LCOE Sensitivity with Respect to Capital Cost, Discount Rate, and Wind Speed

A reduction in the cost of capital from 16% to 7% for a project with a capital cost of $4,259/kW and wind speed of 9 m/s will reduce LCOE from $0.23/kWh to $0.16/kWh ($0.07/kWh). For a project with the same characteristics but a 25% lower capital cost, LCOE is reduced from $0.23/kWh to $0.18/kWh ($0.05/kWh).

The findings suggest that although higher capital costs are expected to continue in the near future, financing terms greatly influence offshore wind energy production costs for developers.

My environmental interests have ranged widely, from trail work in Pennsylvania and Alaska, to teaching environmental education in Connecticut and Florida. I have most recently focused my interests on the field of renewable energy technology, first assisting in advancing an incentive prize program with the Foundation for Geothermal Innovation based out of Los Angeles, CA, and now doing alternative energy research at the Ocean Energy Institute based out of Rockland, Maine.

Questions regarding the blog please direct to me at camaio@une.edu. For more information regarding OEI, please visit the official website or contact at Info@oceanenergy.org.

The founder of Houston-based Simmons & Co. International wrote the 2005 book “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,” raising concerns about Saudi Arabia’s oil reserves and laying out his theory that the world was approaching peak oil production.

Two years later, Simmons founded The Ocean Energy Institute, a think tank and venture capital fund in Rockland to promote offshore wind energy research and development.

The institute is a part of the consortium led by the University of Maine, which aims to design and test floating deep-water wind turbine platforms.

“Matt Simmons was an innovative thinker who pushed ideas that have the potential to yield a more environmentally and economically sustainable future for Maine and the world,” said Maine Gov. John Baldacci, who attended the opening of the institute’s headquarters last month.

Simmons’ body was found Sunday night in his hot tub, investigators said.

An autopsy by the state medical examiner’s office concluded Monday that he died from accidental drowning with heart disease as a contributing factor.

In 1974, Simmons founded Simmons & Co. International, which grew into one of the largest investment banking companies serving the energy industry. He continued to serve as chairman emeritus until last month, when he retired to give his full energy to the Ocean Energy Institute.

“We are deeply saddened by the unexpected loss of a true visionary and friend. As a pivotal figure in the lives of many of our employees, and countless others across the energy industry, Matt will be sorely missed,” Simmons & Co. CEO Mike Frazier said in a statement.

Simmons was critical of BP PLC’s handling of the Gulf oil spill and predicted the company would file for bankruptcy. In one interview, he said the cleanup costs could top $1 trillion.

As an international energy expert, Simmons correctly predicted in 2007 that oil would surpass $100 a barrel. The following year, it peaked at $147 a barrel.

California Congressman Bob Filner is upset with how the Obama Administration and the Veteran’s Affairs Department has handled the local VA Hospital case involving possible dental infections due to improperly cleaned instruments.

Matthew Simmons, Ocean Energy Institute

Should we nuke the oil well in the Gulf? Matthew Simmons was the former energy advisor to President George W. Bush and now he is with the Ocean Energy Institute and he joins Mark to weigh in on the story.

Missouri Congressman Roy Blunt

Mark talks with Missouri Congressman Roy Blunt about his Senatorial Race as well as his new TV ad.

 Turning Seawater Into Fuel: Experiment Underway in Rockland.

Hart also explained to us that the nonprofit Ocean Energy Institute, which employs only Hart full time and a couple of other part-time advisers and interns, is looking at a variety of ways to propel its offshore wind plan forward. One of those could be for the Institute to take on the role of project coordinator, including coordinating funding for the project. Hart says that Simmons, who is an energy investor and adviser, has managed this kind of multi-billion-dollar project financing before and has a long list of industry connections. According to an article in Fortune, after he graduated from Harvard Business School in 1969, Simmons helped raise money for a company called Oceaneering, which turned into “one of the country’s fastest-growing and most successful offshore-drilling service companies.”

