Wind Energy

ANKUR VERMA ARVINDERPAL SINGH

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Ancient Resource Meets 21st Century

2

Wind Turbines

Power for a House or City

3

Wind Energy Outline
History and Context  Advantages  Design  Siting  Disadvantages  Economics  Future

4

History and Context

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Wind Energy History

1 A.D.

 

~ 400 A.D.
  

Hero of Alexandria uses a wind machine to power an organ Wind driven Buddhist prayer wheels Golden era of windmills in western Europe – 50,000 9,000 in Holland; 10,000 in England; 18,000 in Germany Multiblade turbines for water pumping made and marketed in U.S. Thomas Edison commissions first commercial electric generating stations in NYC and London Competition from alternative energy sources reduces windmill population to fewer than 10,000 Heyday of the small multiblade turbines in the US midwest  As many as 6,000,000 units installed

1200 to 1850

1850’s

1882

1900

1850 – 1930

1930+

Grid electricity rapidly displaces multiblade turbine uses

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Increasingly Significant Power Source
Wind could generate 6% of nation’s electricity by 2020.
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Wind currently produces less than 1% of the nation’s power.
Source: Energy Information Agency

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Manufacturing Market Share

Source: American Wind Energy Association

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US Wind Energy Capacity

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Wind Power Advantages

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Advantages of Wind Power
Environmental  Economic Development  Fuel Diversity & Conservation  Cost Stability

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Environmental Benefits
No air pollution  No greenhouse gasses  Does not pollute water with mercury  No water needed for operations

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Pollution from Electric Power
Sulfur Dioxide Carbon Dioxide Nitrous Oxides Particulate Matter Toxic Heavy Metals 0% 20% 34% 33% 28% 23% 40% 60% 80% 70%

Percentage of U.S. Emissions
Source: Northwest Foundation, 12/97

Electric power is a primary source of industrial air pollution
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Economic Development Benefits
Expanding Wind Power development brings jobs to rural communities  Increased tax revenue  Purchase of goods & services

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Economic Development Example
Case Study: Lake Benton, MN $2,000 per 750-kW turbine in revenue to farmers Up to 150 construction, 28 ongoing O&M jobs Added $700,000 to local tax base
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Fuel Diversity Benefits
Domestic energy source  Inexhaustible supply  Small, dispersed design

reduces supply risk

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Cost Stability Benefits

Flat-rate pricing

hedge against fuel price volatility risk

Wind electricity is inflation-proof

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Wind Power Design

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Power in the Wind (W/m2)
= 1/2 x air density x swept rotor area x (wind speed)3 A V3 ρ

Density = P/(RxT)
P - pressure (Pa) R - specific gas constant (287 J/kgK) T - air temperature (K)

Area = π r2 m2

Instantaneous Speed (not mean speed) m/s

kg/m3

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Wind Energy Natural Characteristics

Wind Speed
 

Wind energy increases with the cube of the wind speed 10% increase in wind speed translates into 30% more electricity 2X the wind speed translates into 8X the electricity

Height
 

Wind energy increases with height to the 1/7 power 2X the height translates into 10.4% more electricity

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Wind Energy Natural Characteristics

Air density
   

Wind energy increases proportionally with air density Humid climates have greater air density than dry climates Lower elevations have greater air density than higher elevations Wind energy in Denver about 6% less than at sea level

Blade swept area
  

Wind energy increases proportionally with swept area of the blades

Blades are shaped like airplane wings

10% increase in swept diameter translates into 21% greater swept area Longest blades up to 413 feet in diameter

Resulting in 600 foot total height

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How Big is a 2.0 MW Wind Turbine?
80 59.6

This picture shows a Vestas V-80 2.0-MW wind turbine superimposed on a Boeing 747 JUMBO JET

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Recent Capacity Enhancements
2006 5 MW 600’

2000 850 kW 265’

2003 1.8 MW 350’

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Nacelle Components
5

10

17
1. Hub controller 2. Pitch cylinder 3. Main shaft 4. Oil cooler 5. Gearbox 6. Top Controller 7. Parking Break 8. Service crane 9. Transformer 10. Blade Hub

16 12 12
11. Blade bearing 12. Blade 13. Rotor lock system 14. Hydraulic unit 15. Machine foundation 16. Yaw gears 17. Generator 18. Ultra-sonic sensors 19. Meteorological gauges

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Turbines Constantly Improving
    

Larger turbines Specialized blade design Power electronics Computer modeling

produces more efficient design

Manufacturing improvements

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Improving Reliability
Drastic improvements since mid-80’s  Manufacturers report availability data of over 95%

100

% Available

80 60 40 20 0 1981 '83 '85 '90 '98 Year
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Wind Project Siting
DECIDING PARAMETERS FOR WIND POWER PROJECT

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Siting a Wind Farm

Winds

Minimum class 4 desired for utility-scale wind farm (>7 m/s at hub height) Distance, voltage excess capacity Land-use compatibility Public acceptance Visual, noise, and bird impacts are biggest concern Economies of scale in construction Number of landowners
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 

Transmission

Permit approval
  

Land area
 

Wind Disadvantages

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Market Barriers

Siting
  

Avian Noise Aesthetics

Intermittent source of power  Transmission constraints  Operational characteristics different from conventional fuel sources  Financing

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Wind Energy and the Grid

Pros
  

Small project size Short/flexible development time Dispatchability Generally remote location Grid connectivity -- lack of transmission capability Intermittent output

Cons
  

Only When the wind blows (night? Day?)

