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A RATIONAL LOOK AT
RENEWABLE ENERGY
AND THE IMPLICATIONS OF INTERMITTENT POWER
By Kimball Rasmussen | President and CEO, Deseret Power | November 2010, Edition 2.0

                    New Section — Natural Gas vs. Wind, p 14
TABLE OF CONTENTS


Forward................................................................................................................................................................. 2
Wind Energy......................................................................................................................................................... 2
        Fundamental Issue: Intermittency............................................................................................................ 3
        Name-plate Rating versus Actual Energy Delivery............................................................................... 3
        Wind is Weak at Peak. ................................................................................................................................ 4
                            .
        Texas ............................................................................................................................................................ 4
        California...................................................................................................................................................... 4
        The Pacific Northwest................................................................................................................................ 5
        The Western United States........................................................................................................................ 5
        Enter the “Twilight Zone”—A Control Area Nightmare......................................................................... 6
        The Shadow Grid—The Fossil Fuel Stand-In for No Show Wind............................................................ 8
        The Los Angeles Department of Water and Power (LADWP).............................................................. 9
        Increase in Carbon Dioxide from Wind Power—It is Possible............................................................... 9
        Got Transmission? Another Missing Cost Element.............................................................................. 10
                                                      .
        The Electric Continental Divide................................................................................................................ 11
        Wind Energy Storage—Not Ready for Prime Time................................................................................ 12
        Wind Turbines can Consume Electricity................................................................................................. 13
        Value of Power—Demand versus Energy................................................................................................ 14
        NEW IN 2.0 VERSION: Wind Power Compared to Natural Gas Power............................................... 14
Solar Energy....................................................................................................................................................... 16
        Not All Sunshine is Equal.......................................................................................................................... 16
        How Expensive is PV Solar?..................................................................................................................... 17
        Large PV Solar. .......................................................................................................................................... 17
                      .
        Concentrated Thermal Solar.................................................................................................................... 17
        Solar Demand Versus System Peak........................................................................................................ 18
        The Value of Solar Power—Demand Versus Energy............................................................................. 19
        The Solar Synopsis.................................................................................................................................... 19
                          .
The Renewable Portfolio Standard (RPS) or How 20 Percent
Can Easily Become 100 Percent of a Utility’s Plant Investment. ....................................................... 19
                                                             .
Summary............................................................................................................................................................. 21
        Eyes Wide Open......................................................................................................................................... 22
Special Thanks.................................................................................................................................................. 22
A RATIONAL LOOK AT RENEWABLE ENERGY
and the Implications of Intermittent Power
By Kimball Rasmussen | President and CEO, Deseret Power | November 2010, Edition 2.0




There seems to be a common misperception, that         produce breakthroughs, which could mitigate some
wind turbines provide an inexhaustible supply of       of the impediments to high penetrations of wind
cheap energy—after all, the fuel is free, isn’t it?    and solar power to the electric grid, but as yet these
Why don’t we simply build more and more                impediments remain significant, and no economical
renewable energy and achieve low-cost energy           mitigation is on the immediate horizon.
independence, while at the same time creating
millions of new jobs to fuel a green economic          FORWARD
recovery? What’s not to like about that?               Wind and solar energy—two of the most popular
Unfortunately for all of us, the real world poses      sources of renewable energy—are sometimes touted
limits on renewable energy technology, and with        as the answer to the world’s energy challenges.
those limits come costs—relatively high costs          Some advocates of these energy sources want us
(financial and otherwise), as will be shown in         to believe they can solve a plethora of problems,
this paper—that must be paid to integrate even a       ranging from avoiding the disastrous 2010 oil leak
modest amount of renewable energy into the power       in the Gulf region to materially reducing global
supply portfolio.                                      climate change. Wind and solar energy are also
                                                       routinely promoted with the promise of green jobs,
This paper will explore wind and solar energy in       which will lead to a green technology revolution
terms of their environmental, operational and          while improving the environment—and making
economic attributes. We will then place these in       us “energy independent” to boot. But how well do
context to form a rational look at renewable energy    wind and solar energy solutions actually perform on
and the implications of intermittent power—the         these promises? Let’s take a rational look.
not-so-obvious operational challenges that have to
be addressed when large quantities of intermittent     Wind Energy
energy must be accommodated on the electricity grid.   Wind energy is becoming a significant consideration
                                                       in the planning and development of the modern
This analysis is based on the current state of wind    electric system. In the past decade, [the] United
and solar technologies. Further research and           States (U.S.) wind energy output grew [as a sector]
development efforts of these technologies may          10 times faster than [the combination of ] all other




2 | A RATIONAL LOOK AT RENEWABLE ENERGY
sources of electric energy.1 The growth in wind                              Name-plate Rating versus Actual
turbines is remarkable, given that the U.S. wind                             Energy Delivery
industry installed more than 60 percent of all                               For the sake of this discussion it’s important to
existing turbines in just the past four years.                               know that all power producing equipment comes
We are truly in a wind boom. This is attributable                            with an output rating stating how much power
to a number of factors, including the fact that wind                         the facility will produce. This is referred to as
projects are much quicker to design, permit and                              name-plate capacity and it is expressed in kilowatts
construct than traditional coal or nuclear plants,                           (kW) or megawatts (MW).2 For large utility grade
and wind energy tends to be one of the least                                 generators the customary expectation is that once
expensive renewable energy options. As a result,                             installed, they will deliver the name-plate output,
the U.S. now leads the world in total wind energy                            on demand, when supplied with sufficient fuel.
connected to the grid, surpassing nations such as                            Additionally, they will operate, if required, around
Germany and Denmark. Where we go from here                                   the clock. In the case of wind energy installations
depends on how much we choose to subsidize this                              this is simply not the case. The output over time is
alternative, as well as on some specific attributes of                       only a small fraction of name-plate rating because of
wind and the systems required to deliver it.                                 the intermittency of the fuel resource (moving air).
                                                                             The ratio of actual output divided by maximum
Fundamental Issue: Intermittency                                             potential output is defined as capacity factor.
Despite robust wind development in the U.S.,                                 The entire sector of U.S. wind energy is currently
wind faces a nearly insurmountable issue:                                    operating at a capacity factor of only 30 percent.3
intermittency. Simply put, the intermittent nature
of wind makes it difficult to harness effectively on a                       It is troubling that we see some astonishingly
power grid that is finely tuned to deliver electricity                       simplistic reports in the media which assert the
around the clock, matching demand second-by-                                 number of homes that a given “wind farm” will
second. The down side of this intermittency is                               allegedly supply. When reliability, expressed as
clearly evident in the actual performance data of                            capacity factor, is taken into account, the
wind turbines already installed. Wind performs                               serviceability of wind is much lower than advertised.
poorly across all traditional utility metrics for                            Our modern understanding of supplying electricity
generating resources. For reliability, stability,                            to a home is that a fully sufficient amount will be
forecast ability, proximity to load centers, dispatch                        made available 24/7/365. In reality, it would be rare
ability and economics, wind power is a poor choice                           that any wind development could actually supply
for large-scale power production.                                            fully sufficient electricity to even a single home
                                                                             24/7/365. Such misleading claims by developers
                                                                             may contribute to the sentiment that renewable
                                                                             energy can easily replace fossil fuels—it cannot.



1
    U
     .S. DOE Energy Information Administration, Net Generation by Energy Source, (2010), http://www.eia.gov/electricity/monthly/index.cfm.
    Wind data shown in [on] Table 1.1.A. Net Generation by Other Renewables: Total (All Sectors), 2000 through July 2010. Based on a comparison
    of 2010 versus 2000, wind energy output expanded by 1600 percent, natural gas electric generation grew 63 percent, nuclear grew seven percent,
    coal declined six percent and hydroelectric declined seven percent. The entire electric mix from all sources grew a total of eight percent.
2
    One megawatt is equal to one thousand kilowatts.
3
    U
     .S. DOE Energy Information Administration, Electric Power Monthly, Table 1.1.A, Net Generation by Other Renewables, www.eia.gov/electricity/
    monthly/index.cfm. Annual capacity factor is calculated by dividing 2010 wind generation by the monthly average of installed capacity.


                                                                                                    A RATIONAL LOOK AT RENEWABLE ENERGY | 3
Wind is Weak at Peak                                                            CALIFORNIA
The intermittent and unpredictable nature of                                    The State of California ranks third in the U.S.
wind is further compounded by the fact that the                                 for total installed wind energy (behind Texas
wind tends to be weak during electrical peak                                    and Iowa). California is also the third largest
load conditions. Wind blows most consistently                                   state geographically (behind Alaska and Texas).
and creates the best generation opportunities during                            According to the California Independent System
off-peak hours, cooler days and evening hours.                                  Operator (CAISO),
Unfortunately, this is directly opposite the electric                           	        “ alifornia is a national leader in the
                                                                                           C
customer demand profile. This disparity is a natural                                       development of renewable resources. 	
consequence of the climate forces that determine                                           Because California has large quantities
wind: daily and seasonal temperature differentials.                                        of renewable resources already on-line,
                                                                                           a significant amount of historical data is
For example, on the hottest days of the summer                                             available to accurately model and forecast
the wind tends to be low or non-existent when                                              future performance of the various types of
air conditioning demands are at their peak.                                                renewable resources.”
Then when it gets windy, the temperatures will
naturally moderate and air conditioning loads drop                              	                                      “ ind generation presents . . . significant
                                                                                                                        W
off just in time for the wind energy to pick up.                                                                        operational challenges. Wind generation
So wind supply and user demand are out of sync.                                                                         energy production is extremely variable,
The same phenomena can be demonstrated to occur                                                                         and in California, it often produces its
during winter peak conditions. The very coldest                                                                         highest energy output when the demand
days are also the days when the wind is not blowing.                                                                    for power is at a low point.” 5
For this reason, utility-scale balancing regions
simply do not plan for significant contribution of                              CAISO’s graph demonstrates its summer wind
wind at peak demand periods. This can be amply                                  generation and average variation by hour:
demonstrated in real-world, large scale examples
from Texas, California, the Pacific Northwest
                                                                                     2008 SUMMER LOADS  RESOURCES
region, and the entire western United States.                                       OPERATIONS PREPAREDNESS ASSESSMENT
                                                                                1200

TEXAS                                                                           1000
Texas is home to the largest collection of wind
                                                                                800
                                                                           MW




generation facilities in the nation. More than one
                                                                                600
out of every four wind turbines in America is
                                                                                400
found in Texas. The Electric Reliability Council of
                                                                                200
Texas (ERCOT) only plans for 8.7 percent of wind
name-plate rating as the “dependable contribution                                   0
                                                                                        7/17/06 0:00

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                                                                                                                                                                                                                                                                                                                                                                               7/26/06 0:00




to peak requirements” (also known as Capacity
Value), in accordance with ERCOT’s stakeholder-
adopted methodology.4 This means that more than                                                               Average hourly wind generation                                                                                                              Average output at peak

91 percent of Texas wind turbines are expected to be
off-line when it matters most—at peak load periods.

4
    Kent Saathoff, ERCOT Expects Adequate Power Supplies for Summer, ERCOT, May 12, 2010, www.ercot.com/news/press_releases/2010/nr-05-12-10.
5
    2008 Summer Loads and Resources Operations Preparedness Assessment, Figure 5, Grid Assets, California ISO Version 1.0, April 28, 2008.


4 | A RATIONAL LOOK AT RENEWABLE ENERGY
The wind capacity available at California peak                               On Tuesday December 16, 2008, the BPA system
              demand times is about 200 MW. The name-plate                                 reached its peak for the entire year, with a demand
              capacity of California-based wind generators is                              of 10,762 MW. At the time of peak demand,
              about 2,600 MW. Hence, the wind power available                              the output of the entire fleet of wind resources,
              at peak is less than 10 percent, which is very                               with a name-plate value of 1,599 MW, was only
              similar to the Texas experience. In other words,                             116 MW, or about seven percent of the name-
              about 90 percent of California wind turbines                                 plate potential. This is very similar to the Texas and
              cannot be depended on to be producing at peak                                California wind experience, only in this case about
              load conditions.                                                             93 percent are not producing at the winter peak.

