Wind Power in the UK (PDF). - Sustainable Development Commission

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Wind Power in the UK (PDF). - Sustainable Development Commission

Annex B: Network integration and costsFrom 1990 to 2002, world wind energy capacitydoubled every three years. Few other energytechnologies are growing, or have grown, atsuch a remarkable rate. In 2003, the growth ratewas around 25%, with an extra 8200 MWinstalled, and a similar quantity was installed in2004. Total capacity is now nearly 48,000 MW,with around 888 MW installed in the UK.Whilst cost reductions with increased volume ofproduction are well known in many technologiesthe ‘learning curve’ (as it is termed) for wind iswell in excess of early expectations. Based onan analysis of the relative amounts of labourand material cost in wind turbines Bergeypredicted an 8% reduction of cost per unitdoubling of capacity in 1991; what is actuallybeing achieved is nearly double that figure. 2 Thedata quoted above is consistent with a 15%learning curve ratio, and other authors havederived similar figures.The effect of turbine sizeThe steady decrease in costs has been due, inpart, to the move towards larger machines. In1992 the cheapest machine (per kW) was ratedat 300 kW and it is now around 1500 kW. Largermachines tend to be slightly more expensive.When used in wind farms, however, fewermachines realise savings on foundation costs,transport, electrical connections and operationalcosts, making larger machines potentially moreattractive.The economics for small-scale wind turbines(1-200 kW) are quite different, with the smallestsized machines (1-30 kW) coming out the mostexpensive per unit of installed capacity. Thisreport does not look at small-scale wind power,but it is important to recognise these differences.Breakdown of wind farm costsThe total installed cost of a wind farm includes‘balance of plant’ costs, such as the cost offoundations, transport and internal electricalconnections. These add between 15 and 30% tothe cost of the wind turbines, and there arewide variations which depend on the difficultiesof construction and the size of the project. Inaddition, the cost of the grid connection canoften add a substantial sum to the project cost.A typical cost breakdown for an onshore windfarm is 3 :Turbines 72%Foundations 6%Electrical connections 2%Planning 4%Grid connection 10%Miscellaneous 6%Table 1 summarises a number of recent windfarm published prices, drawn from a database ofabout 30 onshore projects cited in the journal‘Windpower Monthly’ in 2004.There are wide variations, but the averageonshore price is €980/kW (range €707-1350/kW). The average offshore price is around€1600/kW (range €1250-1800/kW). The lowestprices, in each case, come from developingworld locations, especially China and India.Operational costsOperational costs fall with increase of turbinesize. Analysis of data from German windinstallations shows that total costs fall fromaround €25/kW/yr at the 250 kW size to around€13/kW/yr at 1500 kW (Figure 3). 4 These costsinclude operation and maintenance contracts,insurance and administration. In Britain,operation and maintenance costs also includelocal authority rates and the rents payable bythe plant operators to the landowners – typicallyaround 1.5% of turnover.sustainable development commissionWind Power in the UK 125

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