Worldwide PV Equipment Market Squeeze Continues

After declining in the first quarter to its lowest level since the start of the data program, second quarter worldwide completed orders actually increased slightly, up two percent quarter-on-quarter. However, the reported billings of $706 million were only 35 percent of the billings reported in the same quarter a year ago.

Excluding a one-time large order reported in the previous quarter, worldwide bookings declined again, this time 20 percent for the quarter to $235 million, reaching their lowest level since the first quarter of 2010. At 0.33, the book-to-bill ratio stayed below parity for the fifth consecutive quarter.

"It's still bad news, the 7^th inning of the downturn," says Aaron Chew, senior alternative energy / solar power analyst at Maxim Group LLC in New York.  He agreed with SEMI's conclusion that the extremely challenging environment for PV equipment suppliers worldwide is likely to persist due to low booking activities from PV manufacturers, coupled with no near-term signs of recovery. "I see no turnaround in demand for equipment guys for the rest of the year, at least until mid-2013," he said.

Further depressing the outlook for PV equipment manufacturers, he said, is the emergence of a big secondary market for equipment.  "All of the companies that failed are being shut down and liquidated. About 40 cell and wafer companies shut down in China. Their equipment is getting auctioned off at 50 cents on the dollar, so guys like Yingli can ramp up for half the cost.  The bad news for equipment guys temporarily is that they have to compete with that," Chew said.

With huge overcapacity since March 2011, PV prices have dropped approximately 65% in the last year, reducing manufacturers' margins.  But the dour pricing situation could quite likely become the market's salvation, Chew said. "It's a bad time in solar because no one is making any money, but the flip side is that it makes solar more and more competitive with fossil fuels, and demand is fine," he said. "We never thought about solar in markets that are now becoming mainstream, like Chile, Japan, and China. Germany and Italy will feel the pain in shifting from subsidized to unsubsidized markets, but the slack will be picked up by China, Japan and even the US."

As a result, he expects the global solar industry to supply approximately 30 GW of demand this year, 50 GW in 2 to 3 years and 100 GW by the end of the decade. Responding to such increases in demand will require new manufacturing equipment.

"It sounds crazy today because there is such overcapacity weighing on solar, but by mid-2013, a new investment cycle may be starting. I think people may be surprised by the end of next year when we could be at 40GW of demand, and people will need to reinvest in equipment," Chew said.

SEMI's worldwide PV equipment billings and bookings data is gathered jointly with the German Engineering Federation (VDMA) from about 50 global equipment companies that provide primary data on a quarterly basis. 

Lead image: Money squeeze via Shutterstock

20 Sep, 2012

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Studies Cite Increased Demand for Wind Power, Other Renewables

According to the Global Consumer Wind Study 2012 (GCWS), the desire for more renewable energy options was voiced by 85 percent of survey respondents, with 49 percent saying they'd have no problem digging deeper into their pockets to support companies committed to renewable energy in the product manufacturing process. Even more encouraging, those numbers spiked considerably when consumers were asked specifically about wind power, with 62 percent indicating that if given a choice, they would consciously choose to buy products manufactured using wind over traditional forms of power generation.

These statistics bode well for the efforts of WindMade, a nonprofit whose primary function is the identification of companies and products that rely on wind power for at least 25 percent of their overall electricity generation. The organization's ultimate goal is not only to give eco-conscious consumers the information necessary to vote with their wallets, but also to generate interest for an industry whose potential still vastly exceeds its demand.

"One of the important challenges the [wind power] industry is facing in many markets around the world is public acceptance," writes Angelika Pullen, Communications Director for WindMade. "Our objective is to help address this problem by creating a tool for that majority of the public that is supportive of wind power, to identify and favor those brands and companies that are using wind energy." 

But public acceptance is one thing — actual corporate espousal of renewable energy is another. And in an era where social and ecological consciousness ranks high in the area of mass appeal, new evidence has come to light that tells us not all private companies are riding the aforementioned fence over whether to pursue renewable alternatives. An increasing number are leading the charge, as evidenced by the second of the two studies, the Corporate Renewable Energy Index Report 2012 (CREX).

