Operation and Maintenance Costs

Annual O&M Costs: Recent industry estimates of O&M cost, including overhauls and replacements, range from $7,000 to $10,000/year per turbine [38]. This cost level corresponds to $0.005-$0.01/kWh for turbines sizes similar to the 1996 TC turbine and windfarms in the 100 MW range. A recent estimate of $6,534 (1992 dollars) per turbine per year fo r 275 kW turbines in a 50 MW windfarm was made under the DOE Near -Term Product Development Project [21]. Annual O&M is often quoted in units of $/kWh. However, it is difficult to use a single $/kWh estimate because a large portion of the annual O&M is fixed for each turbine, and the cost per kWh therefo re changes depending on the wind resource level and the output of each specific turbine [38,39].

The wind TC 1996 annual O&M cost estimate in dollars per turbine per year is s hown in Table 1 with a larger uncertainty on the low side, reflecting the fact that the estimate is on the high end of recent industry estimates. Note also that costs for periodic overhauls and replacement of components are included in some industry estimates, but are contained in a separate figure for the wind TC.

The 2000 and 2005 annual O&M cost estimates are increased to reflect turbine size-related costs for parts, supplies, and equipment. Reference 21 estimates that parts and supplies comprise approximately 70 percent of total O&M. Some of these costs are independent of turbine cost, and some are directly dependent. For this analysis, it is assumed that 5 0 percent are dependent on the turbine cost. Therefore, 2000 and 2005 annual O&M costs are calculated by adding th e following amount to the previous period's cost:

70% • Previous O&M Cost • 50% • Percent Change in Turbine Cost from the Previous Time Period

While higher in cost per turbine, the resulting cost in $/kWh for year 2000, approximately 0.5 0/kWh, is lower than the 1996 figure and is consistent with preliminary data developed under the DOE NGTD Project. Lower annual O&M cost per kWh is a major driver of the trend towards larger turbines. Actual O&M costs, as seen in the market, may not follow a smooth downward trend as shown in the TC. As new turbines are introduced, annual O&M costs may be higher than for previous designs until sufficient experience is developed in the field. Thus, although a downward trend is expected, the actual cost may be "saw-toothed" as new technology is deployed. This can be especially true with a technology in the earlier phases of commercial development, such as wind turbines, when significant improvements are realized with each new generation of technology. Because the uncertainty bounds are already relatively wide for the 1996 estimate i n Table 1, no changes were made to those values through 2030.

Beyond 2005, annual O&M costs savings are expected to be realized through simplification of design, such as th e elimination of hydraulic systems for brakes an d/or blade pitch mechanisms, and through optimization of O&M practices. This trend is reflected in the decreasing trajectory presented in Table 1.

Overhauls and Replacement Costs: These costs include periodic major component replacements and overhauls. For 1996, repairs include gearbox overhaul and generator bearing replacement in years 10 and 20 at a cost of 5% of total installed cost, and replacement of the blades in year 20 at a cost of 10% of total installed cost [21]. Major replacement/overhaul costs are estimated to be on the same schedule in year 2000 because uncertainty with scaled-up design is assumed to be offset by increased resistance to fatigue from composite rotor materials and/or improved design ability. As mor e experience is gained with these larger designs and newer materials, replacement costs fall to 5% and 10% of total cost in years 10 and 20, respectively, for the 2010 turbine (2005 assumes a lin ear interpolation between 2000 and 2010). Costs fall to 5% and 5% in years 10 and 20, respectively, for the 2020 and 2030 turbines. The impact of these costs on COE varies for different ownership/financing assumptions and wind resource levels. For investor-owned utility assumptions, the effect ranges from 0.3 to 0.5 0/kWh in 1996, and from 0.1 to 0.2 0/kWh in 2030.

These estimates are based on engineering judgement concerning the projected impact of improved design codes coupled with an improved understanding of fatigue-failure modes. Overhaul and replacement costs have a large uncertaint y associated with them, reflecting a wide range of estimates, including detailed engineering cost studies [21] an d manufacturer claims that turbines are designed to avoid major periodic repairs [20,38]. Compared to the average of these estimates, the value in Table 1 is judged to be conservative and therefore has a larger uncertainty on the negative side. This large uncertainty is c arried through the time periods, reflecting the potential for lower costs (higher durability) than those portrayed in the table. In the actual market, a tradeoff exists between initial turbine cost and design lifetime o f turbine components. This composite characterization is believed to reflect a middle ground relative to this tradeoff.

Land Costs: While costs for land lease or purchase will vary for individual projects, the value in Table 1 assumes land is leased using royalty payments and is on the high end of the range quoted for current projects [25,40,41]. Regiona l variations in land availability may alter land cos ts. Estimates of regional land cost variations have not been made for this analysis. There will be different influences on land lease values in the future. The dominant influence is that larger and more advanced turbines will produce more revenues per unit of land. Therefore, land owners will tend to realize much larger revenues from land leases, perhaps giving developers the ability to bargain the percentage down. The larg e uncertainties associated with land lease costs in Table 1 reflects the fact that it is unclear how costs will change over time, and that there is always a range of costs associated with different parcels of land.

Renewable Energy Eco Friendly

Renewable Energy Eco Friendly

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable.

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