Energy production costs: RES vs. conventional sources Pierre - PowerPoint PPT Presentation

Energy production costs: RES vs. conventional sources Pierre Tardieu, Regulatory Affairs Advisor, EWEA

Around und 700 0 mem ember bers from om almost st 60 0 countr untrie ies • Manufacturers with a leading share of the global wind power market • Component suppliers • Research institutes • National wind and renewable associations • Developers • Electricity providers • Finance and insurance companies • Consultants • Contractors This combined strength makes EWEA the world’s largest and powerful wind energy network www.ewea.o .org rg/m /membership hip

EWEA’s leading members

Outlin tline 1. Development of the European market 2. Cost of wind vs. conventional technologies 3. Support for renewables compared to support for conventional energy

Cumulat mulativ ive e wind nd power er inst stalla allatio ions ns in the he EU (GW) 120 106 100 94.3 85 80 75.2 65 56.7 60 48 40.8 40 34.4 28.5 23.1 17.3 20 12.9 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: EWEA

Annual ual onshore shore and nd offshore fshore inst stallations allations (MW) 14000 Offshore onshore 12000 1166 10000 575 883 874 318 373 8000 93 90 6000 170 90 276 10,729 9,695 8,964 8,790 51 8,648 8,109 4000 7,086 6,454 5,743 5,749 5,186 4,377 2000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: EWEA

Wind nd power r shar are e of total otal electr ectrici icity y cons nsum umption ption in EU (7%) %) and d in member ember states 27% 17% 16% 13% 11% 7% 7% 6% 6% 6% 6% 5% 5% 4% 4% 4% 4% 4% 3% 3% 2% 2% 1% 1% 1% 0% 0% 0% 0% 5% 10% 15% 20% 25% 30% Sources: EWEA, Eurostat 2010

Installed talled power er generating nerating capa pacity city per r year ear in MW and d RES shar are e (%) 50000 45000 40000 35000 30000 25000 RES (70%) 20000 15000 10000 5000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Peat Fuel oil Nuclear Coal Gas Geothermal CSP Waste Hydro Biomass PV Wind Sources: Platts PowerVision 2012, EWEA, EPIA, ESTELA

Cost st of wind nd vs. convent entional ional energy ergy

Cost st of wind nd energy ergy Wind turbines and installation Lifetime of Cost of Price of wind Rotor diameter and Site project capital turbines, other physical characteristics foundation, etc. characteristics Capital Operation and costs maintenance costs Total costs Annual energy per year production Cost of Energy € /kWh

Evolu olutio ion n and d futu ture re of Capital ital cost sts s of wind nd power er onshore shore and d offsho fshore re 4,000 Offshore Average Capex 3,470 € /kW 3,500 3,000 2,500 € /MW 2,000 Onshore Average Capex 1,100 € /kW 1,500 1,000 500 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Onshore CAPEX ( € /KW) Offshore Capex ( € /kW)

Rang nge of CAPEX EX for r power er gen enerating erating techn chnologie ologies s Capit ital al cost t per techn hnol ology ogy (euro/kW) o/kW) Techn hnol ology ogy 2011 2020 Wind onshore ore 1,095-1825 803-1533 Wind offshor shore 2,263-4,307 1,460-2,555 Gas 584-730 584-730 Coal 584-1606 584-1606 Nuclea ear 1825-4088 Source: IEA, Energy Technology Perspectives 2012

Levelis elised cost t of electr ectrici icity y from om different erent gen eneratin erating g sour urce ces Levelise ised d cost t of electricity ctricity ( € /MWh MWh) Techn hnol ology ogy 2007 2020 2030 Wind Onshor hore 85 68 64 Wind Offsh fshor ore 104 85 76 Coal 68 69 68 Gas 63 84 90 Nu Nuclea ear 69 67 68 Source: European Commission (Joint Research Centre)

Shor ort t term rm expe pecta ctations tions • Wind energy investments (on and offshore) do not suffer from unpredictable and volatile costs. • To compare LCOE, risk on fuel and carbon price volatility must be included. • EWEA electricity cost calculator:  Risk factored-in: wind competitive in 2020 Risk not factored-in: wind competitive in 2030  • Trends: • Onshore wind is moving towards competitiveness in 2016 (Bloomberg New Energy Finance) • DONG Energy recently stated: offshore wind LCOE could fall to 100 € /MWh by 2020 from 150-160 today. • Offshore cost reduction pathways could lead to 39% cut in levelised cost of wind (Crown Estate)

Suppo pport t for r wind nd vs. conven entional tional energy ergy

Historical orical and d current rent R&D suppor pport t Source: Clean Energy Progress report, OECD/IEA 2011 CEM countries: Australia, Brazil, Canada, China, Denmark, the European Commission, Finland, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Norway, Russia, South Africa, Spain, Sweden, the United Arab Emirates, the United Kingdom, and the United States.

Suppor ort t for r foss ssil il fuels els in EU20* RES in EU27 and d globa obal suppor port t for r wind nd energy gy in € bn bn 45 40 35 Biofuels 30 25 20 15 10 5 0 Global wind support EU20 Fossil Fuel subs EU27 RES support

Conc nclu lusi sions ons • Onshore wind will edge towards competitiveness in the next decade • Offshore wind will eventually follow a similar curve • In order to deliver this the industry needs stable legal frameworks to make the necessary investments: – Well designed support mechanisms; – Level playing field and liberalised electricity market. • Supporting renewables is an investment in our economy: – 238 000 jobs in 2010 – € 32 Billion of contribution to the DGP – € 8.8 Billion of exports

THANK ANK YOU www.ewea.org