Assessment of Potential Improvements in Large-Scale Low Wind

Assessment of Potential Improvements in Large-Scale Low Wind Speed Technology Joseph Cohen Princeton Energy Resources International, LLC 1700 Rockville Pike, Suite 550 Rockville, Maryland 20852 USA jcohen@perihq. com (301) 468 -8416 Global WINDPOWER 2004, Chicago, Illinois March 29, 2004 Global WINDPOWER 2004 - Chicago, Illinois

ACKNOWLEDGEMENTS Project Supported By: &U. S. Department of Energy &Under Subcontract To: National Renewable Energy Laboratory, NWTC Global WINDPOWER 2004 - Chicago, Illinois Technical Inputs: &NWTC Staff q Paul Migliore q Alan Laxson q Mike Robinson q Bob Thresher q Scott Schreck q Paul Veers (Sandia National Laboratories)

TECHOLOGY PATHWAYS ANALYSIS Analysis Process Characterize Reference Step 1: Characterize a set of cost and performance parameters for a composite, reference turbine Identify TIOs Step 2: Identify a “menu” of Technology Improvement Opportunities (TIOs) that could lead to this improvement Estimate TIO Effects Step 3: Estimate the range of potential change in cost, performance, reliability, and O&M for each TIO category Perform Analysis Step 4: Run these through a turbine systems model (the “Pathways Model”) to assess impact on cost of energy Review Results Step 5: Produce a curve of COE versus likelihood of achieving it. Global WINDPOWER 2004 - Chicago, Illinois

CHARACTERIZE REFERENCE TURBINE • Nominal Description of Reference Turbine: q 1. 5 MW q 70 m rotor diameter q 65 m Hub Height q. Upwind, 3 -blade; Variable pitch q. Variable speed • Composite of available technologies – based primarily on (2002) Wind. PACT studies and commercial/market data Global WINDPOWER 2004 - Chicago, Illinois

ANALYSIS METRICS &Overall evaluation metric - Levelized Cost of Energy (COE), which requires the following input variables: q. Turbine Capital Cost (TCC) q. Balance of Station Cost (BOS) q. Levelized Replacement Cost (LRC) q. Annual Operation and Maintenance Cost (O&M) q. Net Annual Energy Production (AEP) &ISSUE: How to choose for “leading edge” technology, 100 MW plant, “favorable installation & maintenance conditions” consistent with large areas of class 4 winds, i. e. , relatively flat land, easy access, no soil issues Global WINDPOWER 2004 - Chicago, Illinois

REFERENCE WIND PLANT CHARACTERISTICS Global WINDPOWER 2004 - Chicago, Illinois

INPUT DATA ARE DISTRIBUTIONS O&M Cost Turbine Capital Cost Data Sources For All Inputs NREL/Sandia staff, Wind. PACT studies, Next Generation Turbine project, LWST proposals, in-house knowledge, etc. Global WINDPOWER 2004 - Chicago, Illinois

REFERENCE COE Levelized Cost of Energy of Reference (2002) Turbine: 4. 8 cents/k. Wh & In constant end-of-2002 dollars q Class 4 winds (13 mph average at 10 m) q Assumes financing structures typical of Gen. Cos (i. e. , balance sheet financing) q Detailed cash flow model used to calculate COE using assumptions for taxes, insurance, depreciation, cost of capital, financing fees, and construction financing q Caveat – uses a relatively high required rate of return compared to current market rates Global WINDPOWER 2004 - Chicago, Illinois

BE CAREFUL – COE IS NOT MARKET PRICE &Constant dollars (Market uses Current) q. Varies, but typically 0. 5 to 1+ cent/k. Wh &PTC (Not included in analysis) q. Varies, but typically above 1 cent/k. Wh &Year Dollars (analysis uses 2002) &Range of resource in each wind power class &Overnight (no costs during construction) q. Typically $50/k. W or more Global WINDPOWER 2004 - Chicago, Illinois

TECNOLOGY IMPROVEMENT OPPORTUNITIES Advanced (Enlarged) Rotor TIOs Advanced materials Site-Specific Design/Reduced Design Margin TIOs Changed/improved structural/aero design Improved definition of site characteristics Active controls Design load tailoring Passive controls Micrositing Higher tip speed ratios/lower acoustics Favorable wind speed distributions and shear Manufacturing TIOs New Drive Train Concept TIOs Manufacturing methods Permanent magnet generator Lower margins Innovative mechanical drives Manufacturing markups Learning Curve Effects Market–driven cost reductions Advanced Tower TIOs New Materials Advanced Power Electronics TIOs Incorporation of improved PE components Advanced circuit topology Reduced Energy Losses and Increased Availability TIOs Innovative structures Health monitoring (SCADA, etc. ) Advanced foundations Blade soiling mitigation Self-erecting designs Extended scheduled maintenance Global WINDPOWER 2004 - Chicago, Illinois

TIO’s POTENTIAL FOR IMPROVEMENT (Improvement from reference, in %) (Initial Analysis for 2003; Subject To Extensive Update in 2004) Capital Costs Annual Energy Production Probability of Success* Advanced (Enlarged) Rotor TIOs 70 70 * Manufacturing TIOs 70 * Reduced Energy Losses and Increased Availability TIOs 65 * Advanced Tower TIOs 80 80 - Site-Specific Design/Reduced Design Margin TIOs New Drive Train Concept TIOs Advanced Power Electronics TIOs Learning Curve Effects *High Probability of Success Case Global WINDPOWER 2004 - Chicago, Illinois 80 70 * 80 80 100 100 *TBD O&M Costs -30 -20 -10 Reliability +10 +20 +30 +40

WIND TECHNOLOGIES PATHWAYS MODEL (A Monte-Carlo Analysis Tool) Capital Costs Annual Energy Production O&M Costs Probability of Success -30 -20 -10 Advanced (Enlarged) Rotor TIOs Manufacturing TIOs Reduced Energy Losses and Increased Availability TIOs Advanced Tower TIOs Site-Specific Design/Reduced Design Margin TIOs New Drive Train Concept TIOs Advanced Power Electronics TIOs Learning Curve Effects Reliability +10 +20 +30 +40 Total System Aggregated Potential for Improvement (%) Total System -40 -30 -20 -10 +10+20+30 +40 70 70 * 7 0 * 65 * 80 80 80 70 * 80 80 100 100 Total System Cost of Energy Potential for COE Reduction (%) -50 *TBD 3 cents/k. Wh at 60% Confidence Level ( subject to revision) Global WINDPOWER 2004 - Chicago, Illinois -40 -30 -20 -10

MEAN IMPACTS ON COE INPUTS Global WINDPOWER 2004 - Chicago, Illinois

Advanced materials Changed/improved structural/aero design Advanced (Enlarged) Rotor Active controls Passive controls Higher tip speed ratios/lower acoustics Manufacturing methods Manufacturing Lower margins Manufacturing markups Reduced Energy Losses and Health monitoring (SCADA, etc. ) Blade soiling mitigation Increased Availability Extended scheduled maintenance New Materials Innovative structures Advanced Tower Advanced foundations Self-erecting designs Improved definition of site characteristics Site-Specific Design load tailoring Design/Reduced Design Micrositing Margin Favorable wind speed distributions and shear Permanent magnet generator New Drive Train Concepts Innovative mechanical drives Incorporation of improved PE components Advanced Power Electronics Advanced circuit topology Market-driven cost reductions Learning Curve Effects Global WINDPOWER 2004 - Chicago, Illinois Reliability O&M Cost Small Production TIO Categories Moderate Energy Large Cost IMPACT OF TIOs ON ELEMENTS OF COE