Renewable energy sources accounted for nearly half the new electricity generation capacity installed globally in 2014, a dramatic illustration of just how far, and how fast, use of wind, solar and other clean, sustainable energy resources has come. Spurred forward by technological advances, rapidly falling costs and energy policy reform, renewable energy, as well as energy efficiency, have become strategic business lines for the world’s largest industrial engineering, manufacturing and construction businesses, including General Electric (GE).
In an October 12 blog post, the head of GE’s Renewables Sales team Peter Oram zooms in on the world’s renewable energy hotspots – for solar, tidal and wind energy specifically — offering insights into emerging trends and current conditions.
Transforming the energy mix worldwide
Oram points out that ongoing growth in renewable power generation capacity is expected to transform the mix of energy resources societies and businesses the world over rely on. He cites Bloomberg New Energy Finance’s prediction that growing use of renewables will reduce the percentage of electricity generated from fossil fuels from two-thirds to one-third by 2040. Moreover, BNEF expects renewable energy resources will account for around 60 percent of the electrical power generated globally by that time.
While taking very different policy approaches, China, the US, Japan and Germany are leading the worldwide community of nations when it comes to investing in, developing and making use of renewable energy resources, Oram highlights.
Growing at a 45% clip, 23 of the total 51 gigawatts (GW) of new wind power generation capacity installed worldwide in 2014 was installed in China, Oram highlighted. That brings China’s nationwide wind power generation capacity to 114GW.
BNEF forecasts that some $3.3 trillion of capital will flow into renewable energy in China over the course of this and ensuing decades – nearly double the amount expected to be invested for the entire Americas region. As a result, BNEF expects some 2,601GW of new renewable power capacity will be installed across China by 2040.
Wind power challenges in China and elsewhere
China’s rapidly growing wind power capacity brings to light technological, economic and regulatory weaknesses, faults and challenges facing power producers, distribution utilities, grid operators, regulators and energy policy makers not only in China, but around the world face as greater amounts of wind and other variable or intermittent renewable power sources is installed, however.
One key challenge is speeding up the rate at which wind, solar and other renewable power generation assets are connected to the grid. As Bloomberg has reported, a significant percentage of China’s new and recently installed wind power plants aren’t connected to the grid. Furthermore, as Oram explains:
¨As wind farms become saturated in densely populated areas and move to more remote locations, power needs to travel increasingly long distances to reach those who need it. For this to happen with as little energy loss as possible, China will need to reform its grid operation.¨
Wind farms are also being deployed in some unconventional locations, including at high altitude, that puts additional stress on equipment. For example, Oram writes, ¨as air gets thinner due to the reduced pressure at higher altitudes, it loses some of its insulating properties, meaning that equipment built to work at high altitudes needs to be designed with sufficient safety spacing distances to prevent high voltage arcs or breakdowns between conductors and other electronic components.¨
Enhancing the performance of utility solar in the U.S.
From China and wind power Oram turns his and GE’s lens on solar power in the US. Some 6.2GW of solar power generation capacity were added in the US in 2014, a 30% year-over-year growth rate that attracted $18 billion of investment capital, according to the US Solar Energy Industries Association (SEIA). Looking ahead, SEIA forecasts installed solar power generation capacity will grow another 31% this year.
With competition keen, investment returns falling and the federal solar investment tax credit (ITC) due to expire in a little over a year, investors and operators of large- and mid-scale solar power projects are focusing much more on optimizing the reliability of PV and concentrated, or thermal, solar energy facilities, Oram highlights.
¨High levels of energy production are needed in order to make back the costs of building a solar farm. Therefore, service will also play a crucial role, avoiding downtime and ensuring that the equipment is as efficient as possible will be key to shifting the CAPEX and OPEX balance in favor of future cost reduction,¨ he wrote.
Continuing to increase the efficiency of solar energy technology is another key facet of stoking market growth, he added. For its part, GE Power Conversion recently began installing its new 1.5kV inverters with a 4MW power rating to the array of equipment included in its turnkey utility-grade solar power generation offering.
According to Oram: ¨Use of this inverter enables the output power capability to increase by up to 50% compared to the industry standard 1MW, and reduce system costs by up to 3%, transforming the scale and efficiency of solar power conversion.¨
Oram and GE Renewables also have their sights set on tidal energy, and in this case, the UK, which has earned its place as a world leader in the development of cutting and leading edge marine tidal energy technology, as well as offshore wind power deployment.