According to the results of the report, global corporate investment in renewables has surpassed investment for fossil fuel generation by a significant margin. In 2011, corporations around the globe spent $237 billion investing in renewable energy, eclipsing the $223 billion spent chasing fossil fuel power generation. The CREX is an index that ranks companies by their level of investment in renewable energies. The report also found that 40 percent of renewable energy purchases made in 2011 were made by companies for the purpose of on-site power generation, showing a marked increase from previous years.

The GCWS survey was conducted by TNS Gallup, and the CREX report was prepared by Bloomberg New Energy Finance.

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20 Sep, 2012

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Blackstone to Buy Vivint for $2B and Support Its Expansion in Solar and Beyond

When the deal closes, which should come before the end of the year, it will give Blackstone control over 50 percent of the company, reported the New York Times. The rest of the company is owned by the management, according to Reuters.

Vivint built its reputation as one of the country's largest residential security service provider in the country. It then added the sales of equipment and services for homeowners to automate and control their thermostats, lighting and small appliances remotely. The company entered the solar business last year and in October announced a $75 million fund from U.S. Bankcorp to finance residential solar installations and sell leases to homeowners. Instead of paying for the equipment and labor of installing a solar energy system upfront, Vivint's customers pay a monthly fee over 20 years. This financing model has become popular not only because it removes the high upfront cost, but it also is supposed to lead to lower monthly utility bills.

Founded in 1999 as Apax Alarm Security Solutions, the company changed its name to Vivint last year to reflect its ambition to move beyond the home security market, Vivint's co-founder and CEO, Todd Pedersen, told me last year. The company's name is a mesh of "Vive," or "to live," and "intelligent."

Pedersen said back then that Vivint became a big home automation company because it figured out how to market and install equipment efficiently. He believed the same strategy will work just as well in the solar business. He was so confident that he predicted Vivint would become the largest residential solar company in the U.S. this year.

Having Blackstone as an investor should help Pedersen realize his vision. Blackstone apparently outbid two other private equity groups to win the deal to buy the majority stake in Vivint. Vivint is counting on a significant financial support from Blackstone that will enable the company to develop "innovative new technologies, products and services designed to expand the company's influence beyond the home environment into the automobile, the workplace, areas of recreation and other core spheres of human activity." This may indicate that Vivint is eyeing other energy management services, including perhaps electric car charging, which could be centralized and remotely controlled by Vivint and its customers.

Blackstone's interest in Vivint reflects this investor sentiment that the retail service segment of the solar market is so much more attractive than the manufacturing sector, which has seen many factory closures and bankruptcies.  The market has experienced an oversupply of solar panels since the start of 2011, and that has benefited installers and their investors as well as consumers. Prices for solar panel systems owned by investors rather than consumers have dropped in California, for example, though that decline doesn't necessarily mean homeowners also are paying lower monthly fees on their leases. 

19 Sep, 2012

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Siemens to Cut 615 US Wind Energy Jobs as New Orders Dry Up

"The industry is facing a significant drop in new orders, and this has an unfortunate consequence on employment in this segment of the power industry," Munich-based Siemens said today in a message to employees that was obtained by Bloomberg.

The cuts account for more than a third of the workforce that Siemens has built up in its U.S. wind-energy business, an operation that helped the company to national prominence after President Barack Obama visited a facility in Iowa in 2010. Siemens said that it has invested $100 million to establish its U.S. wind-power subsidiary over the past 5 years.

The reductions are a setback for Loescher's attempt at bolstering the company's portfolio of so-called green products that are environmentally friendly. Siemens is in the process of realigning its business after having to curtail its earnings forecast twice this year, and the company will present the results of its revamp to management next month.

Copyright 2012 Bloomberg

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19 Sep, 2012

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Is the EU Abandoning Biofuels?

At present, biofuels represent 4.5% of the EU's transportation fuel consumption, with essentially all of this coming from food crops – so, essentially, food crop-based fuels would be capped at not much above existing levels – not much room for growth.

Long-time coming or new trend? Threat or opportunity? Those are the questions being asked around the EU today — and across the globe amongst EU trading partners and fuel developers.

Here are the knowns and unknowns. The questions come down to five.

