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Carbon Trust’s Offshore Wind Accelerator Driving down the cost of offshore wind

Carbon Trust’s Offshore Wind Accelerator Driving down the cost of offshore wind. Phil de Villiers Offshore Wind Accelerator Manager. Our mission is to accelerate the move to a low carbon economy. We cut carbon now by Providing specialist advice and finance to help organisations cut carbon

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Carbon Trust’s Offshore Wind Accelerator Driving down the cost of offshore wind

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  1. Carbon Trust’s Offshore Wind AcceleratorDriving down the cost of offshore wind Phil de Villiers Offshore Wind Accelerator Manager

  2. Our mission is to accelerate the move to a low carbon economy • We cut carbon now by • Providing specialist advice and finance to help organisations cut carbon • Setting standards for carbon reduction • We cut future carbon emissions by • Opening markets for low carbon technologies • Leading industry collaborations to commercialise technologies • Investing in early stage low carbon companies

  3. In 2008 Carbon Trust assessed barriers to offshore windOffshore wind power: Big challenge, big opportunity • Focus of assessment • What is required to deliver offshore wind in the UK? • What does UK Government and industry need to do? Note: Report is available on our website: www.carbontrust.co.uk

  4. UK faces an energy gap and tough renewable energy targetThis requires mass deployment of offshore wind … Installed capacity, projected demand (GW), 2008-2020 % of UK energy from renewables, 2005-2020 Projected peak demand Energy gap 8x increase required Renewables Nuclear Gas Coal 2008 2010 2015 2020 2005 2010 2020 target Source: Committee on Climate Change, 2008 (based on DECC Energy Model)

  5. A Increased RD&D critical for delivering cost reduction Weak commercial returns, high levels of public subsidy Stronger commercial returns, lower levels of public subsidy £75bn £16bn £14bn £45bn Requires major RD&D programme, of which OWA is one component Current expectation Optimal site availability Cost reductions Achievable goal Source: Carbon Trust “Offshore wind power: big challenge, big opportunity”, 2008

  6. Costs must be reducedOtherwise projects cancelled, UK renewable targets missed Cost per MW installed (€m/MW) • Drivers • Rising commodity prices • Bottlenecks in supply chain • Complexity of sites, distance, depth • FX rate volatility Rhyl Flats Robin Rigg Burbo North Hoyle Gunfleet Sands Lynn Kentish Flats Scroby Sands Barrow Year Source: Emerging Energy Research, 2009

  7. Offshore Wind AcceleratorObjective: Reduce cost of energy by 10% through RD&D Offshore Wind Accelerator • 8 developers + Carbon Trust • Focusing on technologies for • Round 2 extensions • Round 3 • Scottish Territorial Waters • Total budget ~£40m • £10m for collaborative R&D • Up to £30m for demonstrations • Carbon Trust funds 1/3 • Commitment to 2014 • Started October 2008

  8. OWA objectivesRequires very targeted RD&D • Focus on commercial outcomes • Reduce cost of energy by 10% • Deliver innovations in time for Round 3 (~2015) • Learn from the capabilities and experiences of each member • Offshore wind, oil and gas, onshore wind • Encourage the best designers to deliver innovations • Engage them on very specific challenges • Let them keep their IP • Look internationally, not just to UK • Engage with other industries for technology transfer • Operate responsively to member needs; manage costs effectively

  9. OWA is an example of market-pull innovation Two approaches to innovation UK offshore wind R&D customer-driven Innovators Market Technology push • Research-focused • May not meet customer needs Marketpull • Customer-focused • Innovators focus on main challenges Offshore Wind Accelerator Source: Carbon Trust 2011

  10. 7 60% of UK market is in OWA: big pull for innovatorsOWA developers have 30GW of licensed capacity in UK waters Developer Round 1 Round 2 STW & Demo Round 3 Total market 12% 8% 2,202 24% 3,750 12% 6,555 14% 1% 5% 1,518 26% 3,983 12% 6,015 12% 16% 1,430 16% 4,185 13% 5,809 12% 3% 1,500 26% 3,600 11% 5,350 11% 20% 5% 1% 3,600 11% 4,396 9% 0% 2,406 26% 2,884 6% 2% 2,250 7% 2,408 5% 2% 0% 2,250 7% 2,408 5% 0% 6% 2,000 6% 2,360 5% 2,000 6% 2,000 4% 0% 3% 0% 1,733 5% 1,985 4% 20% 7% 5% 1,809 4% 16% 1% 1,238 3% 3% 2% 3% 2% 7% 1% 7% 1% 2% 0% 7% 0% 1% OWA Stage II partners Source: RenewableUK (Jan 2010), The Crown Estate (May 2010)

