An Imagination Breakthrough: Offshore Wind Energyns2/AE4803/bbell.pdfAn Imagination Breakthrough:...

An Imagination Breakthrough:Offshore Wind Energy

Alternative Energy TechnologyInnovations:The Coming Economic BoomSavannah, GeorgiaMay 12, 2005

Benjamin BellGE Energy

2Alternative Energy Technology Innovations:

The Coming Economic Boom May 12, 2005

OverviewOverview

• Why Wind?• Why Offshore?• The Technology• Wind Energy Economics• Wind Energy Market• The Arklow Project

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Why Wind?Why Wind?• Fastest growing energy

source• Costs dropped 90% in 20

years• Growing

demand/incentives for green energy

• Wind is lowest cost renewable and can generate bulk power

• Fuel price uncertainty (gas & oil)

• Energy security

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• Energy Security• Distributed Generation

• Low Vulnerability

• Fuel Security• Zero Fuel Price Risk

•• Policy IssuesPolicy Issues• Zero Emissions

Wind: A Technology For Future GenerationsWind: A Technology For Future Generations

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Source: Lawrence Berkeley LabBiomass : Direct fueled

0

5

10

15

20

25

WindWind SmallSmallHydroHydro

FuelFuelCellCell

BioBioMassMass

SolarSolarThermalThermal

SolarSolarPVPV

CoalCoal GT CCGT CC SCSC NuclearNuclear

Renewable Generation:Renewable Generation:

Wind is Cost CompetitiveWind is Cost Competitive

Wind: The Most Practical Renewable TechnologyWind: The Most Practical Renewable Technology

Conventional Generation:

Conventional Generation:

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Next 5 Years (GW)US 7.7 LA 1.8Canada 1.0

US – Potential Continues to GrowUS – Potential Continues to Grow

m/sec> 8 7- 86- 74- 6<4

Wind Speed

LIPA: 5.2 GW within 3-6 miles

Nantucket Sound Cape Cod, MA

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24% of nation’s electric

load7% of nation’s electric

load

Why Go Offshore in the Southeast?Why Go Offshore in the Southeast?

• No windy lands near many load centers in the Southeast

• Transmission barriers on land for long distances

• Strongest winds reside offshore

Source: W. Musial, NREL

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-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1996

1998

2000

2002

2004

2006

Global Market Forecast

Wind - Double Digit Growth OpportunityWind - Double Digit Growth Opportunity

Other Asia Americas

Europe

MW

Inst

alle

d

Source: BTM Consult

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Wind - Double Digit Growth OpportunityWind - Double Digit Growth Opportunity

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Global Market Forecast

OffshoreEuropeAmericas

Onshore

Source: BTM Consult

Inst

alle

d M

W

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GE Energy

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GE Energy – What We DoGE Energy – What We Do• Wind Turbine Design &

Manufacturing

• Operation, Maintenance & Repair Service

• Installation & Commissioning

• Project Engineering & Site Layout

• Project Management

• Project Financing

• Project Development Assistance

• Community Education & Acceptance

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Wind Technology

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RatedCapacity

Rotor Diameter(s)

3.6 MW Offshore

104 m, 111 m

Onshore and Offshore Wind EnergyOnshore and Offshore Wind Energy

1.5 MW

70.5 m, 77 m, 82.5 m

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The 1.5 MW Series Wind TurbineThe 1.5 MW Series Wind Turbine

• Key Facts• 70.5, 77, and 82.5 meter

rotors• 65 - 80 m heights for

optimal energy capture • Electrical blade pitch

system• 50/60 Hz versions

available• Over 2,500 machines in

operation

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Wind Turbine LayoutWind Turbine Layout

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160 MW Offshore Farm – Horns Rev, North Sea

The Offshore ProjectsThe Offshore ProjectsThe Offshore Projects

Location Country Online No. MW Mfg. Water Foundation DistanceDepth m (ft) Tripod Gravity Monopile from Shore