 

Low capacity factor Predicting the wind -- we’re getting better

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Birds - A Serious Obstacle

 

Birds of Prey (hawks, owls, golden eagles) in jeopardy Altamont Pass – News Update – from Sept 22
  

shut down all the turbines for at least two months each winter eliminate the 100 most lethal turbines Replace all before permits expire in 13 years
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Wind – Characteristics & Consequences

Remote location and low capacity factor
 Higher

transmission investment per unit output

Small project size and quick development time
 Planning

mismatch with transmission investment

Intermittent output
 Higher

system operating costs if systems and protocols not designed properly

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Wind Economics

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Wind Farm Design Economics

Key Design Parameters
 

Mean wind speed at hub height Capacity factor
Start with 100%  Subtract time when wind speed less than optimum  Subtract time due to scheduled maintenance  Subtract time due to unscheduled maintenance  Subtract production losses

 Dirty blades, shut down due to high winds

Typically 33% at a Class 4 wind site

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Wind Farm Financing
 Financing

 LIBOR

Terms

Interest rate
+ 150 basis points

Loan term
 Up

to 15 years

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Cost of Energy Components

Cost (`/kWh) = (Capital Recovery Cost + O&M) / kWh/year
 

Capital Recovery = Debt and Equity Cost O&M Cost = Turbine design, operating environment kWh/year = Wind Resource

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Costs Nosedive  Wind’s Success
$0.40 $0.30 $0.20 $0.10 $0.00 1980 1984 1988 1991 1995 2000

38 cents/kWh

3.5-5.0 cents/kWh
2005

Levelized cost at good wind sites in nominal dollars, not including tax credit
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Construction Cost Elements
Financing & Legal Fees 3% Development Activity 4% Interconnect/ Subsation 4% Interest During Construction 4% Towers (tubular steel) 10% Construction 22% Design & Engineering 2% Land Transportation 2% Turbines, FOB USA 49%

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Wind Farm Cost Components

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Wind Farm Economics

Capacity factor
    

Start with 100% Subtract time when wind speed < optimum Subtract time due to scheduled maintenance Subtract time due to unscheduled maintenance Subtract production losses

Dirty blades, shut down due to high winds

Typically 33% at a Class 4 wind site

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Wind Farm Development

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Wind Farm Development

Key parameters
     

Wind resource Zoning/Public Approval/Land Lease Power purchase agreements Connectivity to the grid Financing Tax incentives

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Wind Farm Development

Wind resource
  

Absolutely vital to determine finances

Wind is the fuel Daily and hourly detail

Requires historical wind data

Install metrological towers
Preferably at projected turbine hub height  Multiple towers across proposed site

Multiyear data reduces financial risk

Correlate long term offsite data to support short term onsite data
 Local NWS metrological station
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Wind Farm Development

Zoning/Public Approval/Land Lease

Obtain local and state governmental approvals

Often includes Environmental Impact Studies
 Impact to wetlands, birds (especially raptors)

NIMBY component
 View sheds

Negotiate lease arrangements with ranchers, farmers, Native American tribes, etc.

Annual payments per turbine or production based

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Wind Farm Development

Connectivity to the grid

Obtain approvals to tie to the grid

Obtain from grid operators – WAPA, BPA, California ISO Especially since the grid is operating near max capacity

Power fluctuations stress the grid

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Wind Farm Development

Financing

Once all components are settled…
Wind resource  Zoning/Public Approval/Land Lease  Power Purchase Agreements (PPA)  Connectivity to the grid  Turbine procurement  Construction costs

…Take the deal to get financed

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Financing Revenue Components

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Source: Hogan & Hartson, LLP

Future Trends

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Future Cost Reductions
 

Financing Strategies Manufacturing Economy of Scale Better Sites and “Tuning” Turbines for Site Conditions Technology Improvements

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Future Tech Developments

Application Specific Turbines
    

Offshore Limited land/resource areas Transportation or construction limitations Low wind resource Cold climates

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The Future of Wind Offshore
•1.5 - 6 MW per turbine •60-120 m hub height •5 km from shore, 30 m deep ideal •Gravity foundation, pole, or tripod formation •Shaft can act as artificial reef •Drawbacks- T&D losses (underground cables lead to shore) and visual eye sore

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Wind Energy Challenges

Best wind sites distant from
 

  

Wind variability
 

population centers major grid connections

Non-firm power

Can mitigate if forecasting improves Debate on how much backup generation is required Cape Wind project met with strong resistance by Cape Cod residents Sea floor drops off rapidly on east and west coasts

NIMBY component

Limited offshore sites

Intermittent federal tax incentives
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North Sea essentially a large lake

GE WIND ENERGY

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THANK YOU
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