Japan's floating offshore wind turbines

A recently-installed floating wind turbine off the Japanese coast marks the second operating floating project in Asia.  Located about 12 miles off the coast of the site of the 2011 Fukushima nuclear power disaster, the government-funded project is being developed by a consortium led by Marubeni Corp.  So far, it consists of a single 2-megawatt Hitachi turbine coupled with a floating substation, with near-term plans to add two 7-megawatt Mitsubishi Heavy Industries Ltd. turbines, and a longer-term vision of installing 1,000 megawatts of capacity.

The Fukushima project follows a 2-megawatt floating offshore wind project installed off Nagasaki.  The Nagasaki project is located about 1 kilometer off the island of Kabashima, a 9-sq.-km island with some 110 households, and followed a 100-kilowatt test project deployed in 2012.

Japan's push for offshore wind development is motivated in large part by the Fukushima nuclear disaster.  Before 2011, nuclear power provided about 30% of Japan's electricity, but all 54 of Japan's nuclear reactors were shut down or inoperable after the disaster.

As an island nation with extensive coastal resources and little if any native fossil fuels, offshore wind may be a natural fit for Japan.  Relatively deep waters surrounding Japan make seabed-mounted towers impractical, so floating platforms may enable greater use of renewable wind energy.  The floating pilot projects off Nagasaki and Fukushima are designed in part to test different technologies, and may help reduce the costs of future projects.

Under the Japanese approach, each of these projects is funded by a separate ministry: the Fukushima project is supported by the Ministry of Economy, Trade and Industry, while the Nagasaki project is funded chiefly by the Environment Ministry.

Will Japan continue to develop its deepwater offshore wind resources?  Will floating platforms and turbines play a significant role in powering Japanese society?  Will the pilot projects lead to engineering and manufacturing knowledge that could place Japan at the forefront of the growing deepwater offshore wind industry?

FERC report shows investment in natural gas

This week the Federal Energy Regulatory Commission issued its monthly energy infrastructure update covering May 2013.  The report details highlights in expansions of energy assets, ranging from natural gas pipelines to electric generation and transmission facilities.  It provides a monthly snapshot of recent activity, and can be used to spot trends in domestic energy development.  The current report illustrates increased investment in natural gas-related infrastructure, ranging from proposed new liquefied natural gas export terminals to newly installed natural gas-fired power plants.

The iconic U.S Capitol dome, where policies are made that shape energy investment.

Natural gas exports poised for growth.  Last month two facilities to liquefy natural gas for export advanced through the FERC regulatory process:

• Jordan Cove Energy requested authorization to construct and operate four liquefaction trains and storage facilities at a proposed export terminal in Coos Bay, Oregon.  If authorized and built, the project could export up to 900 MMcf per day of liquefied natural gas (LNG).  This gas would likely be destined for Asian markets.
• Golden Pass Products proposed a larger project in Texas.  Along with Golden Pass Pipeline, Golden Pass Products commenced the FERC prefiling process to construct and operate a 2,100 MMcf per day liquefaction facility for export at an existing import terminal located in Sabine Pass, Texas.  The Golden Pass project also includes proposed modification of an existing pipeline system to enable 2,500 MMcf per day of bidirectional capacity to the proposed export terminal.

These projects demonstrate increased interest in exporting natural gas to overseas markets.  The boom in domestic shale gas production has led to low natural gas prices in the U.S.  Domestic pricing is roughly one-third of the price that exporters can get by sending LNG to Europe or Asia.  Whether and to what extent the U.S. will allow exports remains to be seen, but in the interim, developers are scrambling to secure permits for export. 

New electric generation, mostly fueled by natural gas.  Last month a total of 33 new electric generation units came online.  Nearly three-quarters of the newly installed capacity is fueled by natural gas, adding 2,529 MW of new natural gas-fired electric generating capacity.  The new gas projects vary widely in scope:

• The largest, Mitsubishi Corporation’s 850 MW CPV Sentinel Energy Expansion in Riverside County, consists of eight 106.25 MW units.  Mitsubishi’s generation is sold to Southern California Edison under a long-term contract.
• In the middle, Procter & Gamble Company developed a 64 MW natural gas fired project to produce power for its paper products manufacturing facility in Wyoming County, Pennsylvania.
• At the opposite end of the scale, two landfill gas-fired projects came online in New York.  Wehran Energy Corp.’s 4.5 MW Brookhaven facility consists of three 1.5 MW Caterpillar Inc. generators.  The Brookhaven project was also joined by a 1.6 MW expansion of Waste Management Inc.’s Oneida-Herkimer project.

These projects illustrate the diversity of new natural gas fired projects being developed this spring.  The abundance of low-cost natural gas drives interest in the utility scale gas projects, while a desire to capture landfill-produced methane and put it to use as biogas supports the smaller projects.  As a result, natural gas’s share of total installed operating generating capacity grew slightly to 42.56%.  Despite a resurgence of coal as a fuel for electric generation, coal remains in second place in the installed capacity race, representing 28.9% of total U.S. installed capacity.

While each monthly energy infrastructure update represents only one data point, in the aggregate, they paint a picture of the direction of U.S. energy infrastructure development.  Natural gas is squarely in the center of this picture.  Based on consensus projections that natural gaswill remain the most cost effective fuel for decades to come, increased expansion of natural related infrastructure is likely to continue for some time.