1. Offshore Wind Energy Model
Robert Griffin*, CK Kim, Doug Denu
naturalcapitalproject.org
Natural Capital Project Annual Meeting, 2013

2. Wind energy in the U.S. Land - 50,000 MW installed (12 million homes)
- 32% of all new electric capacity in 2011
- 3% of national energy portfolio
Ocean
- Higher wind speeds, close to population centers
- Developer interest, federal approval of OCS areas
- Public areas with multiple users
Source (U.S. DOE) Land is second to China. Potential 4 TW of power offshore (BOEM), 11TW onshore (DOE). US grid has approximately 1TW generating capacity (BOEM), worldwide capacity is 16TW (Wiki)

3. Spatial wind energy model
Why important? Spatial understanding of …
- Energy potential
- Cost
- Value
- Use conflicts
InVEST model software
- SupplyServiceValue models
- Integrated management
- Open source
- Replicable/Flexible
- Naturalcapitalproject.org

4. Levelized Cost of Energy
Nuts and bolts
Energy Model
Inputs
Outputs
Power density
𝑃= 1 2 𝜌 𝑗=1 𝑐 𝑓 𝑉 𝑗 𝑉 𝑗 3
Weibull
𝑓 𝑉 𝑗 = 𝑘 𝜆 𝑉 𝑗 𝜆 𝑘−1 𝑒 − 𝑉 𝑗 𝜆 𝑘
Profile power law
𝑉 𝑍 𝑟 = 𝑍 𝑍 𝑟 α
Output power
𝑃(𝑉)= &𝑉< 𝑉 𝑐𝑖𝑛 𝑜𝑟 𝑉> 𝑉 𝑐𝑜𝑢𝑡 𝑃 𝑟𝑎𝑡𝑒 & 𝑉 𝑟𝑎𝑡𝑒 < 𝑉< 𝑉 𝑐𝑜𝑢𝑡 (𝑉 𝑚 − 𝑉 𝑖𝑛 𝑚 )/( 𝑉 𝑟𝑎𝑡𝑒 𝑚 − 𝑉 𝑖𝑛 𝑚 ), & 𝑉 𝑐𝑖𝑛 ≤ 𝑉≤ 𝑉 𝑟𝑎𝑡𝑒
Wind Speed
Power Density
Turbine Info
Energy Generated
Cables and Grid Info
Valuation Model
Net Present Value
Equipment costs
𝐶𝐴𝑃= .91𝑘𝑚 𝑡𝑢𝑟𝑏𝑖𝑛𝑒 $.26 𝑘𝑚 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 + $2.0+$8.0 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 , 𝑖𝑓 𝑆𝑖𝑒𝑚𝑒𝑛𝑠 3.6𝑀𝑊 $2.6+$14.0 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 , 𝑖𝑓 𝐴𝑅𝐸𝑉𝐴 5.0𝑀𝑊 ∗𝑀𝑊+1.36∗𝐶𝑎𝑏𝑙𝑒, 𝑖𝑓 𝐶𝑎𝑏𝑙𝑒≤60𝑘𝑚 (𝐴𝐶) 1.09∗𝑀𝑊+ .89∗𝐶𝑎𝑏𝑙𝑒, 𝑖𝑓 𝐶𝑎𝑏𝑙𝑒 >60𝑘𝑚 (𝐷𝐶)
Capital expenditures
𝐶𝐴𝑃𝐸𝑋=𝐶𝐴𝑃/(1−.2−.05)
Net present value
𝑁𝑃𝑉= 𝑡=1 𝑇 𝑅𝑒𝑣 𝑡 −.035∗𝐶𝐴𝑃𝐸𝑋 1+𝑖 𝑡 − .037∗𝐶𝐴𝑃𝐸𝑋 1+𝑖 𝑇 −𝐶𝐴𝑃𝐸𝑋
Levelized Cost of Energy
Financial Parameters

