Ocean Winds and Aker to invest in Scottish renewable energy supply chain

Ocean Winds and Aker Offshore Wind have announced an early investment package of $310m to support the renewable energy supply chain in Scotland. The package is part of their joint bids for the ScotWind offshore leasing process and aims to strengthen Scotland’s power supply chain ahead of the emergence of floating offshore wind farms in the country’s deep waters.

In September 2021, Ocean Winds and Aker Offshore Wind submitted proposals to build three offshore wind facilities in the Outer Moray Firth with 6GW capacity and an investment of up to $19.8bn (£15bn) for all three sites. Each of their proposal is expected to generate more than 5,000 jobs and 200 apprenticeships in Scotland across all project stages.

The companies’ investment package also covers benchmark, feasibility and implementation studies with selected fabricators seeking to set up or upgrade facilities in the country, which would deliver facilities for the fabrication and assembly of floating platforms.

“Building on our 180-year industrial heritage, we know early investment is needed if we want Scottish capability to be built ahead of the project execution phase when globally competitive tenders are sought,” said Aker Offshore Wind UK managing director Sian Lloyd-Rees.

Rubis to acquire stake in French solar energy firm Photosol for $422m

Energy operator Rubis is all set to acquire an 80% stake in French renewable energy developer Photosol for a cash consideration of $422m (€376m). The remaining 20% stake in the company will be held by Photosol’s founders and managers, who will support the future growth and developments of the business.

The fully debt-financed deal is expected to close in the first quarter of this year, and the acquisition will help Rubis fast-track its transition efforts towards renewable energies and decarbonation.

The company has also announced the creation of a new division called Rubis Renewables, through which it aims to deliver over 1GW of installed capacity by 2025 and expects to own and operate at least 2.5GW by the end of 2030. Rubis Renewables is expected to add $28m (€25m) to Rubis’ EBITDA next year, with a growth expected to be around 40% per annum during 2022-2025.

“Photosol management has developed organically one of the largest independent solar energy companies in France and has an excellent reputation in the market," said Rubis managing partner Jacques Riou. "Following this acquisition, Rubis will maintain solid financial structure and continue with its shareholder friendly dividend policy, while investing in organic and external growth opportunities.”

Cognitive, RWE and ORE Catapult to develop Wind AI technology

Spain-based AI company Cognitive has partnered with Offshore Renewable Energy (ORE) Catapult and RWE to expedite the commercialisation of its Wind AI technology, which aims to improve the performance of wind turbine monitoring.

As Cognitive applied AI co-founder and director Christopher Fraser put it: “Wind AI does not use wind speed measurement as an input.

“Instead, it ‘learns’ the performance of each turbine against every other turbine under every conceivable set of conditions, and then uses that information to create algorithms to accurately determine the predicted and actual performance of each turbine at any given moment, thus highlighting any that are underperforming.”

Cognitive’s Wind AI solution has the potential to identify performance degradation with a likelihood of error of less than 1%. According to a cost analysis by Catapult, Wind AI has the capability to minimise the levelised cost of energy, while ORE Catapult noted that the system can reduce the frequency of corrective maintenance by 5%.

In June 2021, UK Export Finance and ORE Catapult entered a partnership to promote the knowledge and capabilities of offshore wind companies in overseas markets.

NuScale Power signs merger agreement with Spring Valley

Nuclear energy company NuScale Power has signed a definitive merger agreement with Spring Valley Acquisition to create a new energy company, the NuScale Power Corporation, which boasts an enterprise value of almost $1.9bn.

Owned by US-based engineering and construction firm Fluor, NuScale offers advanced nuclear power via its NuScale Power Module (NPM), which can generate 77Mwe of electricity. The deal is expected to provide NuScale with $413m in gross proceeds, and includes a private investment in public equity of around $181m from investors including Samsung C&T Corporatio and DS Private Equity.

NuScale will use the proceeds to commercialise its NPM solution and said it does not expect any additional capital requirements between the deal’s closing and achieving positive free cash flow. The deal is expected to close in the first half of this year, subject to customary closing conditions, including approval from Spring Valley shareholders.

“Spring Valley will be a highly complementary strategic partner for NuScale as we enter this next phase of growth, with leadership that brings deep expertise in sustainable energy and a strong operating and investment record in the energy sector, including in nuclear power,” said NuScale president and CEO John Hopkins.

Record EU carbon price continues to rise, diminishing fossil fuel profits

As the cost of EU carbon credits pushes past $101.78 (€90) per tonne for the first time, heavy polluters are looking to the difficult months ahead. If current price trends continue, carbon prices may exceed $113.09 (€100) per tonne before the end of the year. Analysts have said that this remains possible, but unlikely.

Carbon costs on the EU Emissions Trading Scheme (ETS) have risen to more than 150% of their price at the start of November. Since the start of 2021, prices have risen to 250% of their starting price. The EU ETS entered its fourth phase this year, which means fewer free carbon allowances and higher carbon costs for polluters.

Current prices sit significantly above the International Monetary Fund’s recommended global carbon price of $75/tonne (€66/tonne). However, economists polled by Reuters recently indicated that achieving net-zero emissions by 2050 would require a $100/tonne (€88/tonne) carbon price in the immediate future.

The price also reflects the increased demand for energy as Europe enters winter. The continued high price of gas has discouraged gas power plants from meeting this demand, in turn leaving space for more polluting plants such as coal. These require more licenses to operate, further driving prices up.

Engie secures financing for 434MW wind complex in Brazil

Brazilian utility company Engie Brasil Energia has signed a $264m (R$1.47bn) financing agreement with Banco Nacional de Desenvolvimento Econômico e Social (BNDES) for the first phase of the 434MW Santo Agostinho Wind Complex in Brazil.

The wind complex is being developed in the municipalities of Lajes and Pedro Avelino, located almost 120km from Rio Grande do Norte’s state capital city, Natal. Siemens Gamesa will deliver 70 of its turbines for the project, each boasting a capacity of 6.2MW, distributing them across 14 wind farms at the complex.

As of the baseline month of last December, the project’s first phase is estimated to require $401.7m (R$2.3bn), with the financing that BNDES has agreed to provide covering almost 64% of the project’s total investment cost.

Engie said that the project has the potential to create more than 1,000 jobs in the region, with 800 people already recruited and engaged in civil construction activities, component installation and other works. The project is intended to further strengthen Engie’s footprint in Brazil while supporting its growth strategy.

“Right now, the growth of electric energy, especially from renewable sources, is critical to the future of Brazil,” said Engie Brasil Energia chief executive and investor relations officer Eduardo Sattamini. “The feasibility of this financing is the result of a collective effort.

Trafigura to build hydrogen facility at Port Pirie in Australia

The South Australian Government has partnered with physical commodity trading group Trafigura to build a $535m (A$750m) hydrogen project, which will be integrated with the Nyrstar Port Pirie smelter.

Both parties have agreed to provide $1.8m (A$2.5m) for the front-end engineering design to expedite the investments and jobs that the project will create at Port Pirie. The hydrogen project’s first phase will see the development of an 85MW electrolyser facility, which will produce hydrogen and oxygen by splitting water using clean electricity.

The project’s second phase would involve the creation of a 440MW electrolyser, which would supply enough oxygen to meet all the smelter’s needs.

“This A$750m project is part of the ongoing transformation of South Australia into a producer of green hydrogen of global significance based on our outstanding renewable energy resources,” said South Australia Premier Steven Marshall.

“Projects like Trafigura’s, with the support of the South Australian and federal governments, will help South Australia achieve net 500% renewable energy compared to current grid demand by 2050."