These slides show how that long-term reductions in the cost of electricity from wind turbines have primarily come more from increasing the scale (rotor diameter and tower height) of wind turbines. See my other slides for details on concepts, methodology, and other new industries..

1. Geometric Scaling and Long-Run Reductions in Cost:The case of wind turbines SrikanthNarasimalu Ph.D. Student Jeffrey Funk Associate Professor Division of Engineering & Technology Management National University of Singapore

2. Wind Turbines on Land and at Sea

3. Large Wind Farms in the Ocean and on Land

4. Preliminary Observation:Larger Wind Turbines are Being Installed

5. So Conventional Wisdom is Probably Not Very Relevant Cost of producing a product drops a certain percentage each time cumulative production doubles in so-called learning or experience curve (Arrow, 1962; Ayres, 1992; Huber, 1991; Argote and Epple, 1990; March, 1991) as automated manufacturing equipment is introduced and organized into flow lines (Utterback, 1994) Although learning curves do not explicitly exclude activities done outside a factory, the fact that these learning curves link cost reductions with cumulative production focuses policy and other analyses on the production of the final product imply that learning done outside of a factory is either unimportant or is being driven by the production of the final product If major impact of installing more wind turbines was on lowering manufacturing cost, firms would install small wind turbines so there would be high volumes of small blades, towers, etc.

6. Of Course, the Wind Doesn’t Blow Everywhere (and all the Time)

7. Wind Speed Measurements at 8,000 Stations Source: http://www.worldchanging.com/archives/002770.html

9. Frequency of Wind Speed in a Ranch in Texas

10. Installed Global Capacity of Wind Power (MW) 2009: 159 GW 2010 194 GW

11. Installed Wind Capacity by Country

12. But Wind Contributes a Small Percentage of Overall Electricity Generation (1) TWh: Tera Watt Hours

13. Wind Contributes Small Percentage of Electricity Generation (2)

14. How Much Will this Contribution Increase in the Future? Blue is actual, red is forecasted World Wind Energy Association World Wind Energy Report 2009

15. The Future of Wind Power Will wind power continue to diffuse? Advantages It has lower carbon and other environmental emissions Disadvantages Wind doesn’t blow all the time (actual output about 1/3 of rated output) Wind is often far from large population centers, so transmission costs are high Wind turbines are considered ugly by many people Wind power is still more expensive than fossil fuels But will wind power become cheaper than fossil fuels Will countries continue to subsidize wind power or implement a carbon tax? Are wind turbines becoming cheaper on an cost per Watt basis?

16. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs needed? Where are the entrepreneurial opportunities?

17. Wind Farm Level Costs Wind energy: 75% of costs paid upfront Conventional power: less capital intensive – uncertain fuel and carbon costs Data source: EWEA for a 2MW Turbine.

18. Main Components in Terms of Costs

19. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs Needed? Where are the entrepreneurial opportunities?

20. Focus on Horizontal Axis Wind Turbine Ref: Srikanth in JEC(2009).

21. Three Key Dimensions in Geometric Scaling: 1) rotor diameter; 2) swept area of blades; and 3) hub or tower height

24. Empirical Data Finds Stronger Relationship Equation (2) Data source from Henderson et al.(2003) & manufacturer catalogue.

25. Reason for Discrepancy Above equation does not contain wind velocity: which as noted above has large impact on output It does not contain wind velocity since the turbines used for the collection of data on power and rotor diameter for Figure 3 operate under different wind speeds these wind conditions depend on the respective region The impact of rotor diameter and other factors on wind speed was investigated in four ways

26. First, relationship between diameter and maximum rated wind speed Best fit curve: Maximum rated wind speed = Data source: Hau (2008).

27. Second, data on efficiency of wind turbines was also collected Efficiency is the ratio of annual turbine power output compared to the energy available in the wind Less of wind can be harnessed at tips of blades than near center of the rotor

28. Third, Larger Rotor Diameter Better Utilizes Most Common Wind Speeds Data source: Vestas website

29. Fourth, Higher Towers, Higher Speeds Wind velocity is often lower near ground due to uneven terrain or buildings The factor alpha depends on the condition of the terrain and in particular on the impact of the terrain on wind friction and is usually about 0.32 Combining equations (4) and (1) leads to equation (5). Since the exponent for the ratio of the two heights is 3α, an α of 0.32 would cause a doubling of the tower height to result in a 94% increase in power output. Equation (4) Equation (5)

30. Comparison of Wind resource at different altitude (Indiana, USA) Data source: EWEA

31. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs Needed? Where are the entrepreneurial opportunities?

