabilities will benefit the industry.

FORECASTING SILICON AVAILABILITY

To synthesize what rising silicon prices, increasing efficiency ofsilicon use,and new plants coming online by 2008 mean for thePV industry over the next several years,the Prometheus Institute(PI) developed a projection model with three potential growthscenarios (Figure 2).The three growth rate scenarios for the PVindustry in this analysis are 10%,30%,and 50%.We developed themodel’s underlying assumptions through an extensive literaturereview and in consultation with other industry experts.Our keyassumptions are that polycrystalline silicon use per watt willdecline by 5% from its starting value of 12g/W in 2005; themarket share for silicon wafer cells will decrease 0.5% per yearas end-users substitute thin films for wafer-based cells; and theintegrated circuit (IC) demand for polycrystalline silicon of20,000 tonnes in 2005 will increase 7% each year according tosemiconductor industry analysts.

In calibrating the model for 2005, we noted that the PV andsemiconductor industries used approximately 8000 tonnesmore polycrystalline silicon than was reportedly available,basedon the stated annual production capacity from the majorsuppliers. Several factors may serve to explain this discrepancy.First, more polycrystalline silicon was probably delivered to themarket from producers than the capacity figures suggest.Companies made their inventories available to the market.Wacker attributes its ability to meet customer orders to itspolycrystalline silicon inventory, and undoubtedly other siliconcompanies drew down their inventories. PI did not receiveinventory figures from any of the polycrystalline siliconproducers we contacted, but we believe a realistic estimate ofdrawn down from 2004 inventory to be between 2000 tonnesand 3000 tonnes. Analysts Rogol and Pichel believe inventorywas 4000 tonnes and 7000 tonnes, respectively. Given thecurrent high price of silicon, it is unlikely that significantinventories remain to supplement needs in 2006 and 2007. It isalso possible that plants were run in excess of stated capacity orthat yields were optimized for the solar grade process.

Second, recycled polycrystalline silicon probably accountedfor a couple of thousand metric tons between the feedstockrecycled in-house at cell manufacturers like GE and SolarWorld,as well as SRS and PV Crystalox. Recyclers are also expandingcapacities. In the short term, unused wafers left over from

74 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Silicon shortage

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previous years could help alleviate some of the polycrystallinesilicon constraint. SMIC,a wafering company in China, recentlymade public its intention to recycle 300,000 wafers it collectedfrom its own wafering activities and to convert them into PVcells. As inventories of off-spec material are diminished, thecontribution of recycled material to feedstock supply willultimately be constrained by the amount of purepolycrystalline silicon available to the industry.

Third,several companies produced small amounts of useablesilicon in pilot-scale batches not included in the modelpresented here. PI estimates that the available excesspolycrystalline silicon from recycled material, production inexcess of disclosed production capacity, inventory, and pilotscale production amounted to a few thousand tons.This explainsthe discrepancy between capacity and demand in Figure 2.

Our scenarios show that until 2008, growth in the PVindustry must moderate to below 30% per annum due to limitsimposed by the availability of silicon.Variables such as the exacttime when a facility will come online and the time needed toramp up to full production make it difficult to forecastproduction quantities with certainty. Based on announcedcapacity expansions, silicon capacity in 2006 will only be 3500tonnes more than 2007, allowing for less than 6% growth insilicon cells produced.We will see some improvement in 2007 asan additional 6500 tonnes comes online and the industryexperiences 16% growth. By the end of 2008, silicon capacitywill be 50% more than it was in 2007. It is hard to imagine howthe wafer and cell producers will be able to absorb so muchsilicon after two years of constrained growth. After 2008, PVindustry growth rates over 30% are possible based on marginalimprovements in efficient silicon use, announced capacityexpansions, and a reasonable expansion of the thin filmproduction as it gains additional market share.We embedded amodest growth in thin film market share, from 6% in 2005 to 8%in 2010, yet the recent increase in capacity announcementssuggests that our assumptions for thin film growth areconservative.Thin film companies are no doubt looking at thesilicon shortage as an opportunity to gain market share.

IMPLICATIONS FOR THE PV INDUSTRY

Several trends are emerging in response to the polycrystallinesilicon shortage that may have a lasting impact on the industry.First, beyond the contracts between wafer and cell producersand polycrystalline silicon producers mentioned above, itappears that supply agreements are becoming more popularup and down the supply chain. This solidification of the PVindustry is one effect of the feedstock shortage, as companiesattempt to secure materials, whether it is modules, cells,wafers, or polycrystalline silicon. This vertical integrationthrough contractual relationships, and possibly futureacquisitions,will be necessary for producers to have control ofthe vital inputs and customers of their products at the variousstages of production.

Second, capital is rapidly flowing into thin film technologiesnot affected by the silicon shortage, including $600 million innew public equity financing to two top thin film producers –United Solar Ovonic and First Solar – announced so far this year.With thin film’s further benefits of low cost and aesthetic appeal,the silicon shortage should present an opportunity for thin filmmanufacturers to substantially gain market share.

76 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Silicon shortage

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Looking beyond 2008, it is unlikely that the historic PVindustry growth rates near 50% in 2004 and 2005 can berepeated and sustained without the combination of:

• Rapid growth of thin film from its current 6% market shareto over 20%;

• Significant new silicon production capacity beyond thatalready announced and will realistically come online; and

• An industry-wide doubling in the efficient use of silicon (tounder 6 g/W) by today’s dominant PV manufacturers.

It is possible,but not easy, to accomplish all of those goals inthe next 4 years. With growing interest among investors andpolicy-makers, the PV industry has sufficient capital and thetechnical talent for the challenge. But such growth will alsorequire creativity, and perhaps more importantly, the tenacity toendure the pain the next few years of supply constraints willimpose.

Hilary Flynn is a senior researcher at the Prometheus Institutee-mail:[email protected]

Travis Bradford is President and founder of the Prometheus Institute.His book, Solar Revolution: The Economic Transformation of the GlobalEnergy Industry, was released this August from MIT Presse-mail:[email protected]:www.prometheus.org.

This article was adapted and updated from one that originally appearedin the July 2006 issue of PVNews™, published by the PrometheusInstitute for Sustainable Development.

To understand the current and future silicon market, the PrometheusInstitute for Sustainable Development is performing a comprehensiveresearch project on the state of the silicon supply. The central findingsfrom our research are presented here, and the entire report – whichprovides an overview of silicon processing, company descriptions andimplications for the PV industry – will be available later this summer fromthe Prometheus Institute website.

■ To comment on this article or to see related features from ourarchive, go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 77

Silicon shortage PHOTOVOLTAICS

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2005 2006 2007 2008 2009 2010

Year

Pol

ycry

stal

line

sili

con

(ton

nes)

Total capacity

Total Capacity

10%

30%

50%

Growth rate

FIGURE 2. Polycrystalline silicon capacity and demand 2005–2010

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Prof. Peter Woditsch is convinced crystalline silicon will continue todominate as the workhorse of solar PV well into the future. In thisarticle he explains why.

Since 2000, the PV market has been growing at anannual rate of at least 35%, and cell and moduleproduction is expected to reach 7 GW by 2010.Thislevel of growth will largely depend on the existence ofunlimited markets – as estimated in the studies of

CLSA (Rogol), EPIA and other analysts. However, a hockey-stickgrowth curve is expected for crystalline silicon moduleproduction up to 2010. In periods of such rapid growth,supplybottlenecks are a natural event – and have been experiencedby the PV industry before, with silicon (1998–1999), andcrucibles (2001–2002).

At Deutsche Solar we believe that for the foreseeable futureat least, 90% of the world market will be met by crystallinetechnologies. Mono- and polycrystalline modules havedominated the market for the past 25 years and together withribbon technology,have accounted for over 90% of the total PVinstallations. I, personally, believe that crystalline silicon willplay a dominant role in the years to come.So, the availability ofsilicon is the crucial factor for market growth in the next 5 years. It is worth remembering that silicon is the mostabundant material on earth, making up 25% of the Earth’supper crust,and is as abundant as all metals together.Thereforethere is no shortage of silicon, just suitably pure silicon.

In 2005, more than 1.2 million tonnes of metallurgicalgrade silicon was produced (with a purity of around 99%).Thishas a variety of uses in the market, such as the alloying ofaluminium, deoxidization in steel production, and themanufacture of silicones. One of the important uses formetallurgical grade silicon is the production of high puritysilicon for the semiconductor and PV industries.This is usuallyconducted via the classic route of trichlorsilane or silane as

gaseous intermediates.The resulting prime-polycrystalline siliconis the starting material for different crystallization technologies.

Other than a small number of float zone products, theCzochralski-process is the main route for single crystals used inthe electronics industry, and up to 38% of the PV industry.ThePV industry has developed different new technologies for theproduction of polycrystalline silicon ingots.Casting-,Bridgman-and heat-exchange methods are now standard means ofproducing polycrystalline ingots, bricks and wafers for the PVindustry at lower cost, because of the higher productivity andlower energy demand they offer compared with theCzochralski-process.

Enhanced by the lack of silicon, new technologies thatavoid wafer slicing are emerging, such as the string-ribbon-process, EFG (Edge-defined Film-fed Growth) or RGS (Ribbon-Growth-on-Substrate)(see Figure 1).

Over the next five years there is likely to be a steadyincrease in silicon manufacturing capacity – around 15% peryear – and a growing proportion of this additional capacity willavailable for the PV-industry.The demand from the electronicindustry is expected to grow at a moderate 5% per year. So,there is enough silicon for the PV industry to achieve growthof at least 35% per year.

This shortage in silicon supply has occurred because of alack of investment in the production of high purity siliconduring the last five to seven years. First the spare capacities ofthe silicon producers in the first few years of this centuryneeded to be utilized by the PV industry, and prices stabilizedon a profit-bearing level, before the technology owners forsilicon production technology were willing to invest again.ThePV industry,especially cell and module producers, invested too

September–October 2006 ● RENEWABLE ENERGY WORLD ● 79

A bright futureWhy crystalline silicon will continue to deliver

A bright future PHOTOVOLTAICS

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fast, without looking for a safe supply of wafers.So in 2005,silicon users were faced with sky-rocketing spot

market prices and strong price increases for long-termcontracts as well. Becoming more confident of strong growthof PV, the big silicon producers are now investing in additionalcapacities, with proven technologies shifting the risk of theinvestment to their customers by means of long-term ‘take orpay’ contracts. New plants are now coming on-stream.

INDUSTRY FINDING SOLUTIONS

With insufficient numbers of wafers available to maintain thetremendous growth of solar cell production capacity, thechallenge of undersupply with wafers has led to technicaldevelopments to lower the specific silicon requirement per Wp.

The main solutions devised by solar-grade siliconcustomers include:

80 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS A bright future

European PhotovoltaicSolar Energy ConferenceHall 3, Booth No. 37

FIGURE 1. Silicon foils – technologies.Source: Schott solar / Evergreen Solar

__________________

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• thinner wafers • better yield in crystallization and wafering • enhanced recycling of material and • higher solar cell efficiencies.

These have brought down the specific demand of siliconper Wp, from 13 tonnes/MW in 2004 to 9.5 tonnes/MW in2006, and this process will continue to an expected level of 7.5 tonnes/MW in 2010 for the proven crystalline silicontechnology.New technologies,which avoid kerf (sawing) loss,will lower this ratio even further.

String ribbon and EFG have already been commercialized,by Evergreen and EverQ on the one hand, and Schott Solar onthe other side. Sharp’s non-sliced wafer technology (NSWT)and ribbon growth on substrate (RGS) are at a pilot stagetoday (Figure 1).

Now that the market has convinced the silicon producersthat PV will continue as a growing market, they are not onlyinvesting in proven technology but are also putting moneyinto the development of new technologies for production ofsolar grade silicon by means of proven gaseous intermediates(Wacker and Hemlock are looking at granular siliconproduction from decomposition of trichlorsilane, and REC ofsilane), or are looking into fluid-bed-reactor technology orprocesses for the production with very low energy demandand low cost potential for silicon production. Thesetechnologies will add several thousand tonnes, beginning in2008 and then ramping up to reasonable amounts.

One of these new technologies is the free space reactor forsilane decomposition, developed in a joint venture between

September–October 2006 ● RENEWABLE ENERGY WORLD ● 81

A bright future PHOTOVOLTAICS

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FIGURE 2. Silicon value chain – cost effective alternatives Source: Deutsche Solar

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Degussa and SolarWorld. The material flow starts withmetallurgical silicon (or ferro silicon) and ends up with solarsilicon, and a pilot plant for 850 tonnes/year is planned for2008. The main goal of all technology developments is thereduction of cost by means of reduced energy demand andhigher output per volume and time.

Another step in the production of low-cost solar silicon datesback to the 1980s when a couple of companies tried to cleanmetallurgical grade silicon using mainly physical andmetallurgical technologies ending with a directionalsolidification process to clean the silicon through a process ofsegregation. These technologies are now being revived, alongwith the direct route to solar-grade silicon by using high-purityraw materials in the classic electro-smelt furnace. If suchtechnologies are successful, they will supply additional amountsof solar silicon – in 2008 at the earliest, but with potential forlarge amounts.

Because of the strong demand for modules and some delayin filling the silicon availability gap, thin-film technologies arescenting an opportunity. Having been in competition withcrystalline silicon technology since the 1980s, their marketshare dropped from 10% to 6% during the last five years. Underthe impression of rising prices for PV modules during the lastyear, several companies are using this opportunity tocommercialize these technologies now.The investment behindthe projects expected in the period from 2006 until 2009 inGermany adds up to around €400 million and seems to behigher per Wp than for crystalline technology. Is this the way tobecome cheaper in production?

Time will tell whether thin film activities will be moresuccessful than in the past. Since 1980 this writer has alwaysbeen startled by the announcement of thin-film promoters thatthin-film technology will be the future and crystallinetechnology will take second place. It was the other way aroundfor the last 25 years, but no crystal ball will show the answer.

SILICON TODAY

The production and the market for silicon modules in 2005,were out of balance.Germany had a market share of nearly 50%

and a production of around 20%, Japan vice versa. Japan andGermany together have a world wide, and a very high, marketshare of 68%.The challenge for all companies involved in the PVmarket is to develop the markets in other countries, so that thegrowth of PV becomes sustainable and spread world wide (seeFigure 2).

The distribution of the installed cost for a PV system in 2005is given in Table 1, based on a silicon price level for long-termcontracts.Market penetration requires lower prices in the future– at minimum a price decrease of 5% per year as claimed by theGerman feed-in law, ‘which is the biggest export hit to othercountries’.The claimed price decrease has to be followed in allproduction levels.Wafer, cell and modules have to take a part inthe same way as the balance of systems and an easy and quicksystem for installation and the mounting structure as well.

We estimate that by 2010 the costs of crystalline moduletechnology will come down to less than 50% of the cost levelsin 2002, an average decrease of 8% per year (see Figure 3).

The penetration of new markets and countries and the costreduction potential will be a guarantee for future growth of thePV industry. This growth is necessary to be prepared for theenergy demand of mankind in the future.

IN BRIEF

To sum up:

• crystalline silicon will continue to have more than 90% of themarket share, for the forseeable future, at best

• there is enough silicon available to follow an average marketgrowth of 35%

• new technology will show price reduction potentials• new routes for alternative solar grade silicon production are

under development and will increase silicon availability• there is a need to develop new markets besides Germany

and Japan• we see the potential for reducing the price of crystalline

silicon modules down to 50% of 2002 levels by technologydevelopment.

Because of its unlimited availability, lack of toxicologicalproblems,and further cost reductions through new technologies,there is a bright future for PV technology based on silicon

Prof. Dr Peter Woditsch is Chairman of the Management Board ofDeutsche Solar, part of Solarworld, Freiberg, Germany.web: www.deutschesolar.de

This article is based on his presentation at the PV Industry forum,Freiburg, in June 2006.

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.co

82 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS A bright future

TABLE 1. Distribution of costs in silicon-based PVBalance-of-system and labour 33%

Solar grade silicon 10%

Ingot/wafer 14%

Solar cell 16%

Solar module 18%

Distribution 9%

FIGURE 3. Development of production costs 2002–2010Source: Deutsche Solar

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84 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Success on the Horizon

As the companies involved inthe wind industry get biggerand bigger, many smaller,

independent corporations arefinding it necessary to get

backing from larger groups orfinancial institutions. One suchcompany is Horizon Energy, whichmade international news when itwas taken over by investment firmGoldman Sachs. Elisa Wood reports

Horizon Wind Energy is a Cinderella story of the USwind industry. Founded as a small family start-up, thecompany turned heads in March 2005 when it landedthe glass slipper – financial powerhouse GoldmanSachs purchased Horizon (named at the time Zilkha),

a landmark event often cited by analysts to underscore justhow seriously big money takes wind power these days.main

Now Horizon expects to expand its project equity to1400 MW by the end of 2007,up from only about 50 MW twoyears ago

‘Horizon is rapidly evolving from a develop-and-sell playerto a full-fledged wind independent power producer with theGoldman Sachs balance sheet behind it,’ said Keith Hays,GlobalWind Energy Advisory Research Director, for Emerging EnergyResearch, a Cambridge, Massachusetts consulting company.‘The firm is building its footprint both in Texas and theNortheast, and will be a player to watch.’

UNUSUAL BEGINNINGS

The Houston,Texas company has unusual roots for an energyventure. Its founder Selim Zilkha got his start in his father’sfinancial business, a one-room bank in Baghdad that expandedthroughout the Middle East and into Europe. After decidingbanking was not for him, he opened Mothercare in the UK inthe early 1960s, a store that specializes in maternity wear andbaby goods. During his more than 20 years at the helm of the

Horizon expects to expand its project equityto 1400 MW by the end of 2007

The 80 MW Top of Iowa wind farm, part of more than 500 MW built by Horizon so far ALL IMAGES HORIZON WIND ENERGY

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Success on theHorizonUS wind company goes from strength to strength

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company, Zilkha expanded the British operation into otherEuropean countries and the United States.

Then, in the early 1980s, the energy market caught the eyeof the entrepreneur. He sold Mothercare and acquired thetroubled Towner Petroleum and renamed it Zilkha Energy.Along with his son,Michael,he turned the company around by

pioneering use of three dimensionalcomputer modelling, at the time anascent approach, to uncover hard-to-detect gas and oil reserves in shallowwaters of the Gulf of Mexico. Thefather-son team became known astechnology wildcatters.

Competitors followed, the businessbecame tougher, and by the late 1990s,they decided it was time to sell.That’swhen the Zilkhas began to look atwind power. ‘They had an interest inthe environment and energy, and theysaid,‘Well, if it’s going to be difficult toget oil and gas, it stands to reason thatrenewable energy makes sense,’ saidMichael Skelly, Horizon Wind Energy’sChief Development Officer,who beganwith the company when it was ownedby the Zilkhas.

The Zilkhas sold their oil and gasoperation to Sonat for US$1 billion, purchased Texas-basedInternational Wind and transformed it into Zilkha RenewableEnergy.The duo soon found themselves on the right side of anupward trend.Total US wind installations grew from 2500 MWto over 9000 MW during the years they built their windenterprise. The company prospered under a develop-to-sellbusiness model, building plants and then selling down interestin them. Buoyed by the wind industry’s growth, the companyat one point had around 100,000 hectares (250,000 acres) ofland under lease for wind development from New York toCalifornia.

But by the mid-2000s, the Zilkhas began to suspect theyhad taken the company as far as they could. The windindustry was getting too sophisticated for a small developer.The company had little use for the federal production taxcredit, a key financial tool that drew big players to the sector.‘The model had changed; the industry got too big for twoindividuals, albeit individuals with a lot of financialresources,’ Skelly said.‘The amount of capital we needed wasjust too great.’

That’s when Goldman Sachs stepped in with its largechequebook, purchased the company, renamed it HorizonWind Energy, and set a new course for its future. (The Zilkhashave since moved into biomass development.) Supported byone of the world’s largest investment banks, Horizon nowbuilds projects with its own resources, seeks debt financingafter construction, and retains equity ownership.

ALIGNING THE STARS

So far, the company has focused largely on developing windprojects in New York, Iowa, Pennsylvania, and Oklahoma,

86 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Success on the Horizon

In an effort to blend in, Horizon recently housed the control centre for an Iowa wind farmin a rebuilt barn

Total US wind installations grew from 2500 MW to over 9000 MW during the years

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Washington,Texas and Illinois. But it is also expanding intoother areas. Most recently, Horizon made the news when itwon the bid in July to build a 66 MW wind project in Oregonfor Idaho Power. Horizon has 12,140 hectares (30,000 acres)under option at the Union County site where it mayeventually develop 300–400 MW.The company also is eyeingdevelopment in New England in partnership with LinekinBay Energy, which has proposed a 500 MW wind farm innorthern Maine.

As it investigates project sites, Horizon looks for severalelements – the right combination of wind resource,

transmission access, project size and energy prices and stateincentives. The company prefers deals that offer long-termpower purchase contracts.

‘It continues to be a complex business; the stars have toline up,’ Skelly said.At this point, the company is particularlybullish about wind markets in New York, Texas, Oklahomaand Washington, although it’s not ruling out other areas ofthe country in its search.

Horizon often partners with other companies, both largeand small. Such collaborations are a growing trend withinthe industry and one more indication of its maturation,according to Skelly.

While Skelly sees demand for wind continuing to pushgrowth, he also warns that the industry faces some hurdles.President Bush wants wind power to become 20% of thenation’s supply, up from 1%. However, current incentives arelikely to spur only about 50,000 MW by 2015, less than 3% ofthe nation’s electric energy mix, Skelly says.

‘To get there, to get to 10% and upward, a consistentfederal policy would be helpful. And we have majortransmission issues that we need to address nationally.Thereare hard choices to be made,’ he said.

BEFRIENDING THE NEIGHBOURS

Moreover, a growing not-in-my-backyard (NIMBY) sentimentcould seriously derail growth in the wind power sector. Skellyis keeping a particular eye on the controversial 420 MW CapeWind, the nation’s first proposed offshore project. Boston,Massachusetts developer Energy Management Inc. has beentrying to win approval for five years, fighting against politicallyconnected and wealthy property owners that live along theNew England shoreline.They include US Senator Ted Kennedyand his family. Should Cape Wind lose this battle, the entire USwind industry will suffer, says Skelly.‘The Kennedys are doingour industry an immense disservice. I’ve been at public hearing

88 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Success on the Horizon

TABLE 1. Horizon Wind Energy projects in operation or advanced development 2006 Project Name Location Size Partner StatusBlue Canyon Wind Power Lawton, Oklahoma 225 MW Kirmart Operating

Mill Run Eastern Fayette 15 MW Atlantic Renewable Operating

County, Pennsylvania Energy (now PPM)

Somerset Wind Power Somerset County, 9 MW Atlantic Renewable Energy Operating

Pennsylvania (now PPM)

Meyersdale Wind Power Casselman River Valley 30 MW Atlantic Renewable Energy Operating

Pennsylvania (now PPM)

Top of Iowa Wind Farm Worth County, Iowa 80 MW Midwest Renewable Energy Operating

Tierras Morenas Guanacaste province of Costa Rica 24 MW Energia Global, now ENEL Operating

Twin Groves Wind Farm McLean County, Illinois 200 MW 2006/2007

(formerly Arrowsmith)

Pine Tree Wind Power Kern County, California 120 MW Prometheus Energy Services Late 2007

Wild Horse Wind Power Kittitas County, Washington 230 MW Puget Sound Energy will own 2006

Lone Star Wind Farm Sheckleford County, Texas 200 MW RES under construction

Maple Ridge Wind Lewis County, New York 320 MW PPM 200 MW operating

Farm (previously Flat Rock) 320 MW late 2006

A growing not-in-my-backyard sentimentcould seriously derail growth

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The swift erection of land-based windmillinstallations calls for a powerful andversatile crane. The 600 t CC 2800-1 crawlercrane manufactured by TEREX Demag is oneof the most versatile and cost-effective ofheavy-duty cranes for the erection of windfarms.

There’s an upsurge in the wind powermarket – according to recent research at theGerman Wind Energy Institute, by 2014 windfarms are expected to be generating some210,000 megawatts (MW) of electricityworldwide. That’s a predicted rise of151,000 MW! Meantime, the main focus willbe on the onshore market. The challenge: tobuild even more wind farms in far lessinviting terrains and in ever more limitedturnaround times.

Crane manufacturer TEREX Demag(Zweibrücken, Germany) attaches immenseimportance to onshore projects as adeveloping market. For windmill erection,the company already supplies a widevariety of telescopic and lattice boomcranes ranging from 100 to 1,250 tonnes –tailored to suit the needs of the market.

Customers have shown they set great storeby factors such as “lifting capacity”, “lowrunning costs” and “versatility”. All aroundthe globe, facilities generating 2-3 MW havebecome the norm and are likely to dictatethe shape of the wind power market over thenext few years. In their efforts to draw evenmore efficiency from the turbines, engineersand designers are coming up with taller andtaller masts and improved blade shapedesign. That’s why there’s a great demand atpresent for lattice boom equipment ofbetween 400 and 600 tonnes. These cranesare especially adapted to hoist the 75-100tonne gondolas up to the crucial hub heightsthat are located between 90 and 130 metersabove the ground.

