NewEnergyNews: TODAY’S STUDY: OFFSHORE WIND COSTS TO DROP/

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
  • Weekend Video: Impacts Of The Atlantic Meridional Overturning Current Collapse
  • Weekend Video: More Facts On The AMOC
  • THE DAY BEFORE THE DAY BEFORE

    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
  • Weekend Video: Florida Insurance At The Climate Crisis Storm’s Eye
  • Weekend Video: The 9-1-1 On Rooftop Solar
  • THE DAY BEFORE THAT

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
  • Weekend Video: The Changes Causing The Crisis
  • Weekend Video: A “Massive Global Solar Boom” Now
  • THE LAST DAY UP HERE

    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
  • --------------------------

    --------------------------

    Founding Editor Herman K. Trabish

    --------------------------

    --------------------------

    WEEKEND VIDEOS, June 17-18

  • Fixing The Power System
  • The Energy Storage Solution
  • New Energy Equity With Community Solar
  • Weekend Video: The Way Wind Can Help Win Wars
  • Weekend Video: New Support For Hydropower
  • Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, August 24-26:
  • Happy One-Year Birthday, Inflation Reduction Act
  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Tuesday, July 19, 2011

    TODAY’S STUDY: OFFSHORE WIND COSTS TO DROP

    Although utility-scale wind was pioneered in the U.S. in the early 1980s, its momentum fell off in the late 1980s and 1990s as oil and gas prices plummeted. European governments chose at that time to discourage dependence on MidEast oil, Russian natural gas and dirty coal by using tax policy to keep energy prices higher.

    Their dependence on fossil fuels did not quickly diminish but wind-rich countries around the North Sea and the North Atlantic, especially the UK, the Netherlands, Germany and Spain, seized the opportunity.

    The energy business has evolved through three lifetimes since then, the gas guzzling 90s, the 2005-to-2008 New Energy boom and the present recession-driven hesitation. The U.S. has returned to wind and China has taken over world leadership. But Europe continues to move on steadily in wind technology and installed capacity.

    Lacking the wide open spaces needed for onshore wind that are available in China and the U.S., Europe began exploring offshore wind in the early 1990s. In recent years, it set to sea with commitment and, just as it did in the 17th and 18th centuries, it took dominance of the bounding main. Europe leads the world with almost 2,400 megawatts of installed offshore wind capacity and nearly 4,000 more under construction.

    Nowhere is this commitment to ocean wind stronger than in the UK. Driven by its awareness of climate change and the evils of coal as well as by committed, vocal activists determined to move away from nuclear power, UK governments moved progressively toward New Energy. With its North Sea oil and gas resources peaking and the logic of developing its ocean wind riches becoming more and more undeniable, Britain is preparing for a transition.

    Development has been facilitated because the monarchy’s Crown Estate owns complete regulatory authority on the UK continental shelf. The Crown Estate’s concrete, methodical, long term development plan – now in its Round 2 period, preparing for Round 3 and planning Round 4 – has prepared not just to plant turbines but to build a supply chain, ready ports and a construction industry and advance the technology.

    The most important outcome of the UK’s effort, as reported in the study highlighted below, is that the heretofore prohibitively high price of offshore wind-generated electricity could fall by 2022 to within reach of competitiveness with the price of fossil fuel-generated electricity that includes a premium for greenhouse gases.

    In the process, the UK’s development of its offshore wind industry will eliminate 800 million metric tons of greenhouse gas emissions, add £60 billion to its economy from manufacturing and building, another £20 billion from operations and maintenance, £14 billion in tax revenues, and set off the building of a £3 billion domestic supply chain that will grow 45,000 long-term jobs.

    The takeway: Most of these benefits are available to any nation with good ocean winds and smart, far-sighted policy makers.

    The sad truth: Washington blew it in the late 1980s, caught up in the middle part of the 2000-to-2010 decade and is in the process of blowing it again.



    Offshore Wind – Forecasts of Future Costs and Benefits
    June 2011 (Renewable UK)

    Executive Summary

    Offshore wind is now widely accepted as the central focus of the UK’s plans to increase the amount of energy it produces from renewable sources over the next decade. The creation of a project pipeline of nearly 50GW by The Crown Estate has put the country at the forefront of the world market and is attracting key players to set up design and manufacturing facilities in the UK to serve the sector.

    There are still major challenges ahead. The offshore wind industry is not yet mature in either technology or supply chain and, if it is to play a significant, long-term role in the low carbon future of the UK, it must improve costs. A world-class offshore wind supply chain may develop in the UK, but investment is needed in the short term to realise the long term benefits.

    click to enlarge

    This study looks at the whole-life costs of offshore wind projects forecast to be built up to 2022 with a focus on how these costs will change over four-yearly periods. The first period, 2011-14, is associated with early learning and the build out of Round 2 developments; 2015-18 sees volume starting to be delivered though early Round 3 and Scottish Territorial Waters (STW) sites; and 2019-22 looks at the middle phase of STW and Round 3 activities.