But the Ocean Energy Institute is a far ways off from coordinating a massive fund raising effort. The Institute could decide to go other routes to help implement its plan as well, like connecting companies and inventors building technology like new offshore turbines and platforms. And if the Institute decides to act as project coordinator it will likely do so several years down the road, as raising funding in these markets is difficult, Hart concedes. “Everything has certainly changed from a year ago,” Hart says, adding that “capital is very tight.”

Hart says the project development process is in “a very slow dance.” Basically, we get the impression that the plan is a proposal without a clear path to how or if it will be implemented. With a price tag like $25 billion it will take a massive undertaking to coordinate.

Hart also explained to us that the nonprofit Ocean Energy Institute, which employs only Hart full time and a couple of other part-time advisers and interns, is looking at a variety of ways to propel its offshore wind plan forward. One of those could be for the Institute to take on the role of project coordinator, including coordinating funding for the project. Hart says that Simmons, who is an energy investor and adviser, has managed this kind of multi-billion-dollar project financing before and has a long list of industry connections. According to an article in Fortune, after he graduated from Harvard Business School in 1969, Simmons helped raise money for a company called Oceaneering, which turned into “one of the country’s fastest-growing and most successful offshore-drilling service companies.”

But the Ocean Energy Institute is a far ways off from coordinating a massive fund raising effort. The Institute could decide to go other routes to help implement its plan as well, like connecting companies and inventors building technology like new offshore turbines and platforms. And if the Institute decides to act as project coordinator it will likely do so several years down the road, as raising funding in these markets is difficult, Hart concedes. “Everything has certainly changed from a year ago,” Hart says, adding that “capital is very tight.”

Hart says the project development process is in “a very slow dance.” Basically, we get the impression that the plan is a proposal without a clear path to how or if it will be implemented. With a price tag like $25 billion it will take a massive undertaking to coordinate.

The Ocean Energy Institute calls itself a “think tank” and is run, as the IHT notes, by energy investment banker and energy adviser to President George W. Bush, Matthew Simmons, as well as physicist George Hart. Simmons and Hart say that wind turbines built just off the coasts of the U.S. offer better, more powerful wind resources than many onshore wind plans, and that the Gulf of Maine in particular has some of the best wind areas in the world.

Dubbing the plan a “Manhattan Project for Maine,” the Ocean Energy Institute says it could create some 20,000-30,000 jobs. The group on its web site also lays out a larger plan to get the U.S. off of fossil fuels, which the group calls the “Pickens Plan Plus” or the “Simmons Plan’ — use wind farms to power the grid, but add in the large amounts of offshore wind around the U.S.

It’s unclear how much traction with policymakers or the community the group has gotten, or how much funding it’s raised for its ambitious plan. It’s certainly not a good time to turn to capital markets. Also not discussed in the plan is the idea of NIMBYism, which has helped delay other offshore wind projects in the U.S.

The Ocean Energy Institute calls itself a “think tank” and is run, as the IHT notes, by energy investment banker and energy adviser to President George W. Bush, Matthew Simmons, as well as physicist George Hart. Simmons and Hart say that wind turbines built just off the coasts of the U.S. offer better, more powerful wind resources than many onshore wind plans, and that the Gulf of Maine in particular has some of the best wind areas in the world.

Dubbing the plan a “Manhattan Project for Maine,” the Ocean Energy Institute says it could create some 20,000-30,000 jobs. The group on its web site also lays out a larger plan to get the U.S. off of fossil fuels, which the group calls the “Pickens Plan Plus” or the “Simmons Plan’ — use wind farms to power the grid, but add in the large amounts of offshore wind around the U.S.

It’s unclear how much traction with policymakers or the community the group has gotten, or how much funding it’s raised for its ambitious plan. It’s certainly not a good time to turn to capital markets. Also not discussed in the plan is the idea of NIMBYism, which has helped delay other offshore wind projects in the U.S.