The Black Swan Blog

The Black Swan Blog: No ?soft landing? for the PV Solar Industry

Tue, 14 May 2013 00:00:00 -0600

The Tennessee Valley Authority has announced a cap on purchasing of solar power generated by larger Photo-Voltaic installations. The response from regional installers has been typically dramatic. For example, the owner of Sundog Solar declared that this would mean that his company would be "out of business before the end of the year". Tuscon Electric Power has recently cut its PV solar incentive from 75 cents to 10 cents/watt. Local installers predicted "a steep drop-off in sales at the 10-cent level".

The message is clear. Without significant direct subsidies the PV solar industry cannot survive.

PV solar advocates argue that the non-renewable sector has benefitted from heavy subsidies and infrastructure support for almost 100 years. The ability to write off all exploration expenditures, public funding of port facilities and road networks, and government R&D are all identified as direct and indirect subsidies to the oil & gas industry.

I actually have no argument with that accusation. There is a lot of subsidization of the oil & gas industry. However, there is one huge difference between those subsidies and the ones currently enjoyed by the PV solar industry – a difference that PV solar advocates completely ignore at their peril in my opinion.

Oil & gas and the products they produce, including automobile gasoline, aviation fuel, lubricants, and plastics are all absolutely essential to the health of our economy. Without them our daily lives would be impacted in a very serious way. Anyone old enough to remember the line-ups at gasoline stations in 1979 understands how reliant we are on these products, for good or ill.

Having worked in the oil and gas industry for more than 20 years I can state unequivocally that any reduction in the above-mentioned subsidies would translate directly into higher prices for the end products produced. It’s as simple as that. And since the vast majority of North Americans use these products any reduction in "subsidies" would simply be converted into higher commodity prices with little or no savings to the average American or Canadian.

Can the same be said of PV solar? Not at all.

In almost every jurisdiction in North America the local electrical utility already had sufficient dispatchable generating capacity, including a healthy reserve, to supply their customers. The regulated environment they operate in required that. So the introduction of the PV generation that has been added into the mix over the past 10 years has been 100% surplus to existing demand. In a truly free market this surplus electricity would find it impossible to compete with the reliable base-load electricity in place already and therefore would not have been developed.

For valid public policy reasons including the threat of climate change, an over-dependence upon foreign crude oil, and the excessive use of a non-renewable resource, it was decided that extra support was needed to encourage the development of renewable electrical generating capacity.

I actually have no complaint about that either.

But here is the thing.

PV solar generation does not match electricity demand in any significant way despite many statements by PV solar advocates to the contrary. In fact, if we were to implement Time-of-Use (TOU) electricity pricing (which most green energy advocates including myself feel we must do) customers that had installed PV would find they saved almost nothing on their electricity bills because they would generate very low priced electricity and would be paying for high priced electricity.

PV solar fades away to nothing exactly at the time the demand curve starts to rise sharply in the early evening. It follows that some other renewable energy source will have to be relied upon in the long run to meet the peak demand in the evening and into the night.

That source doesn’t exist yet but would likely be wind generation with some combination of a continental smart grid and energy storage. Logically, if that “other” renewable energy source can meet peak demand it can certainly meet non-peak demand so that, once again, PV solar would be 100% surplus to requirements.

In the meantime, PV solar is simply displacing non-renewable generation sources during off-peak times. That means that less coal and natural gas is being burned to generate electricity. Personally I think that is a good thing. But the cost of running the existing coal-fired and natural gas-fired plants has not been significantly reduced. They were designed to be run 7x24x365 and that was an underlying assumption when the construction of these plants was financed.

As a result they can no longer be run profitably and that is an unsustainable situation in either regulated or deregulated markets. And yet, it is impossible to shut any of these plants down because of the unreliability of wind and PV solar.

The result? Taxpayers and ratepayers will have to pay some sort of capacity fee for the non-renewable plants to be kept running inefficiently on standby as “spinning reserves”. They will also have to pay for the construction of new PV solar and wind generation and for the grid improvements required to tie in new renewable sources and for the various subsidies and feed-in-tariffs required to make renewables viable.

Unlike the "subsidies" provided to the non-renewable industry the removal of PV solar incentives would actually reduce the overall cost of electricity and might, in fact, provide more support for other renewable energy sources that would better match peak demand patterns.

