Anholt Picture from https://www.offshorewind.biz/
This week, the 111th wind turbine (using Siemens SWT-3.6-120 units) of Denmark's brand new Abholt offshore wind project was installed. This marks the completion of this $US 1.65 billion infrastructure project, so far on-time and under budget. This project is half owned by the energy company DONG (which is mostly owned by the Danish government = people of Denmark) and half owned by a pair of Danish pension funds, who are most definitely NOT adventurous with their client's savings. A lot of the money for this project was borrowed from several major investment banks; for example, $US 312 billion was borrowed from the Nordic Investment Bank (see http://www.renewableenergyfocus.com/view/20978/financing-secured-for-400-mw-anholt-offshore-wind-farm/). At present, 2/3 of the project (75 turbines, or 270 MW of capacity) is now producing electricity that is being sold into the Danish grid - the remaining units are scheduled to be commissioned by early September of this year. When fully operational, it should supply around 4.5% of Denmark's electricity - enough for around 400,000 people. See https://www.offshorewind.biz/2013/05/19/denmark-sea-power-erects-111th-turbine-at-anholt-owf/
And just by coincidence, the first turbine of the Gwynt y Mor wind farm that is situated in the Irish Sea near England (and also near 3 existing offshore wind arrays (Rhyl Flats, North Hoyle, Burbo Bank)) was also installed on that same day. This new project will use the similar turbines as for Anholt (Siemens SWT-3.6-107 - smaller rotor diameter than with the Danish project), and 160 of them will be employed to make a 576 MW array. This array will cost around $US 3 billion and provide an average output of around 280 MW (see https://www.offshorewind.biz/2013/05/17/uk-first-wind-turbine-at-gwynt-y-mor-owf/). The Gwynt y Mor features two offshore substations and the project is actually arranged in two parts. The wind speed which will power the English farm (8.85 m/s) seem to be very similar to the winds at Anholt (8.81 m/s), so any difference in project electrical outputs would seem to be due to the differences in rotor diameter/blade length. The English project owners get slightly less expensive turbines (lowering capital costs), but there should also be less electricity generated per turbine. That may reflect the differences in how the projects get their revenue - Anholt is a Feed-In Tariff (FIT) project, and income is directly related to performance (electricity produced), while a lot of the income for Gwynt y Mor is due to various subsidies, and project income is not strictly a function of the volume of electricity made. Anyway, this huge renewable energy investment should be complete within a year, and since the turbines are made in Denmark, England's loss (of jobs, business activity) will be Denmark's gain (jobs, supply chain, business activity). However, looks like wind farms are also good for fish, and those birds, like cormorants, that dine on fish, as seen by this picture from one of the 60 x 3 MW turbines of the nearby Robin Rigg array:
As an aside, maybe NY State should pay attention to these real-life lessons. Offshore wind is primarily about job creation up until the project is commissioned; after that there should not be that many jobs realized unless something is dreadfully wrong with major components, like the turbines, cables or substation. There is no reason why a decent campaign to tap NY City's and Long Island's prime renewable energy asset (the shallow waters south of Long Island) which cover around 6000 square miles should not be a major job creation situation. failure to not only make the boats to install the turbines, make the foundation AND make the turbines (towers, blades, nacelles) should be a major criminal offense for those NY officials that allow the massive employment potential to be "off-shored". Even if only one sixth of this potential is developed (1000 square miles), at 12 MW capacity per square mile, this is 12,000 MW of capacity or roughly 6000 MW on a delivered basis. That is 60% of the electricity consumed by NYC (7 GW) and Long Island (3 GW), combined. That's a $54 billion in job creation project, roughly 800,000 job-years of direct job creation, with loads more "spin-off" jobs, and loads of business opportunities, and not much of that investment needs to come from taxpayers (though the bonds used to finance it could be tax deductible). But, maybe that is too much to ask of NY's business and political leaders, since they are effectively owned by "finance capitalists", and those folks don't relish relinquishing their grip on NY State. Such a major middle class job creation and manufacturing stimulus is seen as a threat by the "FIRE" (Finance, Insurance and Real Estate) complex to the FIRE dominance of the state and NY City, but maybe they are just too paranoid and greedy for our own good…. Oh well, so much for that digression….
The Anholt project lenders and investors will be repaid by the sale of the electricity from the project. The FIT price will be around 17 c/kw-hr for the initial ~12 years (actually the initial 20 TWh of produced electricity, which requires an average electricity production of 190 MW = 47.5% of the rated output). It is quite the engineering and construction marvel, and because so much of this was made in Denmark (foundations, towers, blades, nacelles) and the construction done by Danish factories (including the offshore substation foundation), it is quite the economic stimulus for Denmark. The underwater cable was provided by Nexans (Germany) while the substation components were made by Siemens (Germany). The turbines are installed about 15 km off of the more populated eastern half of the country, near the island of Anholt in the Baltic Sea. The average wind speed at hub height is around 8.8 m/s (http://www.4coffshore.com/windfarms/request.aspx?id=owsdb&version=2&windfarmid=DK13), which is very similar to the wind speeds in most of the shallow waters to the south of Long Island. the average depth of water for this wind farm is around 14 meters (about 46 feet deep). For a Long Island wind speed reference, see page 7 of http://web.mit.edu/1.011/www/finalppr/dtobias-Term_Paper_-_Tobias.pdf
A similar comparison to NY State can be made. One of the closest renewable energy things we have done compared to the Anholt would be the Niagara Power project. This was undertaken by the NY Power Authority (NYPA), a NY State government owned corporation, when the 400 MW Schoelkopf power plant fell into the Niagara Gorge. NYPA rapidly assembled a massive construction project, paid for it via long term bonds, and it is now the lowest cost supplier of electricity in NY State (about 0.2 c/kw-hr cost of production). The NPP now supplies around 9.5% of NY's electricity (about 1546 MW on average for 2012) , and it is also all renewable electricity. However, Denmark is a really flat country, so hydropower potential is pretty much nonexistent, except for tidal and wave energy. And there are no more Niagara hydropower projects to be had in NY State - if we want renewable electricity at a reasonable price, we will need to use wind turbines, (either land based or offshore), in significant quantities.
