Microsoft UWIG_Economicsx AW 7720/00 UWIG Economics
User Manual: AW 7720/00
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5/23/2013 Economics of Distributed Renewable Projects Wind Interconnection Workshop Golden, CO May 22, 2013 Tom McDermott, tom@meltran.com MelTran, Inc. Power Wind Speed Cubed 0.5 P 0.5 C p k 4 C p k 2 = relative air density R = swept area radius v = wind speed Cp = coefficient of performance G = generator eff. B = bearings/gearbox eff. k = tip speed ratio 0.4 C p k 1 C p k 0 C p k 1 0.3 C p k 2 C p k 5 C p k 7.6 0.2 C p k 10 C p k 15 C p k 25 1 R 2 3 C p G B 2 0.1 C p k 45 0 2 3 2 4 5 6 7 8 9 k 10 11 12 13 14 15 15 2 Distributed Renewable Economics 1 5/23/2013 Sample WTG Power Curves 3 Top Turbine Suppliers Source: AWEA 2012 Executive Summary Report 4 Distributed Renewable Economics 2 5/23/2013 Turbine Power Curve Library Model Acciona AW77 / 1500 AOC 15/50 Clipper C100 / 2500 Clipper C89 / 2500 Clipper C93 / 2500 Clipper C96 / 2500 Entegrity EW15 / 65 Fuhrlander 1500/70 Fuhrlander 1500/77 Fuhrlander 2500/100 Fuhrlander 2500/80 Fuhrlander 2500/90 Fuhrlander FL100 Fuhrlander FL1250 Fuhrlander FL250 Fuhrlander FL30 Fuhrlander FL600 Fuhrlander MD 70 / 1500 Fuhrlander MD 77 / 1500 kW 1500 65 2500 2500 2500 2500 65 1500 1500 2500 2500 2500 100 1250 250 30 600 1500 1500 Model Gamesa G52-850 Gamesa G80-2.0 Gamesa G83-2.0 Gamesa G87-2.0 GE 1.5 s/se GE 1.5 sle GE 1.5 xle GE 2.5 xl MWT 92 / 2400 MWT 95 / 2400 NEG Micon 48 / 750 NEG Micon 52 / 900 NEG Micon 54 / 950 NEG Micon 72 / 1500 Nordex N100 / 2500 Nordex N60 / 1300 Nordex N80 / 2500 Nordex N90 / 2300 Nordex S70 / 1500 Nordex S77 / 1500 kW 850 2000 2000 2000 1500 1500 1500 2500 2400 2400 750 900 950 1500 2500 1300 2500 2300 1500 1500 Model Northwind 100/19 Northwind 100/20 NorthWind 100/21 RePower MD77 / 1500 RePower MM70 / 2000 RePower MM82 / 2000 RePower MM92 / 2000 Suzlon S64 / 1250 Suzlon S64 / 950 Suzlon S66 / 1250 Suzlon S88 / 2100 SWT-1.3-62 SWT-2.3-82 Vestas NM82 / 1650 Vestas V15 / 75 Vestas V27 / 225 Vestas V47 / 650 Vestas V80 / 1800 Vestas V90-3.0 / 3000 kW 100 100 100 1500 2000 2000 2000 1250 950 1250 2100 1300 2300 1650 75 225 660 1800 3000 5 Wind Production Distributed Renewable Economics 3 5/23/2013 Distributed Wind Economics • Capacity Factor: Determines Energy Production • Look at Wind as an Energy Source, not Capacity • Tax Incentives: Enhance the cash flow – Production Tax Credit (PTC) – Clean Renewable Energy Bonds (CREB) • Grants and other incentives may be available • Plus the usual considerations – Debt and Equity financing – Insurance, O&M, tax requirements – Evaluate by net present value (NPV), internal rate of return (IRR), payback period, etc. 7 Economic Screening Applet • Based on NREL’s WindFinance – http://analysis.nrel.gov/windfinance/login.asp • UWIG Added: – – – – – Power Curve download for the Feeder Simulator Sensitivity Analysis: 1 output vs. 2 inputs Almost 60 Power Curves Temperature Effect on Air Density Grant Effect on PTC and Depreciation 8 Distributed Renewable Economics 4 5/23/2013 Economics: Base Case • 7 Input Screens • Saves Data on the Server • Sample Files on the Server 9 Wind Cost Guidelines • Capital: $2.2 (+/- 50%) million per MW capacity • O&M: either $15-25/kW, or $0.005-0.01/kwhr • Site Royalty: either $2.5-4.0 thousand per MW, or 3% of annual revenues • Insurance: 0.25-1.0% of capital cost, annually • Property Tax: check state and local laws • Local Incentives: enter a Grant Percentage under “Financing Assumptions” 10 Distributed Renewable Economics 5 5/23/2013 Wind Capacity Factor • Energy = CF * (8760 hrs/yr) * (kW rating) • Wind speeds are variable – Power depends on speed3 – Actual site