Navigant Research Blog

Vestas, Mitsubishi Settle on Offshore Turbine Design

— February 24, 2015

In 2014, Mitsubishi Heavy Industries (MHI) formed a joint venture with Vestas called MHI Vestas Offshore Wind. The strategy behind that joint venture is now substantially clearer. MHI’s decision to stop the commercialization of its 7 MW SeaAngel offshore wind turbine, to focus instead on the Vestas V164-8.0 MW turbine under MHI Vestas Offshore Wind, makes sense given Vestas’ expertise in the offshore market and the need to move forward without confusion or conflict between the two turbine platforms.

Technology-wise, the SeaAngel’s novel Digital Displacement Transmission Technology (DDT) looked like the more advanced drivetrain system. It employs a sophisticated series of hydraulic pumps, values, and motors to transfer the energy from the constantly varying rotor speed to a fixed speed generator, without the use of a gearbox. No other wind turbine employs a hydraulic drivetrain like this.

That novel technology, however, adds uncertainty to the construction and operation of offshore wind farms.

Risk Avoidance

The increased construction and turbine servicing costs and associated risks for offshore wind increase the rate of return that investors expect to up to 12% compared to an onshore wind farm’s 7% to 9% in developed markets. Once you add the risk of employing a completely new transmission technology system, you likely outweigh the benefits offered by the new drivetrain design. The joint venture with Vestas provides access to a similarly sized turbine based on a proven and more conventional, medium speed geared technology, eliminating the added risk.

Although Vestas’ turbine is also new in the market, the company’s offshore turbine reliability has dramatically improved since 2004, when it had to replace the transformers and generators in all 81 of its then new V80 machines at Horns Rev offshore wind farm. Much refinement and advancement specific to offshore has been achieved by Vestas and its peers.

No Confusion

It’s also important to send a clear signal to the market that the Vestas V164-8.0 turbine is the primary turbine offering of the joint venture, without a separate Mitsubishi-branded product offered outside or within the joint venture. Although the SeaAngel turbine will disappear as a stand-alone brand, testing of the hydraulic technology will continue.

Onshore testing of the full-size 7 MW turbine officially began on February at a test center in the United Kingdom for validation of the drivetrain design. A similar hydraulic-powered turbine may be installed later in 2015 in Japan on a floating platform,  depending on the results from the U.K. tests.

Ultimately, the aim of the effort is to focus on refinement and validation of the hydraulic drivetrain for possible future use under the MHI Vestas joint venture. The floating platform may, in coming years, become part of the joint venture’s offerings as well. For now, though, the V164-8.0 turbine using proven Vestas technology is marching out to sea, having recently landed its first order of 32 units for the 258 MW Burbo Bank Extension project on the west coast of the United Kingdom in the Irish Sea. Hiring has just begun to build the 80 meter turbine blades.

Roberto Labastida contributed to this post.

 

Biomethane Offers Solution to Energy-from-Biomass Limitations

— February 6, 2015

My colleague Mackinnon Lawrence recently provided a thorough examination of the prospects for biofuels as a viable source of energy for transportation and power generation in the coming years – from both negative and positive points of view.  Last week, the negative outlook was reinforced by a World Resources Institute report that found that using valuable farmland to grow crops for energy is a wasteful practice that will never supply a significant portion of the world’s energy and that will divert land more urgently needed for growing food crops.

By 2050, the report states, the amount of calories available from crops will need to expand 70% simply to keep up with increased demand for food.  Since three-quarters of arable land is already used to provide human needs, “a growing quest for bioenergy exacerbates this competition for land.”  Bioenergy supporters have called for biofuels to supply 20% of the world’s total energy demand by 2050 – a goal that would require about 225 exajoules from biomass each year.

“That amount, however, is roughly equivalent to the total amount of biomass people harvest today—all the crops, plant residues, and trees harvested by people for food, timber, and other uses, plus all the grass consumed by livestock around the world.”

All Aboard

That is simply unrealistic, especially given the anticipated growth in consumption of plants for food and other human uses such as clothing, timber, and so on.  What’s more, clearing forests to burn wood pellets for energy results in a net carbon increase, once you factor in loss of the CO2 removal capacity of the standing trees.  The numbers don’t add up for massive increases in biomass cultivation for energy.

There is, however, another source of renewable, bio-based energy that could be scaled up without robbing food producers of land: biomethane, often called renewable natural gas (RNG).  Biomethane can come from cultivated crops, such as corn silage; but other, more promising sources include municipal waste and livestock operations.  (Navigant Research’s report, Smart Waste, explores the potential for diverting municipal waste streams for energy recovery.)

One advantage of biomethane is that it is chemically indistinguishable from the methane that constitutes natural gas, which means that the infrastructure – pipelines, turbines, vehicle engines – that uses conventional gas collected underground can also run on RNG.  A “poo-powered” bus, fueled entirely by gas collected through sewage treatment, went into service in the U.K. city of Bristol last November.

Not the Trees, Please

On the electricity side, the United Kingdom now has 28 biomethane-to-grid projects connected to the gas distribution network, using gas produced from the transformation of food, brewery, and van wastes – and energy crops.  “These plants have the capacity to produce 1.8 billion kilowatt-hours of gas per year, enough to meet the heating and cooking needs of around 100,000 homes,” reported the Green Gas Certification Scheme, the organization advocating increased use of RNG in the United Kingdom.

In Canada, biomethane advocates are aiming “to have a fully developed RNG marketplace by 2020 that helps meet energy needs, supports growth and innovation for business, and offers a solution to issues associated with waste emissions,” according to a December, 2014 report from the Canadian Gas Association (CGA).  The report found that the potential supply of energy from various biomethane sources could reach as high as 1.3 trillion cubic feet of RNG – equal to one-half of Canada’s natural gas consumption in 2012.