Crawler crane CC 2800-1: a 600-tonnepremium performer

An outstanding specimen of a crane to usein erecting two and three megawatt land-sitewind farms is the CC 2800-1, which boasts a600-tonne lifting capacity. Fitted with a 96-meter SH/LH SGLmax main boom plusspecial wind power jib LF2 12m, the cranemanages to hoist gondolas weighing up to110 tonnes to hub heights of 100 meters

(hook height 108m). With a 102-meter mainboom of the same type, the titan takes 103tonnes up to a soaring 105-meter hub height(114m hook height). Using Superlift for theheaviest of all loads, gondolas weighing 100tonnes can even be hoisted to a hub heighttowering a mind-blowing 130 meters (138mhook height) above ground.

Total flexibility – even in narrow track

To cater for the most specialised ofrequirements that customers may have withregard to a 600 tonne crane, we produce theCC 2800-1 in a number of versions. Thestandard model CC 2800-1 comes with astandard crawler chassis, while the TCversion has an on-road chassis. There’s alsoa Narrow Track version, which permitstransportation of the crane, fully rigged,from one windmill erection site to the nextalong roads that are only 5 meters wide.Due to the fact that dismantling and re-erection can be dispensed with, as the craneis transported to the next site in this way, thetime thus netted can be more gainfullyinvested in a substantial increase inproductivity.

In next time, a dedicated wind power crane

With a few accessory devices the CC 2800-1can be converted – and back again – frombeing a standard crane into a dedicated

600 TonnesCloser To

Wind Power

ADVERTISEMENT FEATURE

wind power crane. As a result, it can bedeployed on any type of construction site,not only on those involving windinstallations.

Featuring among the extras are ultra-strongintermediate segments for the main boomsystem and a rigid ancillary extension, theLF2, which is 12 meters long. These windpower configurations, designed tocomplement standard versions, providefirst-class lifting capacities and clearanceswith minimum bother resulting fromtransport. A further asset: resaleopportunities become a bigger cinch.

Economic double hook operation

Speed is everything. To get a rotorassembled double-quick, using doublehooks on the CC 2800-1 provides themoney-saving answer. The rotor, includingall its blades, can be assembled as a singleunit on the ground and inched into verticalduring its ascent. This greatly cuts erectiontimes.

Ample hoisting power for multi-megawattturbines

As the leading manufacturer of lattice mastequipment, TEREX Demag also suppliescranes capable of erecting multi-megawattturbines. For instance, a CC8800 sporting a1,250-tonne lifting capacity has been used toput up a number of 5-MW class facilities inthe north of Germany.

Consistently the proper equipment – and inthe years to come

TEREX Demag supplies the proper crane forall types of facility. The ever-increasingsignificance of wind power also harnessesfrom the wind enormous energy for thecreation of optimum crane solutions. And nomatter which way the wind aims to blow inthe years ahead – the ongoing supply ofrevolutionary responses will rotate to meetprecisely what the market demands.

Terex-Demag GmbH & Co.KGChristian Schorr-Golsong

Director MarketingPhone: +49 / 6332 83 1738

Email: [email protected]

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where people say, “My home is special too. If the Kennedysdon’t have to look at turbines, why do I? Why is the Kennedy’sdeck more important than my deck?”’

Unlike some of its competitors, Horizon Wind does notshrink from such battles and will pursue projects incommunities that are less-than-hospitable to wind, accordingto Skelly. ‘We realize that sometimes there will be spirited

debate around the merits of a particular project.We are willingto have that debate.’At the same time, if a project truly couldpose harm to birds or the local environment, the company saysit will not pursue development.

One way that Horizon tries to become a good localneighbour is by building projects that meld with the nativearchitecture and landscape. For example, at its 80 MW Top ofIowa Wind Farm in the rural farming region of Worth County,Iowa, the company houses its administrative offices in arecycled barn. A Supervisory Control and Data Acquisition(SCADA) monitoring system replaces what was once thehayloft. Horizon moved the 80-year-old barn to its site from ahog and grain farm about six miles away.The developer wanteda structure that reflected the pastoral beauty of the region,something a pre-fab steel building could not do.

In fact, Horizon’s ‘track record of successful communityrelations’ was one reason why Goldman Sachs acquired the

90 ● RENEWABLE ENERGY WORLD ● September–October 2006

WIND Success on the Horizon

ABOVE Key to Horizon’s success has been its pre-ordered supply of wind turbines. Thishas allowed it to expand at a time of increasing turbine shortage RIGHT The MapleRidge Wind farm in New York State

‘We realize that sometimes there will bespirited debate around the merits of a

particular project’

______________________

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company, according to Alan Waxman, managing director ofGoldman Sachs & Co. ‘Responsible development is missioncritical. If negative perceptions come out about this industry, itis going to significantly hamper growth,’he said at the AmericanWind Energy Association conference in June.

But smart public relations alone can’t drive Horizon’sgrowth.The company made an astute play in securing a largesupply of turbines.While competitors find themselves caughtshort by a manufacturing backlog – in some cases postponingor even cancelling projects – Horizon has the inventory tomove forward.

‘Along with a new CEO and other new hires to strengthenthe team’s execution capabilities, a key aspect of Horizon’sstrategy moving forward will be its turbine position,’ said EER’sHays. ‘With 1400 MW of turbine orders in hand, Horizonbenefits from the North American shortage. It can use its supplyto pursue acquisition opportunities with turbine-depriveddevelopers, as well as improve its ability to acquire projectsfrom players looking to develop and sell.This puts the firm onpar with larger wind IPPs such as FPL and PPM that aim tosource turbines for their multi-gigawatt pipelines, givingHorizon a competitive advantage over other smallerindependent players.’

Given this position, it is little surprise that Goldman Sachs isnothing short of ‘passionate’ – in Waxman’s words – about itsnew venture into wind.He sees ‘exponential’growth ahead.AndHorizon is poised for the journey.

Elisa Wood is US-based writer on energy issuese-mail:[email protected]

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com._____________________

____________

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92 ● RENEWABLE ENERGY WORLD ● September–October 2006

SOLAR COOLING Keeping cool

Solar cooling has beenaround for a long time, butthe recent development of

smaller and more flexiblesystems is encouraging greater

take up of this technology, whilehigher energy prices are improvingits economics. Alasdair Camerontakes a look at some recentprojects.

Electricity for air-conditioning and cooling is already amajor energy requirement in some Asian countries andthe US,and demand is increasing rapidly in Europe, theMiddle East and emerging nations such as India andChina.As summers get hotter and demand for comfort

increases, an alternative to conventional air conditioning mustbe found in order to avoid a massive increase in demand forpeak power, and its associated greenhouse gas emissions. Solarcooling has the potential to provide a usable low-carbonsolution, particularly for large systems (>50 kW), with theadded bonus that the solar resource is greatest when demandis highest.

Solar air-conditioning units use the sun’s heat to drive oneof two cooling cycles (either thermally driven absorptioncycles or desiccant cooling systems). Detailed descriptions ofthese systems can be found elsewhere, but a basic outline canbe found below. The important point is that these thermallydriven systems work in exactly the same way whether they arepowered by solar heat or conventional means – it is simply theheat source that changes. Heat from renewable sources isusually supplied as hot water, with the heat demands of thecooling system dictating which type of solar collector isneeded. Lower temperature systems (around 60º–80ºC) can berun from standard evacuated tube and flat plate solar thermalpanels, while higher temperature systems (>150ºC) can be runfrom roof-top concentrating solar thermal systems.

These thermally driven systems work in thesame way whether they are powered by solar

heat or conventional means

Evacuated tube solar collectors used for cooling system in Freiburg FRAUNHOFER ISE / ESTIF

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Keeping coolSolar air-conditioning

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So far, development of solar cooling has been hampered byseveral factors, including a lack of small-scale chillers whichcould be used for domestic systems, the size of the solarcollector area required, the need for cooling towers (or otherheat sink) which can make some systems impractical in smalldevelopments, and, finally the high capital cost of installingsolar cooling systems. However, improved technology andrising fossil fuel prices are improving the conditions for solarthermal and there is a sense of growing excitementsurrounding this emerging renewable technology.

COOLING SYSTEMS

In general, air-conditioning (AC) units which canuse renewable heat have four main components.Firstly they must possess a heat source to drivethe chiller. This may be a biomass boiler, acogeneration plant or a solar collector. Secondly,the AC system must have a chiller which runs onheat to produce cold water which will be usedto cool the air.The third stage is a means to getthe ‘cooling power’ to where it is needed. Thiscan be achieved with fan coils (where warm airis blown over cold coils, causing it to cool),cooling beams, cool panels, central ducts or some othersystem. Finally, large solar cooling systems must contain aheat sink, to dispose of the excess heat removed from the air.This may be a cooling tower, borehole, swimming pool or adry re-cooling system.

Thermally driven chillersThere are two main types of refrigeration technologies whichare used for building air conditioning systems – electric vapourcompression systems (which use Freon® or similarcompounds),and heat-driven absorption cooling devices.Since

these absorption cooling systems can be driven by steam orhot water (or indeed a fossil fuel burner) they can be poweredby solar thermal installations. Within the absorption chillers,the two most common kinds of refrigerant cycles are lithiumbromide/water and ammonia/water, which have lowertemperature limits of 4.4ºC and -6.6ºC respectively.

The main provider of absorption chiller equipment foruse with solar thermal cooling is Yazaki of Japan, which hassupplied systems for many solar thermal cooling installations,including the Schwarzenegger Stadium in Austria, the newlyrebuilt EAR Tower in Kosovo and a residential development inTampa, Florida. Other companies which provide chillerequipment include Climatewell, EAW and Thermax.Interestingly some of these companies have begun toproduce small systems less than 30 kW – EAW has introduceda 15 kW dessicant cycle machine, while Climatewell iscurrently bringing its 10 kW dessicant system onto themarket. Even smaller, Spanish company Rotartica is enteringthe market with a 4.5 kW system designed for domestic air-conditioning.

SOLAR COLLECTORS

Along with a heat-driven chiller, the next essential piece ofequipment in a solar cooling system is a solar thermal heatsource. These can roughly be divided into those deliveringrelatively low temperature heat (mainly standard solar thermalpanels, like those used for domestic water heating) and systemswhich produce high temperature steam. The latter useconcentrating solar technology and are most suitable inindustrial applications.

Solar thermal collectorsThe technology involved in these solar thermal systems isrelatively simple, with two main types of collectors. Flat platecollectors are glazed, insulated panels containing an absorbersurface which converts sunlight into heat. This collector is

connected via a flow and return copper pipe to aheat exchanger in the hot water cylinder. Flat platesystems generally provide hot water at 60º–70ºC,andso are traditionally less common in solar coolingapplications than evacuated tube systems.Nonetheless, they are being used successfully insome systems, including on a 70-bed hotel in Bavaria(installed by Conergy in 2004), or on the roof of theCitrinSolar factory (see below).

The second main type of solar thermal collectoris the evacuated tube. These consist of a series oftubes, each containing an absorber and a pipesurrounded by a vacuum. The vacuum is generally

better at insulating the water than standard insulation,allowinghigher temperatures to be reached than in flat-plate systems.For this reason evacuated tubes make up the majority of solarthermal systems for low-temperature cooling applications,including the system on the Renewable Energy House inBrussels (see below).

Concentrating solar thermal collectorsSome chiller systems require hot water at a higher temperaturethan can be provided by the conventional systems mentionedabove.In these cases,small concentrating solar thermal devices

94 ● RENEWABLE ENERGY WORLD ● September–October 2006

SOLAR COOLING Keeping cool

ABOVE A small 4.5 kW absorption cooler. The arrival of smaller systems is likely toimprove the take-up of solar cooling ROTARTICA BELOW Concentrating solar collectorspower the cooling system on a house in Tampa, Florida HELIODYNAMICS

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around the world, around the clock

glass made of ideas

SCHOTT / SOLAR ENERGY / ALGARVE / PORTUGAL 8:03 PM.

A power station can be this beautifulwith reliable solar technology from SCHOTT.When it comes to renewable energy, the sun has the greatest potential by far. Every day, SCHOTT engineer Andreas Neumayr works on making its use even more efficient. Future-oriented products for solar thermal applications, as well as highly effective photovoltaic solar modules, are the result. They make SCHOTT a world leader in solar energy, with cutting-edge technologies for almost every application. And SCHOTT pursues its research every day – around the clock. After all, the sun is always shining somewhere on earth.

Advanced solutions and special materials:www.schott.com/solar__________________

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may be used, installed on roof-tops or on nearby land. Thesegenerally resemble small parabolic troughs and use mirrors toreflect sunlight onto a central receiver containing a mineral oil.This heats up to very high temperatures which then passesthrough a heat exchanger to produce hot water or some otherheated liquid. Because of the high temperatures systems suchas these can achieve, they are favoured for some coolingapplications, particularly large industrial systems.

In the US, Solargenix is the main provider of thistechnology through its PowerRoof system. The first PowerRoof was installed in Raleigh, North Carolina in July 2002, andwas capable of providing 176 kW of cooling power.The Power

Roof is a curved (not quite parabolic) collector which focusesonto a central receiver, achieving temperatures of up to 350ºC.

Other providers of CSP technology for heating andcooling applications include Solel, SOLITEM andHeliodynamics. As will be mentioned later, many of thesesystems are fully integrated CHP stations, generating heat,electricity and cooling (tri-generation).

PROJECT EXAMPLES

By the middle of 2005 there were more than 70 solar thermalcooling systems operational in Europe, and several moreinstalled worldwide, including the US and Japan. The leadcountries continued to be Germany and Spain (see Figure 1),and although most systems were large installations designedfor use in factories, hospitals and offices, there are anincreasing number of smaller systems being trialled acrossthe world, as well as the usual industrial systems.

EAW 15 kW trial projects in GermanyAt the lower end of the scale (<30 kW) there has always beena lack of absorption chillers available that could run on hotwater (the smallest unit made by Yazaki is 30 kW). One of the

96 ● RENEWABLE ENERGY WORLD ● September–October 2006

SOLAR COOLING Keeping cool

A 70 kW chiller system in the Fraunhofer ISE building in Freiburg FRAUNHOFER ISE / ESTIF

There are an increasing number of smallersystems being trialled across the world

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main effects of this has been to stifle the development of solarair-conditioning as it has only been available to larger users.Tofill this gap, several small systems are being developed,including a 15 kW water/lithium bromide absorption chiller byEAW and the Institute of Air-Conditioning and Refrigerationbased in Dresden (ILK).So far nine systems have been installed,each with a different primary heat source, of which several arebeing monitored by the ILK (Table 1).

The first of these was installed in Moosburg in the south ofGermany and uses flat-plate thermal collectors and a wetcooling tower, the second uses evacuated collectors and a dryre-cooler, while the third uses the waste heat of a small co-generation unit (a tri-generation system).

The Moosburg system is installed on the roof of theCitrinSolar building, a manufacturer of flat-plate solarcollectors.Altogether the building has 89 m2 of solar thermalcollectors, of which 42 m2 are used for solar thermalapplications, along with a 27 kW biomass back-up boiler. Sincethe system was installed in summer 2005, it has beencontinually monitored and appears to be performing well,providing an average of 10 kW of cooling power.

The second of the systems was installed on the ILKbuilding in Dresden and used 42 m2 of evacuated tube solarcollectors from Schott. Since this system was only recentlyinstalled there is not yet good information on how well it isperforming.

Renewable Energy House The new Renewable Energy House in Brussels, Belgium is agood example of state-of-the art integration of renewable

energy technologies in a less than ideal setting. As theheadquarters of the European Renewable Energy Council,the building contains a large number of renewabletechnologies, one of the most interesting of which is itsheating and cooling system. In addition to its 42 kWth solarthermal collectors (comprised of 30 m2 of evacuated tubecollectors from Thermomax and 30 m2 of high performanceflat-plate collectors from SOLID), the building has an 80 kW

September–October 2006 ● RENEWABLE ENERGY WORLD ● 97

Keeping cool SOLAR COOLING

Solarstocc AG | Karlsberger Str. 3 | D-87471 Durach | Phone: +49 831 540214-0 | Fax: +49 831 540214-5 | [email protected] | www.solarstocc.com

GREAT CHOICE OFGRID-TIE INVERTERSHigh-performance string inverters ranging from 1200 to 6000 Watt

All sizes with a choice of indoor or outdoor, HV or MV

Central inverters up to 100 kW

High warranties – up to 10 years

POLY- ANDMONO-CRYSTALLINE PV MODULESUp to 240 Wp high-quality modules from our own production

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Germany 41%

Greece9%

Spain27%

Israel1%

Turkey1%

Serbia (Kosovo)1%

Netherlands3%

France6%

Italy4%

Austria3%

Portugal4%

FIGURE 1. Distribution of solar thermal systems in Europe andMediterranean (June 2005). Source: Presentation by Hans-Martin Henning,published in the proceedings of ESTEC 2005

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biomass boiler and a 25 kW ground source heat pump,linked to 115 metre bore-hole.While the biomass boiler andheat pump are used to provide heating in winter (withsupport from the solar thermal), in summer, almost the entirecooling system is run by the solar thermal panels, through a37 kW thermally-driven absorption cooler from Yazaki. Thismachine uses relatively cool (80ºC) hot water which can beeasily provided by the solar system. While most coolingsystems of this type require a cooling tower to allow therelease of excess heat, the location and design of the

renewable energy house did not make this feasible (it is anold, architecturally important building, surrounded on bothsides by much taller offices). Instead, excess heat is stored inthe bore-hole, which is prevented from year-on-yearoverheating by heat extraction in winter.

Small cooling systems grow in SpainSpain is emerging as one of the key markets for solar thermalcooling systems, thanks to its high insolation, need forcooling and favourable political environment forrenewables. Furthermore, the recent introduction of thesolar thermal obligation may have a positive impact, asbuildings which already have solar collectors installed couldbe more likely to then install solar-driven chillers.

The last couple of years have seen some excitingdevelopments, as smaller, 4.5 kW systems have beendeveloped for domestic systems. These use LiBr desiccantchillers supplied by Rotartica. Since 2005, five such systemshave been installed, along with several other larger air-

conditioning systems.Table 2 shows a comprehensive list ofthe major projects which have been developed in Spain overthe last five years. In all but one of the examples listed in thetable, solar cooling is used to provide air-conditioning. Theexception is the Fontedosa plant, in which the cooling isused for industrial applications.

From 2006–2008 several new applications are planned,including a group of five new buildings which will form partof the Arfrisol project. Funded by the Spanish Ministry ofScience and Education and led by CIEMAT, the aim of thisscheme is to build demonstration projects usingphotovoltaics and solar thermal to achieve buildings that use

98 ● RENEWABLE ENERGY WORLD ● September–October 2006

SOLAR COOLING Keeping cool

TABLE 1. EAW small capacity solar thermal cooling systems on trial in Europe. Source: EAW Location Absorption chiller Heat source Recooling Cold water useKoethen, Germany Wegracal SE15 CPC-evacuated tube Wet open cooling tower Cooling of office

collectors, 77 m2 space; gravity

cooling system

Westenfeld, Germany Wegracal SE 15 Flat plate collectors and Wet open cooling tower Room cooling with

cogeneration unit fan coils

Bad Schandau, Germany Wegracal SE 50 Flat plate collectors and gas Wet open cooling tower Cooling of exhibition

burner back up spaces, cooling panels

Ingolstadt, Germany Wegracal SE 15 Flat plate collectors, 30 m2 and

cogeneration unit; experimentation

and demonstration plant

Limenau, Germany Wegracal SE 15 Flat plate collectors, electrical

heater; experimentation and

demonstration plant

Moosburg, Germany Wegracal SE 15 Flat plate collectors, 42 m2 Wet open cooling tower Cooling of office

space, fan coils

Eppan, South Wegracal SE 15 Flat plate solar thermal Wet open cooling tower Room cooling, radiant

Tyrol / Italy collectors, 150 m2 cooling panels

Sattledt, Austria Wegracal SE 15 Flat plate solar thermal collectors Wet open cooling tower Room cooling, radiant

cooling panels

Dresden, Germany Wegracal SE 15 Evacuated tube collectors, 45 m2 Closed loop dry cooler (fan coil) Cooling of

experimentation

hall, fan coil

Spain is emerging as one of the key marketsfor solar thermal cooling systems

This system combines solar thermal and photovoltaic technology to generate heat,cooling and electricity HELIODYNAMICS

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O U R W O R L D I S F U L L O F E N E R G Y

Conergy – your strong global partner for renewable energy solutions.

Conergy – your strong global partner for renewable energy solutions.

Conergy is one of the leading international

suppliers in all fi elds of renewable energies.

We offer complete systems for the whole

range of solar applications at a quality

level you’d expect from one of the leading

suppliers in this fi eld.

Conergy is your partner for on-grid and

off-grid solutions including photovoltaic

systems, solar thermal applications for

heating and cooling, solar driven water

pumps, small wind power systems as well as

hybrid systems, and bio-energy solutions.

Visit us at the 21st EU PVSEC Conference

in Dresden, in Hall 4, Stand 53 to fi nd out

more about our broad regenerative product

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only 10%–20% of a standard construction. In all cases, thesedemonstration buildings are expected to use Climatewellchillers provided by Grupo Solar SA.

JTC factory in SingaporeOne of the larger, commercial-style of solar air-conditioningplants, the 200 kW de-humidification system installed on theroof of a JTC factory in Singapore represents an interestinguse of solar air-conditioning mixed with conventionalcooling. Powered by 570 m2 of flat plate solar collectors thissystem helps de-humidify air which is then cooled using aconventional (electrically powered) vapour compressionunit. Interestingly, the designers of this system had originallyenvisaged using an on-site gas turbine to provide heat, butwere forced to change their plans when the local utility saidthat an appropriate gas supply would not be available intime. Solar thermal provided a reliable fall back.

Concentrating solar thermal systemsAlthough not yet widespread there are a number of solarcooling installations which use parabolic trough or otherconcentrating solar thermal power solutions. Because thesesystems can generate very high temperatures they may alsobe used to generate electricity (by using steam to drive aturbine) as well as heating and cooling.

US-based Solargenix is one of the principal companiesoffering this technology for use in cooling applications andhas installed systems on a number of buildings, including itsfirst system which was installed on an office block in Virginiain late 2002.This system provided 176 kW of space cooling,along with heating and domestic hot water. The troughswere installed on the roof of a parking lot next to the Parker-Lincoln building. More recently Solargenix has been focusingon large-scale parabolic trough systems for electricitygeneration, and opened its first 1 MW plant in Arizona earlyin 2006.

Heliodynamics is another US company which uses CSPfor cooling applications. Its ‘Harmony’ system uses mirrors to

100 ● RENEWABLE ENERGY WORLD ● September–October 2006

SOLAR COOLING Keeping cool

TABLE 2. Major solar cooling installations in Spain over the last 14 years. Source: Joan Charles Bruno published in the proceedings of the OTTISolar Air-Conditioning conference, Freiburg 2006.Institution Town / District Year Solar collectors ChillerViessmann offices Pinto 2001 FPC 105 m2 + ETC, 6 m2 105 kW

Engineering school Sevilla 2001 FPC, 151.2 m2 Yazaki 35 kW

Hotel Laia Derio 2002 FPC, 173 m2 105 kW

CARTIF Valladolid 2002 FPC 37.5 m2 + ETC 40 m2 Yazaki 35 kW

Sport Centre Madrid 2003 ETC 740 m2 170 kW

Factory Inditex Arteixo 2003 FPC, 1626 m2 Carrier, 147 kW

Senior residence Navarra 2003 ETC, 149 m2 105 kW

Crever-URV Tarragona 2003 ETC, 96 m2 Yazaki 35 kW

Fontedoso SL Avila 2003 ETC, 504 m2 Yazaki 35 kW + Yazaki 70 kW

Stella-Fuega Santiago de Compostela 2003 FPC, 63 m2 115 kW

Centro Clara Campoamor Baracaldo 2004 FPC, 163 m2 229 kW

Education Dept. offices Toledo 2004 ETC, 175 m2 250 kW

Fabarica del Sol Barcelona 2004 ETC, 175 m2 Yazaki, 105 kW

Fundacion Mteroploi Madrid 2004 ETC, 72 m2 Thermax 80 KW

CENER offices Pamplona 2005 ETC, 240 m2 Thermax, 350 kW

Edificio Trasluz Madrid 2005 ETC, 204 m2 390 kW

Isofotón offices Malaga 2005 ETC, 230 m2 Yazaki 35 kW

Ikerlan Vitoria 2005 FPC, 20 m2 Rotartica 4.5 kW

Fagor Electrodomesticos - 2005 FPC 28 m2 + ETC 21.4 m2 2 x Rotartica 4.5 kW

Rotartica SA Basauri 2005 FPC 30 m2 + 25 m2 + 20 m2 3 x Rotartica 4.5 kW

Gamesa Solar Tarragona 2006 FPC Yazaki, 35 kW

Tknika, Education Dept Renteria 2006 FPC, 20 m2 Rotartica 4.5 kW

of the regional government

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concentrate sunlight on a central set of photovoltaic cells.These produce electricity, while water pipes behind the PVtake away waste heat which is used to drive the absorptioncooler. A stripped down version is also available whichbypasses the PV section and directly heats the water.Currently Heliodynamics is commissioning its first 10 tonne(~35 kW) cooling system in Tampa, Florida.This project willbe followed by others in California and New Mexico, afterwhich the company hopes to establish demonstration sitesin Spain for the Southern European, North African andMiddle Eastern markets.