1. Will this proposal become law?

We believe this is a "yes", but with modifications to carefully define crop-based feedstock. After all, you can eat algae – and petroleum comes, ultimately, from food-based feedstocks, just produced over millions of years instead of minutes or seconds. Simply banning any fuel made in any way related to a crop, or biomass that can be grown as a crop, could lead to a ban on all transportation fuels, including natural gas-fuel vehicles or electric cars powered by coal, gas-based power. The devil is in the detail, as Mies van den Rohe was wont to observe.

2. What is the impact on EU biofuels targets, pegged by statute at 10 percent by 2020?

The targets are law, and law as hard to unwind as it is to pass in the first place. We think the targets will not be altered – but, rather, we'll see fuzzy math employed. There's already a proposal to quadruple count algae-based biofuels. That means you could meet the EU 2020 target with half the fuel produced today, if algae was employed as a feedstock. Future shortfalls will simply be addressed by amping up the bonus on advanced biofuels. Quintuple, sextuple counting? It could start to look at 1923-style German inflation before it is all over.

3. What's the impact for advanced biofuels, utilizing non-food feedstocks?

First of all, let's refer to #2 – depends on the extent to which the EU doubles, triples, or quadruples the value of advanced biofuels – and the extent to which the EU will tolerate non-food feedstocks grown, for example, on the same land once used for food-crops.

At some stage, someone might take the point of view that replacing an acre of, for example, 160-bushel per acre of corn, which would provide nearly 500 gallons of fuel and 1.3 tons of animal feed with a 40 bushel per acre non-food crop, which provides 120 gallons of fuel and some inedible lignin, is not exactly the goal of policy.

Long-term, algae looms as a major beneficiary, if hybid systems as developed by the likes of BioProcess Algae make the grade – or solar fuels of the type produced by Joule. In the nearer term, highyield energy crops that can be grown on marginal land – that is, not currently in production (i.e. made marginal by food crop economics, not by the ability of the land to support agriculture) – well, the impact could be material.

One other matter we will hope to discover – the extent to which aviation biofuels – not just road transport – will count in the overall calculations.

At Raymond James, energy analyst Pavel Molchanov writes, "There is no question that the new policy would meaningfully support adoption of energy crops. This can be segmented into two separate trends. First, we would expect to see actual cultivation of energy crops in EU members with large agricultural sectors (such as France and Poland). Second, in countries where population density or other factors result in small agricultural sectors, imports of energy crops (from, say, Brazil or North America) would be the realistic solution."

4. What's the impact for food crops?

It's not all bad – look for a shift from biofuels to higher-value biobased products and renewable chemicals, which are generally unsubsidized and un-mandated anyway, and offer good returns on investment for selected crops, such as maize.

5. What's the impact for biofuels producers and their existing plants?

To the extent that they can support different feedstocks, such as renewable sugars made from waste, or waste-based fats, oils and greases, not much of a change. For others, look for bolt-on technologies like we see with corn ethanol plants in the uS, that foster a switch from producing fuel ethanol to the production of isobutanol or n-butanol for the chemicals markets.

The bottom line.

It won't be business as usual – far from it – but the technologies and feedstock options have been sufficiently advanced over the past 5 years that the impact will be far from dire. It's payback time for all the far-sighted developers that fostered alternative technologies and feedstocks.

This article was originally published on Biofuels Digest and was republished with permission.

Lead image: Biofuels via Shutterstock

19 Sep, 2012

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Mining for Energy Efficiency Opportunities in NYC Buildings

If markets thrive on information, then New York City recently unlocked a gold mine for the energy efficiency industry.

The city became the first in the US to make public how well (or poorly) each large, private building within its borders performs when it comes to energy and water use. A city website displays information about 2,065 large commercial properties, encompassing 530 million square feet.

Building owners were required by law to participate in the program, part of Mayor Michael Bloomberg's 'PlaNYC' goal to reduce carbon dioxide emissions 30 percent by 2030.

 "I know data isn't always exciting, but the takeaway here is that a city even as large and sophisticated as New York knows almost nothing about its privately owned buildings and how those privately owned buildings use energy," said Andrew Burr, director of building energy performance policy at the Institute for Market Transformation, a non-profit working with New York and several other cities on green building plans.

