Feasibility Appraisal of an Offshore Wind Farm Located in Greece» Author: Panagiota Soursou
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MASTER PROGRAM ON BUSINESS ADMINISTRATION THESIS «FEASIBILITY APPRAISAL OF AN OFFSHORE WIND FARM LOCATED IN GREECE» AUTHOR: PANAGIOTA SOURSOU SUPERVISOR: Prof. DIMITRIOS GEORGAKELLOS CANDIDATE NUMBER: MDE 1530 Acknowledgments I would like to dedicate my master thesis to my beloved grandmother, Panagiota Seferli-Tzivelopoulou, who passed away three months ago. She has supported and encouraged me with her love through the best and worst years of my life. I would also like to express my deepest gratitude to my supervisor Prof D.A.Georgakellos who has supported me with his knowledge and experience to realize this thesis. Special thanks to MrP.Pallamidas, Mr.S.Psomas and Mrs.A.Bilali. Finally, I would like to give a special mention to my family for their real support and love during my studies. Copyright Declaration Abstract The scope of this thesis is the realization of feasibility report about an installation of an offshore wind farm in the North Aegean Sea. This thesis illustrates what exactly contains a real market feasibility report, in order to convince the investors for the sustainability of an investment and the opportunity of gain profits. The next pages contain a brief presentation for the wind energy and technology inviting the reader to enter the terminology and the technology of wind farms. Apart from the literature review, there is a deep analysis of the wind industry, legislation, trends and a detailed analysis of the installation. The last chapter contains the financial analysis and deductions to defend or not the investment. For the convenience of the reader an executive summary is also provided. TABLE OF CONTENTS 1. Introduction ……………………………………………………………1 1.1. Aim of Project 1.2. Approach and Investigation 1.3. Executive Summary 1.4. History of Wind Power 1.5. The basics of Wind Energy at a glance 1.5.1. What is Wind Power? 1.5.2. What is a Wind Turbine? 1.5.3. Types of Wind Turbines 1.5.4. Sizes of Wind Turbines 1.5.5. The three major types of Wind Power 1.5.6. How Wind Turbines work 1.5.7. Windmills vs. Wind Turbines 1.5.8. What is a Wind Farm? 1.5.9. How Wind Energy gets to you 1.5.10. Benefits of Wind Energy 1.5.11. What is Wind Industry? 1.6. How Wind Energy works? 1.6.1. Generating Electricity 2. Literature Review …………………………………………………………6 2.1. Deep Water Offshore Wind Technologies 2.2. Deep Water-The next step for Offshore Wind Energy 2.3. EIA Guide to Offshore Wind Farms 3. Background Information Offshore Wind Farms …………………………..9 3.1. Development of Wind Power 3.2. Large Wind Farm development 3.3. Offshore Wind Farm development 3.4. Overview of Offshore Wind Farms in Northern Europe 3.5. Overview of Offshore Wind Farms in Major Continents 3.6. Economics and Terminology of Offshore Wind Farms 3.7. Roles involved in Offshore Wind Farms 3.7.1. Stakeholders 3.7.2. Regulators 3.7.3. Investors of the Wind Farm Project 3.7.4. Certifiers and Insurers 3.7.5. Developers 3.7.6. First Party Equipment Managers 3.7.7. Asset Managers and Operators 3.7.8. Maintainers/Field Engineers 4. Selection, Design and Construction Process of Offshore Wind Farm …….16 4.1. Design Process 4.1.1. Wind Turbine Design: Basic Load Considerations 4.1.2. Extreme Loads (Forces) 4.1.3. Fatigue Loads (Forces) 4.1.4. Structural Dynamics: An Example 4.2. Site Selection 4.3. Farm Layout 4.4. Turbine Components 4.5. Turbine Operation 4.6. Wind Turbine Foundation Requirement and Dynamics 5. General Information for Environment, Safety & Health ………………….22 5.1. Environmental Impact Assessment-EIA 5.1.1. Applicability 5.2. Environment 5.2.1. Landscape, Seascape and Visual Impacts 5.3. Noise 5.3.1. Construction Noise 5.3.2. Operational Noise 5.3.3. Noise Mitigation Measures 5.4. Biodiversity 5.5. Pre-construction assessments 5.6. Mitigation 5.6.1. Mitigation Measures (Onshore) 5.6.2. Mitigation Measures (Offshore) 5.7. Shadow Flicker 5.8. Water Qualify 5.8.1. Onshore 5.8.2. Offshore 6. Useful Physics of Wind Technology …………………………………………30 6.1. Where does Wind Energy come from? 6.2. Temperature Differences Drive Air Circulation 6.3. The Coriolis Force 6.4. The Energy in the Wind: Air Density and Rotor Area 6.5. Density of Air 6.6. Rotor Area 6.7. Wind Turbines deflect the Wind 6.8. The Stream Tube 6.9. What happens farther Downstream? 6.10. Why not a Cylindrical Stream Tube? 6.11. Wind Speed Measurement: Anemometers 6.12. Quality Anemometers are a Necessity for Wind Energy Measurement 6.13. Wind Speed Measurement in Practice 6.14. Which Tower? 6.15. Data Logging 6.16. Arctic Conditions 6.17. 