Wind Energy

1
Wind Energy

• Economical Aspects Project Development
• With Real Case Studies

Gävle University Renewable energy
course Supervisor Prof. Göran Wall Shahriar
Ghahremanian October 2006
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1- Economical Aspects

• 1-1 Total investment cost
• 1-2 Effective life time of system
• 1-3 Operation Maintenance Cost
• 1-4 Physical properties of wind and wind turbine
  output energy
• 1-5 Technical availability
• 1-6 Total Production cost
• 1-7 Cost Comparison with Other Energy Sources
• Conclusion

3
1-1 Total investment cost

• Total investment of wind turbine is divided to
• Turbine manufacturing (ex-work)
• Construction like foundation, building and
  engineering
• Connecting to grid

Region Power (kWe) Turbine cost (US per kWe)
United states1 200 1000 - 1200
European community2 100 - 400 1000 1300
The Netherlands3 250 800

• Approximately 75 - 80 of total investment is
  related to turbine (reported by USA and the
  Netherlands )
• The total investment is about 900 1300 US per
  kWe
• Making the turbine should be more cost effective
  than construction but connecting to grid are
  increasing

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1-2 Effective life time of system

• For economic considering, wind turbines often
  have 20 years economic life time and this time is
  equal to system design
• Although we should notice that the best turbines
  have proven life time around 10 to 15 years

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1-3 Operation / Maintenance Cost

• O M costs are often considering as a
  percentage of total investment or electricity
  production cost per kilowatt hour

Region O M Cost US cent/kWh
Europe ( scientific experiences)2 0.5
European community study 1
US department of energy SERI1 1
Danish energy agency (1990) 3 0.6 (for first 2 years) 0.8 (for next 3 years) 1 (after 5 years)

• The percentage of the total investment
  attributed to operation and maintenance costs
  rises as wind turbines become older
• Operation and maintenance costs are divided into
  parts such as
• services
• consumables
• repair
• insurance
• administration
• lease of site

Machine Size Year 1-2 Year 3-5 Year 6-10 Year 11-15 Year 16-20
150 kW 1.2 2.8 3.3 6.1 7.0
300 kW 1.0 2.2 2.6 4.0 5.0
500-600 kW 1.0 1.9 2.2 3.5 4.5
Annual operational and maintenance costs in of
the investment in the wind turbine (Danish Energy
Agency, 1999, p.19)
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1-4 Physical properties of wind and wind turbine
output energy

• Average output energy per square meter of rotor
  swept per year is the below form
• 
  KWh/m2/yr
• b efficiency Coefficient (this factor is an
  efficiency quality of wind turbines, is not
  constant around the world and depends on average
  velocity of wind in a year and wind distribution)
• v velocity average in a year

Distribution function of wind velocity 4
Improvement of efficiency factor of wind turbines
4
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1-5 Technical availability

• System availability is the portion of a year that
  turbine can produce energy. A turbine may not
  produce energy all the year because of
  maintenance, unpredictable events and repairing.

Technical availability of best US wind turbines
5

• There are no records or reported experiences
  about unavailability
• Only US (as figure 5-1) showed that
• Medium sized wind turbines (250 KWe) probably
  reached to desired availability
• Large scale wind turbines (gt 300 KWe) are in
  first steps
• The best wind turbines in US reaches to 95
  availability level after 5 years operation.

8
Sample Wind Farm Costs

• For example an indicative capital cost for a
  "turn-key" contract to supply, install and
  commission a large wind farm, as shown in the
  table, based on 400 kW wind turbines (and UK
  experience), is about A850 - 1,050 per square
  metre of rotor swept area or A1.8 - 2.7 million
  per MW

