Wind Power Part 2 16 September 2008

Outline
Now:
Wind Energy - Part 2
• The Recent
Developments and the
Current Situation
• Market Regulations &
Thomas Ackermann, Ph.D. Economics

Energynautics GmbH
• The Power in the Wind
Germany
t.ackermann@energynautics.com

California Started the First

After the Oil Crises Wind Rush in the early 80s
• World-wide interested in Wind Power
slowed down significantly, but ...

• Denmark put up some market

regulations to promote wind power;

• As a result, a local market developed

with local manufactures;

• In the 80s, about 30-50 MW p. a. of

wind power installed in Denmark.

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Wind Power Part 2 16 September 2008

Wind Turbines in CA by 1992 Early 1980: 50 - 75 kW, D = ~ 15 m

Turbines Capacity
U.S 7,786 49 % 725 44 %
Denmark 6,778 43 % 676 41 %
Japan 660 4% 165 10 %
Belgium 174 1% 37 2%
UK 112 1% 34 2%
1992 Total 15,865 1,655
(MW)

Late 1980s/ early 1990 ...

• CA Wind Rush came to an end

Wind Turbine/
• Germany introduced the Feed
Feed- Wind
Wi d Farm
F Sites
Sit

in Law and the German Market Year

1991
took off ...
Source:

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Wind Power Part 2 16 September 2008

Wind Turbine/ Wind Turbine/

Wind
Wi d Farm
F Sites
Sit Wind
Wi d Farm
F Sites
Sit

Year Year
1993 1995

Source: Source:

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Wind Turbine/ Wind Turbine/

Wind
Wi d Farm
F Sites
Sit Wind
Wi d Farm
F Sites
Sit

Year Year
1997 09/2000

Source: Source:

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Wind Power Part 2 16 September 2008

The German
„Wind
Power Plant“
End 2003
~14 000 MW
~14,000

Currently:
23,000 MW
Source:

13

Wind Turbine Development

2008:
2008
First 7MW
Turbine

TECHNICAL DEVELOPMENT

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Wind Power Part 2 16 September 2008

Average size of WTG (MW) Segmentation of Product Sizes

Germany versus USA in 2005-2007
Germany
Year MW Year 2005 2006 2007
1991 0,168 Total MW supplied 11,338 16,007 22,181
1992 0,178 Product (Size range) % of total MW
1993 0,255 "Small WTGs" <750 kW 3.6% 2.4% 1.3%
1994 0,370 "One-MW " 750-1500 kW 48.2% 43.3% 45.8%
1995 0,472 USA "Mainstream" 1501-2500 kW
"Multi-MW Class" >2500 kW
45.8%
2.4%
49.9%
4.3%
47.6%
5.3%
1996 0,530
1997 0,628 T t l
Total 100 0%
100.0% 100 0%
100.0% 100 0%
100.0%
Source: BTM Consult ApS - March 2008
1998 0,785
1999 0,935
2000 1,114 Installed Multi-MW class WTGs (>2.5MW) - 2003 to 2007
2001 1,278
Year: Until 2003 2004 2005 2006 2007
2002 1,394 Installed capacity (MW) during the year 121 72 271 692 1,174
2003 1,650 Number of units installed during the year 39 23 89 225 379
2004 1,715 Share of the World Market in % (ref. MW) 0.3% 0.9% 2.3% 4.6% 5.9%
2005 1,723
Source: BTM Consult ApS - March 2008

2006 1,848
2007 1,916 17 18

250 kW (D = 25 m) From 200 kW to 1000 kW

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Wind Power Part 2 16 September 2008

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Wind Power Part 2 16 September 2008

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The 4 Wind Turbine Types

Variable Resistance
Danish Concept

DFIG Full Converter

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Wind Power Part 2 16 September 2008

Wind Power Development

1995 - 2007

Region Installed Capacity [MW]

End-1995 End- End- End- End-
2004 2005 2006 2007

Europe 2,518 33,660 39,993 48,530 57,126

North America 1,676 7,241 9,550 13,159 18,817
South & Central America 11 208 232 530 547
Asia & Pacific 626 4,698 6,782 11,486 16,924

CURRENT STATUS Middle East & Africa

TOTAL World Wide
13
4,844
241
46,048
256
56,813
448
74,153
467
93,881
Source Data: Wind Power Monthly

Total new wind power installation in 2007:

19,728 MW -> €20 billion, or US$30 billion.
29 30

End-1995 End-2007
+1,625 MW in 2007
Germany 1,136 22,247
Spain 145 15,145 +3,530 MW in 2007
Denmark 619 3,124
Italy 25 2,726
UK 200 2,425
Status in France
Portugal
7
13
2,370
2,150
+901 MW in 2007

Netherlands 236 1,747

Europe 2007 Austria
Greece
3
28
982
871
Ireland 7 806
in [MW] Sweden
Norway
67
4
788
386
Belgium 0 287
Poland 1 280
Turkey 0 192
Finland 7 86
USA: 16,971 MW Ukraine 1 86
(+5,272 in 2007) Hungary 0 65
Bulgaria 0 62
Estonia 0 58
India: 7,844 MW Czech Republic 7 56
Lithuania 0 56
(+1,574 in 2007) Luxembourg 0 35
Latvia 0 27
Croatia 0 17
China: 5,906 MW Switzerland 0 12
(+ 3,312 MW in 2007) Romania 0 8
Russia 5 7
Slovakia 0 5
Total 2,518 57,126
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Source Data: Wind Power Monthly

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Wind Power Part 2 16 September 2008

World Market Growth Rates Still huge potential…?

