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Innovate to Generate –Making Offshore Wind a Truly Global Energy Source

Carbon Trust, 18 September, 2014

September 2014

Confidential © Siemens AG 2014 All rights reserved.

Henrik Stiesdal

Siemens Wind Power Offshore Facts at a glance

Pioneered the offshore market and current market leader

Sold more than 2,250 WTGs for offshore application

Installed base: 1.700 turbines with ~5.500 MW capacity

More than 23 years of offshore experience

Proven 20+ year product lifetime with >95% real availability

Known for robust design with innovative solutions

September 2014


Henrik Stiesdal

Offshore project size developed with Siemens Wind Power from 5 MW to 630 MW in 22 years

5 MW

World‘s 1st

offshorewind power

plant1991

Vindeby40 MW

World‘s 1st

offshore wind power plant w/ MW turbines

2000

Middelgrunden166 MW

World‘s largestoffshore wind power plant in

operation2003

Nysted630 MW


operation2013

London Array504 MW


operation2012

Greater Gabbard

Pioneered offshore wind powerStabilized market during difficult days in 2004Industrialized turbine part of offshore wind power

Our performance

September 2014


Henrik Stiesdal

From an innovation point of view, Offshore wind has had a steep technology development

From 30 kW to 6 MWin 30 years

79.8 meters

30 kW450 kW

1980:11 meters

1991:35 meters

2012:154 meters

6 MW

September 2014


Henrik Stiesdal

The classical yardstick for cost is LCoE(Levelized Cost of Electricity)

September 2014


Henrik Stiesdal

The fundamental challenge – LCOE of Wind

0.01

0.10

1.00

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

LEC

(EU

R /

kWh)

Year

2040

- 5% p.a.

September 2014


Henrik Stiesdal

SCOE: Society’s Cost of Electricity

Geopolitical impact

Economy & employment

System LCOE

Social impact

Variability costs

Transmission costs

(Hidden) subsidies

LCOE

The concept of SCOE –Society’s Cost of Electricity

True cost of electricity

Macro-economiccost of electricity

„Ex-works“ electricity price

Examples

• Reduced tax on fossil fuels, waste disposal, disaster costs

• Grid reinforcements needed for integration of energy source

• Fuel + OPEX + CAPEX + CO2

• Capacity payments to gas plants for providing backup

• Job creation and associated increase in economic value

• Decline of house prices around power plants & wind farms

• Hedging against fuel price risk for imported fuels

SCOE Elements

September 2014


Henrik Stiesdal

SCOE United Kingdom 2020

SCOE: Society's costs of electricity [EUR/MWh]Projection for United Kingdom in 2020 - Average Scenario

Nuclear Coal Gas Photovoltaics Wind On Wind Off

LCOE

- thereof CO2

Cost subsidies

Transmission

Variability

System costs

Social impact

Employment effects

Geopolitical impact

SCOEE W ST SCC / CWN / 2014-09-18 / Projection for United Kingdom in 2020 - Average Scenario

79,2

0,0

59,8

0,0

0,9

140,0

0,1

-28,5

0,0

111,7

105,0

48,3

2,5

0,0

0,5

108,0

0,1

-5,9

1,7

103,9

79,8

21,8

0,5

0,0

0,0

80,4

0,1

-0,2

4,9

85,2

105,2

0,0

0,0

6,6

15,2

127,0

0,0

-44,9

0,0

82,1

40,0

0,0

0,0

2,0

14,3

56,2

5,3

0,0

0,0

61,6

100,0

0,0

0,0

2,0

13,4

115,4

0,0

-46,3

0,0

69,0

September 2014


Henrik Stiesdal

The fundamental motivation for the development offuture offshore wind turbines is reduction of LCOE

Reduction of investmentWTG investmentBOP investment

Reduction of O&M CostIncrease of energy output

September 2014


Henrik Stiesdal

Offshore LCOE is about much more than the wind turbine

September 2014


Henrik Stiesdal

Offshore cost reduction is effective in multiple areas: reaching LCoE below 10 € ct/kWh before 2020

Offshore CoE Targets, Wind farm levelin € cent/kWh

Main levers per Cost Segment

5€ cent/kWh

Based on the SWT-6.0-154 turbine; Offshore project 1.000MW

WTG ++IndustrializationLogistics improvementsInstallation & commissioning

Target Cost 2020

9.5

26%

28%

18%

27%

AEP increase

1.4

100%

Cost target 2020

10.9

26%

28%

18%

28%

Cost out

3.6

16%

45%

14%25%

Baseline 2014

14.5

24%

32%

17%

27%

C-BOPWTG AEP increaseE-BOP OPEX (disc.)