The evaluation painted a sometimes surprising picture of New York (mostly Manhattan). For example, New York has more energy efficient buildings than the nation as a whole. Its newer buildings tend to use more energy than older structures. Larger office buildings are often more energy intensive than smaller ones. And neighborhoods with less efficient buildings tend to have higher asthma rates.

Found here, the information is valuable to building owners, government, real estate buyers and energy efficiency service companies.

Using the data, building owners are able to see how much energy – and money – they waste and take corrective action. City government gains a better understanding of programs and policies that will help improve buildings. Those buying or leasing real estate gain a more clear picture of the value a building. And energy efficiency companies, consultants, and energy technology providers have an opportunity to see where specific opportunities lie.

For building owners, participation was relatively painless, according to Burr. In a process that took 5 to 15 hours, depending on the complexity of the structure, owners gathered information on utility bills, building specs and other data and ran it through the Environmental Protection Agency's Energy Star Portfolio Manager, a tool to track and assess a building's performance for energy and water use.

New York City already had disclosed similar information for its 2,657 municipal buildings, which total 273 million square feet. All large buildings in the city will participate annually in the benchmarking exercise. Large residential buildings are slated to report next fall.

"New York has just taken a giant leap for transparency: this is the largest publication ever of metered energy performance data from buildings in a single city," said Cliff Majersik, IMT's executive director. "Markets need information to function, and this will let New Yorkers know how much energy the buildings around them are using. It will allow them to get crucial real-estate information that hasn't been available until now."

Elisa Wood is a long-time energy writer. Subscribe to her free energy efficiency newsletter at RealEnergyWriters.com.

Lead image: Manhattan buildings via Shutterstock

19 Sep, 2012

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China Solar Manufacturer LDK Looks for Buyer

There are quite a few developments on the solar energy front today, led by the release of new financial results from LDK (NYSE: LDK), the weakest of China's major solar panel makers, that show a company in the midst of a meltdown. Meantime, Beijing has officially protested a US law that allows Washington to levy punitive tariffs against overseas industries that receive unfair state support, such as China's solar sector. Both the US and Europe believe China supports its solar sector with unfair subsidies and have taken various punitive actions; and now India is also launching its own similar investigation, dealing yet another blow to the struggling sector.

Let's start with the LDK results, which show a company teetering on the brink of collapse as it deals with the worst-ever downturn for the young solar panel sector. Not surprisingly, LDK has filed its second-quarter results just 2 weeks before the US-mandated deadline of the end of September, as it attempts to avoid greater attention to its poor performance. Also not surprisingly, the results were quite ugly, with revenue falling by half from the previous year as LDK's loss ballooned to a massive $254 million. (results announcement)

The company's shares fell by a relatively modest 3 percent after the news came out, reflecting the reality that investors have heard so much bad news already that this latest downbeat report is really nothing special. One of my sources tells me LDK has actually hired investment bank Morgan Stanley (NYSE: MS) to try and sell the company to one of China's big state-owned enterprises.

I wouldn't be surprised if this was true, as LDK is clearly in big trouble and would never be able to attract any private sector buyers. Regardless of the situation, we can probably expect to see some spectacular fireworks from LDK by the end of the year, as the company either collapses or gets bought by an unlucky state-run company under pressure from Beijing or the provincial government of Jiangxi, where LDK is based.

Moving on to the bigger news, China has announced it is lodging an official protest with the World Trade Organization (WTO) over a US law that allows Washington to take punitive actions against overseas industries that receive unfair support from their local governments. (English article) China's protest isn't aimed at a specific industry, and indeed the US has used the law to levy punitive tariffs against several Chinese products over the last year. But clearly solar panels are one of the main targets of this new WTO protest by Beijing, after the US earlier this year said it will levy big punitive tariffs on Chinese solar panels that now account for more than half of the world's supply.

While the US has already determined that Chinese solar panel makers receive unfair state support, the European Union also announced last month it is launching a similar probe. (previous post) And now it seems that India will launch its own probe over the matter, dealing yet another setback to the embattled sector. (English article) I'll repeat my advice to Beijing once again by saying that rather than repeatedly protesting the accusations by foreign governments, China needs to finally admit that perhaps some of the complaints are legitimate and then find ways to address the concerns.

