Similarity #3: Necessity breeds invention
Demands on schedule, performance, and project financials drive developers of power projects of any type to embrace advanced technology. In the case of gas turbines, the advanced F-class machines—with substantially higher firing temperatures, greater efficiencies, and lower emissions than competing machines—became attractive because of the incremental financial gains they promised, at least on paper (the pro forma).
Responding to their own pressures, regulators often ratcheted down emissions levels, especially for NOx, and developers were happy to oblige, to get permitting off the critical path. Meanwhile, turbine vendors came up with machines that were said to meet the new limits. This was described as a vicious circle dance among developers, financiers, regulators, and equipment suppliers. Ultimately, plants began to be permitted with NOx limits as low as 9 ppm—with no downstream cleanup!
By the mid-1990s, advanced turbines were being rushed into commercial operation without adequate testing and demonstration. In the 1996–1997 time frame, many of these machines were back on the "repair rack" to fix design or structural deficiencies.
Wind turbine technology may be in the midst of a similar phase. Suppliers relatively new to the U.S. market, or with unique designs, are beginning to sell substantial numbers of machines. One supplier, with an innovative design consisting of multiple gears and permanent magnet generators (Figure 1), recently received orders for hundreds of this turbine. The confidence being expressed by the market in this design is rather remarkable, given that it is based on a single machine being demonstrated in Wyoming for less than two years.
1. Capacity from complexity. This multiple generator–drive machine, a significant design departure, has been ordered by the hundreds for commercial projects. It puts out two-thirds more power than the turbine currently dominating the U.S. market. Source: NREL Report No. CP-500-31178 (January 2002).
In general, turbine blades are getting larger, with more complex, composite construction materials; machines have higher output; and towers are getting taller. New composite materials are reducing weight but not strength, designs are accommodating "issues" with the gearbox and drive train, and new suppliers are gaining a foothold in the market. The fact that the new machines are both larger and more efficient at capturing wind energy means fewer of them are needed for a given plant rating. That makes the financials look a lot better in many, though not all, cases.
A business aspect peculiar to wind, however, is that patent issues involving variable-speed design have kept several prominent European suppliers from entering the U.S. market. Case in point: The second leading supplier of wind turbines worldwide in 2005, a German firm, has no significant sales in the U.S. Recently, the affected suppliers have either settled with the patent holder or found ways around the issue.
As a result, although the U.S. wind power market is still short of turbines, at least five suppliers are, or soon could be bidding on near-term projects. The lesson to be learned from the late 1990s large gas turbine situation is this: Competition is healthy until it leads to price wars, which destroy the delicate balance between first costs and the costs of being on the repair rack, product recalls, design deficiencies, and other surprises. In the U.S. wind power market, the situation could quickly shift from shortage to glut.
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