Tag Archives: Renewables

System LCOE: What are the Costs of Variable Renewables?

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From the Potsdam Institute for Climate Impact Research, a serious piece of work on renewable integration costs.

Abstract:

Levelized costs of electricity (LCOE) are a common metric for comparing power generating technologies. However, there is qualified criticism particularly towards evaluating variable renewables like wind and solar power based on LCOE because it ignores integration costs that occur at the system level. In this paper we propose a new measure System LCOE as the sum of generation and integration costs per unit of VRE. For this purpose we develop a conclusive definition of integration costs. Furthermore we decompose integration costs into different cost components and draw conclusions for integration options like transmission grids and energy storage. System LCOE are quantified from a power system model and a literature review. We find that at moderate wind shares (~20%) integration costs can be in the same range as generation costs of wind power and conventional plants. Integration costs further increase with growing wind shares. We conclude that integration costs can become an economic barrier to deploying VRE at high shares. This implies that an economic evaluation of VRE must not neglect integration costs. A pure LCOE comparison would significantly underestimate the costs of VRE at high shares. System LCOE give a framework of how to consistently account for integration costs and thus guide policy makers and system planers in designing a cost-efficient power system.

The Decline of Renewable Energy

rewnewables_declining_share_lomborg.jpg

When green renewables are cheaper than fossil fuels, they will take over the world. Instead of believing in the Tooth Fairy, we should start investing in green R&D.

Bjorn Lomborg examines the long perspective on renewable energy trends. I liked this piece because it so concisely summarizes both the engineering and social realities of the popular but tragically expensive rush to solar and wind.

Solar and wind energy account for a trivial proportion of current renewables – about one-third of one percentage point. The vast majority comes from biomass, or wood and plant material – humanity’s oldest energy source. While biomass is renewable, it is often neither good nor sustainable.

Burning wood in pre-industrial Western Europe caused massive deforestation, as is occurring in much of the developing world today. The indoor air pollution that biomass produces kills more than three million people annually. Likewise, modern energy crops increase deforestation, displace agriculture, and push up food prices.

The most renewables-intensive places in the world are also the poorest. Africa gets almost 50% of its energy from renewables, compared to just 8% for the OECD. Even the European OECD countries, at 11.8%, are below the global average.

The reality is that humanity has spent recent centuries getting away from renewables. In 1800, the world obtained 94% of its energy from renewable sources. That figure has been declining ever since.

(…snip…)

The momentous move toward fossil fuels has done a lot of good. Compared to 250 years ago, the average person in the United Kingdom today has access to 50 times more power, travels 250 times farther, and has 37,500 times more light. Incomes have increased 20-fold.

The switch to fossil fuels has also had tremendous environmental benefits. Kerosene saved the whales (which had been hunted almost to extinction to provide supposedly “renewable” whale oil for lighting). Coal saved Europe’s forests. With electrification, indoor air pollution, which is much more dangerous than outdoor air pollution, disappeared in most of the developed world.

And there is one environmental benefit that is often overlooked: in 1910, more than 30% of farmland in the United States was used to produce fodder for horses and mules. Tractors and cars eradicated this huge demand on farmland (while ridding cities of manure pollution).

Of course, fossil fuels brought their own environmental problems. And, while technological innovations like scrubbers on smokestacks and catalytic converters on cars have reduced local air pollution substantially, the problem of CO₂ emissions remains. Indeed, it is the main reason for the world’s clamor for a return to renewables.

To be sure, wind and solar have increased dramatically. Since 1990, wind-generated power has grown 26% per year and solar a phenomenal 48%. But the growth has been from almost nothing to slightly more than almost nothing. In 1990, wind produced 0.0038% of the world’s energy; it is now producing 0.29%. Solar-electric power has gone from essentially zero to 0.04%.

Yes, Denmark gets a record 34% of its electricity from wind. But electricity accounts for only 18% of its final energy use.

Europe now gets 1% of its energy from wind – less than before industrialization, when cozy windmills contributed about 2% (and ships’ sails provided another 1%).The UK set its record for 

href=”http://www.histecon.magd.cam.ac.uk/history-sust/energyconsumption/”>wind power in 1804, when its share reached 2.5% – almost three times its level today.