              Note that Texas and California are both summer-                              THE WESTERN UNITED STATES
              peaking systems. Let us consider a vast winter-                              Now let us consider an even broader region—all
              peaking region—the Pacific Northwest—to see                                  eleven western states, from Montana to New Mexico,
              how wind energy performs in that situation.                                  from Washington to California, and everything
                                                                                           in between. This vast area is served as a single
              THE PACIFIC NORTHWEST                                                        “reliability” region known as The Western Electricity
              Oregon and Washington rank fourth and fifth                                  Coordinating Council (WECC). During the heat
              in the U.S. for total installed wind energy.                                 wave of July 2006, the WECC system reached its
              The prominent Federal Power provider in the                                  peak on Monday, July 24, 2006. The hottest day
              region—the Bonneville Power Administration                                   was actually July 23, 2006, but this was a Sunday
              (BPA)—is a winter-peaking system with about                                  so total loads did not peak until Monday. On the
              10,000 MW of load.                                                           hottest day, the capacity factors for wind resources
                                                                                           through most of WECC were well under five
               BONNEVILLE POWER ADMINISTRATION6                                            percent, and on the peak day, which was a slightly
                 ACTUALS - WEEK DECEMBER 14, 2008                                          cooler day, the wind capacity factors were less than
            12,000                                                                         10 percent.7 Again, this is very similar to Texas,
                                                       2008 BPA Peak Load                  California and the Pacific Northwest.
            10,000


                                                                                           These real-world lessons illustrate a grave
Megawatts




            8,000
                                                                                           shortcoming of wind. Approximately 90 percent of
            6,000
                                                                                           wind turbines can be expected to NOT PRODUCE
            4,000
                                                                       Load                power at peak load periods, even when distributed
                                                                       Wind
                                                                       Nameplate           over broad geographic areas.
            2,000

                                                                                           Incidentally, I recently had a conversation with a
                   0
                         Sun       Mon      Tue       Wed      Thur   Fri     Sat
                                                                                           trustee of a large mid-western utility that is home to
                                                                                           450 MW of wind generation. He asked me to guess
                       Data: Bonneville Power Administration
                                                                                           how much of the 450 MW of wind was actually
                                                                                           producing during their system peak. I responded,
                                                                                           “Probably between 30 and 40 MW.” He gasped,
                                                                                           “How did you know? That is exactly what we are
                                                                                           seeing!” Yes, wind is weak at peak.
               6
                   Bonneville Power Administration, http://transmission.bpa.gov/Business/Operations/Wind/default.aspx.
               7
                   WECC, Wind Capacity Issues, Working Draft, March 17, 2010.


                                                                                                                 A RATIONAL LOOK AT RENEWABLE ENERGY | 5
ENTER THE “TWILIGHT zONE”—                                                             ramped up by 1,200 MW in only one hour,
                A CONTROL AREA8 NIGHTmARE                                                              and then down 800 MW in only 20 minutes.
                The demonstrated low performance of wind energy                                        Such rapid changes cause extreme stress to a control
                during peak load conditions is only one side of                                        area and in many cases result in market price
                the coin. The other side occurs during off-peak                                        distortions and environmental degradation.
                periods when unscheduled, unanticipated wind
                energy comes booming onto the system ready to                                                CONTROL AREA/TWILIGHT zONE IN ACTION:10
                serve loads that are nowhere to be found.                                                                 BONNEVILLE POWER ADMINISTRATION
                                                                                                                                                  ACTUAL — APRIL 27, 2010

                                                                                                           1,800

                This can easily happen because of the physics of                                           1,600
                                                                                                                                          60 Min


                wind energy: the power output of a wind turbine                                            1,400




                                                                                                                                                            -800
                accelerates at a much faster rate than the simple




                                                                                               Megawatts




                                                                                                                                     W
                                                                                                           1,200




                                                                                                                                   0M




                                                                                                                                                                MW
                change in wind speed. For instance, if the wind




                                                                                                                                     0
                                                                                                           1,000




                                                                                                                                 +1,2
                speed changes from 10 to 20 mph (a doubling of                                              800

                the wind speed) the associated power output will                                            600                                           20
                                                                                                                                                          Min

                change by a factor of eight.9                                                               400

                                                                                                            200

                                                                                                              0
                An actual case with the BPA brings the control area




                                                                                                                                                   4:00




                                                                                                                                                                     5:00




                                                                                                                                                                                   6:00
                                                                                                                   2:00




                                                                                                                                   3:00




                                                                                                                                                            4:30




                                                                                                                                                                            5:30




                                                                                                                                                                                          6:30
                                                                                                                          2:30




                                                                                                                                           3:30




                                                                                                                                                                                                 7:00

                                                                                                                                                                                                        7:30
                problem into perspective. On April 27, 2010 about
                3:00 a.m., wind generation on the BPA system                                                                                              Time of Day




                         BONNEvILLE POWER ADmINISTRATION 2009/10 TOTAL SYSTEm LOAD
                         AND WIND CONTRIBUTION
            12,000
                                                                                                                                                                     SYSTEM ANNUAL
                                            TOTAL SYSTEM LOAD                                                                                                          PEAK LOAD
            10,000                            WIND NAME-PLATE
                                                  WIND ACTUAL

            8,000
MEGAWATTS




            6,000


            4,000                                                                                                                                          Wind contribution 2% of name-plate



            2,000


                0

                                                                 NOVEMBER 2009

                8
                     Control Area - A power generation regulation region that maintains and balances its power load and power interchanges with other control areas.
                     See also, Control Area Concepts and Obligations, North American Electric Reliability Council, 1992.
                9
                     Note that the physics of wind energy is such that the change in power of a wind turbine is proportional to the cube of the change in wind speed.
                     This means that if the wind speed cuts in half, the power output will cut to one-eighth. See also, Wind Systems Power Calculation, http://wind-
                     power.generatorguide.net/wind-speed-power.html.
                10
                     Bonneville Power Administration, http://transmission.bpa.gov/Business/Operations/Wind/default.aspx or ibid.


                6 |.A.RATIONAL.LOOK.AT.RENEWABLE.ENERGY
Such erratic changes in generation run directly                    base-load, coal-fired generators but they have been
  counter to the needs of utility operators who select               reduced to minimum-load status. The nuclear plants
  from a pool of different traditional generators to                 are running because they remain in “must-run”
  provide the right amount of power at the instant                   condition for safety and economic reasons. The wind
  it’s required. In a normal day they blend the                      turbines are cruising along at a modest output.
  outputs of traditional power plants that include
  coal, nuclear, natural gas, and in some regions                    Now assume that a sudden, unanticipated, change
  hydroelectric to work in concert to minimize                       in the weather brings with it a rapid ramping of
  operating costs while maintaining reliability.                     wind energy output. This can result in a large block
                                                                     of several thousand MW of unplanned energy that,
  Now we have the advent of wind. The use of wind                    when combined with the operating status just
  energy creates an unprecedented challenge, which                   described, can easily swamp out the total load
  can easily launch utility power systems into an off-               requirements of the utility—meaning there’s literally
  peak condition, something that can be described as                 no place for the energy to go.
  the “twilight zone.”
                                                                     Now the utility is forced to make quick and drastic
  Consider an event that occurs during off-peak or                   decisions to balance loads and resources. I call this
  twilight hours. The various utilities are operating                the twilight zone—a control area no-man’s land.
  with all of the peaking plants off line and many of                One option might be to enact the costly decision to
  the intermediate resources off line. Still running are             shut down a base-load resource, such as a nuclear




                                         WIND PERFORMANCE SCORECARD
                                         Total hours in peak period                 2208 or 3 months
                                         Percent of period when output was below
                                         5% of name-plate                           45%
                                         Total hours in period below 5%             982.6 or 5.9 weeks
                                         Consecutive hours of generation below 5%   103.9 or 4.3 days
                                         Capacity Factor during peak period         16%




DECEMBER 2009                                                                          JANUARY 2010




                                                                                               A RATIONAL LOOK AT RENEWABLE ENERGY | 7
or coal unit, and then subsequently face a high cost                            Do you think the twilight zone problem
“re-start” with its attendant unusual wear and tear                             is insignificant? Is this just a remote hypothetical?
on the affected units. In the case of a coal-fired unit,                        Think again. Many utilities have found themselves
emissions will increase as the unit and its pollution                           in precisely this situation. For this reason some
control equipment ramp up during the few hours                                  system operators are now requiring wind turbines
after startup. Another significant problem with this                            to be equipped with a “cut out” switch that
choice is illustrated in the BPA example above.                                 disconnects the wind farm from the grid by
If a base-load source like coal is shut down, and                               remote control. But it doesn’t end there as the wind
then the wind supply suddenly drops, it will not be                             developers still want to get paid for the energy they
possible to re-energize the base-load facility quickly                          might have been able to deliver. When they are
enough to compensate for the wind loss. This could                              denied this payment, they sue.13 No matter what
result in rolling blackouts—which puts us out of the                            the result of such a suit, there is an obvious waste of
twilight zone and into an electric abyss.                                       money and energy.

Another twilight zone choice is to try to sell the                              THE SHADOW GRID—THE FOSSIL FUEL
“hot potato” energy to a neighboring utility or to                              STAND-IN FOR NO SHOW WIND
another control area authority. What if the neighbor                            Wind’s unpredictable nature tends to provide energy
already is operating at (or close to) optimum                                   that does not match user demand. As noted in the
balance—a likely scenario. The choices are quite                                examples of ERCOT, California and the Pacific
limited and whatever option is chosen there will                                Northwest, wind volatility makes it unsuitable for
be a substantial losses incurred by the wind energy                             electricity planners to rely on wind energy to meet
utility (i.e. ratepayer).                                                       peak demand needs. The same applies to base-load
                                                                                and load-following demands. In order to mitigate
In the first case the electricity is sold at a                                  these negative effects, the grid operators and
substantially discounted price (e.g. what costs the                             planners must construct a shadow grid, typically
utility $135/MWh is sold for $20/MWh).11                                        consisting of fossil-fueled power plants (particularly
                                                                                fast responding gas-peaking units). This shadow grid
In the second case the market price for electricity                             stands as reserve generation for those times when
can plunge so low that the price actually                                       wind has unexpected supply variations, which are
goes negative. The host utility might actually have                             inherently a daily matter. This augmentation needs
to pay a neighboring utility to accept the surplus                              to be distinguished from the former backup of
schedule and allow delivery onto its system.                                    conventional sources built into the grid, which was
This absurd result is a reality in a system that has a                          primarily designed to deal with demand variations.
high percentage of wind generation installed and                                Expressed another way, conventional sources have a
can be very costly to the host utility.12                                       Capacity Value of well over 90 percent, while wind
                                                                                energy’s Capacity Value is under 10 percent. This is
                                                                                a profound difference.


11
     FPComment, Ontario’s Power Trip: Power Dumping, http://opinion.financialpost.com/2011/07/20/ontarios-power-trip-power-dumping/.
12
     K
      nowledge Problem, Frequent Negative Power Prices in the West Region of ERCOT Result from Wasteful Renewable Power Subsidies, http://knowledgep-
     roblem.com/2008/11/20/frequent_negati/.
13
     U
      nited States of America Before the Federal Energy Regulatory Commission, Complaint and Petition for Order Under Federal Power Act Section 211A
     Against Bonneville Power Administration Requesting Fast Track Processing, http://www.bpa.gov/corporate/agencytopics/columbiariverhighwatermgmnt/
     otherdocs/2011-06-13_complaintagainstbpa.pdf.


8 | A RATIONAL LOOK AT RENEWABLE ENERGY
Typically, we build new fossil-fueled                                          The need to develop a shadow grid has also resulted
peaking power plants (usually natural                                          in the actual filing of new tariffs to charge for
gas) to augment the wind resources that                                        the cost of such a grid. Puget Sound Electric has
were intended to eliminate fossil-fueled                                       recently filed a tariff with a proposed charge of
resources in the first place.                                                  $2.70 per kilowatt-month to offset the carrying cost
                                                                               of a shadow grid of gas turbines that are required to
This duplication of costs is forced onto consumers,                            stabilize the volatility of wind.14 This can result in
who must pay for both the wind turbine and the                                 an energy charge of one- to two-cents per kWh—
back-up generator.                                                             or an additional 10 to 20 percent (or more) tacked
                                                                               onto the already high cost of a wind turbine in
The Los Angeles Department of Water                                            order to integrate it operationally into the grid.
and Power (LADWP) recognizes the need to
back up wind with gas in order to maintain capacity                            Increase in Carbon Dioxide
and reliability. Consider the following statement                              from Wind Power—It is Possible
from the LADWP’s executive summary of its 2010                                 In addition to the obvious investment and operating
Draft Integrated Resource Plan:                                                cost of the shadow grid, there is another unintended
                                                                               consequence of this fossil-fueled backstop system:
	“There is ongoing debate regarding the 	                                     CO2 [carbon] emissions. As discussed above,
  level of on-peak reliability of renewable                                    a significant penetration of wind turbines into
  resources. However, the renewable 		                                         an electric grid can cause base and intermediate
  resources were added mainly to satisfy                                       resources to be fired up and energized onto the grid
  Renewable Portfolio Standard (RPS) 	                                         or dispatched at levels where design efficiencies are
  target requirements, while natural gas                                       very poor. This results in increased CO2 emissions
  resources were incorporated to ensure 	                                      from what might otherwise be expected.
  system reliability.”
                                                                               Think of it like this: suppose that you were going
In other words, the LADWP overtly recognizes                                   from one part of a city to another, where you are
that the wind projects on the system are only                                  required to maintain an average speed of 30 mph.
meeting the legislatively mandated RPS as they                                 In the base case you take an unobstructed route
provide intermittent energy. But to actually operate                           where you can set the car on cruise control at
a reliable system, with capacity and energy,                                   30 mph. Now consider if another equally long road
LADWP must install additional natural gas                                      you took had stoplights and periodically congested
generation resources. In spite of the purported                                traffic—which would result in unpredictable stops
environmental objective of wind energy, the shadow                             or slowdowns. To maintain the same 30 mph you
grid of gas generation will result in consequential                            would have to rapidly accelerate to 50 mph+ for
air emissions, including carbon dioxide. To meet                               certain intervals. Clearly there would be much
the fast-acting needs of their wind partner, many                              higher fuel used in the second case. This is more
such generators are “simple cycle” peaking units,                              or less what happens to an electric system that
which tend to be less efficient and have the highest                           attempts to accommodate a high percentage of wind
emissions among gas-fired generators.                                          resource into the grid.


