OES Annual Report 2012 - Ocean Energy Systems

More documents

Recommendations

Info

119 05 / DEVELOPMENT OF THE INTERNATIONAL OCEAN ENERGY INDUSTRY: PERFORMANCE IMPROVEMENTS AND COST REDUCTIONS Energy Array Demonstration Fund (MEAD). Table 1(b) below repeats the calculation for phase 1 projects, but considers the case where a €3m/MW grant is made available to the project. Note that this grant aid is further limited to half of the total investment cost up to a maximum of €3m (as in many cases it is difficult to grant fund projects by over 50%). The resulting project costs that can be funded in this way then fall into the Capex range of €6-10m and ESB consider these as acceptable project costs for phase 1. As such, the cost and performance envelope described in Table 1(b) represents a useful target to maximise the chance of successfully financing a phase 1 project. Phase 2 Cost and Performance Envelopes: Once phase 1 projects are performing reliably and operational costs and associated risks are understood with some confidence, it should be possible to build a business case for larger projects and take advantage of economies of scale. Grants will be difficult to justify at this scale and so such projects will need to be commercial based on a bridging tariff alone (such as the 5 ROC market in the UK or equivalent feed in tariffs). Phase 2 affordable costs are calculated here based on: 1. The internal rate of return (IRR) demanded by an investor: Projects at this scale will need to pay for themselves using normal commercial finance. An IRR of 10% is selected for this analysis, though this will depend on the project and the investor. However, offshore projects will carry risk, and some contingency must be included to attract such finance. 2. The revenue stream for the project: ESB considers that tariffs of between €220/MWh (proposed Renewable Energy Feed in Tariff (REFiT) for Ireland) and €300/MWh (approx equivalent to 5 ROCs in the UK market) will be available to undertake these early projects of limited scale. There may also be niche applications for technology (e.g. island communities or in applications for offshore oil and gas activities) where higher tariffs are payable for small projects. €300/MWh is used in this analysis. 3. The lifetime of the project: A project life of 20 years (approaching expected design life of hardware) is appropriate for Phase 2 projects. Table 2 shows the resulting affordable cost and performance envelope for phase 2 projects. An enhanced tariff of €300/MWh is likely to be unsustainable at scale and therefore there will be a limited market for such projects. Phase 3 Cost and Performance Envelopes: Economies of scale, incremental technology improvements as well as improvements in performance and reliability will have a significant impact on the economic case. In order to achieve economic parity with offshore wind, ESB considers the following case: 1. The internal rate of return (IRR) demanded by an investor: As for Phase 2 projects, an IRR of 10% is selected for this analysis. Offshore projects of large scale will still carry risk, and some contingency must be included to attract such finance. 