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Is Wind Energy The Most Stable Renewables Investment – OilPrice.com

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Is Wind Energy The Most Stable Renewables Investment? | OilPrice.com

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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    Offshore wind

    The Covid-19 pandemic has wrought one of the most significant disruptions the energy market has ever faced.  A decidedly gloomy long-term future outlook due to rampant fossil fuel divestments, climate change policies, and decarbonization has been unexpectedly aggravated by a short-term, but even more severe, shock by the health crisis, and thrown the pivotal energy sector into one of its worst existential crises. Project developers, private capital, companies, institutional investors, and public markets have now shifted their attention to sustainable practices, businesses, and assets.

    Suddenly, everybody seems to be reading from the same page: We have to dramatically increase our investments in renewable energy and cut our heavy reliance on high-carbon fuels.

    Not surprisingly, wind power, the easiest to tap, most efficient renewable fuel for electricity generation, and one of the lowest carbon emitters, has gained special prominence in our clean energy transition. Offshore wind, in particular, is having its moment in the sun, with offshore wind investments quadrupling to $35 billion in the first half of 2020, representing the most growth by any energy sector during the Covid-19 crisis.

    Source: The Guardian

    Environmental crisis

    Wind power has earned an undeserved reputation as a bird and bat slayer; However, the truth is that domestic cats kill far more birds whereas wind turbines provide some of the cheapest and cleanest power around with one of the lowest environmental footprints. 

    Wind power, however, is now presenting an unforeseen environmental nightmare: Hundreds of thousands of aging wind turbine blades are coming to the end of their lives with the majority having nowhere to go but landfills.

    Unbeknownst to many clean energy buffs, wind turbine blades are typically made of non-biodegradable fiberglass or carbon fiber materials, meaning they are doomed to lay unchanged in their earthy pits for an eternity and create another environmental headache.

    Wind power is practically carbon-free, with roughly 85% of turbine components, including steel, gearing, copper wire, and electronics gearing easily recycled or reusable. Modern wind turbines are mostly made of steel, a material that is readily recyclable.

    Turbine blades, however, are a different story altogether. Related: String Of Bullish News Sends Oil Rallying Above $40

    Conventional turbines must withstand enormous strain, considering that your typical turbine can reach speeds of 180 mph and generate huge centrifugal forces and other high-impact type stresses. Further, offshore wind turbines frequently encounter particularly hostile weather conditions, including category-5 storms leading to the blades deteriorating significantly in quality over time. To ensure wind turbines meet the strength and versatility demands to perform reliably for at least two decades or so, wind turbine blades are typically constructed from a fiber/resin composite. 

    Unfortunately, these materials have so far proven to be particularly difficult to recycle. 

    Compounding this is the sheer size and bulk of your average turbine blade: Turbine blades can reach lengths longer than a Boeing 747 wing, thus making them cumbersome to handle and transport. To get a rough idea of their sheer sizes, consider that in 2018, MHI Vestas Offshore Wind launched the first commercially available double-digit turbine, the V164-10.0 MW that features 80-meter long blades weighing 35 tons each with a tip height of around 187 meters. Meanwhile, GE Renewable Energy is currently developing the Haliade-X 12 MW, a massive turbine with a capacity of 12 megawatts, a blade length of 107 meters and a height of 260 meters.

    Given their gargantuan proportions, the first step on the way to their final resting place usually involves using a diamond-encrusted industrial saw to cut through the lissome fiberglass to create smaller pieces that can be strapped to a tractor-trailer.

    But the problem does not end there. Wind farms tend to be installed and commissioned in stages, meaning large numbers of blades can simultaneously reach their end-of-life, thus threatening to flood waste processing facilities lacking sufficient storage or specialized equipment to handle them. Even worse, some studies have found that wind turbines are wearing out much sooner than their often stipulated life expectancy of 20-25 years.

    Future Solutions

    If the unfolding situation sounds alarming, consider that the wind power revolution is just getting started.

    The U.S. wind industry commissioned 9,143MW worth of new installations in 2019, the third-highest figure for new wind power capacity installations in the country’s history. According to the latest energy report by the American Wind Energy Association (AWEA), the country’s total installed wind capacity clocked in at 105.6 GW by the end of the year, supplying about 2.5% of the country’s energy needs.

    This helped renewable energy to overtake coal in the nation’s energy mix for the first time ever.

    Source: Energy.gov

    Source: EIA

    But all that could soon look like a dress rehearsal for the burgeoning industry.

