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DNV GL © 2014 SAFER, SMARTER, GREENER DNV GL © 2013
Wind Energy In Thailand: Challenges And Opportunities
1
Irish Thai Chamber of Commerce
Dec 2015
Toby Barber
DNV GL © 2014
Introduction
Toby Barber
Country Manager for
DNV GL Energy Thailand
…and manage a team in India
With Garrad Hassan / DNV GL for 8 years in Melbourne, Australia
December 2015 Private and confidential
2
4 months ago..
DNV GL © 2014
Agenda
A few minutes on DNV GL
Wind farm construction video
Technology
Global wind industry
Thai wind industry
– What has been built so far..
– Under construction and planned..
– Policy overview
– The wind resource
Wind farm development process
Energy Storage… a separate topic
3
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DNV GL – industry consolidation
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Organized to maximise customer value
OIL & GAS
MARITIME
ENERGY
BUSINESS
ASSURANCE
SOFTWARE
RESEARCH & INNOVATION
MARINE CYBERNETICS
DNV GL © 2014 6
No 1 in high power and high voltage testing with 10 laboratories incl. our leading lab in Arnhem
Largest
independent technical advisor on renewable energy and 2,500 energy experts
>25
standards and guidelines published as a leading certification body
90 years experience in the power industry, including 30 years in energy efficiency and wind energy
An energy technology powerhouse
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Manufacturers Portfolio Developers Portfolio Operators Portfolio
Software portfolio
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14 December 2015
8
WindHelm / SunHelm (Operators’ Portfolio)
DNV GL © 2014
Videos
Musselroe – Tasmania, Australia (4 mins)
C:\01. DATA\05. Presentations\Videos\Musselroe Wind Farm - Media Release
January-1.mp4
Pililla – Philippines (2.5 mins)
C:\01. DATA\05. Presentations\Videos\Alternergy Pililla Rizal Wind Farm Bringing
Clean Energy to Manila.mp4
9
DNV GL © 2014
The Technology: Growth and interesting developments
Source: IPCC, 2011: Special report on renewable energy sources and climate change mitigation.
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Which is heavier? The wind turbine… or the wind?
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7 MW, 160 m rotor diameter wind turbine @ 15 m/s mean wind speed Mass of turbine = mass of air flowing through rotor every 5 seconds!
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Blade design – fundamental to wind turbine design
A marriage of:
Aerodynamic design
Structural design
Like all good marriages, requires the art of compromise:
Aerodynamics = thin, flat sections (dominates near tip)
Structures = thick, round sections (dominates near root)
DNV GL © 2014
High fidelity simulation tools in blade design
Computational Fluid Dynamics (CFD) and 3D FEA as a final check on blade design or for
optimisation of specific features
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Blade testing at LM Wind
DNV GL © 2014 15
Individual pitch control (IPC) - capabilities
Load Pitch
Rotational
transformation
(2P)
Rotational
transformation
(2P)
D-axis control
Q-axis control
measurements
(3 blades)
demands
(3 blades)
Rotational
transformation
(1P)
Rotational
transformation
(1P)
D-axis control
Q-axis controlLoad Pitch
measurements
(3 blades)
demands
(3 blades)
Rotational
transformation
(1P)
Rotational
transformation
(1P)
D-axis control
Q-axis control
Source: Bosch
DNV GL © 2014
IPC summary results
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1P IPC reduction [%]
Blade root My 21
Rotating Hub My 27
Rotating Hub Mz 27
Stationary Hub My 3
Stationary Hub Mz 5
Tower torsion Mz 4
Results for a 5MW wind turbine with 126m rotor diameter
Component 1P IPC load reduction [%]
1P & 2P load reduction [%]
Blade Root My 21 23
Rotating Hub My 27 30
Rotating Hub Mz 27 30
Stationary Hub My 3 10
Stationary Hub Mz 5 11
Tower Torsion Mz 4 10
DNV GL © 2014 17
Turbine-mounted LiDAR - Hot topic nowadays!
• Significant fatigue and extreme load reduction • Active prediction & control on spatial turbulence • On-line performance assessment • Yaw error calibration
Source: www.unitte.dk
DNV GL © 2014
Soft tower design for taller steel towers
Taller towers increase hub height and energy capture!