2. The revenue stream for the project: Based on Renewable UK [1] projections for offshore wind levelised costs; ESB considers that tariffs of £130/MWh (~€160/MWh) may be available for offshore renewable generation projects beyond 2020. 3. The lifetime of the project: A project life of 25 years is considered appropriate for Phase 3 projects. Table 3 represents the resultant cost and performance envelope. Note that the current investment cost of offshore wind projects in the UK are circa €4m/MW and such projects can now achieve a capacity factor of 35-40% with operational costs of €80-90k/MW/year (see Renewable UK [1]). These costs are within the envelope described in Table 3 (highlighted). As such, Table 3 represents the cost and performance currently required for a significant market to develop, as for offshore wind.
120 PHASE 1: AFFORDABLE INVESTMENT COSTS FOR GENERATION PROJECTS OPEX €m/MW/annum CAPEX €m/MW CAPACITY FACTOR 20% 25% 30% 35% 40% 45% ANNUAL OPEX AS % OF CAPEX 2.0% 4.0% 6.0% 8.0% OPEX 0.07 0.13 0.17 0.20 CAPEX 3.60 3.17 2.83 2.55 OPEX 0.09 0.16 0.21 0.26 CAPEX 4.50 3.96 3.53 3.19 OPEX 0.11 0.19 0.25 0.31 CAPEX 5.40 4.75 4.24 3.83 OPEX 0.13 0.22 0.30 0.36 CAPEX 6.30 5.54 4.95 4.47 OPEX 0.14 0.25 0.34 0.41 CAPEX 7.21 6.34 5.65 5.11 OPEX 0.16 0.29 0.38 0.46 CAPEX 8.11 7.13 6.36 5.74 to yield a 7% IRR for a 12 year project life where a tariff of €300.00/MWh is payable PHASE 1: AFFORDABLE INVESTMENT COSTS INCLUDING A GRANT FACILITY OPEX €m/MW/annum CAPEX €m/MW CAPACITY FACTOR 20% 25% 30% 35% 40% 45% ANNUAL OPEX AS % OF CAPEX 2.0% 4.0% 6.0% 8.0% OPEX 0.12 0.20 0.26 0.29 CAPEX 6.19 5.11 4.27 3.68 OPEX 0.14 0.25 0.32 0.37 CAPEX 7.09 6.24 5.34 4.60 OPEX 0.16 0.28 0.38 0.44 CAPEX 7.99 7.03 6.27 5.52 OPEX 0.18 0.31 0.42 0.50 CAPEX 8.89 7.82 6.98 6.30 OPEX 0.20 0.34 0.46 0.56 CAPEX 9.79 8.61 7.69 6.94 OPEX 0.21 0.38 0.50 0.61 CAPEX 10.69 9.41 8.39 7.58 to yield a 7% IRR for a 12 year project life where a tariff of €300.00/MWh is payable and a grant of €3m/MW is available up to matched funding level a) b) used in table 7 TABLE 1: Phase 1 project affordable investment costs without grant (a) and with matched funding grant up to a maximum of €3m/MW (b) PHASE 2: AFFORDABLE INVESTMENT COSTS FOR GENERATION PROJECTS OPEX €m/MW/annum CAPEX €m/MW CAPACITY FACTOR 20% 25% 30% 35% 40% 45% ANNUAL OPEX AS % OF CAPEX 2.0% 4.0% 6.0% 8.0% OPEX 0.08 0.13 0.18 0.21 CAPEX 3.82 3.34 2.96 2.66 OPEX 0.10 0.17 0.22 0.27 CAPEX 4.78 4.17 3.70 3.33 OPEX 0.11 0.20 0.27 0.32 CAPEX 5.74 5.01 4.44 3.99 OPEX 0.13 0.23 0.31 0.37 CAPEX 6.69 5.84 5.18 4.66 OPEX 0.15 0.27 0.36 0.43 CAPEX 7.65 6.68 5.92 5.32 OPEX 0.17 0.30 0.40 0.48 CAPEX 8.60 7.51 6.66 5.99 to yield a 10% IRR for a 20 year project life where a tariff of €300.00/MWh is payable used in table 7 TABLE 2: Phase 2 Affordable capital investment for commercial projects >25MW ANNUAL REPORT 2012
Page 1 and 2:
ANNUAL REPORT 2012/ IMPLEMENTING AG
Page 3 and 4:
2012 Annual Report Published by: Th
Page 5 and 6:
IV ANNUAL REPORT 2012
Page 7 and 8:
VI ANNUAL REPORT 2012
Page 9 and 10:
