Wind

May 17th, 2008

It’s hard to know how to keep up with news on the problem of mitigating CO2 emissions – there’s just so much happening – so I’m just going to jot down a few thoughts. This piece on wind power in Salon by Joseph Romm has a couple of particularly interesting snippets I want to jot down.

* since 2000, Europe has added 47 GW of new wind energy, but only 9.6 GW of coal and a mere 1.2 GW of nuclear
* The carbon price required for large scale expansion in wind power (to 20 per cent of all US electricity by 2030) is estimated at $50/ton

Given our larger area of land per person, I’d imagine the economics in Australia would be at least as favorable. Ignoring for the moment the demand response, the revenue associated with permits sold at $50/ton in Australia would be about $25 billion (given current emissions around 500 million tonnes). Taking account of an emissions reduction of at least 20 per cent*, revenue would be $20 billion (enough to fund the abolition of payroll tax and a reasonably generous compensation program for low-income households). The net welfare loss would be much less than this – given the many problems with payroll tax, there might even be a net gain.

* The Salon article is only on electricity, but there are comparable savings to be made in other areas.

To get really serious about reducing CO2 emissions, we’ll need in the end to have a price of $100/tonne or so. At that price, there seems little doubt that we could halve emissions over the next few decades, so we’d be looking at revenue of $25 billion, and a welfare loss of $10 billion to $20 billion, or 1 to 2 per cent of national income. (A request that will doubtless prove fruitless: if you’d like to challenge this estimate, please provide a comparable estimate of your own, rather than thumping the table and saying you don’t believe it).

For a 90 per cent reduction by 2050, as has recently been suggested by Garnaut, we’d need to rely, not only on prices but on the innovations that higher prices will bring about. More on this soon, I hope.

Categories: Economics - General, Environment Tags:
  1. May 17th, 2008 at 20:07 | #1

    ProfQ: Your link is to the second page of the Salon article … should probably be the first page.

    Most interesting comment:

    Ironically, the plunging dollar has done for the domestic industry what conservatives refused to do — make this country the place to build new wind manufacturing capacity

    Whereas our dollar continues to climb (thanks in no small part to our success at exporting the enemy of the human race) and is killing what was left of the local renewables industry. That, and Rudd funneling yet more money out of renewables and into “clean coal”.

    Australia is a coal junkie. Do you seriously expect the government, who’s coffers are filled with coal (blood?) money, to bite the hand that feeds it?

    Sorry, got off track there. The more I think about it, the more disappointed I am with the budget.

    Wind is cool. We should be doing more, so much more than we are.

    P.S. I just don’t believe it. Thump!

  2. swio
    May 17th, 2008 at 21:07 | #2

    The latest New Scientist has an interesting article about wind power from very large kites. Preview here

    If the technology they are suggesting pans out then it may be possible to extract wind power at lower costs than coal. The basic idea is to get large kites up very high into the atmosphere where the wind is stronger and more consistent. The wind is easily twice as fast if you go up to a reasonable altitude and since the power generated by wind is proportioal to the cube of the speed you can get 8 times as much power. You could also build wind farms just about anywhere as if you get high enough there is almost always steady wind.

    Whether the above technology works or not its a hint of what is coming down the pipeline. Renewable technology is still only in its early stages of adoption. A look at the history of any new technology shows that in the early phases there are rapid leaps and bounds and many radical changes in direction before it matures and progress slows and becomes incremental. Airplanes went from a few miles an hour to mach 3 in 60 years. It seems we are still in the early phases of renewable technology and the fact that Europe has been so successful with it already bodes well for the future. In fact I can see a point where renewables may outcompete even coal on a pure cost basis. Alot of coal’s low cost comes simply from maturity and scale. If coal were a new technology and consisted of plants that same size as a moderate wind farm it would be probably be even more expensive. Just because coal is currently the cheapest techonology does not mean its easy low cost way of producing energy. Digging up, and the transporting thousands of tonnes of coal to burnt in facility running thousands of litres of water at hundreds of degrees is a massive and expensive enterprise that would not be viable without its present scale. Plus its had literally hundreds of years to reach its present maturity.

  3. pablo
    May 17th, 2008 at 21:38 | #3

    Very true Swio. If you trail around the northern shoreline of Lake Macquarie, the early history of the NSW colony’s first coal shafts is all too evident. Horse drawn coal wagons, wood rails loaded by mining teams of perhaps a dozen men: onto barges that had to draw less than three feet in order to negotiate the sand bar entrance en route to Sydney. It is a rich but over-romaticised history going back to the 1850′s and now it’s time is up.

  4. May 18th, 2008 at 00:04 | #4

    Carbon tax linked with other tax cuts. Where have I heard that before? Oh yeah… the CIS. :)

    But seriously, it’s a good idea. The tax rate doesn’t have to be as high as $50/tonne co2-e. Alternative energies are becoming steadily more competitive on their own. By phasing in the carbon tax, the adjustment costs would be reduced with the same ultimate change in behaviour.

  5. Ernestine Gross
    May 18th, 2008 at 00:50 | #5

    John, I don’t understand your post. Are you suggesting CO2 pollution permits, valid until 2030, are sold (auctioned) ‘now’ at a price (reserve) of $50 (or $100)?

    If this were the case then a few questions come to mind.

    1. Who would buy the permits? (Banks? Superannuation funds? Individuals?)

    2. How would you ensure that the sale of the permits result in a reduction of carbon emissions?

    3. If you were to require that specified industrial producers of carbon emission buy the permits at or above the specified price, then a lot of (borrowed) funds would be unavailable for the development of new technologies.

    4. However, the finance sector would be very happy with an ‘open market’ for trading permits – a new opportunity to get trading fees.

    5. Are you talking about a ‘world price’ or a local price? If it is the latter and you are confident in the price (now) then taxation would seem to be a more straight forward mechanism to achieve the income redistribution and ensure that the ‘price signal’ arrives at the production unit of the emission. However, in this case the implied assumption that all else will remain unchanged is not one on which I would put my money.

