AWEA Blog - Symposium Update: Wind’s cost falling, more improvement possible

While wind power’s costs have dropped substantially over the past few years, there are a host of possibilities for further reductions, according to an expert panel that appeared at AWEA’s Fall Symposium today in Colorado Springs.

Panel members included Daniel Broderick, Resident Engineering Manager, Gamesa North America; Dorte Kamper, Director, Commercial Sales & Marketing Americas, LM Wind Power; Keith Longtin, Wind Turbine Product General Manager, GE Energy; Mike Revak, Vice President, Onshore, Wind Power Americas, Siemens Energy; and Dan Shreve, Partner, MAKE Consulting. Winergy Drive Systems CEO/President Terry Royer moderated.

Mr. Shreve set the stage with a brief analysis of wind’s current cost. For a typical 100-megawatt (MW) project, he said, with a capacity factor of 40 percent, the cost of energy is about $50/MWh.  For new combined-cycle gas power plants with natural gas at $4 per million BTU (mmBTU), the cost of energy is $45-50/MWh, Mr. Shreve said. That being the case, wind is quite competitive, although the cost from any project varies depending on the site, quality of development, and other factors.

The wind energy Production Tax Credit (PTC) is making possible wind contracts at $35/MWh. “If that goes away, you’ll need to make that up,” Mr. Shreve said, but noted that his firm believes that increasing demand can cause natural gas prices to increase to about $6/mmBTU ($60/MWH) by 2020: “Wind is actually in a very competitive position–you really need to drive that message home.”

At the same time, it was clear from the ensuing discussion that wind power’s cost has not hit bottom. Some areas for further improvement identified during the discussion:

Mr. Shreve: Beyond straightforward technology changes such as longer blades, there are “clever engineering practices–working to get some of the expensive components out of turbines, such as moving away from carbon-fiber blades to fiberglass, moving away from rare earths … ”

Mr. Revak: Tranportation of turbine components, and “how we move them to the site. We can learn more about things like mixing large components such as hubs and blades for rail transport and using different types of cranes that are more efficient or less costly … ”

Mr. Longtin: Research: “We can’t control policy and demand, what we can control is technology, and so we see investment in technology as critical. We’ve invested about $2 billion in R&D since 2002, and we’re going to continue that level of investment.”

Ms. Kamper: Policy stability: “Our company had about 1,000 employees in the U.S. a few years ago. Last year we were down to less than 300 [due to uncertainty about extension of the Production Tax Credit], and now we are over 1,200. That kind of volatility adds to our costs, in hiring and training, and so it adds to the cost of wind energy.  As a global company, we have to make choices about where to invest money, and obviously, we’re looking at countries that have more stable policies.”

Mr. Longtin: Wind farm “plant optimization”: “This is really an exercise in big data. We have 20,000 turbines installed today. We think that by controlling individual turbines, we can optimize the energy production of a wind farm … Some turbines [in an array] will experience wake effects–how can we minimize those wake effects by controlling individual machines? In the last couple of years, we’ve seen some great results.”

With respect to one of the major technology choices–geared turbines versus direct-drive machines–there continues to be a divergence of opinion among turbine manufacturers, with GE’s Mr. Longtin focusing on his company’s success in increasing gearbox reliability and Siemens’s Mr. Revak describing the potential benefits of an innovative direct-drive system, saying, “We think direct drive has the opportunity to really be a game changer, with higher efficiency and reduced [energy] losses.”

GE Energy, Mr. Longtin said, is looking at new designs for both blades and turbines that involve an internal superstructure that is covered with fabric, and that can be lighter than current technology. Of the tower fabric, he noted, “This is similar to the material that has been used on the Denver airport–it’s been tested for ultraviolet resistance, strength, etc.”

Mr. Revak and Gamesa’s Mr. Broderick, in turn, pointed to towers their companies are installing in Europe and Brazil that have lower sections made of concrete. In addition to making increased tower height possible, Mr. Revak said, concrete can be locally sourced, and therefore makes it easier to build projects that conform to domestic content requirements in countries having such requirements.