Norgersund (SE) Sweden 1990 1 0.22 WindWorld 7m (23ft) 0.03 km (100 ft)Vindeby (DK) Denmark 1991 11 4.95 Bonus 3 - 5m (10 -16ft) 1.5 km (.9 mi)Lely (NL) Holland 1994 4 2 NedWind 5 - 10m (16 -33ft) 0.75 km (.5 mi)Tuno Knob (DK) Denmark 1995 10 5 Vestas 3 - 5m (10 -16ft) 6 (3.7 mi)Dronten (NL) Holland 1996 28 16.8 Nordtank 5m (16ft) 20 (12.5 mi)Gotland (SE) Sweden 1997 5 2.75 WindWorld 6m (20ft) 3 (1.9 mi)Blyth Offshore (UK) UK 2000 2 3.8 Vestas 8m (26ft) 0.8 (0.5 mi)Middelgrunden (DK) Denmark 2001 20 40 Bonus 3 - 6m (10 - 20ft) 3 (1.9 mi)Utgrunden (SE) Sweden 2001 7 10 GE Wind 7 - 10m (23 - 33ft) 8 km (5 mi)Yttre Stengrund (SE) Sweden 2001 5 10 NEG Micon 6 - 10m (20 - 33ft) 5 km (3.1 mi)Horns Rev (DK) Denmark 2002 80 160 Vestas 7 - 10m (23 - 33ft) 25 km (15.5 mi)Samso (DK) Denmark 2003 10 23 Bonus 11 - 18m (36 - 59ft) 3.5 km (2.2 mi)Frederikshavn (DK) Denmark 2003 4 11 V, B, N 7 - 10m (23 - 33ft) 3 (1.9 mi)Nysted (DK) Denmark 2003 72 158.4 Bonus 6 - 10m (20 - 33ft) 12 km (7.5 mi)Arklow (IE) Ireland 2003 7 25.2 GE Wind 5 - 10m (16 - 33ft) 10 km (6 mi)

Totals 266 473 1 114 144

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Offshore Today - Subsidized Pilot ProjectsOffshore Today - Subsidized Pilot Projects

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40 MW Bonus Middlegrunden Farm in Copenhagen Harbor

10 MW NEG Micon Yttre Stengrund

Offshore Sweden

160 MW Vestas Offshore Farm – Horns Rev, North Sea

10 MW GE Wind at Utgrunden, Sweden

5 MW Bonus Vindeby Wind Farm – Offshore Denmark

The Offshore ProjectsThe Offshore Projects

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The GE 3.6 MW Offshore Wind TurbineThe GE 3.6 MW Offshore Wind Turbine

• Key Facts• 104 to 111 meter rotors• Enables wind projects

to be sited near load centers

• Specialized systems for the offshore environment:Onboard cranes, specialized coatings, redundant systems

• 50/60 Hz versions

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Offshore Wind Turbine Foundation TypesOffshore Wind Turbine Foundation Types

(Source: Jan van der Tempel, TU Delft )

Gravity Monopile Tripod

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Specialty Equipment - Mayflower

(Source: Mayflower)

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Laying of Sea CablesLaying of Sea Cables

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Operations & Maintenance

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Wind Energy Economics

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The Cost of Wind EnergyThe Cost of Wind Energy

•• The Cost of Energy (COE) for wind can be The Cost of Energy (COE) for wind can be calculated:calculated:

COE ($ / kWh) = Capital Recovery Cost + O&M / kWh / Year

–– kWh / year = the amount of energy productionkWh / year = the amount of energy production–– The Capital Costs of a wind project include site acquisition, The Capital Costs of a wind project include site acquisition,

permitting, installation, balance of plant, financing, legal permitting, installation, balance of plant, financing, legal support, local taxes, insurancesupport, local taxes, insurance

–– Capital Recovery = the cost of Debt and EquityCapital Recovery = the cost of Debt and Equity–– O&M Costs = cost of operating and maintaining a wind plantO&M Costs = cost of operating and maintaining a wind plant

No Fuel Costs: The Wind is Free!No Fuel Costs: The Wind is Free!

