Title:

Largescale offshore wind energy: cost analysis and integration in the Dutch electricity market


Author(s):



Published by:

Publication date:

ECN
Policy Studies

121999


ECN report number:

Document type:

ECNI99003

ECN publication


Number of pages:

Full text:

71

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Abstract:
The results of analysis of the construction and integration costs oflargescale offshore wind energy (OWE) farms in 2010 are presented. The
integration of these farms (1 and 5 GW) in the Dutch electricity distribution
system have been regarded against the background of a liberalised electricity
market. A first step is taken for the determination of costs involved in
solving integration problems. Three different types of foundations are
examined: the monopile, the jacket and a new type of foundation: the
concrete caisson pile: all singleturbinesinglesupport structures. For real
offshore applications (>10 km offshore, at seadepths >20 m, the concrete
caisson pile is regarded as the most suitable. The price/power ratios of wind
turbines are analysed. It is assumed that in 2010 turbines in the power range
of 35 MW are available. The main calculations have been conducted for a 3 MW
turbine. The main choice in electrical infrastructure is for AC or DC.
Calculations show that at distances of 30 km offshore and more, the use of
HVDC will result in higher initial costs but lower operating costs. The share
of operating and maintenance (O&M) costs in the kWh cost price is
approximately 3.3%. To be able to compare the two farms, a base case is
derived with a construction time of 10 years for both. The energy yield is
calculated for a wind regime offshore of 9.0 m/s annual mean wind speed. Per
3 MW turbine this results in an annual energy production of approximately 12
GWh. The total farm efficiency amounts to 82%, resulting in a total farm
capacity factor of 38%. With a required internal rate of return of 15%, the
kWh cost price amounts to 0.24 DFl and 0.21 DFl for the 1 GW and 5 GW farms
respectively in the base case. The required internal rate of return has a
large effect on the kWh cost price, followed by costs of subsystems. O&M
costs have little effect on the cost price. Parameter studies show that a
small cost reduction of 5% is possible when the total construction time is
reduced to 7 years. Different financing options are regarded: a required
internal rate of return of 10% or even 5% reduces the kWh cost price with 27%
up to 50%. The effect of including the lifetimes of components in the price
calculations is analysed, as well as the effect of considering the electrical
grid as part of the public grid. With a maximum public effort the kWh cost
price could be reduced to 8 ct. Integration of largescale offshore wind
energy in the distribution system can cause several technical and economic
effects. These effects are caused by the variable wind supply, and can vary
from insufficient grid connection capacity to the potential danger of a black
out in the distribution system and large price fluctuations on the
electricity market. To solve these problems, the application of backup power
is introduced. Three types are regarded: an old coal plant, a new STEG plant,
and hydroelectric power from Norway. Calculations show a moderate effect on
the wind energy price due to backup power: this price increases with 6% up to
13%. In the backup power calculations an assumed market price is used, which
makes it possible to predict a provisional value of an OWE green certificate.
Finally, a comparison is made between the effect of possible technology
improvements, public incentive effects and the effect of using backup power.
This results in the conclusion that the feasibility of largescale offshore
wind energy depends more on public policy than on technology. 22 refs.
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