Important Developments in Wind Energy: US, UK, Argentina

US to Approve Biggest Wind Farm, Offshore Leases

The biggest wind farm in the US and a huge leasing area for offshore wind off the East Coast have passed final environmental reviews, announced the Department of the Interior (DOI).

In Wyoming, the Chokecherry and Sierra Madre Wind Farm would be the largest in the US and one of the biggest in the world. 1000 turbines would generate 3000 megawatts (MW) of power, enough for a million homes.

The project, spanning public, private and state lands, would be built over 3-4 years.

Offshore, the Interior plans to offer the first competitive lease sales in the US this year, having completed environmental reviews of the Rhode Island/Massachusetts Wind Energy Area.

The two states identified 164,750 acres of mutual interest as part of DOI’s "Smart from the Start" offshore wind program, which proactively sets aside areas off the east coast that are most appropriate for wind development.

"This environmental assessment is the first of its kind in the northeast and is based on thorough scientific and technical analysis and substantial stakeholder input to identify the most suitable location for commercial wind energy activities in this area offshore Rhode Island and Massachusetts," says Tommy Beaudreau, Director of DOI’s Bureau of Ocean Energy Management. "We will continue to seek public participation in our process, including comments on this environmental assessment as we move forward with an innovative, targeted leasing approach to offshore wind."

Earlier this year, DOI made a similar announcement for the off shore wind off the coasts of mid-Atlantic states.

Will these projects get built? The looming expiration of the Production Tax Credit (PTC) in six short months leaves the ultimate fate of these farms up in the air, despite the enthusiasm of Interior Secretary Ken Salazar. Numerous wind projects and even factories have already been cancelled because they don’t make financial sense without the PTC.

But Deepwater Wind, which is planning a massive 1000 MW offshore wind project in the Rhode Island/Massachusetts Wind Energy Area, lauded the accomplishment, saying "today’s announcement allows us to move to the next stage in the leasing and permitting process," and "it’s "hopeful that BOEM will issue a lease for this site in 2012."

UK Greenlights 1 GW Offshore Wind

The British government is greenlighting two projects that total over 1 gigawatt (GW) of offshore wind, but is rejecting a third project because it could endanger the protected Sandwich tern.

British utility Centrica will build the 580 MW Race Banks offshore wind farm and developer Warwick Energy will build the 560 MW Dudgeon project.

Together, the farms represent an investment of about $4.66 billion and will generate electricity for an estimated 730,000 homes.

The Docking Shoal Project was rejected because the area is home to Sandwich terns, which are protected by the European Union’s Birds and Habitats directives. An estimated $15.5 million and three years of planning went into the proposal, which was another Centrica project. It would have powered nearly 400,000 homes.

"We have also shown that we are mindful of other consequences, such as the impact of bird populations, in deciding that it would not be appropriate to consent all three applications," says Charles Hendry, Minister of State for Energy.

The UK has about 2 GW of operational offshore wind and another 4.8 GW in the construction or approval phases. Its target is 18 GW by 2020.

In January, the world’s biggest offshore wind farm came online in the UK, the 367 MW Walney Farm that will power 320,000 homes.

Meanwhile, the government has yet to finalize its renewable energy feed-in tariff, which is postponing projects both onshore and offshore.  

China Funds $3 Billion Argentina Wind Project  

In an interesting twist, Argentina is about to get its largest wind project financed with funds from China.

The project, which will generate 4% of Argentina’s electricity when it comes online, is being financed with a $3 billion loan from China Development Bank. It’s also being built with Chinese turbines and by a Chinese construction firm; both companies will share a 25% equity stake.

Spanning 111,200 acres in the southern part of the country, the 1350 MW project is being built in phases, the first 150 MW comes online in early 2015, and the full project complete in 2017 along with transmission lines.

Completely isolated from infrastructure and far from any port, a "city will have to be built to at the site for the workers," says Eduardo Restuccia, executive vice president of Generadora Eolica Argentina del Sur SA, the developer of the project.

The Argentinian developers have found it to be less expensive and easier to arrange a loan with China than with local banks, who are less familiar with the economics of wind farms.

Because Argentina defaulted on $95 billion of debt during its financial crisis in 2001-2002, it is blocked from the international bond market and can’t get loans from Europe or the US, giving China another advantage.

The new project dwarfs a 306 MW wind farm in Mexico that currently stands as the largest wind energy site in Latin America.  

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