    To the best of my knowledge, the EU system started off issuing permits (free) of limited duration (about 3 years) to industrial production units. The emissions are monitored. There is a market for trading pollution rights. But the purpose of this market is not to ‘price pollution’ but merely to facilitate a more efficient allocation of financial capital in relation to physical capital among disaggregated decision makers. If the mechanism is successful (ie scientists are satisfied that the CO2 emissions have been reduced sufficiently) then the ‘market for CO2’ will cease to exist. A declining price in this market is consistent with a mechanism working in the right direction, subject to physical controls on emissions. Incidentally, emission controls in some countries (eg Germany) go down to annual checks of central heating systems in private homes. There are fines attached to non-compliance.

    I seem to be missing something in your post for I would be very surprised if you were not familiar with the EU system and its rationale.

  6. jquiggin
    May 18th, 2008 at 05:50 | #6

    Ernestine, you’re asking for a lot of operational specifics, while I was just doing some thinking about the implications in general of a carbon price of $50 or $100 a ton. Everything would be equally applicable to a carbon tax, and it might have been better to write it that way. So, if it would help, just substitute carbon tax for emissions permits and read the post that way.

  7. Ernestine Gross
    May 18th, 2008 at 12:48 | #7

    John, thanks for your reply. Fair enough – I am one of your readers who doesn’t consider your site as a mere advocacy site but rather one that allows the exploration of a topic from multiple angles.

  8. Hermit
    May 18th, 2008 at 14:05 | #8

    A difference between an auctioned carbon price and an add-on tax is that conceivably the auction could be a dud because less carbon (via CO2) is demanded than the current cap. Turnbull’s confident projection of $10bn annual auction revenue seems a tad premature. Conversely a carbon tax in a recession could be oppressive if it still applies at low levels of carbon use. I could point out that $50 per tonne of CO2 works out at about $10 per tonne of black coal..the effect of heavier oxygen atoms bonding to carbon. Recent price rises have shot way past that $10 due to Asian demand and nothing to do with administrative imposts.

    I also doubt that the initial cap for 2010 will be ninety-x percent of 500 Mt. From the way Ferguson and Garnaut are talking I suspect carbon capture will get a few more years, aluminium will get time to set itself benchmarks, petrol will be excluded and the New Guineans will be suddenly found to have healthier forests (dedicated to Australia) than we ever imagined. Expect a mish-mash.

  9. Hermit
    May 18th, 2008 at 14:13 | #9

    Whoops. $50 / 2.4 = $21 approx.

  10. Ian Gould
    May 18th, 2008 at 17:52 | #10

    I’m not looking for any kudos here but as it happens, I’ve just switched our housine co-operative over to Jackgreen 100% Green power.

    http://www.jackgreen.com.au/about-jackgreen/

    According to the Greenpower 2006 audit, Jackgreen sources its power entirely from wind farms:

    http://www.greenpower.gov.au/admin/file/content13/c6/Compliance%20Audit%20Final%20Report%202006%20final.pdf

    According to the calculator on the Jackgreen site, switching will cost us around $200 per year. That will reduce greenhouse gas emissions by 12 tonnes of carbon dioxide per year.

    So the cost is roughly $17 per tonne.

    That’s for a household of five adults living in sunny Brisbane with gas hot water and a gas stove.

    Possibly more relevant is the price per kilowatt: 15.45 cents GST inclusive

    http://www.greenhouse.gov.au/inventory/2005/economic-sector.html

    So 200 million tonnes x $17 – $3.4 billion

    Of course, that doesn’t include the various government subsidies currently available for renewable energy.

  11. Ian Gould
    May 18th, 2008 at 17:56 | #11

    Naturally as soon as I hit the post button I found a Greenpeace paper which claims current subsidies for renewable energy are between $317 and $334 million dollars per year which presumably includes solar water heating and the like.

  12. May 18th, 2008 at 19:41 | #12

    John, one quick point, and one I replied on Romm’s article – that 47-odd GW of wind sounds impressive compared to coal and nuclear, but it’s a misleading statistic.

    The capacity factor – that is, the actual output, compared to the output if the thing ran at its maximum capacity 24/7 – of wind is around 25% (though it varies from site to site, obviously). It’s around 70% for coal, and over 90% for nuclear.

    Note that he also doesn’t quote the new gas-fired generation in Europe, which I strongly suspect dwarfs all three combined.

    That said, he’s basically right – we could get 20% of our electricity from wind at fairly low incremental cost. It’s the other 80% that’s the problem.

  13. SJ
    May 18th, 2008 at 23:41 | #13

    Robert Merkel is correct about the need to take capacity factor into account, but there’s even more to it than that.

    Wind has a reliability factor of only around 10% when considered across fairly large geographical areas like Europe of eastern Australia.

    That is, when you’re considering whether a 5 GW wind plant will help support next week’s 10 GW maximum demand, you have to recognise that the wind units can only be counted upon to provide 5 x 0.1 = 0.5 GW or 5% toward the total, not the 50% that the nameplate tells you, or even the 1.25 GW that Robert Merkel’s capacity factor would suggest.

    The 5 GW wind plant needs to be backed up by a 4 GW high reliability plant, which increases the cost of wind far beyond that which a first-order analysis would suggest.

    Not suggesting that wind is good, bad, or indifferent, here, just sayin’ that the analysis is harder than it might first appear.

  14. SJ
    May 19th, 2008 at 00:02 | #14

    There’s a mistake in the above. The 5 GW wind plant would need to have reliable backup of 4.5 GW, not 4 GW.

  15. SJ
    May 19th, 2008 at 00:06 | #15

    OK, there’s multiple mistakes in the above. Like “Europe of eastern Australia” should be “Europe or eastern Australia”. :)

  16. John Mashey
    May 19th, 2008 at 06:21 | #16

    Mark Jacobson is a professor at Stanford who does a lot of excellent work on atmospheric modeling and energy issues. There are many good papers listed on his web page.

    Archer and Jacobson‘s article “Supplying Baseload Power and reducing Transmission Requirements by Interconnecting Wind Farms” says:

    “It was found that an average of 33% and a maximum of 47% of yearly averaged wind power from interconnected farms can be used as reliable, baseload electric power.”

    Basically, the reliability increases with larger numbers if properly interconnected. The article is well worth reading.

