4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015
Assessment of the technical and economic potential of offshore wind energy via a GIS application A case study for the Sicily Region according to Italian laws and incentive frameworks
Marco Beccali, Josè Galletto, Leonardo Noto Roberto Provenza Depts DEIM and DICAM Studio di progettazione e consulenza tecnica Università degli Studi di Palermo Alcamo (TP), Italy Palermo, Italy [email protected] roberto_provenza_libero.it
Abstract— This paper presents a technical and economic analysis farms. Therefore, a complete assessment of the growth of wind of the possible exploitation of offshore wind resources using installations is needed for planning any further enhancements spatial analysis methods based on GIS tools. The study assessed to the electricity network system. Although the same the magnitude and distribution of the main constraints on technology (three-bladed wind turbines) has been used for installation of wind farms by taking into account the relevant power generation, the construction of offshore structures technical factors and local laws on nature protection issues in a presents challenges and opportunities different from those of specific area, i.e., Sicily. Specific cost functions were defined for the onshore wind farms both in terms of infrastructure and several components of the total cost of construction and resources. Offshore installations are favoured by a greater maintenance of a wind farm. Several scenarios were implemented availability of wind in the open sea, with annual average wind according to wind turbine size, hub height, total wind farm speeds greater than those on the mainland and possible power, and distance from the coast, and the levelised production increases in the production of electricity from 2000-2500 cost was assessed for a total of 12 scenarios. The main economic performance outputs were calculated and represented on maps, MWh/MW (typical of land plants) to 3000-4000 MWh/MW. thus demonstrating this approach as a useful tool for decision Offshore experience in Northern Europe and the recent changes makers, stakeholders and planners in the Italian incentive system could give a further boost to this type of application in shallow water, and the technological Keywords: Offshore wind energy, Energy planning, maturity for this application is comparable to that of the Economic evaluation, Decision support system, GIS, Sicily; mainland. In this paper, we evaluated the cost-effectiveness of exploitation of the potential offshore areas in the short, medium I. INTRODUCTION and long-term and on a regional scale through the use of The offshore wind power installed in Europe since today is economic and financial indicators supported by spatial analysis equal to about 5000 MW, with approximately 3000 MW techniques carried out in a GIS (Geographical Information installed in the UK alone [1]. With respect to this technology System) environment. EWEA [1] provides other interesting data that are summarised as follows. European installations represent 90% of the world’s II. ASSESSMENT METHODOLOGY FOR OFFSHORE offshore wind power, and the remaining 10% is shared between WIND POWER POTENTIAL China (9%) and Japan (1%). The average power of the turbines A. Wind resource data and distribution used in offshore applications in 2012 was 4 MW, and the average power generated by an offshore wind farm is The data used to estimate the offshore wind resources in approximately 300 MW. The majority of working plants were case study of Sicily are those available by the Italian Wind concentrated in areas 40 km from the coast and characterised Atlas [9]. The ESRI shapefile “national grid” (which is by a sea depth of 25-30 m. The average plant is located 29 km projected in the reference system UTM ED50 zone 32) was from the coast at a depth of 22 m. The majority of installations converted to a grid with a resolution of 50 m. A bathymetric occurred on foundations of the monopile type (73%), followed map of the Sicily Region was created by digitalisation of the depth contours and spot elevations acquired by geo-referred by the jacket (13%), tripod (6%), tripile (5%), and gravity (3%) nautical charts from the Marine Hydrographic Institute and by types [1, 2, 3]. In recent years, the installation horizon has a subsequent interpolation using geostatistical methods to shifted (for authorised plants or those under construction) up to obtain a 50-m regular grid size. Next, a raster map of the 110 km away from the coast with depths between 40 m and 50 distance from the coast was created with the same resolution as m. [3, 4, 5, 6, 7, 8]. The realisation of offshore wind power plants (usually characterised by higher power) has not yet been the previous data and was calculated using spatial analysis studied deeply in energy planning tools, and network managers functions (Euclidean distance tool). are not yet aware of the possible contributions of offshore wind
