The Second Age of Wind - Driving Costs Down End to End to Get to Grid Parity

Reaching Wind Grid Parity Energy is Not Just about Initial Cost per Watt

Today, more than 85% of the wind energy production cost is the initial capital and installation. Operations and maintenance (O&M) accounts for about 15% of the total energy production cost.

But while initial capital costs fall only a few per cent per year, owners are watching O&M costs rapidly increase after the fourth year, where O&M costs can grow to more than 20% of the total energy production cost.

For instance, the 2008 American Wind Energy Association (AWEA) O&M Council survey identified the following electrical issues.

Early failure of electrical components. Less than ideal matching of the generator and converter results in damage to the converter from generator power transients. In addition, IEC power converters are not designed to be robust enough for the USA grid, which exhibits far more severe power transients than Europe's grid, and so IEC power converters fail earlier than expected. And like IEC power converters, IEC contactors and breakers are designed for up to 105% over-current – a level far less than the frequent power transients of the USA grid. In a comparison test by a major USA Wind Turbine OEM, UL/ANSI components outlasted IEC components by about 2.5 times when subjected to USA grid conditions.

In addition, American Electric Technologies, Inc. (AETI) 2009-2010 interviews with wind farm operators identified the following electrical issues.

Less than expected electrical system performance at start-up and across the life cycle. Lack of complete electrical systems integration between IEC turbine systems and the ANSI electrical collection, substation and yard systems, results in less than desirable electrical system coordination that impacts start-up performance. In addition, the lack of integrated life cycle operations and maintenance planning allows the use of electrical equipment from different suppliers that, because of different design objectives, results in non-optimized electrical design and integration that underperforms over the life cycle.

Getting down to grid parity production costs requires a better approach to managing O&M costs over the life cycle:

• Installation: This includes reducing costs that arise from inadequate commissioning by inexperienced contractors.
• Operating: This includes reducing costs resulting from early failure of non-UL conversion and protection equipment from power surges.
• Maintenance: This includes reducing revenue loss from unplanned system failure.
• Replacement: This includes reducing costs due to using shorter life IEC rather than UL & ANSI electrical components.

Many of these O&M costs are over-looked and under-estimated during the planning stage of the farm. But over time, they add up to impact the total wind energy production cost, to the detriment of the return on investment of the wind farm.

End to End Electrical Integration is One Approach to containing Wind O&M Costs

To truly contain O&M costs over time, integrate and implement the turbine & balance of system equipment using one electrical systems supplier. Two goals are attained by this approach.

Optimized electrical design & project costs. Although initial costs are slightly higher, farm ROI is improved by specification of third-party certified components (UL, KEMA, etc...) that last longer than self-certified (IEC) components for USA wind farms. Electrical coordination is also improved when using the same equipment supplier who uses the same brand of third-party certified components in their electrical equipment design. And by using an electrical systems supplier with construction experience, farm ROI is also improved by eliminating the layers of subcontracting and implementing end to end systems engineering visibility into the construction of the electrical power infrastructure from generation to grid.

Reduced electrical operations & maintenance costs. Although the start-up costs are higher, farm ROI is improved by utilizing a third party to validate farm construction against the design to obtain end to assurance that the farm was installed, coordinated and commissioned correctly while the contractors are still on the development site. Then, implement a condition based monitoring solution combined with an early-warning preventative maintenance service, so that the complete approach all together results in the highest improvement in farm ROI an owner / operator can obtain today.

Thus, to get down to grid parity production costs, an end to end integrated approach towards managing electrical O&M costs over the life cycle is not only essential during operations & maintenance, but during the design, build and construction phases itself. This includes:

• Integrated UL/ANSI bundling of equipment into NEMA 3R line-ups or containerized solutions that are pad-mount ready wires in & out package. This reduces installation costs by deploying pre-wired, pre-tested and pre-commissioned UL and ANSI equipment at the site.
• Using one supplier experienced with IEC, UL & ANSI power conversion & switchgear, which results in coordinated equipment that performs longer with less revenue downtime.
• Using a supplier capable of integrating complete remote condition monitoring in conjunction with providing preventative maintenance services to provide early warning of a failure. This results in minimal revenue loss when the system is serviced long before a drastic electrical failure occurs.
• Replacing IEC components with UL and ANSI upgrades, so that longer electrical operating life can be achieved. And by using a supplier that can also refurbish IEC, UL & ANSI power components, the costs of using new IEC components to repair portions of the wind power infrastructure is avoided.

In Summary

As initial capital costs continue to decline, attention will turn towards using one supplier to integrate wind turbine conversion and wind farm collection subsystems, substation and electrical yard subsystems as custom and complete packages.

As a result, the value adding supplier of tomorrow is an integrator of electrical systems end to end for both wind turbine and wind farm electrical systems, which includes the design, installation, maintenance and refurbishment of the equipment and construction of the farm, all under one extended agreement.