Climateers Tilting at Windmills Updated

Update Sept. 24

 

Don Quixote ( “don key-ho-tee” ) in Cervantes’ famous novel charged at some windmills claiming they were enemies, and is celebrated in the English language by two idioms:

Tilting at Windmills–meaning attacking imaginary enemies, and

Quixotic (“quick-sottic”)–meaning striving for visionary ideals.

It is clear that climateers are similary engaged in some kind of heroic quest, like modern-day Don Quixotes. The only differences: They imagine a trace gas in the air is the enemy, and that windmills are our saviors.

A previous post (at the end) addresses the unreality of the campaign to abandon fossil fuels in the face of the world’s demand for that energy.  Now we have a startling assessment of the imaginary benefits of using windmills to power electrical grids.  This conclusion comes from Gail Tverberg, a seasoned analyst of economic effects from resource limits, especially energy.  Her blog is called Our Finite World, indicating her viewpoint.  So her dismissal of wind power is a serious indictment.  A synopsis follows. (Title is link to article)

Intermittent Renewables Can’t Favorably Transform Grid Electricity

In fact, I have come to the rather astounding conclusion that even if wind turbines and solar PV could be built at zero cost, it would not make sense to continue to add them to the electric grid in the absence of very much better and cheaper electricity storage than we have today. There are too many costs outside building the devices themselves. It is these secondary costs that are problematic. Also, the presence of intermittent electricity disrupts competitive prices, leading to electricity prices that are far too low for other electricity providers, including those providing electricity using nuclear or natural gas. The tiny contribution of wind and solar to grid electricity cannot make up for the loss of more traditional electricity sources due to low prices.

Let’s look at some of the issues that we are encountering, as we attempt to add intermittent renewable energy to the electric grid.

Issue 1. Grid issues become a problem at low levels of intermittent electricity penetration.

Hawaii consists of a chain of islands, so it cannot import electricity from elsewhere. This is what I mean by “Generation = Consumption.” There is, of course, some transmission line loss with all electrical generation, so generation and consumption are, in fact, slightly different.

The situation is not too different in California. The main difference is that California can import non-intermittent (also called “dispatchable”) electricity from elsewhere. It is really the ratio of intermittent electricity to total electricity that is important, when it comes to balancing. California is running into grid issues at a similar level of intermittent electricity penetration (wind + solar PV) as Hawaii–about 12.3% of electricity consumed in 2015, compared to 12.2% for Hawaii.

Issue 2. The apparent “lid” on intermittent electricity at 10% to 15% of total electricity consumption is caused by limits on operating reserves.

In theory, changes can be made to the system to allow the system to be more flexible. One such change is adding more long distance transmission, so that the variable electricity can be distributed over a wider area. This way the 10% to 15% operational reserve “cap” applies more broadly. Another approach is adding energy storage, so that excess electricity can be stored until needed later. A third approach is using a “smart grid” to make changes, such as turning off all air conditioners and hot water heaters when electricity supply is inadequate. All of these changes tend to be slow to implement and high in cost, relative to the amount of intermittent electricity that can be added because of their implementation.

Issue 3. When there is no other workaround for excess intermittent electricity, it must be curtailed–that is, dumped rather than added to the grid.

Based on the modeling of the company that oversees the California electric grid, electricity curtailment in California is expected to be significant by 2024, if the 40% California Renewable Portfolio Standard (RPS) is followed, and changes are not made to fix the problem.

Issue 4. When all costs are included, including grid costs and indirect costs, such as the need for additional storage, the cost of intermittent renewables tends to be very high.

In Europe, there is at least a reasonable attempt to charge electricity costs back to consumers. In the United States, renewable energy costs are mostly hidden, rather than charged back to consumers. This is easy to do, because their usage is still low.

Euan Mearns finds that in Europe, the greater the proportion of wind and solar electricity included in total generation, the higher electricity prices are for consumers.

Issue 5. The amount that electrical utilities are willing to pay for intermittent electricity is very low.

To sum up, when intermittent electricity is added to the electric grid, the primary savings are fuel savings. At the same time, significant costs of many different types are added, acting to offset these savings. In fact, it is not even clear that when a comparison is made, the benefits of adding intermittent electricity are greater than the costs involved.

Issue 6. When intermittent electricity is sold in competitive electricity markets (as it is in California, Texas, and Europe), it frequently leads to negative wholesale electricity prices. It also shaves the peaks off high prices at times of high demand.

When solar energy is included in the mix of intermittent fuels, it also tends to reduce peak afternoon prices. Of course, these minute-by-minute prices don’t really flow back to the ultimate consumers, so it doesn’t affect their demand. Instead, these low prices simply lead to lower funds available to other electricity producers, most of whom cannot quickly modify electricity generation.

A price of $36 per MWh is way down at the bottom of the chart, between 0 and 50. Pretty much no energy source can be profitable at such a level. Too much investment is required, relative to the amount of energy produced. We reach a situation where nearly every kind of electricity provider needs subsidies. If they cannot receive subsidies, many of them will close, leaving the market with only a small amount of unreliable intermittent electricity, and little back-up capability.

This same problem with falling wholesale prices, and a need for subsidies for other energy producers, has been noted in California and Texas. The Wall Street Journal ran an article earlier this week about low electricity prices in Texas, without realizing that this was a problem caused by wind energy, not a desirable result!

