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DNV GL © 2017 08 June 2017 SAFER, SMARTER, GREENER DNV GL © 2017
Marte de Picciotto and Carl Sixtensson
08 June 2017
ENERGY
Wind Project - Experience from a technical advisor
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SEB
DNV GL © 2017 08 June 2017
13 June, 2017 Private and confidential
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1. DNV GL – Short introduction
2. Managing risk in a Wind Project
3. Technology Trends
4. Q&A
DNV GL © 2017 08 June 2017
Five business areas
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OIL & GAS
MARITIME
ENERGY
BUSINESS
ASSURANCE
SOFTWARE
DNV GL © 2017 08 June 2017 4
Assisting companies in solving the energy trilemma
DNV GL © 2017 08 June 2017
Policy & Strategy
Power Generation
Trading Transmission
& Distribution
Use
Services spanning the entire energy value chain - Industry Experience & Competence related to Wind, Solar, Storage, Power systems and Grids
2,500 renewables & power sector staff in 50 locations across 27 countries
DNV GL © 2017 08 June 2017
Technical due diligence, market position in Scandinavia
• Market leader for provision of energy
assessments and technical due diligence
for wind farm projects.
• DNV GL has undertaken a combination of
lender’s and owner’s due diligence for
over 70 GW of wind projects globally.
• DNV GL has also served as advisor for
acquisitions of more than 30 GW of
operational wind farms.
• In Scandinavia, DNV GL has provided due
diligence services for 65 transactions of
wind projects since 2011, including
several of the largest projects in the
Nordics.
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0
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2011 2012 2013 2014 2015 2016 2017
DNV GL involvement in wind farm projects each year in the Nordic region
Swe
den
52
%
Nor
way
36
%
Finl
and
12
%
DNV GL © 2017 08 June 2017
13 June, 2017 Private and confidential
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1. DNV GL – Short introduction
2. Managing risk in a Wind Project
3. Technology Trends
4. Q&A
DNV GL © 2017 08 June 2017
The Stakeholders
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POWER
PURCHASER
LENDER
TECHNICAL
ADVISOR
OWNER
THE PROJECT;
FOSEN VIND DA
DNV GL © 2017 08 June 2017
Project Due Diligence and Construction Monitoring
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Due Diligence Construction Monitoring
1 - 2 months 12 – 24 months
Report on expenditures and cash flow relative to budget,
especially contingency spend
Monitor progress related to schedule
Follow-up on HSEQ performance
Undertake regular site visits to witness key construction
milestones
Issue drawdown certificates and quarterly status reports
Energy Yield Assessment
1 - 2 months
Review data
Wind analysis
Uncertainty analysis
Project management team &
suppliers and contractors
Technical Concept
Permits & Contracts
Technical input to the
financial model
Construction Schedule
Energy Assessment
DNV GL © 2017 08 June 2017
Managing Risk – Icing and Energy Yield
In certain region of the Nordics, icing losses are
seen to be up to 10 % or more. This is a
financial risk if not considered or poorly
estimated in pre-construction energy
production estimates.
DNV GL has developed a robust methodology
for icing loss estimate at pre-construction stage
based on real wind farm production in the
Nordics
DNV GL is involved in discussion with
manufacturers to include benefits for their anti /
de-icing systems in our Consultancy works.
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Extensive validation of pre-construction work
DNV GL © 2017 08 June 2017
Managing Risk – Icing and Energy Yield
Based on real production data from 29 operational
wind farms in the Nordics (Sweden, Norway, Finland)
Strong empirical relationship between loss and
elevation for a great part of Sweden.
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DNV GL © 2017 08 June 2017
Managing Risk – Icing and Energy Yield
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De-icing and/or anti-icing technologies can usually
be divided in two different technological options:
– Heating mats in the leading edge surface of the
blade.
– Hot air blade heating on the inside of the blade.
Two fundamental operational principals:
– De-icing (where the system runs when the turbine
detects ice build-up).
– Anti-icing (where system runs at a determined
temperature to prevent ice build-up).
DNV GL © 2017 08 June 2017
Managing Risks – Project Development Phase
Complex ground conditions requires thorough
investigations for each turbine location
New foundation concepts requires proper
independent verification
Grid code compliance studies should be mandatory
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DNV GL © 2017 08 June 2017
Managing Risks – Turbine Selection & TSA review
New turbines with limited track record requires
contractual mitigations
De-icing warranties (sometimes insufficient or
missing)
Power curve warranties (sometimes insufficient or
unenforceable)
Availability warranty exclusions (not always
accounted for in P&L; e.g time to get to site)
Site suitability – we do not always agree, site data
validation, bad data (sodar in Finland)
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DNV GL © 2017 08 June 2017
Managing Risk – Project Construction Phase
Capex risk are often closely linked to interface
management in the multi-contracting set up.
Multi-contracting or EPC? Look for exclusions in EPC
contract
Delays due to weather is common. Should be clearly
governed in the construction contracts. Build in
sufficient slack.
Grid connection on critical line (schedule), the
developer does often have limited control of this risk
element
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DNV GL © 2017 08 June 2017
Managing Risk - Operation
• Long-term service agreements with ongoing
performance warranty is limiting the risk exposure
• Energy based availability guarantees is becoming
standard
• All inclusive service agreement – really?
• Today few serial defects or major design issues
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DNV GL study: Normalized failure rates for turbines of multiple manufacturer in the DNV GL database
DNV GL © 2017 08 June 2017
13 June, 2017 Private and confidential
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1. DNV GL – Short introduction
2. Managing risk in a Wind Project
3. Technology Trends
4. Q&A
DNV GL © 2017 08 June 2017
Trends Turbine technology – Recent developments
• Improved load measurements enables design
optimization and optimized operation
• Increases in hub height gives higher energy yield in
low-wind and forestry sites
• Larger rotor diameters gives higher energy yield in
low-wind sites
Turbine design improved to ease maintenance
• Improved aerodynamic efficiency has increased
over the last five years leading to improved power
curves
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DNV GL © 2017 08 June 2017
Trends in Operation and Maintenance
• Increasingly competitive cost on service
agreements
• Turbine related maintenance typically constitutes
40 - 50% of total OPEX budget
• Currently WTG maintenance and service
agreements are offered at about 50-60 €k/WTG in
the first project years depending on WTG size, and
increases up to 75-85 €k/WTG in the last years of a
project lifetime
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Turbine Size Years 1-5 Years 6-10 Years 11-15 Years 16-20
2.3 to 2.5 MW
Range min 40 45 52.5 60
Range mid 50 57.5 65 75
Range max 60 70 80 90
3 MW
Range min 50 57.5 65 72.5
Range mid 60 67.5 75 85
Range max 70 80 90 100
DNV GL © 2017 08 June 2017
Trends LCoE development
Estimated LCoE of a typical Norwegian wind farm
(2016): 44 €/MWh, assuming a weighted average
cost of capital of 8% and an annual 3,500 full load
hours, i.e. a capacity factor of 40%.
Estimated LCoE of the 1 GW Fosen Vind onshore
wind farm which is expected to be operational by
2020 to be as low as 35 €/MWh to 40 €/MWh.
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Source: Norwegian Wind Energy Association (NORWEA)
14% drop in wind LCOE for every
doubling of installed capacity
DNV GL © 2017 08 June 2017
Q&A
13 June, 2017 Private and confidential
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DNV GL © 2017 08 June 2017
SAFER, SMARTER, GREENER
www.dnvgl.com
Thank you for your attention!
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Marte de Picciotto, Head of Renewables Advisory Nordic and Baltic Region
+47 92022420