Project Initiation   Financing Planning Consent Project development/ management 1 project cost 10,000 to 50,000 50,000
Capital Costs Ex-factory cost of machines Install and commission Infrastructure connect 550/sq.m swept area 15 ex-factory cost 45 ex factory cost
Annual costs Operation and maintenance Metering reactive power Insurance Land rental Rates 1.5 of capital cost 0.64 c/kVArh 0.5 of capital cost 1.5 of gross revenue 13 per installed kW
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Wind Energy Project Analyses (Data from Renewable
Energy Technology Screen case studies, Canada),
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Project name Unit Remote Community Wind farm Repowering Green Power Production Grid-Connected Wind farm Large Wind Turbines Offshore Wind farm Isolated Island Community Wind Power on Hydro Central-Grid Grid-Connected Wind Farm
Project location --- Yukon, Canada Alberta, Canada Alberta, Canada Andhra Pradesh, India Niedersachsen, Germany Copenhagen, Denmark Newfoundland, Canada Kennewick, WA Wigton, Jamaica
Annual average wind speed m/s 6 6.5 6.2 6.2 6.4 7.2 6.5 6.6 8.3
Grid type --- Isolated-grid Central-grid Central-grid Central-grid Central-grid Central-grid Isolated-grid Central-grid Central-grid
Number of turbines --- 1 32 1 80 6 20 6 49 23
Wind plant capacity kW 150 19200 600 20000 9900 40000 390 63700 20700
Unadjusted energy production MWh 585 65375 1933 43022 18848 110599 908 181128 82133
Pressure adjustment coefficient --- 0.84 0.9 0.9 0.93 1 1 0.98 0.96 0.89
Temperature adjustment coefficient --- 1.08 1.03 1.03 0.96 1.02 1.02 1.04 1.03 0.98
Gross energy production MWh 530 60603 1792 38410 19225 112811 926 179100 71637
Losses coefficient --- 0.88 0.94 0.95 0.9 0.9 0.89 0.87 0.9 0.77
Renewable energy delivered MWh 469 57044 1704 34679 17372 99839 562 161842 55235
Renewable energy delivered GJ 1687 205360 6134 124845 62540 359422 2022 582630 198846
Base case GHG emission factor tCO2/MWh 0.472 0.513 0.491 0.559 0.861 0.898 0.925 0.559 1.019
Net annual GHG emission reduction tCO2 210 25772 770 17045 13767 82513 494 79547 47044
Initial Costs                    
Feasibility Study 5 0.1 2.9 0.3 0.5 1.3 2.4 0.3 0
Development 4.6 0.2 4.5 0.8 3.5 4.1 4 1.1 0
Engineering 6.9 0.2 4.5 0.6 0.3 0 7.2 0.8 11.3
Energy Equipment 38.4 81.6 63.9 77.5 69.4 49.8 50.6 74.6 69.6
Balance of Plant 36.5 12.2 16.3 11.8 21.5 41.7 30 12.1 10.1
Miscellaneous 8.5 5.7 7.9 9.1 4.8 3.1 5.7 11.1 9
Feasibility Study 4 3,500 1 9,100 3 5,300 47413 36487 548804 30,000 245,200 -
Development 4 0,000 5 4,700 5 4,900 132604 281631 1735190 50,000 835,500 -
Engineering 5 9,800 5 9,300 5 4,600 112578 24334 - 90,000 610,500 195,000
Energy Equipment 331,750 2 4,250,400 7 82,200 13607274 5539156 21064398 632,040 59,275,016 1,206,192
Balance of Plant 315,000 3 ,635,000 2 00,000 2071877 1716806 17626301 375,000 9,638,000 175,500
Miscellaneous 73,576 1 ,702,904 9 6,437 1595178 386016 1299375 71,211 8,829,119 156,093
Initial Costs - Total 863,626 29,721,404 1,223,437 17566925 7984431 42274068 1,248,251 79,433,335 1,732,785
OM Annual Costs - Total 26,074 81968 47662 319831 230 725 22.071 2,557,215 50,050
Simple Payback yr 41.6 11.4 13.8 6.3 7.4 7.3 7.2 11.3 7
Year-to-positive cash flow yr more than 25 20.1 15.6 7.6 6.8 7.1 6.9 immediate 5.4
Annual Life Cycle Savings 69489 464025 2 ,012 1220962 253446 1472728 2861 1,229,164 37,231
Benefit-Cost (B-C) ratio --- 1.15 0.47 1.04 3.18 1.45 1.34 0.98 - 1.34
Avoided cost of energy /kWh 0.1 0.06 0.08 0.0901 0.075 0.046 0.19 0.0439 0.0033
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1-6 Total Production cost
SERI / DOE 3 EC 1,2 DEA 3
Total investment cost 400 500 US/m2 1000 1200 US/KWe 400 600 US/m2 900 1100 US/KWe 5680 DKK/KWe 770 US/KWe
Average of wind velocity 6.6 m/s in 25 m height - 6.5 m/s in 30 m height
Total gained energy per year 800 1070 KWe / m2 - 1000 KWe / m2
Capacity factor - 28.5 22.3
Availability 95 95 -
Total energy loss 23 - -
O M 1 cent / KWh 2 of total investment per year 1 - 2 years 1.4 3 5 years 2 6 20 years 2.5
Substitution cost of turbines (after 8th 20th yrs) 27000 40000 ( for 200 KWe wind turbine) - -
Lifetime 30 yrs 20 yrs 20 yrs
Interest rate 0.061 - -
Fixed cost rate 0.102 - -
Investment (real) rate of return - 5 per year 7 per year
Total Cost 6.8 US cent/KWh 3.5 7 US cent/KWh 4.5 US cent/KWh
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1-6 Total Production cost ( Contd)