    Related: Oil Bulls Return As OPEC+ Reassures Markets

    The IEA has predicted that offshore wind power is set to become a $1 trillion industry by 2040. Meanwhile, the Global Wind Energy Council, an international trade association, estimates that wind power deployments across the globe will clock in at 2,110 GW by 2030–or nearly a fourfold increase–and supply 20% of global electricity. That will translate into 2.4 million new jobs created and lower CO2 emissions by more than 3.3 billion tons.

    It will also mean having to deal with millions of tons more of wind turbine waste.

    Thankfully, industry experts are already hard at work looking for solutions for the growing wind power menace. 

    Whereas three-bladed turbines have become the standard model of clean energy generation, things are unlikely to remain that way for long with engineers hunting for more efficient and cost-effective models. One futuristic design with serious street cred is the bladeless wind turbine. Vortex Bladeless has created prototype bladeless turbines that utilize the gyroscopic motion of wind towers to generate energy. The company says the design could potentially cost 50% less than conventional turbines and withstand wear and tear better.

    Other companies have recognized that burying turbine blades into perpetuity is hardly a viable long-term solution and are developing novel solutions to get rid of decommissioned turbine blades. One such company is Global Fibreglass Solutions, a startup that uses chemical methods such as solvolysis or pyrolysis, where very high temperatures destroy the binder material leaving behind the fibers to be dealt with separately. The resulting material is pressed into pellets and fiberboards that can be used for flooring and walls.

    Global Fibreglass says it can effectively process 99.9% of a standard turbine blade and boasts the capacity to process 6,000 to 7,000 blades a year per plant. But until the construction industry warms up to the idea of using turbine debris as building materials, a handful of municipal and commercial landfills that accept them in Lake Mills, Iowa; Sioux Falls, South Dakota; and Casper can expect to continue having their hands full.

    Meanwhile, giant waste utility Waste Management Inc. is working closely with renewable energy companies to develop an effective solution for windmill blade processing, recycling, and disposal. 

    By Alex Kimani for Oilprice.com

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      Sydney's Smart Shop to reopen amid surge in downtown investment – CBC.ca

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      The construction of the new Nova Scotia Community College Marconi campus on the Sydney waterfront is spurring investment in the downtown.

      A notable recent development is the purchase of Sydney’s iconic Smart Shop Place on the corner of Charlotte and Prince streets, which has been sitting vacant in recent years.

      “We see Sydney as booming nowadays,” said Ajay Balyan, who recently purchased the three-level building along with his brother, Ankit.

      Brothers Ajay and Ankit Balyan, former CBU students from India, have purchased downtown Sydney’s iconic Smart Shop building. (Holly Conners/CBC)

      It was a different picture when he moved to Cape Breton from India in 2017 to study at Cape Breton University.

      A lot has changed since then, with a boom in international enrolment at CBU and unprecedented public infrastructure investment in the area, including the new NSCC campus, health-care redevelopment and a potential new regional library.

      “We know after NSCC, the Sydney downtown is going to be the main spot for the students to hang out or to eat,” said Balyan. “And we’re getting good support from the community, as well. So we find it to be a good opportunity for us.”

      Smart Shop Place opened in 1904 as a clothing store and long served as a retail anchor in Sydney. The Balyans plan to rename the building Western Overseas, after their family’s business in India.

      Ajay Balyan, shown in the lower level of the former Smart Shop Place, which he plans to reopen as a fine-dining restaurant. (Holly Conners/CBC)

      Construction is underway to convert the main floor into a small food court and the lower level into a fine-dining restaurant. The upper level will become apartments.

      The brothers, with family partners in India, have similar plans for the former Cape Breton Post building on Dorchester Street, which they bought last year.

      The two also own Swaagat, an Indian restaurant they opened on Prince Street in 2019.

      Craig Boudreau is among a group of investors who have been buying up properties in downtown Sydney. (Holly Conners/CBC)

      Meanwhile, on Charlotte Street, local entrepreneur Craig Boudreau and a group of partners recently bought four buildings and are negotiating a fifth.

      Two years ago, Boudreau purchased the former Jasper’s Restaurant site on George Street. It’s currently being used as a parking lot, but he hopes to start construction next fall on a multi-story commercial and residential development.

      NSCC students will need housing and the community could use more dining options, said Boudreau.

      “It’s really spinoff,” he said. “It’s kind of the perfect scenario.”

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      Don't let fear drive you into a fee trap when working with an investment advisor – BNN

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      Spiking market volatility and a renewed threat of global economic stagnation caused by COVID- 19 has sent stressed-out investors flocking to advisors.

