It’s not enough to say that fossil fuels have to go or nuclear is hopeless (which are both probably true statements). The question is: What will replace them? Furthermore, how long will it take?
An intriguing headline appeared in CleanTechnica on August 4: Wind Could Replace Coal As US’ Primary Generation Source, New NREL Data Suggests. Wouldn’t that be nice? Is it even possible? (The article originally appeared in The Handleman Post on July 26.)
Though solar energy has become the poster child for renewable energy generally, the strongest player in the game, for now, is wind. Wind leads solar energy in capacity installed as well as output (world solar capacity passed 200 GW this year); and other than a few welcome cases (so far) where PV comes in under 5 cents per kWh, wind is generally cheaper.
It is worth noting that some of the world’s industrial giants have not only taken a keen interest in wind energy but have also taken the lead in sticking turbines in the ground. (Offshore makes up only about 2 percent, to date, as the above chart indicates.) GE and Siemens are on the podium, trailing only Denmark’s Vestas. The big three supplied 98 percent of the U.S. market last year according to the Department of Energy (DOE).
Passing the 400 GW mark this year, world wind capacity already exceeds U.S. coal capacity and will likely pass natural gas power capacity in the U.S. this year. It topped U.S. nuclear capacity many years ago, and has now caught up worldwide.
The point of this article is to assert that wind not only can but will replace nuclear as a source of carbon free, risk free energy, with no fuel cost and no externalities. The time has come to acknowledge that spinning wind turbines are the “air apparent.” Given a billion dollars to invest in power plants, which would you rather own, operate and collect income from? Which facility would you rather have in your back yard or your view? Related: Low Oil Prices Could Break The “Fragile Five” Producing Nations
At this point in the debate, the Old Guard will chime in: “Yes, but wind is intermittent, so the capacity factor is far below that of coal, gas or nuclear.” Are you sure about that? The article mentioned above begins with an astonishing claim: “The National Renewable Energy Laboratory (NREL) recently released data showing that the Capacity Factor (CF) for wind power can reach 65%, which is comparable to that of fossil fuel based generation.”
The key to such a high CF for wind is height. “[It’s] head is set among the clouds” is a pretty good translation for the caption under the top picture. At this stage of the game, a 35 percent capacity factor is a tap in. The further up you climb, the steadier the wind and the higher the capacity. The resource is also steadier offshore.
On the bottom line, gas combustion turbines have such a low factor because these facilities are generally only used during peak hours (the so-called Hundred Hottest Hours) when demand for air conditioning causes a spike in the overall system load. This month, extreme heat pushed Texas to a record peak of 69 GW. Though Texas leads the U.S. in wind capacity, it doesn’t blow so much during the day.
Fortunately, the cause of everyone turning on their AC units is also the cure, sunlight; PV will probably take this market away from gas pretty soon. The capacity factor for sun in most of Texas is closer to 25 percent than 5 or 10. Therefore, $600 million dollars is better spent on 400 MW of PV than 1 GW of gas capacity, which still needs fuel; when the peak hours hit, the price of gas spikes with it while the price of solar falls to near zero, which is a different sort of problem, though a better one from the customer’s point of view. (Somewhere Over the Rainbow)
The DOE released its Wind Technologies Market Report this month . Eric Wesoff, the Editor-in-Chief at Greentech Media (GTM), wrote about some key takeaways from that report on August 11. First, though there are still uncertainties, the industry in the U.S. rebounded in 2014, after a dismal 2013, providing 24 percent of all new U.S. capacity. In short, “it’s a growing market with record-low prices.”
A Utility Dive article on August 20 seconds that conclusion: “This year will be big. Next year will be similarly big. What happens after 2016 is anybody’s guess because of concerns about the federal production tax credit.”
This chart ought to prove the point that wind has become a ‘credible resource.’ “Co-author [Mark] Bolinger [from the Lawrence Berkeley National Lab -- LBNL] noted that the number of states where wind accounts for a significant amount of in-state generation has changed drastically from just 10 years ago, reporting, ‘Wind power currently contributes almost 5 percent of the nation's electricity supply, more than 12 percent of total electricity generation in nine states, and more than 20 percent in three of those states.’" (Texas has more than twice the capacity of any other state).