    Archer & Jacobson” have some nice maps of wind power sites acround the world, including Australia – it looks like Tasmania should be the wind capital.

  17. May 19th, 2008 at 09:21 | #17

    Wind you, there are people working on alternative wind power systems that support energy storage.

    Essentially, you put mechanical compressors, rather than generators, on your turbines. You run pipes between your network of wind turbines. If you’re lucky and have a salt mine conveniently located nearby, you pump the compressed air into the salt mine.

    You then use the compressed air as a source of energy – most easily, to run a gas turbine (though the developers of this tech tend to gild the lily a bit on this and talk of “expanders” and other such nonsense). But because so much of the energy involved in running a gas turbine is just compressing the air fed into it, it’s still a massive saving of fuel and greenhouse emissions.

  18. jquiggin
    May 19th, 2008 at 09:50 | #18

    Concern with reliability is largely an artifact of the existing market structure, in which wholesale prices fluctuate widely but these fluctuations aren’t passed on to consumers. If electricity prices varied on a day to day basis the way petrol prices do (as well as between peak and off-peak times of day) demand responses would deal with much of the reliability problem.

  19. Ender
    May 19th, 2008 at 10:04 | #19

    John Mashey – “Mark Jacobson is a professor at Stanford who does a lot of excellent work on atmospheric modeling and energy issues. There are many good papers listed on his web page.”

    What no-one seem to have done however is to simulate interconnected wind plus interconnected solar. I would really like to see a study of this nature as wind is not the sole answer. Our energy future depends on first and foremost energy efficiency gains, secondly a smart grid that is able to integrate different form of energy in the most efficient manner and also manage various forms of storage and thirdly dispersed and varied means of electricity supply.

    I am also bitterly disappointed by the Labor Government and I am a member of the Labor Party (perhaps not for long). We have simply traded a coal mining government for a coal mining union government. What do we have to do to break the Greenhouse Mafia’s grip on Australia’s energy? Perhaps a large carbon tax is the answer.

  20. James Haughton
    May 19th, 2008 at 10:04 | #20

    Has anyone looked at the economics of wave power for Australia? We have a lot of coastline and some big wind/ocean currents to drive them. And unlike wind and solar, the waves never stop.

  21. Ender
    May 19th, 2008 at 10:20 | #21

    SJ – “The 5 GW wind plant needs to be backed up by a 4 GW high reliability plant, which increases the cost of wind far beyond that which a first-order analysis would suggest.”

    Apart from this being wrong wind does not have to be ‘backed up’ with anything at all. This argument is used a lot and it is completely false. If you are going to say that energy sources need to be backed up them everything needs backing up.

    First of all coal and nuclear are base load power plants. That is that they are at their most economical when run flat out all the time and because of their high thermal intertia cannot change output quickly, economically. Also because they tend to be very large the failure of a single generator can seriously affect the grid. So coal and nuclear have to be ‘backed up’ with peaking power plants and spinning reserve.

    Peaking plants are gas turbines or diesel generators than can start and stop quickly and handle peak loads. Spinning reserve are large generators spinning and consuming fuel but not producing any electricity. The NEMMCO mandates 800MW of spinning reserve must be available at all times. This spinning reserve is able to instantly take over in the case of a large generator failure.

    So right now there are larger power plants sitting idle or spinning and producing nothing ready to back up the coal power that you would consider 24X7 reliable power.

    Wind power can make use of this backup generation that already exists. Add in solar thermal with storage, geothermal etc and you can have a reliable 24X7 generation system without any base load plants at all. Coal would be far better used in Integrated Gasification Combined Cycle plants as they are classified as Intermediate and can interact much better with renewables.

  22. Socrates
    May 19th, 2008 at 10:36 | #22

    I am not expert on the economics of wind but I’d also like to add some points in its favour based on South australian experience:
    - you need a consistent wind climate, not necessarily a strong one. The wind climate in south east of SA, WA and Vic is ideal. Qld and NSW are poorer prospects. See Figure 2 of this CSIRO guide for resource potential:
    http://www.csiro.au/files/files/pis7.pdf
    Anything over 8 m/sec average on this map may be viable.
    - there are major economies of scale with wind, as with coal. Large turbines are far more efficient but this makes wind grid dependant. Also capital costs per turbine have fallen
    - one of the biggest non-market distortions of the existing system in favour of coal is investment in the transmission grid. In every state, transmission capacity has been built to support coal fired power station sites. This investment hides the full cost of coal and inflates the cost of alternatives which have to factor in grid expansion.
    - Here in SA wind power on the south coast is almost cost competitive for generation (within 10%) per MWh with the inefficient brown-coal plant at Leigh Creek. The problem is we are close to the limits of grid capacity to deliver more wind power to Adelaide.
    - the ratio of wind power to other sources required can be reduced with better ability to forecast wind and have available wind power supply. This technology is also improving.
    - overall my understanding is that black coal in Qld and NSW cannot be beaten by wind unless there is a carbon tax of $30 per tonne or more. In SA and Vic the story is different – assuming that the states provide the grid, wind can be very competitive with wind now, but there is still a need for base load power when there is no wind.

  23. Socrates
    May 19th, 2008 at 10:55 | #23

    James

    Matthew Daly gave a paper on wave energy at the SSEE conference in Perth last year. In physical terms the energy potential of ocean waves is considerable, but we are still some way off making mechanically reliable devices to utilise that power economicaly. Wind is a better prospect at present.

  24. Socrates
    May 19th, 2008 at 11:02 | #24

    Regarding wind, my understanding is that it is quite complex and there is no one line answer on the economics. It is very location specific. Some locations are much more economical than others because the wind is steady. However in these locations (eg south coasts of WA, SA and VIC) it is becoming competitive with brown coal. A carbon price of $30 / tonne would allow it to beat brown coal and match black coal in SA, VIC and WA. However wind resources in NSW and Qld would still struggle to be competitive.

    Also, the amount of standby/base load power required to match wind power cna be varied with more accurate forecasting of wind and thus prediction of wind power supply. This technology is improving, which in turn helps wind economics.

