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Offshore Wind Installations on Track For Seventh Consecutive Record Year
By J. Matthew Roney
Offshore wind power installations are on track to hit a seventh consecutive annual record in 2013. Developers added 1,080 megawatts (MW) of generating capacity in the first half of the year, expanding the world total by 20 percent in just six months. Fifteen countries host some 6,500 MW of offshore wind capacity. Before the year is out, the world total should exceed 7,100 MW. Although still small compared with the roughly 300,000 MW of land-based wind power, offshore capacity is growing at close to 40 percent a year.
Graphic credit: Earth Policy Institute
In 1991, Denmark installed the world’s first offshore wind farm, a 5 MW project in the Baltic Sea. The country’s offshore wind sector has since alternated between lulls and bursts of activity. Since 2008, Denmark’s offshore wind capacity has more than tripled, topping 1,200 MW by mid-2013. More than 350 MW of offshore wind power were plugged into the grid in the first half of the year—all of it to complete the 400 MW Anholt project, which is expected to meet 4 percent of Danish electricity needs.
Denmark already gets more than 30 percent of its electricity from wind—onshore and offshore—and aims to increase that share to 50 percent by 2020. At about one third the size of New York State, Denmark has the world’s highest wind power capacity per square mile, so it will rely mostly on offshore expansion to hit the 2020 target.
Denmark was first to put wind turbines in the sea, but today it ranks a distant second to the UK in total offshore wind generating capacity. More than 500 MW of new offshore wind power went online in UK waters in the first half of 2013, bringing the country’s grand total to more than 3,400 MW—enough to power more than 2 million UK homes.
The bulk of this new offshore capacity went to completing the 630 MW first phase of the London Array, now the world’s largest offshore wind farm. It overtook another UK project, the 500 MW Greater Gabbard wind farm, which was finished in 2012. In all, the UK has some 12,000 MW of offshore wind capacity under construction or in earlier development stages.
Belgium’s offshore wind capacity grew 20 percent to 450 MW in the first half of 2013, placing it third in the world rankings. Germany reached 380 MW of offshore wind and will have at least 520 MW by year’s end. Beyond this, the German offshore industry expects another 1,000 MW will connect to the grid in both 2014 and 2015.
Countries in Asia are starting to make offshore wind power more than just a European affair. China, for example, brought its first offshore wind farm online in 2010. Since then, China has quickly climbed to fourth in the world, with 390 MW. The official goal is for 5,000 MW of wind capacity in Chinese waters by 2015, ballooning to 30,000 MW by 2020.
Graphic credit: Earth Policy Institute
In Japan, where land is at a premium and where the future of nuclear energy is in question, offshore wind is gaining attention as a potentially huge domestic, carbon-free power source. A 16 MW project inaugurated in the first half of 2013 bumped Japan’s offshore wind capacity to 41 MW.
Because Japan lacks much shallow seabed in which to fix standard offshore turbines, new floating turbine technology is likely the future for offshore wind there. Off the coast of Fukushima prefecture, a 2 MW floating turbine will begin generating electricity in November 2013, the first stage of a 16 MW demonstration project. If it performs well, the hope is to expand the project’s capacity to up to 1,000 MW by 2020.
Floating turbines may actually be a big part of future offshore wind development at the global level. Not only do they greatly expand the area available for wind farms, they also have the potential to dramatically reduce the cost of offshore wind generation, which today is more than twice as expensive as that from turbines on land. While offshore wind manufacturers have managed to achieve cost reductions for the turbines themselves—through lighter, stronger materials and increased efficiency, for example—these savings have thus far been offset by the rising cost of installing and maintaining turbines fixed to the seabed as projects move into deeper waters.
The renewable energy consultancy GL Garrad Hassan notes that working around harsh weather becomes much easier with floating turbines: when conditions are favorable, relatively cheap tugboats can bring a turbine to the project site for quick installation, avoiding the need for specialized installation vessels. The turbine can be floated back to shore when the time comes for maintenance, lowering both cost and risk.
The world is gaining experience in using this young technology. In the last few years, Norway’s Statoil and Seattle-based Principle Power have both deployed floating wind prototypes successfully, in Norwegian and Portuguese waters, respectively.
In June 2013, the U.S. at last joined the offshore wind club when a 20 kilowatt (0.02 MW) floating wind turbine anchored off the coast of Maine first sent electricity to the state’s power grid. The turbine developer, DeepCwind, a consortium led by the University of Maine, plans to deploy two much larger versions, 6 MW each, in 2016.
The first full-fledged offshore wind farm in the United States, though, will likely be of the traditional variety fixed to a foundation in the seabed. Three proposals—Massachusetts’ 470-MW Cape Wind project, Rhode Island’s 30 MW Block Island Wind Farm, and New Jersey’s 25 MW Fisherman’s Energy I project—are the closest to beginning construction.
U.S. offshore wind’s potential is staggering. According to the U.S. Department of Energy, shallow waters along the eastern seaboard could host 530,000 MW of wind power, capable of covering more than 40 percent of current U.S. electricity generation. Adding in deeper waters and the other U.S. coastal regions boosts the potential to more than 4.1 million MW.
This is consistent with the findings of a 2009 Harvard study that calculated wind energy potential worldwide. The authors estimated that in most of the world’s leading carbon dioxide-emitting countries, available wind resources could easily meet national electricity needs. In fact, offshore wind alone would be sufficient.
Clearly, the world has barely begun to realize its offshore potential. Indeed, in some countries, regulatory and policy uncertainty seem to be sapping offshore wind’s momentum just as it really gets going, clouding the picture for future development. The UK government, concerned about costs, recently changed its target date for 18,000 MW of offshore wind from 2020 to 2030. In Germany, turbine orders are scarce as developers await the new coalition government’s plans for regulations and incentives. And in China, offshore wind companies say the guaranteed price for the electricity they generate is set too low to stimulate rapid growth, calling into question whether the country can hit its ambitious goals for 2015 and 2020.
Reflecting the hazy outlook in these and other key countries, projections for global offshore wind capacity over the next decade or so—from research and consulting firms and from industry publications—range anywhere from 37,000 to 130,000 MW. Despite the impressive growth of recent years, it seems that the lower end of these forecasts is much more likely. We know there is practically no limit to the available resource. What remains to be seen is how quickly the world will harness it and give offshore wind power a more prominent place in the new energy economy.
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The huge surge this year in Amazon deforestation is leading some European countries to think twice about donations to the Amazon Fund. LeoFFreitas / Moment / Getty Images
By Sue Branford and Thais Borges
Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:
Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.
Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."
According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.
The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.
But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.
The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.
Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.
An Uncertain Future
The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.
Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.
There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.
Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).
Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.
One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).
Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."
Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.
The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.
The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."
Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.
Hydro / Halvor Molland / Flickr
Alternative Amazon Funding
Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.
In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.
Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."
Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."
Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.
Council of Hemispheric Affairs
Looming International Difficulties
The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.
In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.
But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."
The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."
Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.
Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.
Senado Federal / Visualhunt / CC BY
Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."
Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.
Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."
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