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Delegates are invited to meet and discuss with the poster presenters during the poster presentation sessions between 10:30-11:30 and 16:00-17:00 on Thursday, 19 November 2015.

Lead Session Chair:
Stephan Barth, ForWind - Center for Wind Energy Research, Germany
Lars Hedemann Siemens Wind Power, Denmark
Co-authors:

(1) Siemens Wind Power, Vejle, Denmark

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Presenter's biography

Biographies are supplied directly by presenters at EWEA 2015 and are published here unedited

Lars Hedemann is Sales Strategy Manager in the Offshore Market Unit at Siemens Wind Power. Lars has been with Siemens since 2011 working with Product Marketing and Sales Strategy mainly focusing on the Siemens D7 Platform. Before joining Siemens, Lars has a history as researcher at Aarhus University (DK), Delft University of Technology (NL) and University of Michigan (USA). Besides from his engagement in Renewable Energy Lars is active in Carbon Conservation via the Grow|For|It network.


Poster

Poster Download poster (5.26 MB)

Abstract

'Technical Cost of Energy' vs. 'Business case Cost of Energy' in the scoping of new Wind Turbines

Introduction

The scoping of new wind turbines is crucial in maintaining a competitive edge in today’s Wind Energy arena. Wind Turbine scoping has historically been focused around technology considerations. However, with the entrance of Project Financing in the realization of future Onshore and Offshore Wind Power projects, an investor focus has become of equal importance to the scoping process. In essence, the challenge is that the conventional 'bigger is better' technology scoping-approach can create an artificial gap between the Technical Cost of Energy and the ‘Business-Case’ Cost of Energy. This, we believe is a critical aspect in the scoping of future Wind Turbines.



Approach

Despite a shared logic on the basis behind the Levelized Cost of Energy, the exercise of scoping the Siemens 6MW Direct Drive successor revealed a divergence in how different stakeholders estimate the financial impact of a new technology in their business case modelling. To identify the how this could be accommodated in the scoping of the Siemens 6MW Direct Drive successor, the Siemens team decided to apply an analytical approach based on financial engineering. The basis for the exercise was a triangulation of three in-depth analyses; a customer analysis, a project analysis and a technology analysis.

Main body of abstract

In sum the three in-depth analyses provided an interesting overview of the market conditions wind power technologies will be facing in the journey toward 2020 industry targets:
First, the customer analysis made it clear that the main part of offshore projects to be signed pre-2020 will be Project financed, i.e. based on financing from financial investors. From the experiences with the Gemini project being the world’s first large scale Offshore project realized backed by project financing, the Siemens team possessed firsthand insights into how important reliable Wind Turbine Technology is in optimizing the financing of the project, i.e. the reducing the project’s Cost of Capital; Debt/Equity ratio and required return rates.
Second, the Project analysis provided a site-study analysis looking into matters related to Installation- and Balance of Plant specifications across pre-2020 offshore projects. This analysis demonstrated the importance of remaining true to the low Tower Head Mass and low rotor loading characterizing the Siemens 6MW Direct Drive as this has proven key in being able to deploy monopole foundations at 35-45m depth sites instead of being forced onto more cost-intensive Jacket foundations.
Finally, the Technology analysis reviewed the structural reserve of the Siemens 6MW Direct Drive platform and the capacity of the main components; Blade, Generator, Main bearing and Power Unit. Based on the Platform and component reviews it was realized that a performance increase in the range of approximately 20% would be achievable without compromising safety-margins in the platform structure or main components.


Conclusion

A triangulation of the investigations came out in favor a 7MW solution, based on the Siemens D6 Direct Drive platform deploying the 154 meter rotor already known and IEC A-type certified. In short, the 17% rating increase to 7MW equals fewer units and by that also a reduction in CAPEX and OPEX. On top of this, the fact that the changes in the technology upgrade is extending on a proven and already certified technology allows for a smoother certification process. Finally, the vast amount of quantitative test data already accumulated with the platform reduces technology uncertainty which ultimately allows for more favorable financing conditions and hence a lower Cost of Energy.


Learning objectives
In today’s Offshore environment money talks - louder than ever. And the money comes from investment bankers who do not like uncertainty. Hereby investor uncertainty can create an artificial gap between the technical Cost of Energy and the ‘Business-Case’ Cost of Energy. This we believe is an overlooked aspect in the public discussion on the Cost of Energy, as well as in the assessment of the potential of future Offshore technologies.