Navigant Research Blog

Tailwinds Pick Up for U.S. Wind Market

— November 2, 2014

The U.S. wind market, in the third quarter of 2014, showed clear signs of recovery, with 1,254 MW installed, eclipsing the total of 1,084 MW installed all of last year.  The American Wind Energy Association (AWEA) reports an additional 13,600 MW under construction across 105 projects.  In our March 2014 World Market Update, Navigant Research forecast that by year’s end, the 2014 total could reach 6,300 MW.  The last 3 months of the year typically see more capacity installed than in the previous 9 months combined because of the construction cycle peaking at the end of the year.

Some wind projects may to slide into 2015, though, given that there’s not a policy-driven deadline to commission projects by year’s end.  A number of factors have contributed to a slower construction cycle, despite over 12 GW of wind projects with announced construction for next March.  The supply chain in the U.S. wind market exhibits some unavoidable inefficiencies due to the stop-start nature of U.S. wind power policy.  Wind turbine manufacturers, along with their component suppliers for blades, towers, drivetrains, and other equipment, were forced to throttle back manufacturing capacity in 2013 due to the down market.  Re-hiring and training workers and ramping up capacity is not an overnight process in an industry that produces aerospace-grade products at industrial levels.

Delivery Delays

There are also signs of transportation bottlenecks for some of the largest components.  The majority of wind projects under construction use rotors around 100 meters in diameter and towers that are 90 meters or higher.  Transport companies that move this equipment have been reluctant to invest in new trailers designed for larger wind turbines, given that the equipment could sit idle if the U.S. market falls into another slump.  Railways have also been bottlenecked, partly due to the huge volume of crude oil being shipped around North America.

The turbines installed in 2014 so far have come largely from the Big Three vendors: GE, Vestas, and Siemens.  Most of these installations use GE’s 1.6/1.7 MW turbine.  More than 4,500 MW of the capacity under construction uses GE turbines, followed by 2,775 MW for Vestas, 1,792 for Siemens, and around 3,500 MW not yet reporting a turbine.  Notably, however, turbine vendors that have limited manufacturing presence in the United States continue to secure business, with over 800 MW under construction using turbines from Acciona, Gamesa, and Nordex combined.

Flexible Financing

Also notable is the return of the merchant, or hedged, wind plant.  Most wind projects under construction either have signed a long-term power purchase agreement (PPA) or are utility owned.  But a substantial amount of wind capacity is proceeding on a merchant basis, which is operating without a contract. Most of this is occurring in Texas.

A few years ago, following the financial crisis, it was nearly impossible to secure outside project financing for a wind plant that did not have a PPA.  That rigidity has softened as wind developers seeking higher potential returns are finding ways to move forward and secure project financing without a fixed PPA contract.  In many cases, hedge agreements that went out of style during the recession of 2008-2009 are back in use.  These financial tools allow a wind plant to take advantage of fluctuating electricity spot market prices.  Spot prices in Texas generally range from $45 per MWh to just over $60 per MWh.  Special merchant contracts provide a type of insurance that enables wind plants to be paid the fluctuating spot price while also being protected by a price floor and ceiling – thus reducing risk while not limiting wind power providers to a low fixed price, as is typically the case with a PPA.

Moving forward, all eyes will be looking to the end-of-year project commissioning to see how much the U.S. wind market has recovered from its 2013 doldrums.

 

Wind Energy Innovation: Hybrid Concrete and Steel Towers

— October 8, 2014

As the number of sites with high wind speeds for turbines becomes exhausted, there is a growing need to ensure that sites developed in the future make optimal use of the wind resources available.  Also, as wind turbines are deployed in remote, forested areas of Northern European countries, such as Sweden, Finland, and Germany, the larger wind shear and turbulence created by forested terrain favors larger towers that elevate the rotor.

This trend places greater emphasis on using towers with heights often in excess of 100 meters and capable of supporting the heavier top head mass of large, multi-megawatt turbines.  This is the motivation behind the new breed of hybrid steel and concrete towers, where the bulkiest concrete base section can be produced at a factory and shipped in more manageable sections or produced at the wind plant site.  Some specialized towers, available only recently, can reach as high as 150 meters.

