Windmill capacity is not blowing
- Dec 14, 2020 9:12 pm GMT
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:
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:
"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.
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%.
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!