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1U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Modeling & Analysis to Inform WETO R&DProject ID: A3
Ryan WiserLawrence Berkeley National Laboratory 0
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Interior (49.7 GW) West (12.4 GW) Great Lakes (8.3 GW) Northeast (4.5 GW) Southeast (1.1 GW) Capacity-Weighted Average
2U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Project Overview
Project AttributesProject Principal Investigator(s)
Ryan WiserMark Bolinger
DOE Lead
Patrick Gilman
Project Partners/Subs
National Renewable Energy LabExeter Associates, ABB VentyxIEA Wind Task 26 membersPaulos Analysis
Project Duration
2 years: FY17 and FY18
Project Summary
Synthesize foundational data, conduct innovative and targeted analysis, and provide analytical support to WETO and its partners. Fill critical knowledge gaps in support of WETO and the wind sector by conducting analysis on the potential cost, performance, value, and barriers to wind power in the United States.
Project Objective & Impact
This work informs DOE WETO’s R&D planning approaches and investment decisions, and helps WETO prioritize major technology development initiatives. It also provides WETO and other stakeholders with unbiased data on and objective analysis of the potential cost, performance, value, and barriers to wind power in the United States.
A3: Modeling & Analysis to Inform WETO R&D
3U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Technical Merit and Relevance
Wind Technologies
Market Report
Wind Energy Cost and
Performance Analyses
Grid and Societal Impact
Assessments
R&D Opportunity and Impact Evaluations
Four Areas of LBNL Engagement • Helps WETO understand current market status and serves as empirical foundation for R&D assessments
• Enhances WETO’s ability to discern and prioritize future technology improvement options, and assess impacts
• Supports wide range of R&D investment & other decisions with real-time analysis
• Provides stakeholders with a trusted source of data on and analysis of potential cost, performance, value, barriers
• Advances understanding of wind’s impact, role, and value within electric system
EXTE
RN
ALW
ETO
4U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Approach and Methodology
• The variety of analyses performed under this overarching “project” leads to diverse methods, including various forms of statistical, economic, financial, and engineering analysis
• In all cases, work is designed to build on existing literatureto give stakeholders greater confidence in the results
• As much as possible, analyses are grounded in actual data from operating wind energy projects and in experience with wind energy deployment efforts
• Where appropriate, experts from other labs, industry, and academia are used as both advisors and subcontractors
• A key goal is to stay nimble in order to be responsive to emerging issues and stakeholder needs in a timely manner
• Key objective is to ensure that work is used and useful
5U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Accomplishments and Progress:Wind Technologies Market Report
• Goal: Publish annual ‘flagship’ DOE report that presents data on key trends in the land-based wind market, building on other available data collection efforts; covers installation, manufacturing, technology, performance, cost, and value
• A “go to” guide for diverse stakeholders, and helps DOE benchmark its R&D progress, and provides empirical foundation for other analyses
Dramatic rise in capacity factors… …enables rock-bottom PPA prices
U.S. Wind Turbine
Database
Data visualizations and access
Inter-annual resource
index
Performance degradation assessment
EIA confidential CapEx data
Merchant market-value
analysis
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Interior (26.5 GW) West (7.5 GW) Great Lakes (4.4 GW) Northeast (1.5 GW) Southeast (0.5 GW)
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$/M
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Levelized 20-year EIA gas price projections (converted at 7.5 MMBtu/MWh)
New and Notable
6U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Accomplishments and Progress:Wind Energy Cost and Performance Analyses
• Goal: Conduct analysis of past and possible future wind cost and performance trends and drivers, to inform R&D prioritization and to help illuminate pathways to reduce the levelized cost of wind energy (LCOE)
Drivers of Wind Turbine Prices Wind Performance Uncertainty
Impact of Rising Interest Rates Industry Operational Cost Survey
Improved financing terms present an LCOE reduction
opportunity of up to ~$3/MWh
$/kW 2001-08 2008-15Labor + warranty +116 -38Profit margin +60 -24Turbine scale -4 -24Materials price +90 -71Currency +168-335 -207-308
Drop in tax rate to 21% increases price by
~$2/MWh in 2018
Rising interest
rates through
2020 add ~$2/MWh
PTC phase-out post-
2020 adds another
~$14/MWh
Need reductions in costs and increases in performance, to compensate
OpEx has declined from
~$80/kW-yr for projects built in
the late 1990s to ~$40/kW-yr for projects in 2018
9% OpEx decline for each doubling of wind capacity;
~10% of LCOE reduction could come from OpEx
Ongoing: not yet published
7U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Accomplishments and Progress:Grid and Societal Impact Assessments
• Goal: Advance understanding of wind grid integration needs and system value, and ways to boost value. Inform R&D targets & prioritization beyond LCOE; enhance stakeholder understanding of wind’s role within electric system
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Time Horizon for Wind Resource and Gas Price Projections
