Wind can’t be blind to miners’ green failings

Companies in the wind industry find themselves under pressure every day to show a perfect green image.

Richard Heap
February 25, 2020
Wind can’t be blind to miners’ green failings

Companies in the wind industry find themselves under pressure every day to show a perfect green image. There’s nothing that social media loves more than a witch-hunt fuelled by perceived hypocrisy, and wind businesses get more than their fair share of flak from keyboard warriors.

But we live in an imperfect world where even well-intentioned companies sometimes need to make non-green trade-offs.

We’ve seen two examples in recent weeks.

The first is the photos of turbine blades piling up in the Wyoming desert. This shows in a very arresting way that wind companies face obstacles to recycling blades, and will continue to receive criticism until solutions are found.

Yet we are also confident that companies are investing in solving this problem and have no doubt they will.

The second is rather more complex, and was shared in a briefing note by law firm Watson Farley & Williams last Thursday about challenges for the mining industry. This highlights that pressure is growing on investors to stop funding this ‘dirty’ sector, but also that wind companies rely on miners to support their growth. You don't need to look far to find evidence of this pressure.

For example, the letter from BlackRock chief executive Larry Fink to other chief executives highlighted how companies like BlackRock would be stricter about the types of firms they invest in.

This means that companies with questionable credentials, either for their environmental standards or treatment of their workers, will find life tougher – and that is, of course, laudable. We have seen plenty of negative publicity for mining giants on both of those criteria. But hobbling mining giants could also undermine countries’ attempts to go greener.

The International Renewable Energy Agency has forecast that, to hit climate targets, renewables would need to make up 60% of countries’ total energy consumption by 2050.

That means that significant investment is needed in wind, including a ninefold increase in installed onshore wind capacity by 2050, as well as huge growth in solar and offshore wind too. To achieve these targets, mines are still needed.

Just look at rare earth metals. Dysprosium and neodymium are needed to make the alloys that are used in the permanent magnets in wind turbines, and WFW says that global demand for these metals is due to increase by 2.1 times in the next decade.

Copper is also in high demand for use in turbines and transmission networks, while silver is a key component in solar panels. These are difficult for firms to substitute – and means that renewables, including wind, still relies on miners. This could be a PR problem if wind firms are tarred by miners’ ‘dirty’ images.

So what are the options?

Well, ignoring the problem isn’t one. The use of rare earth materials in wind turbines in well-known, and companies in the wind industry can’t claim they haven’t heard about alleged human rights abuses in some mines either.

We think the answer will involve wind businesses deepening their commitment to help miners improve their environmental credentials. If they do this, it looks like they would be pushing against an open door.

Mining giants including BHP and Rio Tinto have been committing to increase the amount of renewable energy in their energy mix, and the pressure these firms face from activist investors and others will make this more important.

For utilities, that is likely to mean working with miners on projects where they use power purchase agreements to power either individual or multiple mines; and on selling renewable credits that companies can use to offset their non-green energy use, although these are suffering something of an image problem.

For manufacturers, that will include helping miners install on-site generation.

And, when it comes to issues such as human rights, this puts more emphasis on wind companies to know what is happening in the companies that supply them with vital metals. It isn’t enough to turn a blind eye to what happens in the supply chain.

The management teams of mining giants aren’t stupid either. They are affected by the same environmental pressures that affect others and, while many aren’t as far along that path as companies in the renewables sector, it makes sense to help them rather than sneer.

It is easy for people with an environmental conscience to criticise emissions in the mining sector. It is more difficult when we recognise, as we have to, that there is a relationship between renewables and mining that can’t be ignored. That makes this an investment risk that wind must grapple with.

NEWS IN BRIEF

CIP ACHIEVES $3BN CLOSE IN TAIWAN

Copenhagen Infrastructure Partners has reached the $3bn financial close on the 589MW Changfang and Xidao offshore wind project in Taiwanese waters. The project is due to be commissioned in 2024. Read more

NEXTERA ENERGY AGREES $2.5BN RAISE

NextEra Energy Inc. has agreed to sell $2.5bn of equity units to J.P. Morgan, Wells Fargo Securities and Bank of America Securities to help support its investments, which include in renewable energy and storage. Read more

WEC GROWS STAKES IN 750MW US TRIO

WEC Energy Group has agreed to increase its stakes in three US wind farms of 750MW from 80% to 90%. WEC is investing $118m for the extra stakes in the Blooming Grove, Thunderhead and Upstream wind farms. Read more

NORTHLAND DOES DYNAMIC DADO DEAL

Northland Power has agreed to buy developer Dado Ocean to expand its portfolio of offshore wind projects in South Korea and Asia. Read more

QUEENSLAND BACKS 1.2GW ONSHORE GIANT

Forest Wind Holdings, which is a tie-up between CleanSight and Siemens Financial Services, has won development approval from the government of Australian state Queensland for the 1.2GW A$2bn Forest Wind wind farm.