5. Wind energy generation
Conventional modeling approach
- Default inputs
- Global Marine
- East Coast (res)
- Great Lakes (coming)
- Simplified large dataset
- Transformed data
- Extrapolated to hub height
- Wind speed  Power
- Polynomial approximation
- Flexible to turbine design

6. Wind energy valuation Costs Capital expenditure Other costs
- Farm components Installation and misc
- Transmission Operations and management
TC = f(MW, cable length) Decommissioning
Revenue
- Energy generated
- User entered price/kWh Discount rate or WACC O&M

7. Cost model validation

8. New England example 80 Turbine Farm 3.6 MW Turbines 7% Discount Rate
3m Min / 60m Max Depth
$.18/kWh
20 year horizon
Farm Size

9. RI/MA Wind Energy Area
RI/MA MA

10. RI/MA example
Farm Size

11. Integrated analysis Heuristic example of quantitative approach
Location: New England
Task: Wind Energy Area Siting
Concerns:
- Efficient location of Wind
- Ocean uses
Data:
- Sample of uses from Northeast Data Portal (
- Wind energy model NPV output

12. Nuts and bolts
Overlap Analysis and Wind Energy model

13. Nuts and bolts – Energy generation
Power density
𝑃= 1 2 𝜌 𝑗=1 𝑐 𝑓 𝑉 𝑗 𝑉 𝑗 3
Weibull
𝑓 𝑉 𝑗 = 𝑘 𝜆 𝑉 𝑗 𝜆 𝑘−1 𝑒 − 𝑉 𝑗 𝜆 𝑘
Profile power law
𝑉 𝑍 𝑟 = 𝑍 𝑍 𝑟 α
Output power
𝑃(𝑉)= &𝑉< 𝑉 𝑐𝑖𝑛 𝑜𝑟 𝑉> 𝑉 𝑐𝑜𝑢𝑡 𝑃 𝑟𝑎𝑡𝑒 & 𝑉 𝑟𝑎𝑡𝑒 < 𝑉< 𝑉 𝑐𝑜𝑢𝑡 (𝑉 𝑚 − 𝑉 𝑖𝑛 𝑚 )/( 𝑉 𝑟𝑎𝑡𝑒 𝑚 − 𝑉 𝑖𝑛 𝑚 ), & 𝑉 𝑐𝑖𝑛 ≤ 𝑉≤ 𝑉 𝑟𝑎𝑡𝑒

14. Nuts and bolts – Wind energy valuation
Equipment costs
𝐶𝐴𝑃= .91𝑘𝑚 𝑡𝑢𝑟𝑏𝑖𝑛𝑒 $.26 𝑘𝑚 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 + $2.0+$8.0 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 , 𝑖𝑓 𝑆𝑖𝑒𝑚𝑒𝑛𝑠 3.6𝑀𝑊 $2.6+$14.0 # 𝑜𝑓 𝑡𝑢𝑟𝑏𝑖𝑛𝑒𝑠 , 𝑖𝑓 𝐴𝑅𝐸𝑉𝐴 5.0𝑀𝑊 ∗𝑀𝑊+1.36∗𝐶𝑎𝑏𝑙𝑒, 𝑖𝑓 𝐶𝑎𝑏𝑙𝑒≤60𝑘𝑚 (𝐴𝐶) 1.09∗𝑀𝑊+ .89∗𝐶𝑎𝑏𝑙𝑒, 𝑖𝑓 𝐶𝑎𝑏𝑙𝑒 >60𝑘𝑚 (𝐷𝐶)
Capital expenditures
𝐶𝐴𝑃𝐸𝑋=𝐶𝐴𝑃/(1−.2−.05)
Net present value
𝑁𝑃𝑉= 𝑡=1 𝑇 𝑅𝑒𝑣 𝑡 −.035∗𝐶𝐴𝑃𝐸𝑋 1+𝑖 𝑡 − .037∗𝐶𝐴𝑃𝐸𝑋 1+𝑖 𝑇 −𝐶𝐴𝑃𝐸𝑋