10 Minute Averages 6.18. The Wind Rose 6.19. Wind Roses Vary 6.20. How to use the Wind Rose 7. Occupational Health and Safety ……………………………………………..35 7.1. Working at Height and Protection from Falling Objects 7.2. Working over Water 7.3. Working in Remote Locations 7.4. Lifting Operations 7.5. Community Health and Safety 7.6. Blade/Ice Throw 7.7. Aviation 7.7.1. Aircraft Safety 7.8. Marine Navigation and Safety 7.8.1. Marine Safety 7.9. Electromagnetic Interference 7.10. Telecommunication Systems 7.11. Television 7.12. Public Access 7.13. Abnormal Load Transportation 7.14. Grid Connection 7.15. Pitfalls in using Meteorology Data 8. Wind Turbines: Horizontal or vertical Axis Machines? ………………………42 8.1. Horizontal Axis Wind Turbines 8.2. Vertical Axis Wind Turbines 8.3. Upwind Machines 8.4. Downwind Machines 9. Offshore Wind Conditions ……………………………………………………..43 9.1. Wind Conditions at Sea 9.2. Low Wind Shear Means Lower Hub Height 9.3. Low Temperature Intensity=Longer Lifetime for Turbines 9.4. Wind Shade Conditions at Sea 10. Analysis of the big players of the Industry ……………………………………..45 10.1. Vestas 10.2. Enercon 10.3. Siemens Wind Power 11. Wind turbine manufacturing Industry‟s position in Industry‟s life cycle ………47 11.1. Core competences 12. Wind Energy Sources International Trends ………………………….…………49 12.1. Electricity from Wind 13. Global Renewable Sources of Energy …………………………………………..51 14. Digital Wind Farms- The Evolution of Technology …………………………… 56 15. Offshore Wind Power ……………………………………………………..…….58 16. The Offshore Wind Farm of the Thesis ………………………………………....60 16.1. Components 16.1.1. Meteorological Systems 16.1.2. Support System 16.1.3. Foundation 16.1.4. Monopiles 16.1.5. Tripods 16.1.6. Jackets 16.2. Jacket or Lattice Structures 16.2.1. Installation 16.2.2. Pre-pilling 16.2.3. Post-pilling 16.3. Beatrice Demonstrator Project 16.4. Concrete Structures 16.5. Floating Structures 16.6. Transition Piece 16.7. Scour Protection 17. Wind Turbine Interconnection …………………………………………………67 17.1. Electricity Collection and Transmission 17.2. Inner-Array Cable 17.3. Export Cable 17.4. Offshore Substation 17.5. Commissioning 18. Choosing the Suitable Wind Turbine ………………………………………….70 18.1. Market Searching 19. Overview of Legislation ……………………………………………………….74 20. Investing in the Greek Wind Power Sector ……………………………………75 21. The Hellenic Wind Energy Association Joins GWEC ………………………...76 22. Greek PPC Renewables interested building 12 Wind Farms on Islands ………76 23. EIB approved a loan for three new Wind Farms in Greece ……………………77 24. Pavlidis Marble-Granite invested EUR 70 million Greek Wind Farms ……….77 25. Sustainability Assurance ……………………………………………………….77 26. Looking Ahead ……………………………………………………………… 78 27. Market Analysis of the Offshore Industry …………………………………… 79 27.1. Long-term Energy Market Perspective-2050 27.2. Mid-term Wind Turbines Market Perspective-2020 27.3. Competitors 28. Choosing the location: Methodology …………………………………………..83 29. The Morphology of Greece …………………………………………………….83 30. North Aegean …………………………………………………………………..84 31. Central Aegean ……………………………………………………………….. 85 32. South Aegean …………………………………………………………………..86 33. Ionian Sea …………………………………………………………………… 86 34. The Offshore Wind Farm of the Thesis ………………………………………. 87 35. Locating Offshore Wind Farm …………………………………………………87 36. The Grid System of Greece …………………………………………………….89 37. Power Yield ……………………………………………………………………89 38. Submarine Cables of the Offshore Wind Farm ………………………………..90 39. PEFLEX Protection Cable System for Wind ………………………………….90 40. Budgeting of an Offshore Wind Farm ………………………………………....91 41. Financial Analysis ……………………………………………………………..93 41.1. Literature Review 41.2. Financial Analysis Explanation 41.3. Investment Analysis 42. Performing Investment Analysis ………………………………………………95 42.1. Types of Investment Analysis 43. Three Sections of the Cash Flow Statement …………………………………...96 43.1. Cash Flows from Operating Activities 43.2. Cash Flows from Investing Activities 43.3. Cash Flow from Financing Activities 43.4. Cash Flow Statement Considerations 43.5. Payback Period 43.6. Net Present Value (NVP) 43.7. International Rate of Return (IRR) 44. Advantages and Disadvantages of each Method ………………………………99 44.1. Strengths 44.2. Weaknesses 44.3. Advantages of payback period 44.4. Disadvantages of payback period 45. NVP versus IRR ……………………………………………………………….100 46. Expenses of Installation ………………………………………………………..101 47. Annual Expenses ……………………………………………………………....102 48. Cash Flow Analysis ……………………………………………………………103 49. Sensitivity Analysis …………………………………………………………....106 50. Conclusions ………………………………………………………………….....107 51. Discussion ……………………………………………………………………...108 52. Recommendations and further work ……………………………………….......109 53. Appendices …………………………………………………………………......110 54. Risk Assessment (A) and (B) ………………………………………………......111 55. General Health and Safety Rules and Checklist ……………………………….112 55.1. Welfare Facilities 55.2. Hazards and Preventive Remedies / Measures for every stage of the Project 56. References ……………………………………………………………………. 131 Abbreviations & Terminology MW Unit of measuring power. It is equal to one million Watts. GWUnit of measuring power. The Giga Watt is equal to one billion Watts. GWh Giga Watt Hour measurement of the consumption in one hour for large scale plants. kWh kilo Watt Hour is a unit of measuring the consumption in one hour and it is equal to one thousand watts in one hour. HVDC High Voltage Direct Current is the massive transmission of direct current in large distances.