Tidal energy rising in the U.K.
Worldwide, the market for tidal power is forecast to grow 24 percent by 2018. The UK is setting the pace, with the 320MW Swansea Bay tidal lagoon serving as a flagship project.
Tapping into the energy in rising and ebbing tides across the Severn estuary off the coast of Wales, the Swansea Bay Tidal Lagoon is expected to generate 500GWh worth of clean, renewable power. That would be enough to meet the needs of more than 155,000 homes, or 90% of local electricity demand, Oram pointed out.
Indicative of the importance renewable energy to the multinational engineering and industrial manufacturer, GE is actively researching, developing and deploying wind, solar and tidal power technology, as well as investing globally in projects that make use of them.
For example, GE helped develop the high-tech tidal power turbines that are to be installed in Swansea Bay. Just 16 of them will be able to produce 320MW of electrical power. ¨A more traditional array would require hundreds of stream turbines to obtain the same result,¨ GE highlights on its website.
Along with much higher power conversion efficiency, the tidal turbines are expected to last an extraordinarily long time, even by utility industry standards, as well as require little in the way of operations and maintenance costs.
¨The primary difference with tidal lagoons is the efficiency of electricity generation in both directions, due to the deployment of induction generators with variable drive systems and axial flow low-head bulb hydro-turbines,¨ Oram elaborates.
¨What’s more, the technology is designed to last; a plant such as Swansea Bay has an operational life expectancy of 120 years, with no major refurbishments needed for the first 50 years of operation.¨
Project developer Tidal Lagoon (Swansea Bay) plc has proposed building an additional five tidal energy lagoons at sites in the Severn estuary, which boasts the second-highest tidal range in the world. If built, Oram points out that the clean, renewable energy generated from them would amount to 8% of the UK’s currently installed power generation capacity.
GE’s growing renewables ¨footprint¨
GE also aims to play a larger role in China’s fast growing wind and renewable energy markets. This past January marked the signing of GE’s largest wind turbine purchase sale in China to date.
On Jan. 26, management announced that China’s Huaneng Corp. will install 55 of its GE 2.7-120 Brilliant wind turbines – 151 megawatts worth – at the Huaneng Dali Longquan wind farm in southwestern Yunnan province. In addition to delivering turbines, the deal includes a two-year operations and maintenance service agreement.
Shifting focus on the US, it was almost exactly two years ago that GE execs decided to pull the plug on a much touted and much anticipated plan to build a $300 million solar panel manufacturing facility in the Denver suburb of Aurora. GE hasn’t given up on US solar by any means, however.
GE’s new LV5 1,500V inverter figures to play a small, though significant, part in its efforts to expand its global utility-scale solar energy business. Having launched the product in Europe, LV5s are to be installed as part of the utility-scale Hosoe solar power project in Japan.Pacifico and GE Energy Financial Services (GEEFS) are developing the 96.2MW, $290-odd million PV project on the southern island of Kyushu.
In the US, GE has sealed a deal to supply NextEra Energy LV5s for solar power projects with a combined 1GW of power generation capacity.
GE boosts energy efficiency, renewables with Current
From an organization-wide perspective, the recently announced launch of Current is a clear indication that GE management has reassessed its approach and crafted a new, more holistic and integrated strategy as it seeks to capitalize on rising demand for renewable energy and energy efficiency technology, products and services. The new business unit will draw on GE resources spanning solar energy, energy storage, LED and energy efficiency products and services,
In an October 7 Fortune interview, GE vice-chair of Business Innovations Beth Comstock offered up some insights regarding Current’s motivating purpose, its composition and GE’s outlook as it seeks to develop the new business unit.
According to Fortune’s report, ¨Current’s customers include Walgreens, Simon Property Group, Hilton Worldwide, JPMorgan Chase, Hospital Corporation of America (HCA) and Intel. So far they are saving between 10% and 20% of their electricity bills.
¨Current aims to achieve $5 billion in revenue by 2020 and has roughly $500 million in financing available for customers, although Comstock implied that number could increase. ‘We are going to scale pretty quickly,’” Comstock said.