Technology and knowledge are important aspects of wind energy projects, but one important factor that makes a difference is data. Unfortunately, such data is often scarce or non-existent, experts said on the final day of the Clean Energy Expo Asia in Singapore.
In Southeast Asia, the relative wind strength from the different seasons due to monsoons can vary each year, said Tammy Chu, managing director of Entura, a unit of Hydro Tasmania, Australia’s largest renewable energy supplier.
This is why, with respect to wind data, the longer the record the better, she added.
Hydro Tasmania has been making various assessments on the long term wind potential and the environmental impacts of wind farm projects in India, China, Southeast Asia and South Africa over the past decade.
Because “production has yearly variation and from each year the wind resource can significantly change, this can have a big impact on the wind farm financial investment decision,” said Ms Chu, adding that having more than one year of data is very helpful.
But in Asia, long term data is hard to find.
“In this part of the world, there might not be long term data available or any data at all for particular sites,” said Charlie Grover, an energy and projects lawyer currently involved in the development and financing of a major Philippines wind project.
This is why good government policies regarding the renewable energy industry are equally important, said the experts.
At the beginning of a project, companies need to ensure they have connection to the grid, approval to develop, protection from other developers from taking that approval and a secure cash flow. “All these aspects really rely on government policy,” said Mrs Chu.
Two specific case studies presented by the experts show just how important government policies are for building successful wind farm projects, even if data is lacking.
For example, according to the Philippines’ Department of Environment and Natural Resources, the country’s wind potential is estimated at 76,600 megawatts, the largest potential in all of Southeast Asia. The Government’s goal is to become the number one wind producer in the region, but according to Mr Grover, the data is really sparse and not reliable, and the achievement of that goal remains to be seen.
“With an expected capacity of wind production at about 25 per cent, this is very good,” said Mr Grover, who added that the Government of the Philippines has also recently created a supportive policy framework for a deregulated energy industry.
According to Charlie Grover, the Philippines Act of 2008 regulatory environment has helped developers.
The act offers feed-in tariffs designed to accelerate investment by offering long-term contracts at a pre-determined per kilowatt price. Other incentives come in special tax rates, an income tax holiday for seven years and duty free import for machinery, equipment and material within the first 10 years.
The second example is India. In 2003, the government introduced the Electricity Act, which opened up its energy market.
Xavier de Nazelle, an expert with Aloe Private Equity, said that his company decided to invest in India because, among other things, “it has a really great policy platform.”
“Globally, India is probably the best market in renewable energy in the coming years” said Xavier de Nazelle.
Reliable data can be hard to find, but good government policies can help diminish the initial risk and attract investments.
Other ways companies can diminish the initial risk is to learn about their prospective wind farm by going on site and looking at other projects, and to know where the technology is going by learning and talking with their wind farm suppliers, added Ms Chu as part of her final recommendations.
Eco-Business.com’s coverage of Clean Energy Expo Asia 2011, part of Singapore International Energy Week 2011, is brought to you by Schneider Electric.
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