Moreover, solar and wind will still contribute very little in the coming decades. In the IEA’s optimistic scenario, which assumes that the world’s governments will fulfill all of their green promises, wind will provide 1.34% of global energy by 2035, while solar will provide 0.42%. Global renewables will most likely increase by roughly 1.5 percentage points, to 14.5% by 2035. Under unrealistically optimistic assumptions, the share could increase five percentage points, to 17.9%.

So we are nowhere near switching back to renewables anytime soon. In the US, renewables accounted for 9.3% of energy production in 1949. President Barack Obama’s administration expects that number, almost a century later, to increase slightly, to 10.8% by 2040. In China, renewables’ share in energy production dropped from 40% in 1971 to 11% today; in 2035, it will likely be just 9%.

Yet we are paying through the nose for these renewables. In the last 12 years, the world has invested $1.6 trillion in clean energy. By 2020, the effort to increase reliance on renewables will cost the European Union alone $250 billion annually.

Spain now pays almost 1% of its GDP in subsidies for renewables, which is more than it spends on higher education. At the end of the century, Spain’s massive investment will have postponed global warming by 62 hours.

Current green energy policies are failing for a simple reason: renewables are far too expensive. Sometimes people claim that renewables are actually cheaper. But if renewables were cheaper, they wouldn’t need subsidies, and we wouldn’t need climate policies.

Former US Vice President Al Gore’s climate adviser, Jim Hansen, put it bluntly: “Suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India, or the world as a whole is almost the equivalent of believing in the Easter Bunny and [the] Tooth Fairy.”

The solution is to innovate the price of renewables downward. We need a dramatic increase in funding for research and development to make the next generations of wind, solar, and biomass energy cheaper and more effective.

Consider China. Despite the country’s massive investment in solar and wind, it mostly sells solar panels to Western countries at subsidized prices. Wind makes up just 0.2% of China’s energy, and solar accounts for 0.01%.

Meanwhile, China has 68% of the world’s solar water heaters on rooftops, because it is a smart and cheap technology. It needs no subsidies, and it produces 50 times more energy than all of China’s solar panels.

Can the grid handle renewables?

“The grid was not built for renewables,” said Trieu Mai, senior analyst at the National Renewable Energy Laboratory.

Even the LA Times has discovered that the renewables lobby is not telling the whole truth:

Minders of a fragile national power grid say the rush to renewable energy might actually make it harder to keep the lights on.

By Evan Halper

7:57 PM PST, December 2, 2013

WASHINGTON — In a sprawling complex of laboratories and futuristic gadgets in Golden, Colo., a supercomputer named Peregrinedoes a quadrillion calculations per second to help scientistsfigure out how to keep the lights on.

Peregrine was turned on this year by the U.S. Energy Department.It has the world’s largest “petascale” computing capability. It is the size of a Mack truck.

Its job is to figure out how to cope with a risk from something the public generally thinks of as benign — renewable energy.

Energy officials worry a lot these days about the stability of the massive patchwork of wires, substations and algorithms that keeps electricity flowing. They rattle off several scenarios that could lead to a collapse of the power grid — a well-executed cyberattack, a freak storm, sabotage.

But as states, led by California, race to bring more wind, solar and geothermal power online, those and other forms of alternative energy have become a new source of anxiety. The problem is that renewable energy adds unprecedented levels of stress to a grid designed for the previous century.

Green energy is the least predictable kind. Nobody can say for certain when the wind will blow or the sun will shine. A field of solar panels might be cranking out huge amounts of energy one minute and a tiny amount the next if a thick cloud arrives. In many cases, renewable resources exist where transmission lines don’t.

 (…snip…)

Back in Colorado, Peregrine is furiously working to map out grid scenarios involving wind, solar and other forms of renewable energy. Sharing space with Peregrine at the Energy Systems Integration Facility is a “visualization room” with a 16-foot screen that creates 3-D images of how different wind patterns interact with turbines, or how molecules interact inside a solar cell.

More…

Grid 2020: Towards a Policy of Renewable and Distributed Energy Resources

Another unreliable

The transformation occurring across the world’s electrical systems represents one of the greatest technological challenges industrialized societies have undertaken.