measurements are best • Electrical power output depends on the turbine and interface design – Complicated function of aerodynamics and controls – Controls are generally considered proprietary 11 Wind Capacity Factor Projections Capacity Factor by Installed Year and Wind Class 60.00 Capacity Factor 50.00 40.00 30.00 20.00 10.00 0.00 2000 2005 2010 2015 2020 Installed Year Class 3 Class 4 Class 5 Class 6 Class 7 12 Distributed Renewable Economics 6 5/23/2013 Wind Capacity Factor Module • Wind Data: – Actual Measured Distribution – Measured Average Annual Speed – Average Annual Speed from a Map • Power Curve: – Specific » From Library » Uploaded – Generic 13 Heights, Elevation, and Shear Factor Height Hhub Relative Air Density: exp( A / 8.6) Href Wind Speed Elevation (A) [km] Vhub H Vref hub H ref Shear 14 Distributed Renewable Economics 7 5/23/2013 Shear Factor Guidelines • • • • • 0.10 Water 0.14 Low grass or steppe 0.20 Rural with obstacles 0.25 Suburbs and woodlands Measurements at 100 m reference height can look much better than at 50 m reference height 15 Relative Air Density • Power Curves are for standard 1.225 kg/m3 – Elevation is 0 m, Temperature 15 °C or 288.15 °K • Correction for Elevation only: • • • • 288.15 0.0065h 1.225 288.15 5.2588 m) = 1.000 m) = 0.887 “Lapse Temperature” at 1000 m is 281.65 °K Earlier version used 4.256 exponent – m) = 0.9074 16 Distributed Renewable Economics 8 5/23/2013 Effect of Temperature w/ Elevation • Correction for both Elevation and Temperature: • 1.225 Po gh exp RT RT P0=101325, R=287.05, g=9.80665, T=273.15 + °C: Example 288.15 h exp T 29.271T T = 0 °C T = 15 °C h=0m 1.0549 1.0000 h = 1000 m 0.9309 0.8882 17 www.windpoweringamerica.gov/pdfs/wind_maps/us_windmap.pdf 18 Distributed Renewable Economics 9 5/23/2013 Wind Capacity Factor Data Sources • Wind Speeds – www.nrel.gov/wind/resource_assessment.html – Links to state maps, or national map if no state map • Elevation – earth.google.com (requires a download) – www.earthtools.org (no download) • Temperature – www.weatherbase.com (by month) • Turbine Power Curves – Google for the vendor’s brochure – www.inl.gov/wind/software/ (Excel spreadsheets) 19 Solar Production Distributed Renewable Economics 10 5/23/2013 Photovoltaic Generation Inverter Based Interface • Control Interactions? • Cloudy Day Variability • Limit Secondary Unbalance to 20% of Transformer Rating Source: Charlie Williams, S&C 21 Distributed PV Economics • “Capacity Factor” still crucial: – – – – – Technology and cell type Latitude, azimuth, tracking systems Temperature dependence Summer peaking vs. typical winter peaking for wind Daytime peaking vs. typical night peaking for wind • No Production Tax Credit • Other Tax Credits May Apply • Financing and Cash Flow Considerations 22 Distributed Renewable Economics 11 5/23/2013 23 PV Angle Effects • Best elevation depends on latitude and season • Best azimuth depends on time of day 24 Distributed Renewable Economics 12 5/23/2013 PV Cell • p-n junction (diode) • Trapped photons create electron/hole pairs and current qV I pv I L I 0 exp kT 1 25 Maximum Power Point Tracking 24 Ipv [Amps] 20 16 12 100% 80% 60% 40% 20% 8 4 0 0 100 200 300 400 500 600 Vpv [Volts] 26 Distributed Renewable Economics 13 5/23/2013 MPPT In Steady State 4 1.210 100% 80% 60% 40% 20% 4 Power [Watts] 110 3 810 3 610 3 410 3 210 0 0 100 200 300 400 500 600 Vpv [Volts] 27 PV System • Bypass failed modules and strings • Performance degraded by temperature, shading, dirt 28 Distributed Renewable Economics 14 5/23/2013 MPPT Almost Linear Output 4 1.210 4 110 Max Power [W] 3 810 3 610 3 410 3 210 0 0 20 40 60 80 100 Irradiance [%] 29 PV Capacity Factor Data