wind capacity tiers psb cost analysis subgroup william basa ben beinecke july 2009

Wind Capacity Tiers

PSB Cost Analysis SubgroupWilliam Basa

Ben Beinecke

JULY 2009

©2009. Northern Power Systems. All Rights Reserved. Not to be used or shared without permission. Proprietary and Confidential.

Wind Capacity Tiers Make Sense for VT FIT

Wind Capacity Tiers make sense because wind turbines have economies of scale

• Cost per kilowatt decreases as capacity increases (negative slope)• Cost per kilowatt decreases with a non-linear relationship to

capacity (logarithmic shape to curve)• Dividing capacity into tiers helps minimize variation in cost

• Capacity Tiers should be small at low capacities and large at high capacities

• NPS has proposed 3 Tiers above the 15 kW designation:• Small Wind: 16 to 100 kW• Mid-Size Wind: 101-500 kW• Utility Scale: 501-2200 kW

• These recommendations largely agree with REV’s proposed tiers• <15kW, 15-150kW, 151-500kW, >501kW


“Small Wind” Tier Based on Existing Definitions

American Wind Energy Association (AWEA)• Small Wind “defined as having rated capacities 100 kilowatts or

less”

US Federal Government for Investment Tax Credit/ARRA• Eligible small wind property includes wind turbines 100 kW or less in

capacity.

National Renewable Energy Laboratory (NREL)/Department of Energy

• “Small wind turbine” refers to a turbine less than or equal to 100 kW.”


Methodology

Develop a cost curve based on publicly available information on installed costs of commissioned wind energy projects

• Not a perfect approximation of cost at any capacity (not meant to be), but accurate enough to show trend in data (ie economies of scale, decreasing costs)

Test existing tiers (less than or equal to 15 kW; >15 kW) for cost variance

Divide cost curve into tiers based on existing definitions of wind projects and cost variance

Test tiers for cost variance


Published Installed Costs as Chart Data

Project Location MachineTurbine

CapacityInstalled Cost Cost per kW Sources:

Hypothetical Hypothetical MariahPower 1 $9,500 $7,917 http://www.windenergy.com/news/news_Wind_Wire_4-17-09.html

Hypothetical Hypothetical Skystream 2 $19,000 $7,917 http://www.windenergy.com/news/news_Wind_Wire_4-17-09.html

Hypothetical Hypothetical Bergey 10 $65,000 $6,500 http://www.windenergy.com/news/news_Wind_Wire_4-17-09.html

Ocean Gate Ocean Gate, NJ 50 $300,000 $6,000 http://www.app.com/article/20090629/NEWS/90629099/1070/NEWS02

Hypothetical Hypothetical Northern Power 100 $550,000 $5,500 Northern Power

Bartlett Farm Nantucket, MA Furhlander 250 $1,000,000 $4,000 http://www.plumtv.com/videos/bartletts-farm-windmill/index.html

Sand Bay Wind Farm Falkland Islands Enercon E33 330 $1,040,024 $3,152 www.falklands.gov.fk/site/legco/155-08.pdf

Holy Name Worcester, MA Vestas RRB 600 600 $1,500,000 $2,500 www.holyname.net

Mass. Maritime Academy

Buzzards Bay,

MA 660 $1,500,000$2,273

http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20071118/BIZ/711180311/-1/NEWS

Portsmouth Abbey Rhode Island Vestas V47 660 $1,250,000 $1,894 http://www.portsmouthabbey.org/page/1018/

Jiminy Peak Hancock, MA GE 1.5 sle 1500 $3,900,000 $2,600 www.informationweek.com

Berkshire Wind Brodie, MA 1500 $4,500,000$3,000

http://boston.bizjournals.com/boston/stories/2008/06/09/daily39.html

Stetson II Maine 1500 $3,529,412$2,353

http://www.bangordailynews.com/detail/100847.html

Mars Hill Maine 1500 $3,035,714$2,024

http://en.wikipedia.org/wiki/Wind_power_in_Maine#Stetson_Wind_Farm

Rollins Maine 1500 $3,000,000$2,000

http://en.wikipedia.org/wiki/Wind_power_in_Maine#Stetson_Wind_Farm

PMLD Princeton, MA 1550 $3,650,000$2,355

http://www.pmld.com/WindFarm.htm

Otis Air National Guard Otis, MA Vestas V82 1650 $4,600,000 $2,788 www.boston.com

Kibby Mountain Maine Vestas 3000 $7,272,727 $2,424 www.transcanada.com/news/2008_news/20080709.html


Logarithmic Trendline

Wind Energy Installed Cost per Kilowatt by Turbine Capacity y = -838.03Ln(x) + 8477.5

R2 = 0.9236

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

0 500 1000 1500 2000 2500 3000

Nameplate Capacity (kW)

($/k

W)

Existing Proposal for Single Tier above 15kw


Existing Single Tier Proposal: 16-2200kW

Statute Proposed Single Tier: 16-2200 kW

R2 = 0.8095

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

0 500 1000 1500 2000 2500


Ap

pro

x. $

/kW


R2 = 0.9236

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

0 500 1000 1500 2000 2500 3000


($/k

W)

Cost

Variation

~$4200


NPS Proposed Tier 2: 16-100 kW


R2 = 0.9492

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

0 20 40 60 80 100 120


Ap

pro

x. $

/kW


R2 = 0.9236

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

0 500 1000 1500 2000 2500 3000


($/k

W)

Cost

Variation

~$1400




R2 = 0.9612

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

0 100 200 300 400 500 600


Ap

pro

x. $

/kW


R2 = 0.9236

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

0 500 1000 1500 2000 2500 3000


($/k

W)

Cost

Variation

~$1350


NPS Proposed Tier 4: >501 kW


R2 = 0.9665

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

0 500 1000 1500 2000 2500


Ap

pro

x. $

/kW


R2 = 0.9236

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

0 500 1000 1500 2000 2500 3000


($/k

W)

Cost

Variation

~$1300

wind capacity tiers psb cost analysis subgroup william basa ben beinecke july 2009

Documents

wind turbines

small wind tier

vt fit wind capacity

kwmidsize wind

existing tiers

cost variancetest tiers

curvedividing capacity

costcapacity tiers