Low Carbon Energy Technologies Series December 2015 Wind Power

Transcription

1 Low Carbon Energy Technologies Series December 2015 Wind Power Onshore spread, offshore hopes

2 Wind Power Onshore spread, offshore hopes Wind energy has been used for millennia to power wind mills and sailing boats, but is now primarily used to generate electricity. Wind turbines have proliferated over the past decade and, in some regions, wind has become one of the most important sources of electricity supply. Economics have also improved: if wind conditions are favorable, onshore projects are nearing competitiveness with electricity generated from the combustion of fossil fuels. Offshore wind, however, remains at an early phase of deployment. Some progress has been made in Europe, but offshore wind is still constrained by its high up-front costs, uncertainties over the scope for cost reduction and the speed with reductions may be accomplished. The content of this summary is based upon the Wind Power FactBook. For the complete FactBook and other FactBooks by the A.T. Kearney Energy Transition Institute, please visit 2 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

3 Wind turbines use rotor blades and an electricity generator to convert kinetic energy into electrical energy The technical potential of wind energy is considerable Wind energy has been used for millennia for instance for windmills to pump water. Nowadays, the primary use of wind energy is yet to generate electricity from wind turbines. As for all sources of energy but tidal, geothermal and nuclear, solar is the root source of wind energy. When sunlight heterogeneously heats the Earth and its atmosphere, temperature gradients are formed, resulting in air motion i.e. wind moving from cold to warm regions. The global technical potential for wind energy exceeds current global electricity production, although the quality of resources vary according to locations. Wind turbines harvest the kinetic energy of moving air and convert it into electricity The kinetic energy theoretically available for extraction increases with wind speed power is proportional to the cube of the velocity. Wind energy is harnessed thanks to wind turbines that use rotor blades and an electricity generator to convert the kinetic energy of moving air into electrical energy. Several designs have been investigated Several designs are-coexisting. However, horizontal threebladed upwind rotors with variable speed operation have become prevalent. Over time, turbines have grown larger and taller to maximize energy capture over a range of wind speeds while reducing cost per unit of capacity. In addition, turbines are now located also offshore to capture higher wind-speed. Although the fundamentals of the technology are the same offshore wind turbines installed over the past years were essentially scaled-up, marinized versions of land turbines installed in shallow waters, onshore and offshore wind systems are likely to diverge further. Figure 1: Global wind resource map Meters per second (m/s) Wind speed over water (m/s) Source: IPCC (2011), Special report on renewable energy ; IEA (2012), Energy Technology Perspectives ; Picture credit to CNET The energy available in the wind is a function of the cube of the wind speed Wind speed over land (m/s) 3 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

4 Turbines have grown larger and taller to maximize energy capture over a range of wind speeds, while reducing or minimizing increases in the cost per unit of capacity Figure 2: Key components of a wind turbine and typical onshore & offshore technology features 1 Onshore Offshore Rotor blade Resources ~23% capacity factor on average to date ~34% capacity factor on average for new installations ~40% capacity factor on average to date ~49% capacity factor on average for new installations Wind direction for an upwind rotor Hub height Hub Tower Nacelle with gearbox and generator Pitch Rotor Wind direction Yaw drive Tower Low-speed shaft Brake Gear box Yaw motor Generator Controller Anemometer Nacelle High-speed shaft Blades Wind vane Dimensions Environment 1-3 MW turbine size MW wind farm $ million investment Land-based conditions Unrestricted access Land constraints for large turbines (roads) 3-7 MW turbine size (average 3.7 MW) 100-1,000 MW wind farm (average 368 MW) $450-4,500 million investment Rough marine conditions Remote from shore (~32.9 km in 2014 for a 22.4 m depth) Access limited by waves and storms) Foundations Built on solid ground Standard concrete foundations cast on site Built on different types of soil (sand, clay, rock ) Foundations depend on water depth and soil consistency Note: Typical features worldwide to provide order of magnitude. Note that it does not reflect the entire range of options and that typical features may vary from a region to another. Source: US DoE (2015), 2014 Wind Technologies Market Report ; IPCC (2011), Special report on renewable energy, 2011 ; Global Wind Energy Council (2014), Global Wind Report Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

