Plans to build the world’s first full scale floating wind turbine were released by StatoilHydro at All Energy '08 in Aberdeen

by Tom Sawford

First published on the Cleantech Investor website, May 2008, copyright Cleantech Investor Ltd., 2008

If evidence were needed that the renewable energy sector is entering a phase of high growth it was apparent both in the auditorium of the All Energy ‘08 exhibition, and in the themes dominating the news released during the event held in Aberdeen between 21-22 May 2008.  Renewable energy technologies are now being deployed in ever larger commercial projects; the service industries supporting them are growing fast; fossil fuel energy prices are at all time (nominal) highs; but on the downside, factors that may act as a drag on growth are already emerging.

The exhibition itself is testimony to rapid development in the industry.  The first event held in Aberdeen on Scotland’s north east coast had only a handful of companies.  This year, the eighth event, there are now 387 exhibitors, two full days of conference and nearly 4,000 visitors from all over the world.  Aberdeen is rapidly emerging as the world’s marine energy capital, utilising the expertise of its marine oil service engineering companies.  The Aberdeen Renewable Energy Group (AREG - a public-private partnership representing over 100 companies), expanded its stand size by twenty per cent over 2007.  The exhibition covers a broad range of renewable energy solutions with wind, marine and biomass clearly dominant – a reflection of Scottish expertise and project experience.  Nevertheless there was still a strong representation from fuel cells, solar, biofuels, distributed energy, and some novel emerging clean technologies.

The European Wind Energy Association estimates that 80,000 MW of wind capacity will be operational in the EU-27 by 2010.  Recent trends indicate that the target looks achievable with 55,850 MW achieved by the EU-15 at the end of 2007.  The Association expects that offshore wind will provide approximately 3,500 MW or 4% of 2010 total capacity.  However, the capital requirements are huge, and rising, and typically require partnerships between utilities, manufacturers and oil companies.  The latter have the offshore experience, the capital and the need to replace their dwindling oil and gas reserves.  Of the major companies attending, Norway’s Statoil has established StatoilHydro as a subsidiary with one of its key objectives being to retain that company’s seven per cent share of the global energy market in the face of ‘Peak Oil’.  During the event, StatoilHydro announced that it would be moving ahead with the world’s first full scale floating wind turbine project.  The NOK 400 million (£40 million) project will build and develop the pilot, as well as continue research and development of its Hywind turbine concept.

This announcement may have been overshadowed by the recent withdrawal of Shell from the 1,000 MW Thames Array offshore wind project.  The status of that project must now be considered as uncertain, particularly as Paul Goldby, the UK CEO of E.ON, one of the other partners, stated in a recent newspaper article that “Shell has introduced a new element of risk into the project” and that “The current economics of the project are marginal at best,”.  Goldby cited rising steel costs and supply bottlenecks as major project issues.  The issue of rising costs, even with the benefit of the UK’s ROC incentive, is likely to emerge as a consistent theme for the renewable sector in the current environment of constantly higher commodity costs.

One of the great untapped sources of energy for the UK and other countires with long coastlines is marine renewable energy.  There were probably more companies from this sector than any other at the event in Aberdeen. Whilst pilot projects are running, and the European Marine Energy Centre (EMEC) in Orkney is expanding as quickly as it can to cope with the demand for prototype testing, it is clear that this sector is many years away from widespread commercial scale projects.  The UK’s AIM listed Renewable Energy Holdings plc (LSE: REH) is developing its CETO submerged pump technology, with a target of 2009 for a Phase 3 demonstrator.  The company announced a project development agreement with EDF Energies Nouvelles early in 2008.  This follows the path of many clean technology companies, moving from seed finance and venture capital funded stage, to partnership with larger utilities as commercialisation approaches.

Marine renewables can be segmented into three main approaches: tidal, using the ebb and flow of tides inshore or in estuaries; wave technologies utilising wave amplitude; and breakwater concepts that are extensions of wave but utilise changes in pressure within chambers embedded into breakwaters to drive turbines.  Inverness based Wavegen is developing a 300 kW project in the Basque region of Spain and has submitted plans for a 4 MW scheme on the Isle of Lewis on Scotland’s west coast, which could supply the needs of around 1,500 homes on the islands of Lewis and Harris.  If plans are given the go-ahead by the Scottish Government, building work could start in 2009 and take around eighteen months to complete.