      Many advisors have been reporting a rise in new clients since last spring’s lockdown, and a new survey commissioned by Manulife Investment Management backs it up. It shows 63 per cent of respondents plan to seek investment advice in 2020 compared with half in 2019. And more than half of respondents in Canada indicated they were interested in retirement planning and investing advice.

      It’s good that more people are looking for long-term retirement plans managed by professionals, but fear can lead investors into fee traps that consume their investment dollars.

      The path to those fee traps typically begins with investors looking to coordinate a mishmash of investments in their registered retirement savings plans (RRSP), and tax-free savings accounts (TFSA). For the vast majority of Canadians, the only route to a diversified, professionally-managed portfolio is through mutual funds.

      The price investors pay for diversification and professional management in a mutual fund is an annual fee based on a percentage of the money they have invested called the management expense ratio (MER). MERs vary depending on the fund company and asset class, but a typical MER on a Canadian equity fund purchased through an advisor is about 2.5 per cent.

      That might not seem like a lot at first glance, but on a $500,000 portfolio of mutual funds, it adds up to $12,500 annually whether the fund makes money or not. That’s $12,500 each year not invested and not compounding, and potentially hundreds of thousands of dollars over a lifetime of investing.

      Baked into the MER is a hidden trailing commission, or trailer fee, to compensate the advisor who sold the fund for “ongoing advice.” A typical trailer fee is one per cent annually – or $10,000 on a $500,000 portfolio of mutual funds each year.

      Trailer fees are banned in most of the developed world due to the inherent perception of conflict of interest. You have to wonder if an advisor is selling a fund because it is right for the investor or because it provides the best trailer fee from the mutual fund company. 

      And it get’s worse. 

      Some advisors will direct investors toward segregated funds, which are essentially mutual funds wrapped in an insurance product. Seg funds have the potential to make money from the investments they hold but are insured, or partially insured, against losses on the principal amount invested over long terms – often 19 years. Investors pay for that extra security through higher MERs. Manulife – the company that commissioned the survey – for example, sells segregated funds with MERs above three per cent.  

      Segregated funds have certain advantages for small business owners wanting to protect their savings in the event of bankruptcy, but sometimes appear in workplace defined contribution pension plans. 

      Advisors sometimes push seg funds on unsuspecting clients through a regulatory loophole known as “the-know-your-client rule,” which requires advisors to document a questionnaire relating to return goals and risk tolerance, and only sell investments in line with the client’s answers.  

      Some clients might not understand that all investments have some degree of risk and say they expect their savings to grow risk-free. Only segregated funds fit that bill.  

      Payback Time is a weekly column by personal finance columnist Dale Jackson about how to prepare your finances for retirement. Have a question you want answered? Email dalejackson.paybacktime@gmail.com. 

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      TransLink in time crunch to update its 10-year Metro Vancouver transit investment plan – Vancouver Sun

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      Article content

      The COVID-19 pandemic and an unexpected provincial election have put TransLink in a time crunch to finish a required update to its 10-year investment plan.

      Metro Vancouver’s transit authority is obligated, by provincial legislation, to update the plan at least every three years. The current plan was approved on June 28, 2018, which means the new one is due by June 28, 2021.

      “Originally we had had planned for that to happen this year, but because of COVID-19 and dealing with the emergent financial challenges with that, that was not possible,” Mayors’ Council chair Jonathan Coté said following a meeting on Thursday. “But we’ve now reached the point where we need to start to work towards that.”

      Priorities for the update include finding revenue to cover long-term COVID-19 losses. Although the federal and provincial governments will provide a combined $644 million to TransLink to cover its pandemic losses for 2020 and 2021, there will likely be shortfalls of $100 million to $300 million each year between 2021 and 2030.

      The losses will depend on how long the pandemic lasts, the depth of economic damage and how quickly transit ridership recovers. The plan cannot show a deficit.

      “Even with the near-term financial aid, we almost certainly have a fairly significant structural hole in our budget and we’re going to have to work to understand just what that hole is over the months to come,” CEO Kevin Desmond said after the meeting.

      “There’s still a lot of uncertainty about the path of the pandemic.”

      The investment plan will also deliver elements of the second phase of the 10-year regional transportation vision that are outstanding or were delayed due to the pandemic, plus approving projects that are already funded, such as a SkyTrain extension to Fleetwood and the next stage of the low-carbon fleet strategy.

      A lot will have to be done before next June, including confirming federal and provincial contributions, finding new regional funding sources and setting rates, plus consultation with the public and local governments.

      “No doubt this is going to be a significant part of our work plan and probably one of the more challenging things the Mayors’ Council is going to have to work on,” Coté said during the council meeting.

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