This just landed on my desk, from Caltech’s Resnick Sustainability Institute, how to manage the impact of unreliable wind and solar on the US grid by De Martini, Paul and Chandy, K. Mani and Fromer, N. A. (2012) Grid 2020: Towards a Policy of Renewable and Distributed Energy Resources. , Pasadena, CA. From the Executive Summary:

The transformation occurring across the world’s electrical systems represents one of the greatest technological challenges industrialized societies have undertaken. Reconfiguring a grid designed to carry power one way from reliable generation sources managed by few agents to a system in- creasingly laden with unreliable wind and solar energy while involving mil- lions more participants using advanced technologies will introduce a high degree of uncertainty and variability into the future grid. These changes po- tentially threaten reliability of electrical supply and must be carefully choreo- graphed to avoid widespread perturbations in cost, reliability and efficiency. Yet policy mandates for more and more renewable and distributed energy resources (DER) potentially threaten to outpace the solutions necessary to manage change effectively. This report highlights critical engineering, economic and policy issues that must be addressed to ensure a successful transition. These issues arise for several reasons, including:

  • Expectation of uninterrupted power reliability

  • Volatility of some renewable generation and customer demand

  • Time-scale alignment of customers, producers, economic and grid control actions

  • Rapid changes in both energy and information technologies

  • Clean energy incentives alignment with market and grid realities

Three realms in particular require focused attention on solutions. First, the transmission and distribution of electricity is fundamentally changing due to variable generation at wind and solar stations and customer load due to on- site generation and demand responses. This requires a new operating para- digm in which operational decision time cycles are decreasing beyond human capability to be central to the process as is the case today. Also, the need for coordination of transmission operations across operating regions is in- creasing and traditional jurisdictional boundaries between transmission and distribution are blurring. These factors combined with the massive capital investment to replace an aging infrastructure point to the need to reconsider fundamental design and operational reliability principles. The anticipated high degree of variability and uncertainty should be addressed through the use of models and methods designed for such stochastic applications. Further, the use of related risk management techniques adapted from other mission- critical industries should be evaluated.

More to follow…

Solve for X: Danielle Fong on economical energy storage

Lightsail Energy: Economically competitive storage — hmm…? We watched Danielle’s presentation last night. Aside from the SMR companies, this is one of the “green energy” startups that looks interesting. The investors are certainly sophisticated in this space: Khosla, Gates, Thiel+Founders Fund, TOTAL, et al.

We will be poking around to see if there is any supporting evidence exposed to the public. Danielle talked about thermal efficiency but not a word about economics. She says they have a “utility scale” pilot running that is accumulating data. What we care about is the market price of a MWhr of energy delivered into the grid. You can figure the input costs at nearly zero as there is throwaway excess intermittent, esp. wind at night.

Lomborg on the declining share of renewables

When green renewables are cheaper than fossil fuels, they will take over the world. Instead of believing in the Tooth Fairy, we should start investing in green R&D.

Bjorn Lomborg examines the long perspective on renewable energy trends. I liked this piece because it so concisely summarizes both the engineering and social realities of the popular but tragically expensive/ineffective rush to solar and wind. Bjorn forecasts that, in the next 25 years –  from 2011 to 2035, renewables will only increase by about 1.5%. That means from about 13% to 14.5%. But what does “renewables” actually mean. It doesn’t mean “clean” because nuclear power is excluded. Most people think “renewables” means the politically popular “feel good” solar and wind. In some countries, think Norway, New Zealand or Canada, a large portion of renewables comes from hydro power. But expansion of hydro is severely limited – both by opportunity and by politics. So what “renewables” mostly means is burning stuff:

Solar and wind energy account for a trivial proportion of current renewables – about one-third of one percentage point. The vast majority comes from biomass, or wood and plant material – humanity’s oldest energy source. While biomass is renewable, it is often neither good nor sustainable.

And in most places “burning stuff” is really bad. That is the nasty, filthy life that the developed world has escaped – but continues to kill the poorest two billion by air pollution, especially indoor air pollution.

Burning wood in pre-industrial Western Europe caused massive deforestation, as is occurring in much of the developing world today. The indoor air pollution that biomass produces kills more than three million people annually. Likewise, modern energy crops increase deforestation, displace agriculture, and push up food prices.

The most renewables-intensive places in the world are also the poorest. Africa gets almost 50% of its energy from renewables, compared to just 8% for the OECD. Even the European OECD countries, at 11.8%, are below the global average.

The reality is that humanity has spent recent centuries getting away from renewables. In 1800, the world obtained 94% of its energy from renewable sources. That figure has been declining ever since.

(…snip…) 

The switch to fossil fuels has also had tremendous environmental benefits. Kerosene saved the whales (which had been hunted almost to extinction to provide supposedly “renewable” whale oil for lighting). Coal saved Europe’s forests. With electrification, indoor air pollution, which is much more dangerous than outdoor air pollution, disappeared in most of the developed world.

