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Windmill capacity is not blowing

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Jose A. Martinez's picture
CEO ADEX

CEO of a CleanTech company, specialized in making thermal power plants more flexible, efficient and sustainably. Partner of a VC for disruptive SMEs and Business Expert of the UE. Business Angel...

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  • Dec 15, 2020
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Only Top 10 countries collect +80% of the whole windmill capacity in the World

China, USA, Germany, India, Spain, UK, France, Brazil, Canada, and Italy sum 550GW of the global capacity of 650 GW. In those countries Wind share of the electricity mix is still a minority (less than 15% on average).

It means, that Windmill capacity is even a smaller minority in the mix in the other 190 countries. And the required investment to get a majority role is unaffordable.

In the figure below, you can see the evolution of the installed capacity and how China, the USA and the other Top 10 countries takes 83% of the total:

Global Windmill Capacity evolution per country or area in Gigawatts
Global Windmill Capacity evolution per country or area (GW)

 

In the following dynamic graph, you can see this evolution during the years. It is amazing the rise of China from the 8th global position to the worldwide leader, cumulating more capacity than 2nd, 3rd, 4th, and 5th ones together.

 

 

But this is a business still very linked with subsidies and whenever they decrease or a new regulation is put in place, there is a clear decline in the investment. Look at the graph below the years 2016 to 2018. And we are waiting for some data after COVID:

Annual increase of global windmill capacity in Gigawatts
Annual increase of global windmill capacity (GW)

 

 

"Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy."
Michael Shellenberger (Energy contributor)

Michael Shellenberger wrote in his 2019 article at Energy Magazine, titled The Reason Renewables Can’t Power Modern Civilization Is Because They Were Never Meant To’:
“Governments and private investors poured $2 trillion into solar and wind and related infrastructure, creating the impression that renewables were profitable aside from subsidies. Journalists reported breathlessly on the cost declines in batteries, imagining a tipping point at which conventional electricity utilities would be disrupted. But no amount of marketing could change the poor physics of resource-intensive and land-intensive renewables. Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy.”

As reported by GWEC in their 2019 Annual Report, the staggering cost reductions of onshore wind – and those predicted for offshore wind – are leading to calls for zero-subsidy or subsidy-free wind power – in effect an environment where projects are based on revenues from future wholesale prices, which are virtually impossible to predict. China will phase out subsidies for onshore wind by 2021, while merchant utility-scale wind projects are already underway in Denmark and the UK. Governments have been holding “subsidy-free” offshore wind auctions in Germany since 2017 and in the Netherlands since 2018.

Pros & Cons of increasing Windmill capacity by GWEC
Pros & Cons of increasing Windmill capacity by GWEC

 

In the figure above, GWEC summarizes the elements that add and subtract value when increasing Windmill capacity. It is relevant to notice a negative one with a huge impact on profitability for investors: “Increased curtailment“.

Finally, review the cost of removing all the carbon from the electricity mix and its consequences. As an example, I enclose the analysis from Pacific Northwest where the last 1% means up to $170 bn of investment and an annual renewable curtailment of 47%.

Resource adequacy in the Pacific Northwest
Resource adequacy in the Pacific Northwest

All the other scenarios for 2050 include an increase in Gas Power Capacity, even in the 98% reduction scenario. The renewable curtailment in this scenario is still 21% .

And we know today, all the Energy Imbalance Markets are setting new Flexible Operation requirements for Thermal Power Plants, in order to minimize this issue.

Let’s try not to lose this train!

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Matt Chester's picture
Matt Chester on Dec 15, 2020

Finally, review the cost of removing all the carbon from the electricity mix and its consequences. As an example, I enclose the analysis from Pacific Northwest where the last 1% means up to $170 bn of investment and an annual renewable curtailment of 47%.

To play devil's advocate-- why should this immense (and well acknowledged) challenge of getting the last 1% (heck, even the last 10%) stop us from pursuing the more cost-effective 90-99% of decarbonization? Surely reducing the carbon intensity of the grid by 50% is well worth the outcomes even if we don't yet know how/if we can tackle the parts of the energy mix that come after that? We don't need to map out the 100% zero carbon reality today, and by the time we even start to get close there's going to be technological advancements to factor in that aren't available to us today. 

Jose A. Martinez's picture
Jose A. Martinez on Dec 15, 2020

Thank you Matt for opening the debate. Let me make some statements before I answer your questions:

1. I am a true believer in decarbonization

2. We should not wait for future technological advancement. We should make thermal power plants more efficient today so they leave more room for renewables. And there are technologies available to achieve it.

3. We usually speak about "zero-carbon" and many international agreements are around this concept but it is not zero. It means reducing 100% the extra GHG emissions from 1990 levels, which were not zero.

Now I answer you: I fully agree we need to reduce the carbon intensity of the grid, whatever we get.

But if you look at the mentioned scenario 90-98% reduction in Pacific Northwest, there would be between 20 GW to 14 GW of gas power when now they have 12 GW and renewable curtailment would be between 10% to 21% when now is lower than 2%. That implies 2 outcomes for me:

i) Gas power plants will still exist and they will have to be super-flexible

ii) Investors in renewables will have to include those curtailment ratios as a reduction of their RoI, which could minimize their investments and feed the chicken & egg situation

My conclusion is let's try to make thermal power plants more flexible now and so reduce the curtailment, which will encourage investors to keep on investing in renewables.

Bob Meinetz's picture
Bob Meinetz on Dec 17, 2020

José, renewables are the reason thermal plants are inefficient, that they're "inflexible". Their flexibility is only needed to correct the wild fluctuations in renewable output.

Thermal plants can be extremely efficient when allowed to follow the gentle curves of consumer demand. They're current primary purpose is not to meet consumer demand, however - it's to correct erratic supply.

Without natural gas, renewables would take down the grid. Many don't realize that adding more renewables is not replacing natural gas  - it's guaranteeing it an unlimited, polluting future. And vice-versa.

Data from California's Independent System Operator (CAISO) shows that renewables, in 2020, will waste as much electricity through curtailment - 18 trillion watthours - as all of the useful, carbon-free electricity Diablo Canyon power plant produces. And Californians are forced to pay for every kWh of wasted energy, for which they get nothing of value in return.

Time to end the renewables con. Cart 'em all off to the dump and build new nuclear - not only would electricity be cheaper, we could end reliance on fossil fuel forever.

Bob Meinetz's picture
Bob Meinetz on Dec 15, 2020

"Let’s try not to lose this train!"

José, if the train is expensive, if it's intermittent, reliant on fossil fuel backup, exorbitantly land-use-intensive - we can't lose this train fast enough.

Solar and wind are all of the above.

Jose A. Martinez's picture
Jose A. Martinez on Dec 24, 2020

Hi Bob,

Probably I misexplained in the article. My "train" is making thermal power plants more efficient during all the years they will coexist in the mix, which will be 30 years or more.

My point is really that many people do not want to invest in improving the flexibility and the performance of TPPs, just because it does not sound to "green"

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