[1P = rotational frequency of the rotor, 3P = blade passing frequency]
Conventional -
stiff
Advanced control -
soft
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Global Wind Industry
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DNV GL © 2014
Global Wind Industry
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DNV GL © 2014
Renewable Energy Support Mechanisms What are countries around the world doing?
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DNV GL © 2014 22
2011 – Present: In response to
constrained supply/rising pricing, turbine
manufacturers invested in manufacturing
capacity. Slowdown in some key markets
resulted in a broadly oversupplied
international market placing downward
pressure on pricing. Furthermore, low
wholesale electricity pricing continues to
constrain the ability for manufacturers
raise prices .
2006 -2010: rapid growth in installations
New manufacturing capacity insufficient to
meet demand > undersupply which raised
prices. Increase in commodity prices,
including steel which is a key component of
turbine towers and other sub-components,
contributing to higher manufacturing costs.
Total of basic turbine costs including all turbine components, delivery to site, basic SCADA, commissioning and basic warranty. Excludes TSA options, BoP costs and extended warranty.
(US Data))
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Thailand Perspective 1: Vibrant economic centre
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Perspective 2: Significant growth ahead
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Thai electricity demand expected to triple within 20 years
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Thai Wind Industry: Current Status
25
First Korat Wind Farm
K.R. Two Wind Farm
Wind Energy Holdings
2 x 45 Siemens turbines
207 MW
100 m towers
103 m rotors
Nakhon Ratchasima
First large operational wind farm
Source: Modern Energy
DNV GL © 2014
Thai Wind Industry: Current Status
26
Theppana Wind Farm
EGCO
3 GoldWind turbines
7.5 MW
90 m towers
108 m rotors
Chaiyaphum
Only other ‘modern’ wind farm
DNV GL © 2014
Thai Wind Industry: Current Status
27
8 x older ‘experimental’ projects
Total 7.1 MW
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Thai Wind Industry: Under-construction and proposed projects
Under construction / pre-construction:
4 projects in early stages of construction / pre-construction
Total capacity around 300 MW
Developers: WEH, Gunkul, Energy Absolute and Khao Kor Wind Power
Turbine suppliers active and with deals: GE, Gamesa, Vestas, Goldwind, United
Power
Proposed:
In the order of another 20 projects being actively developed
Approx 1,800 MW
Additional sites at early development stages
Geographic spread but activity in northeast, e.g. Nakhon Ratchasima,
Chaiyaphum, and south, e.g. Songkla and Nakhon Si Thamarat.
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DNV GL © 2014
Power Development Plan (PDP):
‘The Bible’ for the energy sector – May 2015
- 20% renewables share to 2036, from current 8%
- Gas generation down from 65% to 30-40%
- Transmission line upgrades across Thailand to support
PDP
What does the market look like
Well developed
finance sector
Competitive labour rates
Large population
Strong engineering capabilities
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Strategically placed for emerging markets in
Laos, Vietnam, Cambodia and Myanmar
Projected 4% annual GDP growth
DNV GL © 2014
Policy settings
Original Target was 1,200 MW and was incentivised with an adder system of
3.5 THB
Target was then revised to 1,800 MW by 2022
PPAs were issued totaling this amount, however many PPAs were applied for
speculatively, and EGAT did not have good visibility of which PPAs were likely
to become realised projects.
Consequently in autumn 2014 all pending PPA applications were cancelled,
and no new applications were accepted
New PDP has target of 3000 MW by 2036
Revised >20 year FiT of THB 6.06/kWh ($0.17/kWh)
Various tax and import duty exemptions
New PPA conditions from ERC
30
DNV GL © 2014
ERC restrictions
Recent proposed restrictions. May need to be revised to realise the target.
– Safety area between individual turbine is 1.5 Times of hub height + blade length
(you needed to secure the land in this size)
– Safety area between wind farm and village is 3 Times of hub height + blade length
( no any house in between)
– Increasing sound from environment sound not more than 10 dBA
– Safety area between individual turbine to PEA grid line is 3 Times of hub height +
blade length
– Safety area between individual turbine to public road is 3 Times of hub height +
blade length
– Installed capacity not more than PPA capacity
– If produce more than Capacity factor 18% annual average, the surplus kWh will be
paid in wholesales price, not FIT price.