In Europe, German-based SOLITEM GmbH has developeda parabolic trough collector capable of generating hightemperature steam for heating and cooling and electricitygeneration.The first of these systems was installed on a hotelin Dalaman, Turkey, and has been successfully operatingsince 2003. This system produces high temperature steam(180º–250ºC) which is used to drive and absorption chillerfor air-conditioning.The economics of this system are helpedby the variable price tariff for electricity in Turkey,depending on the time of day (peak hours are 5pm to10pm). In the future, SOLITEM looks to expand in theMediterranean region, looking to markets with high directsunshine.

ECONOMICS

Currently the major obstacle to the greater uptake of solarcooling technology (aside from the inconvenience of not yethaving off-the-peg small household units) is thecomparatively high capital costs associated with installingthese systems.As energy prices continue to rise however, theeconomics of solar cooling can only improve and in somecases, industrial and commercial projects are already viable,particularly where waste heat is already being produced.

CONCLUSION

The fact is that solar cooling works, and while it maycurrently lack the convenience of small compressor units,the increasing emergence of small systems for domestic usecan only improve the ease of take-up. As domestic PV andsolar thermal systems become more commonplace,opportunities will emerge for increasing integration ofrenewable heating, cooling and electricity systems. Such anintegrated approach (particularly if applied to new buildhousing) would help to reduce the costs of these systemsand bring about a new way of thinking in home energy use.

Alasdair Cameron is Assistant Editor of Renewable Energy Worlde-mail: [email protected]

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 101

Keeping cool SOLAR COOLING

As energy prices continue to rise, theeconomics of solar cooling can only improve

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Fresh ideas needed PHOTOVOLTAICS

For the last twenty years, the donor community has been promoting off-grid PV as an essential part of the African development programme,but with limited success. New models of how to develop PV are needed,says Mark Hankins, including a new way of thinking from both donors andgovernments, that views on-grid being as important as off-grid.

While attending a marketing seminar of a major PVcompany I was struck by a graphic showingrecent world PV demand growth. Graphs showsharply rising sales in Europe,America, Japan andChina – but African sales don’t even register. In

the early days of PV market growth, Africa was an importantmarket and there was much talk about how PV would helpsolve the low access to power throughout rural areas of thecontinent. Ten years later, Africa does not even feature in PVmarketing executives’ world view and we are no closer towidespread electricity access, PV or otherwise.

In 1995,Africa accounted for about a quarter of the annual75 MW world PV demand. Many of us in the PV sector thenthought, with a degree of confidence, that Africa’s place in themarket was secure. Since then, world demand for PV hasskyrocketed to over 1500 MW per year, while PV demand inAfrica has remained virtually stagnant. In fact, the demand foroff-grid PV systems has not grown substantially,few national PVprogrammes have taken off and, with the exception of thetelecoms sector (which is thriving), the PV sector in Africa hasbecome less and less interesting to international players andthe private sector in general.

Why has PV in Africa been such a non-success? Severalreasons are proposed below, which have to do with thestrategies, policies, multilateral projects and use of incentivesfor PV in Africa. In this article, some of the key decisions –-made by donors and governments – that affected the PVindustry in Africa are questioned. For example, why hasdevelopment of PV in Africa been limited to the off-grid sectoronly? Why have PV initiatives in Africa been so closely tied topoverty alleviation? Why have PV subsidies been largelydisallowed, when it can be shown that they are the key togrowth everywhere else in the world?

Might there be a better approach to the development ofAfrica’s PV market? Just about any supplier – even thoseenjoying the billions of dollars pumped into northerncountries’ on-grid programmes each year – will agree that

eventually Africa must be an important market. Investment inreal growth strategies makes sense – but we haven’t seen asuccessful strategy yet.

PV PROMOTED EXCLUSIVELY FOR OFF-GRID RURALELECTRIFICATION

While grid-connected PV has dominated sales in developedcountries, with annual installations in the hundreds ofmegawatts, in Africa the marketing focus has remained almostexclusively on small off-grid, stand-alone systems – especiallythe 50 Wp solar home system (SHS).Yes, PV has much to offerthe rural electrification strategies of Africa. On a continentwhere electrification rates are typically less than 10%,providing any form of power for rural people is of interest.

Since the early nineties, international policy makers andenergy planners (this writer included) promoted PV as a firststep to rural electrification. But PV was never a substitute forthe grid, and power planners and consumers were not asenthusiastic about 50 Wp systems as the donors, multilateralsand NGOs.

There are on the order of 80 million plus rural families offgrid in rural Africa – a huge market, it would seem.Nevertheless, in 10 years, the PV industry hasn’t penetratedmore than a half percent of this market.There are only a fewhundred thousand SHS installed in Africa,and the yearly uptakehas not been impressive. Few large PV companies are overlyexcited about prospects, and they have been unwilling toinvest in infrastructure for delivery of PV to off-grid areas.Without incentives, should they be expected to?

In the few places where the PV SHSs have been moderatelysuccessful (Kenya,Morocco,Zimbabwe),PV markets operate inan informal manner outside of project, government or powercompany control. Like bicycles and gen-sets, PV systems aresold over the counter. Although this private sector marketmight be the preferred approach, it is often accompanied by adownward spiral in quality and performance. Simply put, rural

September–October 2006 ● RENEWABLE ENERGY WORLD ● 103

Fresh ideas neededBuilding the PV market in Africa

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poor cannot afford to buy full systems, so they buycomponents. Their systems are not designed – they arebudgeted for – and the poor performance of thousands ofslipshod systems does not help the reputation of thetechnology.

Therefore, for an expensive technology, the off-grid ruralpoor market segment poses challenges that thus far have notbeen surmounted. Rural spending power is quite limited.Although the cellular phone boom provides hope that PV SHS

markets can be expanded on the continent, theexpansion into the rural household market is nothappening fast enough.

LACK OF GOVERNMENT POLICY, TARGETS ANDINTEREST

The spectacular growth of the PV industry in theNorth has come as a surprise even to Europeans –and in Africa, governments still do not have PV onthe radar. For most, PV has been a donor thing, notsomething that has a real role in overall energy orelectricity sector planning. Even for off-grid PV,donors are usually the champions – PV has notbeen taken seriously at policy levels. Ingovernment ministries, the few PV ruralelectrification ‘projects’ that have been set up arerarely target-oriented, and are often managed in

ways that give players little transparent access to the fundingavailable – in fact very little funding actually installsequipment.

South Africa is one of the few countries that attempted(and that can afford) a large-scale subsidized introduction ofPV systems. In the ten years since Mandela was elected,South Africa doubled grid access from 35% to almost 70%with more than a billion dollars of subsidized electrification.But, as all PV marketers know, it is increasingly expensive toreach the off-grid rural communities.Therefore, in the plan,those areas too far from power lines were supposed to getsubsidized PV systems.

At the launch of the programme six years ago,off grid areaswere divided into seven concessions. These areas weretendered to large commercial players, which each gotexclusive control of their concession, and access togovernment subsidies amounting to well over half the cost ofeach 50 Wp system.

But South Africa’s concession approach has not lived upto its promise of quickly providing hundreds of thousands ofPV systems, and red tape has slowed the roll-out of theproject to a trickle. Unexpected backlashes put a brake onwhat was initially touted to be the largest PV initiative inAfrica. First, systems were often rejected by consumers whoexpected much more than 12 volt power.The 50 Wp ‘one sizefits all’ offering to politically-aware consumers expecting ACpower didn’t go down well. Secondly, PV companyconcession exclusivity killed any incentive to compete thatthe companies might have had. In fact, South Africa’s once-thriving private sector PV SHS market has been destroyed bythe introduction of the concession system.

In many ways, South Africa’s PV experience illustrates theproblem of PV and rural electrification in sub-Saharan Africa.Back in 1980,many African governments proclaimed that 80%would have access to grid electricity by 2000. Of course, thisdid not happen. In 2006, many of the same governments arepushing forward the same unattainable goals to 2020.Practically speaking, no government will stand up and tellvoters that they will not be supplied with ‘real’ electricity –and that they must settle for low output PV systems.1

Moreover, because the target is always to expand the griduniversally, policy makers are not interested in off-grid PV as atool except in far-flung marginal remote locations. In short,

104 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Fresh ideas needed

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unrealistic promises of grid power work better for politiciansthan limited 12 volt power today.Although PV may work ina technical sense, it is suicide in a ‘political’ sense.

For the most part, permanent secretaries, government

ministers and utility CEOs intent on extending wires seelittle role for 12 volt PV systems; for them, at best, it is asecond-class technology for the rural poor. Unaware of therapid advances PV is making ‘on-grid’ around the world,senior planners are preoccupied with the pressing problemsof managing decaying national electric grids, usingconventional solutions such as hydropower and thermalstations. They do not have enough resources (financial orhuman) to innovate or find creative uses of PV – eventhough PV can make substantial contributions to RE,distributed supply solutions and local supplies where thegrid is fragile.

PV is seen as ‘weak technology’ with no potential fornational supply.With this status quo, there is little high-levelinterest in the technology or its potential future role insolving national electricity problems, on or off grid.

POORLY IMPLEMENTED ‘CAPACITY-BUILDING’ DONORPROJECTS

As of 2005, there is relatively little to show for theinvestment of over US$100 million in PV in Africa frommultilateral donors such as the Global Environment Facility(GEF), the UN or the World Bank over the last 10 years.Although, failure of PV projects is linked to development

failures in Africa in general, there are some fundamentalproject issues that need to be re-thought.

In the mid-1990s, the GEF’s operational units, the WorldBank and UNDP, began designing a number of PV projectsthroughout the continent. Using GEF funds, the UN launchednational PV efforts in Zimbabwe, Ghana, Uganda, Malawi,Lesotho, Namibia, Tanzania and elsewhere. The World Bankand IFC used GEF funds to build PV into energy programmesin Kenya, Ethiopia, Mozambique, Zambia and Uganda.

From day one, capacity-building and ‘barrier removal’were the guiding mantras of GEF-supported PV projects inAfrica. The theory of ‘barrier removal’ was that renewableenergy technologies, such as PV, wind or micro-hydro, wouldbe viable if certain key barriers were removed so that theycould enter the marketplace. What was needed, said theeconomist project designers, was elimination of thesebarriers so that renewables could compete on an evenfooting. For PV, high investment costs, low awareness, lack oftechnical skills and capacity were seen as the chief barriers.

So GEF funding, channelled through government, ended upfunding activities that – it was hoped – would remove thesebarriers. In reality, most of the funds supported internationalworkshops, vehicle purchases, development of standards andcodes of practice, hiring of project managers and consultants,development of financing mechanisms and a whole range ofawareness raising activities, while comparatively little was spent

106 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Fresh ideas needed

A small business in Tanzania uses a solar system looted from a project in Mozambique

Removal of barriers does not necessarilymean that the private sector will enter the

sector or that investments will occur

____________

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on actual installation of equipment. In fact, to date, much of theallocated money hasn’t even been spent! In hindsight, it can beseen that removal of barriers does not necessarily mean that theprivate sector will enter the sector or that investments will occur.

Those interested in why PV markets have not expanded inAfrica might want to analyse some of the ‘major’ project effortsthat were supposed to stimulate markets (these projects aretiny by international standards!). The four examples belowprovide a litany of failure – and there are many more:

• A $5 million 1995 UNDP GEF project in Zimbabwe resultedin the PV marketplace growing from four to over 60companies overnight. After the project, most of thecompanies fell out of the market, and the revolving fund setup was quickly depleted and closed down.

• The $5 million 1998 IFC PVMTI project in Kenya sought to

make PV financing funds available to banks and PVcompanies and thereby ‘transform’ the market. Even at theproject’s concessional rates, PV companies and banks werenot interested in the loans. In a market where 15,000systems are sold per year commercially, less than 500systems have been installed by the PVMTI project.

• A multimillion dollar 2003 World Bank GEF effort to expand

the PV market in Ethiopia, offered as part of a $120 milliondollar energy sector loan, was designed by consultants andhanded over to a government department that did not havethe capacity to execute the project. No systems have beeninstalled thus far, but the project is on the GEF website andlisted as an ‘active’ project.

• The Solar Development Group was a $45 million GEF/IFCdevelopment and investment programme aimed ataccelerating private sector reach into rural areas.Aimed atdeveloping country markets, it made several million dollarsof investments and grants to PV companies in East Africa,with a relatively small impact. It had trouble findingcompanies that were interested (or could qualify) for theloans. Eventually its portfolio was handed over to a Dutchbank.

In the aid business, nobody likes a muckraker.Typically, wesay little about the failures and simply move on to the nextproject. We try to learn, but we also have relatively shortmemories – and in time we just get on with it. The danger,though,is that we get cynical,and begin to believe that the ideal– i.e.development of the PV market – is not possible.‘Africa isn’tready for it’ or ‘The continent is too poor’.

Among the projects completed in the last decade, therewere a lot of good ideas on how to build markets, but therewasn’t really that much money and there was even lesscommitment to make things happen. The lag time – andresulting inertia – between the initiation and the execution ofgood ideas often prevented the private sector fromparticipating. PV company directors in Africa will tell of daysspent meeting and working with project designers andmanagers in vain hope that they could make somethinghappen.Too often, projects were designed and handed over toentities, such as small government departments, that could not

possibly execute them. Too often, the well designed projectswere a waste of time in the end because the local willingness,policies,or capacity to execute simply was not there.Too often,the private sector was not concretely involved in projects.

Often, donors did not take responsibility for their funds.Multinational organizations simply went ahead with thebusiness of implementing projects because (as in the case ofthe World Bank) they are green window-dressing for muchlarger loan packages or (in the case of the UN) they are part ofa political process of doling out internationally agreed funds.Even the most enthusiastic government officials, consultants orPV companies were thwarted by GEF’s faceless bureaucracy,committee decision-making and paperwork of the long projectapproval process.

LACK OF SUBSIDY AND INCENTIVES

Nevertheless, the most important single reason for PV’s lackof progress in Africa is the lack of incentives for companies

108 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Fresh ideas needed

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and consumers. The phenomenal growth of PV in Japan,Germany and elsewhere is almost entirely due to incentivesupport and policy drivers that come from governments.

For Africa, the GEF – the largest single investor in PV – hassaid that subsidy is forbidden in its projects. From thebeginning, this was the rule. Elaborate financing andguarantee mechanisms have been designed, pilots have beenexecuted endlessly, new marketing methods have beenintroduced and productive uses have been proposed. Everygimmick imaginable to build markets has been incorporatedinto multilateral projects. But not subsidies.

Without subsidy of the type that has stimulated westernmarkets, it is impossible to expect rural African markets tostart buying PV on even modest scales. If the rich in theNorth – i.e. people that can afford 2 kWp systems – can onlybe convinced to buy if there is a subsidy on offer,how can thepoor in remote households be expected to pay the full price?Moreover, how can PV companies be expected to invest hugeamounts of money to set up infrastructure to sell one 50 Wmodule at a time in remote villages when they can sell themby the thousand in Germany?

A lack of subsidy for African PV is not the GEF’s fault.Thedecision not to subsidize was a political one made at an earlystage by people who agreed that subsidies messed upmarkets. All along, we knew that the GEF did not have thehundreds of millions of dollars needed to really affect changein the sector. In any case, the 4th phase of GEF funding willhave much less support available for PV, so GEF will no longerbe a major supporter of the industry in Africa.

Government rural electrification funds – which might have

subsidized thousands of systems – have not been madeavailable for PV. In most countries, there is not even enoughfunding for grid electrification. Existing resources are tooscarce to extend the hundreds of kilometres of 30 kV linesrequired, and renewable energy departments didn’t want tosplit funding with PV companies.2

Finally, from the overall needs perspective, PV as atechnology has never been a priority.Alleviation of poverty isthe big theme. In the development community, there aremany who believe that PV has received too muchdevelopment assistance already. In a continent where health,shelter, education, water, income generation and other basichuman needs are so poorly served, it is difficult to make adirect case for PV.

Still, when Germany, California and Japan invest billions inPV – places with hundreds of times more kilowatt hours percapita than Africa and scarcely half the solar radiation – doesn’tthe idea of building the Africa PV market make a kind of moralsense? Of course it does! PV must play a role in the future ofAfrica’s power supply.The question is: How to do it.

REAL NICHES FOR PV IN AFRICA

Unlike Germany or Japan, few (if any) African countries havehad a coherent plan or strategy for the PV sector. PV in Africahas always been a small-project led affair, without long-termchampions or deep-pocketed supporters.As mentioned above,national governments do not have serious interest, exceptwhere rural electrification wires can’t reach.The sectors that

matter – the private and utility sectors – are almost universallyunaware and unwilling to invest in PV.

Perhaps the focus on PV for rural electrification only hasbeen detrimental to development of African PV markets,because it has taken the focus off – and diverted resourcesfrom – other viable and important PV markets. While grid-connected growth worldwide has outstripped off-grid PVmarket growth, similar important and strategic niches for grid-connect PV in Africa have been left ignored and undeveloped.

Nevertheless, growing PV production and falling costswill eventually reach Africa and new niches will surelydevelop.As these niches develop, key stakeholders in Africanpower markets, including utilities, mainstream government,regulators, consumers and the private sector – whopresently view PV only as a tool for off-grid electrification –will become more interested in the PV technology.

Those companies and investors interested in the futureof PV in Africa need to prepare themselves. Of course the off-grid market is the first place to watch. But other markets willdevelop, especially in countries like South Africa andNamibia, where such investments can be afforded.

Although much of the potential impact of PV remains insmall off-grid systems (SHSs), there is considerable potential

110 ● RENEWABLE ENERGY WORLD ● September–October 2006

PHOTOVOLTAICS Fresh ideas needed

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for use of PV in more elaborate off-grid systems. Therefore,when considering how to roll out PV for off-grid areas,planners should start expanding their horizons beyond therural poor alone. Maximizing access means looking at thepublic sector (as the World Bank is currently doing in anumber of countries with projects that install PV in clinics,schools and pumping stations) as well as the private sector.Tourism, small business, telecoms and agriculture wouldinvest in PV if provided with the necessary incentives (andcapacity building). It may be that support for larger off-gridcommunity and business-serving systems may have moreimpacts than SHS systems.

If on-grid PV makes sense in countries where there isexcess power, then surely PV makes sense where grid poweravailability and fluctuations are a problem. In places likeKampala, Dar es Salaam and Nairobi, businesses andhouseholds go without electricity for days on end, andconsumers are faced with long waits for grid extension due tolow grid capacity. Today, there are tens of thousands ofinverter/battery back-ups installed in east African cities wherepower supplies are fragile. Addition of PV arrays to suchsystems would be seen as a viable investment by manycustomers. In power-starved countries, a grid-feeding PVsystem, funded by consumers, is of interest to the powercompany, however small the overall PV capacity. Moreover,investment in large on-grid PV systems will build PV industriesand have a positive effect on PV availability in the countries.

Despite clear opportunities for PV on the grid in Africa,there are very few examples of on-grid PV in Africa (Namibiaand South Africa have initiated some projects).This is becauseof a lack of policy support, perceptions among keystakeholders that PV is not viable on-grid (costs, legal), short-term reactive planning that does not include distributedpower, and a lack of ability of pro-PV activists to overcomehurdles such as metering and the potential mis-match ofgeneration and load demand.

But, as happened in Germany, grid-connect programmeswill be critical to development of the PV industry in Africa.First, grid-connect system capacity will build skills in an

112 ● RENEWABLE ENERGY WORLD ● September–October 2006

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TABLE 1. African PV nichesPotential PV applications in Africa JustificationOff-grid PVSolar home systems Household systems (the

market should diversify both

upward and downward from

the 50 Wp SHS)

Public service systems Schools, clinics, water pumps,

community institutions

Private sector systems Ranches, game lodges, small

business, telecomm

Isolated grid power systems In diesel powered off-grid

systems, PV is increasingly

competitive as a power source

On-grid PVUrban and peri-urban offices Such businesses already use

and small businesses battery back-ups as survival

tools to get them through

power shedding.

Upper class households As above

Building facades Developers of buildings

consider energy costs in their

investments and may be

willing to invest in PV if it can

creatively fit with building

energy loads

Tourism (small and large hotels) Hotels increasingly like to be

seen as green and invest in

self-sufficiency as part of their

strategies.

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industry that has been focusing on small off-grid systems.Secondly, they will increase business flow and revenue forstruggling companies. Thirdly, they will add prestige to PVand make the sector more interesting to investors andcorporate customers. Finally, grid-connect PV will enable PVcompanies to diversify their business and, in the long term,enhance their ability to serve rural customers.

WHAT IS NEEDED FOR PROGRESSIVE DEVELOPMENT OFPV IN AFRICA?

There is an urgent need for stimulation of PV development inAfrica. A market that has not grown significantly in 10 yearswill not grow spontaneously. There is an urgent need forsupport of both off-grid and on-grid PV activities. First, there isa need to reinvigorate the off-grid PV sector through the useof well planned initiatives that utilize incentives andintelligent, serious government policy. Secondly, there is aneed to get PV on-grid in Africa.

Support by donors and governments for PV projects and theachievement of agreed targets should go hand-in-hand. It isabsolutely necessary that supporters mandate accountability aspart of their projects. This should mean numbers of systemsinstalled and sold. Africa knows how to install PV – what isneeded are supporters that are concerned about the entireprocess of project design, execution, monitoring and evaluation,not just the front end.

As in Europe, US and Japan, subsidy will be a key element tothe development of the market.With the drying up of GEF PVsupport, there is a need to seek new sources of subsidy funding.Some countries may be able to support modest PV subsidies withlocally raised revenue. Others will require support from donors.If,as has been the case in so many projects,donor projects do notwork, it may be useful for the $20 billion PV industry to considerallocating support for Africa from within its own coffers.

Off-grid, there is a need to rethink how projects are beingplanned and executed.

• PV needs to become part of the rural electrification planningprocess,and governments need to be clear about the limits ofrural grid expansion programmes, because such limitationsare the basis for PV marketing.

• partners and governments should set targets for PVprogrammes, and donor payments should be tied toachievement of targets.

• the private sector needs to champion PV expansionprogrammes.We have seen that the government will not dothis on its own.

• intelligent subsidies and incentives must be made available forthe development of PV markets, in the same way that ruralelectrification funds are made available for grid expansion.

• subsidies should be available for a range of PV systems in thepublic, household and private sector. Large systems intourism, telecoms,agriculture and other commercial facilitiesare needed,as many public sector systems simply are not wellmanaged.

• finance channels need to be stimulated all the way into ruralareas – from importers to retailers to consumers

• development partners, governments and supporters of ruralPV need to have a long term vision, not short term projecthorizons.

114 ● RENEWABLE ENERGY WORLD ● September–October 2006

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On-grid,there is a need to develop experience and treat PV asan electricity source that it highly valued and easily deployed.Clearly a situation where there is over a gigawatt of gridconnected PV in developed countries and nothing in Africa is nottenable.

• targeted education and awareness raising of powercompanies, consumers, regulators and government –especially at high levels needs to take place.

• government – and utility – policy must be adjusted to provideincentives and clear procedures for connecting PV to the grid

• targets must be set by ministries that promote use of PV on-grid

• investment by private sector in grid connect must besupported and encouraged

• creative financing tools must be developed (including carbonfinance)

• group of knowledgeable champions among African powerutilities, ministries, private sector and regulators need to bedeveloped and supported

• frameworks need to be developed for installation of gridconnected systems and resolution of technical (grid codeissues), regulatory, tariff/financial as well as environmentalaccounting issues

• existing global experience in grid-connected PV to the needsto be incorporated into the African market

• markets for grid-connected PV in selected niches must beopened up and popularized among consumers.

In this article, we have seen that the Africa PV market hasbecome increasingly less attractive as other world markets grow.PV markets in Africa have been constrained by a lack of realGovernment policy and achievable targets, a weak ‘capacity-building’ and ‘barrier removal’ approach by donor-fundedpromotion initiatives and a lack of substantive incentives for theprivate sector.

However,we cannot ignore PV markets in Africa.More that inany other part of the world,solar energy must play a role in Africa,as alternatives become increasingly expensive.New efforts in PVmust take different approaches that learn from successes in theNorth, particularly the use of subsidy, and from the mistakes ofpast projects.Governments,utilities and large consumers must beinvolved in PV projects, and new projects must include bothsmall off-grid and large on-grid systems. Increasingly,African PVtraders must look to the large players in the North to help thembuild their markets.

