Factor

Wind power blows through nuclear, coal as costs plunge at sea

10 March 2017 | Mitigation

Water and electric power plants don’t mix well naturally, unless you add some wind.

Water tends to corrode and short out circuits. So what’s happening in the the renewable energy industry, where developers are putting jumbo-jet sized wind turbines into stormy seas, is at the very least an engineering miracle. 

What might be even more miraculous to skeptics like those populating Donald Trump’s administration is that these multi-billion-dollar mega projects make increasing economic sense, even compared to new coal and nuclear power.

Across Europe, the price of building an offshore wind farm has fallen 46 percent in the last five years -- 22 percent last year alone. Erecting turbines in the seabed now costs an average $126 for each megawatt-hour of capacity, according to Bloomberg New Energy Finance. That’s below the $155 a megawatt-hour price for new nuclear developments in Europe and closing in on the $88 price tag on new coal plants, the London-based researcher estimates.

The industry even is taking hold in the U.S., which for years shunned the technology as too costly for a place that historically enjoys lower power prices than Europe. 

A federal auction in December for rights to develop wind farms off the coast of Long Island resulted in a bidding war. Rhode Island has commissioned one plant, and developers are also considering work in Maryland, New Jersey and North Carolina. 

Although Trump said offshore wind was “monstrous” when it came into conflict with his golf course in Scotland, the U.S. government’s official goal for now is to install 86 gigawatts of turbines at sea by 2050. That’s six times the 14 gigawatts of capacity now in place worldwide, according to the Global Wind Energy Council.

The strength of the wind off the coast makes the sea a natural place to anchor turbines. In European waters, breezes average 22 miles per hour about 360 feet (110 meters) off the surface, a good baseline for the scale of many installations, according to The Crown Estate, which leases out areas of U.K. seabed belonging to the Queen to wind farms. That’s almost triple the average wind speed onshore.

While more steady gusts mean each turbine will yield more electricity, fixing the machines to the seabed requires deep concrete footings cast in often turbulent seas. 

The North Sea, the crucible of the modern offshore wind industry, suffers punishing storms and strong tides that batter turbines much of the year. Securing structures as tall as the Washington Monument in the ocean requires deep footings, specialized ships and cranes capable of lifting equipment that can weigh tons. Salt water eats away at machinery and fittings. Cables must be rugged enough for the worst weather. And if equipment breaks, it can take weeks before the seas are calm enough for a work vessel.

All told, a record $29.9 billion was invested in offshore wind in 2016, up 40 percent from the year before, according to Bloomberg New Energy Finance. It expects investment to grow to $115 billion by 2020. What’s driving installations is an expected 26 percent drop in the costs, making offshore wind increasingly competitive with land-based turbines and solar and nuclear power -- even without subsidy.

In years past, grid managers were reluctant to rely on fickle winds for power that flows only about 45 percent of the year. That’s changing too. Battery costs have fallen 40 percent since 2014, making them a realistic way to help balance fluctuating flows of renewable energy to the grid.

Offshore wind projects coming online today are already delivering power at almost half the price of those finished in 2012 thanks to larger turbines and greater competition. That’s emboldening developers to promise supplying power for even less, suggesting the industry will break more records this year starting the a contest in Germany in April, said Deepa Venkateswaran, analyst.

The U.K. remains one of the hottest markets owing to the need to replace ageing power plants. Bids may reach as little as 80 euros a megawatt-hour in the next auction due to start in April, she said. That’s comparable to about 68 pounds a megawatt-hour for the global onshore wind average, and well below the government’s 2020 goal to bring costs below 100 pounds ($125.55) a megawatt-hour.

 

 

Source: Bloomberg