– This rules will be forced on all new PPA after announcement. (no impact to existing
PPA)
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DNV GL © 2014
RE sector projected growth
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Hydro Solar Wind Biomass
DNV GL © 2014
But significant challenges..
Future of wind industry in Thailand?
– New restrictive planning limitations on wind projects
– Policy focus on other technologies
– Transmission line capacity, PPA process, lack of clarity from EGAT
– Transportation of large towers / blades
– Construction risk – inexperienced local contractors
– Community acceptance
– Land access – agricultural designated, national forest land, watershed issues
– Financing
Very competitive field, for project developers and consultants!
33
DNV GL © 2014
Overview of Thailand Electricity Infrastructure – Government Institutions in the Energy Sector
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*DEDE
*ERC
*EGAT
(MOE)
(EPPO)
(Sources: http://www.energy.go.th/)
DNV GL © 2014
Overview of Thailand Electricity Infrastructure
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Figure 1: Thailand Electricity Supply Industry
(Sources: http://www.palangthai.org/docs/ThailandFiTtongsopit&greacen.pdf)
View of the Regulation
DNV GL © 2014
Overview of Thailand Electricity Infrastructure - Generation
Independent Power Producer (IPP):
- Power generation must be in excess of 90 MW.
Small Power Producer (SPP):
- Power generation not less than 10 MW and up to 90 MW.
- Sell their electricity either to EGAT , industrial customers, or both.
Very Small Power Producer (VSPP):
- Power generation up to 10 MW.
- Sell their electricity either to MEA or PEA.
Imported power:
- All importation of electricity from neighbouring countries such as Laos and Malaysia
have to be traded with EGAT, the sole right electricity supplier in the country.
36
DNV GL © 2014
The Wind Resource
Low average wind speed
Focus areas in northeast and south
Strong seasonal and diurnal variation
37
Winter
monsoon
Summer
monsoon
DNV GL © 2014
Seasonal varitaion
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70%
80%
90%
100%
110%
120%
130%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Monthly Wind Speed Variation
Long-Term Mean 2013 2014 Long-Term Annual Mean
DNV GL © 2014
The Development Process: How long does it take
14 December, 2015
39
SIT
E D
ISC
OV
ER
Y
DEVELOPMENT PHASE
(several years)
FIN
AN
CIA
L C
LO
SE
PLANNING
CONSTRUCTION PHASE
(12 to 18 months)
TA
KE
OV
ER
WEATHER
OPERATIONAL PHASE
(20 to 25 years)
DIS
CO
NN
EC
TIO
N
RETURN
CO
NC
LU
SIO
N
DECOMISSIONING PHASE
(3 to 4 months)
WEATHER
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Financing timeframe
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DNV GL © 2014
How is a project developed
14 December, 2015
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FIND A SUITABLE
SITE
SECURE THE LAND
ESTIMATE THE RESOURCE
ENGAGE THE COMMUNITY
SELECT TECHNOLOGY
FINANCIAL MODEL
ASSESS THE IMPACTS
PRELIMINARY DESIGN
APPLY FOR PLANNING
CONSENT ! (CONDITIONS)
DNV GL © 2014
Energy assessment process
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Measure Correlate Predict
Model wind flow
Predict turbine
output Net energy
Predict wake and
other losses
DNV GL © 2014
Wind resource risk – why does it matter?
e.g. 10% error here
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Reduced IRR / profit
Loan default?
Resale value of project down 20%
Loss of financier / investor / management confidence = worse terms for next
project
= 20% less revenue
= 20% lower energy
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Robust measurements
Comply with IEC 61400-12-1 standard
MEASNET calibrations
Active data management
Attention to detail!
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Due Diligence for Lenders
Independent assessment
45
50
P90 = 43.0
GWh/yr
DNV GL © 2014
Financing
Mostly local Thai banks providing finance
Good liquidity in market and interest in financing renewables projects
Similar rigour to international banks, but relatively inexperienced with wind
EPC contracts are preferred due to inexperience and higher risk with multi-
contract model
High uncertainties in assessments.. higher debt service coverage ratios may be
required.
Banks cautious but keen to do business.. success of initial projects is important
46
DNV GL © 2014
SAFER, SMARTER, GREENER
www.dnvgl.com
47
Toby Barber
Thank you!
Time for a…