14
     E
      nergy News Data, California Energy Markets, July 16, 2010, No. 1087, 11-12.




                                                                                                A RATIONAL LOOK AT RENEWABLE ENERGY | 9
The concept and conclusion is as valid as it                                          populous areas far away from the big cities on
is alarming:                                                                          either coast. This mismatch between resource and
                                                                                      population is one of the reasons that developers
Wind power does not produce all of the                                                of wind energy are challenged to find and exploit
claimed benefits of reductions in fossil                                              locations close to existing high-voltage transmission
fuel consumption and CO2 emissions                                                    lines that can carry electricity from wind turbines
when the fuel consumption and related                                                 to big city distribution lines. As more of these
emissions of the shadow grid of gas-                                                  locations become occupied, adding more wind
fired resources are taken into account.                                               generators can only happen in locations where new
                                                                                      additional transmission corridors are cleared and
The actual benefits are much less. When real world                                    constructed, to carry out the delivery process from
efficiency losses and additional emissions from the                                   high wind zones to urban centers. Obviously the
gas turbines are taken into account, the perceived                                    lack of new transmission adds a significant hurdle
environmental savings of wind energy are                                              when considering wind development. Too often
greatly diminished.15                                                                 this substantial component of cost gets overlooked
                                                                                      in discussing the relative costs and benefits of
Got Transmission? 		                                                                  wind energy.
Another Missing Cost Element
No matter where you live, or how windy you think                                      The western continental United States is home to
it is, some regions of the country see relatively little                              eight of the largest states, in terms of land area
sustained wind at all. Below is a basic map of the                                    (with Alaska and Texas completing the top 10).
United States’ wind energy potential.16                                               Of these eight states, only California ranks in the
                                                                                      top 10 in terms of population. The relatively sparse
Note that the regions of maximum wind potential                                       population in the vast, open areas calls for lengthy,
(the areas of red, purple and blue) do not coincide                                   and therefore costly, transmission lines. There can
with the areas of dense population. The wind speed                                    also be significant line losses.
and duration are generally the greatest in the least




                                                                                                           Wind Speed m’s

                                                                                                                   10.0
                                                                                                                    10.0
                                                                                                                     9.5
                                                                                                                     9.0
                                                                                                                     8.5
                                                                                                                     8.0
                                                                                                                     7.5
                                                                                                                     7.0
                                                                                                                     6.5
                                                                                                                     6.0
                                                                                                                     5.5
                                                                                                                     5.0
                           Wind resource data developed by AWS                                                       4.5
                           Truewind, LLC for windNavigator®                                                          4.0
                                                                                                                   4.0
                           Red, purple and blue areas: most economic potential
                           Brown and possible green areas: most technical potential




15
     B
      enteck Energy, How Less Became More—Wind, Power and Unintended Consequences in the Colorado Energy Market, http://docs.wind-watch.org/
     BENTEK-How-Less-Became-More.pdf.
16
     U.S. Department of Energy, Wind Powering America, http://www.windpoweringamerica.gov/wind_maps.asp.


10 | A RATIONAL LOOK AT RENEWABLE ENERGY
The Electric Continental Divide                          The Western Interconnect boundary (WECC)
The United States electric delivery system does not      consists of 30 such “Control Areas” that include
operate as a single grid, but rather as three separate   most of Montana, Colorado, New Mexico and
grids as shown on the map below:                         all states to the west. The Eastern Interconnect
                                                         includes everything east of this border, with about
NORTH AMERICAN ELECTRIC RELIABILTY                       120 individual Control Areas. And Texas? I guess
CORPORATION (NERC) REGIONS                               you don’t mess with Texas! They do their own thing
                                                         down there.

                                                         These three grids operate independently from
                                                         one another. Since the three large grids are not in
                                                         synchronous operation with one another,
                                                         they cannot be interconnected with one another
                                                         through traditional “alternating current” (AC)
                                                         transmission lines. The only possible means of
                                                         interconnection is through “direct current” (DC)
                                                         and this is very costly. Consequently there are only
                                                         six DC ties connecting the Western Interconnect
                                                         and the Eastern Interconnect in the United States
                                                         and one additional DC tie in Canada. The capacity
Because electric energy is instantaneously generated     of these ties is quite limited (due to cost).
and consumed, the operation of these three grids         The current interties, being already in service, have
requires a coordinated balancing of generation           little excess capacity to move new renewable power.
and consumption of power within each grid.               Six or seven interties of several hundred MW
Control Area Operators (CAOs) perform this               will simply not get the job done especially when
function, as well as other important tasks, that allow   compared to the million megawatt size of our
the interconnected electric power systems and their      electric system.
components to operate together both reliably
and efficiently. There are approximately 150 Control     The aforementioned transmission challenges create
Areas in the nation. Most are run by the dominant        a virtual wall between east and west and Texas.
large investor-owned utility in a geographic area        Unfortunately, the greatest natural source of wind
defined by an interconnected transmission grid and       energy is electrically trapped in the Midwest. It is
power plant system. The CAOs dispatch generators         virtually impossible, or at least very cost prohibitive,
from a central control center with computerized          to consider transmitting this resource to the west.
systems in such a way as to balance supply and           It is also impractical and cost prohibitive to transmit
demand and maintain the transmission system              this energy to the east coast population centers that
safely and reliably. This also protects the sensitive    are, in some cases, more than a thousand difficult
electronics to which we’ve grown accustomed by           miles away.
providing a consistent voltage, 24/7/365.




                                                                           A RATIONAL LOOK AT RENEWABLE ENERGY | 11
Just as precipitation will naturally drain within a                            there is much effort underway to develop new
continental divide, in similar manner the nation’s                             storage technologies. An ideal storage mechanism
wind energy resources are virtually constrained                                would be able to economically capture very large
to remain within the three “electric continental                               quantities of electricity, at a near instantaneous rate
divides” of the West, the East and Texas.                                      of charge and discharge on demand. It would also
What happens in the east stays in the east,                                    be able to safely hold a large charge for long periods
what happens in the west stays in the west and                                 of time, with little or no losses. Unfortunately,
what happens in Texas, stays in Texas.                                         as of today, this dream set of criteria is a fantasy,
                                                                               with nothing on the horizon likely to be even
Wind Energy Storage—Not Ready 	                                                close. Unfortunately, the wave of new, wind and
for Prime time                                                                 solar energy sources can only function properly in
What if we could just store the wind energy when it                            a world that has optimized such near-ideal energy
is produced (and not needed) and then call on it in                            storage opportunities.
times of need? Consider this statement from the North
American Electric Reliability Corporation (NERC):17                            It is true that devices have been
                                                                               invented to store bulk electric energy.
	“Unlike water or gas, electricity                                            These tend to be miniscule in scale,
  cannot be stored. It must be generated                                       and expensive to acquire and operate.
  as it is needed, and supply must be kept
  in balance with demand. Furthermore,                                         One particular state-of-the-art storage device
  electricity follows the “path of least                                       consists, essentially, of a high-speed flywheel
  resistance,” so it generally cannot                                          (30,000 rpm) that is suspended (or levitated) above
  be routed in a specific direction.                                           cleverly designed magnets, resulting in a storage
  This means generation and transmission                                       that is almost frictionless. Such a device can begin
  operations in North America must                                             charging (or discharging) in a fraction of a second—
  be monitored and controlled in real time,                                    it is clearly able to respond to any sudden changes
  24 hours a day, to ensure a consistent and                                   in wind or solar output. It is recommended by the
  ample flow of electricity. This requires the                                 developer of this technology that about 2.5 MWh
  cooperation and coordination of hundreds                                     of storage capacity (at a cost of $1.4 million) will
  of electricity industry participants.”                                       accommodate a wind turbine of about one MW
                                                                               name-plate rating. The one MW wind turbine,
Storage of electricity would, indeed, answer many                              according to EIA data,18 would come with an
of the operational concerns raised when it comes                               installed cost of about $2.4 million. Storage,
to renewable energy. In the above statement saying                             in this case, therefore adds about 60 percent
electricity “cannot be stored” would be better                                 to the installed cost of wind. Such a storage
phrased as “cannot be practically and economically                             device is capable of offsetting any unanticipated
stored, at this time.” To fill this perceived need,                            effects of the wind system for a period of at least




17
     North American Electric Reliability Corporation, About NERC: Understanding the Grid, http://www.nerc.com/page.php?cid=1|15.
18
     U
      .S. DOE Energy Information Administration, Updated Capital Cost Estimates for Electricity Generation Plants, November 2010, http://www.eia.gov/
     oiaf/beck_plantcosts/pdf/updatedplantcosts.pdf.


12 | A RATIONAL LOOK AT RENEWABLE ENERGY
2.5 hours, or longer. This gives the utility                              Wind Turbines can Consume Electricity
system more opportunity to operate with more                              One of the little known ironies about utility scale
predictability; it also mates some capacity with                          wind turbines is that they require an external
the wind energy. The storage does not, however,                           source of grid-provided electricity in order to run
mitigate wind’s nationwide annual average capacity                        numerous functions.19 For example, particularly
factor of only 30 percent, or provide for reliability                     in cold climates, where much of the best wind
or dispatch ability on a par with our conventional                        resources can be found, these units must be heated
sources.                                                                  to maintain proper viscosity in lubricating fluids
                                                                          and to protect vital components from damage.
Based on the above estimates, storage would                               Even more of a draw is that blades need to be
add about 4.7 cents per kilowatt-hour to the                              periodically de-iced. When it’s cold in Wyoming
cost of wind. It is doubtful that such a system is                        and up into the Dakota badlands where the calm
economically justified, but it is quite interesting                       night air drops to below-zero, it will be the fossil-
nonetheless. Such exotic storage systems are                              based fuel from gas and coal-fired power plants in
typically reserved for the most rare of applications—                     the region that are called upon to warm the massive
remote islands, arctic outposts, etc., or for research                    wind turbines towering hundreds of feet above the
and development pilot projects. None of these                             windswept plains. These considerations need to be
technologies currently exist with sufficient supply                       factored into not only wind economics but also the
and at a low enough cost to make a meaningful                             actual amount of CO2 saved.
difference to the bulk power system.
                                                                          As we gather more and more real-world data in
Not every region or location is suitable for the most                     the production of wind energy, it is apparent this
promising storage opportunities. It should also                           resource has a long way to go before becoming
be noted that storage technologies always come                            a viable contributor to the world’s energy needs.
at not only a capital cost to develop and acquire                         While there may be a worthy role for subsidies
the storage mechanism, but also an operating cost                         and taxpayer support of wind, the inescapable fact
or storage penalty (essentially the execution of                          is that wind is unlikely to ever be more than
thermodynamic laws). There is always some amount                          high-cost/low-benefit supplemental resource,
of energy loss associated with storage. The flywheel                      which must be backed up by natural gas plants
system previously described claims a storage penalty                      and/or energy storage technology.
of about five percent, including transformation,
while hydroelectric pumped storage (the only
large-scale storage mechanism built to date) requires
about 30 percent more energy to fill the storage
pond than can be extracted upon retrieval.
The energy output of storage is always net negative.