5 Wind capacity has spread worldwide over the past three decades Figure 3: Wind development timeline 1980s First large-scale development in California U.S. 1990s Development in Denmark, Spain & Germany 2000s Massive expansion in European, U.S., Chinese & Indian capacities, with Europe accounting for less than 50% of cumulative capacity at the end of the decade 2010s China becomes leader, with most installed capacity, surpassing the U.S. and Germany 2015 Germany overtakes the U.K. for offshore capacity additions in 2015, but the U.K. remains leader in terms of cumulated capacity. Three offshore projects connected to the grid in Germany ~780 MW in total First wind farm in Denmark (52kW) 1991 First offshore wind farm in Denmark (Windeby), ~5 MW in total 2004 Wind development starts in China & India 2014 ~370 GW of operational capacity(8.8 GW offshore) 2003 First offshore wind farm in the U.K. (North Hoyle), 60 MW in total 2012 London Array, offshore wind farm projected 630 MW in total Source: A.T. Kearney Energy Transition Institute, Global Wind Energy Council (2015), Global Wind Statistics 2014 ; The Guardian (2008), Timeline: The history of wind power 5 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

6 Wind-power capacity has accelerated rapidly over the past decade in the OECD, China & India Onshore wind-power capacity has grown at a robust rate over the last decade Global wind-power capacity has increased by an average of 23% a year for the last 10 years to reach 370 GW at the end of Growth has been driven by onshore technology, which accounts for 97.6% of capacity. China accounted for 41% of capacity additions in 2014 and is the principal driver of market growth ahead of Germany (11% of capacity additions in 2014). The market in the U.S. recovered in 2014 with 4.9 GW capacity additions after having dropped in 2013 down to 1.1 GW due to the expiration of the Production Tax Credits. Despite this impressive deployment, wind is accounting globally for no more than 6.4% of total installed capacity, supplying around 3.6% of global electricity. Wind capacity is expected almost to double by 2020, driven by Asia Going forward, wind growth is yet expected to continue, increasing capacity to over 630 GW by Asia will continue leading wind-capacity additions with 148 GW additional capacity expected in the next 5 years. North American and European markets are also expected to remain dynamic. In addition, wind development should continue to spread globally with emerging markets such as Russia, India, Brazil, Mexico, Turkey, Iran or South Africa. Growth in wind generation should exceed capacity growth because of increasing load factors, mainly as a result of improvements in turbine technology and accelerated deployment of offshore wind farms. However, despite European and Chinese interest, offshore should not account for more than 6.5% of global wind capacity in Figure 4: Global installed wind capacity GW Despite progress in Europe, offshore wind is yet to overcome deployment-phase challenges CAGR 1 : % CAGR 1 : % e 2016e 2017e 2018e 2019e 2020e Onshore Offshore Note: 1 CAGR: compound annual growth rate. Source: Global Wind Energy Council (2015), Global Wind Report 2014 ; IEA (2015), Renewable Energy, Medium-term market report ; Bloomberg (online), German Offshore Wind Installs Surge to 1.76 Gigawatts This Year 6 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

7 The IEA estimates that in order to create an energy system capable of limiting the average global temperature increase to 2 C, wind will need to be meeting 15-18% of global electricity demand by 2050 Figure 5: Wind power forecast capacity additions in key emerging wind markets GW Russia Targets 7 GW by 2020, compared with 14 MW installed as of 2014 Morocco Targets 2 GW by 2023, compared with 0.8 GW installed as of Iran Targets 5 GW by 2020, compared with ~0 GW installed as of Turkey Mexico Targets 20 GW by 2023, compared with 3.8 GW installed as of Targets 12 GW by 2020, compared with 2.5 GW installed as of Brazil Targets 16 GW by 2021, compared with 5.9 GW installed as of South Africa Targets 5 GW by 2019, compared with 0.8 GW installed as of India Targets 60 GW by 2022 (including 1 GW offshore), compared with 22.5 GW installed as of Note: Even in the most conservative forecast (6 C increase, business-as-usual case), wind is expected to play a greater role in the power mix, meeting at least 5.2% of electricity demand in four decades time. Source: A.T. Kearney Energy Transition Institute; Global Wind Energy Council (2015), Annual Market Update 2014 ; Bloomberg (2015), Turkey Seeks 2,000 Megawatts of Wind Power Earlier Than Planned ; Reegle; North American Wind Power (2015), Mexico Wind Has Bright Horizons, Thanks To Energy Reform ; Renewables International, Russia wind power plans part 1 ; Busby (2012), Wind Power: The Industry Grows Up 7 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