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Cost of Wind Energy

Cost of Wind Energy

TurbineSize

TurbineSize

1985 1990 1995 2000 2005 2010

Size (KW)

Cost ($/kw)

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

$0.14

500

1,000

1,500

2,000

2,500

3,000

3,500

A Steady Decline in the Cost of Wind EnergyA Steady Decline in the Cost of Wind Energy

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Bottom Line: 1981-1999 = 30x the power, 2.7x the cost;1999-2001 = 2x the power, 1.2x the cost

1981 1985 1990 1996 1999 2001Rotor (Meter) 10 17 27 40 50 70KW 25 100 225 550 750 1,500Total Cost $65 $165 $300 $580 $730 $1,300Cost/kW $2,600 $1,650 $1,333 $1,050 $950 $790MWh 45 220 550 1,480 2,200 5,600

Growing Economies of ScaleGrowing Economies of Scale

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Wind Energy Market

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Market – Tax IncentivesMarket – Tax Incentives

•• US market characteristics US market characteristics –– PTC boom and PTC boom and bustbust•• Production Tax Credit Production Tax Credit -- federal credit $18 /federal credit $18 / mWhmWh, ,

10 yrs10 yrs•• Short eligibility windows Short eligibility windows -- 11--2 year extensions2 year extensions

•• Boom in PTC years, bust in non PTC yearsBoom in PTC years, bust in non PTC years•• PTC cycle provides urgency to order turbinesPTC cycle provides urgency to order turbines

•• Pushing for 5 year PTC extension, 2 years likelyPushing for 5 year PTC extension, 2 years likely

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Market – ProductionMarket – Production•• 2005 GE North American orders2005 GE North American orders

•• 2003 result, 50% + of market2003 result, 50% + of market•• Market leader Market leader –– due to track record, GE name, due to track record, GE name,

featuresfeatures•• GE capacity sold outGE capacity sold out

•• US delayed PTC extension in 2004 delayed ‘04 US delayed PTC extension in 2004 delayed ‘04 ordersorders

•• PTC extended to 12/05, boom rush of ordersPTC extended to 12/05, boom rush of orders•• ~1,100 units in 2005, record year (2003 record was ~1,100 units in 2005, record year (2003 record was

580 units)580 units)•• GE “ sold out” a result of constrained PTC GE “ sold out” a result of constrained PTC

timing in US markettiming in US market

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Market - EconomicsMarket - Economics

•• Capital costsCapital costs Onshore OffshoreOnshore Offshore•• Turbine and towerTurbine and tower 75%75% 47%47%•• Install and BOPInstall and BOP 20%20% 48%48%•• Development / otherDevelopment / other 5%5% 5%5%•• TotalTotal 100%100% 100%100%

•• Typical total costsTypical total costs•• Varies with site specific costsVaries with site specific costs•• Transportation, installation, interconnectionTransportation, installation, interconnection•• For offshore: Water depth, distance from shore, For offshore: Water depth, distance from shore,

significant wave height, extreme wave heightsignificant wave height, extreme wave height

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Deeper SitesUS Average Depth = 15 mEurope Avg. Depth = 11 m

Stdev = 4 m

Toward Deeper Depth• Larger Depth for Better Wind & Environmental Impact • Traditional Foundation Concepts Get Cost Prohibitive • Calls for New Foundation Beyond Monopile

Foundation & Installation Costs vs. Depth

Higher Installation Costs OffshoreHigher Installation Costs Offshore

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The Arklow Project

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The Arklow Project – 25 MW, 7 x 3.6MW WTGsThe Arklow Project – 25 MW, 7 x 3.6MW WTGs

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Arklow 3.6 MW Machines in Staging Area

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Transporting the Blades from Brazil

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Arklow 50m Blades in Staging Area

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Service Personnel Climb Aboard

Thank You!

For more information,please contact:

Benjamin BellOffshore Sales - AmericasGE Energy(603) 525-3862benjamin.bell@ge.comwww.gewindenergy.com