Year: Installed MW Increase % Cumulative MW Increase %
2002 7,227 32,037 WIND
2003 8,344 15% 40,301 26%
2004 8,154 -2% 47,912 19%
2005 11,542 42% 59,399 24%
2006 15,016 30% 74,306 25%
2007 19,791 32% 94,005 27%
Average growth - 5 years 22.3% 24.0%
Source: BTM Consult ApS - March 2008
Accu. Accu. Accu. Accu. Growth rate 3 years
end end end end 2006-2007 average
Country 2004 2005 2006 2007 % %
Germany 16,649 18,445 20,652 22,277 7.9% 10.2%
USA 6,750 9,181 11,635 16,879 45.1% 35.7%
Spain 8,263 10,027 11,614 14,714 26.7% 21.2%
India 3,000 4,388 6,228 7,845 26.0% 37.8%
P.R. China 769 1,264 2,588 5,875 127.0% 97.0%
Denmark 3,083 3,087 3,101 3,088 -0.4% 0.1%
Italy 1,261 1,713 2,118 2,721 28.5% 29.2%
France 386 775 1,585 2,471 56.0% 85.7%
UK 889 1,336 1,967 2,394 21.7% 39.1%
Portugal 585 1,087 1,716 2,150 25.3% 54.3%
Total "Ten" 41,634 51,303 63,203 80,415 27.2% 24.5%
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Source: BTM Consult ApS - March 2008

Market shares in 2005,

2006 and 2007

Supplied Share Supplied Share Supplied Share

MW 2005 MW 2006 MW 2007
2005 % 2006 % 2007 %
VESTAS (DK) 3,186 27.6% 4,239 28.2% 4,503 22.8%
GE WIND (US) 2,025 17.5% 2,326 15.5% 3,283 16.6%
GAMESA (ES) 1,474 12.8% 2,346 15.6% 3,047 15.4%
ENERCON (GE) 1,640 14.2% 2,316 15.4% 2,769 14.0%
SUZLON (Ind) 700 6 1%
6.1% 1 157
1,157 7 7%
7.7% 2 082
2,082 10 5%
10.5%
SIEMENS (DK) 629 5.4% 1,103 7.3% 1,397 7.1%
ACCIONA (ES) 224 1.9% 426 2.8% 873 4.4%
GOLDWIND (PRC) 132 1.1% 416 2.8% 830 4.2%
NORDEX (GE) 298 2.6% 505 3.4% 676 3.4%
SINOVEL (PRC) 3 0.0% 75 0.5% 671 3.4%
Others
Total
1,032
11,342
8.9%
98%
1,094
16,003
7.3%
107%
2,076
22,207
10.5%
112%
ECONOMIC DRIVERS
Source: BTM Consult ApS - March 2008

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Wind Power Part 2 16 September 2008

Is Wind Power Competitive ? Generation Costs of

other Sources

Japan 4 - 8 €cent/KWh
What is competitive anyway?

Country Structure Germany 5 €cent/kWh down to 2

Germanyy Coal + Nuclear €cent/Kwh
Netherlands Gas + Coal
Italy Oil Sweden was 1.5 €cent/KWh at the
France Nuclear moment 3 €cent/KWh
UK Coal + Nuclear*
Sweden Hydro + Nuclear
Australia zero at night
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Wind Generation Costs Important Aspects

• Market Risk versus High
Investment Costs:
Depends on the Wind Speed !
– High investment costs: 1000€ - 1400€ per
Sweden: ~ 5 - 6 €cent/KWh ( 7 – 7.5
7 5 m/s) kW installed capacity but no fuel costs (but
maintenance costs: 5-10% of the yearly
production);
New Zealand: ~ 2.5 €cent/KWh ( 10 m/s)
– Natural Gas investment costs: 400 - 500€
per kW installed capacity

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Wind Power Part 2 16 September 2008

Support Systems Feed-in Tariff (Germany)

Fixed Tariff: ~ 7 - 8 €cent/kWh, depends on

• Feed-in Tariff Key Support Schemes location
in Europe

• Bidding Process • Utilities have to pay! (and connect if

possible)
• Tax Incentives • Turbine prices used to be 40 % higher
than in competitive markets, currently
• Quotas/ Renewable Energy Portfolio difficult to get turbines
Pool Price: ~5 €cent/ kWh
Wind Costs: ~ 5 - 6 €cent/KWh ( 6 – 7 m/s)
• Green Pricing
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Fixed Quotas Combined

with Green Certificate Trading Certificates
(Renewable Energy Portfolio?)
Sweden UK
• The government introduces fixed Market prize: ~5 6,5 €cent/KWh
quotas for power retailers; Green certificates: ~2 6 €cent/KWh
• Producer of renewable power Avoided Losses: ~ 0,05 0 €cent/KWh
recei e certificates
receive certificates;
Total Income: ~ 7.05 12,5 €cent/KWh
• Retailers must by the certificates
Wind Costs: ~6 5-6 €cent/KWh
• a Market for renewable power is
( 7 – 7.5 m/s) ( 7.5 – 8 m/s)
created! (Sweden, UK)

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Wind Power Part 2 16 September 2008

Conclusions
• Wind energy has become the least expensive
renewable energy technology;

3,124 MW
• Since the energy of the wind varies with the
cube of the wind speed, the economics of wind
2,425 MW energy depend heavily on how windy the site is;
1,747
, MW
22,247 MW
• Even so wind can be competitive with
conventional generation, economic incentives
are key to overcome the disadvantages of high
upfront investment costs;
2,150 MW 2,726 MW
15,145 MW

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Source: EU

Thank you very much for your attention !

Thank you very much for your attention !

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