Chinese firm to take over Gaafaru wind farm project following collapse of GE/Falcon Energy deal

Chinese electrical manufacturing firm XEMC will take over the development of the government’s flagship renewable energy project, the Gaafaru wind farm, following the behind-the-scenes collapse of the US$200 million dollar agreement between GE and Falcon Energy late last year.

Under the new agreement between XEMC and the State Electric Company (STELCO), XEMC will install turbines capable of generating 50 megawatts and submarine cables servicing the greater Male’ area, under a build, own and operate arrangement.

A backup liquefied natural gas (LNG) plant will also be built, capable of providing up to 30 megawatts on windless days, or when there is not enough wind to meet demand. The wind farm will provide up to 20 megawatts to STELCO’s grid, supplementing its current install capacity of 38.76 megawatts.

STELCO’s Managing Director Dr Mohamed Zaid told Minivan News that under the 25 year agreement the new facility will be owned by XEMC and the electricity bought by STELCO, with construction of the wind turbines starting within three months.

XEMC was selected through an open tender, Dr Zaid said, adding that STELCO had not signed a private partnership agreement with GE/Falcon.

“Initially we did not limit this project to a specific renewable energy source, but the XMEC group recommended using wind turbines given their experience with the technology,” Dr Zaid said, during the signing event held recently at the President’s Office.

He said was unable to provide reasons for the collapse of the GE/Falcon Energy deal “at this time”, and the circumstances around it remain unknown.

Minivan News was told that the reasons 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.

The original much-publicised project was to be central to the government’s ambition for the country to become carbon neutral by 2020, and promised a 75 megawatt wind farm in North Malé Atoll that was to produce enough clean energy to allow Malé, Hulhulé and a number of resorts to “switch off their existing diesel power generators”, according to the President’s Office at the time. Excess electricity on windy days was to be diverted to a desalination plant located on Hulhumale’.

The project was, according to President Mohamed Nasheed during its launch, intended to “reduce fuel imports into the country by 25 percent and cut carbon emissions by 40 percent.”

Minivan News raised concerns in an article published in April 2010 that according to figures published in a 2003 report by the US National Renewable Energy Laboratory (NREL), North Malé Atoll had an annual average wind speed of 4.9 m/s (17.7 km/h), while a 2005 report by the American Wind Energy Association (AWEA) described the minimum average wind speed needed to run a utility-scale wind power plants as 6 m/s (21.6 km/h).

That report stated that because “power available in the wind is proportional to the cube of its speed… doubling the wind speed increases the available power by a factor of eight.”

For example, a turbine operating at a site with an average of 20 km/h should produce 33 percent more electricity than a site operating at 19 km/h, because the cube of 20 is larger than the cube of 19.

This means that a difference of just 1 km/h in wind speed could significantly bring down productivity of the wind farm.

The Falcon/GE project’s local lead, Umar Manik, told Minivan News at the time that due to engineering advances the Gaafaru wind farm was expected to run on a minimum wind speed of 5.7 m/s.

However at time of signing the MoU, Falcon had still to raise the required investment with international banks, which by the time of Minivan News’ 2010 article had almost doubled to US$370 million from the original estimate of US$200 million.

“International banks are very keen to invest in the Maldives,” Manik told Minivan News at the time, “but they need eighteen months of wind surveys. They are becoming partners, they don’t want to lose their money.”

The turbines were to be planted once six months of data had been gathered, “to give us full confidence,” according to Manik.

While data was to be gathered by a 150-foot tall wind mast installed in the area, a LNG backup generator with a capacity of 50 megawatts was to be constructed with a supply contract reportedly signed with a Saudi Arabian firm. The deal was quietly terminated in late 2010.

Minivan News was unable to establish the credentials of Falcon Energy, which no longer appears to have a web presence. The Singapore-listed Falcon Energy Group, a major offshore oil and gas player that was widely presumed by the international energy media to be the party involved in the Gaafaru project, denied any knowledge of its existence when contacted by Minivan News last week. GE meanwhile failed to respond to enquiries.

Falcon Energy was introduced in the President Office’s original release as having commissioned “onshore and offshore wind farms totalling 1,500 MW over the past 10 years, in the UK, Spain, Portugal, Ireland and Canada.”

Interviewing Manik last April, Minivan was led to understand that Falcon Energy Group was based in the UK and represented a consortium of four companies – two from the UK, including Falcon Energy, one from Holland and another from Saudi Arabia.

The government’s Isles project website states that when the MoU signed with Falcon Energy was terminated a decision was made to proceed with a new group identified as ‘STAR Renewables Consortium’, a joint venture represented by the Saudi Trading and Resources Company. However an MoU was never signed as STELCO elected to proceed with an open tender – a process that led to the current deal with XEMC.

Minivan News understands that at least two years of wind data needs to be collected before the Gaafaru venture can proceed – data that should be available by the end of the year.

“The only wind speed data currently available is not good enough for a commercial venture,” an informed source told Minivan News. “That will determine what sort of turbines are needed – some are better at low wind speeds.”