VIII The title of the second invite
Page 11 and 12:
2 1.1 / ABOUT THE IEA The Internati
Page 13 and 14:
4 1.4 / OES’S STRATEGIC PLAN The
Page 15 and 16:
6 ANNUAL REPORT 2012
Page 17 and 18:
8 2.1 / MEMBERSHIP The Implementing
Page 19 and 20:
10 2.3 / WORK PROGRAMME & MANAGEMEN
Page 21 and 22:
12 2.5 / SPONSORSHIP Ocean Energy S
Page 23 and 24:
14 3.1 / DISSEMINATION AND OUTREACH
Page 25 and 26:
16 3.2 / ANNEX IV: ASSESSMENT OF EN
Page 27 and 28:
18 3.3 / ANNEX V: EXCHANGE AND ASSE
Page 29 and 30:
20 The first version of the Interna
Page 31 and 32:
22 4.1 / MEMBER COUNTRIES (ordered
Page 33 and 34:
24 WavEC has been further participa
Page 35 and 36:
26 FIGURE 1: Field trip to Wavestar
Page 37 and 38:
28 Main Public Funding Mechanisms T
Page 39 and 40:
30 UNITED KINGDOM Karen Dennis Depa
Page 41 and 42:
32 NORTHERN IRELAND In October 2012
Page 43 and 44:
34 SCOTLAND ÌÌ Scottish Renewable
Page 45 and 46:
36 The Study has produced a series
Page 47 and 48:
38 In the Northern Ireland (NI) off
Page 49 and 50:
40 Technology Development Technolog
Page 51 and 52:
42 Support Initiatives and Market S
Page 53 and 54:
44 The Electricity Research Centre
Page 55 and 56:
46 CANADA Tracey Kutney 1 2 , Jonat
Page 57 and 58:
48 Relevant documents released ÌÌ
Page 59 and 60:
50 Fundy Tidal Inc., a community-ba
Page 61 and 62:
52 Support Initiatives and Market S
Page 63 and 64:
54 In addition to technology advanc
Page 65 and 66:
56 Public Utility District No.1 of
Page 67 and 68:
58 BELGIUM Mathias Damen and Julien
Page 69 and 70:
60 GERMANY Jochen Bard Fraunhofer I
Page 71 and 72:
62 Voith Hydro Wavegen in Inverness
Page 73 and 74:
64 NORWAY Carl Gustaf Rye-Florentz
Page 75 and 76:
66 -off units with a total of 240 k
Page 77 and 78: 68 MEXICO Sergio M. Alcocer 1 , Ger
Page 79 and 80: 70 RESEARCH & DEVELOPMENT Governmen
Page 81 and 82: 72 SPAIN José Luis Villate TECNALI
Page 83 and 84: 74 A new R&D project on wave energy
Page 85 and 86: 76 The Oceanic Platform of the Cana
Page 87 and 88: 78 ITALY Gerardo Montanino GSE INTR
Page 89 and 90: 80 Participation in Collaborative I
Page 91 and 92: 82 Administration (Regione Sicilian
Page 93 and 94: 84 RESEARCH & DEVELOPMENT Governmen
Page 95 and 96: 86 producers of electricity from bi
Page 97 and 98: 88 Blue Energy Blue Energy is an in
Page 99 and 100: 90 renewable energy technologies, i
Page 101 and 102: 92 REPUBLIC OF KOREA Keyyong Hong K
Page 103 and 104: 94 Relevant Documents Released The
Page 105 and 106: 96 The HyTide 110-5.3 horizontal ax
Page 107 and 108: 98 Functional Zoning (2011-2020) wo
Page 109 and 110: 100 TECHNOLOGY DEMONSTRATION Operat
Page 111 and 112: 102 RESEARCH & DEVELOPMENT Governme
Page 113 and 114: 104 FRANCE Georgina Grenon 1 and Ya
Page 116 and 117: 05/ DEVELOPMENT OF THE INTERNATIONA
Page 118 and 119: 109 05 / DEVELOPMENT OF THE INTERNA
Page 146 and 147: 06/ STATISTICAL OVERVIEW OF OCEAN E
Page 148 and 149: 139 06 / STATISTICAL OVERVIEW OF OC
Page 158: OCEAN ENERGY SYSTEMS (OES) www.ocea
show all

OES Annual Report 2012 - Ocean Energy Systems

Create successful ePaper yourself

Delete template?

Save as template?