German renewables giant promises to spend €3.5bn on new renewable capacity over the next three years, with major focus on solar PV rollout
Juergen Grossman, the former CEO of RWE, once joked building solar PV in Germany "makes as much sense as growing pineapples in Alaska".
The rationale for pineapple cultivation in the snowy north may not have changed since those comments, which were made in 2011, but the outlook for solar certainly has, after costs plummeted over 60 per cent since 2008.
Now Innogy, the spin off clean energy company from RWE, is beefing up its solar interests, with plans to rapidly expand its PV portfolio over the next three years.
Speaking at a media briefing yesterday, Hans Bunting, Innogy's chief operating officer for renewables, explained that in the next three years Innogy plans to invest €3.5bn in new renewables capacity, with solar set to form a major part of the new strategy.
"We think PV is the renewable technology of choice on a global scale," he said, explaining that cost reductions have made it much more attractive for developers.
Bunting highlighted countries in the southern hemisphere, where demand for energy is surging, as a key focus for the firm this year. But one of its first solar projects will be in Canada, where it has signed an agreement with a Canadian developer to build out up to 1GW of PV capacity.
The company is also "actively developing" projects in the Netherlands, North America, and, yes, Germany.
Elsewhere in the renewables space, Innogy said it has a total pipeline of clean energy projects totalling 7GW in capacity, which includes onshore and offshore wind as well as solar.
Alongside developing the Triton Knoll offshore windfarm, which it secured a Contract for Difference for in the 2017 UK auction round, Bunting said the firm was also preparing to bid into the upcoming 2019 CfD auction for the 1.2GW Teesside B wind farm in the Dogger Bank, which has been renamed as the Sofia project.
It is also waiting on the results of a subsidy-free auction in the Netherlands, where it is competing against other wind developers, including Swedish firm Vattenfall, to build the Hollandse Kust Zuid project.
The €3.5bn renewables strategy, part of a total €10bn capital investment plan for the firm, represents a "clear ramp up of activities" in the clean energy space for Innogy, Bunting said. Over the last two years the firm has invested between €200m and €250m in new renewables capacity, he said. Bunting explained that Innogy's separation from RWE in April 2016 has loosened investment constraints.
As well as offshore wind, Innogy plans to ramp up its onshore wind activity in the coming months. In December it announced the acquisition of a 2GW portfolio of onshore wind projects in the US, in partnership with private equity investor Terra Firma Capital Partners.
But while US onshore wind is set to be a key growth area for the firm in the years to come, the picture in the UK is less rosy. With no price support auctions for onshore wind on the horizon, Innogy warned fewer new projects would be coming online in 2018 and 2019.
Tanya Davies, head of onshore wind UK at Innogy, urged the government to launch a 'technology neutral' contract for difference (CfD) auction. "We should be allowed to participate in a technology neutral auction, because we are one of the cheapest forms of new generation," she said. "We are calling for a market stabilisation CfD, which will allow us to develop out this form of generation and allow decarbonisation to happen much quicker and at lowest cost."
Since its split from RWE, Innogy has moved quickly to claim a share of fast-growing clean energy markets. Now it's preparing to expand its foothold in offshore, onshore and solar markets around the world. Alaska's pineapple economy may still be lying dormant, but it seems the case for clean energy investment is stronger than ever.
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