At some point in the very near future this “house of cards” will come tumbling down. Artificially concocted RPS requirements will be met, the budget for subsidies will run out, and rate-payers will say “enough is enough”. I would argue that process has already started.

As soon as the demand for PV solar declines significantly there will be too many contractors chasing too few customers which will lead to a major disruption in the industry. The result would be job losses and possibly a serious reduction in the expertise with this technology.

The PV solar industry needs to fess up to the shortcomings of this technology immediately and begin to work to address these shortcomings. As I have suggested in an earlier blog one way to really make solar work as a base-load supplier would be to pair large PV solar installations with Concentrated Solar Power (CSP) with Thermal Energy Storage that would only be used as PV started to fade in the afternoon. That combination could provide relatively economical 7x24x365 solar power.

For residential installations PV solar should be equipped with on-site battery storage of between 10-20 KW-Hours. Of course, the ugly truth of that approach would be that it would probably double or triple the cost of the installation which would make it unpalatable for most customers. The solar industry should agitate for redirection of some of the existing financial incentives to go towards battery storage. Germany has recently initiated such a program.

I have personally been an advocate for solar power for more than 30 years. But it has to be introduced into the grid in a sensible way that will actually allow for the decommissioning of non-renewable electricity generating assets. I don't believe that is happening today and I think the industry is in for a "Humpty Dumpty" sized fall.

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Are we prepared to accept the cost of moving to renewables?

Sun, 05 May 2013 00:00:00 -0600

The financial analysis I did recently to determine the cost of switching 80% of U.S. electricity production to wind power, together with a growing trend towards reconsideration of Renewable Portfolio Standards (RPS) has raised a serious question in my mind about the best path forward. In my blog posting I came up with a figure of $3.6 trillion to make the switch to wind power. What I didn't state in that blog post was that I actually don't think even that amount of money gets the job done.

As much as a massive "smart grid" would allow regional balancing of windy and calm parts of the continent there are times when very large high pressure fronts would leave all of the mid-west wind farms in a "dead zone" (see my Christmas, 2012 blog for a somewhat amusing take on that possibility). I do not believe that there is any way to replace that amount of wind production by shuffling energy from other parts of the continent despite what the computer models might indicate. So, as I have stated ad nauseam in my blogs, energy storage is a key component in any real transition to renewables.

The problem is that any energy storage technology we can come up with won't be cheap.

Just to put things in perspective, the world's largest battery complex was recently brought into service by Duke Energy to provide backup power for the Notrees wind farm in West Texas. This facility can provide 36 MW of power for up to 15 minutes to provide "bridging" power and to smooth the variability that is a characteristic of wind energy production. The facility cost $44 million, half of which was provided by a U.S. government grant. Therefore the cost for the batteries can be calculated as $44 Million / (15/60 x 36) MW-hours =$4.9 million/MW-hour.

The Notrees wind farm itself is a 153 MW facility which probably cost about $300 million to construct. On a windy night this facility could easily reach 80% of capacity so that in 8 hours it would generate 8 x .8 x 153 = 979 MW-Hours of electricity. This electricity would probably not be needed because it was generated in a period of low demand and would be available to be stored in a battery array. The cost of an array large enough to store this energy can be estimated as 979 x $4.9 = $4.8 Billion – about 16 times the cost to construct the wind farm.

Batteries are probably the least attractive of the energy storage options available because of the cost. But there are no other easy options available. I have previously proposed new concepts such as Funicular power, unpumped storage, and using Concentrated Solar Power with Thermal Energy Storage to compliment Photo-Voltaic solar. But none of these concepts have ever been attempted in the real world. And none of them would be cheap. I could see my estimate of $3.6 trillion ballooning to $4.5-6 trillion once the cost of storage technology has been included (although there would be a significant saving because the effective capacity factor for the wind farms would be increased - it would be impossible to determine beforehand if this would offset the cost of storage).

Is there an alternative? Yes and no.

Combined cycle gas turbine (CCGT) facilities are the most efficient and cleanest burning non-renewable electrical generation sources available. And whether we like it or not the construction cost for these plants is very low - less than $1/watt. In fact, it would be possible to replace all U.S. coal-fired plants with CCGT plants for less than $250 Billion. CO₂ production would be cut by about 50% with the elimination of coal.