ICRERA 2015 4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015
Figures 1a and 1b represent the data for the capacity factor second scenario (scenario B), the buffer zone was extended to Cf (expressed in MWh/MW) for hub heights of 75 m and 100 three miles from the coast of Sicily, according to local m above sea level, respectively. legislation. Due to the high rate of use for tourism purposes in large parts of the Sicilian coast, the second scenario was considered more reliable than the first with respect to evaluation of the actual exploitable technical potential in this region. Regional legislation also expresses the need for specific studies in sites containing Posidonia oceanica (sensitive areas) because of the high risk of impact on the trophic chain and the ecosystem. Posidonia oceanica, which is endemic in the Mediterranean sea, is important because it stores large amounts of energy that are transferred to various levels of the food chain, thus contributing to the oxygenation of water (up to 20 litres per day per m2 of grassland). Because most of these variables are spatially referenced, they generally can be represented as spatial layers in our GIS framework. The layers used in this work include the following: • Bathymetry: The areas included in the 0 and -50 m isobaths were extracted from the bathymetric map; • Distribution of underwater meadows of Posidonia oceanica: A vector thematic map was created of the distribution of underwater meadows of Posidonia oceanica. Data were acquired by remote sensing in the framework of the SINPOS project; • Marine Protected Areas established: Additional exclusion zones for offshore wind farm construction that lie in areas within the marine reserves were stored in a vector file; • Wind farm installation prohibited areas: Two vector files were generated using a raster map of distance that Figure 1. Capacity factor Cf (expressed in MWh/MW) for hub heights of 75 m and 100 m above sea level. considers the 0-2 nautical mile and 0-3 nautical mile ranges in which wind farm installation is prohibited. B. Constraints analysis The following themes were also considered: navigation In this phase, the objective was to identify the optimal areas routes, fishing and anchoring interdictions, migration routes, for exploitation of offshore wind resources in Sicily given the underwater archaeological sites, seabed geology, shipwrecks, natural (bathymetry and seabed geology) and regulatory offshore mining platforms, pipelines, and conduits. constraints. Over 1000 km of the Sicily coast is characterised by rather variable geomorphology. A first analysis of the III. EVALUATION OF SUITABLE EXPLOITATION AREAS bathymetric charts highlighted and strengthened this The evaluation of the areas for potential exploitation was consideration. For instance, the Tyrrhenian northern coast created up to the -50 m isobaths, and the exploitable areas for descends several hundred meters below sea level a few scenarios A and B. The available surface included between the kilometers from the coast, whereas the southern coast from coastline and the -50 m depth range is 4028.8 km2. This value Mazara del Vallo to the Gulf of Gela gradually descends to includes 1229.2 km2 in scenario A and 640.6 km2 in scenario. reach great depths only at a distance several kilometers from In addition, the percentage distributions of the different the coast. isobathymetric surface areas were evaluated with respect to the Regulatory limits are primarily applied from the viewpoint available surface in each scenario. of environmental protection because the Decree of 28/04/05 of According to an analysis of the cumulative distributions, it the Land and Environment Department of Sicily Region can be observed that waters with depths less than 10 m are prohibits the construction of wind farms in buffer zones located practically absent in the A and B scenarios. For both scenarios, three nautical miles from the coast in the areas facing marine approximately 90% of the available area is located in the range parks and reserves, beaches, and seaside resorts, with a reduced of -25 -50 m. This circumstance has obvious impacts on the constraint of two miles for the remaining areas [10]. Due to the installation costs. The distribution of the isobathymetric difficulty in obtaining reliable data on coastal area use, the surfaces as function of the distance from the shoreline was also spatial analysis developed on a GIS platform was not able to assessed in each scenario. For estimation of the areas available apply a different buffer. Instead of assuming two scenarios, we for a producible energy class, Table 1 lists the areas with equal proceeded as follows: in the first scenario (scenario A), the capacity factors for the two scenarios A and B according to two buffer zone was set at two miles from the coast, and in the
ICRERA 2015 4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015