    Finally, there is a huge subsidy of coal power built into the existing grid investment. This is built to suit coal power sites. Wind resources in the SA south coast could suppy more power economically to Adelaide but are stymied by grid capacity. Hence we need to compare marginal costs, not averages.

    See this CSIRO paper (Figure 2) for an indication. Locations with average wind speeds over 8 m/s are already economical if the wind is steady.
    http://www.csiro.au/files/files/pis7.pdf

  25. Socrates
    May 19th, 2008 at 11:04 | #25

    Regarding wind, my understanding is that it is quite complex and there is no one line answer on the economics. It is very location specific. Some locations are much more economical than others because the wind is steady. Grid capacity is also a factor. However in these locations (eg south coasts of WA, SA and VIC) it is becoming competitive with brown coal. A carbon price of $30 / tonne would allow it to beat brown coal and match black coal in SA, VIC and WA. However wind resources in NSW and Qld would still struggle to be competitive.

    Also, the amount of standby/base load power required to match wind power can be varied with more accurate forecasting of wind and thus prediction of wind power supply. This technology is improving, which in turn helps wind economics.

    See this CSIRO paper (Figure 2) for an indication. Locations with average wind speeds over 8 m/s are already economical if the wind is steady.
    http://www.csiro.au/files/files/pis7.pdf

  26. wilful
    May 19th, 2008 at 11:55 | #26

    The Victorian Government produced a wind atlas a few years ago, mapping areas of high potential wind. Unsurprisingly, clustered on the coast and in the mountains.

    Still a massive problem with NIMBYists in several areas. Personally, with annual rents per turbine of about $5 000, I would love to be a cocky with a wind farm.

  27. Socrates
    May 19th, 2008 at 13:28 | #27

    Wilful

    Yes there has not been a problem getting farmers to sign up to host wind power turbines on their farm in SA. The complaints always come from someone nearby who doesn’t own the high value site.

    Sorry for my duble post before. I should also add the Renewable Energy Credit assists wind economics. With the REC and equal grid connection costs wind can beat brown coal without a carbon tax. Wind at a good site costs about $100/MWhr and the REC works out at $40.

  28. May 19th, 2008 at 14:25 | #28

    Concern with reliability is largely an artifact of the existing market structure, in which wholesale prices fluctuate widely but these fluctuations aren’t passed on to consumers. If electricity prices varied on a day to day basis the way petrol prices do (as well as between peak and off-peak times of day) demand responses would deal with much of the reliability problem.

    Um, that’s putting a little too much faith in markets for mine; I think perhaps you’re underestimating just how unpredictable the output from wind generation can be. If you have a look at this study of wind power deployment in Ontario, Canada, and particularly Figure 5.6, you can see that wind power can have extended periods of virtually zero production, and that’s across a fairly geographically large area (Ontario is pretty big…).

  29. Hermit
    May 19th, 2008 at 16:34 | #29

    If SA transmission capacity is maxed out where will BHP get the 690 MW they want for desal and the expanded Roxby Downs?

  30. Ender
    May 19th, 2008 at 16:38 | #30

    Robert Merkel – “If you have a look at this study of wind power deployment in Ontario, Canada, and particularly Figure 5.6, you can see that wind power can have extended periods of virtually zero production”

    That is true however Ontario and it cries out for storage to be a mandatory part of any wind farm. However if you looked at the power output of a large coal plant you would also see zero output at different times due to maintenance and failures.

    In reading this study one of the barriers to wind penetration is base load power. Lets imagine a very windy day where 5000MW of wind is available and the demand is 7000MW. The nuclear and coal plants will be running flat out as usual and producing 5000MW. The problem is that these plants cannot be told to reduce their output to 2000MW to allow the 5000MW of wind to fill the demand. It is the despatchable generation, wind, that is told to reduce wasting 3000MW of potential savings.

    This is exactly where the disappointing reductions in CO2 emissions with high wind penetration come from. If you just study the amount of demand satisfied from wind turbines often it is quite small. The fact that this is often because of inflexible base load is almost never reported.

    Contrast this with Esperance in WA. It has a large gas turbine linked with Australian designed and programmed smart controllers that throttle the gas turbine in response to wind production. This allows wind with only 15% of the overall generating capacity to actually contribute up to 22% of the overall demand of Esperance.

    Only when base load power stations become a small part of the grid and more and more flexible power generation, along with more storage, comes on line will the true emission savings of renewables be realised.

  31. chrisl
    May 19th, 2008 at 17:33 | #31

    Ender:How do you store electricity?
    How can wind supply base load power when there is no wind?
    The only way wind generation would be viable (and not require coal back-up) is if true believers like yourself switched off their power supply when there was no wind.

  32. Ian Gould
    May 19th, 2008 at 17:34 | #32

    Even if we build wind power flat out, it will be quite some tibe before wind power contributes sufficiently to the total power mix that variability will become an issue.

    By that time, its a virtual certainty that one or more of the new energy storage technologies will will have been commercialsied.

    There’s a LOT of money going into redox-batteries, compressed air storage; hydrogen fuel cells, fly-wheels et cetera. The first company to commercialise an efficient economical method for storing Megawatt-hours worth of pwoer will make billions.

    Several of these technologies have gotten as far as limited commercial roll-out so I don’t think its unrealistic to assume at least one of them will make it all the way.

    There are alos several emerging technologies that reduce the variability of suppy dramatically.

    One is the continuing drive to bigger and bigger conventional turbines. As well as shutting down in low wind period turbines shut down in high wind to avoid damaging the blades. Larger and larger turbines require progressively stronger blades which in turn can withstand higher wind speeds.

    In addition to the kite idea mentioned earlier, a company called Magenn wants to put turbines on tethered balloons – this is another way to tap into the fasterer and more consistent wind at higher altitudes.

    There’s also a move to floating turbines – current offshore turbines are limited to shallow water. Floating turbines (based on the mature technology of floating oil rigs – could operate in much deeper water. Offshore winds are both stronger and more consistent. There are other advantages such as fewer noise restrictions (noise is another reason onshore turbines have to shut down in stronger winds.)

