Wind Energy trends in Denmark - Aisma vitina, ea energy analyses
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The document summarizes trends in wind energy in Denmark, including: 1) Denmark had early adoption of wind power and now generates over 30% of its electricity from wind, with high cumulative installed capacity. 2) Transmission system operators are involved in wind projects by paying for grid infrastructure upgrades, reducing project risks and costs. 3) Denmark makes turbine-level wind data and rules requiring local shares in projects public, improving acceptance. 4) Project costs have declined over time due to technology improvements, supply/demand changes, and larger turbine sizes, though repowering is a new cost.
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Wind Energy trends in Denmark - Aisma vitina, ea energy analyses
- 1. Wind Energy Trends in Denmark Aisma Vitina, Ea Energy Analyses SEAI and IEA Wind Task 26 seminar ”The Cost and Value of Wind Energy” Dublin, May 26, 2014
- 2. On the menu • The particularities of the Danish (wind power) – Early adoption and high penetration – TSO’s involvement and cost sharing – Public access to data – and ownership – Repowering (*) • Wind energy project cost drivers • Cost development over time in Denmark 2
- 3. THE PARTICULARITIES OF THE DANISH WIND POWER 3
- 4. The particularities of the Danish wind power: Early adoption & high penetration (1) 4 33.2% 0% 5% 10% 15% 20% 25% 30% 35% 0 1000 2000 3000 4000 5000 6000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Windpower%inelectricity generation Cumulativewindpowercapacity (MW) Onshore capacity [MW] Offshore capacity [MW] Wind power % in electricity generation Source: Danish Energy Agency ”Energistatistik2013”, Energinet.dk
- 5. 5 Source: American Wind Energy Association(based on Berkeley Lab estimates,data from Navigant and EIA) The particularities of the Danish wind power: Early adoption & high penetration (2)
- 6. The particularities of the Danish wind power: TSO’s involvement and cost sharing 6 • The developer only pays for the connection from the turbine to the coupling point – Transformers, substations, grid extension – cost socialized (covered by the grid company/-ies) • Also for offshore projects – Exploratory studies (geophysical, geotechnical, metaocean and environmental assessment) carried out by the TSO • Impact on overall project risk and costs Source: IEA Task 26 WP1 Report 2011, Energinet.dk.Photo source for the illustration: http://blog.journals.cambridge.org/,http://meship.com/ Wind power project Existing grid infrastructureNew connection line Paid for by the Developer Paid for by the Grid company
- 7. • Individual turbine-level data starting 1978 reported and published • A regulation stipulating local residents’ ‘right of purchase’ of 20% of the wind power project shares at cost price – Audited share purchase offers (incl. cost data) are publicly available – Contributes to high acceptance rate and availability of sites across the country (terrible noise vs ‘the sound of money being made’) 7 The particularities of the Danish wind power: public access to data – and ownership Interactivemap screenshot from http://vindinfo.dk/
- 8. WIND ENERGY PROJECT COST DRIVERS 8
- 9. Wind energy project cost drivers: key factors • Materials, components, labour – Especially significant in the period leading up to 2008 • Supply-demand dynamics, competitive landscape – Over-supply in the early 2000s, bottle-necks leading up to 2008 • O&M costs – Increase in turbine size / production, among other things, decreases per-kWh O&M costs – More mature technology, higher capacity factors, lower administration and other costs per MW 9 Source: Nielsen, P. ”VindmøllersØkonomi”
- 10. Wind energy project cost drivers: size • Continuous turbine size increase over the past 20 years • In 2012 and 2013 in Denmark, the newly-installed turbines were predominantly 3 MW 10 Source: data from Stamdataregisterby the Danish Energy Agency (2004 and 2007 excluded due to limited sample), turbine sizes 100kW+ 0 20 40 60 80 100 120 0 500 1000 1500 2000 2500 3000 3500 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2008 2009 2010 2011 2012 2013 Rotordiameter(m) Hubheight(m) Turbinecapacity(kW) Average of Capacity (kW) Average of Rotor diameter (m) Average of Hub height (m)
- 11. Wind energy project cost drivers: O&M costs 11 Source: Nielsen, P. ”VindmøllersØkonomi”. Data covers 1996 – 2008, all onshore turbines of nameplate capacity 600 kW+ • For projects 1996-2008 the average lifetime O&M costs (average for years 6-13) estimated at ca.14.5 EUR/MWh (2012 prices) • For new projects as of 2010, indications of 12.3 EUR/MWh (2012 prices) – Significant reductions in O&M costs over time
- 12. Wind energy project cost drivers: Repowering as a new cost category 12 Number of turbines by year of establishment Year of establishment Number decommissioned Number existing Total capacity (kW) by year of establishment Year of establishment kW decommissioned kW existing Source: Danish Energy Agency, Danish Wind Turbine Owners’ Association
- 13. • Introduction of Scrappage Certificates – To continue deployment of wind resource – To facilitate decommissioning of old and poorly sited turbines • Turbines of 450 kW or less can be replaced with new and more efficient wind turbines at an additional subsidy – Scrappage certificate -> additional subsidy for the newly installed capacity – Several subsidy regimes depending on the time period: • 0.02 EUR / kWh for 12 000 FLH of double the decommissioned capacity (upper limit of market price + subsidy at EUR 0.05 / kWh) • 0.01 EUR / kWh for 12 000 FLH of double the decommissioned capacity (fixed) • Total pool of decommissioned capacity: 175 MW • Scheme in force: 2005 – 2012 • An example from 2013 project proposal Nørhede-Hjortmose (22 * 3.3 MW): compensation of 0.5 M EUR per turbine 13 Source: Danish Energy Agency http://www.ens.dk/undergrund-forsyning/vedvarende-energi/vindkraft-vindmoller/vindmoller-pa-land/skrotningsordningen, Wind energy project cost drivers: Repowering as a new cost category (2)
- 14. COST DEVELOPMENT OVER TIME 14
- 15. Cost development over time in Denmark (onshore) 15 - 500 1,000 1,500 2,000 2,500 3,000 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 €/kW(2013prices) Cost of turnkey onshore wind power projects in Denmark 1981 - 2012 Source: Nielsen, P. ”VindmøllersØkonomi” Lower demand than expected; oversupply Steel / material, wage and EBIT increases Overall price decrease post-2008 crisis
- 16. 16 Cost development over time in Denmark (vis-à- vis other countries): capital cost 2003-2009 Source: Lantz, E., Wiser, R., Hand, M. et al ”IEA Wind Task 26 The Past and Future Cost of Wind Energy”, 2012
- 17. Cost development over time in Denmark (vis-à-vis other countries): LCOE 2008 17 Source: Schwabe, P., Lensink, S., Hand, M. et al ”IEA Wind Task 26 Multi-nationalCase Study of the Financial Cost of Wind Energy”, 2011
- 18. Aisma Vitina Ea Energy Analyses Mobile: (+45) 603 917 02 E-mail: av@eaea.dk Frederiksholms Kanal 4 1220 Copenhagen Denmark www.eaea.dk Thank you