• EC capacity factor almost considered high and in
  US long lifetime
• Generally Danish study seems more realistic.
• As a result, we can conclude total production
  cost is about 5 10 US cent / KWh.
• In general, the initial investment for a 1MW
  wind turbine project is about 1.1 million EUR
  (S.E.I., 2004, p.4).
• As shown in the below table, the most expensive
  part of the investment is the costs of turbines,
  accounting for 80 of the total installation
  cost.
• Average cost of a typical 600 kW turbine project
  (Danish Energy Agency, 1999)

Component Average DKK (600kW)
Turbine ex-works5 3 146 000
Foundation 149 000
Grid connection 288 000
Electrical Installation 20 000
Tele communication 14 000
Land 103 000
Roads 39 000
Consulting Finance 36 000 20 000
Insurance 94 000
Total 3 909 000
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1-7 Cost Comparison with Other Energy Sources
(A.W.E.A., 2002, p.1)
Plant Fuel Type USD cents/kWh
Coal 4,8 - 5,5
Gas 3,9 - 4,4
Hydro 5,1 - 11,3
Biomass 5,8 - 11,6
Nuclear 11,1 - 14,5
Wind 4,0 - 6,0

• Data from 1996 comparing the Levelized (Include
  all capital, fuel, and operating and maintenance
  costs associated with the plant over its lifetime
  and divides that total cost by the estimated
  output in kWh over the lifetime of the plant)

Fuels Production cost ( EUR cents/kWh) External cost ( EUR cents/kWh) Total cost ( EUR cents/kWh)
Nuclear 3.1 0.1 3.2
Gas (CHP) 3.2 1.0 4.2
Coal 3.4 2.4 5.8
Wind onshore/inland 7.8 0.3 8.1
Wind onshore/on coast 4.5 0.1 4.6
Wind offshore 5.8 0.1 5.9
Production, external and total costs of different
energy fuels (Belgian Ministry of Energy and
Sustainable Development Pauwel and Streydio,
2000, p.18).
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Conclusion

• It appears that Wind Energy cannot compete in the
  market with traditional energy sources without
  the help of financial support.
• But if we consider climate change, global warming
  and GHG emissions, wind energy will be
  financially feasible.
• Thank You

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2- Project Development

• 2-1 Initial site selection
• 2-2 project feasibility assessment
• 2-3 the Measure-Correlate-Predict technique
• 2-4 site investigation
• 2-5 Public investigation
• 2-6 Preparation and submission of planning
  application

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2-1 Initial site selection

• The mean power production for a wind turbine is
  given by
• P (U) power curve of wind turbine is available
  from turbine suppliers
• f (U) probability density function of the wind
  speed may be obtained from wind atlas (European
  wind atlas, 1989)
• T time period
• Energy yield of a wind turbine can be estimated
  as shown in below by combining the wind speed
  distribution with the power curve
• H (ui) number of hours in wind speed
• P (ui) power output at the wind speed
• Road access for transporting the turbines and
  other related equipment such as main transformer
• A review of the main environmental
  considerations, the important constraints
  includes special consideration of areas
• Ensuring that no turbine is located so close to
  domestic dwellings
• Avoiding area of particular ecological value as
  well as any locations of particular
  archaeological or historical interest
• Noise
• Visual domination
• Light shadow flicker