What about natural gas supply and price? I have said previously that this resource will run out some day and well before that the price will rise dramatically. The latest estimates are that the U.S. has 2,000 TCF or more of natural gas reserves. Currently about 7 TCF per year is being used to generate electricity. By replacing coal with natural gas this usage would triple to about 20 TCF per year and total production would rise to something like 35 TCF/year. So based upon those numbers the U.S. has about 65 years of supply available. There are a great many assumptions in that number but I think it is safe to say that supplies would get somewhat constrained and prices would go up in the next 30 years.

The financial cost difference between a future based upon renewables and one primarily dependent upon CCGT is stark; potentially $4.5-6 trillion vs. $250 billion. But that is not the only factor. Natural gas will run out so that concern is still valid. Operating costs for CCGT, including the cost of gas are significant and will rise over time. Advocates of renewables claim an almost unlimited service life for wind and solar facilities but that is not realistic either. Wind turbines need repair and become obsolete (for example, most of the original turbines in the Altamont wind farm are being replaced). Same goes for solar panels. But the operating costs are certainly much, much lower with renewables.

So all things considered, have I changed my opinion about what we should be doing with the development of renewable resources? Fundamentally, no. I still feel that the public policy initiatives outlined in my Sustainable Energy Manifesto provide the best path forward, with one addition.

Because of the time that will be required to develop utility-scale energy storage options I believe that it would be wise to use CCGT plants to replace the oldest coal-fired plants in the U.S. generation fleet - those that will be forced to close because they cannot be retrofitted to meet MACT requirements for a reasonable cost.

The challenge with that strategy is that without some level of price certainty it will be difficult to finance the construction of these plants. For example, in Europe Moody’s Investors Service published a note on November 6, 2012 warning that it expected “rising levels of renewable energy output to further affect European utilities' creditworthiness”. The situation is not much better in North America.

That leads once again to the last point in my Sustainable Energy Manifesto. It is time to end the era of deregumania; time to admit that for life-critical services like water and electricity an increasingly short-sighted free market will not deliver the stability and reliability needed. There is no shame in admitting that deregulation of the electricity market was a mistake. The same cannot be said for continuing down a path that is clearly leading nowhere.

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Thanks for the support - 10,000 reads as of April 28, 2013

Sun, 28 Apr 2013 01:52:00 -0600

Energyblogs.com was the first place that I started posting entries for the Black Swan blog back in September, 2012. I have had more and more support from the community every month since then.

Although I am now published in a number of different blogging sites as well as in an upcoming hard copy publication I am committed to the continued publication of new entries at energyblogs.com.

Thanks - your support is really appreciated

Index of entries in the Black Swan Blog (in order of publication at Debarel.com)
Publication Date	Title
21-Sep-12	Introducing the Black Swan Blog
28-Sep-12	Residential Power Generation - A "Black Swan" for sustainable energy development
20-Oct-12	Scary Energy Scenarios (Hallowe'en 2012)
27-Oct-12	Electric Vehicles - The Promise and the Problem
19-Nov-12	Funicular Power - Newton's Apple to the rescue
29-Nov-12	Car Pooling Part I: Treading Water
6-Dec-12	Car Pooling Part II: Going for Gold
9-Dec-12	Solar Updraft - Inefficient but Effective
20-Dec-12	The Fright Before Christmas
1-Jan-13	2012 - The Year Renewables became a problem
9-Jan-13	The Panama Canal, Apollo 11, ISS ... Energy Storage
18-Jan-13	Non-Thermal Concentrated Solar Power (CSP)
26-Jan-13	Solar Power 7x24 365 days a year - Believe It Or Not
8-Feb-13	Wind Energy Headlines Need Scrutiny
14-Feb-13	Arnold Goldman - A living, breathing "Black Swan"
24-Feb-13	The coming crisis in electricity generation
2-Mar-13	Hawaii Renewables facing Cross-currents and Headwinds
10-Mar-13	Can we control our addiction to electricity? Should we?
21-Mar-13	Harvesting the Energy Stored in the Ground Below Us
25-Mar-13	Your Speed - 32 mph - Slow Down!
29-Mar-13	We should use Concentrated Solar Power ONLY after sunset
4-Apr-13	Unpumped Storage
15-Apr-13	A Sustainable Energy Manifesto
22-Apr-13	80% Renewables by 2050? Show me a realistic plan!

