Saturday, July 1, 2017

For the First Time, Offshore Wind Power Will Be Profitable Without Subsidies - IEEE Spectrum

Europe’s offshore wind power industry recently achieved a major milestone: three projects to be built without government subsidy. Bent Christensen, who is responsible for energy-cost projections for Siemens’s wind power division, credits industry-wide cost cutting that has outstripped expectations. “We’re three to four years ahead of schedule,” says Christensen.
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In 2013, when new projects were delivering electricity for about €160 (US $179) per megawatt-hour, the industry collectively set what Christensen calls a “realistic stretch goal” to squeeze that to €100/MWh by 2020. Christensen ... says that by his math the industry is already there.
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Christensen’s estimate is echoed by the financial advisory firm Lazard, which projects the unsubsidized cost of newly commenced projects at €105/MWh ($118/MWh)—a 27 percent reduction since 2014. Lazard’s December 2016 analysis finds that offshore wind is cheaper or on par with coal-fired generators, rooftop solar arrays, and nuclear reactors.

Recent bids for near-shore projects, meanwhile, rival the cost of onshore wind and utility-scale solar energy. Several projects in Denmark and the Netherlands promise offshore wind power for less than €75/MWh, and then there are the subsidy-free German bids this April by Copenhagen-based Dong Energy and the German utility Energie Baden-Württemberg. Ulrik Stridbaek, Dong’s senior director for regulatory affairs, estimates its projects’ power cost at €62/MWh.
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Dong’s 1.2-gigawatt Hornsea Project One wind park, which it will begin installing next year at a spot 120 kilometers off the United Kingdom’s Yorkshire coast, is nearly twice the output of the current record holder.... Offshore turbines topped out at 3.9 MW each in 2013, whereas today’s biggest deliver 8 MW....

Zero-subsidy projections for those German projects, meanwhile, rely on 13- to 15-MW turbines that don’t yet exist. Dong is betting, says Stridbaek, that suppliers such as Siemens Gamesa and MHI Vestas Offshore Wind will have such giants ready for the North Sea projects’ completion, in either 2024 or 2025.

... Several novel approaches are now being tested in the Baltic Sea, where a 30-km patch cord between German and Danish wind farms will create an extra interconnector between the Nordic and European grids....

When the Baltic wind farms are idle—about 50 percent of the time—Europe’s software-integrated power markets will use their cables to exchange electricity between northern Europe and Scandinavia....

What made the project feasible, says Jørgensen, is a low-cost arrangement of the high-voltage direct-current (HVDC) converters needed to exchange 400 MW between the two grids, which are not in sync with each other. Early designs would have placed one converter offshore at Kriegers Flak. Instead, the project will place both converters back-to-back in Germany onshore, thus avoiding the roughly 50 percent premium for an offshore platform.

A supersize version of this dual-use cable design hatched last year by the Dutch-owned grid operator TenneT calls for offshore transmission hubs for the North Sea. The proposal, recently joined by Energinet, calls for one or more artificial islands whose power systems would gather up to 100,000 MW of offshore wind generation and parcel it out to the North Sea countries.

These “power link islands” would—like the Kriegers Flak link—minimize transmission costs by keeping HVDC converters on dry land and maximize their value by trading power between grids. They would also host technicians, spare parts, service vessels, and an airport offshore, thus reducing the cost of wind farm maintenance.
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By PETER FAIRLEY
26 Jun 2017

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