different hub heights (75 m and 100 m). When the constraints the turbine CWTG [k€/WTG] (including transport and are considered, the areas with producible energy values greater installation) was evaluated using the following formula [14]: than 3500 MWh/MW and values less than 2000 MWh/MW (near the coast) disappear. (1)
2 The cost for electrical connection is divided into the TABLE I. AREAS WITH EQUAL CAPACITY FACTOR [KM ] following components: internal wiring system, submarine conduit connecting the plant with the nearest point on the coast (where possible), transformer substation. In addition to the mileage factor, the cost of the electric cable depends on the type of electrical connection. In this work, it is assumed that the transmission of electricity takes place using alternating current at a nominal voltage of 20 kV
(the optimal solution for plants of less than 200 MW and After this first this phase, the goal was to investigate the located less than 20 km from the coast) [15]. economic feasibility of offshore wind technology in Sicily, regardless of the constraints of legislation and to analyse only Two different costs are adopted: 120 €/m for the electrical the spatial distribution of the aggregate cost functions related to transmission system within the wind farm [15]; the cost is depth, type of turbine, energy productivity, and conduit length accordingly variable as a function of the total number of (which depends on the distance between the plant and the turbines whose layout has been hypothesised as parallel and nearest point of connection to the main electric network). The straight clusters of up to 10 wind turbines arranged at a implementation of the cost functions in a GIS environment, minimum distance between units equal to 3 times the diameter especially in the subsequent economic analysis, allowed us to of the rotor (as indicated by the standard [10]), which is 270 m summarise the relationships between the various cost items and for the 2 MW turbine and 378 m for the 5 MW turbine. 300 their spatial variability using the definition of an appropriate €/m for the electrical transmission cable to shore [16]. mathematic model that emphasised their geographical The cost of the transformer [k€/WTG] (20 kV/150 kV) was distribution. Moreover, in order to better understand the assumed equal to 8500 €/MW [15]. The relative cost function relative weights of spatial and economic variables, three for the electrical connection CEL (cost of the electrical different values for the plant total power PWF (wind farm total connection [k€/WTG]) is therefore: power [MW]) of 30 MW, 60 MW and 120 MW and two sizes of the individual turbines PWTG (wind turbine power [MW]), (2) i.e., 2 MW and 5 MW, have been considered to build up six possible plants configurations. The selected machines are Vestas V90 2 MW turbines for the short-term scenarios and Where: l is power cable length within the WF [m]; d is RePower 5M 5 MW turbines for the medium- to long-term distance from the coast [m] and N is total number of wind scenarios, taking into account a probable future evolution of turbines on the wind farm the size of the turbines for offshore wind farms in operation [3, The cost of the foundation structure and support for the 8]. The use of machines with a greater power per unit, which turbine includes the costs related to material, construction and also exhibit larger rotor diameters, requires installation at installation. For more recent systems, the monopile type increasing heights, and for this reason, the assessments were foundation clearly predominates for depths up to 25 meters, conducted using data from specific production values of the and the tripod or jackets types are preferred for depths up to 50 resource at 75 meters and 100 m that were extracted from the meters [2, 3, 4, 6, 7]. The cost functions under this heading Italian Wind Atlas. The plant's useful life is assumed equal to therefore depend on the type of foundation and the installation 25 years. depth. The types of foundation considered in this study are the A. Cost's of project's implementation monopile (0 - 25 m) and jacket (25 - 50 m) types. From The cost of an offshore wind farm depends on many analysis of data in the literature [12, 13, 14], the following cost factors, including the number of turbines, the distance of the function CF (cost of foundations) [k€/WTG] was implemented site from shore, the depth of installation, the type of for 2 MW and 5 MW wind turbines, including the cost of foundation, and the nature of the seabed geomorphology. Each transportation and installation (valid for 0≤W≤60 m where W is factor was analysed and several cost functions were defined water depth [m]): The cost of an offshore wind farm depends on many (3) factors, including the number of turbines, the distance of the site from shore, the depth of installation, the type of (4) foundation, and the nature of the seabed geomorphology. Each factor was analysed and several cost functions were defined. The cost of initial investment I0 [k€/WTG] was calculated as the sum of the cost of the turbine (C ), foundations (C ), The costs of the turbines have increased from 2005 to 2008 WTG F electrical connections (CEL) and project development (CPROG) due to the rising cost of copper and steel [11]. For this type of (these costs were assumed equal to 4% of I [15]). plant, the cost is close to 900-1500 €/kW [12, 13]. The cost of 0
