Quantifying Risk Energy Systems

7/30/2019 Quantifying Risk Energy Systems

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Davion M. Hill, Ph.D.

01 November 2010

Quantifying Risk in Energy Systems

Palisade @Risk Conference Las Vegas, Nevada, Nov 4-5 2010


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Det Norske Veritas AS. All rights reserved.

Energy System Output, Reliability, and ROI Projections01 November 2010

2

What does DNV do?

DNV was founded in 1864 to fill a need for an objective

third party to assess sailing ships for their seaworthiness- In the19th century, sailing and shipping was risky

business, but with great rewards possible

- Ship builders needed an objective reviewer to prove

their worth to buyers and insurers

Milestones- 1951: Internal Research

- 1969: Oil in the North Sea

- 2004: Offshore Wind

Buyer Seller

3rd party role

Advisory role


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Energy System Output, Reliability, and ROI Projections

01 November 2010

3

Predictions

Dont cross a river if it is four feet deep onaverage.


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01 November 2010

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Risk in Energy Systems

Wind Solar Oil & Gas Nuclear

PricesandSaleof ProductsConvertedfrom CO2

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

HCOOH CO Methanol Ethylene Methane

Product

$permetricton

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

InvestedEnergyinCreationofProduct(kWh/ton)

MarketPrice $/ton Invested kWh/ton

Energy-PriceGap too high

Energy-PriceGap favorable

CO2Recycling


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01 November 2010

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WIND AND SOLAR


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01 November 2010

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Two Case Studies: US Wind Turbine Fleet and 1 MW Solar Farm

Efficiency of

Panel

Cost of

electricity

Output perpanel per day

(kWh/day)

Earnings per

panel per day

($/day)

Energy: Total

Output

(kWh/day)

CO2: Total Offset

Emissions (ton/day)

based on kWh output

(includes avoided

and life cycle

emissions)

Dollars: Product of

Total Output and

cost of electricity

($/day)

First Level

Outputs

Inputs

ROIOutputs

Case 2: Solar Farm

Capacity Factor

Sale price of electricity

Electrical Subsystem

Failure Rates

Blade Failure Rates

Gearbox Failure Rates

Output of

fleet per year

(MWh/year)

Earnings of

fleet per year

($/year)

Energy: Total

Output

(MWh/year)

CO2: Total

Offset Emissions

(ton/year) based

on MWh output

(includes

avoided and lifecycle emissions)

Dollars: Product

of Total Output

and cost of

electricity

($/year)

First Level

Outputs

Inputs

Case 1: Wind Fleet

Risk

Metrics

What effect

would

reliabilityhave on

meeting the

20% Wind by

2030 goal?

How much

does panel

efficiencydegradation

matter for

large scale

solar farms?

Probabilistic Energy ROI Models: Carbon, Energy, and Dollars. ASME Energy Sustainability, 2010.#90408 Phoenix, AZ.


7/31 Det Norske Veritas AS. All rights reserved.


01 November 2010

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Life Cycle Estimates Including Materials Failure: Wind Turbines

Production of hypothetical US wind fleet between

present and 2030, including blade, gearbox, and

electronics failures (first generation turbines).

Best case scenario with

minimal failures, improved

capacity factor.

Least favorable scenario

with compounded failures

and poor capacity factor.




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Capacity Factor dominates




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Sensitivity to Return on Investment

Impact on ROI is more visible from failures, but revenue per kWh produced

and capacity factor are again dominant.ROI Parameter Minimum Mean Maximum

Energy ROI 22 30 37CO2 ROI 210 270 370Financial ROI 1.2 3 4.5

Payback projections to 2050

(multiples of original investment).




01 November 2010

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Reliability of Solar Photovoltaic Panels

Panel Metrics over Time

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

0 2 4 6 8 10 12 14 16 18 20

Time (years)

COE($/kWh)orPa

nelEarnings

($/day

)

0.000

0.020

0.040

0.060

0.080

0.100

0.120

0.140

0.160

0.180

EfficiencyofPanel

Cost of electricity ($/kWh) Single Panel Earnings Per day ($/d) Efficiency of Panel

Decreasing

efficiency

Rising

electricity prices

Resulting

revenue per

panel




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Financial ROI Sensitivity of 1 MW Farm

Sun exposureand electricity

revenue are

dominant

variables.

Secondary

negative effect

from efficiency

degradation

factors.




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ROI: Multiples of Original Investment

Energy ROI

Carbon ROI

Financial ROI

Factors that make ROI




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Sensitivity for Return on Carbon Investment (ROCI)

Embodied CO2 is a

strong factor for

solar energy.


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01 November 2010

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Sensitivity for EROEI

Embodied energy

is a strong factor

for solar energy.


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01 November 2010

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Unexpected Findings - Wind and Solar

Embodied CO2: 0.01 ton/W for the solar panel, and 0.0002 ton/W

for the turbine (2 order of magnitude difference)

Where it is manufactured can matter as much as where it isemployed.

