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Sixth Northwest Conservation & Electric Power Plan Proposed Wind Plant Capital Cost Assumption

Detailed breakdown of wind plant costs including capital, construction, maintenance, and integration expenses. Analysis covers historical trends and industry comparisons.

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Sixth Northwest Conservation & Electric Power Plan Proposed Wind Plant Capital Cost Assumption

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  1. Sixth Northwest Conservation & Electric Power PlanProposed Wind Plant Capital Cost Assumption Jeff King Northwest Power and Conservation Council Portland, OR August 21, 2008

  2. Wind resource cost elements • Capital cost • Wind plant development and construction cost (uniform) • Transmission development and construction cost (WRA-specific) • Operating costs • Fixed wind plant operation and maintenance (uniform) • Fixed transmission operation and maintenance (WRA-specific) • Variable wind plant operation and maintenance (uniform) • Variable transmission operation and maintenance (WRA-specific) • System integration costs • Regulation & load following • Storage & shaping August 21, 2008

  3. Windpower Cost Assumptions(2006 dollar values) August 21, 2008

  4. Escalation continues at declining rate through 2009; levels off 2010 - 11 2015 > Resumption of historical real cost reduction Real costs decline to ~ 130% of 2004 values 2012 - 15 Recent cost escalation Preliminary thinking on forecast construction cost escalation (to be revisited at later GRAC) August 21, 2008

  5. Normalizing reported plant costs • NPCC database contains reported plant costs (estimates or completion costs) for 36 WECC projects totalling 4450 MW. 2001- present • Reported costs were normalized to "overnight" 2006 dollar values • Unless otherwise stated, reported costs are assumed to be construction costs less project development cost and financing fees. • The cost vintage is assumed to be the year reported or, for completion costs, the beginning of 12 mo construction period (one year prior to service year) • Overnight (instantaneous) construction cost were backcast using appropriate financing (COU, IOU, IPP) with the Council's MICROFIN model. • Project development cost of 1.3% of total capital cost was added to the estimate • Capacity-correlation: • Slight (12%) negative correlation of cost to project capacity was observed • Capacity-weighting was approximated by rounding to nearest 100 MW and plotting each 100 MW multiples separately. August 21, 2008

  6. Proposed 6th Plan draft: $1950/kW "Overnight", 2006$, 2009 service Prelim 6th Plan Biennial Assessment 5th Plan Normalized utility-scale wind project cost August 21, 2008

  7. Other recent surveys and estimates August 21, 2008

  8. EPRI Prop. Dft 6th Pln CEC WM LBL DOE WM LBL Comparison to other surveys & estimates August 21, 2008

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