The Black Swan Blog: 80% Renewables by 2050? Show me a realistic plan!

Mon, 22 Apr 2013 17:50:00 -0600

A report released by NREL on March 26, 2013 concludes that 80% of U.S. Electrical generation could come from renewables in 2050 based upon the use of technologies that are available today.

This report does mention that it is only "technically feasible" and that many issues remain to be resolved. My response would be that it is also "technically feasible" to launch a huge mirror into space and direct additional solar energy towards an earthbound receiving station. It is also "technically possible" to produce energy using nuclear fusion today, albeit for only about 0.5 seconds.

There is a big difference between something being technically feasible and believing that it will actually happen within the next 100 years or so. With all due respect to the scientists at NREL I don't think that it is too difficult to demonstrate that it IS NOT possible to generate 80% of North American electricity demand from renewable sources using currently existing technology. New energy storage technologies will have to be developed and a very different and more holistic approach to many different components of our use of energy will be required in order to achieve this goal.

I have provided a more detailed analysis in my latest posting at The Black Swan Blog

By the way - happy Earth Day - I am a believer!

The Black Swan Blog: A Sustainable Energy Manifesto

Thu, 18 Apr 2013 05:51:00 -0600

The electrical generation and distribution system has evolved over the past 100+ years into an extremely reliable source of power – one which has been the foundation of the industrial expansion and prosperity of the developed world. Our society is totally dependent upon this and even relatively short and localized interruptions in the power supply (for example during the Sandy superstorm) cause major disruptions to everyday life.

In the past 10 years there has been rapid development of renewable energy sources, principally Photo-Voltaic (PV) solar and wind supported by significant tax-payer and rate-payer subsidies. The public policy goal of replacing non-renewable hydro-carbon combustion with renewable generation sources has achieved significant successes; higher efficiencies in manufacturing and more efficient deployment have resulted in lower unit costs which have in some situations made renewables competitive with traditional thermal generation assets (coal-fired, natural gas-fired and nuclear plants).

However, the success of renewables has been achieved in an environment where all traditional thermal generation assets are still in place, able to provide immediate backup power after sunset and when the wind is calm. Even so, as renewable generation becomes a significant component ( > 10% ) of total capacity there have been increasing problems with grid stability (for example in Germany, Hawaii, and Texas). In addition, preferential access to the electrical grid by renewables has seriously eroded the operational efficiency and financial viability of base-load thermal generation plants which are designed (and financed) to run 7x24x365.

In the U.S. the MACT regulations put in place in November, 2011 will result in the permanent shut-down of a significant portion of the coal-fired generation fleet – more than 34 GW by some estimates. It will be very difficult to attract the investment capital required to replace this base-load generation capability in an environment of increasing price uncertainty where renewables are given preferential access to the market.

In order to continue the transition to renewables the problems of variability and reliability must be addressed in a serious way. The roll-out of renewables should continue at a slower pace with reduced financial support in order to direct more research and development and implementation funding to programs designed to maintain the integrity and reliability of the electrical generation and distribution system as a whole. These programs should address reducing end-user demand, development of physical transmission inter-connects and associated “supergrid” technology, and the development of utility-scale energy storage technology.

The following specific initiatives would support an aggressive and relatively painless transition to a truly sustainable energy environment.