Issue 7. Other parts of the world are also having problems with intermittent electricity.

Needless to say, such high intermittent electricity generation leads to frequent spikes in generation. Germany chose to solve this problem by dumping its excess electricity supply on the European Union electric grid. Poland, Czech Republic, and Netherlands complained to the European Union. As a result, the European Union mandated that from 2017 onward, all European Union countries (not just Germany) can no longer use feed-in tariffs. Doing so provides too much of an advantage to intermittent electricity providers. Instead, EU members must use market-responsive auctioning, known as “feed-in premiums.” Germany legislated changes that went even beyond the minimum changes required by the European Union. Dörte Fouquet, Director of the European Renewable Energy Federation, says that the German adjustments will “decimate the industry.”

Issue 8. The amount of subsidies provided to intermittent electricity is very high.

The US Energy Information Administration prepared an estimate of certain types of subsidies (those provided by the federal government and targeted particularly at energy) for the year 2013. These amounted to a total of $11.3 billion for wind and solar combined. About 183.3 terawatts of wind and solar energy was sold during 2013, at a wholesale price of about 2.8 cents per kWh, leading to a total selling price of $5.1 billion dollars. If we add the wholesale price of $5.1 billion to the subsidy of $11.3 billion, we get a total of $16.4 billion paid to developers or used in special grid expansion programs. This subsidy amounts to 69% of the estimated total cost. Any subsidy from states, or from other government programs, would be in addition to the amount from this calculation.

In a sense, these calculations do not show the full amount of subsidy. If renewables are to replace fossil fuels, they must pay taxes to governments, just as fossil fuel providers do now. Energy providers are supposed to provide “net energy” to the system. The way that they share this net energy with governments is by paying taxes of various kinds–income taxes, property taxes, and special taxes associated with extraction. If intermittent renewables are to replace fossil fuels, they need to provide tax revenue as well. Current subsidy calculations don’t consider the high taxes paid by fossil fuel providers, and the need to replace these taxes, if governments are to have adequate revenue.

Also, the amount and percentage of required subsidy for intermittent renewables can be expected to rise over time, as more areas exceed the limits of their operating reserves, and need to build long distance transmission to spread intermittent electricity over a larger area. This seems to be happening in Europe now.

There is also the problem of the low profit levels for all of the other electricity providers, when intermittent renewables are allowed to sell their electricity whenever it becomes available. One potential solution is huge subsidies for other providers. Another is buying a lot of energy storage, so that energy from peaks can be saved and used when supply is low. A third solution is requiring that renewable energy providers curtail their production when it is not needed. Any of these solutions is likely to require subsidies.

Conclusion

Few people have stopped to realize that intermittent electricity isn’t worth very much. It may even have negative value, when the cost of all of the adjustments needed to make it useful are considered.

Energy products are very different in “quality.” Intermittent electricity is of exceptionally low quality. The costs that intermittent electricity impose on the system need to be paid by someone else. This is a huge problem, especially as penetration levels start exceeding the 10% to 15% level that can be handled by operating reserves, and much more costly adjustments must be made to accommodate this energy. Even if wind turbines and solar panels could be produced for $0, it seems likely that the costs of working around the problems caused by intermittent electricity would be greater than the compensation that can be obtained to fix those problems.

The economy does not perform well when the cost of energy products is very high. The situation with new electricity generation is similar. We need electricity products to be well-behaved (not act like drunk drivers) and low in cost, if they are to be successful in growing the economy. If we continue to add large amounts of intermittent electricity to the electric grid without paying attention to these problems, we run the risk of bringing the whole system down.

Why the Quest to Reduce Fossil Fuel Emissions is Quixotic

 

Roger Andrews at Energy Matters puts into context the whole mission to reduce carbon emissions. You only have to look at the G20 countries, who have 64% of the global population and use 80% of the world’s energy. The introduction to his essay, Electricity and energy in the G20:

While governments fixate on cutting emissions from the electricity sector, the larger problem of cutting emissions from the non-electricity sector is generally ignored. In this post I present data from the G20 countries, which between them consume 80% of the world’s energy, summarizing the present situation. The results show that the G20 countries obtain only 41.5% of their total energy from electricity and the remaining 58.5% dominantly from oil, coal and gas consumed in the non-electric sector (transportation, industrial processes, heating etc). So even if they eventually succeed in obtaining all their electricity from low-carbon sources they would still be getting more than half their energy from high-carbon sources if no progress is made in decarbonizing their non-electric sectors.

The whole article is enlightening, and shows how much our civilization depends on fossil fuels, even when other sources are employed. The final graph is powerful (thermal refers to burning of fossil fuels):

Figure 12: Figure 9 with Y-scale expanded to 100% and thermal generation included, illustrating the magnitude of the problem the G20 countries still face in decarbonizing their energy sectors.

The requirement is ultimately to replace the red-shaded bars with shades of dark blue, light blue or green – presumably dominantly light blue because nuclear is presently the only practicable solution.

Summary

There is another way. Adaptation means accepting the time-honored wisdom that weather and climates change in ways beyond our control. The future will have periods both cooler and warmer than the present and we must prepare for both contingencies. Colder conditions are the greater threat to human health and prosperity.  The key priorities are robust infrastructures and reliable, affordable energy.

Footnote:

This video shows Don Quixote might have more success against modern windmills.