By Land or Sea

A primary reason for the increasing demand for these hybrid towers is transport logistics.  With steel towers, erected tower height directly dictates the maximum diameter of the tower’s lowest base section because all wind towers gradually taper as they rise.  The typical tall tower height today for onshore turbines is 100 meters, and the base dimensions for these towers are typically not more than 4.3 meters in diameter.  Widths any larger are not only difficult and expensive to manufacture (because of the challenges of bending thick steel plate), but they also push the boundaries of the cranes and specialized transport vehicles needed to move them.  Likewise, these oversize loads are more limited as to the roads, intersections, bridges, underpasses, and wind plant sites they can travel through.

Hybrid and concrete towers can also offer a more cost-effective solution when the nearest steel tower facility is far from a given wind plant site, which would require prohibitively costly transport for steel sections.  Some wind turbine vendors that have experience working with steel, concrete, and hybrid towers will select their tower type based on these relative materials economics.  If a steel tower facility is in reasonable proximity to a planned wind plant, steel will be chosen.  But as the distance and transportation costs from a steel tower facility increases, shifting to a hybrid or all-concrete offering can be more cost-effective, since concrete facilities are more widespread.

New Form Factors

A number of European companies, including Max Bögl, Advanced Tower Systems, Ventur Droessler, Inneo Torres, and Consolis Hormifuste, are now offering hybrid and concrete towers.  Max Bögl appears to be the current market leader in Europe, with units installed with turbines from Senvion, Vestas, Nordex, Alstom, and Gamesa.  Wind turbine vendors Acciona and Enercon also produce concrete and/or concrete and steel hybrid towers for self-supply.

In more expansive markets, such as North America and China, greater land availability reduces the premium on maximum tower height.  But at least three companies offer concrete or hybrid towers: Postensa in Mexico and Fabcon and Tindall in the United States.  Tindall offers 40-meter concrete base sections that can be used in conjunction with another manufacturer’s steel towers. And the European vendors with a proven track record could expand to the United States and elsewhere globally.

Other approaches to tall towers, such as General Electric’s space frame lattice tower and Siemens’ bolted steel shell tower, offer different approaches to building tall towers and alleviating transport headaches.  These and hybrid concrete towers are likely to begin to be installed in the United States in the next few years as the market continues to mature.

 

Wind Energy Innovation: Segmented Blades

— August 4, 2014

As wind turbine rotors get larger, the cost and complexity – including the specialized equipment needed to transport longer blades – of wind projects increase.  Wind turbine vendors and blade engineers have been interested for years in developing segmented blades that can be shipped in two or more sections.  Costs can potentially also be reduced in the blade manufacturing process if two sections require less costly blade moulds, tooling, and other production costs.  Substantial progress in this area has occurred in recent years.

Gamesa’s G128 turbine, offered in 4.5 MW and 5 MW configurations, is the first commercial turbine offered with a segmented blade, a patented technology the company calls “Innoblade.”  The turbine’s two-piece, 62.5m blade gives the company one of the largest onshore wind turbines, with 128m rotors.  The two sections of the blades are joined with nearly 30 metallic bolt channel fittings integrated into the blades.  They can be transported on two standard 27m flatbed trailers rather than costlier specialized blade trailers, and they greatly increase the cornering ability of the transport, which is a major challenge with larger blades.

Enercon has also commercialized a segmented blade for its 3 MW E-115 turbine.  In this case, the blade is not cut in two horizontally, but lengthwise near the root to reduce the costs of manufacturing the blade.  A full length 44m blade of half shells is produced through vacuum-assisted resin transfer infusion.  A separate 12m inner section that adds width toward the nacelle and load bearing for the full blade is produced using a separate automated pre-impregnated (pre-preg) fiberglass/resin wrapping process around a cylindrical core that later has its own outer shells added.

