Modeling & Analysis - Energy.gov · Hedge Value. Energy, Capacity and REC Value of Offshore Wind...

1U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY

Modeling & Analysis to Inform WETO R&DProject ID: A3

Ryan WiserLawrence Berkeley National Laboratory 0

1,000

2,000

3,000

4,000

5,000

6,000

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Inst

alle

d Pr

ojec

t Cos

t (20

17 $

/kW

)

Commercial Operation Date

Interior (49.7 GW) West (12.4 GW) Great Lakes (8.3 GW) Northeast (4.5 GW) Southeast (1.1 GW) Capacity-Weighted Average


Project Overview

Project AttributesProject Principal Investigator(s)

Ryan WiserMark Bolinger

DOE Lead

Patrick Gilman

Project Partners/Subs

National Renewable Energy LabExeter Associates, ABB VentyxIEA Wind Task 26 membersPaulos Analysis

Project Duration

2 years: FY17 and FY18

Project Summary

Synthesize foundational data, conduct innovative and targeted analysis, and provide analytical support to WETO and its partners. Fill critical knowledge gaps in support of WETO and the wind sector by conducting analysis on the potential cost, performance, value, and barriers to wind power in the United States.

Project Objective & Impact

This work informs DOE WETO’s R&D planning approaches and investment decisions, and helps WETO prioritize major technology development initiatives. It also provides WETO and other stakeholders with unbiased data on and objective analysis of the potential cost, performance, value, and barriers to wind power in the United States.

A3: Modeling & Analysis to Inform WETO R&D


Technical Merit and Relevance

Wind Technologies

Market Report

Wind Energy Cost and

Performance Analyses

Grid and Societal Impact

Assessments

R&D Opportunity and Impact Evaluations

Four Areas of LBNL Engagement • Helps WETO understand current market status and serves as empirical foundation for R&D assessments

• Enhances WETO’s ability to discern and prioritize future technology improvement options, and assess impacts

• Supports wide range of R&D investment & other decisions with real-time analysis

• Provides stakeholders with a trusted source of data on and analysis of potential cost, performance, value, barriers

• Advances understanding of wind’s impact, role, and value within electric system

EXTE

RN

ALW

ETO


Approach and Methodology

• The variety of analyses performed under this overarching “project” leads to diverse methods, including various forms of statistical, economic, financial, and engineering analysis

• In all cases, work is designed to build on existing literatureto give stakeholders greater confidence in the results

• As much as possible, analyses are grounded in actual data from operating wind energy projects and in experience with wind energy deployment efforts

• Where appropriate, experts from other labs, industry, and academia are used as both advisors and subcontractors

• A key goal is to stay nimble in order to be responsive to emerging issues and stakeholder needs in a timely manner

• Key objective is to ensure that work is used and useful


Accomplishments and Progress:Wind Technologies Market Report

• Goal: Publish annual ‘flagship’ DOE report that presents data on key trends in the land-based wind market, building on other available data collection efforts; covers installation, manufacturing, technology, performance, cost, and value

• A “go to” guide for diverse stakeholders, and helps DOE benchmark its R&D progress, and provides empirical foundation for other analyses

Dramatic rise in capacity factors… …enables rock-bottom PPA prices

U.S. Wind Turbine

Database

Data visualizations and access

Inter-annual resource

index

Performance degradation assessment

EIA confidential CapEx data

Merchant market-value

analysis

$0

$20

$40

$60

$80

$100

$120

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Jan-

17

Jan-

18

Interior (26.5 GW) West (7.5 GW) Great Lakes (4.4 GW) Northeast (1.5 GW) Southeast (0.5 GW)

Leve

lized

PPA

Pric

e (2

017

$/M

Wh)

25 MW

150 MW

50 MW

200 MW

Levelized 20-year EIA gas price projections (converted at 7.5 MMBtu/MWh)

New and Notable


Accomplishments and Progress:Wind Energy Cost and Performance Analyses

• Goal: Conduct analysis of past and possible future wind cost and performance trends and drivers, to inform R&D prioritization and to help illuminate pathways to reduce the levelized cost of wind energy (LCOE)

Drivers of Wind Turbine Prices Wind Performance Uncertainty

Impact of Rising Interest Rates Industry Operational Cost Survey

Improved financing terms present an LCOE reduction

opportunity of up to ~$3/MWh

$/kW 2001-08 2008-15Labor + warranty +116 -38Profit margin +60 -24Turbine scale -4 -24Materials price +90 -71Currency +168-335 -207-308

Drop in tax rate to 21% increases price by

~$2/MWh in 2018

Rising interest

rates through

2020 add ~$2/MWh

PTC phase-out post-

2020 adds another

~$14/MWh

Need reductions in costs and increases in performance, to compensate

OpEx has declined from

~$80/kW-yr for projects built in

the late 1990s to ~$40/kW-yr for projects in 2018

9% OpEx decline for each doubling of wind capacity;

~10% of LCOE reduction could come from OpEx

Ongoing: not yet published


Accomplishments and Progress:Grid and Societal Impact Assessments

• Goal: Advance understanding of wind grid integration needs and system value, and ways to boost value. Inform R&D targets & prioritization beyond LCOE; enhance stakeholder understanding of wind’s role within electric system