  33. SJ
    May 19th, 2008 at 19:19 | #33

    Ender Says:

    Apart from this being wrong wind does not have to be ‘backed up’ with anything at all. This argument is used a lot and it is completely false. If you are going to say that energy sources need to be backed up them everything needs backing up.

    This is not something that can be hand-waved away. Everything does indeed need to be backed up. If you have plant like coal, gas or on-demand hydro, the expected availability (i.e. reliability) will be something like 90-95%. Say it’s 90%. With a maximum demand of say 10 GW, you need about 11 GW of plant installed.

    But if you’re using wind with a reliability of 10%, you need to have 100 GW installed to meet the 10 GW expected demand, or else have 10 GW of wind installed plus another 9 GW of gas backup. There’s just no way to get around this.

    It is true that the backup issue wouldn’t be such a problem if wind were limited to no more than 10% of the total capacity, but that’s not what John seems to be suggesting in his post.

    In South Australia, maximum demand is about 3 GW, and there’s already about 700 MW of wind installed or under construction, with another 2 GW proposed, so SA is already approaching the point where wind will become a problem operationally and economically.

  34. Ender
    May 19th, 2008 at 20:44 | #34

    chrisl – “Ender:How do you store electricity?

    Batteries
    http://www.renewableenergyworld.com/rea/news/story?id=47956
    http://www.environment.gov.au/settlements/renewable/recp/enabling/four.html

    “How can wind supply base load power when there is no wind?”

    Wind is not base load
    http://en.wikipedia.org/wiki/Base_load
    Anything can supply what you term base load. If the wind is not blowing often the sun is shining or is blowing somewhere else or you do not need much ‘base load’ or some customers get lower prices if they agree to be turned off (as happens now) or the thermal storage of the solar thermal power stations produces energy or the gas turbine kicks in or a combination of all of the above.

    “The only way wind generation would be viable (and not require coal back-up) is if true believers like yourself switched off their power supply when there was no wind.”

    The only way coal power is viable is because of peaking plant back up. Wind is not viable on its own and no-one expects it to be. We source our power from a variety of sources now so why would you expect it to be different in the future?

  35. chrisl
    May 19th, 2008 at 20:55 | #35

    Ian Gould:A nice summary of the possibilities of power. Reminds me of the possibilities of colonising the moon. Would you believe that some people now believe we never went there in the first place!

  36. Ender
    May 19th, 2008 at 21:08 | #36

    SJ – “But if you’re using wind with a reliability of 10%, you need to have 100 GW installed to meet the 10 GW expected demand, or else have 10 GW of wind installed plus another 9 GW of gas backup. There’s just no way to get around this.”

    First of all the capacity factor of a single wind farm in a good area is about 30%. I don’t know where you got the 10% figure. Connecting multiple wind farms together can raise this to 40% in some cases.

    To meet demand on any given 10 minute interval you need a variety of energy sources. If a single wind farm was supplying the demand then yes it would need to be backed up if the wind was zero. There would have to be sufficient capacity to generate the demand. However that is the situation now. As wind forecasting is used what will happen is that tomorrow, for example, the wind is forecast to be strong. The wind farm operator bids for say 80% of the demand at 10:00am etc and the utility accepts it. Now the wind farm has to deliver the power. If the wind farm is a part of a larger interconnected system then there is a very high probability that there will be sufficient wind to meet the contract. If not the wind operator has to buy power from somewhere to cover the contract. Remember that solar, geothermal etc will be bidding in the future along with V2G car aggregators. The wind farm operator will have a variety of stored, including on site storage, and/or other green power options to call on before firing up the peaking plants for a bit of help. In most cases the backup will be filled with existing or slightly expanded peaking plants using natural gas, gasified coal, gasified biomass and waste etc rather than inflexible coal fired thermal power stations.

    “If you have plant like coal, gas or on-demand hydro, the expected availability (i.e. reliability) will be something like 90-95%.”

    Also you have your terms mixed up. The reliability of wind is extremely high as is the availability. They are reliable because they have few moving parts are require little maintenance. They are also almost always available to generate power if there was wind. Coal plants, especially old ones, are not very reliable requiring frequent down times for maintenance. Also due to the fact that you cannot start up a plant that is down for maintenance they do not have as high availability.

    The term you are looking for is capacity factor. That is the actual output over a unit of time divided by the name plate power output per hour times the same unit period of time.

    So if a 5MW wind turbine generates 100MWHrs over a 100 hour period then the capacity factor would be .2 or 20%. It could have generated 500MWHr over the same period so the CP = 100500 = 0.2. I used 100 hours as it is easy – usually it is a year of operation.

  37. SJ
    May 19th, 2008 at 21:50 | #37

    Ender Says:

    First of all the capacity factor of a single wind farm in a good area is about 30%. I don’t know where you got the 10% figure. Connecting multiple wind farms together can raise this to 40% in some cases.

    The capacity factor may well be 25% as Robert Merkel said, or 30% as you say. It’s not the same thing as what’s properly called diversified reliability. The 10% figure came from a German study done around 2003 (from memory) which I don’t currently have at hand. Diversified reliability refers to the proportion of installed capacity across a wide area at all times. The German study looked at Europe. The problem is that output from wind generators is highly correlated, even across such large areas as the entire continent of Europe. That is, when it’s windy, it tends to be windy everywhere, and when it’s not windy, it’s not windy everywhere.

    Ender Says:

    To meet demand on any given 10 minute interval you need a variety of energy sources. If a single wind farm was supplying the demand then yes it would need to be backed up if the wind was zero. There would have to be sufficient capacity to generate the demand. However that is the situation now…

    …the wind operator has to buy power from somewhere to cover the contract…

    You acknowledge that there needs to be a backup supply, but you hand-wave the problem away.

    Ender Says:

    Also you have your terms mixed up. The reliability of wind is extremely high as is the availability. They are reliable because they have few moving parts are require little maintenance. They are also almost always available to generate power if there was wind.

    Not so, sport. Reliability and availability are terms of art in the power industry, and nowhere do they have the caveat “if there is wind”.

  38. SJ
    May 19th, 2008 at 21:56 | #38

    Missing word:

    Diversified reliability refers to the proportion of installed capacity across a wide area operating at all times.