19
     AWEO, Energy Consumption in Wind Facilities, http://www.aweo.org/windconsumption.html.


                                                                                              A RATIONAL LOOK AT RENEWABLE ENERGY | 13
Value of Power—                                         certainly also add in the cost of frequently calling
Demand versus Energy                                    a taxi when your car stalls half way down the road
Commercial and industrial electric power                to town (or on the middle of your cross-country
is typically priced and valued based on two             vacation), the cost of the tow truck to return your
components: demand and energy. Demand, or               vehicle, the cost of your lost time, the cost of lost
capacity, is the ability to supply electricity at the   business, etc. It doesn’t take much thought to see
very instant it is needed. Energy refers to the         that a focus on the fuel economy (as an accurate
amount of electricity that is actually delivered and    indicator of overall cost) is an illusion, as the real
used over the course of time (such as a monthly         cost of such a vehicle is considerably more than the
billing period, typically in kWh). Depending on the     conventional options. And who wants a car that
utility rate structure, the demand charge component     only runs on its own schedule?
can be as large as or larger than the energy
charge component. This reflects the fact that the       Some wind proponents say that the reliability will
utility must purchase, construct and have available     be equivalent to our conventional sources if we join
all of the generating and transmission resources        together several wind facilities, spread over a very
necessary to meet peak demand needs, as well as the     wide area. In our analogy that would be like buying
cumulative energy needs measured over a period of       multiple undependable cars hoping one of them
a month or a year.                                      would likely work at any time. Clearly the cost
                                                        (e.g. multiple insurance policies, etc.) and nuisance
Satisfying demand is closely associated with the        would far exceed the expense of one reliable vehicle.
notion of dependability or reliability.                 Empirical evidence doesn’t support this claim either.
                                                        See the earlier discussion, “Wind is Weak at Peak.”
Consumers want the power to be there
the very instant that it is demanded.                   This “value of power”concept is very relevant to a
                                                        discussion about renewable energy. A claim might
Having electricity intermittently available, at         be made, for instance, that a certain wind turbine
unpredictable times and quantities, is not acceptable   can produce power at a cost in terms of cents per
in today’s modern electric system.                      kilowatt hour (kWh) that approximates the cost of
                                                        coal or gas. But energy cost is only half the story.
A practical example will help illustrate this point.    The actual value of such power is properly assessed
When it comes to our automobiles, we have a             by considering both the demand and energy
tendency to demand cars be reliable and to meet         provided by any given resource, and the
our wants and needs at our beck and call.               related dependability.
Consider a choice between two automobiles:
one gets 50 miles per gallon, but only runs             WIND POWER COMPARED TO
intermittently about 25 percent of the time;            NATURAL GAS POWER
the other car gets about 20 miles per gallon,           Suppose we are weighing the pros and cons of a
but it runs all of the time. How would you value        decision to add a new resource. The two finalists
each of these cars?                                     are (1) a 100 MW wind farm, and (2) a 100 MW
                                                        combined-cycle gas plant. Our goal is to offset
If the first car had low fuel cost, but also low        emissions from an existing 100 MW coal plant
reliability, how much would you pay for such a car?     that is nearing retirement.
Note that when considering the cost, you would


14 | A RATIONAL LOOK AT RENEWABLE ENERGY
Our target coal plant is currently operated a little                             Since our target coal unit operates with 67 average
less than 67 percent of the time, primarily due to                               MW, the maximum replacement (albeit highly
the fact that the coal plant is dispatched, or operated                          unlikely or even impossible) that we can get from the
to conform to load requirements. Our plant runs                                  wind farm is 30 of the 67 average MW, or a
about the same as the entire fleet of U.S. coal plants.                          45 percent displacement. We are unavoidably left with
It normally runs at very high availability rates—in                              at least 37 average MW of coal that must operate
excess of 90 percent—but is scheduled to match                                   when the wind is not blowing. But, in fairness,
consumer load requirements. Our prospective gas                                  45 percent coal displacement is an extreme upper
plant can easily take the place of the retiring coal unit                        limit of what wind can do. In actuality, the wind farm
as it performs with similar characteristics. It can be                           is likely to produce some of its energy (probably about
sited flexibly near load. It depends on a combustion                             30 percent of the time) during periods when the coal
resource and therefore can be operated to match the                              plant is not operated at all. In addition, wind tends
consumer load requirements at any time.                                          to be strongest during off-peak periods—the same
                                                                                 periods when the coal plant is most likely to be scaled
Our prospective wind resource on the other hand,                                 back to minimum load. And, if the wind energy
can only be scheduled according to the operator’s best                           comes on during these periods, the coal plant cannot
estimate of forward-looking weather patterns. The                                be further reduced, unless it is taken completely off
primary challenge of wind is the intermittency of the                            line (which would subsequently incur restart costs
supply. Unless it is backed up with another peaking                              and ramping challenges). Therefore, the wind will
resource (usually gas turbines), we cannot use the                               most likely displace some other resource, such as gas
wind by itself as a complete coal replacement. But, the                          or possibly hydro. Obviously, the carbon reductions
obvious allure of wind is the promise of low emission                            from wind will be much lower, or even nonexistent,
electricity (e.g. carbon dioxide, sulfur dioxide, nitrous                        in this circumstance. So, the range of coal
oxides, particulates, etc.).                                                     displacement that can be accomplished by wind is
                                                                                 somewhere in the range of 20 percent to 45 percent,
So, how well does wind energy perform?                                           with 30 percent as a reasonable central estimate.
The national average output efficiency
for wind is slightly less than 30 percent.                                       Now, let’s consider the gas alternative.

This means, for instance, that a 100 MW wind farm                                Combustion of natural gas produces about
will average only 30 MW of output. This might come in                            45 percent less carbon dioxide emissions than
the form of near 100 percent output for 30 percent of                            combustion of coal. Further, gas units are more
the time, and 0 percent output during nearly 70 percent                          efficient than their coal counterparts, and when this
of the time, with numerous iterations in between. But,                           efficiency is accounted for a combined-cycle gas
over time, the average will be about 30 MW. Thus, the                            plant can be expected to produce about 60 percent
ability of wind to displace our coal is energy limited                           less carbon dioxide than coal.20
because of the intermittent actual output.

20
     According to the Energy Information Administration, as a national average, coal-fired power plants emit 210.6 lbs. CO2 per MMBTU. Gas, on the 	
	    other hand, emits 117 lbs. CO2 per MMBTU. So, comparing these two fossil fuels, gas emissions are about 55 percent of the coal counterpart. This 	
	    means that there would be a 45 percent savings—but this is only part of the story. These emission rates are further adjusted by equipment efficiency. 	
	    The term used in industry for this efficiency is heat rate, where a lower heat rate constitutes a more efficient machine (the machine produces more
	    electrical energy per unit of heat or BTU input). The national average heat rate for coal is 10,355 BTU per kWh, while the national average heat rate for 	
	    gas is 7,620 BTU per kWh. When we combine heat rate with the emission attributes, we find that natural gas-fired emissions are about 59 percent lower 	
	    than coal-fired emissions per unit of energy, as shown in this formula: [ (210.6 X 10,355) – (117 X 7,620) ] / (210.6 X 10,355) = 59 percent. When we 	
	    employ the same formula for an efficient combined-cycle unit with a heat rate of 7,000 BTU/kWh, can demonstrate CO2 reductions of 64 percent.



                                                                                                       A RATIONAL LOOK AT RENEWABLE ENERGY | 15
Because gas can be run essentially all of the time,                             profile as a viable replacement for coal. If the
and can easily ramp up or down to match consumer                                national policy is to reduce emissions from
loads, it is a natural operational substitute for coal.                         coal-fired units, policy makers should abandon
Therefore, if we were to install a new 100 MW                                   so-called “renewable portfolio standards” that
combined-cycle, gas-fired plant (instead of the 100                             mandate wind and solar, and consider policies
MW wind farm in our example), this would result                                 to promote the use of natural gas as the
in a net carbon dioxide emissions reduction of                                  preferred alternative.
about 60 percent, compared to coal.
                                                                                Solar Energy
Consider the significance of this analysis.                                     There is significant national and international
With the same installed capacity, a combined-cycle                              interest in the development of new solar energy.
gas turbine can provide net reductions in carbon                                While this is obviously an energy source that has
dioxide that are greater than wind—approximately                                more applicability to regions with high levels of
double the benefit. In addition, wind is significantly                          sunshine, it is a promising technology for
more costly when compared to gas. A new wind                                    many reasons. The single greatest challenge to solar
farm can be expected to have an installed cost that                             power is the immutable fact that the sun is only
is about double the price of a new combined-cycle                               available, at best, half of the time, no matter how
gas turbine.21                                                                  ideal other conditions may be.

Emissions Reductions using Natural Gas to Replace Coal                          A well-designed and situated solar
	             Nitrogen Oxides	                   -85.20%                        project will typically provide available
    	         Particulates	                      -99.80%                        energy about 20 percent of the time. 	
    	         Sulfur Dioxide	                    -100%                          At this low availability, solar energy 	
    	         Mercury	                           -100%                          can never be more than a supplement 	
(Assumes gas heat rate of 7,620 BTU/kWh and coal heat rate of 10,355 BTU/kWh)   to a larger portfolio of power 	
                                                                                generating resources.
In the above example, we were focused solely on
carbon dioxide. How does the example pan out                                    And like wind, solar energy begs for supplemental
in terms of other pollutants? Gas performs even                                 storage in order to provide a degree of reliability
stronger when considering other forms of emissions.                             to the grid.
Gas yields an 85 percent reduction in nitrogen
oxides versus coal. And, gas-fired power plants have                            Not All Sunshine is Equal
virtually no particulate emissions, and no sulfur                               Photovoltaic cells, or PV solar, are by far the most
dioxide or mercury, compared to coal.22 So, in these                            common application for electric generation from
regards, it is impossible for wind to outperform gas.                           solar energy. Although there are other forms of
                                                                                solar renewable projects, given the availability and
Conclusion: gas outperforms wind in all                                         popularity of PV, we will focus on it first.
emission-reduction categories when balanced                                     PV panels are made from materials such as
against average wind performance across the                                     crystalline silicon and cadmium telluride, which
U.S. Further, gas can run with the same reliable                                convert photons from the sun’s rays into electric

21
   Calculations based on JEDI model found in U.S. Department of Energy, Wind Powering America, www.windpoweringamerica.gov/economics_jedi.asp 	
	 and www.20percentwind.org.
22
        Energy Information Administration—EIA, Voluntary Reporting of Greenhouse Gases Program Fuel Emission Coefficients, 2012.



16 | A RATIONAL LOOK AT RENEWABLE ENERGY
energy. To make use of the energy produced by                                   the bottom line energy cost to the consumer
these cells, an inverter is attached to a PV array                              would be in the range of 15 to 20 cents per kWh.
to create alternating electric current. Some PV                                 To be competitive, solar would need to cut even
panels are small, roof top applications, and a few                              further, probably another 50 to 70 percent below
are larger, utility scale facilities. PV solar panels                           even these levels.
have no moving parts. Hence the operations and
maintenance consists largely of a careful cleaning                              Large PV Solar
from time to time with glass cleaner. But even a                                Three years ago the much-publicized PV solar
very large PV solar project will have a fairly                                  facility at Nellis Air Force Base was the largest such
modest output.                                                                  facility in North America, and the third largest in
                                                                                the world. It sits on 140-acres and produces about
The entire United States’ output of PV                                          30,000,000 kWh per year. Yet this amount of
solar for the year 2009 was 807,988                                             production is only equivalent to one day’s output
MWh, about one-tenth of one percent                                             of a 1,200 MW coal-fired plant. If we were to
of the U.S. nuclear output.                                                     attempt to replace the entire fleet of coal-fired
                                                                                electrical generation in the United States with
How expensive is PV Solar?                                                      large PV solar projects, we would have to install
Apart from the day/night cycle of solar power,                                  a Nellis-sized facility each month for each of the
which can’t be avoided, another disadvantage                                    next 5,000 years.24 Indeed we are a long way from
of PV solar is its high cost. California provides                               accomplishing much with PV solar energy.
robust rebates and incentives under its California                              With growth in the solar industry, there are now
Solar Initiative and has produced some valuable                                 three other PV solar facilities in the United States
benchmarks for the cost of solar power.                                         that are larger than the Nellis facility, and 40
According to a study produced for the California                                larger PV facilities in the world.
Public Utilities Commission in 2009, the price
of installed PV under the California program                                    Given the inefficiencies of scale associated with PV
averaged $7,090 per kW for large industrial                                     solar, it is not realistic to envision the entire electric
customer installations, and $8,490 per kW for                                   system consisting solely of such distributed units.
residential installations.23 Assuming a 20 percent                              Homes cannot run entirely from PV solar panels
capacity factor, a cost of capital of six percent                               without some form of backup or battery storage.
and a life of 25 years, the cost per kWh of these                               Even large arrays on commercial buildings are
installations would run from 32 to 38 cents per kWh.                            almost always tied into the electric grid because of
                                                                                the various shortcomings in PV systems, and large
This example helps to explain why solar energy                                  scale utility systems require enormous tracts of land
is only a miniscule resource in the United States.                              while providing only modest energy output.
Still, solar is a growth industry and significant
improvements in both design and cost                                            Concentrated Thermal Solar
are forthcoming. Indeed there are anecdotal                                     PV technology directly converts solar energy into
evidences of less costly solar installations—as little                          electrical energy through panels. Concentrated
as $4,000 per kW—but even at that installed cost,                               thermal solar, on the other hand, uses parabolic

23
     Energy News Data, California Energy Markets, July 2, 2010.
24
      ased on the United State’s coal-fired electrical generation of 2 billion MWh per year compared to Nellis’ advertised annual output of 30,000 MWh
     B
     per year. (2 billion / 30,000) / 12 months = 5,555 years.)



