Wind power: operating costs?

Wind power operating costs. A breakdown of wind turbine opex is build up in this data-file, using granular data from technical papers, and our other models.

We think a typical wind turbine costs $40/kw per year to run and maintain, equivalent to 1-2c/kWh of opex, depending on the load factor.

The data-file shows how costs can vary, as a function of inputs. A sensible range is $25-75/kW-year. And the single largest way to lower costs is through up-scaling, spreading relatively fixed costs across larger turbines and larger overall assets. Our recent note on up-scaling wind turbines is linked here.

Wind turbine maintenance market? We estimate that around $25/kW of our cost build-up can be described as ‘maintenance’. Hence across 825GW of global wind capacity (at the end of 2021), the wind turbine maintenance market would be worth >$20bn per year.

This maintenance ‘after-market’ is typically controlled by wind turbine manufacturers. Larger operators can lower costs by self-managing, albeit this comes at the risk of lower uptime.

The data-file includes a build-up of maintenance costs across 19 different categories — drives, generators, hydraulic systems, blades, hubs electricals (chart below)– multiplying their annual failure rates by the sum of their replacement costs (i.e., parts) and the time spent by technicians.

Another surprisingly large cost component is lubricants, around $1-2/kW-year.

Full details on wind power operating costs are split out across 6 tabs, including our highlights from the best technical papers that crossed our screen in the ‘notes’ tab. We have also drawn on other data-files assessing wind turbine capex costs, typical plant sizes, land use, and land costs.

FACTS of life: upside for STATCOMs & SVCs?

Upside for STATCOMs

Wind and solar have so far leaned upon conventional power grids. But larger deployments will increasingly need to produce their own reactive power; controllably, dynamically. Demand for STATCOMs & SVCs may thus rise 30x, to over $25-50bn pa. This 20-page note outlines the opportunity and who benefits?

Glass fiber: what upside in the energy transition?

Glass fiber makes up 50% of a wind turbine blade, lightens vehicles and insulates homes for 30-70% energy savings. Hence we see demand rising 3.5x in the energy transition. To appraise the opportunity, this 13-page note assesses the market, costs, CO2 intensity and leading companies.

Glass fiber: the economics?

This data-file models the economics of producing glass fiber, the key component in fiberglass, which is used in wind turbine blades and the light-weighting of transport; but also an insulation material used in the construction industry.

We have broken down the costs across a dozen different input variables, such as capex, opex, energy and materials, based on technical papers, in order to calculate the economics and CO2 intensity of the material.

Some Chinese-made product can undercut Western-made product by c50% on price, but it will likely also embed about 2x more CO2.

Backup data, market sizing and notes from technical papers follow in the subsequent tabs of the Excel.

Wind turbines: screen of resin and polymer specialists?

This data-file tabulates details for 20 companies that make epoxy- or polyurethane resins and adhesives, especially those that feed into the construction of wind turbines.

We think there are 5 public companies ex-China with 5-35% proportionate exposure to this sub-segment of the wind industry, which could therefore be exposed to an acceleration of wind capacity-building. 3 companies stood out in particular and our highlighted in the data-file.

For each example, we have tabulated their approximate size, geography, patent filings, employee-county and estimated their exposure to wind turbine polymers.

Renewables: can they ramp up faster?

How fast can wind and solar accelerate, especially if energy shortages persist? This 11-page note reviews the top ten bottlenecks that set the ‘upper limit’ on renewables’ capacity additions. Seven value chains will tighten enormously in the coming years. Paradoxically, however, ramping renewables could exacerbate near-term energy shortages.

Small-scale wind turbines: leading companies?

This screen compares the offerings of a dozen small-scale wind turbine providers, with power ratings in the range of 30kW of lower, for residential energy generation. Costs range from $1,000-6,000/kW.

For each company, we have tabulated their size, experience to-date, turbine parameters, estimated costs and system reliability.

The three key challenges are performance, relaibility and cost. We believe that resolving these issues creates a material opportunity for small-scale wind generation.

Carbon fiber: the miracle material?

Energy transition will catapult carbon fiber demand upwards from today’s 120kTpa baseline, across wind turbine blades, more efficient vehicles and hydrogen tanks. This miracle material is 3-10x stronger than steel yet 70-80% lighter. Hence our 16-page note explores opportunities, economics, CO2 intensity, leading companies and one of the most amazing value chains of industrial civilization, which paradoxically depends upon fossil fuels.

Carbon fiber: energy economics?

This data-file captures the economics of producing carbon fiber. We estimate a marginal cost of $25/kg for a 10% IRR at a new world-scale carbon fiber plant, however the production process will likely emit 30 tons of CO2 per ton of carbon fiber if powered by a mixture of gas and electricity.

The data-file also contains technical data across the entire value chain leading up to carbon fibers (e.g., polyacrylonitrate), tensile strength versus weight properties, and our detailed notes from technical papers.

A screen of leading companies in the carbon fiber industry is also provided, reviewing production volumes and market positioning (below).

Please download the data-file to stress test input assumptions such as capex costs, electricity costs, gas prices and CO2 costs.

Offshore wind: will costs follow Moore’s Law?

Some commentators expect the levelized costs of offshore wind to fall another two-thirds by 2050. The justification is some eolian equivalent of Moore’s Law. Our 16-page report draws five contrasts. Wind costs are most likely to move sideways, even as the industry builds larger turbines. Implications are explored for companies.

Copyright: Thunder Said Energy, 2022.