8 Wind R,D&D efforts are focused on maximizing energy capture and solving network-integration difficulties Developing larger and taller turbines is a major focus of R,D&D The growing size the turbine diameters his is driven by offshore wind in order to mitigate the proportionally higher costs of infrastructure (e.g. building foundations) and to lower the number of units per kw of installed capacity in order to facilitate access and maintenance. On the other hand, the height of onshore tower tend be levelling off due to public acceptance of noise and visual disturbance, to road access constraints and in some cases to economics consideration (i.e. higher capital investment is not compensated by higher capacity factor). Nevertheless, rotor diameters of onshore turbine continue to increase in some regions such as the U.S. Unconventional designs mainly airborne wind energy systems are also arousing curiosity although there is no large-scale pilot plant at this stage. R,D&D is also focused on solving network-integration and offshore-specific issues The need to ensure wind power meets network requirements has also resulted in a significant effort to create innovative transmission systems and to develop power control systems. Research, development & demonstration (R,D&D) is now essential for offshore to improve components and reduce technology costs. Public funding for wind energy R&D recovered After stabilizing around $ million from the mid-1980s to the mid-2000s, public R&D funding recovered and peaked again Investment in wind R&D is yet substantially lower than investment in other renewables, such as solar. Figure 6: Evolution of wind-turbine rotor diameter Rotor size in meters for most advanced turbines Altamont Pass, CA Kenetech kw 17m rotor Altamont Pass, CA Kenetech kw 33m rotor Buffalo Ridge, MN zond Z-750 kw 46m rotor Hagerman, ID GE 1.5 MW 77m rotor Unconventional wind-turbine designs arouse curiosity, although there is no largescale pilot plant at this stage Borkum West, Germany Areva 5 MW 116m rotor Østerild, Denmark Vestas/MHI 8 MW 160m rotor Ellern, Germany Enercon 7.5 MW 127m rotor Onshore Offshore Note: 1 This graphic shows prototypical larger-than-average turbines created at different stages of the period shown, and does not depict growth in average turbine size. Source: A.T. Kearney Energy Transition Institute analysis based on US DoE (2015), 2014 Wind Technologies Market Report ; IPCC (2011), Special report on renewable energy, 2011 ; Global Wind Energy Council (2014), Global Wind Report Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

9 Onshore wind is nearing competitiveness in some locations, while the economics of offshore projects will depend on future cost reductions Wind is a capital-driven industry As with most other renewables, upfront investment accounts for the bulk of the full cost of wind power, although operation & maintenance costs are more significant in offshore projects. Investment costs are significantly lower for onshore than for offshore, ranging respectively from $1,300-$2,300 /kw and from $2,700-$5,100 /kw. This gap can be explained by offshore wind s relative lack of maturity, as well as the marine environment s need for expensive foundations and costly grid connections. However, a limited decrease is expected for onshore investment costs by 2020, while offshore should benefit from larger drop in investment costs. The competitiveness of wind power is increasing If wind conditions are favorable, onshore projects are nearing competitiveness, with a levelized cost of electricity (LCOE) of $ /MWh. Offshore wind is not yet competitive, with an LCOE of $ /MWh, varying according to the load factor. In addition, because of the cost structure of offshore wind, the technology s economics are highly sensitive to project delays. Gridintegration costs have not been taken into account in either case. Cost estimates are system specific and dependent on the wind resources available, but, in general, the higher the wind penetration, the higher the integration costs. Figure 7: Typical onshore & offshore wind cost breakdown Onshore [1,300-2,300] $/kw Offshore [2,700-5,100] $/kw Capital cost breakdown 4-10% 13-30% 65-84% 30-55% 8-30% The outcome of future UN climate talks will be critical to the long-term Turbine success costs of CCS. account for most of the capital cost in the case of onshore, whereas offshore incurs significant installation and connection costs 30-50% Share of capital in levelized cost of electricity 11-30% 70-89% 15-35% 65-85% Turbine 1 Balance of station 2 Soft costs 3 Capital cost Operation and maintenance cost Note: 1 Turbine costs include rotor, drive train and tower; 2 Balance of station costs include foundations, roads and civil works, assembly and installation, electrical interface, development, project management; 3 Soft costs include insurance, surety bonds, contingency, construction and financing. Source: IPCC (2011), Special report on renewable energy ; IRENA (2012), Renewable Energy Technologies: Cost Analysis series - Wind Power ; IRENA (2015), Renewable Power Generation Costs In 2014 ; NREL (2013), 2011 Cost of Wind Energy Review 9 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