Sources • HOMER, www.homerenergy.com • NREL In My Back Yard (IMBY) www.nrel.gov/eis/imby/ • SEPA Solar Tools at www.solarelectricpower.org 30 Distributed Renewable Economics 15 5/23/2013 Incentives Types of Incentives • Fixed Quantity – United Kingdom, Australia, Italy, Netherlands – State Renewable Portfolio Standards (RPS) would fall into this category • Fixed Price – European “Feed-In” laws, guaranteed % of retail price • Production Tax Credit – United States at the Federal level • Clean Renewable Energy Bond (CREB) – For non-taxable entities, a zero-interest loan • Grants – USDA and others • Check state & local tax incentives 32 Distributed Renewable Economics 16 5/23/2013 Production Tax Credit (PTC) • • • • • Energy Policy Act of 1992 – 1.5 ¢/kWhr Has been extended eight times Adjusted for inflation – currently 2.3 ¢/kWhr for Wind Lasts for 10 years Must pay federal income taxes in order to use the PTC – Equivalent REPI for non-taxable entity, under-funded at about $5M annually • Currently expires on December 31, 2013 – Project must have started construction by that date 33 Renewable Energy Production Incentive (REPI) • Direct payment for public utilities that don’t pay taxes, and would not benefit from PTC • “Equivalent” to PTC, currently 2.1 ¢/kWhr • Congress must appropriate REPI funds annually: – – – – Competes with other funding priorities May not be able to obtain the full REPI payments Tier 1 (Wind & Solar) 33% paid in 2009 Tier 1 last paid 100% in 2003 • Varied from $3.7M to $5M from FY2000 through FY2009 34 Distributed Renewable Economics 17 5/23/2013 Clean Renewable Energy Bonds • A “tax credit bond” for municipals, cooperatives, tribal governments, others who can’t use PTC • Issuer pays no interest; instead the bondholder receives a Federal tax credit • Energy Tax Incentives Act of 2005 authorized $800M for CREBs issued in 2006 and 2007 – Up to $500M for government organizations – 786 Applications Filed by April 26, 2006 – 610 Approved; 112 for Wind and 434 for Solar • Tax Relief and Health Care Act of 2006 – Extended CREB another $400M (Total $1.2B) – Up to $750M for government organizations – Extended CREB to December 31, 2008 – Applications Were Due at IRS by July 13, 2007 – Fully Allocated by the end of 2007 35 “New” CREBs • Two 2008 Acts, plus 2009 Recovery Act – $800M each for government, cooperatives, public power – Reduced the payments; may need to offer at discount • Applications due August 4, 2009; awards made: – Government: $800M in 739 projects (smallest-to-largest allocated from $3068M in 997 applications) – Cooperatives: $609M in 31 projects (may have a followup) – Public Power: $800M in 35 projects (pro rated from $1446M in 38 applications) – So, about $191M was left over (now gone) 36 Distributed Renewable Economics 18 5/23/2013 New CREB Credit Rate Schedules https:// www.treasurydirect.gov/ GA-SL/SLGS/ selectCREBDate.htm 37 Renewable Portfolio Standards (RPS) (www.dsireusa.org has summary maps of other incentives) 38 Distributed Renewable Economics 19 5/23/2013 RPS with Solar/DG Provisions 39 State Net Metering Policies 40 Distributed Renewable Economics 20 5/23/2013 3 MW 3 * 1 MW for Net Metering Source: Neil LaBrake, Jr., National Grid 41 Performance Based Incentives • MA – 400 MW Solar Carve Out – Qualifying facilities sell Solar Renewable Energy Certificates (SREC) with 30.0¢/kwhr floor price – Solar Alternative Compliance Payment (SACP) for the state RPS; 55.0¢ 36.5¢/kwhr over 10 years • NY – Solar/Biogas Near NYC; Apply for up to 50% installed costs, up to $3M per applicant • NJ – has an SREC and SACP program for PV – 10 – 20% up-front grant for wind, biogas, LFG • CA – feed-in tariff for PV, around 1.4x CC gas 42 Distributed Renewable Economics 21 5/23/2013 Some Other MA Incentives • Commonwealth Solar II Rebates: 40 – 85¢/W for 1 kW – 15 kW Residential/Commercial PV • Personal Tax Credit: up to $1K for PV & Wind • Property Tax Exemption: 20 years for PV, Wind and Hydro • Community Wind Grants: $30k for 2 MW, at least 3 turbines • Sales Tax Exemption: Renewable Energy Equip. 