sandia 2014 wind turbine blade workshop- barr

Analyst PRESENTATION

Blade technology trends and market developments

Aaron Barr

[email protected]

August 26, 2014

Contents

2 Post-PTC US Wind Energy Economics

August, 2014

� Market Dynamics – Global market to experience moderate growth, US faces uncertain future – Wind energy cost of electricity is growing increasingly competitive

� Blade technology trends – New products are trending towards lower windspeeds and longer blades – Longer blades face challenges in cost-effective scaling and transportation – Advanced materials are emerging with promise to displace carbon fiber

� Appendix: Promising blade technology innovations – Reinforcements & Resins – Processes & core materials – Aerodynamic concepts

Delivering renewable energy insight

25 August 2014 3

Global market dynamics

Global grid-connected forecast: 2013-2023 – Updated outlook published 08/20

Long-term market forecast by region Market Dynamics

Source: MAKE

Long-term sustained installations in China underpins global market forecast Significant rebound from 2013 slump is expected to persist for foreseeable future

4 Blade technology trends and market developments

August, 2014

80

60

40

20

0 ´23e

(GW)

+7.2%

´22e ´21e ´20e ´19e ´18e ´17e ´16e ´15e ´14e ´13

Asia Pacific (excl. China) China

Africa and Middle East Eastern Europe

Southern Europe Northern Europe

Latin America North America

United States market outlook, 2013-2023e (GW) – Updated outlook published 08/20

Long term United States demand remains volatile US Market Dynamics

Uncertainty on PTC “start of physical work” has pushed many projects into 2015 Early August PTC guidance puts 2H2014 and 2015 developments on fast track


August, 2014

Source: MAKE

1.33.3

4.7 5.53.9

5.1 5.55.0

8.5

4.6

1.10

6 5 4 3 2 1

9 8 7

+342.1%

‘19e ‘21e '20e ‘18e

(GW)

‘22e

-71.7%

‘23e ‘17e ‘16e '15e ‘14e ‘13

PTC void 2013 PTC 2014 PTC Major RES deadlines

Economic drivers replace PTC support

Toward 2025

US LCOE by technology, vs 2013 wholesale prices

Regional US LCOE dynamics Wind Energy � Latest generation of turbines have

LCOE competitive with natural gas � Driven by >40% capacity factors and

lower cost O&M practices Natural Gas � Historic low natural gas prices

expected to rise in near term � Favorable LCOE and balancing

flexibility driving adoption of gas. Coal � Emerging risk of emissions

regulations has largely halted new developments of coal plants

Nuclear � Latest generation of nuclear

technology is prohibitively expensive due to safety and fuel handling concerns

Wind energy increasingly cost competitive US Market Dynamics

Source: MAKE Note: Unsubsidized LCOE. Wholesale price represents 2013 average. Only considering newly constructed power plants – expansions not considered

Onshore wind in favorable wind conditions is currently competitive without subsidies. Future gas and coal fuel escalation risk reinforces the case for continued wind installs.


August, 2014

150

100

0

50 LCO

E $/

MW

h

45

105

ERCOT

NEPOOL

Nuclear

108

75

130

Coal Thermal

83

43

120

Nat Gas Comb. Cycle

60

40

105

Onshore Wind

67

INVEST FUEL O&M CARBON Range


25 August 2014 7

Blade market and technology trends

Product wind class installs, 2011-2016

New products increasingly targeted towards lower winds Blade market and technology trends

Source: MAKE IEC Certification of turbine, may not indicate resource

Longer rotors on turbines certified for low winds (IEC III) routinely being deployed into medium wind conditions – provides a double-dip for project economics


August, 2014

19%

2011

27%

51%

21%

IECIII (7.5m/s)

IECII (8.5m/s)

IECI (10m/s)

2016e

50%

37%

12%

2012

32%

49%

Specific ratings of new products

Source: MAKE Top 15 OEMs only

450

400

350

300

250

200 ‘12 ‘08 ‘04 2000

Spe

cific

Rat

ing

(W/m

2)

‘12 ‘08 ‘04 2000

- 21%

- 28%

Year of introduction

IEC II (8.5 m/s) IEC III (7.5 m/s)

Global blade length segmentation

50+ meter blades expected to become global mainstream

2016 outlook on blade segmentation


Source: MAKE Source: MAKE

Blades continue to grow in length, with the largest changes occurring in the Americas and Europe. <40m blades expected to only be deployed to the highest wind sites.


August, 2014

38%

15%

33%

28%

11%

43%

4%17%

7%1% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2016e

<40m 40-44.99m 45-49.99m 50-59.99m 60-69.99m >70m

1%

APAC

41%

31%

24% 3%

EMEA

13.9 7%

10%

12%

AMER

8.7 3% 7%

39%

51%

20%

42%

8%

26.3 2016 GW:

US Cost barriers for large rotor turbines

Rotor scaling faces cost challenges, met through technology


Source: MAKE

Cost effective rotor scaling can be very difficult, and requires clever adoption of low-cost technology to meet LCOE goals


August, 2014

Units Mainstream Next Gen 1.X Color

Turbine Rating (MW) 1.8 1.8 Rotor Diameter (meters) 100 124 Specific Rating (W/m2) 230 150

+16%

Capacity Factor (%)

53 46

9%

LCOE (USD/MWh)

60* 66

CAPEX/MW (USD $k/kW)

1.70

+6%

1.60

Added cost components Blades 12 meters longer ~5 tons per blade Tower 10-12 meters taller ~35 tons of steel Machine structure New gearbox / shaft / hub / bedplate Foundations Weight increase ~30% Roads & Electrical collection Turbine spacing increases 7-10 km

