Procedures for Wind resource assessment and their impact on the

Procedures for Wind resource assessment
and their impact on the levelized cost of
Energy (based on the MEGAVind cost model),
Head of Section Hans E. Jørgensen, DTU Wind Energy
&
Lars Landberg
Group Leader, Renewables. Strategic Research and
Innovation
DNV GL – Group
Motivation
• What is the relation between the economy of a wind farm project
and uncertainty?
• Is it really necessary to use development expenses (DEVEK) and
how are these related to the Levelized Cost of Energy LCOE?
DTU Wind Energy, Technical University of Denmark
Some definitions
• The levelized cost of energy is defined as (MEGAVind cost model)
developers prespective (pre-tax):
𝑇
𝐿𝐶𝑂𝐸 =
𝐼𝑡 + 𝑂𝑡 + 𝐴𝑡
/
𝑡
𝑡=𝑘 (1 + 𝑊𝑛 )
𝑇
𝐸𝑡
𝑡
𝑡=𝑘 (1 + 𝑊𝑟 )
• The weighted average cost of capital W is :
𝑊𝑛 =
𝐸𝑞𝑢𝑖𝑡𝑦
𝑅𝑒
𝑇_𝑉𝑎𝑙𝑢𝑒
+
𝐷𝑒𝑏𝑡
𝑅𝑑
𝑇_𝑉𝑎𝑙𝑢𝑒
• Debt Service Coverage Ratio (DSCR) defined as
𝐷𝑆𝐶𝑅 =
𝑁𝑒𝑡 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑖𝑛𝑐𝑜𝑚𝑒
𝐷𝑒𝑏𝑡 𝑠𝑒𝑟𝑣𝑖𝑐𝑒
DTU Wind Energy, Technical University of Denmark
Vesterhav syd (an example)
20 x 10 MW
1031 GWh
DTU Wind Energy, Technical University of Denmark
Production based on mesoscale models
22 submission:
Location: Høvsøre
Level : 100 m
1 year, 10 min averages
of U and D
Reference Høvsøre mast
Production estimates:
± 15 %
DTU Wind Energy, Technical University of Denmark
Assumptions
------ AEP input
1031 ;FixedAEPinputPrYear [GWh]
------ CAPEX
1.50 ;TurbinePriceSimple [M€/MW]
0.600 ;FoundationPriceSimple [M€/MW]
0.080 ;ElecInfraPriceSimple [M€/MW]
0.040 ;OtherInfraPriceSimple [M€/MW]
0.350 :AssembInstalPriceSimple [M€/MW]
------ OPEX input
0.02 ;OPEX cost €/kWh
------ Capital input
25
;NYears
0.30 ;EquityPCT [fraction]
0.05 ;RateDebt [fraction]
0.12 ;RateMarket[fraction]
0.03 ;RateRiskFree [fraction]
1.70 ;CompanyRiskProfile [fraction]
0.30 ;TaxRate [fraction]
0.02 ;Inflation Fraction
DTU Wind Energy, Technical University of Denmark
--- Wind farm
20
;Number of turbines
138.0 ;HubHeight [m]
10.0 ;RatedPower [MW]
220.0 ;Diameter [m]
0.90 ; AEPlossFactor
------ DEVEX input
20.0 ;DEVEX cost M€
3
;OffsetYearsDEVEX
Economical constraints
• DSCR has to be 1.3 based on the P90 production estimate (over 10 year)
• The P90/P50 ratio determines the size of the debt i.e the ratio between
Equity and Debt combined with the DSCR of 1.3
• Assume calculations give E:ratio of 30 %
DTU Wind Energy, Technical University of Denmark
LCOE as function of Equity ratio
Increase the Devek with 10 Meuro (tower offshore)
Decrease uncertainty from
12% to 7 % equals Equity from
base case 30% to 25%
70
Euro/MWh
68
66
64
LCOE
62
Case 1
60
58
56
0
0.1
0.2
0.3
Equity Ratio
DTU Wind Energy, Technical University of Denmark
0.4
0.5
Summary
• The uncertainty of a project determines the amount equity you need to
put in your project and vice versa also determines how big the senior
debt can be (loan with a very low interest rate).
• Measurements on location is necessary to reduce the uncertainty and
even if the tower cost 10 Meuro this can be paid back over 3-4 years on
Vesterhav syd.
• Highly qualified consultants can be of large value for the economics in a
project
DTU Wind Energy, Technical University of Denmark