32. Cost of Wind Turbines More than 2/3 the cost of electricity from wind turbine farms comes from capital cost of wind turbine and almost half the capital costs are in tower and blades (Krohn et al, 2009) Beginning with tower, WindPACT analysis (Malcom and Hansen, 2006) found regression coefficient of 0.999 c = cost of steel ($/Kg); H = tower height; D = rotor diameter Comparing equations (5) and (6), output from turbine increases faster than costs as height is increased. For example, if alpha is 0.32 as was shown above and assuming a constant rotor diameter, increasing height from 10 meters to 20 meters would cause output to rise by 94% and costs to rise by 9 percent Equation (6)

33. Cost of the Rotor: Does not increase linearly Data source: Hau (2008) and EWEA (2010) .

34. Rotor Cost Per “Swept Area” of Turbine Blades (1) Equation (8) Equation (9) Compare them to Equation (2) in which Data source: Hau (2008) and EWEA (2010) .

35. Rotor Cost Per “Swept Area” of Turbine Blades (2) Benefits from increasing scale diameters < 50 meters; Yes diameters > 50 meters; Maybe Not “Maybe” because equation (2) does not take into account the impact of increased tower height or rotor diameter on maximum rated wind speeds or increased efficiencies. Including the increased efficiencies, maximum rated wind speeds, and greater tower heights, which are partly represented by equations (3) and (5) would provide a further improvements in our understanding of scaling would probably show some benefits to increases in scale

36. Cost of Blades (3) The reason for the change in slopes for < and > than 50 meters is that lighter, thus higher cost materials are needed: for diameters > 50 meters (carbon fiber-based blades). than for diameters < 50 meters (aluminum, glass fiber reinforced composites, and wood/epoxy). Early blades can be manufactured with methods borrowed from pleasure boats such as “hand lay up” of fiber-glass reinforced with polyester resin. Carbon-based blades require better manufacturing methods such as vacuum bagging process and resin infusion method that have been borrowed from the aerospace industry (Ashwill, 2004)

37. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs needed? Where are the entrepreneurial opportunities?

38. Remember the Conventional Wisdom Cost of producing a product drops a certain percentage each time cumulative production doubles in so-called learning or experience curve (Arrow, 1962; Ayres, 1992; Huber, 1991; Argote and Epple, 1990; March, 1991) as automated manufacturing equipment is introduced and organized into flow lines (Utterback, 1994) Although learning curves do not explicitly exclude activities done outside a factory, the fact that these learning curves link cost reductions with cumulative production focuses policy and other analyses on the production of the final product imply that learning done outside of a factory is either unimportant or is being driven by the production of the final product If major impact of installing more wind turbines was on lowering manufacturing cost, firms would install small wind turbines so there would be high volumes of small blades, towers, etc.

39. New Materials are Needed Stronger and lighter materials are needed for further increases in scaling Lighter materials are needed in order to reduce inertia of large rotors Stronger materials are needed to withstand high wind speeds Without new materials, there will be few (or no) benefits from further scaling Perhaps too large of wind turbines have already been installed

40. Material Technology Choice for Blades Note: Squared meters is for swept area of rotor Source (Srikanth, 2009)

41. Other Data on Blade Cost Also Reinforces Need for Better Materials Ref: Srikanth in JEC(2009).

42. Policy Implications Promote adoption of new materials and manufacturing processes for the turbine blades to continue the cost reductions in electricity from wind turbines. Support for this R&D (in form of direct funding or R&D tax credits) will probably have a larger impact on reducing costs of electricity from wind turbines than from merely subsidizing their implementation Subsidizing their implementation is partly based on notion that costs primarily fall as cumulative production rises (Arrow, 1962; Ayres, 1992; Huber, 1991; Argote and Epple, 1990; March, 1991), and as automated manufacturing equipment is introduced and organized into flow lines (Utterback, 1994)

43. One Caveat Maybe we have reached the limits to scaling Maybe it would be better if firms produced large volumes of “optimally” sized wind turbine

44. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs needed? Where are the entrepreneurial opportunities?

47. The “Aerogenerator:” Implementation of 275 meter diameter turbine by 2014

48. Tethered Wind Turbine

49. Tethered Wind Turbine What about increasing size of fins?

51. Implications for Policy Maybe policies should promote the development of these kinds of radical designs What are there costs? Will they benefit from increases in scale? Are new materials needed and what are the impact of these materials on costs of electricity? Remember that current policies just encourage the implementation of wind turbines

52. Outline Overview of Wind Turbine Costs Theoretical Output from Wind Turbines (function of diameter squared, wind speed cubed) Empirical Data Power output vs. rotor diameter Impact of rotor diameter and other factors on rated wind speed Cost of wind turbines Implications of Analysis New materials are needed Are new designs needed? Where are the entrepreneurial opportunities?