sixth northwest conservation & electric power plan proposed wind plant capital cost assumption...

Sixth Northwest Conservation & Electric Power Plan

Proposed Wind Plant Capital Cost Assumption

Jeff KingNorthwest Power and Conservation Council

Portland, OR

August 21, 2008

August 21, 2008 2Northwest

Power andConservation

Council

NorthwestPower andConservation

Council

Wind resource cost elements

• Capital costWind plant development and construction cost (uniform)

Transmission development and construction cost (WRA-specific)

• Operating costsFixed wind plant operation and maintenance (uniform)

Fixed transmission operation and maintenance (WRA-specific)

Variable wind plant operation and maintenance (uniform)

Variable transmission operation and maintenance (WRA-specific)

• System integration costsRegulation & load following

Storage & shaping



Council


Council

Windpower Cost Assumptions(2006 dollar values)

5th Plan

(2004)

Biennial Report (2006)

Preliminary 6th Plan

(Q1 2008)

Proposed 6th Plan

Overnight wind plant development and construction cost ($/kW)

$1170 $1500 $1650 $1950

Transmission ($/kW/yr) $23 Unchanged $20 To be addressed at later GRAC

Fixed O&M ($/kW/yr) $23 $30 $22 To be addressed at later GRAC

Learning effects on real fixed costs (20 yr average)

-2%/yr None in near-term

See following slide

To be revisited at later GRAC

Variable O&M ($/MWh) $1.16 $1.50 $1 To be addressed at later GRAC

Regulation & Load-following ($/MWh)

$5.20 - 11.20 Unchanged $5.10 - 10.90 Initial discussion to

follow



Council


Council

Preliminary thinking on forecast construction cost escalation (to be revisited at later GRAC)

0

200

400

600

800

1000

1200

1400

2005 2010 2015 2020 2025 2030

Vintage of construction contract (YOL-1)

Over

nig

ht

con

stru

ctio

n c

ost

(2

006$

/kW

)Escalation continues at declining rate through 2009; levels off 2010 - 11

Real costs decline to ~ 130% of 2004 values 2012 - 15

Recent cost escalation

2015 > Resumption of historical real cost reduction



Council


Council

Normalizing reported plant costs

• NPCC database contains reported plant costs (estimates or completion costs) for 36 WECC projects totalling 4450 MW. 2001- present

• Reported costs were normalized to "overnight" 2006 dollar valuesUnless otherwise stated, reported costs are assumed to be construction costs less project

development cost and financing fees.

The cost vintage is assumed to be the year reported or, for completion costs, the beginning of 12 mo construction period (one year prior to service year)

Overnight (instantaneous) construction cost were backcast using appropriate financing (COU, IOU, IPP) with the Council's MICROFIN model.

Project development cost of 1.3% of total capital cost was added to the estimate

• Capacity-correlation:Slight (12%) negative correlation of cost to project capacity was observed

Capacity-weighting was approximated by rounding to nearest 100 MW and plotting each 100 MW multiples separately.



Council


Council

Normalized utility-scale wind project cost

R2 = 66%

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Year of estimate

Ove

rnig

ht

con

stru

ctio

n c

ost

(20

06$/

kW) Proposed 6th Plan draft: $1950/kW

"Overnight", 2006$, 2009 service

5th Plan

Biennial Assessment

Prelim 6th Plan



Council


Council

Other recent surveys and estimatesCEC Comparative Costs of California

Central Station Electricity Generation Technologies

Jun 07 $1900 "Instant" cost, 2006$

EPRI Engineering & Economic Evaluation of Renewable Energy Technology

Jun 07 $2039 100 MW Total plant (overnight) cost, Dec 06 $

LBL Annual Report on U.S. Windpower Installation, Cost and Performance Trends: 2006

May 07 $1480 (range $1150 - 2240)

Reported costs, 16 U.S. projects, 1326 MW

LBL Annual Report on U.S. Windpower Installation, Cost and Performance Trends: 2007

May 08 $1710 (range $1240 - 2600)

Reported costs, 16 U. S. projects, 7600 MW ($1660 in 2006$)

USDOE 20% Wind Energy by 2030 May 08 $1650 2006$, overnight (Black & Veatch)

Windpower Monthly

Annual power cost comparison Jan 07 €1175 ($1490 @ 1.27)

Reported costs, 40 global projects, 3400 MW

Windpower Monthly

Annual power cost comparison Jan 08 €1300 ($1755 @ 1.35; range $1439 - 2068)

Reported costs, 40 global projects, 3000 MW



Council


Council

Comparison to other surveys & estimates

R2 = 66%

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

$2,200

$2,400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Year of estimate

Ove

rnig

ht

con

stru

ctio

n c

ost

(20

06$/

kW)

WM

LBL

DOE

WM

LBL

EPRI

CECProp. Dft 6th Pln

sixth northwest conservation & electric power plan proposed wind plant capital cost assumption...

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