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This is a case of comparing things that are not really comparable, and it brings out some highly doubtful numbers.

First of all, the notion of a price per MW is atrocious. The only relevant price is that of $/kWh, i.e. per energy output. Prices per capacity can have relevance for intra-industry comparisons (i.e. comparing the cost of one wind farm vs another) but not to compare different technologies. Prices per kWh include the initial investment cost (and the financing cost), the operating cost and the fuel cost. The comparison made appears to focus only on initial investment costs

Second, the comparison of an actual project with an advertisement for a project that does not exist is, similarly, a debatable venture.

Thirdly, presenting offshore wind as a mature technology is also a bit misleading. You can still count on your fingers the number of operating industrial offshore wind farms. PV technology can, conversely, be described as having a 30-year history and it might be more useful to compare recently built PV plants (ther's a number of them) to recently built offshore wind plants.

I won't comment on the Australian project, other than to say that public promotional material made available several years before construction starts is unlikely  to provide much useful information.

On the Dutch project, I'll bring up the following tidbits, to enlighten readers:

  • this is, in many ways, an experimental project. It is the first one to have been built so far from shore (more than 25km), and the first one to be built in such deep waters (20+meters depth). As such, it benefitted from specific public support to get it done, reflecting the extra cost there technical parameters entail;

  • this project was the first one to be project financed by banks. As such, the numbers that were made public reflect the pretty conservative assumptions of the banks with respect to both project costs (including contingencies) and project revenues (taking into account, for instance, lower wind levels than commercially expected). The headline number also reflects the presence of reserve accounts, i.e. money set aside in the budget just in case but that will return to investors once debt is repaid;

  • finally, the Dutch support framework for wind energy is based on a much shorter support mechanism than in other countries - 10 years instead of 15 or 20. This in turn requires financings to be shorter, and thus repaid faster, which increases the apparent financing cost (but not the real cost taken over 20 years, the usual life span of wind turbines);

  • a separate, additional point is that the project has been structured such that the upfront investment costs actually include operating expenses for a number of years, which will thus not need to be added when calculating rea lcosts per kWh.

Thus, the calculation is overtly conservative for offshore wind, and likely very optimistic for the (potential) solar project.

From our portfolio of existing projects, prices for wind are in the 4-7c/kWh range, for offshore wind in the 7-10c/kWh range, and for solar around 15-20c/kWh. Don't ask me to convert these to USD/MW, because I can't.


In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Aug 15th, 2007 at 12:11:16 PM EST
I was also going to comment on costs, but thankfully, you beat me to the punch.  I would like to add some thoughts.

In no sense is offshore windpower mature, and while the long-term prognosis is exceptional, the technology can not truly be considered commercial.  Q7 pushes the frontier in both financing and water depth for a large project, but it uses quite conventional turbines.

The first real offshore turbines are still being tested at onshore prototype sites, including REpower 5M (4WTs), Multibrid 5MW (2 WTs, one with a tripod foundation), and the Enercon 6MW (evolved from a number of turbines beginning at 4.5 MW).  I've visited all these turbines, but won't climb until next month.

Several other smaller turbines have offshore versions, including one Nordex N90 about a 100 or so meters offshore in Rostock harbor.  The German offshore test station is planned to begin construction next year.

REpower has installed one 5M turbine near the Beatrice oil rig at depths around 45 meters, so while this is not a "large commercial" project, it is the state of the art currently.  A second 5M was intended to be installed last year, but was pushed back to this summer as the rig was not available.  I don't know if the second WT is already installed.

The real state of the art will be floating foundations, as the rest of the world does not look the pool table equivilent of the North Sea.  Floating foundations will allow projects to be sited far enough from coasts to obviate conflicting use and visual effects, which in most parts of the world have depths up to 200 meters.

Except in the North Sea, it makes no sense to go offshore until high value onshore wind sites are operational.  Onshore remains the focus of any chance we have to meet necessary renewable targets worldwide, but even including the remaining sites in northern Europe.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Wed Aug 15th, 2007 at 12:39:33 PM EST
[ Parent ]
First of all, the notion of a price per MW is atrocious. The only relevant price is that of $/kWh, i.e. per energy output. Prices per capacity can have relevance for intra-industry comparisons (i.e. comparing the cost of one wind farm vs another) but not to compare different technologies. Prices per kWh include the initial investment cost (and the financing cost), the operating cost and the fuel cost.

Laurent has chosen USD/installed effective watt as benchmark, which is just installation cost (in $) / output (Wh) * the number of hours in a year (365*24). Perhaps not the measurement I would have chosen, but nothing wrong with it per se as long as you want to compare installation costs. I guess the assumption is that the differences in financing and operating cost is small. Fuel cost is the same, zero.

solar around 15-20c/kWh

Thermal, PV or both?

