Showing posts with label small wind. Show all posts
Showing posts with label small wind. Show all posts

Tuesday, August 4, 2009

Sustainable Energy Solutions for Facility Managers with Behind-the-Meter Wind Projects

Commercial applications of single or a few wind turbines with rated power capacity in the range of 50KW to 2,500KW are the focus of this blog. Such turbines can be cost effective for a wide range of applications: Factories; warehouses; office parks; housing communities; schools/colleges; hospitals; municipal facilities like jails; water treatment facilities; and others. These projects are referred to as "Behind the Meter" projects.

A white paper is available that briefly describes: How such projects can fit into your energy mix; how much energy can be produced; how is variability of wind energy managed; what are the incentives; what is the cost of wind energy; what is the ideal location of a wind project; and what to avoid.

It concludes that such projects can deliver electricity at stable costs (because raw material is free) and under the right wind conditions such projects may deliver electricity at a cost that is below retail.

Article written by Pramod Jain

Visit Wind Energy Consulting and Contracting Inc.

Friday, July 10, 2009

Small Wind: Buyer Beware!

Small wind solutions are increasingly becoming financially viable thanks to local and federal incentives, and from a technical perspective the quality factor is improving. The historically negative aspect about installing a small wind solution was that it would take an extraordinarily long period of time to pay back associative costs; if ever during the expected life span of the wind turbine generator.

From my vantage point ‘quality’ and ‘pricing’ in small wind are among the largest concerns. However, of greater concern is that there seems to be a growing abundance of misleading, if not deceptive advertising and false or unrealistic claims by many manufacturers. These take the form of claiming higher energy output, faster payback periods (using higher than what can normally be expected wind speeds in their energy calculations), and other types of unethical claims and behaviors.

But help is on the way, manufacturers of small wind turbines that form the legitimate face of the small wind industry are in the process of creating accountability within their segment of the industry. In addition to industry events, we are seeing the advent of the Small Wind Certification Council. We may soon see a certification process that will eliminate the industry’s seedier side. New small wind turbine generators are rapidly emerging from individual’s garages to manufacturers in both newer vertical and the more traditional horizontal models.

Vertical wind technology remains in its infancy and energy power output claims by manufacturers are almost always overstated…sometimes grossly overstated (the same applies for many horizontal wind turbine generators on the market). In my view, only one vertical wind turbine generator (VWTG) manufacturer is really trying to get it right (I applaud Mariah Power) by subjecting its product to the testing rigors of the National Renewable Energy Laboratory (NREL). After NREL suspended testing for mechanical failure, Mariah Power continues to try and ‘get it right’ through modifications and through an independent testing regime. As of today WECC does not recommend any vertical wind turbine generator to our clients.

Note: Relative to the topic of VWTGs, Mick Sagrillo offers a strongly worded and germane Open Letter to Vertical Wind Access Turbine Manufacturers – worth the read!

We must recognize that in the current environment in most cases the manufacturer claims of power production, payback, power curve, size of generator vs. actual power output, and conditions of internal testing are solely the manufacturer’s, and the consumer must be able to trust that information that is presented to them is indeed reliable. In my view, to determine legitimacy any small turbine as a viable small wind solution, the manufacturer must subject their machine to the rigors of independent testing until such time that the Small Wind Certification Council has codified its processes and independent testing/reporting becomes an industry standard. Using the power curve and energy output data from an entity with no connection to the manufacturer adds strength and proves the manufacturer’s assertions. Up until now in most cases, we only have the manufacturer’s data in order to complete a cost/benefit analysis before purchasing a small wind turbine generator.

A sad fact is that in the past year many, many inventors and manufacturers are emerging in the ‘small wind’ space and the ‘checks and balances’ are not yet in place to protect the burgeoning small wind industry from itself. Until the Small Wind Certification Council gains some ‘legs and teeth’ and the legitimate small wind manufacturers gain momentum in policing the industry, we can expect continued consumer confusion and in some cases, unchecked deceptive practices. The long and short of this is Small Wind: Buyer Beware!

Article written by Wayne Hildreth
Email Wayne at hildreth@frombeginningtowind.com
Visit Wind Energy Consulting and Contracting Inc.

Thursday, July 2, 2009

Small wind - Is it right for you?

The search for affordable and sustainable energy sources in today’s struggling economy may have you looking toward the small wind market. Small wind projects –those 100kW and below - can prove beneficial for small businesses, homes, manufacturing plants, schools and municipalities given the right conditions. However, small wind is not feasible for every situation. Before thinking any further about a small wind project, consider the following.

Small wind is a practical solution for you if:

You have sufficient wind

No wind, no go. A wind speed of at least 6 m/s, or 12mph, is the current standard for feasible and economically viable wind projects of this size.

You have enough space to support the project

A general recommendation is at least one acre of space in a rural setting. It may work in urban settings however, if there is an unobstructed wind flow. Wind turbines work most efficiently when the wind flow is streamlined.

Tall structures are allowed in your area

If there are strict zoning ordinances in your area that would prevent a feasible turbine tower height, small wind may not be right for you. We recommend a fall zone of at least one and one-half the length of the turbine.

You have a realistic picture of your energy demand

Small wind projects can reduce your electricity bill by 50-90%, given an adequate wind resource and hub height. The key is matching your energy demand to turbine power output.

You are comfortable with a long-term investment

Although incentives and grants make wind energy projects more competitive and economically feasible, small wind projects will generally have a longer payback period compared with other investments. If you are looking for a quick return on investment, small wind probably isn’t for you.

Article written by Sarah Smith

Email Sarah at smith@frombeginningtowind.com

Visit Wind Energy Consulting and Contracting Inc.