Foundation Simplified design, industrialized productionQuayside completion

GridNew cost efficient solutionsIndustrialized components

OPEXIncreased robustnessOptimization of Setup

AEP (Annual Energy Production)Turbine upgradesImproved aerodynamicsIncreased availability

September 2014


Henrik Stiesdal

The baseline –The Siemens 6 MW turbine

Blade75 m, 25 t20,000 kNm moment (root)

HubØ4.5 m, 40 t

GeneratorØ6.5 m, 100 t, 6-11 rpm5,500 kNm torque

Bedplate3.5 x 3.5 x 4 m, 25 t

Power converter2 x 3 MW, AC–DC–AC

Transformer7 MVA, 690 / 33,000 V

Tower100 m, ø4 m / ø6 m, 300 t

September 2014


Henrik Stiesdal

Key factors in the cost development of theSiemens 6 MW turbine

Traditional measures remain key factors in thereduction of the total installed cost of the turbine

Classical Cost OutThe relentless pursuit of reduction in complexity, simplification of components, and better purchasing prices

InnovationThe application of new technologies on component level

Value-chain viewThe continuous improvement of the value-chain view, considering all measures in the view of the installed cost, focusing on the impact of improvements on the installation phase

September 2014


Henrik Stiesdal




5€ cent/kWh



Target Cost 2020

9.5

26%

28%

18%

27%

AEP increase

1.4

100%

Cost target 2020

10.9

26%

28%

18%

28%

Cost out

3.6

16%

45%

14%25%

Baseline 2014

14.5

24%

32%

17%

27%






September 2014


Henrik Stiesdal

Modular offshore foundation

Innovative TP design with focus on simplicity, material cost and functionality

1

4

5

6

Leg pipes from existing mass production facilities

3 Brace pipes in standard dimensions also from mass production facilities

Welded nodal joints produced in an automated production line

Bolted connections between nodes and pipes based on 35 years of in-house knowledge

2

Corrosion protection system

7 Suction buckets

September 2014


Henrik Stiesdal

LCoE reductions in real numbers!

Base case cost for an installed foundation: € 6,000,000

40% cost reduction: € 2,400,000

Target cost for the Siemens foundation: € 3,600,000

30m 55m

The cost target has proven to be realistic

The base case is a typical UK project:

Project Size: 600 MWLocation: UK East CoastDistance to port: 100 nmWTG’s: SWT-6.0-154Water depth: 50 m

September 2014


Henrik Stiesdal




5€ cent/kWh



Target Cost 2020

9.5

26%

28%

18%

27%

AEP increase

1.4

100%

Cost target 2020

10.9

26%

28%

18%

28%

Cost out

3.6

16%

45%

14%25%

Baseline 2014

14.5

24%

32%

17%

27%






September 2014


Henrik Stiesdal

Today’s infrastructure design is not long-term viable

September 2014


Henrik Stiesdal

The radical solution to the platform problem :No platform!

Measurement and protection

Turbine switch gear and distribution

Array switch gear

Cable hang-off

Complete AC Booster Turbine

Concept: Platform with 300MVA 220/66kV transformer

Transformer Deck

September 2014


Henrik Stiesdal

Basic 220kV version with back feed on 66kV level

September 2014


Henrik Stiesdal




5€ cent/kWh



Target Cost 2020

9.5

26%

28%

18%

27%

AEP increase

1.4

100%

Cost target 2020

10.9

26%

28%

18%

28%

Cost out

3.6

16%

45%

14%25%

Baseline 2014

14.5

24%

32%

17%

27%






September 2014


Henrik Stiesdal

The key levers for O&M:Robustness!

When reducing cost for offshore O&M,robustness is the key

RedundancySystem redundancy aiming at ensuring turbine operation

MonitoringSimple and efficient systems for continuous monitoring of system state and condition

AccessSafe access under demanding sea state conditions

Service intervalsLong intervals between service visits requiring use of heavy equipment

September 2014


Henrik Stiesdal




5€ cent/kWh



Target Cost 2020

9.5

26%

28%

18%

27%

AEP increase

1.4

100%

Cost target 2020

10.9

26%

28%

18%

28%

Cost out

3.6

16%

45%

14%25%

Baseline 2014

14.5

24%

32%

17%

27%






September 2014


Henrik Stiesdal

The key lever on the increase of AEP –Upgrades!

Upgrades have been a classical way forward toimprove competitiveness of wind turbines

The leading manufacturers have 30 years of experience in turbine upgrades …

22 30 kW95 120 kW450 600 kW1 MW 1.3 MW2 MW 2.3 MW3.6 MW 4.0 MW6.0 MW ..?

In round figures AEP increases by –6% at a 10% increase of rated power4% at a 10% increase of rotor area10% at a 10% increase of both

September 2014


Henrik Stiesdal

In 2020, wind turbines will look as today – but will be different …

OnshoreMain Data

Power rating: 2-4MWRotor: 100-150 mHub heights: 100-200 m

TechnologiesBlades with structural-aerodynamic coupling for passive load reductionHigh-stiffness fibers in blades (carbon, new fiber types)Direct drive transmissionCommoditized design, standard componentsAncillary services, fault robust with short-term storage

OffshoreMain Data

Power rating: 6-10MWRotor: 150-210 mHub heights: 80-140 m

TechnologiesBasics same as onshore technologiesTailored redundancy concepts for increased robustnessTwo-year service intervalsElectrical and civil infrastructure at 40% of today‘s costSimplified installation w/o piling

September 2014


Henrik Stiesdal

Changing the game once more …

An even larger turbine could offer significant benefits on Cost of Energy

Once turbine size has crossed the threshold necessitating use of offshore heavy lift equipment, increasing the turbine size does not materially increase the installation costs

Offshore infrastructure costs do not increase proportionally with turbine size.