And there is one environmental benefit that is often overlooked: in 1910, more than 30% of farmland in the United States was used to produce fodder for horses and mules. Tractors and cars eradicated this huge demand on farmland (while ridding cities of manure pollution).

Of course, fossil fuels brought their own environmental problems. And, while technological innovations like scrubbers on smokestacks and catalytic converters on cars have reduced local air pollution substantially, the problem of CO₂ emissions remains. Indeed, it is the main reason for the world’s clamor for a return to renewables.

To be sure, wind and solar have increased dramatically. Since 1990, wind-generated power has grown 26% per year and solar a phenomenal 48%. But the growth has been from almost nothing to slightly more than almost nothing. In 1990, wind produced 0.0038% of the world’s energy; it is now producing 0.29%. Solar-electric power has gone from essentially zero to 0.04%.

There is lots more Lomborg at Project Syndicate.

Clean energy stagnation

Long before climate policy became fashionable, global energy consumption data shows that from 1965 to 1999 the proportion of carbon-free energy more than doubled to more than 13 percent. Since then, there has been little if any progress in expanding the share of carbon-free energy in the global mix. Despite the rhetoric around the rise of renewable energy, this stagnation suggests how policies employed to accelerate rates of decarbonization of the global economy have been largely ineffective.

Senior Fellow at the Breakthrough Institute, Roger Pielke Jr is one of the very best science communicators. An illustration is this short Breakthrough essay which shows that Kyoto and all the hype has not produced the decarbonization we need. And certainly not the results the renewables advocates want us to believe. Roger concludes with this:

The data shows that for several decades the world has seen a halt in progress towards less carbon-intensive energy consumption, at about 13 percent of the total global supply. This stagnation provides further evidence that the policies that have been employed to accelerate rates of decarbonization of the global economy have been largely ineffective. The world was moving faster towards decarbonizing its energy mix long before climate policy became fashionable. Why this was so and what the future might hold will be the subject of future posts in this continuing discussion.

Read the complete essay. If you are keen to learn what makes for effective policies, then you are very likely to enjoy Roger’s The Climate Fix. For a short introduction see A Primer on How to Avoid Magical Solutions in Climate Policy.

How much of our electricity is generated from emission-free energy?

The purpose of this post is to organize US electrical production data for easy access. To impact global warming what matters is the developing world. But the US data is easy to access, so here it is:

 

Most Renewable-Generated Electricity is from Hydropower

Renewable energy sources provided about 12% of total U.S. utility-scale electricity generation in 2012. The largest share of the renewable-generated electricity came from hydroelectric power (56%), followed by: wind (28%), biomass wood (8%), biomass waste (4%), geothermal (3%), and solar (1%).

Electricity generation from renewable resources is primarily a function of generation capacity and the availability of the resource. The history of electricity generation has been different for each renewable source.

  • Nearly all of the hydroelectric capacity was built before the mid-1970s, and much of it is at dams operated by federal government agencies.
  • Biomass waste is mostly municipal solid waste which is burned as fuel to run power plants.
  • Most of the electricity from wood biomass is generated at lumber and paper mills. These mills use their own wood waste to provide much of their own steam and electricity needs.
  • The amount of installed wind generation dramatically increased in the past decade, due in part to Federal financial incentives and State government mandates, especially renewable portfolio standards.
  • Unlike other renewable sources, a significant amount of solar power is generated by small-scale, customer-sited installations like rooftop solar (or, distributed generation). According to the Annual Energy Outlook 2013, these small solar facilities are projected to generate an estimated 14.13 billion kilowatthours of electricity in 2013.1

Europe: the end of the honeymoon period for renewables

Long-term network analysis by the European Network of Transmission System Operators for Electricity (ENTSO-E) suggests that by the end of this decade, 80 per cent of the bottlenecks in European power grids are directly or indirectly related to integration of renewable energy sources. Transmission system operators (TSOs) across Europe – and to an increasing extent their counterparts at the distribution level (DSOs) – are struggling to cope with the overwhelming introduction of intermittent renewable energy, wind and solar power in particular. There are two main problems to consider with renewables. The first is the fact that their generation capacity is non-dispatchable in the sense that its production cannot be increased upon request by the TSO. The second is that their intermittent power generation necessitates the availability of more fast-responding dispatchable power units to maintain system frequency at 50 Hz.