  39. May 19th, 2008 at 22:19 | #39

    In any case, to summarise:

    1) reliability of supply is a major issue, and I (for one) am not sure you can just wave it away entirely (or even in large part) with market mechanisms.
    2) Wind is not at all reliable, even assuming that wind generators are distributed over wide areas. Wind speeds are quite well correlated over large distances.
    3) Energy storage technology is a) currently not very good, b) completely neglected by policymakers, and c) it’s not yet clear whether any of them will be improved sufficiently to work particularly well in the medium term. Energy storage technologies failed to deliver a viable electric car to California in the 1990s, no matter how much the CARB wanted it.

  40. Ian Gould
    May 19th, 2008 at 22:44 | #40

    “Reminds me of the possibilities of colonising the moon.”

    Except that the first multi-megawatt hour redox batteries are already being installed in commercial applications, the first commercial floating turbine is currently under construction in Italy and the fist full-scale Megann generator is currently undergoing final ground testing prior to launch.

  41. Ian Gould
    May 19th, 2008 at 22:47 | #41

    “The 10% figure came from a German study done around 2003 (from memory) which I don’t currently have at hand.” -SJ

    If I remember corre3ctly and we’re talking about the same study, it focused on one relatively small area of north Germany.

    Other studies of larger more dispersed wind-powered grids get higher results.

  42. SJ
    May 19th, 2008 at 23:02 | #42

    Ian Gould Says:

    If I remember corre3ctly and we’re talking about the same study, it focused on one relatively small area of north Germany.

    I don’t think so, but I’ll dig it out tomorrow, and we can compare notes then.

  43. Socrates
    May 19th, 2008 at 23:27 | #43

    Robert

    The reliability of wind, as well as the output, varies by location. The point of the link I posted is that it shows many wind sites on the australian south coast are more than 80% reliable.

    Hermit 29

    Roxby is not a problem. Transmission capacity is a problem south of Adelaide. Leigh Creek and Roxby are both north of Adelaide. BHPB has no problem, and for a fraction of the cost of ODX they could upgrade the relevant parts of the grid anyway.

  44. Salient Green
    May 20th, 2008 at 09:07 | #44

    The key to large scale renewable energy use is interconnection. High voltage DC transmission to create a ‘whole of Australia’ grid will connect major wind and wave sites in the south with CPV and geothermal in the centre, east and west, with the massive energy potential of tides in the north.

    This site shows that a national grid would very quickly pay for itself in savings currently lost due to ineffective transmission.
    http://www.trec.net.au/content/gettingthepowertomarket.html

    P

  45. Ender
    May 20th, 2008 at 09:48 | #45

    SJ – “The capacity factor may well be 25% as Robert Merkel said, or 30% as you say. It’s not the same thing as what’s properly called diversified reliability.”

    There is no term like that at the moment. What you may be confusing it with is despatchable. If a generator is to be considered what you would term reliable it is despatchable ie:it can be called on at all times to supply demand. A single wind farm without storage is not despatchable which is why so much effort is being put into dispersing them and also adding storage. Reliability as far as I understand it relates to the mechanical reliability of the generator and in this wind is extremely reliable.
    Have a read of this document:
    http://www.nemmco.com.au/dispatchandpricing/140-0091.pdf

    “You acknowledge that there needs to be a backup supply, but you hand-wave the problem away.”

    I am not hand waving the problem away – the backup as you term it is already in the system ready to go to back up the current coal plants. What the smart renewable grid will do is replace the wasteful spinning reserve with batteries that do not emit CO2. The peaking plants will remain as they are now and be supplemented with other forms of generation that are classified as intermediate that can interact with wind and solar.

    “The German study looked at Europe.”

    The German study was also produced by the German coal industry and was not Europe wide. This study can in no way be taken as a yardstick for the entire wind industry.

    “Not so, sport. Reliability and availability are terms of art in the power industry, and nowhere do they have the caveat “if there is windâ€?.”

    The terms if you apply them to the coal industry also do not include the caveat “if there is coal”. A coal plant can neither be reliable or available if there is no coal to fuel it – you are just assuming that every coal plant has an unending supply of fuel using the terms the way you do. Reliability and availability are tems that apply more properly to the mechanical generation plant not the electricity output.

  46. Ender
    May 20th, 2008 at 12:08 | #46

    JQ – Seems as if we are losing posts again. I replied to SJ however the post is lost – Is it in the submitted queue?

  47. Ender
    May 20th, 2008 at 12:22 | #47

    SJ – “The capacity factor may well be 25% as Robert Merkel said, or 30% as you say. It’s not the same thing as what’s properly called diversified reliability. The 10% figure came from a German study done around 2003 (from memory) which I don’t currently have at hand. Diversified reliability refers to the proportion of installed capacity across a wide area at all times. ”

    Other people have referred you to studies that show dispersing wind farms over a wide area does increase the capacity factor and despatchability of wind. The study that you refer to I am sure was written by the German coal industry and is naturally highly critical of wind. It cannot be taken as a figure the the whole wind industry.

    “You acknowledge that there needs to be a backup supply, but you hand-wave the problem away.”

    No I am not hand waving it away. The backup that you refer to is already in the system and exists because most of our current generation is baseload power and has to be backed up with peaking capacity. As wind grows it should be mandated to install storage capacity and disperse accross wide areas connected with HVDC links to increase despatchability. Also new generation that is installed should be intermediate or peaking not baseload so as to be better able to integrate with wind and solar.

    “Not so, sport. Reliability and availability are terms of art in the power industry, and nowhere do they have the caveat “if there is windâ€?.”

    Reliability and availability refer to the mechanical generation part. These terms also do not include the term “if there is coal”. You are assuming, by using them in this way, that there is a magical unending supply of coal. The terms for electricity generation is more correcly despatchable.
    http://www.nemmco.com.au/dispatchandpricing/140-0090.htm

    A read of the other documents at this site is well worth it. The small knowledge that I have of the electricity industry is from reading the wealth of information available here.

  48. Ender
    May 20th, 2008 at 13:12 | #48

    Sorry – my reply to SJ got duplicated

  49. Ian Gould
    May 20th, 2008 at 14:34 | #49

    http://www.aweo.org/windEon2004.html

    This is the German reprot in question – it covers only Schleswig-Holstein and Lower Saxony.

