Monday, October 20, 2008

Wind Cost Data from Carbon Trust

The Carbon Trust was set up by the United Kingdom Government
in 2001 as an independent company. Its mission statement reads:
Our mission is to accelerate the move to a low carbon economy
by working with organisations to reduce carbon emissions and
develop commercial low carbon technologies.
A recent carbon Trust report: "Offshore wind power:
big challenge, big opportunity" highlights the cost of offshore wind generation facilities. The report indirectly suggests that British offshore wind generating facilities will cost around
10% more than the the cost of nuclear generating facilities capable of delivering equivalent amounts of electricity. In addition the cost of load ballancing and maintaing capacity reserves add to wind related grid costs past on to consumers. Finally it should be noted that nuclear plants may be up to 4 times as durable as nuclear planys, meaning thatr nuclear would be a far better long term investment.

Carbon Trust reports that Britain plans 40 Gws of wind power @ £65 billion capital cost, About 29 GWs are anticipated to be generated off shore.

Carbon trust does not break out the cost of offshore wind, but assuming the cost of onshore wind to run @ $2,5 billion per GW (£1.25 billion per GW) the capitol cost of 11 GWs of onshore power would run about £13.75. That leaves us with a cost of about £51,25 Billion or about $100 Billion for 29 GWS of offshore wind power. Or about $3.5 Billion per GW of name plate capacity. Internet personality Jérôme à Paris estimated the European cost of offshore wind generating facilities to run from 2200 to 3000 Euros per KW ($3190 to 4350) in 2007. That would place the british estimated price some where below the average cost of wind European wind generators in 2007 and significantly below the price of $5700 per JW that long Islan Power calculated its off shore wind generating capacity was going to cost it, when it pulled the plug on the project in 2006. The word inflation occures twice in the Carbon Trust report, and on one of those two occasions it notes that inflation rates were calculated on the basis of a current consumer price index, which potentially underestimates price inflation in the wind industry, which saw prices nearly double in the last few years.

Carbon trust calculates that 29GW of off shore wind power delivers about the same amount of power as 11GW of nuclear power.

Assuming that the nuclear plants cost $8 billion per GW, the total costs of the nuclear plants wouid be $88 Billion. Or about 12% less than the wind facilities. But the windmills would have to be replaced after 20 to 30 years while the nuks would last 60 to 80 years.

How much would electricity generated under the British Wind scheme Cost? According to the Carbon Trust:
Capitol costs would run £21/MWh or about $40 Per MWh. Ongoing operation and maintenance (O&M) costs add £3.5/MWh or about $7 per MWh. In addition Carbon Trust assumes that it will cost £1.7/MWh ($3.40) to keep the net balanced, and another £2.0/MWh ($4) to insure that reserve generating capacity is available. So we get a little more than $54 per MWh. On the pluse side both nuclear and wind would reduce Brisish natural gas associated generating costs by £11.9/MWh.

Carbon Trust assumes that factory production of parts and manufacturing experience will lower costs. Since the Carbon Trust report pays virtually no attention is paid to inflation, and may well have placed its initial price too low, the capital costs for wind generators may be significantly higher than the report estimates.

Carbon trust argues for mor wind subsidies.

The London Observer (the Guardian's Sunday edition) had a hint of problems with the Carbon Trust wind plan. In a story titled "UK wind farm plans on brink of failure" the Observer reached pessimistic conclusions. The observer found "that planning delays, long delivery times, escalating costs, 10-year hold-ups in connection to the national grid and technical problems in building offshore windfarms" treatened program goals.

The Observer quoted energy analyst Professor Ian Fells of Newcastle University: 'The numbers do not add up,' Fells said 'It is physically impossible for the industry to meet its target. The most that any country has ever built offshore is 350MW in a year. But they need to install nearly 10 times that in 12 years, and most will be far offshore. It means they will have to install hundreds a week. They cannot do it.'

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