By Ben Backwell
Friday, January 03 2014
Updated: Wednesday, January 29 2014
Things look brighter in 2014, with share prices creeping back up, balance sheets healthier and a moderately faster rate of growth returning. Some of the problems that renewables faced last year, though -- a worsening political climate, stop-go cycles or slow growth in mature markets, overcapacity and a sense of loss of initiative -- are likely to be with us just as acutely in the year ahead.
The good news is, the compelling factors that have made renewables such a success are still with us, and the industry has some strong cards to play. The new year is a time for starting over and getting back into the ring with fresh ideas and spirit. So in the interests of a brighter 2014, here are some ideas for a renewables comeback performance.
1 Stop complaining, solve problems
The wind and solar industries need to stop complaining about things and concentrate on showing that they can solve society's problems. We need to be more like Silicon Valley, which is associated with bringing almost revolutionary change in how we do things, using innovation to improve lives -- while still making money. At the moment, wind and solar are in danger of being seen as mere industry lobbies; more Houston than Palo Alto.
2 Engel is gone, but we can't afford to be boring
Vestas fired long-term chief executive Ditlev Engel in August, and chairman Bert Nordberg has promised a "future without surprises". New chief executive Anders Runevad, a Swede, has so far projected an image of sobriety and caution, share prices have recovered and the company is on track to regain profitability. But Vestas, as the standard-bearer for the wind industry, cannot afford to be boring. Developing the industry -- and with it Vestas' business -- needs new ideas and a huge commitment to public engagement. Initiatives such as Wind for Prosperity and Act on Facts show that the company is conscious of this responsibility. More of this, please, from Vestas and its peers.
3 Transparency is the new name of the game
The days of manufacturers jealously guarding information about turbine performance are over, as developers, financiers and the taxpayer demand greater transparency. Big control centres that were set up to compare lots of different turbines on a like-for-like basis went a long way towards wresting control of information from manufacturers (at least for those who could afford them). And manufacturers are realising that they need to get customer buy-in from an early stage if they want their business. Take Vestas, which involved developer Dong Energy in the early-stage testing of its giant V164 offshore turbine. In a real step change for the traditionally secretive Danish manufacturer, it will supply raw data from the V164 prototype directly to a group of key utility customers. Welcome to the new normal.
4 Embrace the network
Despite an uptick in the wind industry in 2014, overcapacity is not about to disappear any time soon, while price competition remains fierce. Companies are radically reassessing what they consider to be their core businesses and their previous moves towards "vertical integration". Outsourcing of non-core businesses, from tower manufacturing and casting to logistics and warehousing, continues apace, as OEMs realise there are companies out there that can do things better and more cheaply, and make the necessary investments to do so. There is a greater emphasis on recognising outside knowledge and competencies -- the whole area of drivetrains and power electronics is an example -- and working in an open, collaborative way. As The Switch's J-P Makinen predicted, the networked industry is coming.
5 Time to call in the crowd
Financing models are in transition. On the one hand, traditional finance has returned, and there is a growing list of new types of actors -- sovereign wealth funds and pension funds are among the most prominent -- investing in renewables. But beyond these big players, the revolution in information and communication means that directly leveraging the power of the crowd is now a real possibility. Everything from community wind projects in Europe to large PV developments in the US has been funded in very fast time frames. But perhaps even more important, every person who invests his dollars, euros, yen or bitcoins in a renewables project is another voice that will support our industry.
6 Start with the developing world
A large part of the battle for a clean energy matrix is about winning market share by pushing old fossil-fuel capacity off the grid in mature markets. But many people in the emerging world are without power at all. The absence of legacy power and transmission assets means the energy deficit can be addressed by clean, sustainable, decentralised renewables. By working with local communities to bring power to the people, wind and solar will not just be creating a huge new market, they will be showing the world our industry's true power to transform the energy matrix and people's lives.
7 Wind and solar unite!
The bruising debates over renewables support schemes in Europe over the past few years have left the wind and solar industries divided as never before. Yet there are many reasons for the two to work together. And in operational terms, many developers are missing a trick by narrowly specialising in one technology or the other. As Enel Green Power is starting to show, through its integrated development strategy, many wind sites produce more energy at night, so it makes perfect sense to produce solar energy during the day to make better use of grid connections. Holistic thinking is needed across the board here.
8 Repower -- or, who's afraid of retroactivity?
The solar industry, and to a lesser degree wind, have spent much of the past few years defending the principle that governments should never make "retroactive" changes to renewables project tariffs. But why not? As we are fond of pointing out, PV and wind technology has made great strides in reducing costs over the past five years, so why not look proactively at the possibilities of repowering and refinancing projects, with lower tariffs but longer project lives and greater energy production? Bigger market opportunities through repowering, reductions in public support, and greater efficiency and power production -- there has to be a win-win out there.
9 Embrace diversity, promote youth
At the European Wind Energy Association Offshore get-together in Frankfurt in November, a couple of women I follow on Twitter pointed out that on at least one of the conference days there was not a single female speaker on the podium during panels. This was nothing new, but it is disgraceful, and things seem to have got worse rather than better in recent years. The male-dominated proceedings are part of a wider malaise in an industry that seems to be getting older, whiter and more male, in defiance of wider trends in the world of work. The fresh young minds that will help us solve our problems and take the next steps in transforming society's energy matrix will only come to an industry that is diverse and exciting. If the current trend is not reversed, things will get very boring.
10 Sell the story
There are amazing stories to be told about wind and solar. Our technology is, simply put, awesome. And clean. Journalists, politicians and the public need to be wooed (and fed and supplied with alcoholic beverages where appropriate), taken to our projects and facilities, and when they are there, be blown away by what we show them. Renewables is sexy, so let's put a strut back in our step.comments powered by Disqus
NEWS FROM OTHER NHST SITES
To protect your subscription investment, we've instituted a security system to protect against the electronic redistribution of copyrighted Rechargenews content. Read more