  11. Focus is on areas developers most able to influence Turbine Yield Cost of finance O&M I&C BoP

  12. Aiming to reduce impact of distance and depth on cost Wind speed Distance Depth CoE as % typicalnear-shore site <700 700-800 800-900 900+ 0-12 12-30 30-60 60+ 0-20 20-40 40-60 Distance to shore (nm) Depth (m) Wind power (W/m2) Note: Cost analysis for <700 W/m2 wind power, where 100% = £97/MWh (2008 assumptions) Source: Carbon Trust “Big Challenge, Big Opportunity” 2008

  13. Research performed within Technical Working GroupsInnovation is provided by third-parties Steering Committee Carbon Trust Management Team Foundations Wake Effects Access Electrical 125+ people Technical Working Group Technical Working Group Technical Working Group Technical Working Group Innovators, designers Innovators, designers Innovators, designers Innovators, designers 500+ companies OWA partners Carbon Trust 3rd party contractors

  14. Many companies engaged by OWA to deliver innovation Wake effects Foundations Electrical systems O&M Developers Designers Fabricators Installers

  15. Common Partner “A” participation Other Partners’ Projects Two types of activity: Common R&D and Discretionary ProjectsPartners opt-in to participate in Discretionary Projects 2010 2011 2012 2013 2014 Foundations Wake Effects Common R&D Electrical ATL New area 1 New area 2 Demo proj. 1 Selected Demo proj. 2 Discretionary projects Selected Demo proj. 3 Selected Demo proj. 4 Selected Demo proj. 5 ETC

  16. Some important stakeholders for OWA Funders OWA R&D institutes WTG OEMs F A W E Innovators, designers Finance community

  17. OWA focuses on strengthening economics of offshore wind Offshore wind returns CAPEX OPEX Yield Financing costs Foundations Access Electrical systems Wake effects Four technology areas, selected on basis of detailed analysis of over 70 technical barriers

  18. 1 Foundations Most of UK licenced capacity is in 20-60m depths Round 1, 2 and 3potential installedcapacity (MW) 0-10 580 10-20 835 1,340 20-30 5,880 6,260 30-40 6,050 6,220 40-50 50-60 Round 3 Round 2 60-70 Round 1 Depth (m) Source: Crown Estate 2009

  19. Foundations Turbine installation rates will need to increase dramatically Number of turbines installed per year 2003 - 20201 One new turbineinstalled every 11 days One new turbineinstalled per day 2.5 new turbines installed per day Actuals Modelled 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Over 6,000 turbines to beinstalled over 10 years 1. Number of turbines calculated from actual and forecast installed capacity figures, assuming 3MW turbines 2003 – 2013, and 5MW turbines from 2014 Source: Carbon Trust “Offshore wind power: big challenge, big opportunity”, 2008; Carbon Trust analysis 2010

  20. Foundations Foundations research area focuses on 30-60m Shortlist Finalists Current focus Fabrication Keystone Airbus A320 Gifford / BMT /Freyssinet Installation SPT Offshore IHC Demonstration MBD Source: Carbon Trust Offshore Wind Accelerator 2010, IHC

  21. Electrical Systems Electrical systems opportunity: higher voltage arrays • Current priorities • Engaging cable suppliers to deliver higher voltage cables • Optimising design of switchgear, transformers • Benefit • Improved reliability • Lower losses Source: Carbon Trust Offshore Wind Accelerator 2010

  22. More accurate models are being developedIncreases wind farm yields and reduces financing costs Coloured lines represent different models or model variants Wake Effects • Next steps • Develop more accurate wake effects models • Develop tools to optimise layouts • Measurement campaign to reduce data collection costs Source: Carbon Trust Offshore Wind Accelerator 2010

  23. Access Systems Access competition to increase availability and safetyOver 450 designs entered Challenge: improve access in tough metocean conditions New technologies required to implement optimal strategies Transfer systems Vessels Launch & recovery systems Source: Carbon Trust Offshore Wind Accelerator 2010

  24. Some excellent R&D is being performed in EuropeExamples • Denmark – Risø • Germany – RAVE, Fraunhofer • Netherlands – ECN, FLOW • Norway – NOWITECH • Sweden – Vindforsk III • UK – ETI, NAREC

  25. w Greater collaboration is neededReduce duplication, increase efficiency No. projects Turbine development Grid integration Foundations Ecosystem Wind resource assessment Wake effects Access / O&M Electrical systems Floating wind turbine OWA focus area Source: Carbon Trust analysis 2010

  26. Conclusions • We are focusing our RD&D efforts on the needs of end users • Cost reduction in site conditions applicable to EU market • RD&D is essential for driving down cost of offshore wind • Strengthens economic returns • Reduces financing costs • Reduces costs to consumers • Accelerates deployment • Greater collaboration would benefit everyone • Avoids duplication and reinvention

  27. Phil de VilliersOffshore Wind Accelerator ManagerPhil.deVilliers@CarbonTrust.co.uk

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