Monday, June 8, 2009

Common mistakes to avoid in your small wind project

A large fraction of small wind projects turn out to be subpar financial investments because of simple mistakes made in the initial phases of project development. This entry focuses on those common mistakes and provides simple steps that can be taken to ensure a more viable project from the performance and financial perspectives. For more details see the associated whitepaper.

Small turbines, with power ratings of less than 100KW, are being installed at a rapid pace. These wind projects are being used to power small businesses, buildings, malls, houses and a variety of other applications. Unlike the multi-million dollar large scale projects that undergo rigorous wind resource, siting, and financial assessments, small wind projects undergo significantly less analysis and preparation. The end result generally reflects the lack of preparation, as turbines produce less energy than advertised.

In order to attain on par financial performance of small wind projects the following due diligence must be performed:

  • Ensure that the energy production used in the calculation is based on your local wind conditions and based on independently tested or certified power curve.
  • Ensure that the wind speeds used in the calculations have been verified through onsite measurement or some other means.
  • A location has been chosen that will receive unobstructed wind and minimum turbulence from obstacles and local vegetation.
  • Ensure that the turbine is well built and is suitable for your environment and,
  • Check if the turbine is certified; if it is not, obtain test results

If the proper due diligence is not performed you are likely to be negatively surprised by the results.

Article written by Dr. Pramod Jain

Email Pramod at pramod@frombeginningtowind.com

Visit Wind Energy Consulting and Contracting Inc.

Friday, April 17, 2009

Cost of Energy for Small Wind Projects

In this entry I will talk about the cost of energy for small wind projects. The previous blog addressed how the cost of energy is computed and presented the cost of energy generation for utility scale turbines. The focus of this blog entry will be on turbines that are rated 10KW or less.

To recap, the cost of energy production depends on average annual energy production (AEP), total cost of installation, recurring cost for operations and maintenance, and the discount rate.

Three turbines will be compared in this analysis: Bergey 10KW with 7m rotor diameter and 30.5m hub height; SkyStream 2.4KW with 3.7m rotor diameter and 13.7m hub height; and MariahPower 1.2KW with 1.2m width and 6.1m height. The first two are horizontal axis wind turbines (HAWT) and the third is a vertical axis wind turbine (VAWT).

The following parameters will be used for comparison purposes:

  • Wind conditions: 7m/s at 50m, which is Class 3 wind regime
  • Operations and maintenance costs: 1c per kWh of energy produced
  • Annual sinking fund for repairs: 0.75% of total installed cost
  • 3% inflation in costs
  • Wind shear of 0.15; this is used to compute wind speed at hub height while assuming wind speed of 7m/s at 50m
  • Life of wind project: 20 years
  • Annual Energy Production (AEP) is computed based on power curves provided by the manufacturer

The following table contains average AEP, the installed cost and cost of energy.

Turbine

AEP

Total installed cost

Total installed cost per KW

Cost of Energy/ kWh

Bergey 10KW

18.76 MWh

$65K

$6,500

$0.365

SkyStream 2.4KW

5.3 MWh

$18- 20K

$7,500 – $8,333

$0.3596

MariahPower 1.2kW

2 MWh

$9 - 10K

$7,500 - $8,333

$0.4672

Note the cost of energy does not include incentives or tax credits.

Since VAWT do have a hub-height, for computation purposes the hub height was assumed to be the height of pole plus half the height of the turbine, which is equal to 6m for the Mariah Power VAWT. If the VAWT is installed on a roof, then the hub-height would have to be appropriately adjusted, although the impact of turbulence due to air flow along the edge of the building would reduce energy production.

Next, let us examine the impact of the investment tax credit (ITC) grant of 30% that is part of the current stimulus package. In cases where the investment per KW is large, the ITC is preferable over the production tax credit (PTC). For a more detailed description, see WECC whitepaper on the stimulus package.

Turbine

Cost of Energy/ kWh with 30% ITC grant

Bergey 10KW

$0.267

SkyStream 2.4KW

$0.2555

MariahPower 1.2kW

$0.3308


Note that as a result of the ITC grant the reduction in cost of energy is a little less than 30%.

Next, let us look at depreciation, the other major tax benefit. The stimulus package allows a bonus depreciation of 50%, in addition to the accelerated depreciation already allowed for renewable energy items, if the project is put in place before the end of 2009. When a project utilizes the 30% ITC grant, the depreciable basis of the project must be reduced by 50% of the grant amount. The following are costs per kWh when bonus depreciation is coupled with 5-year MACRS depreciation.

Turbine

Cost of Energy/ kWh with 30% ITC grant, bonus dep. & 5-yr MACRS

Bergey 10KW

$0.1758

SkyStream 2.4KW

$0.1657

MariahPower 1.2kW

$0.2133


Note, bonus depreciation in addition to accelerated depreciation leads to a further reduction of about 33% of the cost of energy than with the 30% ITC grant.

On the benefits front one other item requires mention: Renewable Energy Credits (RECs). RECs are a tradable certificate of proof that 1 kWh of electricity was produced using a renewable source. They are typically sold to businesses seeking to reduce their carbon footprint or to government agencies trying to meet renewable portfolio standards set by state or national mandate. Their pricing depends on market conditions related to the current supply and demand of RECs. The price of a REC is typically in the range of 0.5c to 2c.

In conclusion, if a small wind project is able to use all of the tax benefits of ITC and depreciation, then the cost of electricity is reduced by more than 50% of the original installed cost without incentives.

Article written by Dr. Pramod Jain

Email Pramod at pramod@frombeginningtowind.com

Visit Wind Energy Consulting and Contracting Inc.