An Africa with a large PV market benefits everybody.

Mark Hankins is an energy consultant based in Kenyae-mail: [email protected]

NOTES

1 South Africa did this and faced the wrath of consumers who rejected PV SHS by

the thousands!

2. Namibia, Uganda and South Africa are three countries where PV is being

supported with rural electrification funds.

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 115

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116 ● RENEWABLE ENERGY WORLD ● September–October 2006

FINANCE Finding the money

As China looks to increase the share of its rapidly growing energydemand that is derived from renewable sources, Joseph Jacobelli takes alook at some of the key policies that will drive this growth, and at thefinancial instruments that will provide the necessary billions.

On 28 February 2005, the Chinese governmentintroduced a new and comprehensive policy topromote renewable energy sources. Called the‘Renewable Energy Law’, this legislation was formallyenacted on 1 January 2006 and has led to an

acceleration of announcements of new renewable energyprojects, particularly in the areas of wind and biomass. Thereasons for this are obvious.Over the next 15 years or so,Chinais looking at increasing its wind-based electric powergeneration capacity from a little over 1200 MW at the end of2005 to at least 30 GW by 2020.This should require investment

of anywhere between US$21–28 billion; depending on thepercentage of domestically sourced equipment. Overall,electric power generation capacity from renewable energysources should rise from around 10 GW in 2004 to at least 130 GW by 2020. Such strong momentum in the renewableenergy sector raises two key questions: how serious aregovernment authorities in their promotion of renewableenergy sources, and how will this huge planned increase inrenewable energy sources be financed?

CHINESE GOVERNMENT AUTHORITIES ARE SERIOUS INTHE PROMOTION OF RENEWABLE ENERGY SOURCES

The legal frameworkIn the past 18 months or so, the Chinese authorities havereleased two documents important to the development of

renewable energy sources in China. On 28 February 2005, theStanding Committee of the National People’s Congress (NPC)issued ‘The Renewable Energy Law of the People’s Republic ofChina’ to be effective from 1 January 2006. Another keydocument was released by the National Development andReform Commission (NDRC) less than a year later,on 4 January2006, and was entitled ‘Trial Measures for the Administrationof the Pricing of, and the Sharing of Costs in Connection wit,the Generation of Electricity Using Renewable EnergyResources’, also effective from 1 January 2006.

Article 2 of the Renewable Energy Law clearly definesChina’s idea of renewable energy sources. It says that the Lawrefers to ‘non-fossil energy of wind energy, solar energy, waterenergy, biomass energy, geothermal energy, and ocean energy,etc’ and that the ‘Application of [the Renewable Energy Law] inhydropower shall be regulated by energy authorities of theState Council and approved by the State Council.’

We believe there are at least four key articles in the 2006Renewable Energy Law worth highlighting.

• High transparency.Central government authorities madea commitment to publicize renewable energy targets(Article 8).

• Grid connection and purchase guarantee. TheRenewable Energy Law mandates the grid both to connect,and to purchase, all of the available electric power outputfrom authorized renewable energy power producers(Article 14).

• Pass through. Importantly, the Renewable Energy Lawemphasizes the difference to the grid between renewablepower and the other forms of electric power.This meansthat any difference between the price of electricity fromrenewables and on-grid price of power from conventionalsources,as well as any costs incurred by the grid to connectrenewable energy generators to the grid, is to be passed onthrough to end users (Articles 20 and 21).

Finding the moneyIs China’s renewable energy boom real, and if so,how will it be financed?

Over the next 15 years, China is looking atincreasing its wind power capacity from

1200 MW at the end of 2005 to 30 GW by 2020

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September–October 2006 ● RENEWABLE ENERGY WORLD ● 117

China’s rapidly growing economy has put huge strain on the environment, with an estimated four million dying every year from airpollution. This has made the development of renewable energy a priority for the central government

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• Financial support.The Renewable Energy Law providesfinancial support to renewable energy projects in threeways:

1. Establishment of a government renewable energy development fund (Article 24).

2. Authorization of preferential loans from financial institutions (Article 25).

3. Preferential tax treatment for authorized renewable energy sources projects (Article 26).

The 2006 trial measures, applicable to renewable energysources projects approved after the end of 2005, also contain afew key articles worth mentioning.

• Pass through.These measures clarified that the differencebetween the on-grid tariffs for renewable-generatedelectric power and for desulphurized coal burning, shouldbe passed through to the retail price and that the difference‘shall be apportioned over the quantity of electricity soldby grids at the provincial level and nationwide’ (Article 5).

• Pricing for biomass.These measures detailed the pricingmechanism for renewable energy–based electric powergeneration projects.The most important factor is that suchprojects would receive a subsidy of RMB250/MWh($31.25) above the benchmark on-grid tariff fordesulphurized coal burning generators (Article 7).

• Pricing for solar.The measures simply mentioned that thetariff rates would be determined by the State Council’spricing department ‘based on the principle of reasonablecosts and profit’ (Article 9).

• Surcharges. Several articles within the measures (Articles12–18) explain the process under which end users wouldpay for a surcharge for using renewable-based electricpower. While detailed, the various articles do not offer anautomatic process. Rather, they emphasize that thedetermination of the surcharge remains within theauthority of the State Council’s pricing department.

Overall, it is impressive that the body of legislation wasreleased ahead of the expectations of industry practitioners.These participants, however, have publicly criticizedauthorities for not offering a feed-in tariff for wind powerprojects.

In the energy field, China has never blindly and hurriedlyundertaken change. The restructuring of the electric powertransmission and distribution and generation sectors took thebest part of eight years and now, four years later, fine-tuning isstill taking place (China’s two grid companies no longer haveadministrative functions but still own a small number ofgeneration assets which they were supposed to sell off).

In short, China has not been comprehensive enough withits policies but the fact that some sensible legislation is alreadyin place is a tremendous leap forward for the Chineserenewable energy industry. Confidence remains high that inthe next five years, authorities will further amend and improverenewable energy sources legislation.

THE MOTIVATION

The motivation on the part of Chinese government to promotethe development of the renewable energy industry arises fromthree concerns – over the environment, social obligations andenergy security.

Concerns over environmentChina has a well publicized pollution crisis and this hasprovided the authorities with a greater drive to promoteemissions-free energy. While politically, energy security isprobably the basic motivator behind a greater emphasis onrenewable energy, the most serious driver is (or should be)pollution, which is regularly highlighted by local and globalmedia.The pollution-related costs to the environment are great.A recent article highlighted some of the issues:

• According to the World Bank, China has six of the world’s10 most polluted cities

• Pollution may cost $54 billion per year in environmentaldamage and health problems

• Acid rain falls on one-third of the land.

Others have highlighted that China is the world’s second-largest producer of greenhouse gases and that two-thirds of

118 ● RENEWABLE ENERGY WORLD ● September–October 2006

FINANCE Finding the money

China has not been comprehensive enoughwith its policies, but the legislation in place is

a tremendous leap forward

____________________

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New Books on Renewable Energy from Earthscan

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The new book from the internationally renowned author of TheSolar Economy and A Solar Manifesto, and winner of TimeMagazine’s ‘Hero of the Green Century’, demonstrates why thetransition to renewable energy is essential and how in can bedone.

Energy AutonomyBy Hermann Scheer(Hbk ISBN 1844073556 | £19.99 | November 2006)

Diversifying the energy mix is an economic and environmentalimperative. To this end we need new technologies and the rightpolicy frameworks to trigger and deploy them. This book offers knowledge and inspiration to promote renewable energy indeveloping and industrialised countries.Klaus Toepfer, Executive Director of UNEP

Renewable EnergyEdited by Dirk Assmann, Ulrich Laumanns and Dieter Uh(Hbk ISBN 1844072614 | £65.00 | July 2006)

Unlike the majority of other texts on wind power, which arewritten primarily for engineers or policy analysts, this bookspecifically targets those interested in, or planning to devel-op, wind power projects.

Developing Wind Power Projects By Tore Wizelius(Pbk ISBN 1844072622 | £45.00 | October 2006)

This new Energy from the Desert volume examines and evaluates the potential of very largescale photovoltaic power generation (VLS-PV) systems. The authors present case-studies ofboth virtual and real projects based on selected regions (including the Mediterranean, Sahara,Chinese Gobi, Mongolian Gobi, Indian Thar, Australian Desert and the US) and their specificsocio-economic dynamics, and argue that VLS-PV systems in desert areas will be readilyachievable in the near future.

Energy from the DesertBy Kosuke KurokawaHbk ISBN 1844073637 | £75.00 | October 2006)

For more information or to order, simply visit www.earthscan.co.uk or call us on +44 (0)20 7387 8558

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its cities have poor-quality air, often due to coal dust frompower plants.According to the World Health Organization, airpollution kills about 4 million people per year in China.

Rural electrificationAnother factor which motivates the Chinese government isrural electrification and China has been aggressive in tryingto ensure that all its people have access to electricity.

Depending on the source, Chinese organizations estimatethat there are between 10.5 million and 30 million people in

the country with no access to electricity, mostly in ruralareas, representing 0.8%–2.3% of China’s total population.Currently, the National Development and ReformCommission is targeting to provide power to all those withno access to electricity via two programmes, ‘VillageElectrification’ and ‘Household Electrification’.

Energy securityWhilst fossil-fuel (gas and coal) supplies appear abundant,historically there has been too much dependence on coal.Since late 2003, when electric power demand began risingfaster than expected by authorities, problems with such largedependence on coal-fired power plants has became apparent.In one instance, coal prices rose so sharply from 2003–2004that some thermal coal plants in eastern and southern Chinadid not have sufficient fuel to generate power and were forcedto shut down.

The sharp rise in global oil prices and existing limitedavailability of oil has once again highlighted to the Chineseauthorities the need for greater energy security. Whilstrenewable energy may only account for about 12% of China’s

120 ● RENEWABLE ENERGY WORLD ● September–October 2006

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total installed capacity by 2020, it should still help infurthering energy security.

Other motivationsRenewable energy would appear to be beneficial in meetingmost of the challenges faced by the electric power generationsector.

PriceCurrently the electric power tariff mechanisms for variousforms of generation are at an early stage in China.For coal,oil,gas and nuclear generation, the on-grid tariff (i.e. wholesaletariff) mechanism is still being developed by authorities.Theimmediate target is to involve coal-fired generation in

experimental, competitive on-grid power sales, in some keyregions including eastern, north-eastern and southern China.Relative to these other forms of electric power generation,renewable energy sources have some clear guidelinesregarding the on-grid tariffs, thanks to the Renewable EnergyLaw.The hydro on-grid tariff too is unlikely to change, as it isfixed by government. Biomass-generated power already has afixed feed-in tariff. For wind and solar-generated power fornow, as with hydro, the on-grid tariff is fixed by governmentand not by a utility regulated formula.

Utilization ratesIt is widely known that increases in electrical capacity havefinally begun to outpace growth of demand, and this should

September–October 2006 ● RENEWABLE ENERGY WORLD ● 121

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TABLE 1. Renewable electricity projects vs. other electric power generation sourcesSource: Merrill Lynch AsiaPac Utilities Research

Coal Hydro Oil Gas Nuclear RESPrice Tariff mechanism currently still at Unknown Neutral Unknown Unknown Unknown Positive

early evolutionary stage

Volume Utilization rates nationwide declined Negative Neutral Negative Neutral Unknown Neutral

in 2005 and should decline in 2006–7

Fuel Thermal costs have risen sharply in Negative Neutral Negative Positive Positive Positive

2004–6 and should stay at high level

High gas price levels may hinder Positive Neutral Neutral Negative Neutral Positive

its development as a key generation fuel

Energy fuels (thermal coal and gas) Negative Neutral Negative Negative Neutral Positive

supply disruptions could occur again

Financing Rising debt from sharp generation Negative Negative Negative Negative Positive Positive

and T&D expansion

______________________________

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continue in 2006 and 2007.This will affect coal and oil-firedgeneration whose dispatch depends on overall utilizationrates in individual grids.The trend should be neutral to hydroand other renewable energy generation, as the grid is obligedto pick up all of the output generated by these two forms. Itis also neutral for gas,which is expensive and not widely usedfor baseload in China. For nuclear, dispatch is dependent onthe grid,but is largely treated like hydro and power generatedfrom renewable energy sources.

Higher fuel costsPower generated from renewable energy sources is now alsolooking much more competitive than competing forms ofgeneration. It is estimated from sample projects that wind andbiomass can sell power to the grid at anywhere betweenRMB500–700/MWh ($62.5–87.5).This is generally lower than

oil-fired generation which is typically more likeRMB600–800/MWh ($75–100). Nuclear energy is currentlypriced a little lower than wind and biomass, at aroundRMB400–500/MWh ($50–62.5). The range for gas is notcurrently applicable, given that there are only limitedexamples.

High gas pricesChina’s target to have 60 GW of gas-fired generation by 2020(from a base of just 1–2 GW in 2004) now seems ambitious.The target was devised on the assumption of low oil and gasprices – well before $70 oil! These high prices may hinder thegrowth of gas and some of the balance may be substituted bycoal-fired or renewable energy sources generation.

Energy fuels supply disruptionsIn 2003–2005, a sharper-than-expected increase in electricpower demand put pressures on the coal transportinfrastructure, leading to some coal-fired generation power

122 ● RENEWABLE ENERGY WORLD ● September–October 2006

FINANCE Finding the money

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plants with limited (or no) coal supply during peak demandperiods. In 2005 and 2006, residential, and to a lesser extentcommercial, demand for natural gas disrupted the supply ofnatural gas to new gas-fired power plants. Both events arepositive for renewable energy sources based generation,which should not suffer from such severe fuel supplydisruptions.

Sharp expansion of generation and transmission anddistributionIn 2005, China added about 65.9 GW of generating capacity,bringing its total to 508 GW.We estimate China will be adding75 GW in 2006, 82 GW in 2007 and then 74.5–84.5 GW onan accumulated basis between 2008 and 2010. Concurrently,the heavily neglected transmission and distribution systemsmust be expanded as well, at an estimated cost of around$291 billion between 2006 and 2010 and a further $625billion between 2011 and 2020. The sharp increase inspending may cause some to be concerned as to whetherrenewable energy sources would have challenges in raisingfunds for the development of the projects.This should not bea concern given that electric power generation andtransmission and distribution projects are priority sectors.Thus these projects should find raising funds from China’sfour key commercial banks relatively easy.Also, as mentioned,the Renewable Energy Law does authorize preferential loansfrom financial institutions (Article 25) to renewable projects.

THE FINANCING OF HUGE PLANNED INCREASES INRENEWABLE ENERGY SOURCES

We estimate that China will be raising installed capacity fromrenewable energy sources from about 10 GW in 2004 to130–140 GW by 2020. The strongest growth will come fromwind power which should increase from 1.2 GW in 2005 to30–40 GW by 2020. Hydro, solar, and biomass are each likely toincrease more than 10-fold.

We suspect that actual wind power capacity expansion islikely to top the current 30–40 GW target. In fact, in recent daysauthorities at an industry conference mentioned that China wasraising its 2010 wind power target 60%, to 8 GW from 5 GW,although no mention was made of the 2020 target.1 China’sbiggest wind power operator, China Longyuan, part of ChinaGuodian Group (one of China’s Big Five electric powergeneration groups), said at this same conference that it was

September–October 2006 ● RENEWABLE ENERGY WORLD ● 123

Finding the money FINANCE

TABLE 2. Generation estimates by type. Source: Speech of EnergyBureau in World Renewable Energy Conference 2004; China SustainableEnergy Program. NDRC.Generation targets Year-end 2004a 2010b 2020b

by type (GW)Renewable energy 10 60 130

target (total)

Renewable energy 9.71–9.81 60.45 130–141

target (calculated)

Small hydro plants 7 50 79

Wind 0.76 4 30.00–40

Biomass 1.90–2 6 20

Solar PV 0.05 0.45 1–2a Actual capacity installedb Estimated capacity

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itself targeting wind power installed capacity of 3 GW by2010 from about 0.42 GW in 2005.

Updated targets should be released relatively soon as semi-official Chinese media sources reported that the State Councilwill soon issue mid- and long-term objectives for thedevelopment of renewable energy sources.2 Given such massivegrowth, where will the necessary finance come from, and willsufficient funds be available to ensure maximum development?

Commercial bank loansAssuming an average of $800–1000/kW, China should bespending at least $104–140 billion developing renewable

energy generation. Typically, electric power projects can be70%–80% financed by commercial bank loans. This meansthat the banking system should be looking at lendingbetween $72.8–112.0 billion.

Other forms of fundingWhilst renewable energy sources are a priority area for Chinaand thus raising commercial bank loans should be relativelystraightforward for authorized projects, the downside is thatthese loans are typically based are on floating rates. As such,Chinese renewable energy projects, and electric powercompanies in general, have been looking at graduallydiversifying their funding sources. These have included theissuance of corporate bonds, fixed-rate short-term notes andconvertible bonds,along with the setting up of joint ventures orselling stakes and raising funds on the stock markets. Below wedetail some examples from 2006 of these various channels tohighlight the scale and diversity of forms of funding other thancommercial bank loans.3 It is worth noting that equity issuancehad stopped for about a year in China and that only in May 2006did the China Securities Regulatory Commission resume theapprovals process for initial public offerings.

Corporate bonds• 11 May: China Yangtze River Three Gorges Project

Development Corp said it would issue 20-year bonds at4.15% annual coupon worth RMB3 billion ($375 million)

Fixed-rate short term notes • 21 June, Huaneng Power International announce it would

124 ● RENEWABLE ENERGY WORLD ● September–October 2006

FINANCE Finding the money

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issue a 1-year note in the inter-bank market worth RMB4.5billion ($562.5 million)

• 25 May: Huaneng Power International Inc. said it hadfloated its first batch of short-term bonds for 2006,RMB500 million worth ($62.5).

Convertible bonds• 23 May: Shanghai Electric Power Co. board approved the

issuance of RMB1 billion ($125 million) worth of five-year convertible bonds.

Setting up of joint ventures or stake-sale• 21 June: Beijing-based China Energy Conservation

Investment Corp announced it had taken a 47.5% stake inZhejiang Windey for RMB40 million ($5 million)

• 21 June: Guangxi Guidong Electric Power Co Ltd said itsparent would sell 29% in power producer to Spain’sIberdrola for RMB218.21 million ($27.3 million)

• 16 June: Singapore-based China EnerSave Ltd said Fridayit bought a 51% stake in a 270MW power plant in Henanfor $45 million.

• 20 May: France’s Electricité de France said it wasconsidering acquiring further stake in Chinese electricitycompanies or power stations.

Initial Public Offering (IPO) and other equityissuance• 21 June: Zhejiang Windey, a wind turbine manufacturer

said it is looking at an IPO in the next two years to raiseup to RMB200 million ($25 million)

• 20 June: Another wind turbine manufacturer, GoldwindScience & Technology Co., said it was considering an IPO.

CONCLUSION

China is an exciting investment prospect for the renewableenergy industry, with predictions of rapid growth and thefirst steps towards a comprehensive renewable energysupport policy. With a wide range of sources of equity andfinance, the only real limits on this growth will be thetechnology and the political will.

Joseph Jacobelli is Head of AsiaPac Utilities Equity Research andSenior Director, Merrill Lynch (Asia Pacific) Ltde-mail: [email protected]

NOTES

1. ‘China May Raise Wind Power Installed Capacity to 8mn kW’, 19 June 2006,

SinoCast China Business Daily News

2. ‘China commits preferential fiscal, tax policies for renewable energy firms’, 20

June 2006, Xinhua’s China Economic Information Service

3. Data sourced from: AFX Asia, Asia Pulse, China Daily, China Securities Journal,

Dow Jones International News, Le Figaro, Reuters, Xinhua Financial Network.

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 125

Finding the money FINANCE

______________________

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With small hydro growing at over 4 GW per year in China, D. Pan takes atimely look at one of the largest renewable energy markets in the world,how it got that way, and what the Chinese government’s policy is for thefuture.

By the end of 2005, there were 39,660 MW of smallhydro capacity in China, representing over 95% of allrenewable electricity capacity installed. In 2004 and2005 the sector had continued to grow rapidly, withChina installing an additional 3.59 GW each year.

According to the Chinese Ministry of Water Resources, duringthis period half of the land, one third of the counties (in Chinaa county is an administrative region which can correspond to acity and its hinterland) and one quarter of the Chinesepopulation were supplied with electricity mainly derived fromrural hydro power.

It has been widely recognized that SHP has a special role toplay in energy supply, poverty alleviation, environmentalimprovement, increase of farmers' living standards anddevelopment of local economy. In China, the definition of smallhydro has been modified several times of the last 40 years,risingfrom <3 MW in the 1960s to <50 MW in the 1990s.

The environmental benefits of developing SHP shouldnot be ignored. The annual generation from rural smallhydropower in China replaces the need to burn 44 milliontonnes of standard coal, displacing the emission of over 110

million tonnes carbon dioxide, 85 million tonnes of carbonmonoxide and 900,000 tonnes of sulphur dioxide. Most ofthe electrified counties are situated on the upper reaches ofrivers, where the land is more thickly forested. Using smallhydro in such regions saves firewood, meaning logging canbe prevented and soil erosion avoided. According tostatistics, there are nearly 20 million residents usingelectricity to cook in areas supplied by rural hydropower inChina, thus protecting a huge amount of timber from beingchopped down every year. In the primarily electrifiedcounties, the forest cover increased at an annual average of9.88% over the past 15 years, 5.4% quicker than that of thewhole country. Previously farmers – especially the womenand children – spent a great deal of time picking up orcollecting fire wood, and burning hay and fuel wood all theyear round.This not only polluted the local environment, butwas inefficient and undermined their health.

Meanwhile, the boom in SHP has greatly benefited thehydropower equipment manufacturers in China. 2004 sawthe production of a record 6.3 GW of hydropowerequipment. In 2003 the production of hydropowerequipment was around 5.16 GW, whereas in 2002 this figurewas only 2.98 GW. Encouragingly, along with thedevelopment of SHP in the past decades, the quality of thehydropower equipment produced in China has alsoimproved considerably, especially in recent years. So far, 12kinds of standards or regulations relating to the hydropowerequipment sector have been established.Due to the constantprogress made in information technology, a series of highefficiency turbines have been developed and produced. For

September–October 2006 ● RENEWABLE ENERGY WORLD ● 127

The annual generation from rural smallhydropower in China replaces the need to

burn 44 million tonnes of coal

Liquid assetsFactors contributing to the developmentof small hydro in China

Liquid assets SMALL HYDRO

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instance, the efficiency of the domestically producedimpulse turbine (single jet) has reached 90.75%, very closeto the 91% achieved in some advanced countries, whileefficiency for the Francis turbine scores 94.5% in China,compared to 94.9% achieved elsewhere. At the same time,owing to the fact that the processing costs of manufacturingmedium and small sized turbine equipment represents fairlya large proportion of their price, the equipment is verycompetitive on the international market.

FACTORS CONTRIBUTING TO FAST SHP GROWTH

In 2002, China started to confront its growing power shortage,something which was brought to light in 2003 when 21provinces and autonomous regions in China experiencedfrequent brownouts.This has provided an opportunity (and animpetus) for the development of alternative electricity sources,with several consequences for the SHP sector.

• High market demand. China's severe shortage ofelectricity in recent years has created a golden age forSHP development.The national GDP growth rate in 2003reached 9.1% (the expected growth from the centralgovernment was 7%) and the GDP growth rate hit 15% oreven higher in many of China's eastern coastal areas.Thishas continued ever since, with growth in 2004, 2005, and2006 averaging at 8%–9%. In 2003 the steel outputreached 222 million tonnes, up 21.9% on 2002; thegrowth rate of cement production accounted for 18.9%.These energy-intensive industries became the main forcebehind the growth of the industrial consumption ofelectricity. Thus, the demand of electricity consumptionwas much higher than predicted.

• Favourable tax policy.The Chinese government set therate of value-added tax for SHP at only 6%, whereas therate for large hydro was 17%. Meanwhile, the 33% incometax for SHP can be reduced to 16.5%or even 0% in some places. Otherpreferential policies have beenintroduced by both central and localgovernments, and hundreds ofmillions of dollars are being allocatedfor SHP development each year. Thereturn period for SHP developedwith a low interest loan is 10 years.

