wind Data-Files - Thunder Said Energy

Wind and solar: costs of grid inter-connection?

What are the costs of inter-connecting a utility-scale wind and solar project into the power grid, via a spur line, grid tie-in or feeder?

This data-file assesses twenty case studies of renewables assets in North America, based on published inter-connection documents.

Costs are highly variable. But a good baseline is to expect $100-300/kW of grid inter-connection costs, or $3-10/kW-km, over a 10-70 km typical distance (which includes the length of downstream lines that must be upgraded). Larger and higher voltage projects tend to have lower tie-in costs.

What is most surprising is how vastly the ranges can vary. The lowest-cost tie-in was $25/kW, tying in a solar asset to a 230kV power line with spare capacity that is a mere 1-mile away. Whereas the highest-cost tie-in was $1,250/kW (i.e., more than the 40MW solar project itself!) where the asset owner was asked to contribute an eye-watering c$50M to cover the costs of upgrading 500km of high-voltage transmission lines downstream of the inter-connection point.

Recent Commentary: to read more about costs of wind or solar grid connection, please see our article here. We are getting increasingly excited about opportunities in power transmission and power-electronics .

Global Energy Markets: 1750 to 2100

This model breaks down 2050 and 2100’s global energy market, based on a dozen core input assumptions.

You can ‘flex’ these assumptions, to see how it will affect future oil, coal and gas demand, as well as global carbon emissions.

Annual data are provided back to 1750 to contextualize the energy transition relative to prior transitions in history (chart below).

We are positive on renewables, but fossil fuels retain a central role, particularly natural gas, which could ‘treble’ in our base case.

A fully decarbonized energy market is possible by 2050, achieved via game-changing technologies that feature in our research.

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.

Onshore wind: the economics?

This data-file models the costs and the economics of constructing a new onshore wind power project, based on technical papers and a detailed line-by-line capex cost build-up.

A typical onshore wind project requires a 6-7 c/kWh power price and a $50/ton CO2 price in order to generate an unlevered IRR of 10%. However, investors may be inclined to view 5-6% IRRs, lowering the incentive price to 5-6c/kWh even without a carbon price.

The main cost is capex, which varies between $1,000-3,000/kW (below). The data-file gives a detailed breakdown, across materials, fabrication, transport, installation and linking to our other models. Larger turbines will reduce future costs, as stress-tested in the cost tab.

Energy Costs of Constructing Wind Assets

This data-file reviews 10 technical papers, in order to estimate the energy costs of manufacturing 1kW of wind turbines (in MWH/kW), the payback time to recoup that energy (in years) and the ultimate energy return on energy invested (EROEI).

The average CO2 intensity of wind turbines is suggested at around 13g/kWh, based on papers that disclosed this number.

Although one observation from reviewing the papers is that their methodologies are rough and may have under-estimated total energy intensities, especially around waste materials.

Comparable data for solar assets is linked here.

UK grid volatility as renewable gain share?

This data-file contains the output from some enormous data-pulls, evaluating UK grid power generation by source, its volatility, and the relationship to hourly traded power prices. We conclude the grid is growing more expensive and volatile.

Different tabs in the data-file cover the total monthly demand of the UK power grid since 2016, broken down by generation source, month-by-month and smoothed over trailing twelve-month timeframes; statistical analysis of hourly power prices, by day and by quarter; and an hourly cross-correlation of wind generation with power prices (chart below).

We have recently updated the data-file to capture the extreme price spikes and volatility seen in 3Q2021.

The data-file is also regularly updated and we are happy to run bespoke analysis on the underlying data-sets for TSE clients.

Gas power: decline rates?

This data-file tabulates the power generation profiles of 3,000 US natural gas-fired power plants, which have reported data to the US EIA, aggregated using in-house web-scraping software.

Unlike wind and solar assets, which exhibit clear decline rates of 1.5% and 2.5% per year, natural gas assets run at c44% of their peak utilization rates on average, which does not change materially over time, flexing within an interquartile range that spans from 14% to 74%.

In other words, gas power plants provide flexibility and long-term reliability in a grid, as they are dialled up and dialled down over time to meet demand. This is also illustrated by looking at the underlying data of individual power plants in the file (chart below).

The data-file also presents a cautionary tale from California. To accomodate 40TWH of new utility-scale renewables generation, we show that 35TWH of gas generation has now been permanently shuttered and another 11TWH has been idled. These closures are equivalent to 30% of California’s baseload and 17% of its peakload power capacity, providing one explanation for the State’s recent rolling black-outs. Full details are split out in the data-file.

Ten Themes for Energy in the 2020s

This short presentation describes our ‘Top Ten Themes for Energy in the 2020s’. Each theme is covered in a single slide. For an overview of the ideas in the presentation, please see our recent presentation, linked here.

Offshore wind costs are inflating?

This data-file tabulates the capex costs of 35 offshore wind projects in the UK, with 8.5GW of capacity, which have been installed since the year 2000.

We model the incentive price for each project, i.e., the power price that is needed to earn a 10% levered but unsubsizided. There is little evidence for deflation. Rather, breakevens appear to have risen at a 2.5% CAGR over the past decade.

Please download the data-file to interrogate the findings, or view the individual project parameters. Continued technical innovation is needed in the wind industry. We find new airship concepts could help deflate logistic costs.

Battery Storage Costs: the economics?

This model shows the full-cycle cost of storing a kWh of electricity, across ten different technologies that have been proposed to backstop renewables.

The model allows you to flex input assumptions, such as the costs of each battery, its useful life and the frequency of charge/discharge cycles.

Pumped storage currently screens as most economical for backstopping renewables, by a factor of 3x, under our base case assumptions.

Backstopping solar also looks about 3x easier than backstopping wind, as smaller batteries are needed, and costs are a function of system size. But no battery can truly backstop renewables.

Covered storage technologies include pumped storage, compressed air storage, lithium ion batteries, redox flow batteries, four other battery types, flywheels and ultra-capacitors.

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