Over the next three years cut both the wind energy Production Tax Credit and Photo-voltaic Feed-In-Tariffs in half. Redirect these support mechanisms to Concentrated Solar Power (CSP) developments that include Thermal Energy Storage with the proviso that these CSP systems begin operations in the late afternoon and throughout the peak demand period at night. With a combination of PV during the day and CSP at night solar energy can become a cost-effective and reliable base-load substitute in the Southern U.S. and in many other parts of the world.
Pass legislation that prevents regional grid operators from treating energy storage systems as an “end user” subject to grid tolls. Utility-scale energy storage systems are essential to address the variability and reliability issues associated with renewables and should be supported by grid operators, not penalized by them.
Institute a Feed-In-Tariff for stored energy that is released to the grid. These systems are as yet in early stages of development and need tax-payer and rate-payer support in order to achieve the large scale deployment that will result in more effective and lower cost systems.
Create an Internationally coordinated Research & Development program to develop utility-scale energy storage systems with funding in the tens of billions of dollars spread over the next decade. The challenges associated with any viable storage technology are enormous and will require an ISS-style effort to overcome.
Establish a North American “Smart Grid” initiative that will include extensive upgrades not only to the systems used to control energy flow but also to build out required physical inter-connections. The concept that “the wind is always blowing somewhere” does have some validity but would require massive and expensive inter-connection capabilities. Given that transmission lines require significant environmental review, often encounter citizen protest, and take years to construct, this is a process that will take decades to complete. The sooner we get started the better.
Designate all hydro-electric power as a renewable resource (in California large scale hydro is not eligible for the state's Renewable Portfolio Standard) and plan for the further development of hydro where it is available. In particular, plan for the integration of hydro from northern Manitoba and Saskatchewan as backup to the plentiful wind resources of the Canadian Prairies and the U.S. Mid-West. In other areas explore the concept of unpumped storage which implements excess hydro generating capacity to balance wind and PV solar. This will require co-operation between Canada, the United States, and the individual states and provinces. The goal should not be maximizing revenue for any particular generating source in a “spot market” approach, but rather for long-term stability in both supply and price for the entire system.
Provide additional support for utility-scale geothermal projects such as the one that has provided base-load electricity for the "Big Island" of Hawaii for the past 20 years. Like CSP and Hydro, Geothermal is one of the only reliabe and renewable base-load generation sources and deserves enhanced interest and financial support.
Develop national education programs designed to raise the awareness of consumers regarding the responsible use of electricity with the specific aim of supporting Time-Of-Use and Demand Response programs. This must be a "call to arms" to industry and consumers with clearly identified goals for “clipping” peak demand in both summer and winter. During peak demand times a web site, media segments included with weather reports and outdoor billboards should be used to visually display total electricity usage and peak prices being paid in order to focus attention on the environmental and financial consequences of peak demand electricity usage.
Amend the building codes across North America to require geoexchange systems for heating and cooling which reduce electricity use by more than half and effectively “clip” peak demand on hot summer days and cold winter nights. This requirement should apply to all new commercial and industrial buildings and all new residential neighbourhood developments unless a credible technical or economic justification can be made to implement traditional, energy-intensive HVAC systems.
Promote car-pooling through a national education program, support for a unified car-pool participant matching system, and “tolls” for Single-Occupancy-Vehicles entering major urban centers during rush-hour (with exemptions for individuals that cannot make car-pooling work for them in a reasonable way).
Re-establish regulatory control over the wholesale electricity market. Deregulation has been largely ineffective in every jurisdiction it has been implemented in with no measurable benefits for consumers and significant degradation of electrical reserves in most cases. It is simply not possible to justify multi-billion dollar investments in more efficient and cleaner generation capacity without some price certainty. Regulated profits for privately owned firms or public ownership of generating assets served to build reliable and cost effective generation systems for more than 100 years. We have “fixed” something that was not broken to satisfy an anti-government, anti-regulation political agenda and now we really have broken the system.

Implementation of these proposals will take many years, in some cases decades. There will be very significant costs and in many cases public resistance. The bottom line, which many will have a hard time accepting, is that we have to change the way we live, the way we construct buildings, our driving behavior, and our collective allocation of resources if we really want to wean ourselves away from hydro-carbons and transform into a truly sustainable society.

We do not have to turn our backs on most of the technology we use or even give up many of the creature comforts we enjoy. But we will have to sacrifice a bit of convenience to choose car-pooling or public transit; we will have to accept that being hot and sweaty on some summer days when the winds are calm is alright; we might have to put on a sweater (fashionable of course) on some cold winter nights so that we can turn the heat down; we will have to pay a bit more in the short term so that our buildings can use geoexchange; and taxes and utility rates will have to go up somewhat to pay for smart grids, extended high voltage transmission lines, and energy storage research.

If this doesn’t sound very pleasant consider the alternatives.

We can stand by and watch as the 3^rd world consumption of oil and gas increases and the physical supplies get tighter and tighter. At some point, probably in the next 10-15 years, there will be a significant imbalance between supply and demand and the price of oil and gas will escalate dramatically and quickly. Shale gas and arctic oil will not prevent this inevitable scenario.