ICRERA 2015 4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015
(5) incentive rate for 25 years [18]. The maximum combined power to be eligible for the incentive is 650 MW (from which the 30 MW plant near Taranto offshore must be excluded) [18]. (6) This tool is heavily inspired by the Contract for Difference (CFD - Contract For Difference) in use in the UK. A value of According to literature, in order to define the costs of a total remuneration (strike price) is guaranteed to the energy wind power plant, the specific cost of installation I0_SP [€/kW] producers (not necessarily renewable). If the price of electricity is utilised. It is defined as the ratio between I0 and PWTG. sold on the market is lower than the strike price, the producer is paid the difference between the strike price and the market price, whereas in cases in which the market price is higher than (7) the strike price, the energy producer must pay the difference to the energy buyer, thus ensuring that the total remuneration is The result of these calculations were values consistent with fixed in any case and always at the strike price. Therefore, a those reported in [3, 17], i.e., between 1500 €/kW and 3500 feed-in premium that varies hourly or a contract for €/kW. However, it must be observed that the costs are not fixed differences, according to the British experience. Compared and can vary to a great extent depending on the depth of with the British model, however, a substantial difference exists: installation (because the cost of the foundation accounts for a if the price of energy is higher than the reference value, the higher percentage of the total cost); costs of 1500 €/kW are energy producer will not be required to repay, contrary to the more prevalent in shallow water (between -10 m and -15 m) in situation in the UK when the energy exceeds the strike price. In location close to the coast with 5 MW turbines. However, this this situation, the Premium for Difference (PFD) appears [19]. result emphasises that the constraints rule out a possible This type of incentive is a "premium for difference" type exploitation of these sites and therefore the associated costs as and is determined by the following formula: well. Note that I0_SP decreases with increases in the number of turbines. Similar results were reported by [5]. For additional [€/MWh] (10) details on the relationships among the I0, depth, distance from the coast and the size of the system, see Kaiser and Snyder Where: Inc is incentive [€/MWh]; Tb is basic incentive [17]. Table 2 presents the costs of the detected maximum and tariff [€/MWh]; Pr is additional premium to Tb [€/MWh]. minimum specific costs of installation (I0_SP) for the analysed According to Italian legislation, the tariff discount, that is scenarios (described by the acronym “PWF_PWTG” for each related to a free choice of the applicant, ranges continuously wind plant configuration). between the minimum 2% value and a maximum 30% value [18]. For offshore wind power, the basic rate is 165 €/MWh TABLE II. VALUES OF MAX-MIN I0_SP (€/KW) VARIATIONS OF THE (Tb), and the price (related to the execution of electricity POWER OF THE TURBINES AND THE WIND FARM connection works) is 40 €/MWh (Pr) [18]. If the minimum discount value (2%) is applied on Tb, then the maximum bonus is 201.70 €/MWh, whereas if the maximum discount value (30%) is applied, then the maximum bonus is 155.50 €/MWh. In order to describe the two extreme situations, these economic values were used as a reference for the economic analysis scenarios. For the purposes of this study, we adopted the methodology adopted by the International Energy Agency (IEA) for the calculation of energy production [20]. The unit An analysis of the cost of installation was carried out for cost of produced energy or levelised production cost - LPC (i = scenarios A and B. The use of large-size wind turbines (5 MW) 5%, O = 2% I0 [13, 15]) expressed in c€/kWh. yields a better result in terms of the specific cost of installation, which is always less than 2500 €/kW with minimum values TABLE III. VALUES MAX-MIN LPC (C€/KWH) approximately 1500 €/kW. If 2 MW turbines are used, only half of the exploitable areas fall under the 2500 €/kW threshold, and the maximum value is 3500 €/kW. Maps showing the spatial distribution of I0_SP represented for installations of 60 MW plants with 2 MW and 5 MW turbines have been elaborated. It is clear that I0_SP increases with the distance from the coast.