    The quoted average feed from wind farms in ca. 15% in 2003 and 15% on 2005.

    http://scitation.aip.org/getabs/servlet/GetabsServlet?prog=normal&id=IEECPS0020050CP508000243000001&idtype=cvips&gifs=yes

    Denmark which gets a significantly larger proportion of its power from wind (20% versus Germany’s 7%), has significantly higher average feed.

    Part of the reason for this is that the Danish wind industry has been operating longer whereas many of the German farms are relatively new. (That’s what you get when an industry grows at 30% + per annum for several years in a row.)

    Like most complex machines, wind turbines have a breaking-in period during which performance needs to be optimised.

  50. Ian Gould
    May 20th, 2008 at 14:37 | #50

    In the second para of the previous post the sentence the sentence should read: “…ca. 15% in 2003 and 18% on 2005.”.

  51. Ender
    May 20th, 2008 at 15:55 | #51

    Ian – “The quoted average feed from wind farms in ca. 15% in 2003 and 15% on 2005.”

    And that figure is the average feed in from wind farms not the capacity factor of the wind farms. The low figure could be because of the factors I mentioned before even though this would not be noted in the report.

  52. Ian Gould
    May 20th, 2008 at 17:34 | #52

    http://www.windfair.net/press/sendnews.php?news=4547

    For years, people in the wind power field have talked about and tried to build shrouded turbines – a shrouded turbine uses an outer metal or fabric shroud to direct the wind onto a small turbine.

    This raises the effective wind speed allowing the turbine to operate a lower speeds and with greater efficiency and replacing the extremely expensive high-tech turbine blades used on current grid-scale wind projects with much smaller and cheaper ones.

    It’s a simple idea that has surprisingly difficult ot make work in practice – for one thing the weight of the shroud has been a problem.

    It appears the problem has now been solved:

    http://www.windfair.net/press/sendnews.php?news=4547

    Flodesign is an established aeronautical company with numerous successful design projects behind it.

    They also one a recent sustainable design competition run by MIT.

    So personally I’d hesitate before dismissing them with analogies to moon colonisation.

    Flodesign wind turbine shoudl be cheaper than existing designs, produce more power and have significantly higher availability factors due to their superior low wind speed performance.

  53. chrisl
    May 20th, 2008 at 17:52 | #53

    Ian; Forgive me for being ever so slightly sceptical. Even in their own press release they say
    “A wind turbine shaped like a jet engine that its designers hope will provide more electricity at a lower cost than conventional windmills”
    Hope?
    These breakthroughs are always, on the cusp,nearly there,one step away….. but alas
    Perhaps they can power the new colonies on the moon.

  54. wilful
    May 20th, 2008 at 18:15 | #54

    The wind shroud is almost exactly the same idea as the new solar panels, concentrate the expensive difficult bit into a small area, make the big stuff cheap.

  55. SJ
    May 20th, 2008 at 20:00 | #55

    Ian, that doesn’t look like it, and I couldn’t locate the power point presentation I had with the link to the paper.

    Doesn’t matter, though. I found a better source. This author uses the term “capacity credit”, which is equivalent to what I referred to as diversified reliability.

    This one’s a literature review covering 50 earlier studies:

    WIND POWER HAS A CAPACITY CREDIT A CATALOGUE OF 50+ SUPPORTING STUDIES (13 page .PDF)

    Wind energy has a capacity credit. All the about 50 studies catalogued here, done by public research institutes, private consulting companies and electrical utilities, support this statement. The capacity credit is depending (among other things) on the load factor and the penetration. It tends to decrease from approximately the load factor for small penetrations to some 10-15 % at high penetrations.

    So the study I had read had the number at the low end of the range, but the high end isn’t much higher, at 15%.

  56. SJ
    May 20th, 2008 at 20:13 | #56

    Ian, your paper had a reference to the one I was looking for:

    Planning of the Grid Integration of Wind Energy in Germany Onshore and Offshore up to the Year 2020 (20 page .PDF)

  57. SJ
    May 20th, 2008 at 20:29 | #57

    Ender, this is what reliability means in this context:

    NATIONAL ELECTRICITY RULES, Chapter 4, Power System Security

    4.2.7 Reliable Operating State

    The power system is assessed to be in a reliable operating state when:

    (a) NEMMCO has not disconnected, and does not expect to disconnect, any points of load connection under clause 4.8.9;
    (b) no load shedding is occurring or expected to occur anywhere on the power system under clause 4.8.9; and
    (c) in NEMMCO’s reasonable opinion the levels of short term and medium term capacity reserves available to the power system are at least equal to the required levels determined in accordance with the power system security and reliability standards.

  58. Ender
    May 20th, 2008 at 21:37 | #58

    SJ – “Ender, this is what reliability means in this context:”

    Ok fair enough – I am glad we are on the same page now.

  59. Ian Gould
    May 20th, 2008 at 23:20 | #59

    “Hope?
    These breakthroughs are always, on the cusp,nearly there,one step away….. ”

    There’s a difference between healthy skepticism and willful denial,

    The rate of technological progress is never easy to predict exactly – but the correct answer is seldom “zero”.

  60. observa
    May 21st, 2008 at 08:51 | #60

    I’ve deleted this incomprehensible snark in line with previous warnings. If you have a point to make, please do so in a clear and straightforward way, without
    (a) making insinuations about alleged inconsistencies in someone or other’s position
    (b) pretend-professions of bemused ignorance
    (c) anything else along these silly-clever lines
    As the previous warning seemed to work for a while, I hope you will return to making constructive comments – JQ

  61. observa
    May 21st, 2008 at 11:57 | #61

    OK John. The pros and cons of wind energy being of some interest here in ameliorating CO2 emissions, the clear impetus for such technology is boiling down to the best way to increase the price of current CO2 externality, presumably in order to better reflect truer social cost and make alternatives like wind more economic and widespread. I largely concur with Greg Mankiw that ‘cap and trade = carbon tax + corporate welfare’ and now we’re observing that here-
    http://www.news.com.au/business/story/0,23636,23730759-31037,00.html
    Skeptics of straight carbon taxing care to differ, or else explain why a committed, large producer of CO2 is selling its rights to emit to a financial institution, who you’d reasonaby expect would have a lesser need to emit same on behalf of its customers, albeit, no doubt they are emitting more CO2 on that score than they were 12 months ago?