Bottom line: LDK's latest earnings report shows a company on the brink of meltdown, while Beijing's latest trade complaint shows it is still in denial about its unfair subsidies to the country's solar sector.

19 Sep, 2012

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PV Firms and Utilities Eye Residential Storage

"When we take the literal definition of grid parity for PV, nothing is going to change,' he says. 'No customer looks at PV and calculates the levelised cost of energy - the average customer couldn't do that."

The next bit, though, is where it gets interesting. While residents may not register when 'both points are equal', they will spot when the cost of grid electricity overhauls their revenue from feed-in tariffs (FiTs). "When we reach that point, the timing for storage will be right," says Bhamre. And, in his view, we could be fairly close. By 2014-2015, a "considerable market" will be building up, he says.

EuPD Research's forecasts rest on a model for residential PV's development in which the sector undergoes a comprehensive transformation to enter a new era: PV 2.0, in the firm's terminology.

According to EuPD, residential PV in Europe has already witnessed two cycles of growth within the "PV 1.0" era. In the first cycle, the sector was propelled by 'environmental idealists', who can take credit for kickstarting installations in 2007 and 2008. In the second cycle, "straight-edge investors" became the engine of growth. Drawn to the sector purely by attractive returns from FiTs, these have driven surging new capacity over the last few years.

Now, as PV's appeal to investors wanes in line with sliding FiTs, the cost of its electricity is also poised to drop, ushering in the third cycle: "Green electricity generation in an open market".

In this "post-grid parity" market, EuPD expects the essential structure of PV systems to be transformed. At the peak of the second growth cycle, residential PV systems tended to feed all their power into the grid. In Germany, though, 90 percent of new systems are already engineered for self-consumption. From now on, existing and new systems are likely to feature storage.

"It makes sense," says Bhamre. "It's about saving electricity costs rather than making money with a FiT. If, with hypothetical numbers, for each unit you feed to the grid you receive €0.20 but to buy one unit from the grid you pay €0.25, you'd rather use the electricity you have on top of your house."

A desire for autonomy and a sense of environmental responsibility emerge from surveys as other factors that will speed development, in Germany at least. "People will go for storage even if it's a little more expensive," says Bhamre.

Exploring Storage

The commercial world is clearly thinking along similar lines. Storage has provided the dominant theme at a number of major renewable energy trade shows in 2012.

Phono Solar Technology Co, a Chinese state-owned solar panel maker, recently showcased its Enercube for residential energy storage and management. With a storage capacity ranging from 6.4 kWh to 9 kWh, it features an energy management system to help households alter consumption as well as "time shift" their demand.

Several other PV players have announced initiatives to enter storage. For PV manufacturers, in fact, the plunge in panel prices raises interest in downstream technology such as storage. Trina Solar's announcement of a collaboration with Germany's E3/DC - a supplier of car charge and home storage systems - stressed that the project would strengthen the company's position as "provider of solar energy solutions".

Lithium-ion based storage solutions are set to emerge from Trina's tie-up from mid-2013. Initially targeted at early adopters in Germany and Switzerland, the storage solutions would be marketed independently from PV.

Hanwha SolarOne aims to be on the market earlier with a bundled product developed with Silent Power, a U.S.-based specialist in distributed energy storage systems for the renewable energy and backup power markets.

Under a partnership announced on 9 July 2012, Korea's Hanwha Group has invested $8 million in Silent Power. A co-marketing strategy will feature the storage specialist's OnDemand Energy Appliance, a "battery-agnostic" device - suited for lithium-ion, sealed lead-acid and advanced lead-acid battery packs - that can store excess energy produced during times of peak production.

Not that battery makers need solar firms to point out the opportunity. In recent weeks, Panasonic has already targeted German homes with long-life lithium-ion battery systems that could plug the looming gap between FiTs and grid power. The 1.35 kWh module has an estimated lifetime of 5000 load cycles at 80 percent depth of discharge (DOD).

