Words: K. Adriaenssen, W. Smook, J. Peeters
A revolution is happening in the world of renewable energy. All key markets have adopted auction-based approaches to subsidising renewables.
New wind market dynamics
In theory, the idea is rather simple. Set a target level of investment in renewable energy capacity, and then allocate contracts to the lowest bidders. As renewable energy markets mature and penetration increases, a growing number of countries are looking to reduce subsidy costs by spurring competition. This concept will initiate large disruptions as markets evolve to a new equilibrium.
Looking at how procurement costs are falling in countries that had previously relied on other mechanisms, it seems possible – even likely – that auction-based procurement is accelerating price erosion and reducing procurement costs relative to what we would have seen otherwise.
This sounds like good news. But is it really? It’s good news if falling procurement costs reflect the market’s ability to seek out the most cost-effective projects, and if this competitive pressure will fuel efficient innovation going forward. But there are concerns about whether the industry can cope with the developments and cost reductions going forward.
The success of these dynamic market conditions will depend on an understanding of how auctions can be designed to deliver sustainable cost reductions. ZF Wind Power anticipated these dynamics by developing a new breed of wind gearbox platforms. This modular platform is designed around faster time-to-market and offers high flexibility in adapting wind turbine designs to changing market requirements. This technology innovation and policy innovation is needed to fully realize renewable energy transition.
Bundling all gearbox experience in a modular platform approach
The traditional wisdom on wind gearboxes is based on bespoke gearbox designs optimized for a specific turbine development. At first sight a gearbox platform approach seems to have a less optimized cost structure when comparing it to a single unique turbine design. But fast changing markets result in reduced turbine lifetime and lower volumes for unique developments. Wind turbine manufacturers are in search of high flexibility for their new generation turbine developments, while shorter time-to-market and business certainty to support forward selling in an auction or project based market become crucial.
ZF Wind Power has developed a new concept to help wind turbine manufacturers reduce the Cost of Energy of new generation wind turbine platforms. Our experience in reliable high torque applications is bundled in a new gearbox platform design to cover the dynamics of the wind market, safeguarding specific customer requirements and significantly reducing time-to-market.
