NewEnergyNews: TODAY’S STUDY: HOW TO CUT OFFSHORE WIND COSTS

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YESTERDAY

  • FRIDAY WORLD HEADLINE-Climate Change Report – ‘Upheaval’ In ‘Uncharted Territory’
  • FRIDAY WORLD HEADLINE-Oil Giants Buying In On EU Ocean Wind
  • FRIDAY WORLD HEADLINE-Japanese Floating Solar Backed by Apple
  • FRIDAY WORLD HEADLINE-Germany Upped EV Access 27% in 2016
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, March 23:

  • TTTA Thursday-No Majority Anywhere Doubts Climate Change
  • TTTA Thursday-Making The Baby Decision As The Climate Changes
  • TTTA Thursday-Wind Delivers 54% Of Power To Midwest 11-State System
  • TTTA Thursday-A System To Better Use New Energy
  • THE DAY BEFORE THE DAY BEFORE

  • ORIGINAL REPORTING: New Markets Opening Up To Distributed Resources
  • ORIGINAL REPORTING: Utilities Driving Record Solar Growth
  • ORIGINAL REPORTING: Hawaii’s Fight For 100% New Energy Goes On
  • THE DAY BEFORE THAT

  • TODAY’S STUDY: Battery Energy Storage Right Now
  • QUICK NEWS, March 21: Eight Things To Do About Climate Change; The Fight For New Energy Wires; The Best New Energy Battery
  • AND THE DAY BEFORE THAT

  • TODAY’S STUDY: Ways To Get To Zero Emissions
  • QUICK NEWS, March 20: $19 Trillion Benefit In Global Climate Fight; U.S. New Energy Now A $200Bil Biz; $10Bil EV Buy Planned By Band Of Cities
  • THE LAST DAY UP HERE

  • Weekend Video: The Colors Of Energy
  • Weekend Video: The Jobs Boom In New Energy
  • Weekend Video: Veterans Join Wind's Fight For New Energy
  • --------------------------

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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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  • ---------------
  • WEEKEND VIDEOS, March 25-26:

  • Bill Maher Talks Trump Havoc, Climate Havoc
  • What NYC Faces From Climate Change
  • Kids Design A New Energy City

    Monday, March 09, 2015

    TODAY’S STUDY: HOW TO CUT OFFSHORE WIND COSTS

    Cost Reduction Monitoring Framework; Summary Report to the Offshore Wind Programme Board

    February 2015 (Innovate UK – Offshore Wind Energy Council)

    Executive Summary

    The Offshore Renewable Energy Catapult was commissioned by the Offshore Wind Programme Board and sponsored by the members of the Offshore Wind Industry Council (OWIC) to develop a Cost Reduction Monitoring Framework (CRMF) for the offshore wind industry. The design of the CRMF was developed jointly by the Offshore Renewable Energy Catapult and The Crown Estate.

    Results show that the Levelised Cost of Energy (LCoE) of offshore wind has reduced by 11% during the period 2010-2014. Evidence suggests that the target of £100/MWh by 2020 is achievable; however, challenges remain. This report describes these challenges and provides recommendations.

    The evidence supporting this report’s findings and recommendations is contained in both a quantitative and a qualitative analysis conducted by Deloitte and DNV GL respectively.

    Cost reductions are being achieved largely by progress in the development of larger turbines, XL monopile foundations, improvements in operation & maintenance and extended design life. Progress is also being made in finance (cost of debt, equity and insurance) and across the supply chain (competition, collaboration, contracting)…

    Recommendations

    Below are the primary recommendations to the OWPB to ensure that progress continues and the target is achieved for projects reaching FID by 2020.

    1. Clarify the Government’s future programme and level of regulatory support for offshore wind after the current CfD auction, and with respect to the Levy Control Framework beyond 2020. Industry investors and supply chain innovators need the market opportunity to be clearly illustrated such that sufficient investment can be attracted to reduce costs. This message must be clearly and consistently communicated across the industry to administrators and policy makers.

    2. Encourage the demonstration of balance of plant innovations such as novel foundations and optimised electrical networks. Technology demonstration remains a major hurdle to commercialisation and electrical networks and foundations innovations must deliver on their cost reduction potential if the overall targets are to be achieved. The industry should collaboratively support these innovations and facilitate efficient knowledge sharing to enable rapid adoption.

    3. Investigate the potential impact of lower than anticipated levels of investment in the jack-up and heavy lift construction vessel fleets, particularly for foundation installation. Additionally, the influence of a depressed international oil price should be considered on vessel availability. One of the largest impacts of a smaller market is on fit for purpose vessel development. It should be determined what fleet size and vessel capability is required to support the volumes predicted over the next five to ten years.

    4. Support the capture and sharing of knowledge and best practice through increased collaboration with a view to increasing the predictability of project execution. Identifying and promoting best practice in project execution will support the reduction of contingencies. It would be reasonable to expect some reduction to financial contingencies as offshore wind construction activities become more established but there is no clear evidence that contingency levels are decreasing for new projects. It is noted that, due to rapid technology innovation, a significant amount of uncertainty continues to be priced into projects when making investment decisions.

    5. Continue to monitor cost reduction progress in the UK and extend to take consideration of European offshore wind development. An annual assessment of progress against key qualitative milestones requires significant industry support to ensure all relevant evidence is gathered. The ongoing assessment of actual project costs requires continued support and engagement from asset owners with the Cost Reduction Monitoring Framework. It is also recommended that the metric used to assess the progress of ‘Growth and Scale’ is reviewed to ensure that it remains relevant as the target year of 2020 approaches.

    6. Further consideration should be given to identifying and, if required and appropriate, addressing the gaps in skills and expertise required to deliver and operate an offshore wind farm.

    This report combines and summarises the findings and recommendations of the primary Qualitative and Quantitative assessment reports prepared by DNV GL and Deloitte LLP respectively. Additional recommendations are included in each of these reports and further details can be found on the ORE Catapult website https://ore.catapult.org.uk/CRMF.

    Conclusions

    The Cost Reduction Monitoring Framework has been highly successful in drawing together a coherent picture of the costs of recent projects within the UK offshore wind industry and provides an accurate assessment of the associated cost reduction trajectory.

    Results show that the Levelised Cost of Energy (LCoE) of offshore wind has reduced by 11% during the period 2010-2014. Evidence suggests that the target of £100/MWh by 2020 is achievable; however, challenges remain.

    Cost reductions are being achieved by progress in the development of larger turbines, XL monopiles, improvements in O&M and extended design life. Progress is also being made in finance (cost of debt, equity and insurance) and across the supply chain (competition, collaboration, contracting). However, market growth has been lower than forecast by The Pathways Study and whilst good progress has been made there are risks to continued cost reduction:

    • the supply chain, including turbine manufacturers, does not have sufficient confidence in the size of the market up to and beyond 2020 to justify making the technology investments that will drive cost reduction further.

    • solutions expected to be necessary for constructing deeper water further offshore sites, e.g. jacket and/or gravity-based foundations and HVDC connections, are not being developed quickly enough.

    Whilst this report concludes that good progress is being made towards the LCoE target of £100/MWh by 2020, there is still more work to be done to lock in the cost reductions delivered and ensure the momentum is maintained.

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