Trailer pinch in 2015 for 53m+ blades

Blade transport in the US becomes looming bottleneck

Rear overhang restrictions in US


Source: MAKE Source: MAKE, Logisticus Group

US logistics carriers hesitant to invest in new equipment, creating a trailer pinch in 2015 Longer blades drive the need for innovation on transport and blade segmentation


August, 2014

Enforcing rear overhang restrictions

Early indicators of restrictive policy

Major port for blade import

Domestic blade manufacturing Primary region of US development

-20%

Trailer availability,

2015e

10.3GW

0.9

Trailer availability,

2012e

12.9GW

Total available trailer equipment for wind

8.5GW

MAKE forecast 2015e

5.5

Order backlog for 2015

commissioning

<53m blades ��P�EODGHV

3.0

Available equipment and drivers are down

9.4 Trailer shortage capable of

hauling 53m+ blades

Carbon Fiber Penetration Has Grown

Carbon fiber blade material usage outlook

Long-term Trends May Reverse


Growth of turbine size has driven carbon adoption � New turbines with larger rotors utilize carbon fiber

as first option Stiffness of carbon fiber blades provides options � Carbon fiber allows OEMs to leverage existing

hardware in the rest of the turbine Cost pressures are forcing the hand of top OEMs � Profitability pressures are favoring high modulus

as a preferred alternative

Source: MAKE

Adoption trend has been positive, but emergence of high-modulus glass is voiding the business case for carbon fiber


August, 2014

0

20

5

15

25

10

2010

23

2012

Per

cent

Util

izat

ion

of C

arbo

n Fi

ber

2016

19

2013

17

12

2011

14


25 August 2014 13

Appendix: Promising blade technology innovations

Blade material commercial landscape

Commercial Maturity

Commercial status of blade materials – reinforcements & resins


Source: MAKE

E-glass and epoxy dominate the market due to cost position and track record, high modulus glass expected to gain share at the expense of high-priced carbon fiber


August, 2014

Material Features, benefits and drawbacks Maturity Trend

Rei

nfor

cem

ents

E-Glass • Ample capacity, low cost

H-Glass • Increased stiffness over E-glass

S-Glass • High performance with cost penalty

Carbon fiber • World-class stiffness, cost and material handling concerns

Res

ins

Epoxy • Excellent mechanical properties

Polyester • Lower cycle times and material costs

Vinyl esters • Good compromise on material properties, cost and cycle time

High Low

Future Trends

Increase Decrease

Blade structures commercial landscape

Commercial Maturity

Commercial status – processes and core materials Blade market and technology trends

Source: MAKE

Box spars and prepreg technology used by Vestas and Gamesa face lower utilization Pultrusion technology shows significant promise, but advancing slowly


August, 2014

Features, benefits and drawbacks Maturity Trend

Proc

ess

Structural shell • Flexible to advanced geometries, reliance upon bonding paste

Box spar • Potential for automation, high capital cost of equipment

Prepreg plys • Material handling and temperature concerns

Dry fiber layup • Quality and repeatability concerns, cost leadership

Pultrusions • Excellent quality control, material property limitations

Cor

e m

ater

ials

PVC • Dominant material, lower strength than balsa

Balsa • Low cost, material consistency concerns, high resin uptake

PET • Lower cost and improved material consistency over balsa

SAN • Lower weight and reduced resin update

Tycor • Reduced resin uptake, highly engineered reinforced core

High Low

Future Trends

Increase Decrease

Blade aerodynamics commercial landscape

Commercial Maturity

Commercial status – aerodynamic concepts Blade market and technology trends

Source: MAKE

Significant blade aerodynamic occurring in the aftermarket as performance upgrades.


August, 2014

Features, benefits and drawbacks Maturity Trend

Aero

dyna

mic

feat

ures

Trailing edge features Reduced noise, higher efficiency

Vortex Generators Improved efficiency, aftermarket upgrade option

Winglets Higher aerodynamic efficiency, reduced tip noise

Swept blade Load shedding bend-twist coupling, complex manufacture

Flatback airfoils Lower blade weight, increased root lift and efficiency

Slender airfoils Improved efficiency, increased demand on material strength

Gurney flaps Passive flap on trailing edge, low cost, bonding concerns

Leading edge slats Increased lift, higher manufacturing costs

Trailing edge flaps Active control of trailing edge, complicated manufacturing

Jet actuators Increased lift, high energy use, reliability concerns

High Low

Future Trends

Increase Decrease

Contact

consultmake.com © 2014 MAKE Consulting A/S. All rights reserved. Reproduction or distribution of this report in any form without prior written permission is strictly forbidden. Violation of the above restrictions will be subjects to legal action under the Danish Arbitration Act. The information herein is taken from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions, analyses and forecasts on which they are based. MAKE Consulting A/S cannot be held liable for any errors in this report, neither can MAKE Consulting A/S be liable for any financial loss or damage caused by the use of the information presented in this report.

Denmark Sønder Allé 9 DK-8000 Aarhus T +45 7026 6628

U.S. 117 N. Jefferson Street Suite 400 Chicago, IL 60661 T +1 312 441 9590

U.S. 225 Franklin Street 26th floor Boston, MA 02110 T +1 978 448 3186

China Level 26, Shanghai Times Sq. Office Tower, Shanghai 200021 T +86 22 2318 5066

U.K. 18B Charles Street London, WIJ 5DU T +44 207 129 1433

Germany Neuer Wall 10 20354 Hamburg T +44 207 129 1433

Aaron Barr

[email protected]


August, 2014

sandia 2014 wind turbine blade workshop- barr

Engineering

market developments august

iec iii

5m