The renewables sector is a showcase for innovative engineering concepts.  The Norwegian energy company Statkraft is exploring the use of osmotic power generation.  Freshwater and seawater are fed into separate chambers separated by a membrane.  The salt in the seawater then draws the freshwater through the membrane, causing the pressure to increase, corresponding to a head of 120 metres.  The pressurised water drives a turbine to produce electricity.  A typical location for this type of plant is anywhere freshwater flows out into high salt concentration seawater.

Loughborough, England, based Intelligent Energy created a lot of interest with their range of fuel cells for use in clean motoring.  The company has  developed a fuel cell powered motorcycle and has signed a development agreement with Suzuki which envisages the production of commercially viable fuel cell motorcycles.  Its  H2Origin collaborative research project with Peugeot Citroen culminated in April 2008 with the delivery of a demonstrator van which the company claims trebles the electric vehicle’s range to 300km.  Perhaps the company’s most eye-catching project to date has been its claim to the first ever manned flight of a fuel cell aircraft in the first quarter of 2008, as part of a collaborative project including Boeing Research and Technology Europe.

The rising cost of energy for Nova Scotia based Luneburg Foundry & Engineering Ltd, prompted President & CEO, Peter J. Kinley to explore the use of solar power to reduce his bills.  After evaluating a range of systems, he applied some of his team to focus on concentrated solar power.  The work has resulted in the Prometheus device which Kinley claims uses the energy of the sun to produce temperatures high enough to melt metal.  The device and process is patent protected and considerable work and funding requirements lie ahead.  However, if successful, the potential range of applications is vast.

The conference part of All Energy ‘08 addressed some of the realities facing the industry.  The food versus fuel debate within the biofuels industry; the opportunities presented by the rising cost of fossil fuel energy; but also the increasing project cost pressures resulting from price rises in the raw materials required to build the large scale turbines and marine devices.  Some visitors came specifically to find solutions to their problems. Ivan Javanoski, a mining company executive from Macedonia was looking for ways to generate local power to control the spiralling energy costs at his lead/zinc mine and associated smelter.  

Growing industries often encounter skills shortages and it would appear that, just as mining hit the buffers with this problem after 2003, the renewable energy sector has now expanded so quickly that it faces serious shortages of experienced project managers and engineers.  This issue was the subject of continuous debate at the event.  The UK is managing to achieve small increases in the number of graduate engineers, but the ‘black hole’ is at the middle management level.  The response has been closer collaboration by some companies, recruiters, and universities with the recruitment net being cast globally.  Apprentice schemes and cross training initiatives have been introduced, but the demands are unlikely to go away anytime soon.  If what has happened in the mining sector is any guide, it is likely that there will be increased overhead costs as wage rates rise, and some projects will be delayed for want of qualified staff. Successful renewable companies may not just be those with the most commercially viable technologies, but also those with the most attractive HR policies!

These challenges are not substantially different to those faced by other industries as they grow.  Those running most companies have the view that they will manage their way through their problems. Managements are focussing on project development and commercialisation.  The passion and optimism of presenters and exhibiting companies was clearly apparent.  Many have a clear vision and are determined to achieve their goals.  Perhaps the most ambitious project presented was the Masdar Project. This proposed USD 22 billion walled city on the coast of Abu Dhabi, will be home to 40,000 people, offering high-tech employment opportunities.  It is being master-planned by Foster + Partners, and aims to be a zero carbon, zero waste city.  Masdar intends to incorporate the very latest clean technologies offering major opportunities to suppliers and project development partners.

If an event such as All Energy can be seen as a barometer of the health of the renewable energy industry it is probably fair to say the forecast is fair, albeit that there may some turbulence ahead.  The challenges and opportunities on exbibit at Aberdeen would appear to suggest that if the 1990’s were dominated by the software engineer, the early part of the 21st century may well be the age of opportunity for the electrical and mechanical engineer.