structural changes
“There has certainly been an
impact on the onshore side of
the business, where we have
seen a slowdown in the rate of
new projects coming through
the pipeline.”
Chris Ehlers, Siemens Energy
When The Informed Executive last ex- be seen in the context of a sharply con- “This is having a huge effect on compa-
amined the sector in the early Summer strained investment arena. Had Mr nies which supply wind turbines as most
of 2008, the pressure was already on ven- Ehlers and his team noticed changes in are built outside the UK in Europe, and
dors to commit investment to supplying their customers’ willingness to make the are sold to their customers in Euros.”
every available Megawatt-hour of long term investments which wind power
‘clean’ electrical power if those targets demands?
were to be approached. “There has certainly been an impact
Changes within customer base
The view then was that the goals were on the onshore side of the business, Renewable Obligations Certificates
probably attainable if investment in the where we have seen a slowdown in the (ROCs) are the most important single fi-
sector could be accelerated, and that rate of new projects coming through the nancial incentive for energy suppliers
there were sufficient incentives in terms pipeline. to produce ‘clean’ energy. The certifi-
of ‘success’ payments to sustain that There is a relatively small number of cates, which nominally represent one
investment. players in the market under any circum- Megawatt-hour of energy produced in
There were reservations expressed in stances – perhaps ten European and na- this way are sold back into the market to
the corridors of Westminster, however, tional utility companies operating in the non-renewable producers.
that targets could be under pressure from UK sector, along with one or two global This generates a revenue steam that
a lack of skilled staff. oil companies, and a handful of wind compensates the renewable energy sup-
project developers. “ pliers for their investment and higher
Considered view
Ehlers expects to see some structural operating costs.
changes amongst the customers during The announcement in April 2009 that
We turned first to Chris Ehlers for a more the downturn. The smaller developers certain categories of renewable energy
considered perspective on the situation. will be unable to raise the investment would earn 1.5 ROCs per MWh of elec-
He is the Divisional Director, Renewa- funds needed from their own resources, tricity went some way to provide a stimu-
bles at Siemens Energy and was the he believes, and this will lead to the lus to wind power, which was one of the
company’s principal spokesman when larger players – who have the cash re- sectors which qualified for this addi-
we assessed its role in wind power gen- serves – strengthening their position. tional benefit.
eration. It would follow also that there would But it was not the major stimulus that
Wind will account for the largest pro- be some changes in the supply market. industry observers had been forecasting,
portion of all renewably-sourced elec- Wind power systems providers which are as Chris Ehlers noted: “The 1.5 figure had
tricity in each of the first two carbon part of much larger and diversified or- been widely trailed ahead of the an-
budgeting periods (2008-12 and 2013- ganisations would be more insulated nouncement and producers’ financial
17) defined by the Climate Change Act from the current downturn in demand than models were already being based on that
of 2008. It will probably retain that lead smaller suppliers whose total revenue number.”
by the end of the third of those periods in base is the renewable energy market. The 2009 budget statement appeared
2022, by which time carbon emissions The ability to invest in the UK wind to hold out the prospect of 2 ROCs per
should have fallen by 34% from their sector has been affected also by the MWh to the offshore wind industry, where
1990 level. slide in the value of Sterling against the significant new investment is required
Any proposals that Alastair Darling Dollar and the Euro (where there has if targets are to be reached. A review was
made in his April budget speech have to been a 13% fall since the middle of 2008). announced into the support for that
The smaller developers are likely to be unable to raise the investment funds needed from their own
resources, leading to the larger players – who have the cash reserves – strengthening their position.
The Informed Executive
15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98