Offshore maintenance costs do not increase proportionally with turbine size, at lease not when applying Direct Drive technology

September 2014


Henrik Stiesdal

Applying upscaling logic to 6 MW

The key parameters of Siemens’ next offshore turbine emerge from the upscaling logic

Direct Drive technology (same as 6 MW)

Same overall concept as earlier Direct Drive turbines – three blades, upwind, active yaw system

Same generator concept as in earlier Direct Drive turbines – outer rotor topology, permanent magnet excitation, segmented stator, LV winding (750 V rated voltage), redundant converter arrangement (separate power converters for subsets of segments)

September 2014


Henrik Stiesdal

Main data for 10 MW Siemens turbine

Hard dataRated power: 10 MWRotor diameter: 210 mTower height: 140 mBlade weight: 55 tonsGenerator weight: 200 tonsAnnual energy: 50,000 MWh

Soft dataAt 10 m/s wind speed, 420 tons of air will pass through rotor every secondOne 10 MW turbine will produce in five days what the first 30 kW turbine did in 35 years

September 2014


Henrik Stiesdal

Development of average LCOE trajectory withpresent measures and applicability to the market

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016 2017 2018 2019 2020 2021

LCO

E, c

t/kW

h

Forecast 'Realistic'

September 2014


Henrik Stiesdal

The Carbon Trust OWA is an important vehicle for making this happen

Reducing O&M cost

Reducing Foundation

cost

Reducing Financing cost

NautiCraft WaveCraft Extreme OceanFjellstrand

UniversalKeystone Suction Bucket Jacket

FLIDAR Babcock Fuga Wake Campaign

Reducing Elec. System cost

66kV Cable qualification

September 2014


Henrik Stiesdal

New data on the competitive status of wind energy

Source: Danish Energy Agency (Energistyrelsen, "Elproduktionsomkostninger" )

Cost of Electricity – Danish Energy Agency Report (July 2014)

September 2014


Henrik Stiesdal

Recent data for wind production in Denmark

Wind Production relative to load

That is kind of cool!

Highest annual average33% (2013)

Highest three-month average55% (Dec.13 - Feb.14)

Highest monthly average:62% (January 2014)

Highest at individual wind turbine level89% (Siemens 2.3 MW, Frederikshavn)

Highest at wind farm level87% (Siemens 200 MW Horns Rev II project)

Single project contribution8% of DK load (Siemens 400 MW Anholt project)

Capacity factor

September 2014


Henrik Stiesdal

Share of wind in total energy consumption in Denmark

Source: Energinet.dk and Dansk Energi

41%

Feb

49%

Jan

62%

Dec

55%

Jul

23%

Jun

25%

May

25%

Apr

39%

Nov

36%

Oct

43%

Sep

29%

Aug

29%

Jul

22%

33%

Mar

37%

Feb

21%

Jan

29%

Jun

35%

May

26%

Apr

70%

60%

Mar Aug

43%

0%DecNovSep

50%

40%

30%

20%

10%

Oct

Share of wind 2014Share of wind 2013

Average 40%

Average 33%

September 2014


Henrik Stiesdal

A new world record!

Highest ever total wind productionIn August, 2014 Four Siemens SWT-2.3-82 turbines have each reached 100 million kWh

No other turbine in the world has reached this level. For the first time ever wind turbines need a 9-digit kWh meter

The four SWT 2.3-82 turbines are located at the Harboøre Tange in northwest Denmark. They were installed early 2003 and reached the 9-digit level after 11½ years of operation.

The turbine location is semi-offshore, with turbines located in shallow water on the shore side of a low strip of land facing the North Sea.

September 2014


Henrik Stiesdal

If the wind industry can manage to bring costs down to direct grid parity, the energy world may change

Comments

The “digital” thresholdsIf wind is more expensive than other energy sources, we serve only a politically driven part of the market.If we become competitive with other energy sources, we will serve the whole marketThis may completely change the energy world

September 2014


Henrik Stiesdal

Your moment of zen

SWT-6.0-154• The future offshore workhorse• Annual Energy Production 25

million kWh at an offshore site• 1000 pcs. 6 MW at an

offshore site have an AEP equal to the annual electricity consumption of Scotland

• Developed in Denmark and the UK

• To be manufactured in Hull, UK

That is kind of OK!

September 2014


Henrik Stiesdal

Can we do it?

Question:

Can the joint effort of industry and public funded research provide the basis for the required reductions in Cost of Energy?

Answer:

Why Not?

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