$40

$45

$50

$55

$60

$65

$70

$75

$80

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

Time Horizon for Wind Resource and Gas Price Projections

Wind P50-P1 LCOE range (range due solely to wind resource uncertainty)

Gas P50-P1 LCOE range (range due solely to fuel price uncertainty)

Wind P50 LCOE (no PTC)

Gas P50 LCOE

P1

P5P10

P25

25-y

ear L

COE

(Nom

inal

$/M

Wh)

Note: wind numbers do NOT include the PTC

P50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Wind P1 = Gas P10

Wind P1 = Gas P5

HealthBenefits(avoidedSO2)

FuelPriceHedge Value

Energy, Capacity and REC Value of Offshore Wind (also considered merit order and natural gas price suppression

Regional Merchant ‘Market Value’ of Wind, 2017

Societal Value (FY17) Grid System Value (FY18)


Accomplishments and Progress:R&D Opportunity and Impact Evaluations

Built on IEA Wind Expert Survey and NREL SMART Wind Plant efforts to understand

need for and benefits of R&D (led by NREL)

Wind technology advancement is a core enabler for sustained wind deployment,

resulting in lower system costs

13

17

19

0

5

10

15

20

4-yr acceleration 6-yr acceleration 8-yr acceleration

Benefit-to-Cost Ratio

Nearing completion of assessment of economic

return to WETO’s historical R&D investments

Across multiple approaches & sensitivities, sizable net return

to WETO’s historical R&D


Accomplishments and Progress:Other Activities and Accomplishments

Impact of wind and solar on wholesale power prices • ongoing research on the impacts of wind, solar, and other drivers on wholesale prices, to inform

electric-system transformation and related impacts on costs, reliability, planning

IEA Wind Task 26 on cost of wind energy • compare land-based wind technology, cost, and performance data across countries in

upcoming report; populate data viewer to enable external access to wind data from participating countries; analysis of the ‘system value’ of large rotor, high-hub-height turbines

IEA Grand Vision • participate in an IEA- and NREL-led workshop and subsequent discussions, ultimately leading to

submission to Science focused on the most critical R&D opportunities for wind energy

Retail rate impacts • assess degree to which renewables deployment has impacted retail electricity rates

Expert survey on the future cost of wind energy • disseminate results from earlier survey, including factsheets, press, speaking engagements

Technical assistance • provided extensive technical assistance to numerous parties, including the DOE, state and

federal decision-makers, and a variety of wind and utility stakeholders


Milestones and Schedule: FY17--FY18• Formal milestones listed in narrative summary of project—not repeated here• Milestones reflect formal annual operating plans established annually• In practice, additional deliverables completed beyond formal milestones• All milestones met on time or, in a few cases, with minimal delay

– Maximum delay for quarterly milestone = 2 months; next highest = 2 weeks– One milestone delayed by 5 months, due to ‘hold’ request from DOE WETO

• All go/no-go decision points achieved: go/no-go decision points :– FY17: Update stakeholders on trends in cost, performance and deployment of wind energy technologies

in the U.S. by publishing annual Wind Technologies Market Report, and completing dissemination activities in accordance with direction from DOE communications staff: Go

– FY17: Deliver to DOE draft internal analysis in PowerPoint briefing form that identifies the potential LCOE impacts associated with potential interest rate increases, with and without the PTC, to determine how the project finance environment for wind might be affected by interest rate risk: Go

– FY18: Based on its assessment of the document's value to the program and in light of other budgetary and analysis priorities, the WETO will decide whether or not to direct LBNL to lead the creation of the "2017 Wind Technologies Market Report“: Go

– FY18: Based on the high-level analysis of performance degradation presented within the capacity factor section of the “2017 Wind Technologies Market Report,” WETO will decide whether or not to fund LBNL to follow up with a more-detailed and -rigorous degradation analysis, comparable to those recently conducted in Europe, in FY19: Go


Communication, Coordination, Commercialization

Tight coordination and collaboration with other Labs (especially NREL), international community via IEA Wind, consultancies, and wind industry

Lab reports12

Journal articles

4Conference posters

2

Press uptake

139

Presentations

44

Technical assistance

67+

[ see: https://emp.lbl.gov/publications ]


Upcoming Project Activities

Goal: Stay nimble to target emerging needs of DOE WETOand the wind industry, but also strategic to anticipate DOEand industry longer-term needs

FY19 Current and Ongoing Work

•2018 edition of annual Wind Technologies Market Report•Enhanced wind market-value analysis at project level and inclusive of capacity•Finalize assessment of impacts of wind (and solar) on wholesale market prices•Finalize industry survey tracking past and recent trends in land-based wind OpEx•Assess wind project performance as projects age, and underlying drivers•IEA Wind: update data, finalize cross-country report, prep for possible new survey•Grand Vision for wind energy, in collaboration with IEA Wind, NREL, others•DOE WETO program-level cost-benefit analysis of historical R&D investments

Milestones and budget are all on track

Modeling & Analysis - Energy.gov · Hedge Value. Energy, Capacity and REC Value of Offshore Wind...

Documents

Transcript of Modeling & Analysis - Energy.gov · Hedge Value. Energy, Capacity and REC Value of Offshore Wind...