OES Annual Report 2012 - Ocean Energy Systems

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05 / DEVELOPMENT OF THE INTERNATIONAL
OCEAN ENERGY INDUSTRY: PERFORMANCE
IMPROVEMENTS AND COST REDUCTIONS
ESB OCEAN PROJECT INDICATIVE PROJECT REQUIRED TRL LEVEL REQUIRED COST ENVELOPE
Phase 1 Project Pre-Commercial Array (5-10MW) TRL 8 Table 1(b)
Phase 2 Project Small Commercial Array (25MW+) TRL 9 Table 2
Phase 3 Project Large Scale Array (50MW+) TRL 9 Table 3
TABLE 6: TRL and Economic Requirements for ESB Ocean Energy Projects
Ocean Energy Cost Trajectories
Based on the cost envelopes in Tables 1 to 3, it is possible to extract realistic cost trajectories that ocean
energy must achieve for commercial acceptability. For example, consider a wave energy technology that has
been verified to TRL8 and is assessed to have a potential capacity factor of 25% (based on the application of
specifications such as IEC 62600-100 and 62600-101 as well a realistic allowance for availability). Assuming
that investors are happy that annual operational expenditure (Opex) can be kept at or below €250k per
MW per year then the affordable capital expenditure (Capex) according to table 1(b) is €6.24m/MW. If this
is sufficient to fund a phase 1 project, then as the industry grows for subsequent projects there is potential
for overall project Capex and Opex to fall while energy yields increase. Table 7 below sets out a realistic
trajectory for wave energy technology costs through the three phases. In this case, ultimate project Capex
is projected to be €3.3m/MW, a little less than offshore wind, though Opex is a little higher, perhaps
owing to accessibility to high wave energy sites. Figure 1 is based on this same logic, though it should
be considered that different technologies will have varying expectations of capacity factor and Opex so
many such Capex curves could be produced. It is only important that Capex, Opex and capacity factor are
collectively within acceptable envelopes (Tables 1 to 3) at each stage.
PROJECT PHASE PROJECTED CAPACITY FACTOR PROJECTED OPEX TARGET CAPEX
1
5-10MW
25%
based on TRL8 testing and application
of IEC standards and allowance
for poor reliability initially.
€250k/MW/year
based on allowance for poor reliability,
increased need for intervention and lack
of dedicated supply chain / vessels
€6.2m/MW
(from table 1b)
2
25MW+
30%
based on phase 1 project performance
and demonstrated reliability (TRL9)
€200k/MW/yr
based on improved reliability
and supply chain experience
€5.0m/MW
(from table 2)
3
50MW+
35%
based on improved reliability, design
and access to more energetic sites.
€130k/MW/yr
based on bespoke supply chain facilities, vessels
and much reduced need for repair intervention.
€3.3m/MW
(from table 3)
TABLE 7: Realistic Cost Projections for Wave Energy Conversion Projects
Project Cost Breakdown
The costs given above are total project costs and it is useful to consider what cost breakdown is expected
for wave and tidal energy projects. These costs can be broken down in various ways [4], [5] but will be
broken down here under the below headings. Offshore wind is a useful guide [6] to understand the typical
breakdown that is targeted. Opex is not considered here, so this is a breakdown of Capex only.
ÌÌ
Development – This is typically 4% of total Capex for offshore wind, it is expected that this will be similar
for wave and tidal farms with similar consenting requirements.
ÌÌ
Converters – WECs / TECs – In offshore wind, turbines are typically 40% of the total Capex, uninstalled.
It is expected that this will be closer to 45-50% for both wave and tidal farms due to the potential for
savings in other Capex components.