IV. INCENTIVE SYSTEM - REVENUES To highlight the cost trends associated with the turbine The Italian incentive system for renewable energy sources sizes, Table 3 shows the maximum and minimum values of has undergone significant changes due to the Ministerial LPC for the various scenarios. This parameter is independent Decree of 6 July 2012. From 1 January 2013, offshore wind of the incentive system and is strongly dependent on the power plants with power exceeding 5 MW will participate in a investment costs and the producible energy. For 2 MW "reverse auction" mechanism that has been granted an
ICRERA 2015 4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015 turbines, the values of LPC lie in the range of 6-17 c€/kWh and that (excluding the above-mentioned scenario) the NPV (net are reduced significantly for 5 MW turbines. present value [k€/WTG]) is always positive or at most zero. Negative values are found in the central and northern regions The LPC analysis shows that it is convenient to install where the available areas are located at depths between 40 m turbines of larger size regardless of the overall size of the entire and 50 m with a capacity factor of 2000-2200 MWh/MW at 75 plant system. Figures 2a and 2b represent the LPC for 60 MW and 100 meters above sea level, respectively. The maximum plants with 2 MW and 5 MW turbines, respectively. As noted, values of IP can be reached by direct reduction in the 2% rate the LPC increases with the distance from the coast and yields for 5 MW turbines, whereas for 2 MW turbines, the IP shows the lowest values in the western region of the island, where the values greater than 1 for 25-30% of the total available area and capacity factor is higher. The distribution of LPC is different only in scenarios A2 and B2. Obviously, with a reduced rate of from that of I0, for which the minimum values are found in the 30%, the available areas with favourable economic southwest). The results obtained confirm those provided by performance are considerably reduced. The maximum values other studies [21] in which values between 4 c€/kWh and 14 found in the B scenario for 5 MW turbines, however, are c€/kWh were reported for the coastal areas of China. 2 comparable with the maximum values recorded in the A2 and B2 scenarios for all system configurations with 2 MW turbines. The increase in plant size has a positive effect on this index because the IP values increase with plant size. The IP reaches its highest values closest to the coast and these values decrease with distance from the coast.