• Multi-channel fund mobilization.One of the main obstacles to SHPdevelopment is the availability ofconstruction capital. SHP-based ruralelectrification not only depends onthe local governments but also on thelocal people to be mobilized. So it isimportant to have ways of collectingfunds:

– Multi channel ways of collectingfunds. Farmers, groups of farmers as well asenterprises are encouraged to invest. Funds outsidethe county are also encouraged to develop SHP. Inshort, whoever invests, all are welcome, adopting the

mantra ‘who invests, owns and benefits’– Adopting a share system or share co-operativesystem for the mobilization of funds and finance,including using the foreign capital. Since the early1990s when some areas adopted share systems to runSHP stations, about 80 SHP stations and grids havebeen set up. Such a system is beneficial for themobilization of funds for SHP construction – Self-rolling funds for SHP enterprises. Due to theconstant input and construction over the last fewdecades, many counties now generate sufficient profitfrom their SHP plants to invest in new facilities

• Abundant SHP potential. The theoretical SHP potentialin China is 150 GW, with 72 GW seen as economicallyexploitable. Since the 1990s, SHP stations with aninstalled capacity of up to 50 MW could enjoy thepreferential SHP policies. Thus, the theoretical SHPpotential in China was increased to 170 GW, and theexploitable potential to 120 GW.

In 1983, the state issued a call to ‘develop SHP activelyand set up rural electrification pilot counties’. For the past20 years, 653 counties based on SHP-based rural

electrification have been developed, representing one thirdof the total in China. In all, 1576 Chinese counties havedeveloped SHP, of which 780 counties are mainly suppliedby SHP, representing (as mentioned earlier) half of theterritory and roughly one quarter of the population.

The policy of Three selves – selfconstruction, self management and selfconsumption developed in China in theearly 1960s has been the guidingphilosophy of SHP development in China.Self construction allows localgovernment and people to mobilize theirinitiative to make full use of the localresources, technology and crudematerials to develop SHP, with thecollection of funds generally being madeby the locals. In some places, they evenproduce the SHP equipment themselves.Self management means that those whoinvest own the SHP station, protectingthe initiative of the local people todevelop SHP. Hence, the managementsystem for SHP is quite ahead the time.Self-consumption means that the energyproduced by the SHP station should be

consumed locally for the main, indicating that SHP must haveits own supply area and it forms the SHP market of unifiedsystem embodying generation, supply and consumption.

In contrast with some other developing countries, the

128 ● RENEWABLE ENERGY WORLD ● September–October 2006

SMALL HYDRO Liquid assets

In all, 780 counties are mainly supplied bySHP, representing half of the territory and one

quarter of the population

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development of small hydro power in China has tremendousgrass root support. Apart from the strategic objectives,standards and policies which are set forth by the centralgovernment, the planning, exploitation, operation,management and equipment manufacturing are allimplemented by the local governments. Such principles of‘self-reliance and mainly depending on the locals’ to developSHP and extend the state grids form the main features of themanagement system. Hence, rural energy is supplied by thestate grids, local grids and the isolated rural grids in adecentralized manner in China.

SHP PROSPECTS

In 2005 the total annual power consumption in China hit2500 billion kWh. As predicted, the total installed electricalcapacity in China exceeded 500 GW by 2005 and the newlyadded installed capacity in the whole country hit 70 GW.From January to June this year, total power consumptionreached 1311 TWh, a 12.89% increase as compared to thesame period in 2005.

While the majority of generation in China is from fossil-fuel powered thermal stations, SHP is a renewable andenvironmentally sound energy. With the availability of smallscale investment, it is sustainable and appropriate for thevast number of decentralized rural households. Therefore,the approach of Chinese Ministry of Water Resources hasbeen clear – to continue to intensify harnessing ruralhydropower.

In 2003, China began an ecological protection projectdesigned to speed up the replacement of firewood used forcooking with electricity from SHP. The implementation of

the project has so far been smooth, and itlooks as though the problem of around104 million farmers burning cooking fuelcan be resolved, reducing theconsumption of burning hay 149 millionm3, protecting 22.6 million ha of forest,reducing the annual emission of 200 million tonnes of carbon dioxide and920,000 tonnes of sulphur dioxide.Furthermore, a scheme such as this hasthe potential to unfetter rural productiveforces, improve standards of living,alleviate the hardships of choppingwood and burning hay, and promote co-ordinated development between therural regions and towns.The project canshow that the development of SHP has akey role to play in solving the issue of hayfor the farmers, supplying rural energy,protecting the environment, resolving theissues of ‘agriculture, farmers and villages’and improving the living conditions ofthe farmers.

By 2020 China will have completedthe development of 300 SHP counties,each with an installed capacity over

100 MW (of which 100 will be over 200 MW in terms ofinstalled capacity, 40 will be super SHP bases of over 1 GWand 10 provinces will have over 5 GW. This at least is thestrategic plan from the Chinese Ministry of Water Resources.

In accordance with plans outlined by China's NationalDevelopment & Reform Commission, the country will investaround 1000 billion yuan (US$125.4 billion) in developingSHP to meet the demands of China’s rapidly growingeconomy in the coming years, with the target for SHPcapacity set at 75 GW by 2020.

A new era of green energy is coming. Over the last 20years, the interest of the world community in hydro power hasbeen increasing.A number of international conferences haveappealed for greater utilization of renewable energy sourcessuch as small hydro power, including the World Summit onSustainable Development held in Johannesburg of SouthAfrica in 2002 and the Ministerial Declaration issued at ThirdWorld Water Forum held in Kyoto of Japan in March 2003.

Meanwhile, China’s recently introduced RenewableEnergy Law recognizes both large and small hydro power asrenewable energy, although the incentive price policy forrenewable energy does not apply to hydropower. Howeverthanks to China’s rapid economic growth, SHP will hopefullymaintain its level of development and be exploited andpromoted in sound and rational manner in the future.

D. Pan , is Acting Secretary General of the HRC Secretariate-mail: [email protected]: www.hrcshp.org

For more information on the China Renewable Energy Law, see articleFinding the money by Joseph Jacobelli on page 116.

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 129

Liquid assets SMALL HYDRO

ABOVE The quality of Chinese-made small hydro equipment has improved dramaticallyover the years and is now almost equal to imported machinery ITPOWER BELOW LEFT Apico hydro turbine in use in China ESHA

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130 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

As the biofuel and biomassindustry goes from strengthto strength, questions are

emerging regarding itsavailability and environmental

credentials. Here Martin Junginger,André Faaij, Frank Rosillo-Calle andJeremy Woods provide a run-down ofbiomass potentials, look at some of therecent studies on sustainability andexamine some of the methods beingused to ensure the ‘greenness’ ofenergy production from biomass.

In the 2006 March–April edition of Renewable EnergyWorld, Alasdair Cameron raised some interesting pointsregarding the sustainability of biofuels, their potential tocontribute to the global energy supply, reduction ofgreenhouse gas emissions (GHG),and their impact on land

use and biodiversity. Given the complexity of this issue, theauthors gladly wish to contribute to this discussion. First, wegive an overview of biomass production potentials, and theimportance of technological development and perennial cropsto utilize this potential. Second, we take a look at some of themost critical issues for developing large-scale biomass forenergy production, and indicate at the same time how theseissues may be avoided or solved.Third,we provide an overviewof on-going developments to ensure the ‘greenness’ of biomassby developing safeguards, e.g. via sustainability criteria andcertification schemes for bioenergy. Finally, we highlight theimportance of sustainable international bioenergy trade as amajor driver to develop biomass potentials.

WHAT ARE THE PERSPECTIVES FOR PRODUCINGBIOMASS FOR ENERGY?

In principle we divide biomass into three categories: energycrops on current agricultural land; biomass production onmarginal lands;and residues from agriculture and forestry,dungand organic wastes. As we show below, we estimate thatglobally, these categories may supply 200 EJ, 100 EJ and 100 EJ(EJ = 1018 J) respectively.

Clearly, biomass production requires land.The potential forenergy crops therefore largely depends on land availability,which must also account for growing worldwide demand forfood, nature protection, sustainable management of soils andwater reserves and a variety of other uses. Given that a major

Harvesting sugarcane in Brazil. Land availability and farming efficiency (intensity) willbe the key limiting factors on bioenergy production ELLEN CORDEIRO / UNICA

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A growing roleOpportunities, challenges and pitfallsof the biofuels trade

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part of the future biomass resource for energy and materialsdepends on these intertwined, uncertain and partially policydependent factors, it is impossible to present the futurebiomass potential in one simple figure. A review of theliterature on future biomass availability carried out in 2002 (17studies in total) revealed that no complete integrated scenarioassessments were available [Berndes et al.,2003].These studiesinclude those by IPCC,US EPA,World Energy Council,Shell,andStockholm Environmental Institute, and arrived at varying

conclusions on the possible contribution of biomass to thefuture global energy supply (e.g., from less than 100 EJ/yr toabove 400 EJ/yr in 2050).Table 1 provides a summary of thebiomass categories and biomass supply ranges as a result ofvarious approaches and methods used by different studies.Themajor reason for the differences is that the two most crucialparameters – land availability and yield levels – are uncertain,and subject to widely different opinions (e.g., the estimates for2050 plantation supply ranges from less than 50 EJ/yr to almost240 EJ/yr). In addition, the expectations about futureavailability of forest wood and of residues from agriculture andforestry vary substantially among the studies.

In theory, with projected technological progress andwithout jeopardizing the world’s food supply, energy farmingon current agricultural land could contribute over 800 EJ.

Organic waste and residues could possibly supply another40–170 EJ, with uncertain contributions from forest residuesand potentially a very significant role for organic waste,especially when bio-materials are used on a larger scale.2 Intotal, the upper limit of the bioenergy potential could be over1000 EJ annually. This is considerably more than the currentglobal energy use of about 430 EJ.

How do these bottom-up potentials compare to top-downcalculations on how much biomass could be produced? In the1980s and 1990s, the late Prof. David Hall (at the time theworld's leading expert on photosynthesis), and others showedthat man already appropriates roughly 10% of the global netprimary production (NPP) of biomass through agriculture andforestry activities. Dukes takes this analysis further andextrapolates it to say that the energy fixed throughphotosynthesis into biomass by this 10% appropriation isapproximately equal to current global primary energydemand. Hence, by simple extrapolation, mankind would needto appropriate another 10% of the global NPP to meet a 430 EJdemand solely from bioenergy. In this discussion, it isimportant to point out that global photosynthetic capacity andtherefore NPP is not fixed because limiting factors such asplant nutrients,water and pest and diseases can be managed byfarmers and foresters.3

However, the question of how an expanding bioenergysector would interact with other land uses, such as foodproduction, biodiversity, soil and nature conservation, andcarbon sequestration has been insufficiently analysed in thesestudies.A refined model of interactions between different usesand bioenergy, food and materials production, would facilitate

132 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

In theory, energy farming on currentagricultural land could contribute over 800 EJ

TABLE 1. Overview of the global potential of bioenergy supply on the long term for a number of categories and the main pre-conditions andassumptions determining these potentialsa

Biomass category Main assumptions and remarks Potential bioenergy supply up to 2050 (EJ/yr)

Energy farming on Potential land surplus: 0–4 Gha (Most studies find 1–2 Gha). A large surplus 0–700

current agricultural land requires intensive agricultural production systems (i.e. modernization of all aspects). (100–300)

When this is not feasible, the bioenergy potential could be reduced to zero. On average

higher yields are likely because of better soil quality: 8–12 dry tonne/ha/yr are assumed.

Biomass production on On a global scale a maximum of 1.7 Gha could be involved. Low productivity of 2–5 dry 0–150

marginal lands tonne/ha/yr. The supply could be low or zero due to poor economics or competition (60–150)

with food production.

Residues from agriculture Potential depends on yield/product ratios and the total agricultural land area as well as 15–70

type of production system. Extensive production systems require re-use of residues for

maintaining soil fertility. Intensive systems allow for higher utilization rates of residues.

Forest residues The sustainable energy potential of the world’s forests is unclear. Part is natural forest 0–150

(reserves). Low value: figure for sustainable forest management. High value: technical (30–150)

potential. Figures include processing residues.

Dung Use of dried dung. Low estimate based on global current use. High estimate: technical (0)5–55 EJ

potential. Utilization (collection) on longer term is uncertain.1

Organic wastes Estimate on basis of literature values. Strongly dependent on economic development, 5–50+

consumption and the use of bio-materials. Figures include the organic fraction of MSW

and waste wood. Higher values possible by more intensive use of bio-materials.

Total Most pessimistic scenario: no land available for energy farming; only utilization of

residues. Most optimistic scenario: intensive agriculture concentrated on the better

quality soils. (In brackets: more average potential in a world aiming for large scale

utilization of bioenergy).a The overview is based on review of 17 studies and [Faaij et al., 2000], [Smeets et al., 2004] and [Hoogwijk et al., 2005]. Where two ranges are given, numbers between

brackets give the range of average potential in a world aiming for large-scale utilization of biomass. A lower limit of zero implies that potential availability could be zero, e.g. if

we fail to modernize agriculture so that more land is needed to feed the world.

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an improved understanding of the prospects for large-scalebioenergy in the future. Recently, these issues were addressedin several studies. One approach is reported in Smeets et al.,[2004] where bottom-up information was used on land-use,agricultural management systems on a country-by-countrybasis, projections for demand for food and information onpossible improvements in agricultural management (both forcrops and production of meat and diary products). Figure 1shows the possible variation in the technical potential,assuming four different agricultural production systems (seealso table in appendix). In all scenarios, no food shortagesoccur. Scenarios 1 to 3 have in common that they are based onmedium growth assumptions between 1998 and 2050 forglobal human population (from 5.9 to 8.8 billion people) andper capita food consumption (from 2.8 to 3.2 Mcal per personday),a high plantation establishment scenario (from 123 to 284

Mha) and a high technological level for the production ofbioenergy crops. Scenario 4 is based on the assumption thatresearch and development efforts may increase yields abovethe existing level of technology used in this study as e.g. inscenario 3. In scenario 4 crop yields are 25% higher than inscenario 3 due to additional technological improvements. Forfurther details, see Smeets et al. 2004.

Other studies used integrated assessment modelling toevaluate future biomass potentials for different SRES scenario’s[Hoogwijk 2004 and Hoogwijk et al., 2005]. In these analyses,Latin America, Sub-Saharan Africa and Eastern Europe are themost promising regions; Oceania and East and North East Asiaalso show significant potential in biomass production areas

under some scenarios in the longer term. The latter can beexplained by the projected demographic developments(possibly declining population in China after 2030) and fasttechnological progress in agriculture, leading to substantialproductivity increases. These analyses also show that a largepart of the technical potential for biomass production may bedeveloped at low production costs of about US$2/GJ[Hoogwijk, 2004 and Rogner et al., 2000].

TECHNOLOGY DEVELOPMENT

While the main efficiency gains are to be found in agriculturalproductivity, technological developments can dramatically alsoimprove competitiveness and the efficiency of bioenergy.These gains encompass two major components: conversion ofprimary biomass to final energy carriers, and long-distancebiomass supply chains (i.e. intercontinental transport ofbiomass derived energy carriers) [Faaij, 2006 and Hamelinck etal., 2004]. Regarding the first component, current productionof biofuels for transport is inefficient, from the perspective ofthe energy balance and the production per hectare.With theexception of ethanol from sugar cane, ‘first generation’biofuels, such as ethanol from corn, sugar beet or wheat, orbiodiesel from oil seed crops such as rape seed, typically onlyreach 20%–50% well-to-wheel GHG emissions reductionscompared to gasoline (for ethanol) and diesel (for biodiesel)[IEA, 2004].4 Also, such schemes are fairly inefficient on aGJ/ha basis, and far from competitive, even with current oilprices. However, there are several ‘second generation’technologies in the pipeline, such as ethanol production fromlignocellulosic feedstocks, and production of biodiesel usingthe Fischer-Tropsch process.

These technologies can achieve higher GHG reductionrates and higher yields per hectare. Also, they will be able toconvert a larger diversity of biomass feedstocks than thecurrent first generation technologies, in particular, low-costresidues. It is expected that these second generationtechnologies will be commercially available within the nextone or two decades, i.e. in the time frame in which truly large-scale production of biofuels could take off.These aspects haveto be taken into account when calculating future land-requirements.Thus, we deem calculations, such as how muchthe EU’s land area would be needed to cover its domesticdemand for e.g.biodiesel based on current rape seed yields andconversion technologies, rather misleading. Regarding thesecond component of bioenergy logistics, developmenttechnologies which convert low-density (both in terms of massand energy per volume) primary biomass to high-density, highvalue energy carriers such as wood pellets, torrefied pellets,pyrolysis oil or even directly produced transportation fuelssuch as ethanol and biodiesel, will widen the possibilities oflong-distance bioenergy trade and increase thecompetitiveness of biofuels.

PERENNIAL CROPS – THE WAY FORWARD

Regarding the feedstock production, second-generationtechnologies will favour the production of perennial crops(such as eucalyptus,poplar,and grasses such as miscanthus andsugar cane), as they are better than the current annual

134 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

World

North America

75168

204

39

Oceania America

55 93

11440

Japan

2 2 2 2

19 25 30

W.Europe

13 E.Europe 13 2429

5

CIS & Baltic States

111

223269

83

Caribean &Latin America

162 234

281

89

sub-SaharanAfrica

117

282 347

Middle East & North Africa

2 31 392

South Asia

26 313723

East Asia

28

158 194

22

1273

1548

610

367 forest growth and

agricultural and forestry wastes and residuesdedicated woodybioenergy crops

surplus forest growth

162234

281

89

2

49

FIGURE 1. Total bioenergy production potential in 2050, agriculturalproduction systems scenarios 1 to 4. The numbers above the barsare EJ/yr. For more background information, see appendix andSmeets [2004].

Technological developments can dramaticallyalso improve competitiveness and the

efficiency of bioenergy

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agricultural crops, economically and environmentally. Nextto their better GHG performance, soil carbon improvementscan be realized, while fertilizer and pesticide inputs aregenerally lower. In addition, a recently published article inNature shows that actual biomass yields can be higher if alarge biodiversity of perennial crops is maintained [Tilman,2006a, 2006]. If designed and managed wisely, biomassplantations can be multi-functional and may generate localenvironmental benefits. For example, willow plantations inSweden may be used for soil carbon accumulation, increasedsoil fertility, reduced nutrient leaching, shelter belts for theprevention of soil erosion, plantations for the removal ofcadmium from contaminated arable land (phyto-remediation), and vegetation filters for the treatment ofnutrient-rich, polluted water [Börjesson and Berndes, 2006].

Short rotation woody crops (SRC) in general requirefewer inputs of herbicides and pesticides. Rich et al. [2001]suggest SRC plantations are generally better for a wide

variety of wildlife than existing adjacent farmland aroundthe (former) ARBRE project area in the UK.When establishedon agricultural land an increase in biodiversity usually result,e.g. in some cases an increase in species richness occurs.SRC is generally regarded as environmentally friendly andmany environmental groups view the technology favourably.Also, in the UK, large-scale SRC monoculture is unlikely giventhe nature of land tenure. Rather, the most likely scenariomay be a large number of small plots scattered over largeareas.

WHAT ARE THE MAIN CRITICAL ISSUESREGARDING THE LARGE-SCALE PRODUCTION OFBIOMASS FOR ENERGY?

The (sustainable) use of different types of land(marginal and degraded, as well as good qualityagricultural and pasture land) depends on the successof accelerating the improvements in currentagricultural management practices, and integratingbiomass production in a sustainable way into currentland-use patterns. Our understanding of how this canbe achieved from region to region is often limited.Current experience with energy crops such as willow,miscanthus and switchgrass is limited but can point tohow biomass production can gradually be introducedin agriculture and forestry. In developing countries(e.g. in sub-Saharan Africa) very large improvementscan be made in agricultural productivity.5 Howeverbetter and more efficient agricultural methods cannotnot be implemented without investments, propercapacity building and infrastructure improvements and

political stability. Much more experience is needed with suchschemes, in which the introduction of bioenergy can play apivotal role to create more income for rural regions byadditional bioenergy production.Financial resources generatedcould then accelerate investment in conventional agricultureand infrastructure and also lead to improved management ofagricultural land. Listed below are some of the critical issuesthat require further research,particularly local demonstrations.

Competition for waterWater is a critical resource for both food and biomassproduction and is in short supply in many regions. Waterscarcity in relation to additional biomass production has beenaddressed to a limited extent. Berndes [2002] explains that‘large-scale expansion of energy crop production would leadto a large increase in evapotranspiration appropriation forhuman uses, potentially as large as the presentevapotranspiration from global cropland. In some countriesthis could exacerbate an already stressed water situation. Butthere are other countries where such impacts are less likely tooccur. One major conclusion for future research is thatassessments of bioenergy potentials need to considerrestrictions from competing demand for water resources.Improved agriculture must enhance water-use efficiency (e.g.through breeding for drought tolerance and by using dripinstead of overhead irrigation).

Availability of fertilizers and pest controlRaising agricultural productivity can only be achieved whenbetter management and higher productivities are achieved.This implies better plant nutrition and pest control methods.Sound agricultural methods (agroforestry, precision farming,biological pest control, etc.) exist that can achieve majorincreases in productivity with neutral or even positiveenvironmental impacts. However, such practices must besecured by sufficient knowledge, funds and human capacity.

Land-use plans taking biodiversity and soil quality into accountCriticism is raised by various recent studies (e.g. by the MNP[Brink et al., 2006] and the European Environment Agency

136 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

Second-generation technologies will favourperennial crops such as eucalyptus, poplar,

miscanthus and sugar cane

ABOVE Palm kernels stacked for testing at a palm oil processing plant in Malaysia RALPH

SIMS RIGHT Most ethanol in the US is currently made from maize (corn) – a relativelyinefficient method of manufacture. New technologies will improve the situation NREL

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[EEA, 2006]) that further intensification of agriculture andlarge-scale production of biomass energy crops may result ina losses of biodiversity compared to current land-use, evenwhen international standards for nature protection(10%–20% of land reserved for nature) are respected [Smeetset al., 2004]. Perennial crops have a better ecological profilethan annual crops and the benefits with respect tobiodiversity can be achieved when perennial crops aredisplaced. However, insights into how biodiversity can beoptimized and improved compared with current land-use,when sound landscape planning isintroduced, are limited and urgentlyrequire additional research. Overall,experience from Sweden and the UKwith integration of willow production,indicates there is a positive effect. SaoPaulo State has strict standards for sugarcane production areas and which appearto ensure that its production does notnecessarily lead to a loss in biodiversity.More regional efforts, experience andsite-specific solutions are needed.Regarding improvement of soil quality,Lal [2006] shows how some biofuel plantations e.g. Jatropha,Pongamia, can contribute to restore degraded soil andsequester carbon in biota and soil.

The use and conversion of pasture land As discussed above, much land can be released whenproduction of meat and diary products is done in more

intensively (including partial zero-grazing).This would allowgrassland currently used as pasture to be used moreefficiently. Grasslands could then be used for production ofenergy grasses or partly be converted to woodlands. Suchchanges in land-use functions have been poorly studied.Theimpacts of such changes should be closely evaluated.

Socio-economic impacts Large scale production of modern biofuels, could provide amajor opportunity for many rural regions around the world to

generate income and employment. Giventhe size of the global market for transportfuels, the benefits could be vast, e.g. byreducing oil imports and exportingbiofuels.Nevertheless, it is far from certainthat those benefits will accrue to the ruralpopulations and small-holder farmers.Also, the net impacts for a region aswhole, including possible changes andimprovements in agricultural productionmethods, should be kept in mind whendeveloping biomass and biofuelproduction capacity. New biofuel

production schemes should ensure the involvement of theregional stakeholders, in particular the farmers. Worldwideexperience with such schemes needs to be developed.

Macro-economic impacts of changes in land-use patterns Although the analyses discussed indicate that both worldfood demand and additional biomass production can be

September–October 2006 ● RENEWABLE ENERGY WORLD ● 137

A growing role BIOMASS

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reconciled, more intensive/efficient land-use and additionalland-use for biomass production may lead to macro-economic effects on land and food prices. Although this isnot necessarily a bad outcome as it could be vital for farmersto enable investment in current production methods, thepossible implications on macro-economic level are poorlyunderstood. Again, more work is needed to identify thespeed at which changes should be implemented to avoidundesired economic effects.6

Net GHG emissions – including indirect land-use effectsConnected to the previous issue are impacts on overall GHGemission rates related to (biomass-induced and general)changes in land-use.As pointed out previously by Cameron,the pressure on land is often huge in many developingcountries such as Malaysia and Indonesia, and to a lesserextent Brazil.7 In these cases, increasing production of palmoil and soy are one of the main drivers of deforestation, andGHG emissions arising from forest clearance by fire, andchanging soil carbon stocks with different types of land use.If biomass energy crops increase pressure on land, theseproblems could be exacerbated, both directly and indirectly.For the direct cases, more research is required on GHGbalances when perennial energy crops replace pastures,(degraded) farm land or forests – the choice of the rightcropping system is crucial. Regarding the induced impacts, itis clear that land-use change patterns are complex, and thatwhole-system GHG emissions have to be assessed.