We can continue to rapidly develop solar PV and wind generation because it is very easy and relatively cheap. But without giving the support required to commercialize utility-scale storage we will destroy the stability of the electricity distribution system which will lead to regular grid failures and blackouts.

We can continue to ignore how our behavior as individuals impacts the overall supply-demand balance; by using incandescent light bulbs, washing and drying clothes in the early evening, baking at the height of peak demand on a cold winter evening, not having programmable thermostats, and a thousand other “little” things that add up to 10-15% of peak demand.

In other words we can continue on our current path with relatively few changes until we hit a brick wall. Or we can make serious changes that will help us transition to a sustainable energy environment as painlessly as possible.

I know which path I would prefer – I don’t like brick walls.

These changes will not come about without significant public support and advocacy. If you believe that some or all of this Sustainable Energy Manifesto is valid then I encourage you to become a follower of @enrgy_manifesto on Twitter. I will put out a tweet every day around noon Pacific time which addresses some aspect of this manifesto. By retweeting you can help raise awareness of these necessary changes and hopefully encourage action on the part of our politicians and industry decision-makers.

The Black Swan Blog: Unpumped Storage

Thu, 11 Apr 2013 00:00:00 -0600

Whenever I launch into one of my frequent rants about the need for utility-scale energy storage to support the rollout of more Solar and Wind generation there are always people that point to pumped storage as a credible solution. And every time that happens I argue very strenuously (and I hope convincingly) that pumped storage is NOT a viable solution because there are not enough locations where it works.

The Bath County facility in Virginia (the world's largest pumped storage) is an engineering marvel - I encourage anyone interested in storage to check out their site and the video which is quite inspiring. But to create a second large reservoir close to the main reservoir in other locations is difficult. There may be many sites being proposed but are they large enough to make a real impact?

To get an idea of the scale required it would take 3 Bath County sized facilities to be able to store the output from the existing wind generation capacity in Texas. It took 8 years from the time the Bath County facility was licensed until it went into production. And these days the development of large reservoirs is subject to significant resistance from some segments of the environmental community.

I support the development of as much pumped storage as we can reasonably do as quickly as possible. I just don't think it will be large enough or fast enough in North America to help us deal with wind variability in the next 5-10 years. On the other hand, pumped storage may be a significant part of the solution in Europe if they can overcome the cost/environmental challenges of building the undersea interconnects required.

In terms of North America it seems to me that there may be a way to achieve the same result using a different approach.

Every hydro facility has penstocks and generators sized to make use of the average stream flow of the river that feeds the reservoir behind the dam. It would not make sense to design in a lot more generating capacity because using more water would quickly draw down the reservoir to a level where power generation would no longer be possible. In dry years some of the penstocks are closed and in wet years water is spilled but on average the facility is designed to use all of the water supply available and no more.

Now if we decided to use existing hydro facilities in a different way it would be possible to provide backup generation for wind and solar. What I am proposing is that additional penstocks and turbines be added to large-scale hydro facilities in North America – perhaps as much as double the current capacity. In most cases this could be done using tunnels from the existing reservoir as shown below.

In order to make this work the average capacity of wind generation (typically 25-30% of nameplate) would have to be roughly equal to the excess capacity built into the hydro facilities.

When wind generation dips below the average the hydro facilities could make use of the excess capacity installed to make up the difference. This of course would lower the level of reservoirs but typically reduced wind conditions only last for a few hours or at most a few days.

When wind generation exceeds the average the hydro generation could be cut back and reservoirs could be refilled or water spilled. By balancing the two generation sources the regional grid would always have access to the same amount of power despite the variability of wind.

This exact situation is already occurring in Scandinavia where excess wind energy from Denmark is often available at night and excess hydro is available during the day. The difference with "Unpumped Storage" is that the entire system will be designed to balance excess wind capacity whenever and wherever it might occur with excess hydro built into existing facilities.

There are some significant challenges with this approach (as there are with any concept that embraces renewable sources in a major way).