Ryan Wiser, the other co-author, adds: “Electric utilities now consider wind to be a mainstream energy source and part of the portfolio.”
The next item on the Report’s list shows rotors are getting bigger which makes for higher capacity factors and more power. According to the report, "Since 1998-99, the average capacity of wind turbines installed in the United States has increased by 172 percent, the average turbine hub height has increased by 48 percent, and the average rotor diameter has increased by 108 percent.”
Best of all costs keep coming down. LBNL reports that projects in 2014, on average, were installed at $1,710 per kilowatt, down $600 from the 2009 peak. This translates into cheap power. "The average levelized long-term price from a sample of wind power sales agreements signed in 2014 (and admittedly concentrated in the lowest-priced central region of the country) fell to just 2.35¢/kWh. These prices are below the bottom of the range of nationwide wholesale power prices, and compare very favorably to a range of projections of the fuel costs of gas-fired generation." Related: As Oil Industry Cuts Back, Prices Could Spike In Years Ahead
Most of the uncertainty referred to above stems from the expiration of the production tax credit (PTC) which still lingers for those projects that were begun in 2014 if they are up and running in 2016. The other primary uncertainty has to do with the price of natural gas. The GTM article concludes: “As for what happens after the PTC, Bolinger suggests that ‘the PTC actually has an impact on how these projects are financed.’
The structure favors tax equity funding, ‘one of the most expensive sources of capital.’ As the PTC fades, different and cheaper sources of capital will be available to wind project developers, according to Bolinger. ‘That shift to lower-cost capital will partially mitigate the loss of the PTC.’” In other words, we shall see. (For Report highlights only)
Wind Over Seas
Offshore wind is steady and it lies close to the largest load centers, i.e. big cities, where empty fields for planting wind turbines are few and far between (and those available are too pricey). The biggest drawback is the cost, as seawater is not only corrosive but the constant turbulence is hard on equipment, so it costs more to engineer the arrays to operate reliably for decades. The world’s largest offshore array is in England (the 630 MW London Array – the 300 MW Thanet Wind Farm is nearby); Britannia still rules some of the waves.
Another Greentech Media article of note was published on August 10: Europe Launches Offshore Wind Power Bonanza. It asks the question, ‘Is 55 gigawatts of new offshore wind by 2020 possible?’ According to the European Commission, approximately 130 GW of wind (mostly onshore) provided 8 percent of Europe’s electricity in 2014. Though offshore makes up only about 2 percent of total capacity worldwide (as noted above), the proportion in Europe is higher, and the push to continue is much stronger than in the U.S. where the first project, off the coast of Rhode Island, finally got a regulatory green light.
“Offshore wind is expected to boom over the coming years in Europe, building on a record year in 2014, which saw nearly $20 billion in investment, according to Bloomberg New Energy Finance. . . . Europe expects to see a 40 percent reduction in costs for offshore wind farms by 2020, a trend that has already started. Better installation techniques alone could cut up to 15 percent of costs, an important factor as increasingly large turbines are installed in deeper offshore areas. Large offshore wind turbines are now pushing 6 MW to 8 MW power ratings and are more than 500 feet tall. The size of offshore projects is also growing.”
Siemens, based in Germany, has begun testing its massive new 7 MW offshore turbine in Denmark. According to Cleantechnica, these units can each supply 32 million kWh annually which indicates a capacity factor greater than 50 percent (i.e. 4,500 hours per year). Another of its virtues is gearless technology: “A synchronous generator with permanent magnets converts the rotor motion directly into electrical energy without the use of a gearbox which normally steps up the low speed of the wind rotor to high speed for generating electricity. With the new technology, the entire drive train operates with significantly fewer components, making it lighter, more compact and less prone to wear.”
The fastest ramp ever for an energy source, from 1 to 20 quads, came from nuclear power plants between 1970 and 1990. (A quad is one quadrillion Btus, the amount of energy in roughly 175 million barrels of oil).