Wind P50-P1 LCOE range (range due solely to wind resource uncertainty)
Gas P50-P1 LCOE range (range due solely to fuel price uncertainty)
Wind P50 LCOE (no PTC)
Gas P50 LCOE
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COE
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Note: wind numbers do NOT include the PTC
P50
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Wind P1 = Gas P10
Wind P1 = Gas P5
HealthBenefits(avoidedSO2)
FuelPriceHedge Value
Energy, Capacity and REC Value of Offshore Wind (also considered merit order and natural gas price suppression
Regional Merchant ‘Market Value’ of Wind, 2017
Societal Value (FY17) Grid System Value (FY18)
8U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Accomplishments and Progress:R&D Opportunity and Impact Evaluations
Built on IEA Wind Expert Survey and NREL SMART Wind Plant efforts to understand
need for and benefits of R&D (led by NREL)
Wind technology advancement is a core enabler for sustained wind deployment,
resulting in lower system costs
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Benefit-to-Cost Ratio
Nearing completion of assessment of economic
return to WETO’s historical R&D investments
Across multiple approaches & sensitivities, sizable net return
to WETO’s historical R&D
9U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Accomplishments and Progress:Other Activities and Accomplishments
Impact of wind and solar on wholesale power prices • ongoing research on the impacts of wind, solar, and other drivers on wholesale prices, to inform
electric-system transformation and related impacts on costs, reliability, planning
IEA Wind Task 26 on cost of wind energy • compare land-based wind technology, cost, and performance data across countries in
upcoming report; populate data viewer to enable external access to wind data from participating countries; analysis of the ‘system value’ of large rotor, high-hub-height turbines
IEA Grand Vision • participate in an IEA- and NREL-led workshop and subsequent discussions, ultimately leading to
submission to Science focused on the most critical R&D opportunities for wind energy
Retail rate impacts • assess degree to which renewables deployment has impacted retail electricity rates
Expert survey on the future cost of wind energy • disseminate results from earlier survey, including factsheets, press, speaking engagements
Technical assistance • provided extensive technical assistance to numerous parties, including the DOE, state and
federal decision-makers, and a variety of wind and utility stakeholders
10U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Milestones and Schedule: FY17--FY18• Formal milestones listed in narrative summary of project—not repeated here• Milestones reflect formal annual operating plans established annually• In practice, additional deliverables completed beyond formal milestones• All milestones met on time or, in a few cases, with minimal delay
– Maximum delay for quarterly milestone = 2 months; next highest = 2 weeks– One milestone delayed by 5 months, due to ‘hold’ request from DOE WETO
• All go/no-go decision points achieved: go/no-go decision points :– FY17: Update stakeholders on trends in cost, performance and deployment of wind energy technologies
in the U.S. by publishing annual Wind Technologies Market Report, and completing dissemination activities in accordance with direction from DOE communications staff: Go
– FY17: Deliver to DOE draft internal analysis in PowerPoint briefing form that identifies the potential LCOE impacts associated with potential interest rate increases, with and without the PTC, to determine how the project finance environment for wind might be affected by interest rate risk: Go
– FY18: Based on its assessment of the document's value to the program and in light of other budgetary and analysis priorities, the WETO will decide whether or not to direct LBNL to lead the creation of the "2017 Wind Technologies Market Report“: Go
– FY18: Based on the high-level analysis of performance degradation presented within the capacity factor section of the “2017 Wind Technologies Market Report,” WETO will decide whether or not to fund LBNL to follow up with a more-detailed and -rigorous degradation analysis, comparable to those recently conducted in Europe, in FY19: Go
11U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Communication, Coordination, Commercialization
Tight coordination and collaboration with other Labs (especially NREL), international community via IEA Wind, consultancies, and wind industry
Lab reports12
Journal articles
4Conference posters
2
Press uptake
139
Presentations
44
Technical assistance
67+
[ see: https://emp.lbl.gov/publications ]
12U.S. DEPARTMENT OF ENERGY OFFICE OF ENERGY EFFICIENCY & RENEWABLE ENERGY
Upcoming Project Activities
Goal: Stay nimble to target emerging needs of DOE WETOand the wind industry, but also strategic to anticipate DOEand industry longer-term needs
FY19 Current and Ongoing Work
•2018 edition of annual Wind Technologies Market Report•Enhanced wind market-value analysis at project level and inclusive of capacity•Finalize assessment of impacts of wind (and solar) on wholesale market prices•Finalize industry survey tracking past and recent trends in land-based wind OpEx•Assess wind project performance as projects age, and underlying drivers•IEA Wind: update data, finalize cross-country report, prep for possible new survey•Grand Vision for wind energy, in collaboration with IEA Wind, NREL, others•DOE WETO program-level cost-benefit analysis of historical R&D investments
Milestones and budget are all on track