OFFSHORE WIND Economies of scale, engineering ... - CiteSeerX

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Garrad Hassan and Partners Ltd Document: 3914/BR/01 Issue: C FINAL 2 ECONOMICS OF OFFSHORE WIND 2.1 Objectives The objectives of this work were to provide a supported opinion on: Capital costs for current (e.g. UK Round 1) offshore wind projects, broken down by major constituent parts – see Section 2.2; Annual operation and maintenance (O&M) costs for current (e.g. UK Round 1) offshore wind projects, broken down by major constituent parts – see Section 2.3; Expected capital and O&M costs for next generation (e.g. UK Round 2) offshore wind projects – see Section 2.4; and Anticipated long-term trends in these costs – see Section 2.5. 2.2 Current capital costs 2.2.1 Approach There have only been thirteen offshore wind farms constructed to date which gives a very limited reference for estimation of current or future costs. Added to that, many of the existing projects are very much of a demonstration nature and have limited relevance to the current crop of projects. In 2002 and 2003, five projects have been built which form the primary reference, although not all have published costs and none have done so in explicit detail. Added to those, two further UK Round 1 projects have been open-tendered. GH has managed both of those tender competitions which facilitates some of the insights presented here although specific project data is confidential. The aim of this section is to provide a summary of costs for the current generation of projects, namely UK Round 1 and similar, constructed or to be constructed, in the time period 2003 to 2005. 2.2.2 Reference costs Several previous projects have published their capital cost data and these are summarised in Table 2.1. The costs of the early projects were collated as part of the CA-OWEE project in which GH was a partner [2.1]. Others have been sourced as referenced in the notes to the table. Insofar as is possible, these have been made comparable by inclusion of grid connection costs. However, many of the costs have significant uncertainty associated with them in regard to the exact scope associated with them and the risk allocation. 2 of 30
Garrad Hassan and Partners Ltd Document: 3914/BR/01 Issue: C FINAL Project name Rated power Date Capital cost [€M] Specific capital [MW] installed cost [£M/MW] Vindeby 4.95 1991 10.25 1.45 Lely (Ijsselmeer) 2.00 1994 4.5 1.58 Tuno Knob Dronton / Irene 5.00 1995 10.35 1.45 Vorrink (Ijsselmeer) 16.80 1996-97 20.5 0.85 Bockstigen 2.50 1997 4.7 1.32 Blyth 4.00 2000 6.32 1.11 Utgrunden (Oland) 1 10.00 2000 13.9 0.97 Middelgrunden 2 40.00 2000-01 51.3 0.90 Horns Rev 3 160.00 2001-03 5 300.0 1.31 Samsoe 23.00 2002-03 35.0 1.07 North Hoyle 60.00 2003 5 105.7 1.23 Nysted 158.4 2003 5 268.8 1.19 Scroby Sands 60.00 2003-04 5 3 of 30 107.1 1.25 Notes 1 Confidential – figures shown are based on budget costs and possible rating of 10.5MW, not 10MW restriction. 2 Derived from figures published for half the project owned by Middelgrunden Co-operative, with estimate added for grid connection 3 Verbally advised by Techwise July 2002, including grid connection. Vestas have announced that turbine supply contract price is DKK 1 Bn (€134M). 4 Based on exchange rates: €1 = £0.70 = DKK7.44 5 Works still underway – not necessarily final costs. Table 2.1 Published total technical capital costs for offshore wind farms As Table 2.1 clearly shows, there is only a limited database on which to base any cost estimate and in fact many of the projects shown there are far from representative. For instance, the early Danish and Dutch projects (1997 and earlier) were demonstration projects. They were also located in very sheltered waters, with much less weather delay risk than in the Irish or North Sea. Moreover, the wind turbines used were much smaller than those planned for future use. The Horns Rev, North Hoyle, Nysted and Scroby Sands wind farms are much more representative of the current generation of projects in terms of turbine size and project nature and are considered the best cost references. The current cost position appears to be at around £1.1 – 1.3M/MW. However, caution is advised in characterising wind power costs on a per MW basis as the energy output per MW is a function not just of site parameters but also of technical concept. Notwithstanding the project-specific factors described, it is useful to observe the trend of dropping capital costs over time which is also very much a feature of onshore wind farm developments. However, there is a clear step-up in this trend after 2000, representing the move to more demanding sites and closer to commercial conditions. 2.2.3 Cost model To gain an insight into the component costs and how those may vary in the future, GH has assembled a simple budgetary model, Appendix 1. This has made a wide range of
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