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CREATING CLEAN ENERGY

Working with a Spanish wind turbine manufacturer focused on driving down the levelised cost of energy (LCoE) for wind power, contributing to the delivery of the seventh and 13th UN Sustainable Development Goals (SDGs).

A Spanish wind turbine manufacturer is focused on driving down the levelised cost of energy (LCoE) for wind power. The LCoE is the net present value of the cost of a unit of electricity throughout the lifetime of the generating asset. In other words, it is a proxy for the average price that a power-producing utility, such as a wind farm, must receive in order to break even over its lifetime. Given that lowering the LCoE for wind power is its core objective, the company is contributing to the delivery of the seventh and 13th UN Sustainable Development Goals (SDGs) and a natural fit with one of our eight impact themes: energy transition.

83 GW

Of installed capacity worldwide

SDG Target 7.2

By 2030, increase substantially the share of renewable energy in global energy mix

20%

Annual increase in energy production due to new direct-drive turbines

The company has 83 gigawatts of installed capacity worldwide. However, its first 18 months were challenging. Turbine prices slumped due to political and taxation uncertainty in the US, and in India the start of competitive auctions resulted in wind-farm developers factoring in lower fixed prices for electricity in project bids. But lower tariffs for wind power – which affect all turbine manufacturers – have now eased at a new normal and the company is adapting rapidly to this environment.

The company’s leading offshore-wind technology generates the majority of its additionality: outputs that help society achieve SDGs seven and 13. The new SG 8.0-167 turbine is the only direct-drive offering on the market, making it significantly lighter than others and more economical to increase the size – and therefore generation capacity – of offshore platforms. In time, this should deliver a 20% increase in annual energy production, making offshore wind more competitive against fossil fuels. By replacing gearboxes, which are more complex, direct-drive turbines also reduce servicing requirements, which is very important for wind farms based far from the shoreline. We believe that such innovation and progress directs the company towards its chief goal: driving down the LCoE for wind power.

These case studies are examples of companies we have either held or engaged with.
Source: Hermes Investment Management.