TACKLING THE ISSUES – DEVELOPMENT CRITERIA FORSUSTAINABLE BIOMASSPRODUCTION

With the increasing internationaltrade in biomass resources, concernshave been growing about whether allimported biomass streams can beconsidered sustainable. Theproduction and removal of biomasscan have negative impacts onecology and land-use, as well as socio-economic impacts and GHGemissions. Recently, these aspectshave been recognized by policymakers, scientists and the industry.Various preliminary efforts have beenundertaken to move towardscertification and track-and-tracesystems for imported biomass.Examples include the developmentof the Green-Gold-Label, a biomass

tracking system developed by Essent [CU, 2006], theFairBiotrade research project carried out by Copernicus UU(see e.g. Lewandowski et al., 2005, Damen and Faaij, 2004and Smeets and Faaij, 2006), and various other studies onsustainability and certification of biomass (see e.g.Tipper etal., 2006; WWI, 2006; WWF, 2006 Hamelinck, 2004).Furthermore, the initiatives such as the IEA Bioenergy Task40 on International Sustainable Bioenergy Trade (seewww.bioenergtrade.org), the FAO International Bioenergyplatform (IBEP) or the UNCTAD Biofuels initiativedemonstrate the increased attention to global biomass tradeand sustainability.

The need for biomass sustainability criteria has also beenrecognized in several EU countries and by differentinternational bodies. Current examples are:

• Ongoing development of GHG and sustainability criteriafor biomass transportation fuels under the renewabletransport fuel obligation (RTFO) in the UK [Archer,2006].

• Existing regulations energy/CO2 balances andsustainability criteria for Belgian biomass for co-firing[Ryckmans, 2006].

• The EU strategy for biofuels [EC, 2006], in whichstandards to ensure the sustainability of biofuelfeedstocks are explicitly mentioned.

• More in general, the issues surrounding the production ofpalm oil in Southeast Asia and soy beans in South Americahave triggered the establishment of round tables whereall stakeholders in the chain are represented.

The Dutch government has one of the most advancedpolicies for developing sustainability criteria for biomass. Inthe autumn of 2005, awareness regarding the necessity ofbiomass sustainability criteria increased whenenvironmental NGOs condemned the use of palm oil forgreen electricity production in natural gas-fired powerplants. While the short-term policy reaction was to reduce

138 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

More research is required on GHG balanceswhen perennial energy crops replace pastures,

(degraded) farm land or forests

Traditional crops such as olives can provide oil for biodiesel production, and also woodwhich can be converted to biofuels by ‘second generation’ technologies

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feed-in tariffs for palm oil, the urgent need for biomasssustainability criteria was recognized by the Dutchparliament. Thus, a commission was established in January2006 to develop a system for biomass sustainability criteriafor the Netherlands.

The main starting points of the commission were[Cramer et al., 2006]:

• Development of a long-term vision about biomasssustainability (2020–2040).

• Based on this vision, development of concrete,measurable biomass sustainability criteria in the shortterm.

• Development of a universal framework of sustainabilitycriteria, with the emphasis on non-food applications(chemical industry, fuels, energy production). Thesustainability criteria and indicators developed couldalso be of importance to judge food production onsustainability aspects. It is acknowledged that biomass,feed, fuel and fodder can barely be regarded separately.

• Compliance with international treaties, EU regulations,WTO rules etc.

• Development of short term minimum sustainabilitydemands and stricter criteria in the longer term.

• Sustainability criteria are valid for both biomass energycrops and biomass crops, and both applicable forimported biomass and domestic biomass.

Based on these starting points, consultations with Dutchstakeholders and scientific support, the commission

developed a number of biomass sustainability criteria andindicators/procedures for the short-term (2007) and themedium term (2011). These included GHG reductions of atleast 30% (rising to 50% by 2011),no decline of biodiversity orvaluable ecosystems, prevention of soil erosion, preservationof quality and quantity of surface water and ground waterincreased human welfare and no reduction in food supplies,etc., see appendix for more details [Cramer et al., 2006].

While it is clear that for most of such criteria, indicatorsand procedures still need to be developed, these approachesshow promise. What is more important to emphasize is thatsuch criteria cannot be developed overnight.The procedure isto set minimum levels of sustainability criteria now, and usepilot cases to build up experience of how sustainabilitycriteria can be met under diverse conditions. Also, theproposed sustainability goes far beyond many other sectors.This could easily backfire on biotrade if too many restrictionsare put in place, making an evaluation period even moreimportant. In addition, some sustainability criteria mayactually conflict with each other and, the costs of meeting thesustainability criteria will have to be evaluated and ifnecessary the criteria and indicators can be adapted andimproved.8, 9 This was the approach followed in the Dutchcase, and a four-year evaluation period has been established.

Finally, a crucial aspect of such criteria is enforcement.Examples from FSC-certified wood show that such systemsare effective – but not flawless. Frequent field visits are vitalto ensure compliance with criteria, as is stakeholderparticipation both during the set-up and monitoring ofcertification systems.

A growing role BIOMASS

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THE ROLE OF INTERNATIONAL BIOENERGY TRADE

After discussing the potentials and pitfalls of globalbioenergy production we want to emphasize, be it briefly,the importance of international bioenergy trade as one ofthe main drivers behind development of the majortransitions required.As can be seen in Figure 1, main supplyregions are generally not situated in densely populated andhighly developed areas where demand is likely to be large.These three examples highlight the rapidly emerging tradein bioenergy.

Pellet exports from Canada to European countries and theUSAThe export of wood pellets from Canada has grownexponentially in the past several years (see Figure 2),primarily from the west coast. There are at least 11 pelletplants in Canada, exporting to Europe and the US [Bradley,2006]. Expectations are that production will exceed onemillion tonnes in 2006.

Ethanol exports from Brazil to Japan, the USA and Europe Figure 3 shows Brazil’s ethanol trade since 1970. Marketopportunities and constraints have determined exports andimports. A substantial amount of ethanol was importedduring the 1990s, first during the supply shortage of ethanol(1990–1991) and second when international sugar marketswere favourable for exports (1993–1997). Traditionally,Brazilian exports of ethanol have been oriented for beverageproduction and industrial purposes but, recently, trade forfuel purposes has increased significantly, as illustrated inFigure 3. In 2004 exports reached 2.5 billion litres and it isestimated that almost the same amount was exported in2005 [Walter et al., 2006].

Palm oil and palm kernel shell exports from Malaysia andIndonesia to EuropeOver the last few years, increasing amounts of palm kernelshells and palm oil have been co-fired in European powerplants. While no exact statistics are available, substantial

imports have been occurring in the UK and the Netherlands[Junginger et al., 2006, Rosillo-Calle & Perry, 2006].

These examples show how international bioenergy tradehelps to meet the demand for transport biofuels and forelectricity from biomass. The future vision of globalbioenergy trade is that it develops over time into a real‘commodity market’ which will secure supply and demandin a sustainable way.The development of truly internationalmarkets for biomass may become an essential driver todeliver the biomass potentials discussed above, and toexploit a resource which is currently under-utilized in manyworld regions. Exporting biomass-derived commodities tosupply the world’s energy markets could provide a stable

and reliable demand for rural communities in manycountries, particularly developing ones, thus creating animportant incentive for rural investment that is muchneeded in many areas in the world.Thus, we see trade as anessential prerequisite for viable bioenergy development,with the practical monitoring of sustainability as a key factorfor long-term security.

SO WHAT CAN BIOMASS-FOR-ENERGY DELIVER?

The techno-economic potential of biomass resources forenergy and industrial materials can be very large – in theory,twice the current global energy demand, but more likelyaround 400 EJ – without competing with food production,protection of forests and nature. Roughly, one quarter (100 EJ) could be provided by efficiently exploiting residuesfrom agriculture and forestry and from organic waste.Another 100 EJ could stem from the rehabilitation of

140 ● RENEWABLE ENERGY WORLD ● September–October 2006

BIOMASS A growing role

0

800

700

600

500

300

100

Tonn

es(th

ousa

nds)

1997 1998 2000 2002 20041999 2001 2003 2005 2006

400

200

Capacity ProductionUS sales Overseas sales

Domestic sales

FIGURE 2. Pellet production and export in Western Canada.Source: Bradley, 2006

1970 2001–3000

3000

2000

0

–2000

Braz

il's

etha

nolt

rade

(mill

ion

litre

s)

1975 1985 19951980 1990 2000

1000

–1000

Imports Exports

FIGURE 3. Trade in ethanol in Brazil 1970–2005.Source: Walter et al., 2006

We see trade as an essential prerequisite forviable bioenergy development, with practical

sustainability as a key factor

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degraded land. Note that these two potentials do not requireadditional land. The remaining half could come fromdedicated energy crops on current agricultural and pasturelands, corresponding to about 1 billion ha worldwide.This issome 8% of the global land surface and one-fifth of the landcurrently in use for agricultural production. If the globalbioenergy market is to develop to supply 400 EJ per yearover this century (compared with 430 EJ current total globalenergy use), the value of that market assuming $4/GJ wouldamount to some $1.6 trillion per year. Logically, not allbiomass will be traded on international markets, but such anindicative estimate how important this market couldbecome for rural areas worldwide.

These numbers are impressive, perhaps daunting tosome. Major transitions are required to exploit thisbioenergy potential, which can only be reached in thesecond half of this century. Improving agricultural land-useefficiency in developing countries (i.e. increasing crop yieldsper hectare) is a key factor. It is still uncertain to whatextent, and how fast, such transitions can be realized indifferent regions. Significant problems are posed by the lackof capital, skills, land tenure, etc., all of which are majorimpediments to agricultural modernization. Under lessfavourable conditions, the (regional) bioenergy potentialscould be quite low.

Biofuels are not the panacea for solving the global energysituation, but should be seen as part of the solution. Whilebioenergy can, in theory, provide a substantial part of thefuture global energy supply, realizing these potentials willrequire profound changes, especially in agriculture.There arepotential alternatives to bioenergy that can also play a majorand sometimes synergistic role, such as solar, geothermal,wind, etc. Even though there are a number of critical issuesinvolved with the large-scale production of biofuels, we alsosee opportunities for many countries: for example, restoringdegraded soils using biomass could result in environmentalgains and exporting refined biofuels can be high-valueexport products allowing re-investment in poor rural areas.

Ensuring the sustainability of biomass production is amajor challenge, but also a great opportunity. Change meansnot only threats, but also opportunities. The challenge is tobe able to implement the change in intelligent and benignways. After all, this could be a first large-scale commoditymarket where there is considerable scope for implementingsustainability criteria – which, in turn, could have positiveimpacts on food and fodder commodities.At the same time,global bioenergy trade is growing rapidly, and annualincreases of 100% of traded biomass volumes are becomingreality. Therefore, the rapid early development andimplementation of sustainability frameworks is crucial.

Certification, preferably starting from an internationallyaccepted framework but applied and verified at a regionallevel with strong stakeholder participation, seems to be afeasible way to achieve this. Showing best-practiceoperations through export-oriented pilot projects in adiversity of developing countries and different rural areas iscrucial in the short term. Good examples of successfulbusiness models and sound sustainability frameworks canguide market forces in a sustainable direction. If we succeed,we may be looking at the first stages of the Green OPEC (orBIO-PEC) of the future!

Martin Junginger and André Faaij are based at the Department ofScience, Technology and Society in the Copernicus Institute at Universityof Utrecht in the Netherlands.e-mail: [email protected] and [email protected]

Frank Rosillo-Calle and Jeremy Woods are based at the Centre forEnvironment Policy at Imperial college, London.e-mail: [email protected]

The authors would also like to thank Bo Hektor for valuable comments.While the authors are all members on IEA Bioenergy Task 40, thearguments and visions expressed in this article are not necessarily thoseof the IEA Bioenergy Agreement. For more information on IEA Task 40,see www.bioenergytrade.org.

FOOTNOTES

1. Note that traditional use of dung as fuel should be discouraged. The dung

potentials shown here mainly stem from intensive agriculture, which offers

opportunities for fermentation and production of biogas.

2. The range of the land area required to meet the potential additional global

demand for bio-materials (such as bio-plastics or construction materials) was

not included in Table 1. The energy supply of bio-materials ending up as waste

can vary between 20–55 EJ (or 1100–2900 Mt dry matter) per year. This

range excludes cascading and does not take into account the time delay

between production of the material and ‘release’ as (organic) waste.

3. For example, leaving aside (at this point) the wider environmental and social

implications, well-managed sugarcane grown in Brazil's cerrados fixes between

20 and 30 oven dry tonnes of biomass per ha/yr compared to undisturbed

'natural' vegetation which could fix between 0 and 5 odt/ha/year when

mature. Land management is a crucial factor therefore.

4. Note that Brazilian ethanol from sugar cane is the only biofuel currently

commercially available, which achieves much higher GHG emission reductions,

i.e. 80%–90% (IEA, 2004). Also other current biofuels from crops in tropical

regions (e.g. biodiesel from jatropha, palm oil etc.) perform better than biofuels

from crops grown in temperate regions).

5. Current agricultural methods deployed in sub-Saharan Africa are is often

subsistence farming, with low yields per hectare.

6. For a more detailed treatment of the biomass vs. fuel debate, see for example

the SEI Newsletter [June 2005].

7. See the March/April edition of Renewable Energy World.

8. For example modernization of agriculture may make the necessity of very hard

physical labour obsolete. At the same time greater mechanization will lead to

less employment.

9. Examples of other certification system show that depending on the local

situation and specific criteria, additional costs may vary widely, e.g. 8%–65%

(Junginger, 2006).

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 141

A growing role BIOMASS

Due to space restrictions, all references and Tables 2 and 3 donot appear here. However they have been included in a digitalcopy of this article, which can be requested by emailing theauthors. It will also be available to download at www.renewable-energy-world.com.___________

__________

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Always a sunbeam ahead

The SolarMax web portal is another innovative servicefrom Sputnik Engineering for SolarMax users. A new,simple yet sophisticated solution for monitoring, analy-sis and data presentation of SolarMax PV installations.Internet-based communication solutions are becomingincreasingly significant in many areas. PV installationsare no exception. The SolarMax web portal can be usedfor visualisation of energy yields, CO2 savings and payment information. Data can be exported to otherprograms.

Status and error messages displays are available inconjunction with the MaxControl monitoring option.Overview options enable consolidation and compari-son of several systems.

Despite its advanced functionality, the SolarMax WebPortal is simple to operate. It offers informative analy-sis and graphical or tabular display options.

Trust is good. Monitoring and visualisation is better.

Not everyone has to be as flexibleas the SolarMaxPortal!

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All SolarMax customers can use the SolarMax webportal free of charge.

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Sputnik Engineering AGHöheweg 852501 Biel, SwitzerlandPhone: +41 (0) 32 346 56 00Fax: +41 (0) 32 346 46 [email protected]

4-8 September 2006,Dresden

Hall 2 / Stand 19

21st EuropeanPhotovoltaic Solar EnergyConference and Exhibition

Sponsoring Exhibitor

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Volker Quaschning describes the basics of direct solar electricitygeneration using photovoltaic systems, looking at the different cell andmodule types and the related technology.

The history of photovoltaics goes backto the year 1839, when Becquereldiscovered the photovoltaic effect, but notechnology was available in the 19thcentury to exploit this discovery. Thesemiconductor age only began about 100years later. After Shockley had developeda model for the pn junction, BellLaboratories produced the first solar cell in1954; the efficiency of this, in convertinglight into electricity, was about 5%.

PRINCIPLE OF SOLAR CELLS

Electrons and the ‘holes’ they leave behindare, respectively, negative and positivecharge carriers, which usually appear inpairs within solid matter. Semiconductorsare used to produce solar cells, and thecharacteristics of the semiconductormaterial make it easy for incoming photonsof sunlight to release electrons from theelectron hole binding. Leaving the holesbehind them, the released electrons canmove freely within the solid.

However, these movements have noclear direction; to make use of theelectricity, it is necessary to collectelectrons. The semiconductor material istherefore polluted with ‘impure’ atoms. Twodifferent kinds of atom produce an n-type and a p-type region inside thesemiconductor, and these two neighbouringregions generate an electrical field (seeFigure 1). This field can then collectelectrons, and draws free electronsreleased by the photons to the n-typeregion. The holes move in the opposite

direction, into the p-type region. However,not all of the energy from the sunlight cangenerate free electrons. There are severalreasons for this. Part of the sunlight isreflected at the surface of the solar cell, orpasses through the cell. In some cases,electrons and holes recombine beforearriving at the n-type and p-type regions.Furthermore, if the energy of the photon istoo low – which is the case with light atlong wavelengths, such as infrared – it isnot sufficient to release the electron. On theother hand, if the photon energy is too high,only a part of its energy is needed torelease the electron, and the rest convertsto heat. Figure 1 shows these processes ina photovoltaic (PV) cell.

The model shown in Figure 2 provides afigurative demonstration of the way inwhich a solar cell works. The modelconsists of two flat levels; the first level hasplenty of holes, and these are filled with

water. Rubber balls then fall onto this level,and water splashes from the holes.Although some water splashes back ontothe first level, some reaches the secondlevel; it flows from there to a waterwheelthat drives a dynamo and generateselectricity. On the first level, water flowsback into the holes, to be hit again byfurther rubber balls. In this model therubber balls represent the photons ofsunlight, the two levels are the n-type andp-type regions, and the water signifies theelectrons.

SOLAR CELL MATERIALS

Various semiconductor materials aresuitable for solar cell production; however,silicon is the most frequently used materialtoday, being employed in the manufacturein the majority of solar cells. The secondmost common chemical element in the

Photovoltaic systems FUNDAMENTALS

September–October 2006 ● RENEWABLE ENERGY WORLD ● 143

Photovoltaic systemsTechnology fundamentals

FIGURE 1. Processes occurring in an irradiated PV cell

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earth’s crust (after oxygen), silicon canmainly be found in quartz sand (SiO2). Areduction process is used to extract siliconfrom the quartz sand at high temperatures,and the next step is to remove remainingimpurities from the polycrystalline silicon.Polycrystalline silicon crystals are orientedin different ways, separated by grainboundaries, which introduces someefficiency losses. Seeding a single crystal athigh temperatures can transform thepolycrystalline silicon into monocrystallinesilicon, and, with no grain boundariespresent in the resulting material, losseswithin a solar cell are thus reduced.However, more energy is needed toproduce monocrystalline silicon, and it ismore expensive.

Besides crystalline silicon, thin-filmmodules present promise as a futuresolution. These can be made of amorphoussilicon and other materials such ascadmium telluride (CdTe) or copper indiumdiselenide (CuInSe2, or CIS). Thin-filmmodules can be produced using only afraction of the semiconductor materialnecessary for crystalline cells, and theirdevelopment potential is therefore veryhigh. However, it is not yet clear which

material will dominate future markets. Mostexperts say that crystalline solar cells willcontinue to dominate for the rest of thisdecade, but thereafter, other materialscould become more important, providedthey can be produced more economically.

SOLAR CELL PARAMETERS

Most photovoltaic data sheets present a lotof parameters; the most common termsrelating to crystalline solar cells will beexplained here.

The solar cell generates a current, andthis current varies with the cell voltage.Current–voltage characteristics usuallyshow this correlation. When the voltage ofthis solar cell is zero – described as a‘short-circuited’ solar cell – the ‘short circuitcurrent’ ISC, proportional to irradiance on thesolar cell, can be measured. The ISC riseswith increasing temperature, though thestandard temperature for reporting shortcircuit currents is usually 25°C. If the cellcurrent is equal to zero, the solar cell isdescribed as ‘open-circuited’. The cellvoltage then becomes the ‘open circuitvoltage’, VOC. The dependence of VOC onthe irradiance is logarithmic, and decreases

at a faster rate with rising temperature thanthe ISC increases. Therefore, the solar cell’smaximum power and the cell efficiencydecrease with rising temperature. For mostcells, a temperature rise of 25°C causes apower drop of about 10%.

The solar cell generates its maximumpower at a certain voltage. Figure 3 showsthe current–voltage and power–voltagecharacteristics. It shows clearly that thepower curve has a point of maximumpower, called, quite straightforwardly, the‘maximum power point’, MPP. Themaximum power point voltage, VMPP, is lessthan the open circuit voltage, and thecurrent IMPP is lower than the short circuitcurrent. At the MPP, current and voltagehave the same relation to irradiance andtemperature as the short circuit current andopen circuit voltage.

In order to make solar cells andmodules comparable, MPP power ismeasured under standard test conditions(STC): irradiance at 1000 W/m2, atemperature of 25°C, and air mass (AM) 1.5.The power generated by the solar modulesin real weather conditions is usually lower,hence STC power has the unit Wp (Wattpeak). In terms of dependence onirradiance, the current dominates thedevice’s behaviour, so that the MPP poweris nearly proportional to the irradiance.

Solar cell efficiency is the ratio of themaximum electrical solar cell power to theradiant power on the solar cell area.Saleable crystalline solar cells now reachefficiencies up to almost 20%, but in thelaboratory, efficiencies of more than 25%are possible. The efficiencies of thin-filmsolar cells are, however, lower.

PRODUCTION OF SOLAR MODULES

Solar cells are not normally operated on anindividual basis, due to their low voltage,and in PV modules, cells are mostly

144 ● RENEWABLE ENERGY WORLD ● September–October 2006

FUNDAMENTALS Photovoltaic systems

FIGURE 2. Modelling the principle of solar cell operation

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connected in series. Single, unprotectedcrystalline silicon solar cells can also bedamaged rapidly, due to climaticinfluences, so to avoid this, severalcrystalline cells of edge length 10–15 cm

(4–6 inches) are combined in the form ofa solar module for protection. The frontcover of this is formed by glass with alow iron content, and the back coverconsists of glass or plastic. Between the

146 ● RENEWABLE ENERGY WORLD ● September–October 2006

FUNDAMENTALS Photovoltaic systems

front and back covers, the solar cells areembedded within plastic, usually EVA(ethylene vinyl acetate), which is cured attemperatures of 100°C. This process iscalled lamination. A frame is in somecases added to the finished modules,while a junction box is used to protectthe contacts from water, and to mountbypass diodes inside.

If just one cell of a large number ofseries-connected cells becomes shaded,then the shaded cell starts blocking tocurrent, and the whole string then stopsgenerating power. The bypass diodecannot avoid the disproportionate powerloss, but can avoid possible damage tothe shaded cells. Therefore, partialshading of PV generators should beavoided whenever possible.

The base for thin-film modules is asubstrate. In most cases, this is made of glass or a metal foil, and spray anddeposition processes then add the solar cell materials and cell contacts. Thesolar cells are interconnected directly inseries within the module. Finally, thesamples are then either laminated orcoated with a polymer, to protect thesolar module from climatic influences.

FIGURE 3. Current–voltage and power–voltage solar cell characteristics, showing MPP

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STAND-ALONE SYSTEMS

Connection of PV modules in series,parallel or series–parallel combinationsbuilds up the solar generator (as is shownin the photograph below left). Consumersare hardly ever connected directly to thesolar generator, however, as in realityphotovoltaic systems are more complex.In the absence of any kind of storage,there will be periods without any powerfor a system solely powered byphotovoltaics, which is clearly notdesirable.

Today, the most common method forelectricity storage is the lead–acidbattery, and the main reason for this iscost. The car industry in particular preferslead batteries. So-called ‘solar batteries’have a slightly modified structure,compared with car batteries, in order toachieve longer lifetimes. The simplestbattery system consists only of a PVgenerator, a battery and the load.Rechargeable batteries in simple batterysystems, with the PV generator and loaddirectly connected to the battery, are not,

however, protected against deepdischarge or overcharging. Therefore,such systems should only be chosen ifnegative operating conditions candefinitely be avoided – otherwise, thebattery can be damaged very quickly. Asa consequence, most battery systemsuse a charge controller; today, most ofthese are parallel charge controllers, asseen in Figure 4. This charge controllermeasures the battery voltage anddisconnects the load if the battery isnearly empty; if the battery is full, the PVgenerator is short-circuited, and in thiscase a blocking diode avoids batterydischarge. An inverter can be also addedto the battery system to drive alternatingcurrent (AC) loads.

GRID-CONNECTED SYSTEMS

A large number of photovoltaic systemsinstalled in industrial nations today are grid-connected. An inverter converts the directcurrent (DC) voltage of the modules to thetwo-phase or three-phase AC voltage of thepublic grid. The inverter usually has anintegrated MPP tracker which operates thePV generator at the maximum power point.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 147

Photovoltaic systems FUNDAMENTALS

FIGURE 4. PV battery system with parallel charge controller

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However, the voltage and currentgenerated by the PV modules must fitwithin the inverter range. If PV modulesare connected in series, their voltageadds to the total voltage, whereas thecurrent of parallel PV modules adds tothe total current.

Photovoltaic inverters only operate atrated power for a very few hours in anyyear, as, due to changes in solarirradiance, they work predominantly atpart load. Therefore, it is very importantthat inverters have high efficiencies, evenwhen operating at these part loads. Arepresentative efficiency is used tocompare different inverters, the so-called‘Euro efficiency’. This is clearer than theterm ‘average efficiency’, and is the

average efficiency for typical Europeanirradiance conditions.