It took coal 70 years to get from 1 to 20 quads (1830 to 1900 – wood was top dog for a few millennia before that); it took oil a bit more than 40 years (from the Model T rollout in 1908 until 1950), and gas took about the same amount of time as oil (from roughly 1920 to the early 1960s.
The U.S. uses about 100 quads per year and world demand is on the order of 500 quads. To be fair, that figure for nuclear power is a bit of a stretch since the number of Btus delivered was closer to 7 quads. But let’s be generous and ignore the inefficiencies in thermal power generation. (Source: Vaclav Smil, Energy Transitions, Appendix.)
In other words, the scale of what is needed to feed the world energy beast is enormous and it takes a very long time for even the best sources to move from being a rounding error to becoming the top dog, or even a major player at the very least. Even if low cost power and heat from the wind and the sun are the greatest thing since the Almighty said ‘Let there be light,’ going from a few percent of our energy requirements and a few quads, where they are now, to the top of the table won’t happen overnight.
Wind replaces Nuclear power
Electricity replaces Oil for Transport
Sunlight replaces Oil & Gas for Heat & Power
Wood replaces Coal
Efficiency: the One Thing to Rule Them All
Even if the table above were the agreed upon summary of mission objectives, and that is far from being true, it will still take decades to bring about the stated results. The first objective seems the most likely to happen first, however, and sooner than you think.
Approximately 400 nuclear stations around the world produced 2,364 terawatt-hours (TWh) in 2014. (Source: Nuclear Energy Institute.) We don’t yet know what the average capacity factor for wind turbines will be in ten years’ time, but if that number gets to 50 percent, then it would take 600 GW of wind to replace the current nuclear contribution. With 400 GW now in place, the goal line seems already in sight.
Since existing turbines have a lower capacity factor than those to come (currently around 33 percent according to NREL), it will take more than 600 GW; for the sake of argument, let us say between 750 and 800 GW, with the next 400 having an average CF of 50 percent. 51 GW of wind capacity were added worldwide in 2014 (bringing the total to 370 GW). Even if that number did not grow, and another 50 were added every year, the crossover point would be achieved by 2022 or 2023. Related: Saudis Could Face An Open Revolt At Next OPEC Meeting
Note that Germany quickly replaced all 43 TWh of lost nuclear generation since shutting its fleet down after Fukushima with wind and solar power, so this is by no means a fantasy. Even without the PTC in the U.S., it is reasonable to assume that more than 50 GW will be added each year. China is the world’s top market (adding 23 GW in 2014) and they do not intend to slow down. Furthermore, as offshore wind becomes a larger part of the mix, with higher and steadier winds available, these numbers seem conservative.
The second item on the list of Mission Objectives will depend on several nebulous variables so it is much harder to predict. What will the price of batteries be in 2020? In 2030? UBS believes that once the price falls below $150 per kWh (and right now it is around $250) EVs will start to take over the car business.
When will that be? Navigant says the cost of materials is around $87. Elon Musk says he will be disappointed if the price does not get below $100 per kWh by 2020. Other important variables include the price of oil/gasoline and the level of world economic activity between now and then. Place your bets.
Tilting at windmills used to be an expression to describe someone ‘off their rocker’ who was pursuing a fantasy or fighting an imaginary enemy, as was the case with Cervantes’ hero Don Quixote (Part 1, Chapter VIII):
Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them that he said to his squire, "Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless."
"What giants?" asked Sancho Panza.
"Those you see over there," replied his master, "with their long arms. Some of them have arms well nigh two leagues in length."
"Take care, sir," cried Sancho. "Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone."
Don Quixote symbolized a dying age, the age of Knights and Chivalry. Today’s dying age is based upon fossil fuels and nuclear power. Consequently, tilting at windmills should now be taken to mean someone who doesn’t realize there is no stopping them, i.e. windmills.
Nuclear power does not measure up (on price, on time to build, on fuel, on risk) and cannot compete with 2.35 cents per kWh. Fossil fuels, though they still measure up (at least until carbon gets a price), are finite. Resistance is futile, and the risk to investors who don’t get this is substantial and rising.
Vestas Ventum Facit
By Henry Hewitt for Oilprice.com
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