                                                                                                       A RATIONAL LOOK AT RENEWABLE ENERGY | 17
mirrors, or similar technology, to focus solar energy                                             very predictable, barring the unpredictable effects
into heating a fluid that then goes through a heat                                                of intermittent cloud cover. If solar panels are
transfer process that is not unlike a traditional                                                 spread over a wide enough area, some of the cloud
gas- or coal-fired steam electric turbine. In fact,                                               cover effect can be mitigated through diversity.
many concentrated solar facilities will have natural                                              However, even in the best case the peak solar output
gas-based generation as a backup or supplement.                                                   tends to occur prior to the time of peak load for the
Concentrated solar installations tend to cost around                                              utility shown in blue.
two-thirds, or less, compared to the cost of a
                                                                                                                          St. George City peak load
PV installation. This is a significant step in the right                                                                   vs. SunSmart’s output:
direction, but still very expensive power compared                                                 100%
to traditional base load resources.                                                                90%




                                                                          RATIO: HOURLY TO PEAK
                                                                                                   80%

                                                                                                   70%

Nevada Solar One boasts one of the newest and                                                      60%                                                                                 Solar output falls
                                                                                                                                                                                       off daily just as load
largest concentrated solar facilities in the                                                       50%

                                                                                                   40%
                                                                                                                                                                                       in St. George peaks



United States. This project delivers 64 MW of                                                      30%

                                                                                                   20%
capacity and approximately 134,000 MWh of                                                           10%

energy per year. Gilbert Cohen, vice president of                                                   0%
                                                                                                          1   2   3   4   5   6   7   8   9   10   11   12 13 14 15 16 17 18 19 20 21 22 23 24
Engineering and Operations for Solargenix, said the                                                       HOUR OF PEAK, JULY 17, 2009                        Dixie’s St. George Load
project installation costs are somewhere in the range                                                                                                        SunSmart Output


of $220 to $250 million. At that price, the power is
more expensive than most wind power projects, but                                                 Based on the graphic, about 30 to 60 percent of
less expensive than typical PV projects. Energy from                                              the solar peak was useful during the peak hour.
Nevada Solar One currently costs about 13 cents                                                   The fit between solar-produced energy and the
per kWh.25 The developers of Nevada Solar One                                                     demand curve for electricity usage is not as close as
believe that a target of seven cents per kWh will be                                              one might expect, and certainly not as good as one
achievable in the future. At that price, concentrated                                             would hope. This can be significantly mitigated and
solar would be fairly competitive as a viable, utility                                            improved if the solar project is combined with an
grade source of power.                                                                            energy storage facility, but that would add to the cost.
                                                                                                  A similar result can be demonstrated across a much
Solar Demand versus System Peak                                                                   larger system. Last year, CAISO reported peak
A desirable attribute of solar energy is that it is                                               demand of 45,994 MW, which occurred at 3:00 p.m.
produced during hours that roughly coincide with                                                  on September 3, 2009. In that hour, even though
utility system peak loads. The coincidence is not                                                 California had installed PV capacity of nearly
perfect, but much better than wind. The chart in                                                  250 MW, that was operational and online on the
the following column is an actual output profile of                                               state’s electric grid, only about 144 MW of solar
the 100 kW SunSmart project in St. George, Utah.                                                  energy was being generated to help serve the peak
                                                                                                  demand, or around 58 percent of the amount that
The solar output shown in yellow tends to ramp                                                    the installed solar units were capable of producing.
up around 10 a.m. and then ramps down in                                                          By contrast, as of noon that same day, the PV
the afternoon. The shape of the output curve is                                                   solar units reached their maximum capacity factor
                                                                                                  at about 72 percent, which is the typical peak

25
     Jesse Broehl, Renewable Energy World.Com, A New Chapter Begins for Concentrated Solar Power, (2006), www.renewableenergyworld.com/rea/news/
     article/2006/02/a-new-chapter-begins-for-concentrated-solar-power-43336.


18 | A RATIONAL LOOK AT RENEWABLE ENERGY
Renewable energy and intermittency
Renewable energy and intermittency
Renewable energy and intermittency
Renewable energy and intermittency
Renewable energy and intermittency
Renewable energy and intermittency
Renewable energy and intermittency
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Renewable energy and intermittency

