Just a sprinkling
of industry suppliers
"See you at Sustain 2005," was the parting message to visitors and delegates leaving the fourth edition of the biennial World Sustainable Energy Exhibition & Conference in the Netherlands. Given the evident shrinkage in Sustain's size and scope, however, a fifth edition in Amsterdam is looking increasingly unsustainable. On the exhibition floor, once a showcase of wind turbine technology, the industry was virtually invisible. Of the major manufacturers only GE had taken a stand -- "just to get our name more widely known." Symbolically the tiny model of GE's giant 3.6 MW offshore machine was dwarfed by the only full scale turbine in sight: a prototype of the 2.5 kW vertical axis Turby (Windpower Monthly, February 2002), which is due to go into zero series production in the Netherlands later this year.
Among the sprinkling of wind industry suppliers present at Sustain 2003, organised by Amsterdam's RAI congress centre in late May, was first time exhibitor Davi, an Italian manufacturer of steel plate rolling machines. It was particularly disappointed at finding itself almost alone among wind industry members. Having worked with NEG Micon to develop a machine which slashes tower production times, Davi was looking to find new customers in what it regards as a high growth sector. Sustain, however, proved the wrong venue: "I think we made a bit of a mistake, we should just have taken an advert rather than an exhibition stand," said the company representative on the Davi stand.
Wind's absence from the trade fair contrasted strongly with its dominance of the conference program -- which was tailored primarily for business leaders looking to invest in renewables. Throughout the two days of presentations, wind's place as the leading technology in a renewables sector set fair on expansion was more or less taken as read. Market take-off and the mainstreaming of renewables technology -- the mission objectives of Sustain 2001 -- have now been successfully achieved, according to Fortis Bank director Dirk Meulemeester, chair of the opening plenary session.
Nuclear's grab for attention
Indeed, the debate in the opening session focused on nuclear's claim to a share of the renewables pie, with David Bonsor from British Nuclear Fuels Limited trying to convince some 60 delegates of nuclear's improved safety record and credentials as vital to hydrogen production. He was given short shrift by the only utility representative among the conference speakers, Dutch Nuon's head of sustainability, Annemarie Goedmakers. She said her company is so opposed to nuclear that it had once pulled out of a takeover of a German company because it had a nuclear plant among its assets. "We don't want nuclear -- our main problem is with waste and until that is solved we will always look at other options. Nuclear is a government business: no private company is prepared to consider the risk."
Unlike nuclear, wind is eminently financeable -- onshore at least -- irrespective of the support mechanism or cultural context, according to Marc Buiting of PriceWaterhouseCoopers. In a recent "movers and shakers" survey of utilities, wind was the most favoured renewables technology. The main investment driver, however, remains compliance legislation, with share-holder value only at fourth place, the survey revealed. This suggests that the "mega-trend" from the idea of power as a basic commodity to a product with "added value," identified by Nuon's Goedmakers, still has some way to go.
Western Europe is currently the favoured region for investing in wind, but by 2020 half of the wind capacity will be in non-OECD countries compared with the OECD's current 85% share today. "Wind is the most interesting in technological terms as the investment cost of wind turbines continues to fall. It also has the nicest replacement values with good opportunities for re-powering with better equipment," Buiting told delegates. For the time being, he advised, wind investors should look to Portugal, Germany, Greece and France.
The real questions now facing the industry are all offshore. While David Quarton from UK wind consultancy Garrad Hassan sketched the likely developments in offshore technology, Nick Gardiner of Fortis Bank did the same for offshore finance. Moving offshore will require a quantum leap in the scale of investment -- some $500 billion by 2020, he calculates. The size of investor is currently too small to make this leap: bigger players will bring bigger investors but they will still require incentives.
A break down of current investment risks shows that while "fuel supply" data is generally good for offshore wind -- though better in northern Europe than southern -- the real questions concern technology certification and warranties. Can the industry provide the level of assurance needed to draw money into untested waters? A quick survey of the trade floor on this issue revealed that GE, at least, is optimistic it will be able to resolve any certification and warranty issues.
Further, said Gardiner, while the market is clearly headed in the direction of green certificates, the harmonisation of support systems across the EU is absolutely vital -- regulatory risk and uncertainty is currently the biggest issue with Fortis. How the emerging green certificate and carbon emissions markets will affect that risk was another hot topic. The mechanics of the now familiar -- yet still experimental -- pan-European Renewable Energy Certificate System (RECS), were outlined by Peter Niermeijer, secretary general of RECS International. Erik Saat from Carbon Credits NL updated delegates on the Dutch government's carbon credit procurement program, which continues to buy carbon credits at around EUR 5 a tonne. With no framework for international emissions trading in place, however, or decisions made on linkage between the various Kyoto mechanisms, Saat's forecasts of volume and price were no less provisional than those being bandied about in 2001.