43 Screening Distributed Renewable Economics 22 5/23/2013 PTC In WindFinance PTC used to be 1.9 cents, is now actually 2.3 cents / kWh “Incentive Inflation Rate” approximates this growth 45 CREB In WindFinance 46 Distributed Renewable Economics 23 5/23/2013 Grants in WindFinance 47 Effect of Grants on PTC USDA and other Federal grants offset the PTC – The PTC offset is capped at 50% Example: project cost of $1.8M with $500K Grant 1800 500 PTC 2.1 1.52 1800 Most state grants don’t offset the PTC, so you have to make this adjustment manually depending on the type of grant All grants reduce the depreciable basis for MACRS 48 Distributed Renewable Economics 24 5/23/2013 Discounted Cash Flow Analysis Future Dollars Worth Less than Present Dollars – You Could Have Earned Interest on Present Dollars PV FV (1 rate)n Net Present Value (NPV) is the sum of all future cash flows back to the starting year Internal Rate of Return (IRR) is the interest rate that makes NPV Zero Payback is the time period for zero NPV 49 Present Value Example • 10 years, 5% interest rate • (1.05)10 = 1.6289 • FV – multiply by 1.6289 – $1000 today grows to $1628.90 in 10 years • PV – divide by 1.6289 – $1000 in 10 years has a present value of $613.91 today • IRR – if you invest $1000 today and then have $1628.90 in 10 years, your internal rate of return was 5% 50 Distributed Renewable Economics 25 5/23/2013 NPV, IRR, and Payback Example • NPV – $3,696K – @ 15.22% • Payback – 5 years – @ 15.22% • IRR – 19.46% 51 Economics: Sensitivity Analysis 52 Distributed Renewable Economics 26 5/23/2013 HOMER Modeling • • • • Started at NREL Spun off to www.homerenergy.com Free download version 2.68 Capabilities: – 8760-hour energy balance simulation of loads and sources – Optimization and sensitivity analysis of costs – Models of PV output, wind output, batteries, and diesel generator dispatching – No electrical simulation, CREB or PTC analysis 53 When to Use WindFinance or Homer? • WindFinance – – – – More detailed effects on Wind Capacity Factor Effects of PTC, CREB, Grants, Taxes, Loans, etc. Larger single projects More Turbines in the library • HOMER – – – – 8760 Energy simulations with Load and Pricing How many wind turbines, PV arrays, batteries, etc.? PV Capacity Factor estimates Hydro, Biomass, and Fuel Cells 54 Distributed Renewable Economics 27 5/23/2013 NREL In My Back Yard (IMBY) • http://www.nrel.gov/eis/imby/ and then click • “Use IMBY Now” – Find your home address, choose Solar energy – Draw a PV panel on your rooftop, Run the simulation – After the initial results appear, choose a nearby sample load profile and Run the load profile – Switch to Wind energy, place a Generic 3-kW wind turbine nearby, and Run. The capacity factor is your annual production, divided by (3*8760). 55 Workshop Links for Exercises • http://www.uwig.org/distwind/Default.htm • Your login credentials are based on the two-digit computer number, on the “ETRAIN” label – User Name = goldnguest?? – Password = guest??# – Where ?? is the computer number, with a leading zero if necessary (e.g. goldnguest02 and guest02#) • For the new toolbox developmental version – http://www.meltran.com/uwig/DGToolBox.html 56 Distributed Renewable Economics 28
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