10 Despite reductions in costs and the increasing maturity of wind s ecosystem, the deployment of wind is still shaped by policy support Wind economics are still largely shaped by policy support As with most other emerging low-carbon energy technologies, supportive government policies remain crucial for wind-power deployment. These usually fall into two categories: altering prices to which investors are exposed, such as feed-in-tariffs or tax incentives; or mandating a certain quantity of wind power, within renewable portfolio standards or auctions, for example. Auctions are becoming increasingly popular and have proved an effective method of achieving very low prices. In April 2015, for instance, an auction for 90 MW of onshore wind concluded at around $60/MWh. However, prices this low do not necessarily reflect the true costs of wind power and such aggressive bidding may not be sustainable. The ecosystem of wind power has matured In parallel with the expansion in capacity, wind finance took off during the 2000s. However, it is now facing growing competition from solar photovoltaic. The ecosystem of wind power has developed and matured over the last years with a growing role of financing players. Whereas the onshore wind turbine market is relatively fragmented with a significant presence of non-oecd players, offshore is still dominated by northern European companies. The outcome of future UN climate talks will be critical to the long-term The success outlook of CCS. for investmentcost reduction in offshore wind projects over the next few years remains uncertain, but is likely to be greater than for onshore Figure 8: Typical LCOE range for renewable technologies and regional weighted averages $2014 /kwh The most competitive onshore wind projects are now regularly delivering electricity for $0.05/kWh, and even lower costs (~ down to $0.04/kWh) are expected to be possible Fossil fuel power cost range 0 Wind onshore Wind offshore Solar PV Concentrating solar power Hydro power Africa Asia Europe Middle East North America Oceania South America Note: The levelized cost of electricity (LCOE) represents the per-kilowatt-hour cost of building and operating a generating plant over an assumed financial life and duty cycle. Its ranges reflect differences in resources available, local conditions and choice of sub-technology. Calculations are based on a 7.5% discount rate for OECD countries and China, and 10% in the rest of the world. While LCOE allows comparison of costs among technologies, it may be an unreliable metric when comparing technologies at different stages of maturity. LCOE can also be a misleading measure of the value of technologies that perform different roles in an electricity system and that should be assessed in terms of their contribution to system reliability, flexibility and cost.. Source: A.T. Kearney Energy Transition Institute based on IRENA (2015), Renewable Power Generation Costs in Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

11 Wind is not facing any major environmental and social hurdles Wind does not directly emit GHGs or other pollutants Wind power is one of the lowest greenhouse-gas-emitting energy technologies, with median emissions of 11 and 12 grams of CO 2 equivalent per kwh over its full lifecycle for onshore and offshore technology, respectively. However, wind CO 2 abatement is highly system specific and its overall impact depends on the penetration level and on the power system s ability to compensate for wind s intermittency without relying on carbon-intensive peaker power plants. Wind incurs few social challenges except aesthetic and noise impacts Despite the reluctance of the public to accept wind power because of the noise of turbines and their aesthetic impact, and relatively high space requirements, wind is not facing significant social or environmental hurdles. The outcome of future UN climate talks will be critical to the long-term Wind success has a of lower CCS. capacity density than solar, but the footprint of turbines on wind farms is negligible Figure 9: Land-use comparison for two 330 MW-equivalent renewable-power plants 1 GW onshore wind farm km 2 of total wind plant area Typical U.S. onshore plant 500 x 2 MW turbines 33% capacity factor Undisturbed land 1.4 GW Solar PV plant 2 10 km 14 km 2 of panels 34% capacity factor Disturbed land Turbine pad and clearing area 3 km 2 Land directly impacted Service road Note: 1 The weighted average capacity density of 172 existing U.S. onshore wind farms is 35 ± 22 hectare/mw, whereas land directly impacted averaged 0.3 ± 0.3 ha/mw according to NREL (2009) Land-Use Requirements of Modern Wind Power Plants in the United States. Such a plant would meet the need of roughly 2.2, 1.6 and 0.8 million households in China, Brazil and Germany, respectively; 2 According to the US DoE, modern solar PV plants require 10 to 20 km² per GW of capacity installed, depending on the latitude. 10km² /GW in this example; 3 Refer to appendix 4 for more information. Source: NREL (2009) Land-Use Requirements of Modern Wind Power Plants in the United States ; IPCC (2014), Technology-specific cost and performance parameters ; NREL(2013), Land-Use Requirements for Solar Power Plants in the United States 11 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