LNG was selected as a backup option due to the ability to rapidly power it on and off as demand necessitated, however “at some point we will want to switch off the gas.”

Minivan News understands that the intention is to ultimately power Male’ and its surrounding islands with a mixture of wind, gas and marine current generation, with potential for the latter presently being determined by a £48,000 (US$76,000) study led by Scotland’s Robert Gordon University and due to report this year.

Foreign investment in such projects is subsequently to be coordinated by the government’s new office of Renewable Energy Investment, operating under the Ministry of Economic Development.


16 thoughts on “Chinese firm to take over Gaafaru wind farm project following collapse of GE/Falcon Energy deal”

  1. dear JJ, u seem to be very enthusiastic to spread Govt's propagenda. There never was any deal on a Gaafaru windfarm. And there will never be. We know it. During Gayoom's time there were lots of mega projects like this such as ihavandhipolhu project, hulhumale phase 2, moonbay marina. That was all attempts by the rulers to hodwink us. That was back then. Things havent changed in this country. ITs the same. Only the people changed. The people who rule will only do 'projects' that will benefit them. 'projects' that will give them millions..such as gulhifalhu project which gave mdp strong man Reeko. When would maldivians learn anything. i dont know we ever will.

  2. It is not convincing and let’s see what happens.
    The only positive news is government is trying hard to deliver.

  3. Above must be Idiots of the former guard commenting; who desperately wants to hang on to the loot and block progress to the mass!!!

  4. they are players , they are still playing. even when bringing down the dictator, these mdp goons spread so many false stories abt the then regime, and they did succeed with it.

    They are still playing the people.

  5. Yes everything is spread with propagenda, since the MDP Guys gave these projects without Tender, Look what happen Immigrtaion project it was tender and went according to the Tender Board rules and regulation but these people fail those what about these projects?

  6. Today's new phrase from the MDPicon.

    "Trying Hard to Deliver" - Initiate and publicize projects which defy reason, logic and any standard of feasibility / Make loud declarations regarding commitments of questionable sincerity on public occasions and near election time.

  7. Indian Gov will play a series of propaganda against this Chinese initiative. The biggest challenge for this gov ever will be maintainingba balance of project/investments between India, China and US. Maldives is now a US puppet in Indian ocean. US pressure to gov to bow to yahoodees. Exploit Maldives to achieve their objectives in Asia.

  8. Yes.. If they want they will fail the project after winning and will use Haveeru news paper and DhiTv to spread false stories to public and their own government name spoil ..

  9. I am going to walk on my head for an entire day, if this latest venture with the Chinese works out. I am quite confident that this is yet another stunt by Nasheed's regime.

    There was a lot of criticism of the lack of project management during Gayyoom's regime. I don't see any improvement at all by the present one. Infact, the number of phantom projects and MoUs have increased quite considerably under the present regime.

    Citizens are taking note of these.

  10. I think its best for the people to wait and see if any of these big projects actually go through and work out before giving any credit to the Government. Too many promises and too many projects at the same time has actually left only a few even making it half way. Even than political spat between MDP and DRP has only caused projects to be lost. Foreign Investors see how big of a time waste it is to invest in the Maldives at the time. The Chinese should be careful too as there is too much political uncertainties in the country at the moment. First all these politicians who are talking big against each other needs to be given a proper education on their duties to the people and the most weak of the people. They need to learn to lower their voices and be humble in their words. They need to learn to have good and polite character so that people can actually have good views of Maldivian politicians. Currently the ones that are generally labeled the most corrupt in the country are the Judges and Politicians. Imagine that in a time of supposed democracy in the country.

    Even Egypt is moving faster than Maldives looking at the huge size of the country compared to ours. People need to be more cautious when dealing with politicians even of their own parties. They need to make sure that these politicians do not feel that with authority comes invincibility. I admire the people of Egypt on how mature they are when it comes to understanding that they should never trust the politicians in a time of corruption on all sides.

  11. Better find aladin,s lamp. That is the only solution for you circus clowns !!!!

  12. We have experienced the outcome of a joint venture in the telecom sector where the Dhiraagu had been squeezing us from all telecommunications unless Wataniya came into the scene!

    Let us hope that our electricity bills would not end up like the telecom bills Dhiraagu had been shamelessly pushing to us where Rf. 30/= had been charged for giving a caller identification service which in fact could have been given free of charge with the flick of a switch on the control panel!

  13. I seriously do not know if these projects, specially the renewable energy projects will work out or not, but what I do know is if it does work out, a very heavy load from our shoulders will be lifted hence our reliance on oil will be so much reduced. With this in mind it is worth a try and give all our blessings to these hopes, not because you support or don't support our rulers but, us and our future generations will benefit.

  14. @ 800 DRP, good positive thinking wish our country folks can be like you. We need miracles here in Maldives. Our ancestors; practiced sorceries to solve their problems.

  15. No surprises here. We believed Rannamari, Foolhudhiguhandi, Ibn Batuta's call for Arabian camels dreams' from centuries old beliefs on buddhism, etc.

    So. its just another one of those. We are guile, naive, forgetful... anybody could fool us, with any shit story, anytime.


Comments are closed.