Wednesday, February 14, 2018

Saudi Arabia Ramping Up Renewable Energy Investments

By Vincent El Hayek

Early last year Saudi Arabia announced a national renewable energy program with the goal of supplying 10% of its power demand with renewable energy by 2023. Recently, the head of Saudi Arabia's Renewable Energy Project Development Office, Turki Mohammed Al Shehri, announced that Saudi Arabia is planning to tender up to $7 billion of renewable energy projects this year as efforts to reach the 2023 goal start to ramp up.

Tuesday, February 6, 2018

JinkoSolar to Build US Manufacturing Plant

Two weeks after the Trump administration’s unveiling of a 30% tariff on imported solar cells and modules, JinkoSolar (U.S.) Inc. (JinkoSolar) is planning to open a manufacturing plant in the US. Reports indicate that JinkoSolar is the company behind a plant under negotiation in Jacksonville, Florida.  The company announced in a press release its signing of a master solar module supply agreement for 1.75 gigawatts of solar modules to an unnamed US counterparty and that it would be constructing a manufacturing plant in the US in connection with the agreement.   The board of JinkoSolar had previously authorized the construction of a US manufacturing plant, but had not provided any further details. 

The plant under negotiation in Jacksonville with an unnamed foreign manufacturer, code-named “Project Volt,” is projected to cost $410 million and is expected to create 800 new jobs.  The Jacksonville City Council has approved $24.2 million in incentives for Project Volt, part of a $53 million incentive package from the city and state to entice the foreign manufacturer’s investment in the plant.   JinkoSolar has not confirmed that is the company behind Project Volt.

According to PVTech, the top-ten module suppliers by shipment volume in 2017 were all based in China and South Korea.  Previous attempts by large foreign manufacturers to establish plants in the US have been unsuccessful due to the inability to compete with imported modules.  The supply chain in the US is generally seen as less competitive with high operating costs. 

JinkoSolar is expected to produce modules in the US using tariff free imported cells, taking advantage of the 2.5 gigawatt quota included in the Trump’s administration tariff announcement.  Accounting for the 30% tariff on modules for the first year, the US modules are expected to be less expensive than modules made in Asia.   

Credit Suisse noted to investors that “JinkoSolar’s strategy to build U.S. module-manufacturing makes sense near term as U.S. modules will cost 15%-5% less compared to imported modules under tariffs through 2021, firm supply contracts protect downside if import-tariffs are withdrawn prematurely, and higher U.S. margins provide cushion against growing oversupply and lower margins in the industry.”  Additionally, JinkoSolar expects to take advantage of a “Made in America” premium on its modules upon expiration of the tariffs.

Thursday, January 25, 2018

Trump Administration Announces Tariffs on Imported Solar Cells and Modules

The Trump administration unveiled four-years of tariffs on imported crystalline-silicon solar PV cells and modules, announcing a 30 percent tariff for the first year. The tariff will step-down 5 percent each year and the first 2,500 megawatts imported each year are exempt from the tariff.  

The administration’s decision on Monday follows the U.S. International Trade Commission’s (ITC) recent remedies recommendation on imported solar cells and modules. The ITC had previously found “substantial injury” to the domestic solar cell and panel manufacturing resulting from foreign imports.  In its remedies decision, the ITC commissioners were divided, releasing three different remedies proposals to President Trump.

Tuesday, January 9, 2018

New Startup Applying Blockchain to Renewable Energy Financing

By Vincent El Hayek

In what seems to be a first, WePower Ltd., a European startup, is aiming to finance the development of renewable energy projects across Europe using a blockchain powered platform. The company aims to fill what they view as structural problems in the manner in which renewable energy projects are currently financed that are depressing investment in the sector. In effect, WePower is looking to open up the project financing of renewable energy projects to the general public.

The WePower platform will allow energy producers to issue "energy tokens", each one of which represents a commitment to produce 1 Kw of energy in the future. A person or potential investor can buy tokens from a renewable energy project and either use the energy or sell the token. The purchase price of the tokens will be at below market rates. Further, .9% of the energy produced by energy projects on the platform is given to holders of tokens in a form of "dividend" that increases the value of the token. If the investor does not use the energy corresponding to the tokens the investor holds when the energy is produced, or does not sell the token, then the energy is automatically sold to the wholesale energy market and the investor receives the energy price in either fiat or crypto currency.

Besides just opening up renewable energy project financing to the general public, WePower claims that because everything on their platform is done via smart contracts, the transaction costs for each financing will be significantly lowered.

At the moment WePower is still rolling out its platform; however, they claimed in October to have already started working with a 1000 MW solar plant in Spain and to have a pipeline of renewable projects ready to be financed in Spain, Germany, Italy, Greece and Portugal. According to WePower, the company's platform has been cleared by European regulators and they are currently working with the Governments of Estonia and Lithuania. WePower has also recently been accepted into the Startupbootcamp track in Australia, one of world's biggest startup accelerators.

WePower is hoping to roll out its platform across Europe over the summer of 2018. To finance their expansion plans, an initial coin offering (roughly, the cryptocurrency world equivalent of an initial public offering) is planned to occur in February. It is still too early to know if the WePower platform will be successful, but successful or not, it is likely just one of the first of many applications of blockchain technology to the project finance and renewable energy fields.



Monday, December 11, 2017

State of Massachusetts Awards $20 Million for Energy Storage Projects

by Ben Grayson
The State of Massachusetts recently awarded $20 million worth of grants to 26 energy storage demonstration projects. The awards are an extension of the state’s June announcement that called for a 200 megawatt-hour energy storage target for the state’s three electric distribution companies to achieve by 2020. According to the Massachusetts Clean Energy Center, the projects will add 85 megawatt-hours of storage capacity to the state’s 7 megawatt-hours of storage currently installed.

Tuesday, November 28, 2017

16 Projects Awarded PPAs in Mexico's Third Power Auction

With an average price of $20.57 per MW of clean energy (MWh + clean energy certificate), the Mexican independent system operator (CENACE) announced the official results of the third long-term power auction. The average price of energy and clean energy certificates in this auction is almost 40% lower than the average of $33.47 obtained in the 2016 second long-term power auction.

Wednesday, November 8, 2017

GOP Tax Plan Hurts US Wind Development Forecasts

by Ben Grayson

Under current IRS rules, wind developers can claim the full amount of the federal production tax credit (PTC) through 2020 if they either started physical work of a significant nature or spent at least five percent of total project costs before the end of 2016. The date of beginning construction is irrelevant as long as construction is complete by 2020. As a result, a popular way to capture the credit is to have purchased turbines before the end of 2016. Developers can either begin construction immediately or warehouse the equipment.