QUICK NEWS, November 28: CHINA Q3 WIND FINANCIALS BLEAK; SOLAR PRICES CONTINUE TO FALL; CAPE WIND PPA APPROVED

CHINA Q3 WIND FINANCIALS BLEAK Sinovel, Goldwind Forecast ‘Arduous’ 2013 as Turbine Sales Drop

November 19, 2012 (Bloomberg BusinessWeek)

“Sinovel Wind Group Co. (601558) and Xinjiang Goldwind Science & Technology Co. (002202), China’s biggest makers of wind turbines, forecast a difficult 2013 after reporting a decline in sales in the third quarter…

“…[Sinovel foresees] grid constraints, slowing growth and [a challenging] economic environment…Goldwind also predicts tough market conditions…The two companies, which together account for a quarter of China’s wind market, have posted losses in the three months ended Sept. 30. Sinovel’s sales plunged 82 percent and Goldwind fell 42 percent.”

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“China, the biggest market for the companies, will for the first time post a 20 percent drop in annual installations to 16.4 gigawatts this year. It will add 16.3 gigawatts of wind farms in 2013, Bloomberg New Energy Finance said…

“Chinese regulators implemented a stricter approval process for on-land projects [especially those in the northern provinces] in 2011 as grids struggled to carry electricity generated from wind-energy installations. The nation had 10 billion kilowatt-hours of electricity from wind farms unused last year and the number may grow this year…”

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SOLAR PRICES CONTINUE TO FALL Costs Of Solar Energy Rapidly Declining Throughout U.S. Market

27 November 2012 (Solar Industry)

“The installed price of solar photovoltaic power systems in the U.S. fell substantially in 2011 and through the first half of 2012, according to the latest edition of Tracking the Sun, an annual PV cost-tracking report produced by the Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab)…The median installed price of residential and commercial PV systems completed in 2011 fell by roughly 11% to 14% from the year before, depending on system size. In California, prices fell by an additional 3% to 7% within the first six months of 2012.

“These recent installed price reductions are attributable, in large part, to dramatic reductions in PV module prices, which have been falling precipitously since 2008, according to Berkeley Lab…[N]on-module costs - such as installation labor, marketing, overhead, inverters and the balance of system - have also fallen significantly over time…”

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“…[A]verage non-module costs for residential and commercial systems declined by roughly 30% from 1998 to 2011, but they have not declined as rapidly as module prices in recent years. As a result, non-module costs now represent a sizable fraction of the installed price of PV systems, and continued deep reduction in the price of PV will require concerted emphasis on lowering…[non-module] soft costs…[M]edian installed price of PV systems installed in 2011 was $6.10/W for residential and small commercial systems smaller than 10 kW in size and was $4.90/W for larger commercial systems of 100 kW or more in size…

“Utility-sector PV systems larger than 2,000 kW in size averaged $3.40/W in 2011…[T]he authors suggest that PV prices in the U.S. may be driven lower through large-scale deployment programs…[O]ther factors are also important in achieving installed price reductions…The market for solar PV systems in the U.S. has grown rapidly over the past decade, as national, state and local governments offered various incentives…and accelerate cost reductions…”

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CAPE WIND PPA APPROVED Massachusetts DPU Approves Cape Wind's PPA With NSTAR

27 November 2012 (North American Windpower)

“Following an eight-month proceeding, the Massachusetts Department of Public Utilities (DPU) has approved the 15-year power purchase agreement (PPA) between NSTAR Electric Co. and Cape Wind Associates for the Cape Wind project, a 468 MW offshore wind project planned for Nantucket Sound…

“The DPU concluded that the benefits of the contract exceeded its costs…that the agreement provides adequate protections for ratepayers...[and] the contract will assist NSTAR and the commonwealth in complying with the state's renewable energy and greenhouse-gas emissions-reduction requirements, moderating the system peak load demand, enhancing the electric reliability in the state, and creating jobs.”

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“The agreement, which NSTAR and Cape Wind agreed to in February, is for NSTAR to purchase 27.5% of the output of the Cape Wind project. The contract sets the base price (for electricity, capacity and renewable energy attributes) at $0.187/kWh for 2013, rising 3.5% annually…[But] if the actual project costs, as verified by an independent audit, fall to such an extent that the developer’s rate of return on debt and equity exceeds 10.7%, the contract price of electricity will be reduced to give ratepayers 60% of the benefit of the lower costs…[and if] the actual project costs are higher than anticipated and reduce this rate of return, the developer would absorb those losses without impact on rates paid by consumers…

“The contract is expected to increase electricity customers’ bills by 1.3% to 1.4% for residential customers and by 1% to 2.1% for commercial and industrial customers. On average, the bill of a typical NSTAR residential customer using 500 kWh of electricity per month will increase by $1.16 per month…With the DPU's approval of this contract, the Cape Wind offshore wind project has secured contracts for 77.5% of its output. The DPU already approved a 15-year PPA for National Grid to buy 234 MW from the project…”

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