Cost Reduction for Offshore Wind Energy … a Vattenfall Perspective

Jens Madsen Head Wind R&D, Vattenfall AB

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Vattenfall Wind Power

5 countries

>1,000 wind turbines

50 turbine types (approx.)

1.9 GW installed (onshore + offshore)

>3.0 GW in 2016

82% of growth investments

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Cost of Energy focus

• Wind energy must be cost competitive to ensure continued growth - Onshore wind approaching grid parity in some markets - Offshore wind continues to be fully dependent on subsidies

• Eventually become financially viable without subsidies • Offshore concessions awarded through competitive auctions (lowest bidder)

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

The Offshore Wind Industry – Coming of Age

Source: The Future Of Vessels For Offshore Wind, Fred Olsen Wind Carrier, 2014, London

HR3

Infancy

Childhood Adolescence

Pro

ject

CA

PE

X (

£m/M

W)

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

0

10

20

30

40

50

60

70

80

90

100

LEC-total CAPEX

CAPEX

OPEX discounted

Finance

WTG package

BOP

Wind Turbine;

33%

Foundation/substructure;

22%

Electrical infrastructure;

12%

Logistics & Installation;

19%

Construction/Financing/

DevEx; 14%

Manhour of work

Spare parts

Consumerables

Tools & Cranes

Lost Production

Drivetrain 44% Generator System 21% Rotor System 8%

Source: Navigant (2013)

Source: Vattenfall internal

OPEX

CAPEX

Wind Power Cost Breakdown (typical)

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Flyvbjerg on Mega-projects*

10-year delay 1400 % cost overrun

On time On budget

* Projects with cost > 1$b and/or wide society impact

Nine out of ten mega-projects have cost overruns

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Does Offshore Wind projects fit Mega-project characteristics?

Mega-project Characteristics Offshore Wind

High degree of complexity + Large-scale, and geographical dispersed + Enormous budgets (over billions of euros) + Major impact on the environment and society (+) Can be subject of citizen resistance + Long planning horizons (+) Embedded in national political context, which can change over time + New and unproven technologies and legislation (+) Involvement of many stakeholders (complex interfaces) + Often unique at national level (+) High quality aesthetics

Consortia and sub-contracting to legally separate partners + Source: A.Marrewijk, “Organizing Mega-projects: Understanding their Cultural Practices” (2014)

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Cost Reduction … more than a Technical Challenge

• Financing solutions - Access to affordable capital

• Project management excellence

- Managing cost and risk - Steady pipeline of projects - Active use of lessons learned

• Industrialization

- Standardized technical solutions - Harvest benefits of scale in manufacturing,

installation, and operations

• Technical innovation • Courage to introduce innovative solutions • Drive towards Operational Excellence

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Offshore Clustering

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

O&M Synergies from Offshore Clustering

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Quantifying Global Wake Effects (Farm-Farm)

• AEP uncertainty means investment risk • Account for farm-farm interaction

• Global wake deficit, f(distance, size, ..)

• Validate models from operational data

• Quantify upstream blockage effect • Spatial planning within zones

• Farm clusters (example Horns Rev 1+2+3)

• Extension projects

Thanet

A.M. Striedlinger , TU Delft (2014): Wind Farm Effects on the Atmosphere

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Optimized cable routing

• Integer optimization problem • Minimize total cable cost with constraints

• Penalize cable crossing • Load flow restrictions (turbines/radial) • Max number of strings to substation

Layout Optimization (Collection Grid)

Manual cable routing

• Fixed WTG and Substation positions

• Two cable types: different capacity/cost

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

2 cable crossings 9% capex savings No cable crossings

Lessons Learned: Grouted Connections

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

• Insourcing of O&M work on Lillgrund, moving away from full OEM service concept

• OPEX reduced by 40%

• Time to service a turbine has reduced by more than 40%

• Same level of performance in terms of availability (>98%) and safety maintained

O&M Excellence

Lillgrund Wind Farm (SWE) – 48 x SWP 2.3MW

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Blade Reliability

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Romo iSpin Technology

• Technology rolled out across Vattenfall’s

Nordic onshore wind turbine portfolio (to date 69 wind turbines)

• Purpose: Monitor & correct wind turbine yaw misalignments, increase production, and reduce fatigue loads

• Ongoing R&D projects investigate using same technology for

• Power Performance testing • Turbine control (in-the-loop) • Ice detection

Focus on Performance Optimization

Yaw alignment optimization

Science Meets Industry, Bergen. 2015.09.15 -– Confidentiality: C1

Adam Ezzamel/ KFE (May 2015)

Concluding Remarks

• Offshore wind is beginning to deliver on cost targets

• Technology innovation must go hand-in-hand with Industrialization

• Joint R&D and technology demonstration is needed

Thanks for your attention !

Science