12 Wind energy raises network-integration issues that are system-specific Wind is an intermittent source of energy Wind output is variable, imperfectly controllable and predictable, and can be subject to changes in rate on several timescales, from inter-annual events to sudden, short-term turbulences. In addition, wind output tends to be poorly correlated with demand. As a consequence, wind power tend to increase flexibility needs which is apparent by observing the residual load (i.e. demand minus wind and solar generation), while making a limited contribution to the flexibility pool of resources mirrored by the low capacity that are granted by system operators. Therefore, despite the output smoothing resulting from geographic dispersion, wind requires back-up resources, whether in the form of dispatchable plants, energy storage, interconnection with adjacent markets, or demand-response. These resources are system and location specific. The quality of wind resources is location specific The best wind resources are often far from large consumption centers or in offshore locations, requiring long-distance or marine transmission lines. As a consequence, it is highly likely that wind will foster the development of high-voltage direct current. Figure 10: Annual average wind electricity penetration 1 in top-23 wind countries GW Denmark Ireland Portugal Spain Approximate wind penetration end of 2014 Approximate wind penetration end of 2013 The outcome of future UN climate talks will be critical to the long-term Wind success power of CCS. can be smoothed out geographically to reduce unpredictability but this requires expensive interconnection lines % 13 Global wind penetration in 2014 s electricity 3 2 production 1 Romania Germany U.K. Greece Approximate wind penetration end of 2012 Approximate wind penetration end of 2010 Sweden Austria Netherlands Poland Canada Italy Australia U.S. Turkey France China India Brazil Mexican Japan Approximate wind penetration end of 2008 Approximate wind penetration end of 2006 Note: 1 Wind penetration corresponds to the share of total electricity consumption supplied by wind power. Source: IEA (2014), Renewable Energy, Medium Term Market Report 2014 ; NREL (2012), Renewable Electricity Futures Study ; IEA (2012), World Energy Outlook Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.

13 Conclusion Despite attracting less attention than solar photovoltaic, wind power is by far the largest renewable energy after hydro power. The development of wind power has accelerated over the past decade and growth is expected to continue, increasingly driven by Asia, but also by emerging markets in Latin America or Africa. It is important to distinguish onshore wind power, a mature, proved technology, from offshore concepts, which still need to overcome the deployment challenge and to demonstrate their economic viability. In the longer term, airborne wind systems may change the game by harvesting higher wind speeds, while lowering investment costs. But airborne wind remains at an early stage of development. A.T. Kearney Energy Transition Institute FactBooks Natural Gas Series Introduction Gas Hydrates Low Carbon Energy Technologies Series Carbon Capture and Storage Wind Solar PV Solar CSP Storage Hydrogen Water & Energy Smart Grids Climate Change About the A.T. Kearney Energy Institute The A.T. Kearney Energy Transition Institute is a nonprofit organization. It provides leading insights on global trends in energy transition, technologies, and strategic implications for private sector businesses and public sector institutions. The Institute is dedicated to combining objective technological insights with economical perspectives to define the consequences and opportunities for decision makers in a rapidly changing energy landscape. The independence of the Institute fosters unbiased primary insights and the ability to co-create new ideas with interested sponsors and relevant stakeholders. Acknowledgements A.T. Kearney Energy Transition Institute wishes to acknowledge for his review of this FactBook: Ryan Wiser, Senior Scientist and Deputy Group Leader in the Electricity Markets and Policy Group at Lawrence Berkeley National Laboratory. His review does not imply that he endorses this FactBook or agrees with any specific statements herein. The Institute also wishes to thank the authors of this FactBook for their contribution: Benoit Decourt and Yann Fayet. For further information about the A.T. Kearney Energy Transition Institute and possible ways of collaboration, please visitwww.energy-transition-institute.com or contact us at contact@ 13 Summary FactBook Low Carbon Energy Technologies Series December 2015 Permission is hereby granted to reproduce and distribute copies of this work for personal or nonprofit educational purposes.