The cost discussionWill onshore wind follow offshore wind?
Hans Rijntalder
14 June 2017
Why this discussion?
• Less than a year ago we could substantiate onshore wind by saying that onshore wind is still (too) expensive
• Now this not the case any more and onshore wind needs to realign it’s raison d’être
• The following questions come to mind:
– Is onshore wind expensive?
– Is onshore wind more expensive than offshore wind?
– Does onshore wind has cost reduction potential?
– Is onshore wind still worth the hassle?
Is onshore wind expensive?
• Prices offshore wind and solar dropped
• Renewable is cheaper than or comparable with fossil and nuclear sources
• Wind Europe expects price levels of 54 €/MWh for offshore wind
Compared to other sources
Source: EU, report by Ecofys November 2014
?
in LCoE
Costs analysis of onshore wind
• Based on questionnaires developers
• Current cost level in LCoE: 70 – 92 €/MWh*
• Typical breakdown average project
• Differences offshore wind: Cost of Capital
Analysis by Ecofys, april 2017
DEVEX4%
CAPEX66%
OPEX19%
Costs of Capital10%
Decommisioning Costs1%
DEVEX CAPEX OPEX Costs of Capital Decommisioning Costs
* In some cases lower cost levels can be found
Is onshore wind more expensive than offshore wind?
Compared to current Dutch offshore tender system
• DEVEX excluded Minister EZ
• Grid infrastructure (export cable, OHVS) TenneT
Are the costs comparable?
• Current situation: Offshore wind seems toat least equal onshore wind
• Future: Offshore wind will benefit of its vast potential in terms of scaling– Farm size
– Turbine size
– Steady pipeline competition
• What will onshore wind do?
Back to the question
Is onshore wind more expensive than offshore wind?
Does onshore wind has cost reduction potential?
Cost reduction potential
• Technical (e.g. logistical efficiency)
• Non technical international (e.g. standards)
• Non technical domestic (e.g. tender, extension of support, grid)
Ecofys, april 2017
0
10
20
30
40
50
60
70
80
90
Current price (€/MWh) Calculated price after cost reduction (€/MWh)
42 %
in LCoE
Does onshore wind has cost reduction potential?
Conclusions
• 40 – 50 €/MWh for larger (100 MW) sites with good wind resources
• 60 – 70 €/MWh for smaller, constrained and sites with less favourable wind resources
Yes..
Is onshore wind still worth the hassle?
• Large projects onshore (repowering) can profit from offshore system innovations (tender)
• Smaller projects can hopefully benefit from scale and standardisation from large projects
Off course …
Source: EU, report by Ecofys November 2014
in LCoE
Onshore wind
It is not all about costs
• Importance of locally owned and accepted projects, different and smaller players
• Useful to have local produced renewable energy close to the load center (households, industry)
• Allows for local/regional grid optimisation against reasonable costs
Conclusion
• We have no choice but to use all mainstream renewable sources as wind (onshore and offshore) and solar
• We should be extremely happy with the price developments of these sources compared to fossil and nuclear ones
Considering the current level of renewable energy…