Assembly Not Included

Enercon says this hybrid of pre-preg and vacuum infusion with two separate longitudinal sections reduces labor costs and increases the precision bonding needed for the thick inner section.  Unlike the E-126 segmented blades that are bolted together during installation, the two sections of the E-115 blades are bolted together at the factory to reduce onsite labor.  Enercon’s first commercial use of two-piece longitudinal blades was with its 3.05 MW E-101 turbines, which used a smaller bolt-on section near the root that acted as a spoiler, capturing additional lift.  The E-115 blades are an evolution on the earlier E-101 design, as shown in the comparison below.

Enercon Turbine Blades: E-101 and E-115

Other companies with intellectual property (IP) patents pursuing segmented blades include Blade Dynamics, Modular Wind Inc., and GE.  Blade Dynamics is furthest along, with its 49m segmented blade that relies heavily on carbon fiber for its internal structures.  It is designed to be transported in two pieces that are assembled together on site.  It is not yet in commercial use or serial production, but full prototypes were built and certified by DNV GL.  California-based Modular Wind Inc. holds patents for a three-piece segmented 45m blade design, but progress is on hold as the company seeks financial backing.  GE holds patents on segmented blades, but it has not seriously pursued the technology, instead opting to put effort into its blade extension efforts, which are a form of segmented blade designed as an upgrade.

 

Wind Energy Innovation: Vortex Generators

— July 15, 2014

The wind energy industry has doggedly pursued higher energy yields and lower costs of energy with each successive generation of wind turbines.  As a result, the wind energy industry has lowered its costs by over 40% in just the past 4 years.  Innovations in wind turbine design, materials, and the sub-component supply chain are continually yielding advances – sometimes from the smallest places.

The mature aerospace industry has provided many complementary solutions to the wind industry in terms of design, materials, manufacturing, and the operation of large rotors.  Among these is the relatively recent introduction of vortex generators (VGs).  These small, simple fins, usually less than 8 centimeters tall and wide, energize airflow directionally around a blade when applied in multiples and keep it from erratically scattering as it passes over the blade surface.

The image below, from LM Windpower, the largest global independent blade manufacturer, shows the difference in airflow over a blade during recent testing.  The benefits are most pronounced close to the thickest section of the blade, near the blade root.

(Source: LM Windpower)

Lower Speed, More Energy

Lessons learned long ago in aviation show that planes with wings equipped with VGs are able to reach slower speeds before stalling out, as the VGs helped increase lift on the wings.  Wind blades operate similarly to aircraft wings, in that wings capture passing wind to create loft for flight, and blades capture passing wind as loft for mechanical turning power of the rotor.  The effects proven in aviation are also more pronounced at lower air speeds, when wing flap angles are more aggressively angled toward the passing wind.

Similarly, the effects of VGs appear to increase the productivity of a wind turbine more during medium and low wind speeds versus high wind speed environments.  This is complementary to the fact that, in recent years, the majority of new turbines installed in the mature markets of North America and Europe are designed for lower wind speed environments.

No wind blades presently are manufactured with VGs attached out of the factory, but a robust retrofit business has evolved among some independent service providers (ISPs) to install VGs during blade maintenance and inspection.

UpWind Solutions, an ISP based in North America, says it has installed 22,000 VGs across multiple wind turbine models and found that assumptions around a General Electric (GE) 1.5 MW turbine, with a power purchase agreement of $50/MWh and operating at a 40% annual capacity factor, would see an increase in annual energy production (AEP) of around 2.2% and recoup the cost of VG installation in 20 months.

From the Factory, Soon

Siemens has discovered the value of VGs and other aerodynamic add-ons and has incorporated these into aftermarket power curve upgrade services, similar to UpWind’s applications.  In early 2014, Siemens added VGs as a retrofit upgrade to the existing 175 wind turbines at the 630 MW London Array offshore wind project.  Siemens says the aerodynamic upgrades will yield about a 1.5% increase in AEP.

Independent blade manufacturer LM Windpower also offers VGs as an add-on service to blades.  With ISPs, turbine vendors and blade manufacturers offering VGs as add-on aftermarket services, it’s only a matter of time before vendors begin offering VGs with their standard blade offerings.

After all, they are already standard offerings on your average mallard duck.

 

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