    Having explored capital and operational costs, the report then sets these costs in the context of the wider benefits that the offshore wind industry can be expected to provide for the UK.

    click to enlarge

    Forecasts of costs to 2022

    The focus of the study is an analysis of lifetime costs based on technical considerations, though sensitivity to market dynamics and external factors such as exchange rate variation are also considered. In order to forecast the lifetime cost of offshore wind, overall cost is broken down into five key elements. The cost of each of these elements has been forecast for 67 discrete projects that are anticipated to be installed in UK waters between now and 2022. For each project, specific site parameters such as water depth, mean wind speed and export cable length are considered alongside turbine rating, rotor diameter and foundation and electrical transmission technology.

    Trends in capital expenditure (CAPEX), operational expenditure (OPEX) and energy generation due to these parameters and other relevant considerations were peer reviewed by a cross-section of industry, facilitated by RenewableUK. Results of the analysis and conclusions drawn were also peer reviewed, giving further integrity to the following conclusions.

    click to enlarge

    Based on a buoyant market, with a cumulative installation in the UK of more than 30GW by the end of 2022 and an anticipation of growth extending beyond the next decade, we forecast the following:

    UK offshore wind farm CAPEX per MW of installed capacity will continue to increase over the next decade as projects are located further offshore and in deeper water. Technology development and industry learning will have a significant impact in offsetting the costs caused by these conditions so that by the third period costs will be improving, despite projects being located in increasingly challenging locations.

    OPEX per MW installed will decrease significantly over the lifetime of wind farms installed in the next decade, primarily due to the use of larger and more reliable turbines.

    click to enlarge

    The move to sites further offshore will give developers access to improved wind resources. Combined with increases in turbine size, this will increase the energy yield per MW installed by more than a fifth over the period considered.

    The most important measure for the offshore wind industry is whole-life cost of energy, which is dependent on CAPEX, OPEX and the energy yield from wind farms. This cost of energy from UK offshore wind projects is expected to be driven down by more than 15% in real terms between 2011 and 2022, despite the increase in costs due to working in harsher conditions on later projects. Comparing the cost of energy improvement over the three periods while removing the impact of working in harsher conditions gives an improvement of more than 20%.

    click to enlarge

    A range of other factors beyond those relating to site conditions and the choice of technology can also affect prices. These include competition, innovation, exchange rates and steel prices. Opportunities exist for cost improvements of more than 15% between 2011 and 2022, with strong competition and innovation able to reduce the cost of energy by a further £20 per MWh. Favourable conditions across all four factors could see costs fall to around £100 per MWh (a 33% reduction). However, this cost reduction could be lost altogether if a lack of Government ambition fails to stimulate competition and innovation, or exchange rates and steel prices move the wrong way.

    click to enlarge

    In addition, assuming a buoyant market in the UK, elsewhere in the EU and beyond, plus the availability of sites similar to those that will be constructed during the third period, preliminary analysis of technology and process improvements available suggests that a reduction in the cost of energy of a further 15% over the 12 years after 2022 is well within the capability of the industry. This improvement would be in line with the historical trend in cost of energy reduction achieved during the growth of the global wind industry over the last two decades.

    click to enlarge

    Costs and benefits

    It is forecast that the installation of offshore wind farms between 2011 and 2022 will:

    Avoid nearly 800 million tonnes of carbon dioxide emissions by fossil fuel energy generation in the UK.

    click to enlarge

    Add approximately £60 billion to the UK economy through development, manufacture and installation activities.

    Create a further £20 billion in UK gross value added (GVA) in operation and maintenance over the lifetime of offshore wind farms built during this period.

    click to enlarge

    Provide approximately £14 billion in Treasury revenue through taxation and The Crown Estate licensing arrangements.

    • Trigger £3 billion of investment in the UK supply chain that will support more than 45,000 long-term jobs.

    1 Comments:

    At 9:07 AM, Anonymous Anonymous said...

    Hmm...let's create a market that is unnecessary and will delay production of our integrated power grid that is shovel ready now and is more sustainable. The central portions of Canada and the US have been shown to be able to produce many times more electricity than we can use, even with conservative development. This isn't about money for big companies, it's about the American consumer and doing something American for them. Building an integrated power grid is essential and eliminates the need to go offshore, as Europe had to due to limited on-shore wind land mass. Put aside the politics of generating more jobs to support unnecessary offshore wind projects, which will only increase the cost to consumers in the US. Put thousands of workers in all 50 states to work now, building our integrated power grid that can efficiently pipe power to where it's needed. NREL already has the model, so let's start doing what the people with the 10-pound brains say is smart. Let's get on with the business of delivering cheap, reliable power that can survive disasters by implementing solutions that are smart for the country as a whole, instead of throwing millions at something that is largely experimental here, and is being used by global power companies as a means to create more revenue, regardless of the fact that there's a better solution ready to go in the ground right now. National leadership on this issue is missing. We need to step up and make some progress on moving all our different energy around in a way that puts capital where it belongs, so more investment can be made in areas like public transportation, home energy efficiency, and personal vehicle design -- not unnecessary offshore platforms. Quit comparing us to the EU. Wind energy in the US should follow a US model, and we need to execute a strong firing solution in the name of what's needed, not what we can simply do because someone else is...

     

    Post a Comment

    << Home