United States

United States

Revealing glimpse of financial details

Documents filed with the bankruptcy court by lawyers for Kenetech last month reveal details about top management salaries and million dollar incentives. Kenetech Windpower also lists some, perhaps all, of its assets to a total of $93 million, plus the "realistic" sale prices of various development and "technology" assets. Sale prices are not noted for some of the most valuable assets. A possible buyer is EnergyWorks, one of several firms scrutinising the assets of Kenetech Windpower.

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A draft amendment to Germany's Electricity Feed Law (EFL), now being considered by federal government, would slap an effective limit on output generated by wind turbines in particularly windy areas of the country. The wind lobby has protested sharply against the limit proposed by the Upper House, pointing out that any curtailing of income from wind turbine ownership would threaten the fledgling market. Most wind plant are still operating within their guarantee period and little experience of long term operation has been gathered, it adds.

The Upper House's EFL amendment has three main points and is based largely on recommendations from Schleswig Holstein, which with over 500 MW has the greatest concentration of wind power capacity in Europe installed in its region. Two of the points clear up areas of uncertainty in the existing law, but the third issue has been raised by the Upper House on its own initiative. It concerns an exact interpretation of the EFL's so-called "hardship clause."

This yet-to-be-tested clause allows a utility in a windy area overburdened by purchases of wind power, to pass on the costs to its parent company. Though claims made by utilities regarding the cost of the EFL are hotly disputed by wind proponents, the proposed amendment tackles this issue. It relieves a utility from having to buy wind power at EFL rates on two conditions: if there is no parent company to which the costs can be passed on to; and if the EFL payment exceeds 5% of the cost of the utility's own generation and purchases from elsewhere. The 5% limit also applies to the next utility up the chain.

The wind lobby fears such a ceiling sets a dangerous precedent, although acknowledges it is high. The Association for Inland Wind Energy (IWB) has calculated that in the case of Preussenelektra, which is the start of the chain of supply in large areas of northern Germany, the 5% limit would be 4 GWh, or 4.0 billion kWh. Yet any ceiling is shortsighted, says the IWB, especially considering the potential of for wind power, including that offshore.

Offshore payments

The draft amendment also deals with offshore wind generation, ruling that the utility owning the grid at the nearest onshore site is required to buy electricity from an offshore plant. Until now utilities have argued that wind power plant offshore were outside their supply areas and they were not obliged to buy electricity from them, as dictated by the EFL.

Thirdly, the amendment rules unequivocally that if wind turbines are generating more electricity than a utility can sell, this power must be taken by the next utility along the chain of supply at the EFL rate. The problem of over capacity has been raised several times in the past by utility Schleswag.

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