(…)In addition, there are increasing calls for a pan-European obligation for renewable generators to become responsible for ‘balancing’ their own production. 

Imagine that – a renewable utility is required to pay the full cost of of their intermittent production! That would zero-out new renewable construction overnight. Altogether this is a refreshing article on EU energy policy that isn’t a puff piece by the wind/solar lobbies or suppliers. Timon Dubbeling wrote this for European Energy Review. He has been studying International Energy Markets at the Institut d’Etudes Politiques (IEP) – SciencesPo Paris. And he is currently doing an internship at the European Network of Transmission System Operators for Electricity (ENTSO-E).

My short summary is that the magical thinking behind EU energy policy is beginning to collide with reality, especially economic reality. The EU countries have erected a monstrosity of subsidies and regulations designed around the goal of making voters and politicians feel good and righteous about themselves.

Now that troubles are becoming obvious, the EU approach to cope with this mess is not to erase the subsidies and regulations that have caused the grid instability. It is to erect yet another tower of regulations. To rescue actual dispatchable generation from closure, a new patchwork is already being implemented – “Capacity Remuneration Mechanisms” (CRMs). Timon again: 

Italy became the latest country to support its thermal units in this way, joining countries like Spain, Portugal, Ireland, Greece and some Nordic countries who had already done so. France, Germany and the UK are also considering implementing capacity markets.

(…) In an attempt to prevent the closure of their conventional power plants, an increasing number of European countries have implemented or are considering implementing capacity remuneration mechanisms (CRMs).   

(…) For all of these reasons, the European Commission is very critical of national CRMs. In a leaked draft version of a Communication on the Internal Energy Market, scheduled to be published in mid-October, the Commission shows itself worried about their impact on market functioning. The Communication states that “the Commission expects Member States not to intervene and introduce capacity mechanisms before carrying out a full analysis of the existence and possible causes of a lack of investment in generation”. It continues by stating that “Member States should analyse the necessity and the impact of their planned intervention on neighbouring Member States and on the internal energy market”.

(…) Revision of the status quo

The obvious shortcomings of CRMs will add to the pressure to change the rules underlying electricity markets. In order to achieve the triple ambition of EU energy policy to create a low carbon economy on the basis of competitive markets that guarantee security of supply, renewable generators are likely to be burdened with more duties and lose some of their current privileges. If renewables are the main reason that conventional power plants are driven out of the market, then – recognizing that the potential of demand-side response, stronger interconnections and electricity storage is limited in the short term – they will have to step up their contribution to the long term security of power grids. 

As ‘balancing-responsible’ parties they would have to match their production with demand through the power exchange or by OTC trades. If they fail to do this, they would have to pay a balancing charge, like other market players. The level of this charge has to be high enough to push for more discipline among renewable generators – in any case higher than the revenues they receive through their support scheme. 

Making renewable generators responsible for balancing will push them to be more prudent in their forecasts, thus reducing the need for flexible reserves. A possible drawback is that wind and solar PV units might be curtailed more to avoid imbalances. In order to prevent structural losses of renewable output, such a measure should therefore go hand in hand with the development of liquid intraday markets, where gate closure time (GCT) – the last moment where producers are able to submit their bids – is as close to real time as possible. Bringing GCT closer to real time will lead to more accurate output predictions and a more efficient activation of renewable power assets.

A second major reason why we may expect the role of renewables to change is that currently they are the main driver of grid investment needs, as shown in figure 2. A more integrated vision of renewable production and the needs of the power grid will considerably reduce the need for expensive investments in transmission cables. In most European countries, legal provisions oblige the local TSO to provide any renewable generator access to the transmission grid. The costs of extending and reinforcing the grid are most often ‘socialized’ through Use of System Charges (UoSC). As a result, renewable energy project developers have no incentive to build plants near demand, and instead build at locations with the strongest wind or the most sun-hours per year. If there were less need for grid operators to connect remote wind and solar plants, or if some of the associated cost is shifted to the generator itself, it would allow for capital-constrained TSOs to address other weak spots in the transmission system. (…)

The article goes on at length to consider an alphabet soup of ad hoc patches intended to undo the unintended consquences of existing renewable subsidies. The hated word “nuclear” is not mentioned once. Nor is any consideration of returning electrical supply to free markets.

Meanwhile the earth weeps. While politicians avoid consideration of any policies that would actually work.