Wednesday, December 31, 2008

December 2008 Rpt

Introduction

2008 has been a very tumultuous and also record breaking year for the wind industry. It also appears that the wind turbine capacity installed for this year will be a record for both the world and the U.S. For the second year in a row, the nation with the most new installed capacity in the world will be the U.S., and for the first time in two decades, the U.S. will be the country with the most installed (and delivered) wind turbine capacity, surpassing Germany.

At the end of 2008, there should be more than 120 GW of wind capacity installed worldwide, which would be delivering about 30 to 35 GW on an average basis. This is the equivalent of about 35 to 40 x 1 GW nukes, or the 30 to 35 x 1 GW quantity of coal burners quantity. At an average of 7.9 million tons of CO2/year per GW of electricity from a coal burner, the wind industry is delivering "savings" of approximately 250 megatons of CO2/yr. To put this in perspective, the net "excess" of CO2 pollutant dumped into our atmosphere last year (the amount of CO2 put into the atmosphere not absorbed by the oceans (mostly), trees and soils) was about 4500 megatons of CO2 per year. Wind turbines are potentially mitigating the Global Warming problem by providing pollution-free electricity equivalent to about 5.6% of this 4500 megaton CO2/yr pollution rate.

So, depending on how you look at it, either "not bad for a beginning technology" or "we still have a long way to go, and not much time to get there". Or both. It's sort of in the vein of "is the beer glass partly empty or partly full?"


Discussion

Among the many interesting trends was the increase in the price of new coal burning facilities, and also the increase in the price of coal. It turns out that new coal burning facilities and expensive coal (even after declining from the peak value earlier this year) require electricity prices of more than 10 cents/kw-hr, and that is before considering the cost to "stash the CO2 trash", which could add another 6 cents/kw-hr. Furthermore, coal prices had been very stable up until recently; that assumption has been shown to be invalid. Thus, one of the main attributes of coal - it's cheapness - can no longer be depended on. As far as nukes go, there was a great deal of favorable (and quite often, purchased for that outcome) press, but the one facility under construction (in Finland) is over budget and behind schedule, significantly, from 3 to 4.5 billion Euro (now $US 6.27 billion, but this varies depending on the Euro-dollar exchange rate).

In general, wind turbine pricing will most likely be quite stable in 2009, since the major raw material cost items (steel, copper, concrete, fiber-glass, epoxy resin) have come down in prices from their peaks in mid to late 2008. And given the competition in this business (Vestas, GE, Enercon, Gamesa, Siemens, Clipper, Nordex, Mitsubishi, Suzlon/REPeower, for example) and the track record for installations/experience with these, new wind plant installations are now less of an experiment and more a routine construction project. Even 5 and 6 MW wind turbines are now commercially available (Enercon, REPower, Areva (ex-Prokon-Nord), Bard), mostly for offshore installations.

Some highlights of the year include:
1. Clipper gets its act together - resolves the bugs in its gearbox and also for its (formerly) made in Brazil blades
2. GE starts making 2.5 MW turbines (Europe only), and "retires" CEO
3. Vestas resolves issues with its V90 x 3 MW turbines - offshore version
4. Vestats begins marketing V90 x 1.8 and 2 MW low wind speed units in the U.S. and Canada
5. Acconia begins making 3 MW units
6. Nordex resumes sales to U.S.
7. Several new U.S. and Canadian manufacturing facilities built/announced:
  • Vestas (in Colorado) - blade, nacelle and towers
  • Enercon (in Quebec) - nacelles and concrete towers
  • REPower (in Quebec) - nacelles
  • Acconia (Iowa)
  • Nordex - nacelles in Arkansas
  • Siemens - blades in Iowa
  • Fuhrlaender - nacelles in Montana
  • DeWind - nacelles in Texas
In addaition, a number of component manufacturers (blades and towers, plus sub-components) installed new facilities. Unfortunately, NONE of those appear to be in NY State. This is most definitely a "room for improvement" topic which has need to solutions that produce job-producing results. NY now has 1300 MW of installed capacity, and 8000 MW "in the NYISO Queue", but no manufacturing of completed systems or major components....not good. It is one of the few places in the world where that quantity of installed capacity and that lack of manufacturing are co-resident in the same political entity (i.e. NY State

If you have any additional leads, please email WAG...we like to spread good news.

Vestas finnaly decided to bring its variable speed 1.8 and 2 MW turbines to North America - they found a way arund the GE variable speed patent (which was only valid in the U.S., having been found invalid in Europe). These units feature 90 meter diameter rotors, and are much more attuned to low and moderate wind speed regimes...such as those present in NY State. They also come with either an 80 or a 95 meter tower for the 1.8 MW version):
http://www.vestas.com/files/filer/ame/brochures/factsheet_v90-1_8mw_uk_us.pdf
Their 3 MW V90 unit is designed for very fast average wind speeds (more than 8 m/s at hub height), so this 1.8 MW unit should find a large market in the NE U.S.

An innovative company in Owen Sound, Ontario has rescently tested a 65 kw unit with a "friction drive", and announced plans to make a 2 MW unit based on this drive (similar in size to the Vestas V82 unit). See http://www.newworld-generation.com/Images/poster.jpg and
http://www.newworld-generation.com/news/docs/CWINDWWECJune.pdf
The friction drive takes high torque low speed rotor rotation and increses the speed for several generators that are positioned around the main friction drive. This is really a large tire attached to the turbine main rotor, and a buch of smaller "tires" that are attached to generators. In somes ways this is a variant of Clipper's drive system, but without any gearing. The use of a tire as the "main drive gear" also allows for dampening of the shocks/vibrations that get transmitted from the blades and into a "gearbox", and often from there into the generators. Odds are, this will also be much less expensive than the traditional 3-gear speed increaser, or the Clipper one (which caused a lot of problems due to the exacting nature of the manufacturing specifications needed for the Clipper unit). Also, repairs should be much easier, and the stated efficiencies are the same as the "geared" units.

As for 2009, one of the biggest challenges will be dealing with the credit crisis. Since wind turbines are very capital intensive investments, access to credit is extremely important. One way to allay the fears of investment bankers (loans are usually 60 to 100% of a wind turbine project's eventual financing) may be through Feed-In Laws, because those allow for predictable electricity pricing over the course of a project. This minimizes the financial risk associated with project finance. However, there may be other ways to minimize risk, though usually at the cost of continued governmental tax based subsidies. On the plus side, the election of Obama should help matters considerably in the renewable energy business/industry.

And with that, Happy New Year.

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