Panasonic had earlier partnered with German firms to develop the E3/DC power management and storage system, which went on sale this year. The system has a usable capacity of 4.05 - 8.10 kWh and a maximum power output of 4 kW, suited to the needs of an average German household.

Under the Franco-German Sol-Ion research project, scientists at Baden-Württemberg's Center for Solar Energy and Hydrogen Research (ZSW) in Stuttgart have also been testing a storage system about the size of a standard household freezer over six months.

The Sol-Ion contains the power inverters needed for the solar array as well as a battery charge rectifier, both with a nominal output of 5 kW. Lithium-ion batteries with a capacity of 6 kWh provided the centerpiece for the system, which was fed by a 5.1 kW array.

Outside Europe, Japan has provided another test bed for solar storage systems. A system from Kyocera integrates solar panels, an inverter and monitoring software with lithium-ion storage and inverter from Nichicon Corp. A 7.1 kWh battery unit weighing about 200 kg features lithium-ion cells from Samsung.

Getting to Market

Pilot projects and early installations suggest that PV storage systems can indeed work as planned. A case study from EuPD Research concludes that a German family of four with a 5 kW system could raise the proportion of their needs served by their PV panels from 25 percent up to 58 percent by integrating a 5 kWh battery in the system.

Yet costs remain prohibitive. Ben Hill, president of Trina Solar Europe, estimates that the cost of adding storage to a residential PV installation could near $10,000, doubling the cost of the system. His estimates chime with EuPD estimates for prices of about €9500 for a 9 kWh lead-acid battery system or €13,000 for an equivalent system based on lithium-ion batteries - prices for either route that far outweigh any savings on grid electricity.

19 Sep, 2012

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19 Companies Urge Congress To Extend Wind Tax Credit

The diverse coalition of firms, which includes Ben & Jerry's, Johnson & Johnson, Levi Strauss, Starbucks, and Yahoo!, says that raising taxes on the wind sector would be bad for businesses that buy large amounts of wind electricity.

These companies join a very large bi-partisan chorus of renewable energy supporters asking Congress to give the wind industry some certainty and put the sector on a level tax playing field with the oil and gas industry, which enjoys billions of dollars in permanent tax benefits.

Over the last year, the National Governor's Association, County Commissioners, and numerous Republican politicians have all sent separate letters to Congressional leaders in support of extending federal wind tax credits for at least another year. Now this latest group of prominent companies is playing up another theme: Ending support for wind isn't just bad for the wind industry, it's bad for downstream non-utility companies that procure energy from wind:

As major U.S. employers and some of the largest non-utility purchasers of renewable energy, we urge you to extend the Production Tax Credit (PTC) for wind energy before the end of the 112th Congress. A failure to pass an extension will amount to levying a tax on companies committed to buying American energy and growing the U.S. economy. In today's economic climate, a taxhike on American businesses buying American renewable energy is unwarranted.

In the past decade American businesses have significantly ramped up their purchase of American wind energy. For consumers of wind electricity, the economic benefits of the PTC are tremendous. Electricity rates, which reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market. Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks. We are concerned that allowing the PTC to expire will immediately raise prices for the renewable electricity we buy today.

The PTC has enabled the industry to slash wind energy costs – 90% since 1980 – a big reason why companies like ours are buying increasing amounts of renewable energy. Wind now supplies over 3% of US demand and accounts for 35% of new power capacity installed in the last four years. In the seven years that the PTC has been continuously in place, installed wind capacity has grown sevenfold to nearly 47 Gigawatts representing more than $79 billion in private investment.

As Congress investigates ways to spur business growth, we urge you to ensure an extension of the PTC. Failure to extend the PTC for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy and hurt our bottom lines at a time when the economy is struggling to recover. Extending the PTC lowers prices for all consumers, keeps America competitive in a global marketplace and creates homegrown American jobs.

These 19 leading companies are part of the Business for Innovative Climate & Energy Policy (BICEP), a project from the sustainability advocacy group Ceres. They say that failure to extend the wind credit will add new costs to businesses throughout the economy. Interestingly, far-right conservative groups aggressively opposed to raising taxes are the only ones coming out in opposition to the wind tax credit.

