Project Financing Risk Identification/Mitigation

Transcription

1 Supported by the U.S. Department of Energy Project Financing Risk Identification/Mitigation Mark Jacobson NREL July 2018 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

2 Energy Development Conundrum Adam Energy development is a balance of resource availability, cost, impact assessment, demand, and a heavy dose of politics. The energy sector is risk averse and dependent on limited capital markets with a low risk tolerance. Photo from Green Mountain Power, NREL NREL RISK matters: Power production Structural engineering Grid integration. Photo by Warren Gretz, NREL NREL Especially since RE technologies already are associated with a risk premium. 2

3 Resource Assessment is Driven by the Question Question: Will it be windy on my hike today? Which instrument is better? VS. Boy Scout with a wet finger RESULT: WINDY +/-? m/s Anemometer RESULT: 8 m/s +/- 0.1 m/s What is at risk? An uncomfortable hike A Boy Scout might work for this scenario. 3

4 Resource Assessment is Driven by the Question Question: How windy will it be at my wind farm? Which instrument is better? VS. Boy Scout with a wet finger RESULT: WINDY +/-? m/s Anemometer RESULT: 8 m/s +/- 0.1 m/s What is at risk? Champagne or bankruptcy Anemometer is the way to go with so much at stake! 4

5 Cost and Risk Trade-off Risk Pyramid? Cost Long-Term and Hub-Height Measurements Extrapolated Measurements Wind Maps and Virtual Met Masts Uncertainty 5

6 Project Financing Risk Buckets: Energy Resource Risk Technology Risk Market Risk Land Risk

7 Project Financing Risk Energy Resource Risk: Resource Study o High Quality: Quality Sensors Boom Length (best practices) Multiple Collection sites Data hub height Strong documentation o Independent Study

8 Ex: Philippines Wind Resource Assessment The NREL 2001 study estimated a 70-GW wind development potential for the Philippines, but many constraints have limited development. 8

9 Wind Resource Assessment Considerations Important wind characteristics: Wind shear, spatial and temporal variations, terrain influences Seasonal and diurnal wind patterns Wind direction and speed frequencies Turbulence and complex terrain influences Extreme weather events. New wind resource tools: Best areas m/s Capacity factors 30-35% Best areas m/s Greatly improved wind modeling Capacity factors 35-40% Best areas m/s Capacity factors 40-45% Computational-based worldwide wind data sets Validation of regional modeled wind speeds with tower-based measurement sites Better understanding of wind changes with height For some locations, virtual measurement can be obtained, which can help spur wind development. 9

10 High-Resolution Wind Mapping North Dakota s Cha gi g Wi d km resolution 30-m height No ground cover Minimal terrain data km resolution 50-m height Basic ground cover Good terrain data m resolution Multiple heights (80 m) Good ground cover Excellent terrain data With the new and expanded availability of data, increasing computational power, and better prediction models, the ability to conduct national wind assessments has increased almost exponentially. This allows developers and policy makers to better assess potential. 10

11 Advances from a 2001 Typical Analysis 2001 Analysis 2018 Analysis 30m data GIS terrain flow 30,50,80,100,140,200m data Numerical Weather Prediction Shorter term o Exposure based o Deprecated technology o Limited information Wind power class (outdated approach) o No Shear, wind direction, temperature o Long term representative o Physically based model o Latest generation technology o Detailed information o Frequency distribution Shear, Wind Direction o Temperature, Air Density o Temporal information o

12 Current Wind Resource Assessment: Work Products-wealth of data Geo-referenced Wind Resource & Climatology at each height of 30m, 50m, 80m, 100m, 140m, and 200m: o Annual mean wind speed o Annual mean power density o Annual mean temperature o Annual mean air density o Annual Weibull a and k o Annual sectored wind speed count (16 sectors) o Annual wind speed histogram (30 bins) o Monthly mean wind speed (for 12 months) o Monthly mean power density (for 12 months) o Monthly mean temperature (for 12 months) o Monthly mean air density (for 12 months) o Monthly Weibull a and k (for 12 months) o Monthly sectored wind speed count (16 sectors) o Monthly wind speed histogram (30 bins) o Hourly mean wind speed (for hours 0 to 23) o Hourly mean power density (for hours 0 to 23) o Hourly mean temperature (for hours 0 to 23) o Hourly mean air density (for hours 0 to 23) o Hourly Weibull a and k (for hours 0 to 23)

13 Resource Assessment to Development Although static national wind maps can help identify development potential, they have not provided a clear path to developed projects. 13 Photo by Andrew Clifton, NREL NREL Photo by Warren Gretz, NREL Photo by Richard Ker, NREL Basic maps cannot be substituted for measurement data. Implementation of simple assessment tools (Geospatial Toolkit) allows viable comparisons for policy decisions. National wind resource measurement programs are needed to provide data to support project assessment. Modern meso-scale computational models using validated data can allow expanded development by making initial resource assessments available to a wide pool of potential developers Photo by Warren Gretz, NREL at lower cost (i.e., better risk/return). Photo by Warren Gretz, NREL 11209

14 Resource Risk Bottom Line: o More accurate Energy Resource information reduces risk o Improves Financing Terms

15 Project Financing Risk Technology Risk/Supplier Risk: Manufacturer with a proven track record Current Model type that is matched appropriately with the resource Supplier Contract: Developer/Owner has signed agreement with turbine delivery dates that match the OffTaker s/developer s COD schedule

16 Changes in Turbine Technology Rapidly changing turbine technology focused on taller turbine towers and larger turbine rotors (longer blades) is changing the landscape of wind development. 16

17 Changes in Viable Wind Deployment Area of the United States with viable (30% capacity factor) wind development Class II turbine, 77-m rotor on an 80-m tower Class III turbine, 100-m rotor on a 110-m tower Class III turbine, 117-m rotor on a 140-m tower 17

18 Updated Philippines Wind Resource Assessment Given the changes in resource modeling and turbine technology over the past decade, what will a new national assessment look like? It would include more economically viable wind potential closer to loads and infrastructure. But will this be enough to expand wind development in the Philippines? May e, ut it s a k to a assess e t of the risk/reward premium. More efforts will likely be needed to reduce the risks associated with largescale wind development on behalf of regulators, utility providers, developers, and financers. 18

19 Project Financing Risk Market Risk: Financeable Contracts: o Power Purchase Agreement/Build-Transfer Agreements (PPAs/BTAs) standard o Construction Contracts o Large Generator Interconnection Agreements (LGIAs) Utility construction schedule o Transmission Service Agreements (TSAs) o Example Issues: Schedule, Performance Bonds, Replacement Power o Risk appropriately placed between Project Owner and Off-taker Politics

20 Project Financing Risk: LAND Risk: 1. Land Use Evaluation: a) b) c) d) 2. Landowner Engagement: a) b) c) 3. Ownership (Private, State or Federal lands large or small parcels) Proximity to Schools, churches and businesses Environmental: Parks, Refuges and Wildlife areas Evaluate Risk of opposition groups Financeable Contract Fair Dealings with Landowner team De-commissioning language Permitting (Local, State/Provincial, Federal) a) b) c) Sound study, Flicker study, Property Value Study, Wildlife impact studies (birds and Threatened & Endangered species) Historical Preservation Office? Balance Impact with Benefits: I. II. III. IV. Jobs (Direct and Indirect) Leasing Income to hosting landowners Tax benefits to community Environmental benefits to community (water conservation and reduced emissions)

21 Questions Mark Jacobson,