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What influences a device's cost of energy?
In short, the costs of making it, getting it to where it needs to be, operating it and maintaining it, weighed against the potential revenue from sales of energy. A system's cost of energy can therefore be lowered by either reducing its costs, increasing its energy output, or both. It is not enough to focus solely on performance; high performance is a non-starter if the system is too expensive. Nor is it sufficient to look only at costs; a more expensive device might yield substantially more energy. What the MEC was most interested in is the balance between the two.
Higher performance can be achieved in quite a number of ways, as can lower costs. For instance, increasing the power captured in long-period waves might improve the performance of an offshore wave energy device and building it out of reinforced concrete rather than steel might lower its costs. Such possibilities were being pursued during the MEC. Also under consideration were design changes that both lower costs and improve performance simultaneously, thereby reducing the cost of energy in a single step. Such changes are generally harder to make, but worth exploring when a good understanding of the dependencies between different aspects of a design is reached. For example, what is the relationship between a device's size and power capture potential? Could a smaller device actually capture more power and cost less to manufacture?
The potential for ‘single-issue’ cost and performance improvements (e.g. mass production) are considered in other articles, but for now, let's consider design changes that can impact on both. These are illustrated in Figure 1.
Figure 1: Design changes that could impact on both cost and performance
Figure 1 – Stages in the development of a marine renewable energy device, showing reductions in cost of energy as a function of development time. Each bar represents the device at a certain stage of development and the steps in between are design changes to reduce cost of energy. A central estimate, upper bound of certainty and lower bound of certainty are shown at each stage and the reducing height of the bars suggests an increase in certainty of cost of energy as the device develops.
Changes in concept
Without departing from the fundamental idea behind a device, it may be necessary or at least worthwhile to consider radical changes to its conceptual design. For example, the choice of referencing system for a point absorber may be crucial to both its power capture and capital costs and pursuing the wrong option could lead to a blind alley – a device that generates little and costs a lot.
Even devices with considerable development time invested could require a ‘concept shift’, particularly as the design makes the transition from what is merely technically feasible to something both technically sound and commercially attractive. Unfortunately, this is easier said than done, especially where in the early stages of device development, the technical challenge is so great that developers sometimes do not focus on commercial requirements.
Changes in intended resource
A fair match between the device design and intended resource is important for the performance to be as good as possible. For example, while more energetic sites might initially be favoured for an offshore wave energy device, a trade-off is likely between the device's ability to survive such conditions and its ability to generate reliably at high levels. The need for this trade-off might only be apparent when some detailed structural design work is complete, which is often only after a performance prediction model has been developed.
Optimum conditions for economic energy generation are certainly not ‘one size fits all’. Some devices are inherently better suited to deployment close to shore, while others need the greater depths of water found further out to sea. With marine current generation systems, water depth and tidal range are important parameters in addition to current velocity, since they influence how and where a device may be situated between the seabed and water surface.
Changes in unit size
How big should a marine energy generation device be? The technical difficulty of predicting device/resource interactions can make this a difficult question to answer. Some devices follow the relationship of increasing power capture ability with increasing size and furthermore may offer economies of scale. But this is not true of others, where building too big can lead to a significant drop in efficiency, leaving the cost of structural materials too high to be justified.
An important aspect to the choice of device size is generator rating. A high-rated generator receiving relatively small amounts of mechanical power may be inefficient, but a generator rated too low may be unable to cope with peak power conditions. What is almost certainly necessary is a degree of control over one or both of the prime mover and generation system, so as to generate continuously and maintain a reasonable quality of power produced.
Changes in the unit/plant boundary
Many technology developers are pursuing discrete devices with the intention of deploying them in groups to make large power stations, much like wind farms. ‘Discrete’ in this sense means that the entire power capture and take-off mechanism (e.g. turbine, gearbox and generator) is packaged within a single structure and that any number of these structures can be deployed at once and the power station is readily scalable.
For some designs, however, it may be worthwhile thinking of alternatives to this approach. While offering flexibility, the modular approach might involve a trade-off in either costs or performance. Could equipment be shared between several units, and does this offer any advantages? And furthermore, rather than a change in unit size, will a change in plant size be of benefit? Some devices certainly lend themselves to bigger installations, while others may be more appropriate for individual deployments.
Figure 2: Approach to cost-of-energy assessments in the MEC
Figure 2 – Approach to cost of energy assessments in the MEC, showing three stages of development: entry to the MEC (present-day baseline), result of MEC work (improved prototype) and, after further development work (indicated by the break in the x-axis), a commercial design. (The graph is illustrative only and not to scale).
A key task of the MEC was to evaluate opportunities for cost of energy reduction, but how was this done in practice?
Well, firstly by establishing the starting point. For some devices under consideration, detailed analyses of costs and performance had been made prior to the MEC, and subject to some checks and balances (e.g. the market prices of structural materials), their costs of energy could be estimated quite readily. With others though, a fair amount of work was needed to determine what the capex, opex and power captures are really likely to be, for a baseline embodiment of the device concept that would actually work and which could actually be constructed (i.e. more than just a conceptual design). Since both costs and performance are subject to uncertainties, due either to engineering factors or the present depth of understanding, it was necessary to consider a range of energy costs for each device, above and below a middle value.
The second step was to consider the potential for cost and performance improvements. For the results to be useful, quantification of these improvements required further detailed design work, in particular honing-in on cost items (e.g. deployment costs) and performance characteristics (e.g. turbine efficiency) that are particularly important. This took original baseline designs to new variants, some of which may be taken forward to prototype designs, but others may be discarded because their cost-reduction potential is too low. As in the first stage, recording the assumptions associated with this design process was crucial.
Towards its end, the MEC looked towards prototyping and demonstration of device concepts and subsequently device farms, once they have been engineered to a high level with their costs minimised and performance maximised. This is illustrated by the third point in Figure 2, some way further down the development process. The development time needed to reach this stage varies significantly between different devices, but the Carbon Trust has looked at some that show promise to be relatively close to market and others for which design changes identified during the MEC set out a clearer path to commercialisation.
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