Resource utilization dominates all forms of payback for therenewable energy systems studied.

Though materials failures have direct financial consequences, theuptime is dominant.


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01 November 2010

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TRADITIONAL ENERGY SYSTEMS (OIL, GAS, NUCLEAR)


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Nuclear Waste Storage

Carbon steel ASTM A-516, double-walledtanks

Liquid interior kept at ~pH 13

(12.5 mm) or 5/8 (16 mm) walls

750,000-1,300,00 gallons (2.8M to 5M L)

Diameter: 75-85 ft (23-26 m)

Depth (Height): 24-33 ft (7.5-10.3 m)

Risk Models for Materials Selction and Corrosion Inhibition in Offshore Oil/Gas Risers and Nuclear WasteStorage Tanks. NACE 2010. San Antonio TX.


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01 November 2010

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Nuclear Waste Storage Tanks: Wall Lifetime

Analysis does not include stress.

Wall thickness

Corrosion rate


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01 November 2010

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Offshore Oil and Gas Risers

Majority of riser material is conventional

carbon steel such as C1018 or pipesteel.

Near bend and subsea stations, interior

is clad with nickel alloy such as Inconel

625.

Cladding important for stressedsections (like bends)

Corrosion rate profile is affected by

galvanic corrosion.

Desire to add inhibitor to reduce

corrosion rate of carbon steel and

improve lifetime.

Areas that may

contain interior

cladding (Inconel)

Bare carbon

steel

Corrosionrate


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01 November 2010

2020

Experimental and Field Data Conditions

150,000 ppm

chloride, 55 ppmbicarbonatesimulated brine

CO2 purged throughsystem

10:1 area ratio of

I625:C1018


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01 November 2010

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Probability vs. Consequence: Operations Risk for Offshore Operations

Highest probability,

lowest

consequence.

High probability,

medium-high

consequence

Medium probability,

high consequence

Medium probability,

medium consequence


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01 November 2010

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Calculating the Combined Effect of Corrosion Rate and Pressure

Wall thickness

Corrosion Rate

Pressure

Pipe radius

Effect of Pressure:

rt

P

Corrosion rate reduces wall thickness over

time, but wall thickness is critical to hold

pressure. Pressure reduces lifetime further.


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01 November 2010

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Lifetime Predictions in each case

Stopped flow and failed

inhibitor flow are high riskconditions.

Lifetime reduced to


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01 November 2010

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CARBON DIOXIDE VALUE CHAIN


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01 November 2010

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CO2 Useful Products

Thermochemical

Biochemical

Photochemical

Electrochemical

DNV Strategic Research program:

Investigation of sustainable

technologies for carbon dioxide

management.


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01 November 2010

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Recoverable Energy Density kWh/ton

0

1000

2000

3000

4000

50006000

7000

8000

9000

10000

NiMH

Battery

Flywheel NaS Battery Li-ion

Battery


Energy Storage Medium

RecoverableEnergyDensity

(kWh/ton

)

Recoverable Energy Density of Useful Products

Products

electrochemically

converted fromCO2


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01 November 2010

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+ O2(combustion)

Coal orpetroleumreformed to coke

CO

Methyl Formate

Methanol

Formic

Acid

Methane

+CO +H2O +Energy

+CO

Coal orMethane

CO2 + Impurites

MEA

CO2

Formic

Acid(ECFORM)

Waste

Product

Useful Product

Methane

Ethylene

Oxide Ammonia

Ethylene

+ O2(combustion)

Conventional Formic Acid Value Chain ECFORM

+H2O +

Energy

+H2O +

Energy

+H2O +

Energy

+H2O +

Energy

+H2O +

Energy

+H2O +

Energy

Lost Costs

Waste

Water

Waste

Product

Generation of Formic Acid without Dedicated Feedstock


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01 November 2010

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Electrochemical Conversion

Prices and Sale of Products Converted from CO2

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400


Product

$permetricto

n

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

InvestedEnergyinCreationof

Product(kWh/ton)

Market Price $/ton Invested kWh/ton

Energy-Price

Gap too high

Energy-Price

Gap favorable


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01 November 2010

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CO2 Recycling

Energy dominates the profitability of the reaction, but

consumables are minimized with electrolyte selection.

Can it be done

profitably, efficiently,

and net carbon

negative?


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01 November 2010

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Conclusions

1. Variability Matters: dont cross a river if it is four feet deep on average.

- We can see the deep spots2. Forecast degradation: far future is more uncertain than near future (read

Orwells 1984)

- Still difficult to capture, but we can at least see whyuncertainty exists

3. Misunderstanding randomness: dont underestimate the consequences

of rare events

- Buried within the probability distributions are random and seemingly

unlikely events we can at least acknowledge them and hope for the

best


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01 November 2010

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