  • 1. A RATIONAL LOOK AT RENEWABLE ENERGY AND THE IMPLICATIONS OF INTERMITTENT POWER By Kimball Rasmussen | President and CEO, Deseret Power | November 2010, Edition 2.0 New Section — Natural Gas vs. Wind, p 14
  • 2.
  • 3. TABLE OF CONTENTS Forward................................................................................................................................................................. 2 Wind Energy......................................................................................................................................................... 2 Fundamental Issue: Intermittency............................................................................................................ 3 Name-plate Rating versus Actual Energy Delivery............................................................................... 3 Wind is Weak at Peak. ................................................................................................................................ 4 . Texas ............................................................................................................................................................ 4 California...................................................................................................................................................... 4 The Pacific Northwest................................................................................................................................ 5 The Western United States........................................................................................................................ 5 Enter the “Twilight Zone”—A Control Area Nightmare......................................................................... 6 The Shadow Grid—The Fossil Fuel Stand-In for No Show Wind............................................................ 8 The Los Angeles Department of Water and Power (LADWP).............................................................. 9 Increase in Carbon Dioxide from Wind Power—It is Possible............................................................... 9 Got Transmission? Another Missing Cost Element.............................................................................. 10 . The Electric Continental Divide................................................................................................................ 11 Wind Energy Storage—Not Ready for Prime Time................................................................................ 12 Wind Turbines can Consume Electricity................................................................................................. 13 Value of Power—Demand versus Energy................................................................................................ 14 NEW IN 2.0 VERSION: Wind Power Compared to Natural Gas Power............................................... 14 Solar Energy....................................................................................................................................................... 16 Not All Sunshine is Equal.......................................................................................................................... 16 How Expensive is PV Solar?..................................................................................................................... 17 Large PV Solar. .......................................................................................................................................... 17 . Concentrated Thermal Solar.................................................................................................................... 17 Solar Demand Versus System Peak........................................................................................................ 18 The Value of Solar Power—Demand Versus Energy............................................................................. 19 The Solar Synopsis.................................................................................................................................... 19 . The Renewable Portfolio Standard (RPS) or How 20 Percent Can Easily Become 100 Percent of a Utility’s Plant Investment. ....................................................... 19 . Summary............................................................................................................................................................. 21 Eyes Wide Open......................................................................................................................................... 22 Special Thanks.................................................................................................................................................. 22
  • 4. A RATIONAL LOOK AT RENEWABLE ENERGY and the Implications of Intermittent Power By Kimball Rasmussen | President and CEO, Deseret Power | November 2010, Edition 2.0 There seems to be a common misperception, that produce breakthroughs, which could mitigate some wind turbines provide an inexhaustible supply of of the impediments to high penetrations of wind cheap energy—after all, the fuel is free, isn’t it? and solar power to the electric grid, but as yet these Why don’t we simply build more and more impediments remain significant, and no economical renewable energy and achieve low-cost energy mitigation is on the immediate horizon. independence, while at the same time creating millions of new jobs to fuel a green economic FORWARD recovery? What’s not to like about that? Wind and solar energy—two of the most popular Unfortunately for all of us, the real world poses sources of renewable energy—are sometimes touted limits on renewable energy technology, and with as the answer to the world’s energy challenges. those limits come costs—relatively high costs Some advocates of these energy sources want us (financial and otherwise), as will be shown in to believe they can solve a plethora of problems, this paper—that must be paid to integrate even a ranging from avoiding the disastrous 2010 oil leak modest amount of renewable energy into the power in the Gulf region to materially reducing global supply portfolio. climate change. Wind and solar energy are also routinely promoted with the promise of green jobs, This paper will explore wind and solar energy in which will lead to a green technology revolution terms of their environmental, operational and while improving the environment—and making economic attributes. We will then place these in us “energy independent” to boot. But how well do context to form a rational look at renewable energy wind and solar energy solutions actually perform on and the implications of intermittent power—the these promises? Let’s take a rational look. not-so-obvious operational challenges that have to be addressed when large quantities of intermittent Wind Energy energy must be accommodated on the electricity grid. Wind energy is becoming a significant consideration in the planning and development of the modern This analysis is based on the current state of wind electric system. In the past decade, [the] United and solar technologies. Further research and States (U.S.) wind energy output grew [as a sector] development efforts of these technologies may 10 times faster than [the combination of ] all other 2 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 5. sources of electric energy.1 The growth in wind Name-plate Rating versus Actual turbines is remarkable, given that the U.S. wind Energy Delivery industry installed more than 60 percent of all For the sake of this discussion it’s important to existing turbines in just the past four years. know that all power producing equipment comes We are truly in a wind boom. This is attributable with an output rating stating how much power to a number of factors, including the fact that wind the facility will produce. This is referred to as projects are much quicker to design, permit and name-plate capacity and it is expressed in kilowatts construct than traditional coal or nuclear plants, (kW) or megawatts (MW).2 For large utility grade and wind energy tends to be one of the least generators the customary expectation is that once expensive renewable energy options. As a result, installed, they will deliver the name-plate output, the U.S. now leads the world in total wind energy on demand, when supplied with sufficient fuel. connected to the grid, surpassing nations such as Additionally, they will operate, if required, around Germany and Denmark. Where we go from here the clock. In the case of wind energy installations depends on how much we choose to subsidize this this is simply not the case. The output over time is alternative, as well as on some specific attributes of only a small fraction of name-plate rating because of wind and the systems required to deliver it. the intermittency of the fuel resource (moving air). The ratio of actual output divided by maximum Fundamental Issue: Intermittency potential output is defined as capacity factor. Despite robust wind development in the U.S., The entire sector of U.S. wind energy is currently wind faces a nearly insurmountable issue: operating at a capacity factor of only 30 percent.3 intermittency. Simply put, the intermittent nature of wind makes it difficult to harness effectively on a It is troubling that we see some astonishingly power grid that is finely tuned to deliver electricity simplistic reports in the media which assert the around the clock, matching demand second-by- number of homes that a given “wind farm” will second. The down side of this intermittency is allegedly supply. When reliability, expressed as clearly evident in the actual performance data of capacity factor, is taken into account, the wind turbines already installed. Wind performs serviceability of wind is much lower than advertised. poorly across all traditional utility metrics for Our modern understanding of supplying electricity generating resources. For reliability, stability, to a home is that a fully sufficient amount will be forecast ability, proximity to load centers, dispatch made available 24/7/365. In reality, it would be rare ability and economics, wind power is a poor choice that any wind development could actually supply for large-scale power production. fully sufficient electricity to even a single home 24/7/365. Such misleading claims by developers may contribute to the sentiment that renewable energy can easily replace fossil fuels—it cannot. 1 U .S. DOE Energy Information Administration, Net Generation by Energy Source, (2010), http://www.eia.gov/electricity/monthly/index.cfm. Wind data shown in [on] Table 1.1.A. Net Generation by Other Renewables: Total (All Sectors), 2000 through July 2010. Based on a comparison of 2010 versus 2000, wind energy output expanded by 1600 percent, natural gas electric generation grew 63 percent, nuclear grew seven percent, coal declined six percent and hydroelectric declined seven percent. The entire electric mix from all sources grew a total of eight percent. 2 One megawatt is equal to one thousand kilowatts. 3 U .S. DOE Energy Information Administration, Electric Power Monthly, Table 1.1.A, Net Generation by Other Renewables, www.eia.gov/electricity/ monthly/index.cfm. Annual capacity factor is calculated by dividing 2010 wind generation by the monthly average of installed capacity. A RATIONAL LOOK AT RENEWABLE ENERGY | 3
  • 6. Wind is Weak at Peak CALIFORNIA The intermittent and unpredictable nature of The State of California ranks third in the U.S. wind is further compounded by the fact that the for total installed wind energy (behind Texas wind tends to be weak during electrical peak and Iowa). California is also the third largest load conditions. Wind blows most consistently state geographically (behind Alaska and Texas). and creates the best generation opportunities during According to the California Independent System off-peak hours, cooler days and evening hours. Operator (CAISO), Unfortunately, this is directly opposite the electric “ alifornia is a national leader in the C customer demand profile. This disparity is a natural development of renewable resources. consequence of the climate forces that determine Because California has large quantities wind: daily and seasonal temperature differentials. of renewable resources already on-line, a significant amount of historical data is For example, on the hottest days of the summer available to accurately model and forecast the wind tends to be low or non-existent when future performance of the various types of air conditioning demands are at their peak. renewable resources.” Then when it gets windy, the temperatures will naturally moderate and air conditioning loads drop “ ind generation presents . . . significant W off just in time for the wind energy to pick up. operational challenges. Wind generation So wind supply and user demand are out of sync. energy production is extremely variable, The same phenomena can be demonstrated to occur and in California, it often produces its during winter peak conditions. The very coldest highest energy output when the demand days are also the days when the wind is not blowing. for power is at a low point.” 5 For this reason, utility-scale balancing regions simply do not plan for significant contribution of CAISO’s graph demonstrates its summer wind wind at peak demand periods. This can be amply generation and average variation by hour: demonstrated in real-world, large scale examples from Texas, California, the Pacific Northwest 2008 SUMMER LOADS RESOURCES region, and the entire western United States. OPERATIONS PREPAREDNESS ASSESSMENT 1200 TEXAS 1000 Texas is home to the largest collection of wind 800 MW generation facilities in the nation. More than one 600 out of every four wind turbines in America is 400 found in Texas. The Electric Reliability Council of 200 Texas (ERCOT) only plans for 8.7 percent of wind name-plate rating as the “dependable contribution 0 7/17/06 0:00 7/17/06 12:00 7/18/06 0:00 7/18/06 12:00 7/19/06 0:00 7/19/06 12:00 7/20/06 0:00 7/20/06 12:00 7/21/06 0:00 7/21/06 12:00 7/22/06 0:00 7/22/06 12:00 7/23/06 0:00 7/23/06 12:00 7/24/06 0:00 7/24/06 12:00 7/25/06 0:00 7/25/06 12:00 7/26/06 0:00 to peak requirements” (also known as Capacity Value), in accordance with ERCOT’s stakeholder- adopted methodology.4 This means that more than Average hourly wind generation Average output at peak 91 percent of Texas wind turbines are expected to be off-line when it matters most—at peak load periods. 4 Kent Saathoff, ERCOT Expects Adequate Power Supplies for Summer, ERCOT, May 12, 2010, www.ercot.com/news/press_releases/2010/nr-05-12-10. 5 2008 Summer Loads and Resources Operations Preparedness Assessment, Figure 5, Grid Assets, California ISO Version 1.0, April 28, 2008. 4 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 7. The wind capacity available at California peak On Tuesday December 16, 2008, the BPA system demand times is about 200 MW. The name-plate reached its peak for the entire year, with a demand capacity of California-based wind generators is of 10,762 MW. At the time of peak demand, about 2,600 MW. Hence, the wind power available the output of the entire fleet of wind resources, at peak is less than 10 percent, which is very with a name-plate value of 1,599 MW, was only similar to the Texas experience. In other words, 116 MW, or about seven percent of the name- about 90 percent of California wind turbines plate potential. This is very similar to the Texas and cannot be depended on to be producing at peak California wind experience, only in this case about load conditions. 93 percent are not producing at the winter peak. Note that Texas and California are both summer- THE WESTERN UNITED STATES peaking systems. Let us consider a vast winter- Now let us consider an even broader region—all peaking region—the Pacific Northwest—to see eleven western states, from Montana to New Mexico, how wind energy performs in that situation. from Washington to California, and everything in between. This vast area is served as a single THE PACIFIC NORTHWEST “reliability” region known as The Western Electricity Oregon and Washington rank fourth and fifth Coordinating Council (WECC). During the heat in the U.S. for total installed wind energy. wave of July 2006, the WECC system reached its The prominent Federal Power provider in the peak on Monday, July 24, 2006. The hottest day region—the Bonneville Power Administration was actually July 23, 2006, but this was a Sunday (BPA)—is a winter-peaking system with about so total loads did not peak until Monday. On the 10,000 MW of load. hottest day, the capacity factors for wind resources through most of WECC were well under five BONNEVILLE POWER ADMINISTRATION6 percent, and on the peak day, which was a slightly ACTUALS - WEEK DECEMBER 14, 2008 cooler day, the wind capacity factors were less than 12,000 10 percent.7 Again, this is very similar to Texas, 2008 BPA Peak Load California and the Pacific Northwest. 10,000 These real-world lessons illustrate a grave Megawatts 8,000 shortcoming of wind. Approximately 90 percent of 6,000 wind turbines can be expected to NOT PRODUCE 4,000 Load power at peak load periods, even when distributed Wind Nameplate over broad geographic areas. 2,000 Incidentally, I recently had a conversation with a 0 Sun Mon Tue Wed Thur Fri Sat trustee of a large mid-western utility that is home to 450 MW of wind generation. He asked me to guess Data: Bonneville Power Administration how much of the 450 MW of wind was actually producing during their system peak. I responded, “Probably between 30 and 40 MW.” He gasped, “How did you know? That is exactly what we are seeing!” Yes, wind is weak at peak. 6 Bonneville Power Administration, http://transmission.bpa.gov/Business/Operations/Wind/default.aspx. 7 WECC, Wind Capacity Issues, Working Draft, March 17, 2010. A RATIONAL LOOK AT RENEWABLE ENERGY | 5
  • 8. ENTER THE “TWILIGHT zONE”— ramped up by 1,200 MW in only one hour, A CONTROL AREA8 NIGHTmARE and then down 800 MW in only 20 minutes. The demonstrated low performance of wind energy Such rapid changes cause extreme stress to a control during peak load conditions is only one side of area and in many cases result in market price the coin. The other side occurs during off-peak distortions and environmental degradation. periods when unscheduled, unanticipated wind energy comes booming onto the system ready to CONTROL AREA/TWILIGHT zONE IN ACTION:10 serve loads that are nowhere to be found. BONNEVILLE POWER ADMINISTRATION ACTUAL — APRIL 27, 2010 1,800 This can easily happen because of the physics of 1,600 60 Min wind energy: the power output of a wind turbine 1,400 -800 accelerates at a much faster rate than the simple Megawatts W 1,200 0M MW change in wind speed. For instance, if the wind 0 1,000 +1,2 speed changes from 10 to 20 mph (a doubling of 800 the wind speed) the associated power output will 600 20 Min change by a factor of eight.9 400 200 0 An actual case with the BPA brings the control area 4:00 5:00 6:00 2:00 3:00 4:30 5:30 6:30 2:30 3:30 7:00 7:30 problem into perspective. On April 27, 2010 about 3:00 a.m., wind generation on the BPA system Time of Day BONNEvILLE POWER ADmINISTRATION 2009/10 TOTAL SYSTEm LOAD AND WIND CONTRIBUTION 12,000 SYSTEM ANNUAL TOTAL SYSTEM LOAD PEAK LOAD 10,000 WIND NAME-PLATE WIND ACTUAL 8,000 MEGAWATTS 6,000 4,000 Wind contribution 2% of name-plate 2,000 0 NOVEMBER 2009 8 Control Area - A power generation regulation region that maintains and balances its power load and power interchanges with other control areas. See also, Control Area Concepts and Obligations, North American Electric Reliability Council, 1992. 9 Note that the physics of wind energy is such that the change in power of a wind turbine is proportional to the cube of the change in wind speed. This means that if the wind speed cuts in half, the power output will cut to one-eighth. See also, Wind Systems Power Calculation, http://wind- power.generatorguide.net/wind-speed-power.html. 10 Bonneville Power Administration, http://transmission.bpa.gov/Business/Operations/Wind/default.aspx or ibid. 6 |.A.RATIONAL.LOOK.AT.RENEWABLE.ENERGY