VESTAS WINS 108MW MEXICAN ORDER

Sempra subsidiary IEnova and Saavi Energía have picked Vestas as turbine supplier and EPC contractor for their 108MW Energia Sierra Juarez II wind farm in Mexico. The project is set to complete by mid-2021. Read more

RWE AND SAITEC FORM FLOATING TIE-UP

RWE Renewables and Saitec Offshore Technologies have linked up on a floating wind pilot project. The 2MW DemoSATH pilot is due to be commissioned in the Bay of Biscay off Spain's west coast in autumn 2021. Read more

VINEYARD BACKS OFFSHORE ACCELERATOR

US offshore developer Vineyard Wind has teamed up with cleantech incubator Greentown Labs to run an accelerator scheme for offshore wind innovations. The partners are looking to support early-stage start-ups. Read more

BUFFETT LAUDS WIND IN 2019 RESULTS

US tycoon Warren Buffett has lauded the impact of wind farms on Berkshire Hathaway Energy's results for the 2019 financial year in his annual letter to the shareholders of Berkshire Hathaway. Read more

GREENCOAT BUYS £51M SSE WIND FARM

SSE Renewables has agreed to sell 100% of the 18.8MW Slieve Divena II wind farm in Northern Ireland to Greencoat UK Wind for £51m. Read more

Companies in the wind industry find themselves under pressure every day to show a perfect green image. There’s nothing that social media loves more than a witch-hunt fuelled by perceived hypocrisy, and wind businesses get more than their fair share of flak from keyboard warriors.

But we live in an imperfect world where even well-intentioned companies sometimes need to make non-green trade-offs.

We’ve seen two examples in recent weeks.

The first is the photos of turbine blades piling up in the Wyoming desert. This shows in a very arresting way that wind companies face obstacles to recycling blades, and will continue to receive criticism until solutions are found.

Yet we are also confident that companies are investing in solving this problem and have no doubt they will.

The second is rather more complex, and was shared in a briefing note by law firm Watson Farley & Williams last Thursday about challenges for the mining industry. This highlights that pressure is growing on investors to stop funding this ‘dirty’ sector, but also that wind companies rely on miners to support their growth. You don't need to look far to find evidence of this pressure.

For example, the letter from BlackRock chief executive Larry Fink to other chief executives highlighted how companies like BlackRock would be stricter about the types of firms they invest in.

This means that companies with questionable credentials, either for their environmental standards or treatment of their workers, will find life tougher – and that is, of course, laudable. We have seen plenty of negative publicity for mining giants on both of those criteria. But hobbling mining giants could also undermine countries’ attempts to go greener.

The International Renewable Energy Agency has forecast that, to hit climate targets, renewables would need to make up 60% of countries’ total energy consumption by 2050.

That means that significant investment is needed in wind, including a ninefold increase in installed onshore wind capacity by 2050, as well as huge growth in solar and offshore wind too. To achieve these targets, mines are still needed.

Just look at rare earth metals. Dysprosium and neodymium are needed to make the alloys that are used in the permanent magnets in wind turbines, and WFW says that global demand for these metals is due to increase by 2.1 times in the next decade.

Copper is also in high demand for use in turbines and transmission networks, while silver is a key component in solar panels. These are difficult for firms to substitute – and means that renewables, including wind, still relies on miners. This could be a PR problem if wind firms are tarred by miners’ ‘dirty’ images.

So what are the options?

Well, ignoring the problem isn’t one. The use of rare earth materials in wind turbines in well-known, and companies in the wind industry can’t claim they haven’t heard about alleged human rights abuses in some mines either.

We think the answer will involve wind businesses deepening their commitment to help miners improve their environmental credentials. If they do this, it looks like they would be pushing against an open door.

Mining giants including BHP and Rio Tinto have been committing to increase the amount of renewable energy in their energy mix, and the pressure these firms face from activist investors and others will make this more important.

For utilities, that is likely to mean working with miners on projects where they use power purchase agreements to power either individual or multiple mines; and on selling renewable credits that companies can use to offset their non-green energy use, although these are suffering something of an image problem.

For manufacturers, that will include helping miners install on-site generation.