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2-2 project feasibility assessment

• Once a potential site has been identified then
  more detailed, and expensive, investigations are
  required in order to confirm the feasibility of
  project
• The wind farm energy output, and the financial
  viability of the scheme, will be very sensitive
  to the wind speed over the life of the project
• To establish a prediction of the long term wind
  resource, it is recommended to use the
  measure-correlate-predict (MCP) technique.
  (Derrick, 1993, Mortimer, 1994)

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2-3 the measure-correlate-predict technique

• MCP approach linear regression is used to
  establish a relationship between the measured
  site wind speed and long term meteorological wind
  speed data of the form
• Usite a b Ulong-term
• Coefficients are calculated for some directional
  sectors and the correction for the site applied
  to the long term data record of meteorological
  station
• Thus, MCP requires the installation of cup
  anemometers and wind vane at the wind farm site
  and one anemometer at the hub height of wind
  turbine
• Measurements are made over at least 6 month
  period and correlated with measurements made
  concurrently at the meteorological station
• Estimate what the wind speed at the wind farm
  site would have been over the last 20 years (as a
  prediction of the wind speed during the life of
  the project )
• Difficulties
• with modern wind turbines, high site
  meteorological masts are necessary also with
  planning permission
• availability of suitable meteorological station
  within 50-100 km
• the gaps and quality of meteorological station

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2-4 site investigation

• A careful assessment of existing land use
• How best the wind farm may be integrated with
  e.g. agricultural operations
• The ground conditions for ensuring turbine
  foundations, access roads and construction areas
• Local ground conditions for position of turbines
• Hydrological study for determining whether spring
  water supplies of wind farm
• More detailed investigation like bend radii,
  width, gradient and any weigh restrictions on
  approach roads
• Discussion with local electricity utility
  concerning the connection to distribution network

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2-5 Public investigation

• Prior the erection of the site anemometer the
  wind farm developer may initiate some form of
  informal public consultation like local community
  organizations, environmental societies and
  wildlife trusts.

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2-6 Preparation and submission of planning
application

• The purpose of wind farm environmental statement
  (that is an expensive and time consuming and
  requires the assistance of various specialists)
  may be summarized
• physical characteristics of wind turbines and
  their land use requirement
• environmental character of proposed site and
  surrounding area
• environmental impacts of the wind farm
• measures which mitigate any adverse impact
• need for the wind farm and allowance for planning
  authority and general public decision on the
  application

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2-6 Preparation and submission of planning
application

• Topics covered in environmental statement will
  typically include the following (BWEA, 1994)
• policy framework
• site selection
• designated areas
• visual and landscape assessment
• noise assessment
• ecological assessment
• archaeological and historical assessment
• hydrological assessment
• interference with telecommunication systems
• aircraft safety
• safety
• traffic management and construction
• electrical connection
• economic effects on the local economy
• decommissioning
• mitigating measures
• non-technical summary

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Extras Appendixes

• Sample Wind Farm Costs
• 9 Wind Energy Project Analyses

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References

1. J.M. Cohen , Methodology for computing wind
   turbine cost, American energy association , 1989
2. H.N. Nacfaire, Demonstration program for wind
   energy, United Kingdom, EWEC, 1999
3. Danish energy agency wind energy in Denmark,
   1999
4. N.C. van de Borg, The energy production of wind
   turbines, The Netherland, 1999
5. H.J.M Beurskens and E.H.L. Lysen, Perspective of
   wind energy, European wind energy association,
   2001, www.ewea.org
6. British wind energy association, best practice
   guidelines for wind energy development, 2001,
   www.bwea.com
7. European wind atlas, Risø national lab, 1999,
   www.wind-power.dk
8. International energy agency, wind turbine, 2000,
   www.iea.org
9. The wind atlas analysis and application program,
   www.wasp.dk
10. D. Taylor, wind energy and the environment, IEEE
    energy, www.ieee.com
11. Renewable Energy Technologies Screen
    International Clean Energy Decision Support
    Centre, www.RETScreen.net

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THANK YOU FOR YOUR ATTENTION