Local newspaper Haveeru has published an interview with the purported managing director of the Falcon Energy Consortium, Steven David Jones, who told the paper the group would take legal action against the government’s termination of a US$370 million (Rf5.7 billion) memorandum of understanding (MoU) to develop a wind farm at Gaafaru, in North Male’ Atoll.
According to an email interview between Haveeru News and Jones’ Maldivian business partner, Falcon Energy claimed that it was not informed of the termination and had meanwhile invested nearly US$1 million (Rf15 million) in meteorological masts and initial readings.
The government has disputed the existence of a legally-binding contract since media reports of the termination were published in August. Maldives’ State Electric Company (STELCO)’s Managing Director Dr Mohamed Zaid had previously told Minivan News that no private partnership agreement had been signed with General Electric (GE) and Falcon Energy.
In 2010 STELCO signed a Memorandum of Understanding (MoU) on behalf of the government with Falcon Energy and GE. But according to Jones, STELCO then agreed to amend its supposed agreement with Falcon to reflect the extra cost of laying an underwater cable, a feature not previously included in the MoU.
After concerns were raised by the public over Falcon’s legitimacy, the MoU was terminated and the Gaafaru project cancelled.
Minivan News was told that reasons for the termination included a lack of consensus between the parties involved, and whether they had the requisite experience: “Falcon didn’t work out,” said one informed source, while “a lot of things were not carried out according to the memorandum of understanding,” said another. Local newspaper Haveeru meanwhile reported that there were concerns about pricing and profitability of the enterprise.
STELCO proceeded with an open tender for another project which led to the current deal with Chinese company XEMC.
Jones, however, told Haveeru that it was a “big shock” when the Maldivian government signed the deal with XEMC this August.
Minivan News could not obtain contact information for Jones at time of press, and was also unable to find any mention of an individual by that name in connection with a Falcon Energy group.
Haveeru’s Editor Moosa Latheef said the paper had solicited the interview, but did not have a phone number and was not willing to provide Jones’ email address.
Falcon Energy itself holds a scattered track record. The Group was originally presented as a consortium of four companies from the UK, Holland and Saudi Arabia. In media reports on the deal, the President’s Office said it understood that Falcon’s credentials included commissioned “onshore and offshore wind farms totaling 1,500 MW over the past 10 years, in the UK, Spain, Portugal, Ireland and Canada.”
International media and the renewable energy trade press widely reported that the Falcon Energy involved in the Gaafaru project was the Singapore-listed Falcon Energy Group, a major offshore oil and gas player. However that Falcon Energy bluntly denied any knowledge of the project when contacted by Minivan News following the collapse of the deal.
Falcon Energy earlier claimed that funding for the project would be provided by international bank loans. Yet at the time of signing the MoU, Falcon had still to raise the required investment with international banks. Research and observations from readers led Minivan News to find that the consortium had only a minimal web presence, which appear to no longer exist.
Furthermore, Falcon’s assessment of wind power in Gaafaru did not correspond with existing scientific studies on the matter.
In an article published in April 2010, Minivan News reported that figures published in a 2003 report by the US National Renewable Energy Laboratory (NREL) indicated that North Malé Atoll’s annual average wind speed was merely 4.9 m/s (17.7 km/h), while a utility-scale wind power plant requires at least 6 m/s (21.6 km/h), according to a 2005 report by the American Wind Energy Association (AWEA).
The report cautioned that a difference of just 1 km/h in wind speed could significantly bring down the productivity of a wind farm.
However, Falcon/GE project’s local leader Umar Manik told Minivan News at the time that engineering advances would enable the Gaafaru wind farm to run on a minimum wind speed of 5.7 m/s.
The utility of wind in the Maldives remains an open debate.
“Wind is an option, with other renewable energies,” said Assistant Director of Energy at the Environmental Ministry, Ahmed Ali. “The north has been found to be most productive area for wind turbines, but studies of met masts installed in the South, in Addu, are showing that it is feasible there as well.”
Meanwhile, an article published in the Telegraph critiqued the Maldives’ goal of achieving carbon neutrality via wind and solar power as expensive and difficult, particularly because the wind “scarcely blows in the islands for months on end.”
“What do you do in the eight months without enough wind?” asked President Nasheed’s Energy Advisor Mike Mason at Soneva Fushi’s Slow Life Eco Symposium earlier this year.
“What you do is put up solar. In that case, why bother to put up wind at all? With solar the sun rises every day – it is wonderfully predictable.”
Minivan News was unable to reach officials in the President’s Office, Economic Development Ministry, STELCO and any traceable affiliate of the Falcon Energy Consortium for comment at time of press.
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