There are several different inverterconcepts that can be used when setting upa PV system. As Figure 5 demonstrates,these are:

• a number of parallel PV module stringsconnected to central inverters, whichcan convert the PV generator power upto several hundred kilowatts

• only one PV string, with a power rangebetween 500 W and 2.5 kW, connectedto a string inverter.

• module inverters, used to connect asingle module to the grid; theseoperate well even if some modules areshaded or do not have exactly the

same power, though general inverterefficiencies decrease with smallersystems.

MARKET AND ENVIRONMENT

One argument often used againstphotovoltaics is the huge amount ofenergy needed to produce PV systems,with the idea that more energy is used toproduce systems than they can generatein their lifetime. However, a multitude ofstudies has proven that the energybalance of PV systems is clearly positive– today’s systems need between two andfive years to pay back the energy used inproduction, depending mainly on annualsolar irradiation. Future thin-film systemswith lower material needs will reduce thisperiod significantly, and recycling ofphotovoltaic modules is also possible.The lifetime of today’s PV modules isexpected to be 25–30 years, and somemodule manufacturers give 25-yearwarranties.

By the end of 2005, more than 3100MW of photovoltaics were installedworldwide. Germany has the highestinstalled capacity, followed by Japan andthe US; between them, these threecountries represent about two thirds ofglobal PV capacity. Market growth ratesin the last 10 years were between 20%and 40%, and in recent decades (untilrecently at least), there was a pricereduction of 20% when the marketvolume doubled. As a result of this,photovoltaic prices dropped by about50% every decade.

It is not sure how long this pricereduction process will continue.However, photovoltaics has the potentialto become competitive even withconventional grid-connected systems, ina few decades. The potential for PV ishuge, and in theory, PV could meet thetotal global electricity demand. Alongwith the other renewables, it is one of themost important options for a future,climate-compatible electricity supply.

Dr Volker Quaschning is author of Understanding

Renewable Energy Systems, published by James &

James/Earthscan. See www.earthscan.co.uk.

e-mail: [email protected]

web: www.volker-quaschning.de

■ To comment on this article or to see relatedfeatures from our archive, go towww.renewable-energy-world.com

148 ● RENEWABLE ENERGY WORLD ● September–October 2006

FUNDAMENTALS Photovoltaic systems

FIGURE 5. Connection of photovoltaic modules to inverters using a) central inverter; b) stringinverter; c) module inverter

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Dresden, Hall 2, Stand 11

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The business of optimism RENEWABLES

Renewable energy is a business based on sound technology and theprinciples of sustainable living. As such it generates levels of enthusiasmand passion that most industries can only dream about. Jeff Decker wentto one of the world’s biggest grass roots renewable energy fairs to get afeel for this excitement.

One of the world’s biggest renewable energy fairsbroke its attendance record in June, when more than18,000 people travelled to Custer, Wisconsin. Theycame for the technology, the optimism and thebusiness opportunities at the 17th annual Midwest

Renewable Energy Fair.For three days innovators and distributors discussed the

present and planned the future while others learned to maketheir homes and lives sustainable. Surrounded by experts andvisionaries, with practical and affordable energy alternativesin every direction, you started to believe that society justmight overcome its energy troubles to create a responsibleand efficient way of life.

That won’t happen though, predicted keynote speakerJames Kunstler. ‘People seem to thing they’re entitled to thissmooth transition,’ he points out, ‘but it’s liable to be a verymessy process. We do face tremendous problems withreforming our way of life – assuming that we want tocontinue being civilized.’

In his eyes (and in his bestselling book, The LongEmergency: Surviving the End of the Oil Age, ClimateChange, and Other Converging Catastrophes of the Twenty-first Century) modern urbanized society is using upresources at full speed with no sensible plan for the future.The big money is still on fossil fuels, he points out, and it’s atthe front of a doomed social plan. Experts say oil productionwill peak sometime between 2005 and 2025. US productionpeaked in 1971.

Kunstler sees enormous opportunities to replace falleneconomic and energy giants after the infrastructure fails,

while his peers see those chances today.His bleak predictionsstruck home with the lunchtime audience. Some tried toconvince Kunstler he was wrong and a lot tried to convincethemselves.True or not, cataclysm or none, the people at thatenergy fair believe a better world sits in the future. It’s a morehumble and respectful lifestyle they plan to build – withknowledge and determination.

That will come with persistence and co-ordination,believes Dr J. Drake Hamilton, science policy director forFresh Energy and the opening day keynote speaker. Hernonprofit organization lobbies for policy change to fosterrenewable energy growth, and she said events like theMidwest Renewable Energy Fair can be a catalyst for action.‘People need to know that they’re not just a voice in the dark,and one of the great benefits of the Renewable Energy Fair isto see that there are thousands and thousands of individualswho feel the need to change to a renewable energy economy,’she said. ‘They’re very concerned about the number ofproblems that are out there but they’re not sitting thereworrying.’

In fact, they’re pushing a young economy to greaterheights, even as federal and local governments largely ignorethe calls for reform. ‘I talked to hundreds of people at our

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The business ofoptimismWisconsin’s Midwest Renewable Energy Fair

Events like the Midwest Renewable EnergyFair can be a catalyst for action

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display and after our talk, and they’re finding these barriers ofunsupportive polices,’ she explained. Just as public demandled Nixon to create the Clean Air Act, Fresh Energy believesvoters can force change. ‘I found at the energy fair a lot of

people are totally in line with cutting their own emissions andare very supportive of these new clean technologies that wehave to adopt right away,but people that I spoke with had lessof an idea where the politicians are, and the politicians reallyneed to lead,’ she said.

This is important because government leadership providesthe key to market success, as witnessed in countries withmore successful renewable energy promotion policies.

Brazilian leaders have begun to hear the call and areimplementing broad transitions. Germany is investing publicfunds in renewables and is the world leader in solarelectricity and wind power. Spain too is a leader in windpower, according to the 2005 Global Status Report releasedby the Renewable Energy Policy Network for the 21stcentury. An estimated US$500 million goes to developingcountries each year as development assistance for renewableenergy projects, with $30 billion invested worldwide onrenewables in 2004. Renewable Energy sources generate17% of the world’s primary energy (including large hydro),with biomass burning at 9%.

The private sector has driven growth in the US, and hashelped Robert Geye of Milwaukee improve the sustainability inhis home and his landscaping business. For 15 years he’s goneto the Midwest Renewable Energy fair to find innovations hecould find nowhere else, even in this digital age. ‘I find newtechnology, and also learn how to put that technology intoexisting buildings,’ he said. This year, ‘I’m looking into ageothermal heat pump unit for heating and cooling the house.’

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RENEWABLES The business of optimism

Solar cooker being demonstrated at the fair

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He’s constantly astounded by breakthroughs: ‘Being ableto run McDonald’s grease in your car and not need to burnfuel anymore. Different types of wind generators. Differenttypes of solar panels. Different types of arrays and trackers.’

Many of the fair’s 100 workshops help him keep abreastof the latest products and techniques. The manytechnologies were compared against each other inEconomic analysis of RE systems. How to make and usecompressed earth blocks (CEBs) was one of manyconstruction sessions, while Bursting the hydrogen bubblechallenged the saviour notion of hydrogen-powered cars (i.e.where does the hydrogen come from?). How to use biomassfrom animal and human waste and turn a generator was asession filled with farmers, while an online service guidesparticipants at home. Educators were welcome at privatesessions, such as Using RETScreen to model solar energy,which outlined free software from the Canadian governmentthat helps predict savings from solar.

Geye said the bustling fair assures him that technicalsupport will always be on hand for the hardware he alreadyhas and that he’s not alone in his desire for sustainability.‘It’salmost like a big old ho-down,’ he chuckled, ‘People arewearing everything from old dresses to shorts to sport coats.You name it, but everyone’s here looking for some kind ofknowledge and because of that they’re willing tocommunicate with all others.’

Todd and Louis Kleland drove there from Moose Lake,Minnesota.‘You could stand in any one place and watch themost interesting people walk by,’ Todd said. ‘Everybody’sexcited. Everybody’s having a good time.’That was even true

on the show’s second day when major storms pushed everyattendee into the modern barns-turned-exhibit halls. Astornadoes threatened to tear into the record crowd, thepeople themselves chatted heartily with whoever wascrammed nearby.

Kleland found the optimism he knew as a youth. ‘It’sreally nice to see so many young people who are so active indoing this stuff,’ he said, ‘They’re doing things that ourgeneration tried to do back in the 70s, but the momentumwasn’t there.There’s a lot of hopeful stuff here. Plus, you arethinking, you’ve got to be doing some of this stuff yourself.You’ve got to be using less electricity and less gas and tryingto come up with alternatives.’

The car of James Trocola burned unleaded petrol as hedrove north from Chicago for a fishing trip, but it was thefair’s first Clean Energy Car show that drew him to Custer.Featuring converted diesels that run on vegetable oil and anunconverted bus that runs on biodiesel, other vehicles suchas ethanol and electric cars were on sale, as were a collectionof hybrid racing buggies that burn as little as one US gallonper 456 miles.

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The business of optimism RENEWABLES

The solutions need to be more comprehensivethan just switching to new car fuels. The

people at the Midwest fair understood this

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‘There are a lot of sights to see,’ Trocola sighed. A newelectric bicycle has its engine tucked in the inner axle of thefront wheel, with an exceptionally efficient batteryunnoticed under the seat. Another used two giant solarpanels to power a traditional e-bike. Nearby massive sheetsof tin reached skyward and reflected sunlight to bakecookies.

The passion impressed even Kunstler. ‘Ithought it was a pretty impressive event,’ hesaid. ‘I met a lot of really good, thoughtful,earnest people out there. Considering theplaces that I go, and the number of people Ido meet, it’s reassuring to find people whoare tuned in to the appropriate scale.’ Thesolutions need to be more comprehensivethan just switching to new car fuels, heasserted. ‘The people at the Midwest energyfair, I think, understood this, so what you seein an event like that is a lot different from thenonsense that you see on CNN.’

All across the grounds holisticsustainability was in practice, with sustainablebuilding materials in use, organic food and aheavy emphasis on recycling and composting.

‘What’s great about the fair,’ explainedMidwest Renewable Energy AssociationExecutive Director Tehri Parker, ‘is we

actually focus on really practical things that are available topeople right now, as opposed to lot of conferences that arereally technical on things that could happen in the future.We’re sort of the pulse point of what the real people on theground are thinking.’ Exhibitors were asked to rate the valueof exhibiting at the fair. 56% said the value was excellent,31% said it was good, and 13% said fair.

It’s one of the top gatherings for experts to comparenotes, and those same people prepare workshops foradvanced and beginning homeowners. This year thepresenters were all American or Canadian, but she said thateach year between two and three percent of attendees arefrom across oceans. In 2002, 37 companies were representedand one year someone from all seven continents was at thefair, she said.‘If you were from a European company and youwanted to find out what was going on, sort of at thegrassroots level of renewable energy, the fair would be theplace to go,’ Parker stated.

That doesn’t mean they need to come to this fair inCuster, she said. ‘One of the things that we’ve really beenworking on is hoping other people run similar events intheir locales, so we don’t have to use as many fossil fuels forpeople to learn this stuff.’ It takes a year to plan each fair, shesaid, and MREA has the experience to give guidance. ‘Startplanning early. Look at what other people are doing. Theycan contact us. We’re happy to share our timeline andbudgets with them.’

New fairs would have broad appeal, she said, as investorsbegin to see the future. ‘There are a lot of conferencesaround the country focusing on renewable energy financing,and those conferences are targeting big money investors andwhere the future of the industry is going.

MREA’s fair generates public interest and customers, saidJames Polcyn, sales director of Phocos, Inc, a solar energyproduct company from Arizona. ‘Since that show, we’venoticed some of our dealers have been purchasing morefrom us,’ he said. ‘I don’t want it to seem like it’s a sign thatwe’re definitely catching up to places like Europe and thingslike that, but there’s definitely a larger subculture hereinterested in renewable energy.’

From a distributor’s perspective, it’s hard to feel a direct

154 ● RENEWABLE ENERGY WORLD ● September–October 2006

RENEWABLES The business of optimism

ABOVE A modified motorbike with an electric engine is one of the more home madeinnovations on display RIGHT James Kunstler gives a keynote speech

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boost from the show, warns Robin Gudgel,president of MidNite Solar Inc. ofWashington State. ‘You might make acontact or show a product to a distributor,and that distributor could take many, manymonths before they act on what they’veseen,’ he said. ‘Because they’ve already gotinventory and it may be difficult for them toswitch to a different manufacturer.’A boothcosts $750 for manufacturers anddistributors and $375 for dealers andcottage industries.

The fair is a big deal each yearregardless, he said, partly because of how ittends to energize customers, stimulatingthe renewable energy market.‘The novices,they’re there the whole time. They find adealer and ask questions. Then that dealergoes to their distributor. And they ask “doyou carry MidNite Solar?” Well, they onlylike to say no so many times before theyfeel like they’re missing out on something.’

As the man who designed popular off-grid inverters for20 years, Gudgel expects to deal with informed dealers. Hesees how the MREA’s fair draws so heavily from the generalpublic. ‘There are an awful lot of novices. People saying,“what’s an inverter?”That kind of gives an indication on thelevel of education of the people.’

He trusts his dealers to work with the public, but Gudgelacknowledges momentum is building. Companies now needto facilitate its growth, he said. ‘A friend said, "you know, Iabsolutely am convinced that 50% of my advertising budgetis totally wasted. The problem is, I don’t know which 50percent.’"

Where the public and where investors will go can’t beforetold, but it’s certain that more are expanding theirrenewable portfolios. The yearning to become green is sostrong that utility customers pay a premium to supportrenewable sources, even though no electrons are divertedfrom windmills straight to their homes.

Several utilities are sponsors of the energy fair. BrianDowney, spokesperson for Alliant Energy, said the fair is theideal opportunity to explain the renewable options and howto integrate technologies into the grid.‘In that context, we’vegot the same mission as the founders of the fair have, andthat’s getting the word out on how individuals could morewisely use energy, conserve energy, and how, as a society, tomove toward greater use of renewable energy.’

That’s inevitable, said Franc Fennessey, local relationsmanager for American Transmission Company, another fairsponsor. His company is charged with connecting everyoneto the grid who has electricity to sell, and a lot of thosepeople go to the fair. And so do people who loathe

transmission lines, especially new ones. Northern Wisconsinwas recently the site of a prolonged battle over a new lineroute. ‘A lot of people feel that MREA and ATC areincompatible,’ he said. ‘Much to the contrary. We are verymuch a part of the renewable story and we like to tell ourrole in that.’

They also compare notes on access issues. ‘Sitingtransmission lines, believe it or not, can be controversial.Andwe’ve actually found a sympathetic audience, in part frompeople who have found similar reaction to wind turbines,’Fennessey said.

As transmission companies and utilities move more andmore toward renewable energy sources, investment andresearch will follow.Those at the fair are blazing those trails,and even Kunstler thinks there are business opportunities inrenewable energy. Of course, he sees cash and credit first,and later the revenues could be in barter form.

‘There will be enormous opportunities in rebuildinglocal economic networks,’ the author said.‘The one thing wecan’t really predict is what kind of social friction or discordthis is going to generate.There will be a lot of winners andlosers. ’

The courage and will in an ecologically aware society arealive at the fair. Inside those farm stalls and exhibit halls arepeople who understand their place among the Earth’screatures. It’s centred on independent living and responsibleexistence. If that lives and thrives anywhere then it may oneday be everywhere. Whether the devotion catches on willdetermine whether wasteless and efficient technologies everdominate the market.

Jeff Decker is a freelance journalist based in the USe-mail: [email protected]

■ To comment on this article or to see related features from ourarchive, go to www.renewable-energy-world.com

September–October 2006 ● RENEWABLE ENERGY WORLD ● 155

The business of optimism RENEWABLES

The fair is a big deal each year because ofhow it tends to energize customers,

stimulating the renewable energy market

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Iexpect that many of you, at some time in your lives, haveseen the Eiffel Tower in Paris, and perhaps – as I did –have gone up to the top. It stands 324 metres above theground. Now imagine that I’m at the top of the EiffelTower and I throw down a rope. Someone down below

takes the rope and ties a knot around a beautiful Volvo car.Then I, from my position up above, start pulling, hand overhand, and lift that car all the way up. Imagine how muchenergy that would take. Of course, I don’t have that kind ofstrength. But my point is: to do that job, all that’s needed isone decilitre of oil. That’s how powerful oil is. That’s howstrong the competitor to our bioenergy is.That gives you anidea of the power source that we will do our best to replace.It will not be easy, but that is the task.

I believe that we share a vision of the future.A vision inwhich we have freed ourselves from dependence on oil.When I speak about oil I am also speaking about other fossilfuels. Just over six months ago I appointed an OilCommission here in Sweden.The goal that we have set is tofree ourselves from dependence on oil by 2020.We are notgoing to do away with oil, but of our dependence on it.Thatin itself is drastic enough.

If we are to succeed, bioenergy will play a crucial role. It’snot the entire solution, but a part of the solution. Working

technology in the field is already in operation. Not only doyou ‘know how’, you can ‘show how’.

There are many reasons why we should do away withdependence on oil. The most important is the threat ofclimate change. The threat from burning oil, coal and gas.That cannot be ignored. It is, essentially, a deeply moralquestion.A question of solidarity.This is because the poorest,those who already live in the most vulnerable places aroundthe world, are those who will be hardest hit by climatechange. They are the ones who will be driven from theirhomes. Here in Sweden we will also be affected but we willmanage better according to our forecasts. Not well, butbetter than the poorest.

This is one dimension of solidarity.The other is betweengenerations. What message does it send that we inherited aworld from our parents that was in better shape than theone we leave to our children? What right does ourgeneration have to destroy the climate?

This deeply moral question has only one answer. We donot have that right.That same moral demands that we try todo something about it.

But there is more to oil dependence than this moralperspective. It also includes politics – security politics andeconomics. Dependence makes us vulnerable.

Sweden plans to free itself from its dependenceon oil by 2020. Here, Swedish Prime Minister GöranPersson, who addressed the audience at World Bioenergyearlier this year, explains why he is personally committedto this important policy initiative.

Enduring freedom?

September–October 2006 ● RENEWABLE ENERGY WORLD ● 157

Enduring freedom? THE LAST WORD

the last word

Sweden’s plans to wean itself off oil

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There is a steady, dramatic increase in the demand for oil.Not least due to the enormous growth that we see incountries like China and India. Countries that still however,together, only use half the amount of oil that the UnitedStates does alone.

At the same time it is clear that the supply can’t keep upat the same pace.You don’t need to be a Nobel Prize winnerto understand that this leads to an underlying pressure onprices.To the point where oil becomes much too expensiveto burn.

The oil prices this spring, of over US$75, have resulted inmore and more people coming to realize how great ourdependence really is, and how vulnerable it makes us.

In May, the OECD adjusted its forecast for growth in theOECD area upwards. Even so, we see stock market shifts allover the world.The future is anything but secure.

This is the new age we are living in. Everything that wenow think is pointing in the right direction can, in a fewhours, vanish into thin air.All you have to do is take a look at

the energy issue to understand how vulnerable modernsociety is.

Let us say that a large-scale terrorist attack takes placesomewhere in those regions that are vital to oil production.How high might the price of oil rise, and how much can theworld economy take?

A year or so ago, Alan Greenspan, the former FederalReserve Chairman, said that the limit was $50 per barrel.Theprice of oil then was about $30. Later, it reached $50. Now, ithas been up over $75.And no one will be surprised if it soonwill be over $100. And still the limit does not seem to havebeen reached.

There is a limit of course – but what it is, we don’t know.This is something we have no control over. If something

happens, it happens. And the impact is swift. If somethinghappens this afternoon, we see the results tomorrow, maybeeven tonight, in each and every one of our countries.That isglobalization and that is something we will continue to live with.

That is how vulnerable the world is, due to itsdependence on oil and fossil fuels.

It is this vulnerability that I hope we can graduallyeliminate.To do that, we cannot make ourselves dependenton overly large energy generation plants, nor too dependenton certain types of energy.We must view the profitability ofinvestments in a long-term perspective. Do everything wecan to save energy, use it more efficiently. Everything we can

158 ● RENEWABLE ENERGY WORLD ● September–October 2006

THE LAST WORD Enduring freedom?

All you have to do is take a look at the energyissue to understand how vulnerable

modern society is

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Enduring freedom? THE LAST WORD

do to replace oil is potentially a good deal, if not today, thenat least over time. I am also convinced that when we do so,it will be good for jobs and good for businesses.

When I speak of freeing ourselves from dependence onoil, it is not a dream about recreating times gone by. Butabout new technologies and new solutions, although oftenrooted in previously tested ideas. It’s about new investments,research and development. It is important to have this said.It might be easiest to illustrate this with the transport sector,where the truly difficult transition must occur.

Today, our cars run almost exclusively on fossil fuels. ButI do not believe in a future with fewer cars. I am old enoughto remember when my family bought its first car. It wasfreedom to be able to travel outside of town. People in richcountries are not going to want to give up the freedom thatcars provide.And in those countries where ordinary peopledon’t already have cars, people will want to get them.Therewill be more cars in the future, not less – I am convincedabout that. But cars don’t have to use so much petrol. It’spossible that they don’t even have to run on petrol, or on

fossil fuels at all. Therein lies the challenge. For the carindustry, for all of us.

Think about a country like Sweden. A country with twocar brands, Saab and Volvo – beautiful cars – and two truckmanufacturers, Volvo and Scania. The development of carsand car engines for the new age will also be a question ofsurvival, for the industry, for jobs. Hardly any country is asdependent on its automotive industry as Sweden per capita.If the industry is to survive and develop, it must remain atthe forefront when new ideas are developed.You see, it’s notthe new technology I am afraid of, it’s the old. It’s not thenew technology that creates unemployment andenvironmental problems, it’s the old.

It’s not the old technology that drives growth, it’s thenew. We already see this in the transport sector. More thanone out of every ten new cars sold in Sweden is a green car.In the last year, sales of ethanol have grown by more than500%. Billions are being invested in new production ofbiofuels. We are working intensively to develop newmethods of producing ethanol, methanol, DME, biogas andother fuels from biomass. For agriculture and forestry, thefuture looks bright, but we have only started the process.Wedo not know what lies ahead, and with a process of thismagnitude and these strong driving forces much will happenthat we can not foresee today.We have started the process –and that is the most important thing to do today.

In this way, climate policy also becomes industrial policy.

It’s not the new technology I am afraid of, it’s the old

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Poinger Strasse 2,85551 Kirchheim-Heimstetten, GermanyTEL. + 49-89-2011177 FAX. +49-89-2012877www.vosselectronic.de

Nanwa Nihonbashi Bldg., 2-16 4-Chome,Nihonbashi-Muromachi, chuo-ku, Tokyo 103-0022, JapanTEL. 03-3241-9141 FAX. 03-3241-9170

Energy policy also becomes employment policy.Environmentalinitiatives also become initiatives for jobs and growth.

But if we are to get anywhere, it requires policies andinternational policies. It requires the will. Otherwise it willtake too long.

Those who believe that this can be done withoutpolitics, without policy levers, are wrong.

But we know the usual reaction every time an attempt ismade to introduce environmental taxes for instance or otherpolicy levers. That is regarded in the debate as a threat tojobs, or a threat to competitiveness.To those who think thisway, I would just like to point out a little of what we haveaccomplished in Sweden so far.

Since we came to power in 1994, after a three-year breakin opposition, energy intensity in society has been reducedby almost 20%. Carbon dioxide emissions have beenreduced.We have introduced environmental taxes as well asother policy levers. And at the same time we haveexperienced a higher per capita growth rate than the EU, the

OECD or the United States as an average over the last ten years.

So to say that high ambitions with regard to theenvironment threaten jobs and growth is something I don’tset much store by.The fact is that the opposite is true.

It is clear that bioenergy will play an important role, bothfor heating and for electricity production and as a motorfuel. But it will require policy.Today, 25% of Sweden’s energyneeds are met by bioenergy.

And while as we see that replacing oil in motor fuel willbe an enormous and difficult challenge, the challengedoesn’t seem so great when it comes to heating. In this areawe don’t have far to go. 40 years of expanding districtheating networks and other facilities, and the transition tobiofuels, mean that today, only 10% of housing is heated byoil. And those 10% will disappear in the coming 15 years –I’m convinced about that. At the same time as we aredeveloping the use of bioenergy, we are working to producemore biomass.There are our forests, but in addition, we havefarmland that is not needed for food production. Farming forenergy purposes will grow in importance.

So even if we’ve already come a long way with bioenergyin Sweden, we need to do more to increase our production,our use and our research and development in the field.Andwe will do more.

There are those who say that it doesn’t matter what wedo in a small country like Sweden when pollution continues

160 ● RENEWABLE ENERGY WORLD ● September–October 2006

THE LAST WORD Enduring freedom?