Such optimistic projections must be tempered, though, by the limits on sourcing biomethane from crops.  More than half of the supply of biomethane projected in the CGA report would come from one source: forests.

 

Building Innovations Form Pivotal Spokes in the Circular Economy

— February 2, 2015

The annual World Economic Forum in Davos, Switzerland, has come and gone again, and the usual irony of 1,700 private jets delivering the global elite to discuss climate change and inequality was perfectly ridiculed by Jon Stewart last week. But, beyond the spectacle of outsized wealth, there are some valuable economic and policy projects that hold promise outside the weeklong schmooze-fest.

In particular, the Circular Economy, an ongoing project at the forum, aims to tackle the current paradigm of consumption in light of a future of constrained resources and exponential growth in demand.  The Ellen McArthur Foundation, which supports an ongoing dialog on the circular economy explains the concept as thus:  “A circular economy seeks to rebuild capital, whether this is financial, manufactured, human, social or natural. This ensures enhanced flows of goods and services.”  An important question is how the theory of the circular economy can become tangible, which was a hot topic for this year’s discussions in Davos.

Rethink, Remodel

In the run-up to this year’s event, a Forbes article explained that the circular economy “requires businesses to rethink more than just their resource footprints and energy efficiency. It demands a more radical remodelling of business models.”  Reflecting on the big ideas of the circular economy, it seems the intelligent building, smart city, and innovations in energy management could be an ideal proving ground for these concepts in action.

The intelligent building is characterized by automated and responsive systems that maximize efficiency in consumption and productivity.  Intelligent buildings offer a new sort of resource that extends beyond the walls of any single facility to support key goals of grid modernization and the development of smart cities.  The technology exists to enable this kind of facility optimization, and investment in intelligent buildings and smart cities can demonstrate the benefits of a circular economy.  The following examples highlight how companies are bringing solutions to the intelligent building and smart city marketplace that align with the opportunity of the circular economy.

  • Philips has committed to the circular economy and the company’s lighting as a service offering aims to engage cost-constrained customers and manage the end-of-life treatment of lighting and system components.
  • Schneider Electric and Autodesk have announced a new partnership to bring innovation to building lifecycle management and “drive a deep and long-term transformation in the construction industry, providing greater value to each user and contributing to solve the energy challenge.”
  • Cisco’s position is presented as an “engineering strategy around the Internet of Everything [supporting] the transition to a circular economy, with new connected devices enabling the tracking of products, components and materials for re-use and recovery; new business models through greater connection with customers; and more effective reverse logistics chains.”

While the circular economy might seem like a lofty ideal that will demand major shifts in our consumption mindset, advances like these demonstrate steps in the right direction.

 

Cape Wind Project Faces New Hurdles

— January 26, 2015

The prospects for near-term offshore wind take-off in the United States dimmed at the end of 2014, as the two utilities that had agreed to buy the electricity output of the 468 MW Cape Wind offshore project terminated their contracts.  The deals collapsed because the developers of Cape Wind had failed to reach key contractual milestones for project financing and construction launch by December 31, 2014.  National Grid signed a conditional power purchase agreement (PPA) in 2010 for 50% of the project output, and utility NSTAR agreed to purchase an additional 27.5% of the project’s output in 2012.

Saying they do not regard the terminations as valid, Cape Wind officials claim that force majeure provisions in the contracts stipulate that the milestones should have been extended.  Once again, the embattled project is in a legal dispute – and this one with potentially show-stopping consequences.  No offshore wind project in the United States can proceed without the price certainty of a PPA.  The outcome of these contract disputes could deal a fatal blow to a project that has been under development for 14 years.

Not in My Ocean

Planning for Cape Wind has taken so long partly because it was the first to navigate the unchartered waters of offshore wind development in a country that has little offshore wind policy and, as yet, no steel in the water.  Vociferous and well-funded opposition to the project’s location off Nantucket Island – a popular vacation destination for the affluent and influential – plagued it from the beginning.  The developers have been fighting a two-front battle against the challenges of offshore wind and the legal hurdles put up by anti-wind activists, coastal homeowners, and conservative billionaires.

The unfortunate reality is that, while the United States has excellent offshore wind potential along the Eastern seaboard and growing need for diversified and clean electricity generation, U.S.  policies are ill-suited to support offshore wind.  The production tax credit (PTC) and investment tax credit (ITC) for renewable energy projects subsidize around 30% of the cost of building an offshore wind farm.  European countries like Germany, Denmark, and the United Kingdom provide similar levels of subsidy.  The major difference is that those incentives have been consistent and long-lived enough to support projects that are years in development.

Back and Forth

Unlike most developed countries, where tax law is permanent until changed through legislation or other decrees, many U.S. tax laws and incentives are increasingly enacted on a temporary basis.  This is partly because U.S. lawmakers count on industries like wind power to help finance their election campaigns.  As a result, tax favors are largely granted on a 1- or 2-year basis, resulting in boom and bust cycles (13 GW of wind installed in 2012 in the United States, for example, followed by 1 GW installed in 2013).  This also results in severe inefficiencies in manufacturing and human resources as factories lay off workers only to rehire again when incentives resume.

The onshore wind industry grudgingly copes with this back-and-forth because onshore wind can be built in 1- and 2-year cycles.  But offshore projects require much longer to develop and build.  Eventually, U.S. lawmakers may realize the benefits of offshore wind and provide suitable long-term incentives.  Unfortunately, that will likely come decades after more progressive countries in Europe – and now China – are far ahead in offshore wind.

 

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