TABLE IV. MAX-MIN VALUES OF IP (SCENARIOS A2 – B2)
TABLE V. MAX-MIN VALUES OF IP (SCENARIOS A30 – B30)
The only negative values, as mentioned previously, are Figure 2. LPC for PWF =60 MW in Scenario A (a: PWTG =2 MW; b: PWTG =5 found for scenario A30 in the northern region of Sicily. MW). Moreover, the lowest IP values are recorded for each scenario in these areas. In any case, the energy cost of offshore installations along the coast of Sicily appears higher than those in the Northern V. RESULTS AND DISCUSSION Europe offshore areas, between 4.4 c€/kWh and 4.8 c€/kWh [22], primarily due to the costs of the foundations, which in The analysis of the case study carried out in this work was turn are dependent on the different characteristics of water intended to verify the potential for offshore wind farms in depths and wind resources. Sicily. The first observations specifically address the morphology of the seabed in Sicily. Because the foundation A cost-benefit analysis was carried out with the aim of techniques are currently limited at depths between 0 m and - 50 investigating the sites that are more cost-effective, with an m it is possible to classify the eastern side (from Messina to extension of the survey to the entire spatial domain of the Catania) as an unsuitable coastal area because the seabed is set offshore areas of Sicily. For this purpose IP (profitability at a depth near 50 m even near the coast. These areas are also index) and SP (simple payback period) were used. These ratios disadvantaged from the point of view of the resource. The are strongly dependent on the incentive system and also on the areas with the highest potential are instead concentrated in the decrease offered at auction for allocation of the tariff. south-western side of the island (the provinces of Trapani, Therefore, scenarios A and B are subdivided into sub-scenarios Agrigento and Caltanissetta). (A2 - B2 with a 2% tariff discount and A30 - B30 with a 30% tariff discount). These four scenarios describe the impact that After the preliminary evaluation of the areas of potential the variable “tariff discount” could play on the final results. As use, a technical and economic analysis was conducted on the shown in Tables IV and V, the value of IP is always positive entire coastal territory up to isobath -50 m. To accomplish this task, it was necessary to make assumptions with respect to the except for scenario A30 with 2 MW turbines. This result means
ICRERA 2015 4th International Conference on Renewable Energy Research and Applications Palermo, Italy, 22-25 Nov 2015 configuration of plants for in short-, medium- and long-term than or equal to 100 m. These results could improve due to scenarios, which differ in the size of the installed turbines (2 economies of scale [8] and the effects of learning by doing. For MW and 5 MW). Obviously, we first reviewed the costs the learning effect expected, in fact, the cost of the turbines reported in the literature for the various foundation may fall by up to 700 €/kW [13], and the values of I0_SP could technologies and connection works (by dividing the internal reach up to 1500-1800 €/kW by 2020 [13]. connection to the park from the outside with the transmission grid to the ground), and subsequently evaluated the achievable REFERENCES revenues according to recent incentive mechanisms. [1] EWEA, 2012.Wind in power European statistics, www.ewea.org; The first parameter evaluated was the specific cost of [2] EWEA, 2012. European offshore statistics.www.ewea.org; installation I . The use of 5 MW turbines (compared with 2 [3] Madariaga A., Martínez de Alegría I., Martín J.L., Eguía P., Ceballos 0_SP S., 2012. Current facts about offshore wind farms. Renewable and MW turbines) produces a significant decrease in this Sustainable Energy Reviews 16, 3105– 3116; parameter: greater than 2500 €/kW with the lowest values near [4] Bilgili M., Yasar A., Simsek E., 2011. Offshore wind power 1500 €/kW. The range for the 2 MW turbines is extended to development in Europe and its comparison with onshore counterpart. between 1750 €/kW and 3500 €/kW. Renewable and Sustainable Energy Reviews 15, 905–915; [5] Snyder B., Kaiser M.J., 2009. Ecological and economic cost-benefit By the means of an LCP mapping, the following can be analysis of offshore wind energy. B. Snyder, M.J. Kaiser. Renewable noted: using 5 MW turbines, approximately 70% of the Energy 34, 1567–1578; available area for the two scenarios (A and B) is located below [6] Y NREL, September 2010. Large-Scale Offshore Wind Power in the the threshold of 7-8 c€/kWh; with the calculation assumptions United States - Assessment of opportunities and barriers; used in this work, the increase in the size of the system [7] Breton S.P., Moe G., 2009. Status, plans and technologies for offshore (regardless of the turbine used) produces a slight decrease of wind turbines in Europe and North America. Renewable Energy 34, I0. This increase represents the costs of the electrical 646–654; connection, which are inversely proportional to the power of [8] Snyder B., Kaiser M.J, 2009. A comparison of offshore wind power development in Europe and the US: Patterns and drivers of the wind farm. In any case LPC, along the coast of Sicily, development. Applied Energy 86, 1845–1856; appears higher than that for offshore locations in Northern [9] Interactive Italian Wind Atlas - http://atlanteeolico.rse- Europe, where values are between 4.4 c€/kWh and 4.8 c€/kW