And, when it comes to issues such as human rights, this puts more emphasis on wind companies to know what is happening in the companies that supply them with vital metals. It isn’t enough to turn a blind eye to what happens in the supply chain.

The management teams of mining giants aren’t stupid either. They are affected by the same environmental pressures that affect others and, while many aren’t as far along that path as companies in the renewables sector, it makes sense to help them rather than sneer.

It is easy for people with an environmental conscience to criticise emissions in the mining sector. It is more difficult when we recognise, as we have to, that there is a relationship between renewables and mining that can’t be ignored. That makes this an investment risk that wind must grapple with.

NEWS IN BRIEF

CIP ACHIEVES $3BN CLOSE IN TAIWAN

Copenhagen Infrastructure Partners has reached the $3bn financial close on the 589MW Changfang and Xidao offshore wind project in Taiwanese waters. The project is due to be commissioned in 2024. Read more

NEXTERA ENERGY AGREES $2.5BN RAISE

NextEra Energy Inc. has agreed to sell $2.5bn of equity units to J.P. Morgan, Wells Fargo Securities and Bank of America Securities to help support its investments, which include in renewable energy and storage. Read more

WEC GROWS STAKES IN 750MW US TRIO

WEC Energy Group has agreed to increase its stakes in three US wind farms of 750MW from 80% to 90%. WEC is investing $118m for the extra stakes in the Blooming Grove, Thunderhead and Upstream wind farms. Read more

NORTHLAND DOES DYNAMIC DADO DEAL

Northland Power has agreed to buy developer Dado Ocean to expand its portfolio of offshore wind projects in South Korea and Asia. Read more

QUEENSLAND BACKS 1.2GW ONSHORE GIANT

Forest Wind Holdings, which is a tie-up between CleanSight and Siemens Financial Services, has won development approval from the government of Australian state Queensland for the 1.2GW A$2bn Forest Wind wind farm.

VESTAS WINS 108MW MEXICAN ORDER

Sempra subsidiary IEnova and Saavi Energía have picked Vestas as turbine supplier and EPC contractor for their 108MW Energia Sierra Juarez II wind farm in Mexico. The project is set to complete by mid-2021. Read more

RWE AND SAITEC FORM FLOATING TIE-UP

RWE Renewables and Saitec Offshore Technologies have linked up on a floating wind pilot project. The 2MW DemoSATH pilot is due to be commissioned in the Bay of Biscay off Spain's west coast in autumn 2021. Read more

VINEYARD BACKS OFFSHORE ACCELERATOR

US offshore developer Vineyard Wind has teamed up with cleantech incubator Greentown Labs to run an accelerator scheme for offshore wind innovations. The partners are looking to support early-stage start-ups. Read more

BUFFETT LAUDS WIND IN 2019 RESULTS

US tycoon Warren Buffett has lauded the impact of wind farms on Berkshire Hathaway Energy's results for the 2019 financial year in his annual letter to the shareholders of Berkshire Hathaway. Read more

GREENCOAT BUYS £51M SSE WIND FARM

SSE Renewables has agreed to sell 100% of the 18.8MW Slieve Divena II wind farm in Northern Ireland to Greencoat UK Wind for £51m. Read more

Companies in the wind industry find themselves under pressure every day to show a perfect green image. There’s nothing that social media loves more than a witch-hunt fuelled by perceived hypocrisy, and wind businesses get more than their fair share of flak from keyboard warriors.

But we live in an imperfect world where even well-intentioned companies sometimes need to make non-green trade-offs.

We’ve seen two examples in recent weeks.

The first is the photos of turbine blades piling up in the Wyoming desert. This shows in a very arresting way that wind companies face obstacles to recycling blades, and will continue to receive criticism until solutions are found.

Yet we are also confident that companies are investing in solving this problem and have no doubt they will.

The second is rather more complex, and was shared in a briefing note by law firm Watson Farley & Williams last Thursday about challenges for the mining industry. This highlights that pressure is growing on investors to stop funding this ‘dirty’ sector, but also that wind companies rely on miners to support their growth. You don't need to look far to find evidence of this pressure.

For example, the letter from BlackRock chief executive Larry Fink to other chief executives highlighted how companies like BlackRock would be stricter about the types of firms they invest in.

This means that companies with questionable credentials, either for their environmental standards or treatment of their workers, will find life tougher – and that is, of course, laudable. We have seen plenty of negative publicity for mining giants on both of those criteria. But hobbling mining giants could also undermine countries’ attempts to go greener.

The International Renewable Energy Agency has forecast that, to hit climate targets, renewables would need to make up 60% of countries’ total energy consumption by 2050.