Over last five years, wind has brought $20 billion of annual private investment to the U.S., according to the American Wind Energy Association (AWEA). There are now 75,000 jobs across the country in wind manufacturing, operations, maintenance and education. However, a report from Navigant Consulting prepared for AWEA concludes that failure to extend the wind tax credit could result in up to 37,000 job losses in the coming year.

This article was originally published on Climate Progress and was republished with permission.

Lead image: Wind turbine in clouds via Shutterstock

19 Sep, 2012

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Incremental Advances in Wave Power Technology Not Enough to Temper OPT Q1 Losses

"We're still at the point where the car industry was of not knowing whether the engine should be at the front or the back," quips Christopher Barry, chair of the Ocean Energy Technical and Research panel at the Society of Naval Architects and Marine Engineers. "At least a dozen companies are looking into [wave power]…with at least half a dozen main ideas for getting the energy out that are distinctly different and many variants on those themes.  There are lots of opportunities and we don't know which will be the winner." 

In contrast, he notes, turbine technology being used for tidal power installations is well developed, with just some tweaking being done around the edges, such as creating floating versions.  "Wave is quite a distance back from that," he says.  Indeed, tidal installations are beginning to deliver power to grids, such as Ocean Renewable Power Company's (ORPC) Eastport, Maine deployment on September 13.

The lack of technological maturity hampers even the leaders in wave power, like Ocean Power Technologies, Inc. (Nasdaq: OPTT).  Despite some notable project advances and a 38% decrease in product development costs in its fiscal 2013 first quarter ended July 31, 2012, OPT reported Friday a net loss of $4.4 million. The loss was smaller than last year's first-quarter loss of $5 million.

But even in the face of continued losses, both Barry and Dr. Paul Jacobson, water power program manager at the Electric Power Research Institute, agree that OPT is the leader in wave power. "In terms of wave power in the US, [OPT] are out in front of everyone else," says Jacobson.

Specifically, says Barry, OPT is the leader in  "donut on a stick" technology that uses a "latching" technique to maximize the technology's ability to generate electricity.  "Latching is being widely studied, but [OPT] are probably the only folks commercializing latching technology," Barry said, adding "whether the donut on the stick technology is the right thing to do is not yet certain."

OPT's chosen technology is not the most efficient, he says, extracting only slightly more than 50% of the wave's total energy because it captures only the up-and-down motion, but he acknowledges that robustness in the ocean environment could ultimately trump higher efficiencies.

In the meantime, the U.S. Federal Energy Regulatory Commission awarded OPT the first license to build a grid-connected wave power station in the U.S. The 1.5-megawatt power station off Reedsport, Oregon will be based on OPT's 150-kw PowerBuoy (PB150), which is in final assembly and inland testing. OPT expects the PB150 will be ready for deployment in early October, with actual deployment dependent on weather conditions.  Following the Reedsport wave park, OPT says it intends to build up to 100 MW in Oregon. "It's just a matter of scaling up. They will be gathering information as this first phase is deployed in order to support expansion," says Jacobson.

OPT said its decline in product development costs was due primarily to the deployment of the PB150 off the coast of Scotland in 2011, and lower costs related to the Reedsport PB150 as it nears completion and deployment.  The firm also says it is undertaking "other initiatives" to reduce the costs associated with wave power – in particular, the Reedsport buoy's new direct-drive power take-off system that will have lower maintenance costs that the previous hydraulic PTO.

The quarter also brought an agreement with Lockheed Martin to develop a 19-megawatt wave energy project off Portland, Victoria, Australia and a Cooperative Research and Development Agreement with the U.S. Department of Homeland Security to demonstrate the use of its Autonomous PowerBuoy for ocean surveillance. In Australia, the two firms are focusing on permitting activity and getting the financing necessary to secure a previously announced A$66.5 million (US$69.5 million) grant from the Commonwealth.

Barry said it is still not clear which business model OPT intends to adopt.  "Will OPT be a technology developer, build devices and lease them, or sell them to PG&E?  We don't know," he said. 

19 Sep, 2012

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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/incremental-advances-in-wave-power-technology-not-enough-to-temper-opt-q1-losses?cmpid=rss
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