  • 9. Such erratic changes in generation run directly base-load, coal-fired generators but they have been counter to the needs of utility operators who select reduced to minimum-load status. The nuclear plants from a pool of different traditional generators to are running because they remain in “must-run” provide the right amount of power at the instant condition for safety and economic reasons. The wind it’s required. In a normal day they blend the turbines are cruising along at a modest output. outputs of traditional power plants that include coal, nuclear, natural gas, and in some regions Now assume that a sudden, unanticipated, change hydroelectric to work in concert to minimize in the weather brings with it a rapid ramping of operating costs while maintaining reliability. wind energy output. This can result in a large block of several thousand MW of unplanned energy that, Now we have the advent of wind. The use of wind when combined with the operating status just energy creates an unprecedented challenge, which described, can easily swamp out the total load can easily launch utility power systems into an off- requirements of the utility—meaning there’s literally peak condition, something that can be described as no place for the energy to go. the “twilight zone.” Now the utility is forced to make quick and drastic Consider an event that occurs during off-peak or decisions to balance loads and resources. I call this twilight hours. The various utilities are operating the twilight zone—a control area no-man’s land. with all of the peaking plants off line and many of One option might be to enact the costly decision to the intermediate resources off line. Still running are shut down a base-load resource, such as a nuclear WIND PERFORMANCE SCORECARD Total hours in peak period 2208 or 3 months Percent of period when output was below 5% of name-plate 45% Total hours in period below 5% 982.6 or 5.9 weeks Consecutive hours of generation below 5% 103.9 or 4.3 days Capacity Factor during peak period 16% DECEMBER 2009 JANUARY 2010 A RATIONAL LOOK AT RENEWABLE ENERGY | 7
  • 10. or coal unit, and then subsequently face a high cost Do you think the twilight zone problem “re-start” with its attendant unusual wear and tear is insignificant? Is this just a remote hypothetical? on the affected units. In the case of a coal-fired unit, Think again. Many utilities have found themselves emissions will increase as the unit and its pollution in precisely this situation. For this reason some control equipment ramp up during the few hours system operators are now requiring wind turbines after startup. Another significant problem with this to be equipped with a “cut out” switch that choice is illustrated in the BPA example above. disconnects the wind farm from the grid by If a base-load source like coal is shut down, and remote control. But it doesn’t end there as the wind then the wind supply suddenly drops, it will not be developers still want to get paid for the energy they possible to re-energize the base-load facility quickly might have been able to deliver. When they are enough to compensate for the wind loss. This could denied this payment, they sue.13 No matter what result in rolling blackouts—which puts us out of the the result of such a suit, there is an obvious waste of twilight zone and into an electric abyss. money and energy. Another twilight zone choice is to try to sell the THE SHADOW GRID—THE FOSSIL FUEL “hot potato” energy to a neighboring utility or to STAND-IN FOR NO SHOW WIND another control area authority. What if the neighbor Wind’s unpredictable nature tends to provide energy already is operating at (or close to) optimum that does not match user demand. As noted in the balance—a likely scenario. The choices are quite examples of ERCOT, California and the Pacific limited and whatever option is chosen there will Northwest, wind volatility makes it unsuitable for be a substantial losses incurred by the wind energy electricity planners to rely on wind energy to meet utility (i.e. ratepayer). peak demand needs. The same applies to base-load and load-following demands. In order to mitigate In the first case the electricity is sold at a these negative effects, the grid operators and substantially discounted price (e.g. what costs the planners must construct a shadow grid, typically utility $135/MWh is sold for $20/MWh).11 consisting of fossil-fueled power plants (particularly fast responding gas-peaking units). This shadow grid In the second case the market price for electricity stands as reserve generation for those times when can plunge so low that the price actually wind has unexpected supply variations, which are goes negative. The host utility might actually have inherently a daily matter. This augmentation needs to pay a neighboring utility to accept the surplus to be distinguished from the former backup of schedule and allow delivery onto its system. conventional sources built into the grid, which was This absurd result is a reality in a system that has a primarily designed to deal with demand variations. high percentage of wind generation installed and Expressed another way, conventional sources have a can be very costly to the host utility.12 Capacity Value of well over 90 percent, while wind energy’s Capacity Value is under 10 percent. This is a profound difference. 11 FPComment, Ontario’s Power Trip: Power Dumping, http://opinion.financialpost.com/2011/07/20/ontarios-power-trip-power-dumping/. 12 K nowledge Problem, Frequent Negative Power Prices in the West Region of ERCOT Result from Wasteful Renewable Power Subsidies, http://knowledgep- roblem.com/2008/11/20/frequent_negati/. 13 U nited States of America Before the Federal Energy Regulatory Commission, Complaint and Petition for Order Under Federal Power Act Section 211A Against Bonneville Power Administration Requesting Fast Track Processing, http://www.bpa.gov/corporate/agencytopics/columbiariverhighwatermgmnt/ otherdocs/2011-06-13_complaintagainstbpa.pdf. 8 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 11. Typically, we build new fossil-fueled The need to develop a shadow grid has also resulted peaking power plants (usually natural in the actual filing of new tariffs to charge for gas) to augment the wind resources that the cost of such a grid. Puget Sound Electric has were intended to eliminate fossil-fueled recently filed a tariff with a proposed charge of resources in the first place. $2.70 per kilowatt-month to offset the carrying cost of a shadow grid of gas turbines that are required to This duplication of costs is forced onto consumers, stabilize the volatility of wind.14 This can result in who must pay for both the wind turbine and the an energy charge of one- to two-cents per kWh— back-up generator. or an additional 10 to 20 percent (or more) tacked onto the already high cost of a wind turbine in The Los Angeles Department of Water order to integrate it operationally into the grid. and Power (LADWP) recognizes the need to back up wind with gas in order to maintain capacity Increase in Carbon Dioxide and reliability. Consider the following statement from Wind Power—It is Possible from the LADWP’s executive summary of its 2010 In addition to the obvious investment and operating Draft Integrated Resource Plan: cost of the shadow grid, there is another unintended consequence of this fossil-fueled backstop system: “There is ongoing debate regarding the CO2 [carbon] emissions. As discussed above, level of on-peak reliability of renewable a significant penetration of wind turbines into resources. However, the renewable an electric grid can cause base and intermediate resources were added mainly to satisfy resources to be fired up and energized onto the grid Renewable Portfolio Standard (RPS) or dispatched at levels where design efficiencies are target requirements, while natural gas very poor. This results in increased CO2 emissions resources were incorporated to ensure from what might otherwise be expected. system reliability.” Think of it like this: suppose that you were going In other words, the LADWP overtly recognizes from one part of a city to another, where you are that the wind projects on the system are only required to maintain an average speed of 30 mph. meeting the legislatively mandated RPS as they In the base case you take an unobstructed route provide intermittent energy. But to actually operate where you can set the car on cruise control at a reliable system, with capacity and energy, 30 mph. Now consider if another equally long road LADWP must install additional natural gas you took had stoplights and periodically congested generation resources. In spite of the purported traffic—which would result in unpredictable stops environmental objective of wind energy, the shadow or slowdowns. To maintain the same 30 mph you grid of gas generation will result in consequential would have to rapidly accelerate to 50 mph+ for air emissions, including carbon dioxide. To meet certain intervals. Clearly there would be much the fast-acting needs of their wind partner, many higher fuel used in the second case. This is more such generators are “simple cycle” peaking units, or less what happens to an electric system that which tend to be less efficient and have the highest attempts to accommodate a high percentage of wind emissions among gas-fired generators. resource into the grid. 14 E nergy News Data, California Energy Markets, July 16, 2010, No. 1087, 11-12. A RATIONAL LOOK AT RENEWABLE ENERGY | 9
  • 12. The concept and conclusion is as valid as it populous areas far away from the big cities on is alarming: either coast. This mismatch between resource and population is one of the reasons that developers Wind power does not produce all of the of wind energy are challenged to find and exploit claimed benefits of reductions in fossil locations close to existing high-voltage transmission fuel consumption and CO2 emissions lines that can carry electricity from wind turbines when the fuel consumption and related to big city distribution lines. As more of these emissions of the shadow grid of gas- locations become occupied, adding more wind fired resources are taken into account. generators can only happen in locations where new additional transmission corridors are cleared and The actual benefits are much less. When real world constructed, to carry out the delivery process from efficiency losses and additional emissions from the high wind zones to urban centers. Obviously the gas turbines are taken into account, the perceived lack of new transmission adds a significant hurdle environmental savings of wind energy are when considering wind development. Too often greatly diminished.15 this substantial component of cost gets overlooked in discussing the relative costs and benefits of Got Transmission? wind energy. Another Missing Cost Element No matter where you live, or how windy you think The western continental United States is home to it is, some regions of the country see relatively little eight of the largest states, in terms of land area sustained wind at all. Below is a basic map of the (with Alaska and Texas completing the top 10). United States’ wind energy potential.16 Of these eight states, only California ranks in the top 10 in terms of population. The relatively sparse Note that the regions of maximum wind potential population in the vast, open areas calls for lengthy, (the areas of red, purple and blue) do not coincide and therefore costly, transmission lines. There can with the areas of dense population. The wind speed also be significant line losses. and duration are generally the greatest in the least Wind Speed m’s 10.0 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 Wind resource data developed by AWS 4.5 Truewind, LLC for windNavigator® 4.0 4.0 Red, purple and blue areas: most economic potential Brown and possible green areas: most technical potential 15 B enteck Energy, How Less Became More—Wind, Power and Unintended Consequences in the Colorado Energy Market, http://docs.wind-watch.org/ BENTEK-How-Less-Became-More.pdf. 16 U.S. Department of Energy, Wind Powering America, http://www.windpoweringamerica.gov/wind_maps.asp. 10 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 13. The Electric Continental Divide The Western Interconnect boundary (WECC) The United States electric delivery system does not consists of 30 such “Control Areas” that include operate as a single grid, but rather as three separate most of Montana, Colorado, New Mexico and grids as shown on the map below: all states to the west. The Eastern Interconnect includes everything east of this border, with about NORTH AMERICAN ELECTRIC RELIABILTY 120 individual Control Areas. And Texas? I guess CORPORATION (NERC) REGIONS you don’t mess with Texas! They do their own thing down there. These three grids operate independently from one another. Since the three large grids are not in synchronous operation with one another, they cannot be interconnected with one another through traditional “alternating current” (AC) transmission lines. The only possible means of interconnection is through “direct current” (DC) and this is very costly. Consequently there are only six DC ties connecting the Western Interconnect and the Eastern Interconnect in the United States and one additional DC tie in Canada. The capacity Because electric energy is instantaneously generated of these ties is quite limited (due to cost). and consumed, the operation of these three grids The current interties, being already in service, have requires a coordinated balancing of generation little excess capacity to move new renewable power. and consumption of power within each grid. Six or seven interties of several hundred MW Control Area Operators (CAOs) perform this will simply not get the job done especially when function, as well as other important tasks, that allow compared to the million megawatt size of our the interconnected electric power systems and their electric system. components to operate together both reliably and efficiently. There are approximately 150 Control The aforementioned transmission challenges create Areas in the nation. Most are run by the dominant a virtual wall between east and west and Texas. large investor-owned utility in a geographic area Unfortunately, the greatest natural source of wind defined by an interconnected transmission grid and energy is electrically trapped in the Midwest. It is power plant system. The CAOs dispatch generators virtually impossible, or at least very cost prohibitive, from a central control center with computerized to consider transmitting this resource to the west. systems in such a way as to balance supply and It is also impractical and cost prohibitive to transmit demand and maintain the transmission system this energy to the east coast population centers that safely and reliably. This also protects the sensitive are, in some cases, more than a thousand difficult electronics to which we’ve grown accustomed by miles away. providing a consistent voltage, 24/7/365. A RATIONAL LOOK AT RENEWABLE ENERGY | 11
  • 14. Just as precipitation will naturally drain within a there is much effort underway to develop new continental divide, in similar manner the nation’s storage technologies. An ideal storage mechanism wind energy resources are virtually constrained would be able to economically capture very large to remain within the three “electric continental quantities of electricity, at a near instantaneous rate divides” of the West, the East and Texas. of charge and discharge on demand. It would also What happens in the east stays in the east, be able to safely hold a large charge for long periods what happens in the west stays in the west and of time, with little or no losses. Unfortunately, what happens in Texas, stays in Texas. as of today, this dream set of criteria is a fantasy, with nothing on the horizon likely to be even Wind Energy Storage—Not Ready close. Unfortunately, the wave of new, wind and for Prime time solar energy sources can only function properly in What if we could just store the wind energy when it a world that has optimized such near-ideal energy is produced (and not needed) and then call on it in storage opportunities. times of need? Consider this statement from the North American Electric Reliability Corporation (NERC):17 It is true that devices have been invented to store bulk electric energy. “Unlike water or gas, electricity These tend to be miniscule in scale, cannot be stored. It must be generated and expensive to acquire and operate. as it is needed, and supply must be kept in balance with demand. Furthermore, One particular state-of-the-art storage device electricity follows the “path of least consists, essentially, of a high-speed flywheel resistance,” so it generally cannot (30,000 rpm) that is suspended (or levitated) above be routed in a specific direction. cleverly designed magnets, resulting in a storage This means generation and transmission that is almost frictionless. Such a device can begin operations in North America must charging (or discharging) in a fraction of a second— be monitored and controlled in real time, it is clearly able to respond to any sudden changes 24 hours a day, to ensure a consistent and in wind or solar output. It is recommended by the ample flow of electricity. This requires the developer of this technology that about 2.5 MWh cooperation and coordination of hundreds of storage capacity (at a cost of $1.4 million) will of electricity industry participants.” accommodate a wind turbine of about one MW name-plate rating. The one MW wind turbine, Storage of electricity would, indeed, answer many according to EIA data,18 would come with an of the operational concerns raised when it comes installed cost of about $2.4 million. Storage, to renewable energy. In the above statement saying in this case, therefore adds about 60 percent electricity “cannot be stored” would be better to the installed cost of wind. Such a storage phrased as “cannot be practically and economically device is capable of offsetting any unanticipated stored, at this time.” To fill this perceived need, effects of the wind system for a period of at least 17 North American Electric Reliability Corporation, About NERC: Understanding the Grid, http://www.nerc.com/page.php?cid=1|15. 18 U .S. DOE Energy Information Administration, Updated Capital Cost Estimates for Electricity Generation Plants, November 2010, http://www.eia.gov/ oiaf/beck_plantcosts/pdf/updatedplantcosts.pdf. 12 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 15. 2.5 hours, or longer. This gives the utility Wind Turbines can Consume Electricity system more opportunity to operate with more One of the little known ironies about utility scale predictability; it also mates some capacity with wind turbines is that they require an external the wind energy. The storage does not, however, source of grid-provided electricity in order to run mitigate wind’s nationwide annual average capacity numerous functions.19 For example, particularly factor of only 30 percent, or provide for reliability in cold climates, where much of the best wind or dispatch ability on a par with our conventional resources can be found, these units must be heated sources. to maintain proper viscosity in lubricating fluids and to protect vital components from damage. Based on the above estimates, storage would Even more of a draw is that blades need to be add about 4.7 cents per kilowatt-hour to the periodically de-iced. When it’s cold in Wyoming cost of wind. It is doubtful that such a system is and up into the Dakota badlands where the calm economically justified, but it is quite interesting night air drops to below-zero, it will be the fossil- nonetheless. Such exotic storage systems are based fuel from gas and coal-fired power plants in typically reserved for the most rare of applications— the region that are called upon to warm the massive remote islands, arctic outposts, etc., or for research wind turbines towering hundreds of feet above the and development pilot projects. None of these windswept plains. These considerations need to be technologies currently exist with sufficient supply factored into not only wind economics but also the and at a low enough cost to make a meaningful actual amount of CO2 saved. difference to the bulk power system. As we gather more and more real-world data in Not every region or location is suitable for the most the production of wind energy, it is apparent this promising storage opportunities. It should also resource has a long way to go before becoming be noted that storage technologies always come a viable contributor to the world’s energy needs. at not only a capital cost to develop and acquire While there may be a worthy role for subsidies the storage mechanism, but also an operating cost and taxpayer support of wind, the inescapable fact or storage penalty (essentially the execution of is that wind is unlikely to ever be more than thermodynamic laws). There is always some amount high-cost/low-benefit supplemental resource, of energy loss associated with storage. The flywheel which must be backed up by natural gas plants system previously described claims a storage penalty and/or energy storage technology. of about five percent, including transformation, while hydroelectric pumped storage (the only large-scale storage mechanism built to date) requires about 30 percent more energy to fill the storage pond than can be extracted upon retrieval. The energy output of storage is always net negative. 19 AWEO, Energy Consumption in Wind Facilities, http://www.aweo.org/windconsumption.html. A RATIONAL LOOK AT RENEWABLE ENERGY | 13
