Rising materials costs, engineering challenges, and installation snags threaten European goals to dramatically expand wind power, according to a report by Cambridge Energy Research Associates.
The European Union aims to get 20 percent of its energy from renewables by 2020. But wind power won't meet a significant portion of that unless more government subsidies help companies offset increased costs, the firm warned Wednesday.
The world market for wind power will grow by 155 percent by 2012, according to a March report by the Global Wind Energy Council.
But a global backlog of turbines has sent wind park builders scrambling to keep projects on track. Expanding prices for steel and copper are a culprit. Engineers are also finding it tricky to build more powerful turbines.
Installation hold-ups loom in addition to rising costs, according to the Cambridge Energy Research report. Modified barges are used to set up offshore turbines, but only one such vessel is available that can install a five-megawatt turbine, and it can take a year to prepare more of them.
In addition, capital costs could rise by 20 percent from $3,555 to $4,342 per kilowatt in the next several years, based on current exchange rates from the Euro.
Prices spiked by 74 percent for land-bound wind turbines and by 48 percent for offshore turbines in the last three years, according to research by BTM Consult APS of Denmark, as reported by Treehugger. That amounts to $3.5 million per megawatt for turbines on land and $2 million per megawatt for offshore turbines.
Sweden approved Tuesday what would become its largest wind farm and one of Europe's largest, capable of producing 860 megawatts.
Norway's Oil and Energy Minister told Reuters Monday that the nation could become "Europe's battery" by pumping $44 billion into oceanic wind farms by 2025.
Cambridge Energy Research recommends that offshore wind developers secure long-term contracts with turbine makers and charter vessels to install turbines at sea far in advance.
And it called for more government help. Subsidies in Europe vary by nation and take the form of either clean-energy certificate trading programs or feed-in tariffs, through which utilities can buy renewables in advance at a set price.
Clean energy companies in the United States often cite stronger government support in Europe for hastening progress there. U.S. renewable energy tax credits are set to expire at the end of this year, sending some start-ups here to look abroad to build wind and solar farms.
Solar power businesses, meanwhile, anticipate relief in the coming year. Prices for polysilicon needed for photovoltaics are expected to drop as more suppliers come on board.
The biodiesel industry in Germany is nearing a state of collapse because of a tax increase that kicked in at the first of the year, according to a report on Reuters.
Biodiesel refiners in Germany are only producing at 10 percent capacity, according to the Reuters story from a European biodiesel conference. That's down from 20 percent the year before. Because of the downturn, some biodiesel manufacturers are taking apart their factories and selling the equipment to manufacturers in the U.S. and Canada.
The problem? Like solar energy, biofuels still largely depend upon government support and subsidies. Biodiesel costs more than regular diesel. You don't have to dig deep wells in the ground to get at it, but making it largely requires growing crops and harvesting plant oils. Biodiesel can be made out of waste vegetable oil and animal fat, but there's not nearly as much of that around as you might think. (In the U.S., the deep fat fryers and slaughterhouses of this great land of ours could probably only provide a billion gallons of fuel each year, far below the 62 billion-plus gallons of diesel consumed here.)
To make biodiesel competitive, U.S. refiners get 50 cents a gallon (for used oil) to $1 a gallon (for virgin oil) in subsidies.
Not so in Germany. Instead, the government taxes biodiesel. The taxes began in 2006 because the government didn't want to give up the revenue. Thus, biodiesel isn't cost competitive there anymore. (Biodiesel provides around 11 percent less energy than regular diesel as well, which probably further hurts.)
Ironically, the E.U. is currently implementing many green technology initiatives and trying to come up with ways to reduce greenhouse gas emissions. Diesel cars are also far more popular there than in the U.S. Sales of biodiesel in Europe so far exceed sales in the U.S.
Although it taxes biodiesel, Germany provides sizable incentives for putting it solar panels. Several farmers in the past few years have pulled up fields and gotten rid of their animals in favor of solar panels. The farmers then sell the electricity to utilities at premium prices.
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