Trump win clouds US wind outlook just as new data shows rising activity
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Trump's presidency seen as risk to wind growth
Donald Trump is to become the first Republican President since 2009 after defeating Hillary Clinton in an election which saw the Republican Party retain control of the Senate and the House of Representatives.
Trump has questioned the cost and reliability of wind and solar energy while pledging new support measures for the coal, oil and gas industries. Wind and solar industry observers fear Trump could roll-back federal Clean Power Plan (CPP) legislation and the Production and Investment Tax Credits currently supporting wind and solar growth.
“While we don’t think he can reverse the trend of increasing renewables or the challenges for coal, he surely could slow down renewables penetration. Any slowdown in renewable(s) will likely extend the economic asset life of Independent Power Producer’s existing asset bases,” Citi analyst Praful Mehta said in a note November 7.
“As a candidate, Trump often questioned federal support for solar and wind projects, with industry observers expecting a rollback of green energy subsidies in the coming year,” S&P Global, a market intelligence agency, said.
While Trump’s energy platform appears bearish for renewables, growth would likely continue due to the implementation of state-level renewable portfolio standards and falling technology costs, S&P Global said in an earlier report.
Renewable energy has support from Republicans as well as Democrats, as many conservative states have prospered from wind energy, S&P Global noted.
Iowa's Republican Senator Chuck Grassley, author of the original wind energy production tax credit legislation in the 1990s, told reporters in August that "if [Trump] wants to do away with it, he’ll have to get a bill through Congress, and he’ll do it over my dead body."
Over 80% of U.S. wind farms are in Republican-held congressional districts, according to the American Wind Energy Association (AWEA).
“We envision that the Republican leadership in Congress and the White House will want to keep our industry growing,” AWEA said.
US wind project data shows growing construction activity
U.S. wind energy capacity under construction is at near-record levels, following last year's five-year extension to the Production Tax Credit (PTC), the American Wind Energy Association (AWEA) said in its quarterly report, published October 27.
Installed wind capacity rose by 895 MW in Q3 2016, down by 44.2% compared with the same quarter last year following last year's rush to build due to fears the PTC incentive scheme would expire.
However, the extension of the PTC in late 2015 has prompted quarter-on-quarter growth in development activity, AWEA figures show.
Wind project developers reported 13.6 GW under construction last quarter and 6.7 GW in advanced development. This capacity is spread across 147 wind projects in 32 states.
US wind development activity in 2016
Source: AWEA
Project developers signed 729 MW of Power Purchase Agreements (PPA) during the third quarter and a total of 3.2 GW of PPAs have been signed so far this year, some 39% higher than a year ago, AWEA said.
GE, Clean Line to build 4 GW interstate power line
GE Energy Connections and transmission line developer Clean Line Energy are to jointly develop a 4 GW high-voltage direct current power line to transport wind power capacity some 720 miles from the Oklahoma Panhandle to Arkansas, Tennessee and other states in the mid South and south-east, the companies announced November 1.
HVDC transmission systems provide the most efficient means of connecting wind generation to distant end-use customers and the $2.5 billion Plains & Eastern Clean Line project will be the first overhead HVDC project in the US in more than 20 years.
The new power line creates the potential for "several billions of dollars of new, renewable energy investments," according to the project website.
The Plains & Eastern Clean Line will be 100% funded by private investment and will use GE Energy Connections Technology.
The project has the support of the U.S. Department of Energy and construction is expected to begin in the second half of 2017.
Vestas raises 2016 outlook but warns of slower growth ahead
Denmark's Vestas posted third-quarter profit of 309 million euros, up by 50% on a year ago as higher turbine deliveries boosted revenues in what the company called an "extraordinary year."
Quarterly sales rose by 37% to 2.9 billion euros and Vestas raised its full-year 2016 revenue forecast from a minimum of 9.5 billion euros to a range of 10 billion-10.5 billion euros, mainly due to improved delivery visibility "for the remainder of the year," it said November 8.
However, Chief Executive Officer Anders Runevad warned growth may slow in 2017.
Runevad told analysts that the outlook for the next three years is slower growth than that seen in 2016, Bloomberg reported.
"We expect the U.S. specifically in 2017 to be a lower activity level than 2016,” he said.
The wind turbine major also raised its 2016 investment forecast from 500 million euros to around 600 million euros.
The combined backlog value of wind turbine orders and service agreements rose by 700 million euros in Q3 2016, to 17.1 billion euros.
Vestas' orders totalled 1.8 GW last quarter, up by 261 MW compared with the same time last year.
"USA, China, Germany, and Morocco were the main contributors to order intake in Q3 2016, accounting for approx 75%," the company said in its investor presentation.
Over the first three quarters of this year, Vestas' order intake in the Americas fell by 23% to 2.3 GW, largely driven by lower US activity due to Production Tax Credit changes (see above article).
In Europe the Middle East and Africa, Vestas' order intake rose by 22% to 3.3 GW.
DONG Energy posts higher operating profit, plans oil and gas exit
Denmark's DONG Energy posted third-quarter operating profit (EBITDA) up 7% on a year ago to 4.8 billion crowns ($714 million) due to improved performance in the wind power business and the company plans to exit the oil and gas business, it said November 8.
DONG Energy has gradually shifted its focus away from oil exploration and fossil fuel power generation to become the world's largest offshore wind power developer. DONG Energy listed in Copenhagen in June in what was this year's largest Initial Public Offering (IPO) to date.
DONG Energy confirmed its full-year 2016 EBITDA forecast of 20 billion-23 billion crowns, subject to the completion of farm downs of the UK Race Bank and Walney Extension projects. Gross investments in 2016 are forecast at between 18 billion crowns and 21 billion crowns.
DONG Energy is currently building seven large offshore wind farms for a total 4.4 GW of capacity. The construction programme is "well on track" and the company is continuing to prepare a "pipeline of offshore wind project opportunities for the period beyond 2020," the company said.
In August, the UK government granted DONG Energy permission to build the 1.8 GW Hornsea Project Two offshore wind farm on a site located 89 kilometres off the Yorkshire coast.
Hornsea Project Two would be the largest offshore wind project to date. DONG Energy had already set the record for the largest project when it announced in February it would go ahead with its 1.2 GW Hornsea One project.
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