Navigant Research Blog

In Asia, Wind Industry Picks Up Again

— August 6, 2014

The wind power market in Asia is normally quiet during summer, but this year is different.  Recent policies and new developments in China and India have delivered a very strong signal that Asia`s two largest wind power markets are ready to pick up the pace again.

China’s wind industry has been constrained the past few years by power transmission bottlenecks and high wind-power curtailment rates.  Figures released by China’s National Energy Administration (NEA) in July, however, show that the situation is improving, especially since the ultra-high-voltage Hami-Zhengzhou transmission line was connected.  In the first half of 2014, 6.32 gigawatts (GW) of wind power capacity has come online, up 31% from the same time in 2013, and the wind curtailment rate fell to 8.5%, 5.14% lower than the first 6 months of 2013.  It won`t be a surprise if this year China surpasses the record of 18.9 GW of new capacity that it achieved in 2010.

Survival of the FITtest

Another positive sign for the Chinese wind industry is that the NEA released its long-awaited feed-in tariff (FIT) for offshore wind in June.  Although the FIT is valid only for projects commissioned before 2017, and is not applicable for the four offshore projects included in the first offshore concession program, it provides certainty for near term investment.

According to Navigant Research’s annual wind power market report, World Market Update 2013, China will add 96 GW of new wind capacity over the next 5 years.

At the Offshore Wind China 2014 conference in Shanghai, many developers and turbine venders complained that the temporary FIT is too low and is not flexible to reflect differences in geographic location and wind resources.  While those are valid claims, I personally believe that NEA has learned from the “blind” investment that Chinese onshore wind experienced in the past and is working deliberately to introduce a low FIT so that only developers who have strong technical, engineering, and financial background and a sound project pipeline can take the necessary risks.  That’s the right way to minimize upfront risks and to secure a strong and stable offshore wind market in the long run.  Currently, there are six offshore wind projects totalling 784 megawatts (MW) under construction in China and another six projects totalling 1,350 MW that have been approved and are ready to be built.  It is likely that around 2,500 MW offshore wind capacity could be in operation by the end of 2016.

Restoration in India

In India, Asia`s second largest wind market, its Finance Minister has just announced the plan for the restoration of accelerated depreciation, an incentive was originally introduced back in 1990 but stopped in March 2012.  This tax savings supported private-owned projects that account for the majority of wind project installations in India.  At the historical rate of installation in India, AD is expected to create around 1,000 MW of wind power installations per year.  If the depreciation holds up, Navigant Research`s forecast for India in 2014, of 2,500 MW, is certainly achievable.

In short, it’s expected that India and China combined will account for at least 40% of global wind power installation in the next 5 years – a great contribution to reducing carbon emissions worldwide.  For a more detailed examination of the global wind power market, please join us for our webinar, “The State of the Global Wind Energy Industry,” on August 12 at 2 p.m. EDT.  Click here to register.

 

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.

 

U.S. Wind Market Buffeted by Boom-Bust Cycles

— May 28, 2014

The wind energy market in the United States operates in a boom and bust environment that, this year, once again, highlights the absurdity of U.S. policies around clean energy – or the lack thereof.  The Production Tax Credit (PTC) and its accompanying Investment Tax Credit (ITC) are the central pillars of government support for the U.S. wind market.  The PTC provides $0.23/kWh for 10 years from project commissioning, while the ITC provides a roughly equivalent cash grant.  Both credits are worth approximately 30% of the full installed cost of a wind plant, although the PTC is more valuable in areas of high wind speed (more kilowatt-hours relative to installed cost).

Both of these incentives are currently expired.  And yet, the wind industry is booming, with as much as 13 GW in various stages of construction in over 20 states and over 95 projects.  This is the result of the PTC being enacted on January 1, 2013, for 1 year.  Special safe harbor guidance from the Internal Revenue Service (IRS) allows for wind plants that began construction during the enacted PTC to qualify, as long as developers either began construction in 2013 – the physical work test – or spent at least 5% of the project capital costs.  Projects that went either route then have 2 years to come online in order to qualify for the PTC or ITC.

Time Running Short

In an ideal scenario, the 13 GW of construction reportedly underway may come online by the end of the 2-year window ending December 31, 2015.  Navigant Research forecasts around 12 GW of the 13 GW will come online, roughly split between 2014 and 2015.  A few items of uncertainty around this build cycle are in play.  Around 9 GW of power purchase agreements (PPAs) were signed during 2013 and through 1Q 2014.  PPAs, in almost all cases, are essential for wind plants in the United States to secure financing.  That’s not to say a further 3 GW to 4 GW of PPAs cannot be signed for this build cycle, but time is running out.

Time is also running out for turbine purchases, with top executives of major turbine vendors saying that only a few months remain to secure turbines for end-2015 installation.  They also worry that many developers that started construction, but did not put down payments on turbines by the end of 2013, may ultimately not secure PPAs, turbines, financing, or qualify under the IRS safe harbor stipulations during this build cycle.

Start Up, Again

Would that be a disaster?  Not necessarily.  If just over 9 GW is commissioned between 2014 and 2015, that still represents a healthy baseline of wind installation.  But it shows again the inefficiency of the U.S. system of stop-start development cycles, driven by the federal government’s inability to provide the wind industry long-term stability.  Most tax and other subsidy incentives for the fossil fuel sectors are written into permanent tax law and do not require contentious re-authorizations from a dysfunctional Congress every 1 or 2 years.

The PTC doesn’t have to exist forever.  Wind is increasingly competitive with new national gas plants in windy areas of the country.  But for now, the PTC needs to be extended to continue wind’s momentum.  In the longer term, the PTC should be reduced in value in exchange for a long-term multiyear phaseout when gas prices have recovered to realistic and sustainable cost levels.  Otherwise, the insane and inefficient boom and bust cycles will continue.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Energy Storage, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Grid Practice, Smart Transportation Practice, Utility Innovations

By Author


{"userID":"","pageName":"Wind Power","path":"\/tag\/wind-power","date":"9\/21\/2014"}