Those who believe that this can be donewithout politics, without policy levers,

are wrong

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in other places. I definitely do not agree.Of course we can’t stop climate change on our own, but

we can show the way. What happens will depend on whatwe all do in the EU, in North America. What is done incountries like China, with its dynamic growth. Countries likeChina can provide major assistance to all of us who want tosee new green solutions if the solutions they choose arerenewable.

I want Sweden to be a partner for all those who want toinvest in bioenergy.We have a great deal of experience thatwe would be pleased to share. But we also need to listen andlearn.That’s why a conference like this one is so important.

Together, there is so much more we can do. I hope thatWorld Bioenergy can become an important meeting placefor the new bioenergy industry. And that the visit here inJönköping can be the starting point for a lot of goodbusiness. Because it’s only when it’s based on good businessthat progress in bioenergy can really gain momentum. I amextremely afraid of a situation where we via subsidies buildup a new industry.We have the right in short perspective touse pilot projects yes, but in long-term it must be based on

its own capacity, its own efficiency and it must be profitable.And I believe it can gain momentum.We live in a world with growing environmental

problems. But also with a growing awareness that we have todo something about them. And along with that awarenesscomes a growing demand for green energy, from companies,from consumers and from decision-makers. I don’t usuallymake predictions about the future of different industries. ButI have to say that I am firmly convinced that bioenergy andenvironmental technology will enjoy a long and veryprosperous future. If not the future of mankind will be sad.

So good luck in your extremely important job.

Prime Minister Göran Persson addressed the opening session ofWorld Bioenergy 2006 conference, held in Jönköping, Sweden. Alsopresent as VIP was Mr.Liu Zhen Ya, President of the State GridCorporation of China, and the Chinese Ambassador. Mr Persson gave aspecial welcome to the Chinese delegation, saying he hoped that thetwo countries ‘can take an initiative for a major effort to developbioenergy in a strategic co-operation between Sweden and China…that could serve as a lever in global development.’

Thanks to SVEBIO and Elmia for their co-operation in the preparation ofthis article.

■ To comment on this article or to see related features from our archive,go to www.renewable-energy-world.com.

September–October 2006 ● RENEWABLE ENERGY WORLD ● 161

Enduring freedom? THE LAST WORD

Of course we can’t stop climate change onour own, but we can show the way

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DIARY

Send details of your event to:Renewable Energy Worlde-mail: [email protected]

200621st European PV SolarEnergy Conference andExhibition Dresden, Germany4–8 September 2006WIP-Renewable Energies,Sylvensteinstr. 2, 81369München, GermanyTel: +49 89 720 12 735Fax: +49 89 720 12 791e-mail: [email protected]: www.photovoltaic-conference.com

Power-Gen Asia 2006 Hong Kong5–7 September 2006PennWell Corp., PennWellHouse, Horseshoe Hill, UpshireEssex, EN9 3SR, UKTel: +44 1992 656629Fax: +44 1992 656700e-mail: [email protected]: www.powergenasia.com

5th European Motor BiofuelsForum Newcastle, UK11–13 September 2006Ms Marieke Bouman,Europoint, PO Box 822, 3700AV Zeist, the NetherlandsTel: +31 30 6933 489Fax: +31 30 6917 394e-mail: [email protected]/biofuels2006

5th Offshore Wind EnergyConference Hamburg, Germany12–13 September 2006Mirja Rathlev, GermanischerLloyd WindEnergie GmbH,Steinhoeft 9, 20459 Hamburg,Germany

Tel: +49 40 31106 7016Fax: +49 40 31106 1720e-mail: [email protected]: www.windmesse.de

AWEA Wind ResourceAssessment Workshop Syracuse, New York, USA13–14 September 2006AWEA, 1101 14th Street NW,12th Floor, Washington, DC20005, USATel: +1 202 383 2500Fax: +1 202 383 2505e-mail: [email protected]: www.awea.org

3rd International Conferenceon Biomass for Energy Kiev, Ukraine18–20 September 2006Conference on Biomass forEnergy, Institute of EngineeringThermophysics, NAS ofUkraine, 2a, Zhelyabov str.,03057, Kiev, UkraineTel: +38 044 456 94 62Fax: +38 044 456 60 91e-mail: [email protected]: www.biomass.kiev.ua/conf2006

The Washington Summit onClimate StabilizationWashington, DC, USA18–20 September 2006Climate Institute, 1785Massachusetts Avenue, NW,Washington, DC 20036, USATel: +1 202 547 0104 Fax: +1 202 547 0111e-mail:[email protected] http://washington_summit.climate.org/

Global Windpower 06 Adelaide, Australia18–21 September 2006Jacqui Stuart, Australian WindEnergy Association, PO Box4499, Melbourne VIC 3001,Australia

Tel: +61 3 9670 2033Fax: +61 3 9602 3055e-mail: [email protected]: www.gw06.net

Power Expo 2006 Zaragoza, Spain20–22 September 2006Feria de Zaragoza, Ctra. A-2,km 311, E-50012 Zaragoza,SpainTel: +34 976 764 700Fax: +34 976 330 649e-mail: [email protected]: www.powerexpo.org

Marine Renewable EnergyConference London, UK21 September 2006ICE Conferences, Institution ofCivil Engineers, One GreatGeorge Street, London SW1P3AA, UKTel: +44 20 7665 2313Fax: +44 20 7233 1743e-mail: [email protected]: www.iceconferences.com

8th Annual RenewableEnergy Finance Forum London, UK25–26 September 2006Euromoney Energy Events,Nestor House, Playhouse Yard,London EC4V 5EX, UKTel: +44 20 7779 8914Fax: +44 20 7779 8945e-mail:[email protected]: www.reff-london.com

Intercarbon – InternationalTrade Fair and Congress forRenewable ClimateProtection Projects andEmissions TradingAugsburg, Germany28 September – 1 October 2006erneuerbare energien GmbH,

Unter den Linden 15, 72762 Reutlingen, GermanyTel: +49 7121 30160Fax: +49 7121 3016100e-mail: [email protected]: www.energie-server.de

Eolica Expo Mediterranean2006 Rome, Italy28–30 September 2006Artenergy Srl, Via Gramsci 57,20032 Cormano (MI), ItalyTel: +39 02 66306866Fax: +39 02 66305510e-mail: [email protected]: www.eolicaexpo.com

IHE Wood Energy 2006 – co-located with RENEXPO 2005Augsburg, Germany28 September – 1 October 2006erneuerbare energien,Kommunikations- undInformationsservice GmbH,Unter den Linden 15, 72762Reutlingen, GermanyTel: +49 7121 30 16 0Fax: +49 7121 30 16 100e-mail: [email protected]: www.energy-server.com

International Congress onRenewable and AlternativeEnergies and Protection ofthe Environment Estoril, Portugal2–4 October 2006Excalibur Project, Avenida 25 de Abril, 17, 2º Frente, 2750-513 Cascais, PortugalTel: +351 21 483 75 14Fax: +351 21 483 75 14e-mail: [email protected]: www.excaliburproject.com

AWEA Wind Power Finance &Investment Workshop New York City, New York, USA4–5 October 2006

Diary

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Co-organised by

Supported by

American Wind Energy

Association

CanadianWind Energy Association

Chinese Renewable Energy Industries

Association

JapaneseWind Energy Association

Japanese Wind Power

Association

Sponsored by

18 - 21 SEPTEMBERADELAIDE, AUSTRALIA

MORE INFORMATION: www.gw06.net / www.auswind.org

Australia’s wind energy capital is proud to host GLOBAL WINDPOWER 2006

South Australia is an internationally renowned wind, wine and wildlife destination. The Government

has already approved plans which will result in the state having the third highest percentage of

installed wind energy capacity in the world. Combined with the impending opportunities expected

from the new Asia-Pacific Partnership for Clean Development and Climate, Australia is in a

unique position to expand and export the wind energy industry througout the Asia-Pacific region.

GLOBAL WINDPOWER 2006 is a NOT TO BE MISSED EVENT providing an important forum for the global wind industry

to meet, share information, exhibit products and contribute to GWEC’s mission of ensuring that wind power continues

to establish itself as one of the world’s leading energy resources. GLOBAL WINDPOWER 2006 is expected to attract

representatives from all of the major wind energy continents.

BE BLOWN AWAY IN ADELAIDE

European Wind Energy Association

Indian Wind Turbine

Manufacturers Association

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AWEA, 1101 14th Street NW,12th Floor, Washington, DC20005, USATel: +1 202 383 2500Fax: +1 202 383 2505e-mail: [email protected]: www.awea.org

Renewable Energy 2006 Chiba, Japan9–13 October 2006Dr Masayuki Kamimoto Tel: +81 29 862 6033e-mail: [email protected]: www.re2006.org

Sustainable Energy & EnergyEfficiency Expo London, UK10–11 October 2006Madeleine Johnson, Event Connexions, Mulberry House, 142 Berry Lane, Chorleywood,Hertfortshire WD3 4BS, UKTel: +44 870 160 4540Fax: +44 870 160 4541e-mail:[email protected]: www.energy-expo.info

BWEA28 Annual Conferenceand Exhibition – SecuringOur FutureGlasgow, UK10–12 October 2006Helen Barnes, BWEA, 1 Aztec Row, Berners Road,London N1 0PW, UKTel: +44 20 7689 1968Fax: +44 20 7689 1969e-mail: [email protected]: www.bwea.com/28

Forum of Environment andDevelopment Bonn, Germany12–13 October 2006Christina Paetzold, ForumUmwelt und Entwicklung, Am Michaelshof 8–10, 53117 Bonn, GermanyTel: +49 228 35 97 04Fax: +49 228 92 39 93 56e-mail: [email protected]: www.forumue.de

Solar Power 2006 San Jose, California, USA16–19 October 2006Solar Energy Industries Assoc.,805, 15th St, NW, Suite 510,

Washington, DC 20005, USATel: +1 202 857 0898Fax: +1 202 682 0559e-mail: [email protected]: www.solarpowerconference.com

2006 CanWEAConference & TradeshowWinnipeg, Canada22–25 October 2006Canadian Wind EnergyAssociatione-mail: [email protected]: www.canwea.ca

2nd International Conferenceon JI Projects in Ukraine –Climate Change andBusinessKiev, Ukraine23–25 October 2006Organizing Committee,Conference on JI Projects,Institute of EngineeringThermophysics, NAS ofUkraine, 2a, Zhelyabov str.,03057, Kiev, UkraineTel: +38 044 456 94 62Fax: +38 044 456 60 91e-mail: [email protected]: www.biomass.kiev.ua/JIconf2006

The Great Wall WorldRenewable Energy Forumand Exhibition 2006 Beijing, China24–27 October 2006CISSCT, Room 710, No.86 Xueyuan Nanlu, Beijing 100081, ChinaTel: +86 10 62180145Fax: +86 10 62180142e-mail: [email protected]: www.gwref.org

Power-Gen India & CentralAsia 2006 New Delhi, India25–27 October 2006Sally Stanley, PennWellCorporation, Horseshoe Hill,Upshire, Essex EN9 3SR, UKTel: +44 1992 656 615e-mail: [email protected]: www.power-genindia.com

Carbon Expo Asia – CarbonMarket Trade Fair &ConferenceBeijing, China26–27 October 2006Ms Sheryl Buan, KoelnmessePte Ltd, Singapore

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Tel: +65 6396 7180Fax: +65 6294 8403e-mail: [email protected]: www.carbonexpoasia.com

PVTech Expo 2006 Milan, Italy26–29 October 2006Artenergy Srl, Via Gramsci 57,20032 Cormano (MI), ItalyTel: +39 02 66306866Fax: +39 02 66305510e-mail: [email protected]: www.pvtech.it

China Power TechnologyConferenceBeijing, China31 October – 1 November2006Tel: +86 10 85895156Fax: +86 10 85892570e-mail: [email protected]: www.chinapower2006.com

EP China 2006 – 11thInternational Exhibition onElectric Power Equipmentand TechnologyBeijing, China31 October – 3 November2006Watson Yau, Adsale ExhibitionServices Ltd, Unit 1101–1106,11/F, Island Place Tower, 510 King’s Road, Hong KongTel: +1 852 2811 8897Fax: +1 852 2516 5024e-mail: [email protected]: www.2456.com/ep

5th World Wind EnergyConference & RenewableEnergy Exhibition Delhi, India6–8 November 2006World Wind EnergyAssociation, Charles-de-Gaulle-Str. 5, 53113 Bonn, GermanyTel: +49 228 369 40 80Fax: +49 228 369 40 84e-mail: [email protected]: www.wwec2006.com

Large Scale Integration ofWind Energy – EWEA PolicyConferenceBrussels, Belgium7–8 November 2006The European Wind EnergyAssociation, The RenewableEnergy House, 63-65 Rue d’Arlon, B-1040 Brussels,Belgium

Tel: +32 2 546 1940Fax: +32 2 546 1944e-mail: [email protected]: www.ewea.org

Greenbuild 2006 Denver, Colorado, USA15–17 November 2006U.S. Green Building Council,1015 18th Street, NW Suite 805,Washington, DC 20036, USATel: +1 202 828 7422e-mail: [email protected]: www.greenbuildexpo.org

RIO 6: World Climate &Energy Event – alongsideLAREF 2006: Latin AmericaRenewable Energy FairRio de Janeiro, Brazil17–18 November 2006RIO 6 – LAREF Organization Office, a/c PML, Av. Rio Branco, 25–18 andar, 20093-900 Rio de Janeiro – RJ, BrazilTel: +55 21 22 33 39 53Fax: +55 21 25 18 22 20e-mail: [email protected]: www.rio6.com

DEWEK 2006 – InternationalTechnical Wind EnergyConferenceBremen, Germany22–23 November 2006German Wind Energy Institute (DEWI), Ebertstr. 96,26382 Wilhelmshaven, GermanyTel: +49 4421 4808 0Fax: +49 4421 4808 43e-mail: [email protected]: www.dewek.de

Power-Gen International2006 Orlando, Florida, USA28–30 November 2006Lisa Gasaway, PennWell Corporation, 1421 S. Sheridan Road, Tulsa, OK 74112, USATel: +1 918 832 9245Fax: +1 918 831 9875e-mail: [email protected]: www.power-gen.com

11th National RenewableEnergy MarketingConference San Francisco, California, USA3–6 December 2006www.renewableenergymarketing.net__________________

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2007Power-Gen Middle East Manama, Bahrain22–24 January 2007Samantha Malcolm, PennWell Corp., Horseshoe Hill,Upshire, Essex EN93SR, UKTel: +44 1992 656 619Fax: +44 1992 656 704e-mail: [email protected]: www.power-gen-middleeast.com

2007 European RenewableEnergy Policy Conference Brussels, Belgium29–31 January 2007European Renewable EnergyCouncil, Renewable EnergyHouse, 63–65, rue d’Arlon,B-1040 Brussels, BelgiumTel: +32 2 546 1933Fax: +32 2 546 1934e-mail: [email protected]: www.erec-renewables.org/events

Renewable Energy Exhibition Lyon, France14–17 February 2007Arnaud Wigniolle, Sepelcom,Avenue Louis Blériot, BP 87 –69683 Chassieu cedex, FranceTel: +33 4 72 22 30 75Fax: +33 4 72 22 32 58e-mail: [email protected]: www.energie-ren.comgenera 07 – Energy andEnvironment InternationalTrade FairMadrid, Spain28 February – 3 March 2007IFEMA - Feria de Madrid,Parque Ferial Juan Carlos I,28042 Madrid, SpainTel: +34 91 722 30 00Fax: +34 902 22 57 88e-mail: [email protected]: www.genera.ifema.es

World Sustainable EnergyDays 2007Wels, Austria28 February – 2 March 2007O.Ö. Energiesparverband,Landstraße 45, A-4020 Linz,AustriaTel: +43 732 7720 14380 Fax: +43 732 7720 14383e-mail: [email protected]: www.esv.or.at

Power-Gen RenewableEnergy & Fuels

Las Vegas, Nevada, USA6–8 March 2007Kay Baker, PennWellCorporation, 1421 S. SheridanRoad, Tulsa, OK 74112, USATel: +1 918 831 9102Fax: +1 918 831 9875e-mail: [email protected]: www.power-gengreen.com

IWEC 2007 – Irish WindEnergy AssociationDublin, Republic of Ireland29–30 March 2007IWEA, Arigna, Carrick-on-Shannon, Co. Roscommon,Republic of IrelandTel: +353 71 9646072Fax: +353 71 9646080e-mail: [email protected]: www.iwea.com

Hannover Messe 2007 Hannover, Germany16–20 April 2007Hannover Messe AG,Messegelände, D-30521Hannover, GermanyTel: +49 511 89 0Fax: +49 511 89 32626web: www.messe.de

EWEC 2007 – European WindEnergy Conference andExhibitionMilan, Italy7–10 May 2007EWEA, The Renewable EnergyHouse, 63-65 Rue d’ Arlon, B-1040 Brussels, BelgiumTel: +32 2 546 1980Fax: +32 2 546 1944e-mail: [email protected]: www.ewec2007.info

15th European BiomassConference & Exhibition Berlin, Germany7–11 May 2007ETA-Renewable Energies,Piazza Savonarola, 10, 50132 Florence, ItalyTel: +39 055 5002172Fax: +39 055 573425e-mail: [email protected]: www.conference-biomass.com

Russia Power Moscow, Russia29–31 May 2007PennWell Corp., HorseshoeHill, Upshire, Essex EN9 3SR,USATel: +44 1992 65 6600

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e-mail: [email protected]: www.russia-power.com

WINDPOWER 2007 Los Angeles, California, USA3–6 June 2007American Wind Energy Assoc.,1101 14th Street, NW, 12th Flr,Washington, DC 20005, USATel: +1 202 383 2500Fax: +1 202 383 2505e-mail: [email protected]: www.awea.org

estec 2007 Freiburg, Germany19–20 June 2007German Solar IndustryAssosiation, BundesverbandSolarwirtschaft e.V. (BSW),Energieforum, Stralauer Platz34, 10243 Berlin, GermanyTel: +49 30 2977788 11Fax: +49 30 2977788 99e-mail: [email protected]: www.estec2007.org

Intersolar 2007 Freiburg, Germany21–23 June 2007Solar Promotion GmbH,Kiehnlestrasse 16, 75172 Pforzheim, GermanyTel: +49 7231 58598 0Fax: +49 7231 58598 28e-mail: [email protected]: www.intersolar.de

Power-Gen Europe 2007 Madrid, Spain26–28 June 2007Vanesa Martinez, PennWellCorp., Horseshoe Hill, Upshire,Essex EN9 3SR, UKTel: +44 1992 656614e-mail: [email protected]: www.powergeneurope.com

Solar 2007Cleveland, OH, USA8–12 July 2007American Solar Energy SocietyTel: +1 303 443 3130e-mail: [email protected]: www.ases.org

Bioenergy 2007 Jyväskylä, Finland3–6 September 2007Ms Mia Savolainen, FINBIO, Vapaudenkatu 12, 40100Jyväskylä, FinlandTel: +358 14 338 5435Fax: +358 14 338 5410

e-mail: [email protected]: www.finbioenergy.fi/bioenergy2007

ISES Solar World Congress2007 Beijing, China18–21 September 2007The International Solar Energy Society (ISES),International Headquarters, Villa Tannheim, Wiesentalstr. 50, 79115 Freiburg, GermanyTel: +49 761 45906 0Fax: +49 761 45906 99e-mail: [email protected]: www.swc.2007.cn

Husum Wind 2007 Husum, Germany18–22 September 2007Messe Husum, Am Messeplatz 16–18, D-25813 Husum, GermanyTel: +49 4841 902 0Fax: +49 4841 90 22 46e-mail: [email protected]: www.husumwind.com

Greenbuild 2007 Fort Lauderdale, Florida, USA7–9 November 2007US Green Building Council, 101518th Street, NW, Suite 508,Washington, DC 20036, USATel: +1 202 828 7422e-mail: [email protected]: www.greenbuildexpo.org

Rome 07 – 20th World EnergyCongress & ExhibitionRome, Italy11–15 November 2007MicroMegas ComunicazioneS.p.A., Viale Parioli, 2, 00197 Rome, ItalyTel: +39 06 8091051Fax: +39 06 80910533e-mail: [email protected]: www.rome2007.it

2007 Copenhagen OffshoreWind – InternationalConference & ExhibitionCopenhagen, Denmark5–7 December 2007Danish Wind IndustryAssociation, Vester Voldgade106, DK-1552 Copenhagen V,DenmarkTel: +45 3373 0330Fax: +45 3373 0333e-mail: [email protected]

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Advertisers’ index20th World Energy Congress 2007, Rome 150

AEE Solar 66

Agni Energie Sdn Bhd 135

Aleo Solar GmbH IFC

Ampair MicroWind 52

ASYS GmbH 47

August Krempel Soehne GmbH 149

Axitec GmbH 147

Baccini s.p.a 73

Bachmann electronic GmbH 59

BAE Batterien GmbH 68

Beijing Sunda Solar Energy 100

Technology Co Ltd

Beijing Tsinghua Solar Ltd 101

Berger Lichttehnik GmbH & Co KG 72

Blue Sky Energy 70

Boading Tianwei Yingli New 69

Energy Resources Co Ltd

BWEA28, Glasgow 63

Calimax Entwicklungs- und Vertriebs-GmbH 139

CamLine GmbH 41

Carbon Expo Asia, Beijing 165

CEEG Nanjing PV-Tech Co Ltd 102

China Power Technology Conference, Beijing 167

Clipper WindPower 6

Comer Industries s.p.a 28

Conergy AG 99

Cube Engineering GmbH 90

Earthscan 119

Ecoprogetti Srl 161

ErSol Solar Energy AG 39

ESAB 61

Etimex Primary Packaging GmbH 81

EU Energy Plc 10

Evergreen Solar 15

EWEC 2007, Milan 126

Exxon Mobil 53

Fram Renewable Fuels 137

Fronius International GmbH & Co Ltd 40

Fulghum Fibrefuels Ltd 133

Global WindPower, Adelaide 163

GP Solar 144

GT Solar Technologies 96

Günther Spelsberg GmbH & Co KG 74

Hansen Transmissions International nv 87

HCT Shaping Systems SA 115

HMS Höllmüller Maschinenbau 78

Huber and Suhner AG 105

Ingeteam 17

International Institute for Environment and 164

Development

Isovolta AG 107

KACO Solar USA Inc. 42

Kipp & Zonen BV 22

Klüber Lubrication 91

Lincoln Gmbh & Co KG 86

Lust Antriebsteknik GmbH 26

M Watanabe & Co Ltd 160

Manitoba HVDC Research Centre 20

Manz Automation AG 125

Mastervolt 111

Meier Vakuumtechnik GmbH 152

Metglas 16

Meyer Berger AG 109

Multi-Contact AG 153

Ningbo Solar Electric Power Co Ltd 37

NRG Systems Inc 1

Ocean Power Delivery Ltd 14

Oerlikon Balzers Coating 23

Outback Power Systems 113

P.Energy 38

Pauwels International NV 50

Peter Brotherhood Ltd 19

Phaesun GmbH 114

Photon Energy Systems Ltd 76

Photowatt International 35

Power Expo 2006, Zaragoza 25

PV Engineering GmbH 104

PV Tech expo 2006 62, 154

Q-Cells AG 36

Raycap Corporation 21

RENA GmbH 120

REpower Systems AG 29

Rogers NV 65

Ropatec AG 88

Roth & Rau AG 110

Saft 146

Sanyo Electric Co Ltd 32

Scheuten Solar Holdings BV 122

Schott AG - Solar 95

Second Wind Incorporated 12

Shell Renewables OBC

Siemens Wind Power AS 31

SMA Technologies AG 45

Solar Energy Systems International 24

Solar Outdoor Lighting 124

Solar Power 2006, San José 156

Solarstocc AG 97

Solarworld 4

Solland 75

Solutronic GmbH 112

Somerset County Council 30

Southwest Windpower IBC

Spire Corporation 121

Sputnik Engineering AG 142

Stangl Semiconductor Equipment AG 77

Studer Innotec 158

Suntech Power Co Ltd 159

SunTechnics Solartechnik GmbH 71

Surrette Battery Company Ltd 83

Suzlon Energy Ltd 2

Swiss Wafers AG 18

Tenesol Total Energie AG 123

Terex-Demag GmbH & Co KG 89

Tyforop Chemie GmbH 34

Ulbrich Stainless Steels & Special 108

Metals Inc

University of Geneva 118

US Greenbuild 2006, Denver 168

Verteco 54

Vestas Wind Systems A/S 8-9

Von Ardenne Anlagentechnik GmbH 80

Webel-SL Energy Systems Ltd 106

WindLogics Inc 64

WindPro 55

World Sustainable Energy Days 2007, Wels 166

Xantrex Technology SL 145

GREEN BUILD200611/15/06THROUGH11/17/06DENVEREARLY REGISTRATION

DISCOUNTUNTIL SEPTEMBER 6, 2006WWW.GREENBUILDEXPO.ORG

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Now appearing in backyards everywhere.

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THE POWER TO CHOOSE.

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