  • 16. Value of Power— certainly also add in the cost of frequently calling Demand versus Energy a taxi when your car stalls half way down the road Commercial and industrial electric power to town (or on the middle of your cross-country is typically priced and valued based on two vacation), the cost of the tow truck to return your components: demand and energy. Demand, or vehicle, the cost of your lost time, the cost of lost capacity, is the ability to supply electricity at the business, etc. It doesn’t take much thought to see very instant it is needed. Energy refers to the that a focus on the fuel economy (as an accurate amount of electricity that is actually delivered and indicator of overall cost) is an illusion, as the real used over the course of time (such as a monthly cost of such a vehicle is considerably more than the billing period, typically in kWh). Depending on the conventional options. And who wants a car that utility rate structure, the demand charge component only runs on its own schedule? can be as large as or larger than the energy charge component. This reflects the fact that the Some wind proponents say that the reliability will utility must purchase, construct and have available be equivalent to our conventional sources if we join all of the generating and transmission resources together several wind facilities, spread over a very necessary to meet peak demand needs, as well as the wide area. In our analogy that would be like buying cumulative energy needs measured over a period of multiple undependable cars hoping one of them a month or a year. would likely work at any time. Clearly the cost (e.g. multiple insurance policies, etc.) and nuisance Satisfying demand is closely associated with the would far exceed the expense of one reliable vehicle. notion of dependability or reliability. Empirical evidence doesn’t support this claim either. See the earlier discussion, “Wind is Weak at Peak.” Consumers want the power to be there the very instant that it is demanded. This “value of power”concept is very relevant to a discussion about renewable energy. A claim might Having electricity intermittently available, at be made, for instance, that a certain wind turbine unpredictable times and quantities, is not acceptable can produce power at a cost in terms of cents per in today’s modern electric system. kilowatt hour (kWh) that approximates the cost of coal or gas. But energy cost is only half the story. A practical example will help illustrate this point. The actual value of such power is properly assessed When it comes to our automobiles, we have a by considering both the demand and energy tendency to demand cars be reliable and to meet provided by any given resource, and the our wants and needs at our beck and call. related dependability. Consider a choice between two automobiles: one gets 50 miles per gallon, but only runs WIND POWER COMPARED TO intermittently about 25 percent of the time; NATURAL GAS POWER the other car gets about 20 miles per gallon, Suppose we are weighing the pros and cons of a but it runs all of the time. How would you value decision to add a new resource. The two finalists each of these cars? are (1) a 100 MW wind farm, and (2) a 100 MW combined-cycle gas plant. Our goal is to offset If the first car had low fuel cost, but also low emissions from an existing 100 MW coal plant reliability, how much would you pay for such a car? that is nearing retirement. Note that when considering the cost, you would 14 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 17. Our target coal plant is currently operated a little Since our target coal unit operates with 67 average less than 67 percent of the time, primarily due to MW, the maximum replacement (albeit highly the fact that the coal plant is dispatched, or operated unlikely or even impossible) that we can get from the to conform to load requirements. Our plant runs wind farm is 30 of the 67 average MW, or a about the same as the entire fleet of U.S. coal plants. 45 percent displacement. We are unavoidably left with It normally runs at very high availability rates—in at least 37 average MW of coal that must operate excess of 90 percent—but is scheduled to match when the wind is not blowing. But, in fairness, consumer load requirements. Our prospective gas 45 percent coal displacement is an extreme upper plant can easily take the place of the retiring coal unit limit of what wind can do. In actuality, the wind farm as it performs with similar characteristics. It can be is likely to produce some of its energy (probably about sited flexibly near load. It depends on a combustion 30 percent of the time) during periods when the coal resource and therefore can be operated to match the plant is not operated at all. In addition, wind tends consumer load requirements at any time. to be strongest during off-peak periods—the same periods when the coal plant is most likely to be scaled Our prospective wind resource on the other hand, back to minimum load. And, if the wind energy can only be scheduled according to the operator’s best comes on during these periods, the coal plant cannot estimate of forward-looking weather patterns. The be further reduced, unless it is taken completely off primary challenge of wind is the intermittency of the line (which would subsequently incur restart costs supply. Unless it is backed up with another peaking and ramping challenges). Therefore, the wind will resource (usually gas turbines), we cannot use the most likely displace some other resource, such as gas wind by itself as a complete coal replacement. But, the or possibly hydro. Obviously, the carbon reductions obvious allure of wind is the promise of low emission from wind will be much lower, or even nonexistent, electricity (e.g. carbon dioxide, sulfur dioxide, nitrous in this circumstance. So, the range of coal oxides, particulates, etc.). displacement that can be accomplished by wind is somewhere in the range of 20 percent to 45 percent, So, how well does wind energy perform? with 30 percent as a reasonable central estimate. The national average output efficiency for wind is slightly less than 30 percent. Now, let’s consider the gas alternative. This means, for instance, that a 100 MW wind farm Combustion of natural gas produces about will average only 30 MW of output. This might come in 45 percent less carbon dioxide emissions than the form of near 100 percent output for 30 percent of combustion of coal. Further, gas units are more the time, and 0 percent output during nearly 70 percent efficient than their coal counterparts, and when this of the time, with numerous iterations in between. But, efficiency is accounted for a combined-cycle gas over time, the average will be about 30 MW. Thus, the plant can be expected to produce about 60 percent ability of wind to displace our coal is energy limited less carbon dioxide than coal.20 because of the intermittent actual output. 20 According to the Energy Information Administration, as a national average, coal-fired power plants emit 210.6 lbs. CO2 per MMBTU. Gas, on the other hand, emits 117 lbs. CO2 per MMBTU. So, comparing these two fossil fuels, gas emissions are about 55 percent of the coal counterpart. This means that there would be a 45 percent savings—but this is only part of the story. These emission rates are further adjusted by equipment efficiency. The term used in industry for this efficiency is heat rate, where a lower heat rate constitutes a more efficient machine (the machine produces more electrical energy per unit of heat or BTU input). The national average heat rate for coal is 10,355 BTU per kWh, while the national average heat rate for gas is 7,620 BTU per kWh. When we combine heat rate with the emission attributes, we find that natural gas-fired emissions are about 59 percent lower than coal-fired emissions per unit of energy, as shown in this formula: [ (210.6 X 10,355) – (117 X 7,620) ] / (210.6 X 10,355) = 59 percent. When we employ the same formula for an efficient combined-cycle unit with a heat rate of 7,000 BTU/kWh, can demonstrate CO2 reductions of 64 percent. A RATIONAL LOOK AT RENEWABLE ENERGY | 15
  • 18. Because gas can be run essentially all of the time, profile as a viable replacement for coal. If the and can easily ramp up or down to match consumer national policy is to reduce emissions from loads, it is a natural operational substitute for coal. coal-fired units, policy makers should abandon Therefore, if we were to install a new 100 MW so-called “renewable portfolio standards” that combined-cycle, gas-fired plant (instead of the 100 mandate wind and solar, and consider policies MW wind farm in our example), this would result to promote the use of natural gas as the in a net carbon dioxide emissions reduction of preferred alternative. about 60 percent, compared to coal. Solar Energy Consider the significance of this analysis. There is significant national and international With the same installed capacity, a combined-cycle interest in the development of new solar energy. gas turbine can provide net reductions in carbon While this is obviously an energy source that has dioxide that are greater than wind—approximately more applicability to regions with high levels of double the benefit. In addition, wind is significantly sunshine, it is a promising technology for more costly when compared to gas. A new wind many reasons. The single greatest challenge to solar farm can be expected to have an installed cost that power is the immutable fact that the sun is only is about double the price of a new combined-cycle available, at best, half of the time, no matter how gas turbine.21 ideal other conditions may be. Emissions Reductions using Natural Gas to Replace Coal A well-designed and situated solar Nitrogen Oxides -85.20% project will typically provide available Particulates -99.80% energy about 20 percent of the time. Sulfur Dioxide -100% At this low availability, solar energy Mercury -100% can never be more than a supplement (Assumes gas heat rate of 7,620 BTU/kWh and coal heat rate of 10,355 BTU/kWh) to a larger portfolio of power generating resources. In the above example, we were focused solely on carbon dioxide. How does the example pan out And like wind, solar energy begs for supplemental in terms of other pollutants? Gas performs even storage in order to provide a degree of reliability stronger when considering other forms of emissions. to the grid. Gas yields an 85 percent reduction in nitrogen oxides versus coal. And, gas-fired power plants have Not All Sunshine is Equal virtually no particulate emissions, and no sulfur Photovoltaic cells, or PV solar, are by far the most dioxide or mercury, compared to coal.22 So, in these common application for electric generation from regards, it is impossible for wind to outperform gas. solar energy. Although there are other forms of solar renewable projects, given the availability and Conclusion: gas outperforms wind in all popularity of PV, we will focus on it first. emission-reduction categories when balanced PV panels are made from materials such as against average wind performance across the crystalline silicon and cadmium telluride, which U.S. Further, gas can run with the same reliable convert photons from the sun’s rays into electric 21 Calculations based on JEDI model found in U.S. Department of Energy, Wind Powering America, www.windpoweringamerica.gov/economics_jedi.asp and www.20percentwind.org. 22 Energy Information Administration—EIA, Voluntary Reporting of Greenhouse Gases Program Fuel Emission Coefficients, 2012. 16 | A RATIONAL LOOK AT RENEWABLE ENERGY
  • 19. energy. To make use of the energy produced by the bottom line energy cost to the consumer these cells, an inverter is attached to a PV array would be in the range of 15 to 20 cents per kWh. to create alternating electric current. Some PV To be competitive, solar would need to cut even panels are small, roof top applications, and a few further, probably another 50 to 70 percent below are larger, utility scale facilities. PV solar panels even these levels. have no moving parts. Hence the operations and maintenance consists largely of a careful cleaning Large PV Solar from time to time with glass cleaner. But even a Three years ago the much-publicized PV solar very large PV solar project will have a fairly facility at Nellis Air Force Base was the largest such modest output. facility in North America, and the third largest in the world. It sits on 140-acres and produces about The entire United States’ output of PV 30,000,000 kWh per year. Yet this amount of solar for the year 2009 was 807,988 production is only equivalent to one day’s output MWh, about one-tenth of one percent of a 1,200 MW coal-fired plant. If we were to of the U.S. nuclear output. attempt to replace the entire fleet of coal-fired electrical generation in the United States with How expensive is PV Solar? large PV solar projects, we would have to install Apart from the day/night cycle of solar power, a Nellis-sized facility each month for each of the which can’t be avoided, another disadvantage next 5,000 years.24 Indeed we are a long way from of PV solar is its high cost. California provides accomplishing much with PV solar energy. robust rebates and incentives under its California With growth in the solar industry, there are now Solar Initiative and has produced some valuable three other PV solar facilities in the United States benchmarks for the cost of solar power. that are larger than the Nellis facility, and 40 According to a study produced for the California larger PV facilities in the world. Public Utilities Commission in 2009, the price of installed PV under the California program Given the inefficiencies of scale associated with PV averaged $7,090 per kW for large industrial solar, it is not realistic to envision the entire electric customer installations, and $8,490 per kW for system consisting solely of such distributed units. residential installations.23 Assuming a 20 percent Homes cannot run entirely from PV solar panels capacity factor, a cost of capital of six percent without some form of backup or battery storage. and a life of 25 years, the cost per kWh of these Even large arrays on commercial buildings are installations would run from 32 to 38 cents per kWh. almost always tied into the electric grid because of the various shortcomings in PV systems, and large This example helps to explain why solar energy scale utility systems require enormous tracts of land is only a miniscule resource in the United States. while providing only modest energy output. Still, solar is a growth industry and significant improvements in both design and cost Concentrated Thermal Solar are forthcoming. Indeed there are anecdotal PV technology directly converts solar energy into evidences of less costly solar installations—as little electrical energy through panels. Concentrated as $4,000 per kW—but even at that installed cost, thermal solar, on the other hand, uses parabolic 23 Energy News Data, California Energy Markets, July 2, 2010. 24 ased on the United State’s coal-fired electrical generation of 2 billion MWh per year compared to Nellis’ advertised annual output of 30,000 MWh B per year. (2 billion / 30,000) / 12 months = 5,555 years.) A RATIONAL LOOK AT RENEWABLE ENERGY | 17
  • 20. mirrors, or similar technology, to focus solar energy very predictable, barring the unpredictable effects into heating a fluid that then goes through a heat of intermittent cloud cover. If solar panels are transfer process that is not unlike a traditional spread over a wide enough area, some of the cloud gas- or coal-fired steam electric turbine. In fact, cover effect can be mitigated through diversity. many concentrated solar facilities will have natural However, even in the best case the peak solar output gas-based generation as a backup or supplement. tends to occur prior to the time of peak load for the Concentrated solar installations tend to cost around utility shown in blue. two-thirds, or less, compared to the cost of a St. George City peak load PV installation. This is a significant step in the right vs. SunSmart’s output: direction, but still very expensive power compared 100% to traditional base load resources. 90% RATIO: HOURLY TO PEAK 80% 70% Nevada Solar One boasts one of the newest and 60% Solar output falls off daily just as load largest concentrated solar facilities in the 50% 40% in St. George peaks United States. This project delivers 64 MW of 30% 20% capacity and approximately 134,000 MWh of 10% energy per year. Gilbert Cohen, vice president of 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Engineering and Operations for Solargenix, said the HOUR OF PEAK, JULY 17, 2009 Dixie’s St. George Load project installation costs are somewhere in the range SunSmart Output of $220 to $250 million. At that price, the power is more expensive than most wind power projects, but Based on the graphic, about 30 to 60 percent of less expensive than typical PV projects. Energy from the solar peak was useful during the peak hour. Nevada Solar One currently costs about 13 cents The fit between solar-produced energy and the per kWh.25 The developers of Nevada Solar One demand curve for electricity usage is not as close as believe that a target of seven cents per kWh will be one might expect, and certainly not as good as one achievable in the future. At that price, concentrated would hope. This can be significantly mitigated and solar would be fairly competitive as a viable, utility improved if the solar project is combined with an grade source of power. energy storage facility, but that would add to the cost. A similar result can be demonstrated across a much Solar Demand versus System Peak larger system. Last year, CAISO reported peak A desirable attribute of solar energy is that it is demand of 45,994 MW, which occurred at 3:00 p.m. produced during hours that roughly coincide with on September 3, 2009. In that hour, even though utility system peak loads. The coincidence is not California had installed PV capacity of nearly perfect, but much better than wind. The chart in 250 MW, that was operational and online on the the following column is an actual output profile of state’s electric grid, only about 144 MW of solar the 100 kW SunSmart project in St. George, Utah. energy was being generated to help serve the peak demand, or around 58 percent of the amount that The solar output shown in yellow tends to ramp the installed solar units were capable of producing. up around 10 a.m. and then ramps down in By contrast, as of noon that same day, the PV the afternoon. The shape of the output curve is solar units reached their maximum capacity factor at about 72 percent, which is the typical peak 25 Jesse Broehl, Renewable Energy World.Com, A New Chapter Begins for Concentrated Solar Power, (2006), www.renewableenergyworld.com/rea/news/ article/2006/02/a-new-chapter-begins-for-concentrated-solar-power-43336. 18 | A RATIONAL LOOK AT RENEWABLE ENERGY