That means that significant investment is needed in wind, including a ninefold increase in installed onshore wind capacity by 2050, as well as huge growth in solar and offshore wind too. To achieve these targets, mines are still needed.

Just look at rare earth metals. Dysprosium and neodymium are needed to make the alloys that are used in the permanent magnets in wind turbines, and WFW says that global demand for these metals is due to increase by 2.1 times in the next decade.

Copper is also in high demand for use in turbines and transmission networks, while silver is a key component in solar panels. These are difficult for firms to substitute – and means that renewables, including wind, still relies on miners. This could be a PR problem if wind firms are tarred by miners’ ‘dirty’ images.

So what are the options?

Well, ignoring the problem isn’t one. The use of rare earth materials in wind turbines in well-known, and companies in the wind industry can’t claim they haven’t heard about alleged human rights abuses in some mines either.

We think the answer will involve wind businesses deepening their commitment to help miners improve their environmental credentials. If they do this, it looks like they would be pushing against an open door.

Mining giants including BHP and Rio Tinto have been committing to increase the amount of renewable energy in their energy mix, and the pressure these firms face from activist investors and others will make this more important.

For utilities, that is likely to mean working with miners on projects where they use power purchase agreements to power either individual or multiple mines; and on selling renewable credits that companies can use to offset their non-green energy use, although these are suffering something of an image problem.

For manufacturers, that will include helping miners install on-site generation.

And, when it comes to issues such as human rights, this puts more emphasis on wind companies to know what is happening in the companies that supply them with vital metals. It isn’t enough to turn a blind eye to what happens in the supply chain.

The management teams of mining giants aren’t stupid either. They are affected by the same environmental pressures that affect others and, while many aren’t as far along that path as companies in the renewables sector, it makes sense to help them rather than sneer.

It is easy for people with an environmental conscience to criticise emissions in the mining sector. It is more difficult when we recognise, as we have to, that there is a relationship between renewables and mining that can’t be ignored. That makes this an investment risk that wind must grapple with.

NEWS IN BRIEF

CIP ACHIEVES $3BN CLOSE IN TAIWAN

Copenhagen Infrastructure Partners has reached the $3bn financial close on the 589MW Changfang and Xidao offshore wind project in Taiwanese waters. The project is due to be commissioned in 2024. Read more

NEXTERA ENERGY AGREES $2.5BN RAISE

NextEra Energy Inc. has agreed to sell $2.5bn of equity units to J.P. Morgan, Wells Fargo Securities and Bank of America Securities to help support its investments, which include in renewable energy and storage. Read more

WEC GROWS STAKES IN 750MW US TRIO

WEC Energy Group has agreed to increase its stakes in three US wind farms of 750MW from 80% to 90%. WEC is investing $118m for the extra stakes in the Blooming Grove, Thunderhead and Upstream wind farms. Read more

NORTHLAND DOES DYNAMIC DADO DEAL

Northland Power has agreed to buy developer Dado Ocean to expand its portfolio of offshore wind projects in South Korea and Asia. Read more

QUEENSLAND BACKS 1.2GW ONSHORE GIANT

Forest Wind Holdings, which is a tie-up between CleanSight and Siemens Financial Services, has won development approval from the government of Australian state Queensland for the 1.2GW A$2bn Forest Wind wind farm.

VESTAS WINS 108MW MEXICAN ORDER

Sempra subsidiary IEnova and Saavi Energía have picked Vestas as turbine supplier and EPC contractor for their 108MW Energia Sierra Juarez II wind farm in Mexico. The project is set to complete by mid-2021. Read more

RWE AND SAITEC FORM FLOATING TIE-UP

RWE Renewables and Saitec Offshore Technologies have linked up on a floating wind pilot project. The 2MW DemoSATH pilot is due to be commissioned in the Bay of Biscay off Spain's west coast in autumn 2021. Read more

VINEYARD BACKS OFFSHORE ACCELERATOR

US offshore developer Vineyard Wind has teamed up with cleantech incubator Greentown Labs to run an accelerator scheme for offshore wind innovations. The partners are looking to support early-stage start-ups. Read more

BUFFETT LAUDS WIND IN 2019 RESULTS

US tycoon Warren Buffett has lauded the impact of wind farms on Berkshire Hathaway Energy's results for the 2019 financial year in his annual letter to the shareholders of Berkshire Hathaway. Read more

GREENCOAT BUYS £51M SSE WIND FARM

SSE Renewables has agreed to sell 100% of the 18.8MW Slieve Divena II wind farm in Northern Ireland to Greencoat UK Wind for £51m. Read more

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