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Wed Aug 15th, 2007 at 12:58:26 PM EST
[ Parent ]
are only part of the cost. Financing and operating costs are not irrelevant, in fact financing costs are the single biggest driver of relevant costs for renewable energy. And using a figure that requires the fule cost to be zero is extremely dangerous as it makes all renwables look really bad compared to fossile fuel-based sources.

As far as I know, both thermal and PV are in that price range.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Aug 15th, 2007 at 01:26:18 PM EST
[ Parent ]
First of all, the notion of a price per MW is atrocious. The only relevant price is that of $/kWh, i.e. per energy output.

If you read my post carefully you see that I quote only output figures, I just divide them by 365*24.

Why do I do this division and post in installed efficient MW and not USD/kWh "retail price"?

Because I don't have data for financing, maintenance and lifetime of the power plants which is needed to provide the retail price per kWh. Financing being equal we have to guess the relative value of other parameters if we want to get the kWh retail price.

several years before construction starts

My understanding is that the CS500 solar dish model is in production since 2003 at the Umuwa site according to the company document I cited, but it has only 10 dishes (at a price of 207 500 USD per 22kW peak dish, probably first prototypes :).

google map of the Umuwa plant:

http://maps.google.com/maps?q=http%3A%2F%2Fbbs.keyhole.com%2Fubb%2Fdownload.php%3FNumber%3D893511&am p;t=k&om=1&ie=UTF8&ll=-26.473512,132.01476&spn=0.002295,0.003616&z=18

Here is an Oil Drum post with a nice photo of Umuwa dishes:

http://europe.theoildrum.com/node/2583

The 22kW peak dishes at Umuwa have a diameter of 13.7 meter, height of 14.5 meters:

http://www.bcse.org.au/docs/Project%20Profiles/Anangu%20Pitjantjatjara%20Solar%20Station.pdf

I don't know if the dish will be the same or different at the Victoria plant.

Of course all projects carry risk, overestimates are floating around but that's life :).

by Laurent GUERBY on Wed Aug 15th, 2007 at 01:12:54 PM EST
[ Parent ]
well, as pointed out above, energy and "net" capacity may be partially linked for renewable sources, but they are certainly not for other energy sources and thus provide highly misleading numbers, which the coal and gas industry will certainly love you for, as it will paint them in a highly flattering light (their investment costs are in the 1 USD/kWe - less for gas, a bit more more for coal)

USD/kWh is not a retail price, it's the price of energy. It can be retail or wholesale. Using USD/MW is like quoting the price of water with respect to the diameter of the pipe - it makes little sense.


Because I don't have data for financing, maintenance and lifetime of the power plants which is needed to provide the retail price per kWh.

Well, my point is precisely that the items you don't have are very relevant and do drive the actual price of electricity for the various technologies. In one case they are included (and even oversized), and in the other they are ignored, or at least unknown.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Aug 15th, 2007 at 01:34:44 PM EST
[ Parent ]
(please read my post again for the water/pipe)

Well, my point is precisely that the items you don't have are very relevant and do drive the actual price of electricity for the various technologies. In one case they are included (and even oversized), and in the other they are ignored, or at least unknown.

That's why there's more to the diary than just the first two paragraphs :).

If you look risk and maintenance by small window of the scale of physical parameters in the plant:

  • Wind: normal temperature, large physical forces/motors, no hasardous material
  • Solar thermal: high temperatures, moderate to large physical forces (stirling engine or other), may be hasardous materials (to move heat)
  • Solar PV: normal to moderate temperatures (they cool the PV cell if I understand correctly), no physical forces (just moving small mirrors on ground), no hasardous material.

I can't quantify the induced risk and maintenance overhead of course, but I'd say solar PV will likely have the lower of the three.
by Laurent GUERBY on Wed Aug 15th, 2007 at 01:50:01 PM EST
[ Parent ]
This 189 pages PDF has many info:

http://www.azcommerce.com/doclib/energy/az_solar_electric_roadmap_study_full_report.pdf

page 88-90 it gives 2006 cost per installed effective Watt at 21.7 USD. It notes than if more than 10 MW/year are installed this cost would likely go down to 13 USD.

But the interesting line is their "Non-Fuel Fixed O&M" if you look at the tables you see that CPV are low compared to other solar tech (and projections for the future are even lower).

Amonix technical paper for 2006 has a section on maintenance of their CPV systems for the past years.

by Laurent GUERBY on Wed Aug 15th, 2007 at 02:22:54 PM EST
[ Parent ]

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