Ripple Energy wind farm?

QrizB

Exiled_Tyke said:

So why not simply invest in a wind turbine company such as Greencoat Wind (not a recommendation by the way) which is an 'investment for social and environmental purposes' and is currently also paying decent returns?

I have; I've got roughly equal stakes in both.

Eggs & baskets.

Looking at the big picture, it's interesting to see that onshore wind appears financially viable without subsidy. And I'm looking forward to seeing what strike prices the current CfD round throws up.

Martyn1981

Mart1nSt said:

My primary concern is cystal ball based over the lifespan of the project.
In 10+ years are these small turbines likely to be obsolete given the advancements in power generation over the last 10 years.  Offshore wind generation can be much much larger and more efficient.  I suspect land-based wind generation will be far more efficient too and suspect shareholders may see an 'upgrade fee' to keep these turbines relevant ?

Hiya. I'm guessing a bit here, but I'm not sure how much onshore wind can advance. I'm sure there will be improvements in materials, maybe some blade finetuning, but I doubt any massive advances as the technology is 'quite' mature (how's that for a sneaky caveat?).

Offshore has higher costs, but as you say can be more efficient, and most of the rising efficiencies and crucially capacity factors is down to them simply being physically larger, which means they reach higher, and benefit from the stronger and more consistent wind speeds. Also larger, means less, so savings on the number of monopiles and connections for a given MW or GW rating for a farm.

But ..... onshore wind has largely maxed out on size, since the limitations mainly come down to transport, both the ability to get blades to sites, sites that are typically more remote, and with trickier access, and also to get giant cranes onto site. These are not typical truck mounted mobile cranes, but truck transported massive cranes. These need access roads built to each WT site (not just the WF site), and also need to be assembled each time.

For offshore wind, the industry use the gigantic specialist ship based cranes that simply move from monopile to monopile.

I have an 'old' 2.5MW WT near me, built about 11yrs ago, and I think 2MW to 3MW is typical for large onshore WT's now. There are larger ones available, around 5MW, but their use will depend on the location and access, probably not suitable for rural hill top installs / typical UK sites, but perhaps great for open plains wind generation, such as that seen in the middle of the US.

But again, I'm guessing quite a lot here.

JKenH

QrizB said:

Exiled_Tyke said:

So why not simply invest in a wind turbine company such as Greencoat Wind (not a recommendation by the way) which is an 'investment for social and environmental purposes' and is currently also paying decent returns?

I have; I've got roughly equal stakes in both.

Eggs & baskets.

Looking at the big picture, it's interesting to see that onshore wind appears financially viable without subsidy. And I'm looking forward to seeing what strike prices the current CfD round throws up.

The construction cost per MW for the new Ripple project is coming in at £1.73m compared to £3.25m for phases A and B of the Dogger Bank offshore wind farm. Ripple are projecting a capacity factor of 36.6% for Kirk Hill so Dogger Bank would have to have a capacity factor of 68.75% to achieve the same cost per MW generated. (I hope I have got my sums right). 

Edit: Also Kirk Hill has effectively no finance costs if the cooperative members are putting in the money up front. That is a huge advantage. The cost of Dogger Bank assuming 2% interest compounded over 25 years would bring the £3.25m/MW up to £5.33m/MW. Compared to Kirk Hill therefore Dogger Bank is costing 3x as much per installed MW capacity. Realistically Dogger Bank might have a CF 1.5 x Kirk Hill but would then still need 2x the revenue per MW to achieve the same level of profitability. (I have ignored O&M costs by the way, to keep it simple. The figure Ripple suggest seems quite high but I wouldn’t expect offshore O&M costs to be any lower).

The Ripple offer therefore seems quite attractive compared to investing in offshore wind farms.

retireddoc

I paid my £25 a few months ago and am now thinking about what to do. The return in terms of energy bill reductions doesn't look too bad, but that of course will depend on future electricity prices.

If I understand it correctly, you get back the difference between wholesale cost and the cost of production which is factored in at about 2p/Kwh. They've projected 6p/KwH but wholesale is currently around 16p so if it stays around that then payback is much quicker. But current prices aren't likely to last, it seems to be a bit of a political issue that's put them up, and lots more wind power will be coming on stream.

It took me a while to get my head around what happens to the capital. It looks like they assume depreciation of 5%pa so will depreciate your capital down to zero over 20 years. But you don't get any of it back, it's included in the payments that are based on electricity production and wholesale cost. This makes the projected 4.9% return look poor. What happens in 20 years time? Do you continue to get income from it? Or do they then have a green light to ask for more dosh for new blades or whatever?

QrizB

retireddoc said:

It took me a while to get my head around what happens to the capital. It looks like they assume depreciation of 5%pa so will depreciate your capital down to zero over 20 years. But you don't get any of it back, it's included in the payments that are based on electricity production and wholesale cost.

Yes, that's how it works.

This makes the projected 4.9% return look poor.

Poor compared to what, exactly?

What happens in 20 years time? Do you continue to get income from it? Or do they then have a green light to ask for more dosh for new blades or whatever?

I don't know the answer to this but I'm not aware of any way for co-op members to be asked for additional funding.

TCA

As I understand it, at the end of its life, all options will be on the table. Money will have been budgeted for decommissioning the site but if the co-op wishes to fund or secure funding for refurbishment of the turbines, they can choose to do so.

JKenH

QrizB said:

I don't know the answer to this but I'm not aware of any way for co-op members to be asked for additional funding.

If prices fall members may be asked for additional funding

“In the unlikely event the wholesale value of the power generated is less than the operating cost of the wind farm, then appropriate action will need to be taken by the Board. Such action may include seeking

to reduce the operating costs or seeking additional investment from the members in order to meet the necessary shortfall. Additional investment would not be mandatory, but those who do not participate may see an adjustment in the percentage of shares they own in the co-op”

Verdigris

Unless JET get a wiggle on, with that fabled fusion, I don't see wholesale prices dropping below 2p/kWh any time soon.

manofcarbon

I am concerned about the projected Capacity Factor (aka Load Factor), which at 2900 MWh/year from 900 W is 36.6%.
That is very high for onshore wind; offshore is much better. The average for Scotland is 26.8%, slightly more than the UK as a whole. Locally, Kirk Hill is in South Ayrshire, which according to national statistics had 51 onshore wind sites in 2020 producing 1,294,669 MWh from 652.0 MW capacity. Correct me if I'm wrong, but that's an average CF of just 22.67% from a respectable sample size.

I only just found the local statistics but I emailed Ripple 4 days ago about the Scottish one. No reply so far.

To be fair, the few localities above 30% are islands and west coasts, including North Ayrshire, so this is feasible if Kirk Hill is a prime coastal site. But I can't yet trust it until I see more about the location. 

Verdigris

They said it was based on 2 years of on-site measurements. I looked on the Ordnance Survey map and it should get unobstructed westerlies straight off the sea.