If you do a simple financial analysis of the Anholt project, 20 TW-hrs (20 million MW-hrs) at 17 c/kw-hr ($170/MW-hr) is close to $US 3.4 billion in a 12 year time period; after that, the electricity will be sold at "market price". If the "O&M" portion is around 2 c/kw-hr, that means that the capital repayment would have been 15 c/kw-hr, or $US 3 billion over 12 year period. That works out to about $250 million/yr over a 12 year term/ or roughly 15% of the installed capital paid out each year. This is, for people familiar with the mortgage payment formula, equivalent to a 10.5%/yr loan for 12 years. Since the project will last at least 24 years, the electricity provided for the remaining 13 years of the project will be quite inexpensive (and with a 2 c/kw-hr "break-even price", not many projects will be able to undercut it. But, electricity prices will be higher than that, providing a profit for the two Danish pension funds and a profit for DONG. And those should be some happy pensioners.
It turns out that the Danish government owns 76% of DONG; 18% is owned by a pair of Danish companies and 6% is owned by a variety of small shareholders. It was originally the entirely state owned Danish Oil and Natural Gas (DONG) company (they extract oil and methane from the shallow but nasty waters of the North Sea, especially in Danish territorial waters), and that was expanded into the electricity production market in the last decade. DONG owns/co-owns a variety of oil and natural gas wells, some gas pipelines in the North Sea region, but those are depleting, and the company has bet big on offshore wind, which does not deplete. Offshore wind projects employ many of the skills and technologies needed to drill for oil and gas in the North Sea, so viewed in that respect, offshore wind is a natural choice for this company. DONG now owns most of the offshore wind projects in Denmark (including the biggest four) and several in Great Britain, either as sole owner or as a part owner, plus some ones being readied in Germany. By the end of 2013, it will own almost 1400 MW of offshore wind capacity. Due to its competency at managing the construction projects that are offshore wind turbine projects, these have become quite profitable. Lately DONG has been installing offshore arrays and then selling significant ownership shares to others, also at a hefty profit. It has also been very capable at increasing the net outputs of the projects it owns/co-owns. Last year, the Horns Rev 2 project (installed 2009, 209 MW) had a net output of close to 52%.
So, the people of Denmark, via the ownership in DONG of their government, stand to gain in a major way from owning wind farms in Europe. The profits from the sale of ownership positions and also the sale of electricity from these projects will allow the Danish government to provide services (universal healthcare, free/low cost college education, and lots of other "Nordic Socialism" benefits to Denmark's people) without needing to raise taxes on the majority of Danish citizens. Maybe that should be a model for NYPA, although right now it certainly is not. DONG is quite focussed on lowering the cost of offshore wind, primarily by keeping the net output of the turbines in these arrays as high as possible. But maybe it takes a state owned corporation like DONG to focus on that concept when privately owned ones still consider 35% net yields as "acceptable" when the wind resource is essentially world class. After all, a larger rotor diameter for a given generator size can always up the yield, and the blades are a pretty minor cost component of offshore wind. The wind turbine itself (towers, blades, nacelle) averages about 27% of the total installed project cost, and the blades might only be 20% of the turbine cost. Anyway, here is a quick presentation of their plan to drop the cost of electricity production to around 13 c/kw-hr from the present 17 c/kw-hr:
Meanwhile, in NY State….. we do nothing with regards to the offshore potential of the Atlantic Ocean to the south and east of Long Island. That is really the major local renewable energy potential for the NY City/Long Island region, with its 11 million or more people and hundreds of thousands of companies/governmental entities. And if instead of getting money at 10.5% for 12 years, money at 4% for 25 years was employed, the capital portion of an offshore wind project would only cost 9.2 c/kw-hr with a total cost of around 11.2 c/kw-hr once the O & M part is added in. And while this may seem large while natural gas prices (delivered to electricity generators) is still only $5.3/MBtu (Henry Hub price $4/MBtu) which allows 4 to 5 c/kw-hr electricity to be made from this methane, five years ago the natural gas prices (delivered) were approaching $15/MBtu. And NYPA is a big consumer of natural gas (they own the 500 MW Poletti plant under construction and 720 MW of other gas burners in NY State). Maybe they should repent from their presently "do lots of evil, climate wise" sinful ways (in the Global Warming sense) and partner with DONG to start several GW of offshore wind off of NY City and Long Island. You know, join the future instead of revealing in the 20th century, when gas burning as an electricity approach was already obsolete…. After all, 800,000 job-years of direct, real wealth creating jobs over a 10 year period is only an average of 81,000 new jobs. Who knows, maybe it could be one of yours, or those jobs could lead to the creation of your job. Something to keep in mind at college graduation time, when less than half of college graduates will be able to land a job that actually requires a college degree, let alone one in the specialty of that particular college degree obtained.