    As for the pros and cons of wind energy here, I have only an anecdotal experience to relate, after spending 4 days in Edithburgh, directly across St Vincent’s Gulf from Adelaide a few weeks ago. Just outside Edithburgh was an impressive array of 30-40? (I didn’t count) wind turbines churning powefully for 3 of the days on this clearly windy promontory. On the last day I arose early to brew the caffeine in the motel on the esplanade and peruse the investments in the Fin, whilst the town was thinking of stirring, if not the bubble and strife. Since the jug turned off with the lights immediately without warning I retired for a sojourn along the seafront to watch the emerging light and sunrise. Directly across the glassy water you could unusually see Adelaide’s Mount Lofty on the horizon, before the sun rose at least. Further along, Kangaroo Island boldy perched on this perfect grey mirror and no doubt the wind turbines far away on the opposite mainland toward Cape Jervis were as tranquil and silent as Edithburghs. I had more than an hour to soak it all up before the motel sign lit up to beckon me back for the caffeine, etc. The media seemed as oblivious to it all over the next few days as Mrs sleepyhead was at the time. Late risers too I surmised.

  62. jquiggin
    May 21st, 2008 at 12:09 | #62

    Thanks for this Observa. Now I can see what you are getting at.

    It turns out that AGL is a big supplier of offsets. I guess they are on both sides of the market, but the stated explanation that they are trying to provide liquidity to get the market going seems plausible under the circumstances.

    I’ll try to post a bit more on taxes vs emissions trading when I get a bit of free time.

  63. wilful
    May 21st, 2008 at 12:41 | #63

    cap and trade = carbon tax + corporate welfare

    Only in practice, not in principle.

    The real test of Rudd et al. and the one that may go down in infamy is if they give away free permits to non-trade exposed industries. Still, we shall know by the end of the year.

  64. jquiggin
    May 21st, 2008 at 13:30 | #64

    Exactly. The real question is free permits, not cap-and-trade vs taxes (which could be offset by various forms of compensation analogous to free permits)

  65. observa
    May 21st, 2008 at 13:50 | #65

    Liquidity? And here was I thinking all that CO2 AGL puts into the atmosphere was a gas. Still, it looks like AGL’s cup runneth over with their version of liquidity-
    “Information not supplied by AGL”
    Perhaps if their spin doctors and Westpacs produce enough hot air it will reduce the need for all that CO2. Look out solar, AGL and Westpac are coming through! However if AGL haven’t exactly assuaged all my reservations about cap and trade here, no doubt they will soon if they get their fair share of those free permits wilful suspects. The ones that AGL will be so surprisingly short of by then. In that case my Wespac Broking finger will be firmly on their ‘buy’ button, strictly to assist with all that liquidity you understand. Come to think of it, perhaps they know something about all that future liquidity I don’t know about right now. Gotta go… something urgent’s come up…

  66. observa
    May 21st, 2008 at 14:14 | #66

    “The real question is free permits..” and underpriced ones, not that all the players might know that at the time. I’m thinking of all those soldier settler blocks with water rights along the MD Basin, along with the Snowy infrastructure to boot, all for services rendered. In retrospect some might argue now they were a bit underpriced, but imperfect knowledge and all that. Might have been a bit different now if they’d started out leasing those water rights, however cheaply at the time.

  67. Peter Wood
    May 21st, 2008 at 16:26 | #67

    If a carbon tax is too low, then there will not be enough emissions reductions; if a cap is too high (too weak), the carbon price will be much less than the social cost of carbon.

    I suspect that the factor with the biggest risk of undermining climate policy is if politicians set a cap to be too weak or a price to be too low. In this sense the political barriers to climate change abatement are greater than other ones.

    It seems like Garnaut is mostly opposed to free permits, but whether Penny Wong and the Dept of Climate Change decide whether to allocate any free permits is another matter.

    I don’t know a great deal about how the water market in the MD Basin works but I get the impression that permits to use water last for much longer than a year or so which is why the government is planning to buy permits back. If greenhouse emission permits lasted for a long time and were over-allocated then it would of course be a disastrous policy.

  68. observa
    May 22nd, 2008 at 11:17 | #68

    You nail the problems I have with CO2 cap and trade pretty well Peter. In fact I don’t really know what form C&Tcan take to overcome the problems demanding its solution by that path. It’s not like water in the MD Basin where there is a fixed average flow available, albeit that might be falling over time somewhat if the science is right. That essentially means a fixed quantity available per year as a natural cap. OTOH we have a relatively fixed amount of CO2 emitted per year now(albeit that seems to be growing with demographics somewhat)and want to decrease that, presumably annually to our ideal. Let’s say by 60% by 2050, although 90% reductions are now being bandied about. In other words, presumably the cap needs to be shrinking by 1.5% pa to get that 60% over 40 years, the low hanging fruit argument for front end loading aside here. How on earth do you invent a cap and trade system to do that, other than auction a 1 tonne permit today, that the successful bidder understands is shrinking by 1.5% pa and can take ownership and trade same accordingly, presumably to gain the maxm benefits of C&T. Either that or you auction say some 3yr permits and they have to come back and bid for the next lower tranche. That negates the benefits of C&T and becomes a defacto tax. If so why not cut out all the admin/policing dramas and slap on a straight tax? The alternative one off auction of declining permits is fraught with the long term information problem, just like MD water rights all those years ago. It seems to me we’re really arguing about a C&T ghost here. These high priests need to how us the substance, rather than their incantations. Failing that, their ghost who walks is really an AGL flogging make believe carbon credits to banks. You can’t cover up rubbish tips and walk away from them without tapping the methane, or you’ll end up with a bigger bang than Chernobyl. The fact that AGL saw an opportunity to claim the necessary as an emission credit is as facile as Origin’s similar try-on when it took over Snowy Hydro.

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