Show notes
In this episode, Allen, Joel, Phil, and Rosemary discuss new German legislation to streamline wind permitting, the economics of floating offshore wind in France, and Iberdrola's increased investments in offshore wind. They also delve into how the U.S. Production Tax Credit has impacted wind farm maintenance practices and explore the industry-wide challenges that arose when sales teams overpromised on turbine capabilities, creating tension with the engineering realities.
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Allen Hall: Down in Kyle, Texas...
Joel Saxum: That's by me!
Allen Hall: It's near Joel. That's why I'm bringing it up. They were trying to break a world record for the largest gathering of people with one name and despite having 706 Kyles they missed The bar because the crown is held by a town in Bosnia. They had 2, 300 people named Ivan together in 2017, but it seems a lot easier to do quite honestly.
Having a lot of people named Kyle and Kyle, Texas, that's got to be relatively hard, Joel, because there's not, we know Kyle Weatherman, right? So we have a Kyle. We know, I know a couple of other Kyles, but I don't think I could get 2, 300 Kyles in a two town in Texas.
Joel Saxum: I think we could do this one. We go to Punxsutawney, Pennsylvania.
And see how many fills we can get.
Allen Hall: Oooooh.
Joel Saxum: It has to be on the groundhog day.
Allen Hall: Phil, has that been tried?
Philip Totaro: I, to my knowledge, it has not been tried. I have never heard of this. I'm befuddled by these what constitutes a Guinness World Record now? Shouldn't we be striving for things that are, like, advancing society, rather than, hey, can we get 8, 000 people with the same name in a fricking single town.
I don't know. What are we doing? What are we doing?
Allen Hall: I'm not with Phil. This is fun. We should do more of this. See, here's the problem with this whole thing in Kyle, Texas is that they chose the 416th ranked name. You got to pick something in the top 10.
Well, Joel, the German government has agreed to speed up authorizations for wind turbines and industrial plants. The new law aims to enable faster construction through digitalization, And reducing bureaucratic hurdles. Plants affected include wind turbines, metal mills, foundries, waste disposal, and hydrogen production facilities.
And I think Rosemary would be against the hydrogen production facility, but the change is expected to be finalized in the coming weeks and. Renewable energy plants will get special priority for faster approval under the coalition agreement. So that has been one of the big holdups in Germany in terms of wind deployment.
They don't have the space to put up a thousand turbines, right? So you're getting turbines spread around the country a good bit. And every little province town has had restrictions, right? And they've been trying to remove those restrictions. Piece by piece. This is a big move for Germany, I think, Joel.
Joel Saxum: Yeah. If you look at the way it's this, these things are rolling out in developments worldwide, right? So the ACP and the developers and people have been complaining about permit restrictions and let's get this thing streamlined, let's get this, able to put more Megawatts in the ground for renewable energy production.
Everybody on the U S has been screaming about that. They've been screaming about it at wind. Europe has been doing it for a few years, right? All the way up to now, the OEM saying Hey, like government, stop stepping on our own feet here. Let's streamline some of these processes. I know we, Allen, you and I have complained about it in, in private, where we heard the U S was it last year, they said that they, Put 80, 000 new IRS agents.
And we're like, can we just have 10, 000 of them to streamline some projects for us in the renewable energy space? And this is right in the face of the European union and even like in the UK. A lot of hair on the back of people's necks being raised about the possibility of some Chinese competition coming in if Germany is able to do this and some of the other EU countries start to follow suit about easy, not necessarily easing restrictions, but just streamlining the processes to get these things built.
It's going to be better for the whole entire renewable energy transition because we're going to be able to get things in the ground. We're going to be able to get it quicker instead of being held up. I know I saw something. A few years ago where they were talking about like an onshore wind farm. I think it might have been Germany taking seven years or nine years from, like plan to actually having a tower in the ground.
That's ridiculous.
Philip Totaro: This is obviously good news if they're actually going to follow through this time and speed things up. There have been a lot of permitting changes that have been promised over the years. The good news is this seems to have been done in conjunction with the European Commission.
To not just fix the issue in Germany and the red tape there but, Italy's had severe problems you've even run into, issues throughout some of the other countries in Europe. The reality of it is that any time you remove red tape, it's usually a good thing.
And it's something that we've been calling for as an industry For a long time.
Joel Saxum: Yeah. It's like the pendulum swinging, right? When things first started, you were one way, and now we're coming back and finding an equilibrium that makes sense for having things done properly, but also getting them done.
Allen Hall: Over in France, they had a big announcement for offshore wind. Bewa and Alicio Consortium won the French floating wind auction with a price of 86 euros per megawatt hour, which is a decent price. It's actually much lower than what's happening in the states at the minute. The word of capacity was 270 megawatts with 10 participants bidding.
It is a huge milestone fill for Europe on the floating wind side. Now, there's going to be more, right? There's a lot more in the pipeline for France?
Philip Totaro: Yes, this is also the cheapest power offtake agreement that anyone's ever struck globally for floating offshore. So in spite of the fact that it's, I think it's what, 86, 45 Euro per megawatt hour, that's About 94 U. S. dollars. That, that's competitive, very competitive. And the funny thing is, we've We've studied this at Intel Store, and we've come to the conclusion that at scale you, you actually see floating offshore being cheaper than fixed bottom in a lot of cases. And, the reality is that we have to get to, sufficient scale with floating offshore wind so that we don't have to see these fits and starts with that kind of segment of the industry anymore.
So this is exciting. Again, as you mentioned, it's only 270 megawatts, so it's a baby step. It's a good first step to start getting more. France definitely wants to do more of these. They've got something like, 500 gigawatts worth of offshore wind resource, I believe, so 500, 600 gigawatts.
The more they can start exploiting that in both the Atlantic and the Med that's gonna be great.
Allen Hall: Are they gonna be Vestas or GE turbines?
Philip Totaro: Eh let's put it this way. Some of these pilot projects in France have already had some Vestas, some Siemens Gamesa, they were, there were a few projects that were actually supposed to use GE Haliad turbines the original Haliad the, 6 megawatt platform and they switched.
Because of availability and other things. It's probably, all, I think all three of them are contenders. I definitely don't see the Chinese actually getting involved in any of these kinds of tenders, at least not. To a serious degree, the it's interesting because they're there and they're supposedly offering turbines and undercutting the market and all this insidious stuff.
But in reality, it's really just the independent power producers in Europe trying to use the Chinese as negotiating leverage to get a better price out of, the likes of Festus that's probably, Those three Western companies are probably going to be where the turbines are coming from.
Allen Hall: Does the 94 a megawatt hour drive other countries to push the prices down for offshore electricity?
Philip Totaro: Not necessarily because what's going on in France at the moment is they've got, um, there's pretty high prices onshore for regardless of fuel type or power generation source. So the fact that they can do a cheap offshore project where, you know they're going to use the power close to the load centers with these, with these sites that, that they were in Eliseo of one in this tender that's likely to end up resulting in some economies of scale being achieved in France.
You could probably also, if Spain ever decides to get their act together with their floating offshore wind market or their offshore wind market in general they'd probably have some pretty cheap prices in Spain as well. But it's not necessarily something where the entire rest of the world is going to say, Oh, that's the price floor or the ceiling or whatever.
And we've got to, come in underneath it. I think that's, we're still a ways off yet on achieving meaningful scale with a utility scale, floating offshore installations around the world to say that everybody's going to be down at that that kind of a price level.