An Imagination Breakthrough: Offshore Wind Energy Alternative Energy Technology Innovations: Savannah, Georgia Benjamin Bell GE Energy
Overview Why Wind? Why Offshore? The Technology Wind Energy Economics Wind Energy Market The Arklow Project 2
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 3
Wind: A Technology For Future Generations Energy Security Distributed Generation Low Vulnerability Fuel Security Zero Fuel Price Risk Policy Issues Zero Emissions 4
Wind is Cost Competitive 25 20 15 Renewable Generation: Conventional Generation: 10 5 0 Wind Small Hydro Fuel Cell Bio Mass Solar Thermal Solar PV Coal GT CC SC Nuclear Wind: The Most Practical Renewable Technology Source: Lawrence Berkeley Lab Biomass : Direct fueled 5
US Potential Continues to Grow Wind Speed m/sec > 8 7-8 6-7 4-6 <4 Nantucket Sound Cape Cod, MA LIPA: 5.2 GW within 3-6 miles Next 5 Years (GW) US 7.7 LA 1.8 Canada 1.0 6
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 7% of nation s electric load 24% of nation s electric load Source: W. Musial, NREL 7
Wind - Double Digit Growth Opportunity Global Market Forecast 14,000 MW Installed 12,000 10,000 8,000 6,000 4,000 Other Asia Americas Europe 2,000 - Source: BTM Consult 1996 1998 2000 2002 2004 2006 8
Wind - Double Digit Growth Opportunity Installed MW 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Global Market Forecast Offshore Europe Americas Onshore Source: BTM Consult 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 9
GE Energy 10
GE 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 11
Wind Technology 12
Onshore and Offshore Wind Energy Rated Capacity Rotor Diameter(s) 1.5 MW 70.5 m, 77 m, 82.5 m 3.6 MW Offshore 104 m, 111 m 13
The 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 14
Wind Turbine Layout 15
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The Offshore Projects 160 MW Offshore Farm Horns Rev, North Sea Location Country Online No. MW Mfg. Water Foundation Distance Depth 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 17
Offshore Today - Subsidized Pilot Projects 18
The Offshore Projects 160 MW Vestas Offshore Farm Horns Rev, North Sea 40 MW Bonus Middlegrunden Farm in Copenhagen Harbor 10 MW GE Wind at Utgrunden, Sweden 10 MW NEG Micon Yttre Stengrund Offshore Sweden 5 MW Bonus Vindeby Wind Farm Offshore Denmark 19
The 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 20
Offshore Wind Turbine Foundation Types Gravity Monopile Tripod (Source: Jan van der Tempel, TU Delft ) 21
Specialty Equipment - Mayflower (Source: Mayflower) 22
Laying of Sea Cables 23
Operations & Maintenance 24
Wind Energy Economics 25
The Cost of Wind Energy The Cost of Energy (COE) for wind can be calculated: COE ($ / kwh) = Capital Recovery Cost + O&M / kwh / Year kwh / year = the amount of energy production The Capital Costs of a wind project include site acquisition, permitting, installation, balance of plant, financing, legal support, local taxes, insurance Capital Recovery = the cost of Debt and Equity O&M Costs = cost of operating and maintaining a wind plant No Fuel Costs: The Wind is Free! 26
A Steady Decline in the Cost of Wind Energy Cost ($/kw) $0.14 $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 $0.00 Turbine Size Cost of Wind Energy 1985 1990 1995 2000 2005 2010 Size (KW) 3,500 3,000 2,500 2,000 1,500 1,000 500 27
Growing Economies of Scale Rotor (Meter) KW Total Cost Cost/kW MWh 1981 10 25 $65 $2,600 45 1985 17 100 $165 $1,650 220 1990 27 225 $300 $1,333 550 1996 40 550 $580 $1,050 1,480 1999 50 750 $730 $950 2,200 2001 70 1,500 $1,300 $790 5,600 Bottom Line: 1981-1999 = 30x the power, 2.7x the cost; 1999-2001 = 2x the power, 1.2x the cost 28
Wind Energy Market 29
Market Tax Incentives US market characteristics PTC boom and bust Production Tax Credit - federal credit $18 / mwh, 10 yrs Short eligibility windows - 1-22 year extensions Boom in PTC years, bust in non PTC years PTC cycle provides urgency to order turbines Pushing for 5 year PTC extension, 2 years likely 30
Market Production 2005 GE North American orders 2003 result, 50% + of market Market leader due to track record, GE name, features GE capacity sold out US delayed PTC extension in 2004 delayed 04 orders PTC extended to 12/05, boom rush of orders ~1,100 units in 2005, record year (2003 record was 580 units) GE sold out a result of constrained PTC timing in US market 31
Market - Economics Capital costs Onshore Offshore Turbine and tower 75% 47% Install and BOP 20% 48% Development / other 5% 5% Total 100% 100% Typical total costs Varies with site specific costs Transportation, installation, interconnection For offshore: Water depth, distance from shore, significant wave height, extreme wave height 32
Higher Installation Costs Offshore Toward Deeper Depth Larger Depth for Better Wind & Environmental Impact Traditional Foundation Concepts Get Cost Prohibitive Calls for New Foundation Beyond Monopile Deeper Sites US Average Depth = 15 m Europe Avg. Depth = 11 m Stdev = 4 m Foundation & Installation Costs vs. Depth 33
The Arklow Project 34
The Arklow Project 25 MW, 7 x 3.6MW WTGs 35
Arklow 3.6 MW Machines in Staging Area 36
Transporting the Blades from Brazil 37
Arklow 50m Blades in Staging Area 38
Service Personnel Climb Aboard 39
Thank You! For more information, please contact: Benjamin Bell Offshore Sales - Americas GE Energy (603) 525-3862 benjamin.bell@ge.com www.gewindenergy.com