OES Annual Report 2012 - Ocean Energy Systems

111
05 / DEVELOPMENT OF THE INTERNATIONAL
OCEAN ENERGY INDUSTRY: PERFORMANCE
IMPROVEMENTS AND COST REDUCTIONS
The cumulative effects of moving to larger-scale farms reduce the CoE by approximately 50 percent, without
considering any technology innovations, as illustrated in Table 2. CoE in this case was calculated using a
fixed charge rate (FCR) of 12.4 percent and a project life of 20 years. This is typical for commercial, mature,
utility-scale power projects in the United States. The power-density at the reference deployment location to
compute device performance is 34 kW/m.
PLANT CAPACITY
5 MW 20 MW 50 MW
CAPEX $6,912 $5,035 $4,347
OPEX $438 $239 $162
O&M percent of CAPEX 6.3% 4.7% 3.7%
PERFORMANCE 5 MW 20 MW 50 MW
Capacity factor 30% 30% 30%
Availability 95% 95% 95%
COE (¢/KWH) 5 MW 20 MW 50 MW
CAPEX Contribution 30 22 19
O&M Contribution 22 12 8
Total 52 34 27
TABLE 2: Reference cost and
economic profile from aggregated data
and techno-economic modeling
It is important to point out that the CoE in this study was computed using a utility generator CoE model, with
returns on capital seen typically in utility-scale power plants, hence the study does not consider the impact
on higher capital borrowing costs that are typical for immature technologies. In reality, there would be a risk
premium paid by the developer at smaller-scale plants.
Learning Curves
While predicted commercial costs for larger-scale farms are well below present pilot and demonstration cost
levels, significant cost reductions will need to be achieved by the industry if the technology is to be deployed
at a large deployment scale in competitive utility-industry marketplaces.
20,000
1983
10,000
1981
Photovoltaics
learning rate ~20%
R&D and technical
demonstration phase
Commercialization
phase
U.S. (1990) $/KW
5,000
1,000
1982
2002
Windmills (U.S.)
learning rate ~20%
1987
500
Gas turbines (U.S.)
learning rate ~20%, ~10%
2002
1980
100
10 100
1,000
10,000 100,000
CUMULATIVE MW EXPERIENCE
FIGURE 4: Historical learning curves. (Source: “Learning Curves,” Project Finance, July 2008.)