Grid Capacity: Balancing wind generation with hydro that might be a thousand miles away will require new transmission lines – very large new transmission lines. In the worst case with a large high pressure zone sitting over the Mid-West wind generation could drop to essentially zero from a high of something like 10 GW or more (this exact situation happened in December, 2012 in Texas where a new wind generation record of 8.6 GW was followed the very next day with 6 hours of no appreciable wind at all). So Unpumped Storage would require a very significant investment in new inter-connections between regional grids
Reservoir Levels: Unpumped Storage would cause reservoirs levels to drop more quickly and to a lower level than with normal hydro operations. This would have ecological impacts that need study and could have a significant impact on recreational activities.
Energy Prices: This approach would not work in a deregulated environment where wind and hydro producers were effectively competing for market share in a "spot market". Hydro, being the reliable source, could demand almost any price when wind generation dropped dramatically. By way of example, Texas is in the process of raising the ceiling price of electricity to $9,000/MW-Hour (the average annual price in Texas is $55/MW-Hour) to try and entice utilities to build more base-load generation capacity. The concept seems to be that if you let base-load plants charge 170x the average price for the few hours that they can get access to the grid then utilities will spend the $billions required to build new facilities. Call me a skeptic but I would say "that dog don't hunt."
In the other extreme when the wind is blowing hard the spot price can drop to zero (actually to less than zero in Texas about 10% of the time because of Production Tax Credits earned by wind producers).
Jurisdictional Issues: To make Unpumped Storage work the jurisdictions in which the hydro and wind were located would have to cooperate in every way; regulations, import/export policies, transmission facility planning and control, pricing mechanisms, and financial incentives would all have to be aligned across the entire region regardless of how many state and provincial borders the electrons crossed.
Would this be easy? No. Would it be expensive? Very. But would it work? In many regions of North America the answer is a definite yes.

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: We should use Concentrated Solar Power ONLY after sunset

Fri, 29 Mar 2013 00:42:00 -0600

There is an ongoing battle between Photo-Voltaic (PV) solar which converts sunlight into electricity through an electro-chemical reaction and Concentrated Solar Power (CSP) which generates electricity using steam turbines. Based upon the nameplate capacity under development today PV is winning the battle hand's down. Some projects that were originally designed to use CSP have recently been converted to PV.... continued

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Your Speed - 32 mph - Slow Down!

Sun, 24 Mar 2013 17:50:00 -0600

Have you ever driven past one of those radar speed signs that indicates how fast you are going and flashes a warning if you are speeding? If yes, did it cause you to slow down?

If you answered yes to both questions then you are in the majority when it comes to driving behaviour.

More and more cities and towns are spending significant amounts of money to install these signs because they are very effective at reducing average traffic speed. It is worth giving some thought to why that is.

In every case the radar sign is replacing a simple metal sign that clearly indicated the maximum speed allowed. So there was no confusion about what driving behaviour was expected; and yet the signs were often ignored. But when radar signs are installed drivers tend to adhere more closely to the speed limits.

There have been numerous studies on this topic and the consensus is that these signs increase our awareness of how we are behaving. In other words, it is not that we are unwilling to drive within the speed limit – it is just that we are not aware of the fact that we are speeding.

You might expect that the effectiveness of these signs would diminish over time as people get used to where they are and come to realize that speeding tickets are not generated by these signs. But the exact opposite is true. The longer one of these signs exists at any particular location, the more effective it is at reducing traffic speed. The graphic below shows results from a study conducted by the City of Bellevue, Washington after more than 10 years experience with these signs.

So what does this have to do with energy use and conservation? I think that the main reason that we are not more consistent about energy conservation is that we are not aware of how much energy we are wasting on a daily basis. Lights get left on, clothes dryers get run in the early evening, thermostats are not programmed to reduce heating and cooling when houses and offices are not occupied.

Making the public aware of energy usage in real time has been one of the tools used in post-Fukushima Japan. Energy usage is reported through the media on a color coded scale similar to the U.S. Terrorist Threat warnings; green is less than 90% of capacity, yellow indicates that 90-95 percent of capacity is being used, orange tells customers that they are using up to 97 percent of available capacity.

Japanese office and factory workers cope with thermostats set at 83 degrees Fahrenheit in the summer and verbal alarms are issued on office intercoms when energy usage within a building is exceeding targets.

The result of all this public education was a 15% reduction in electricity demand the first summer after safety concerns shut down 50 of the 52 nuclear reactors in Japan. This reduction in electricity usage could not be sustained in 2012 as consumers grew weary of hot and sticky summer days and cold winter nights. Even so, peak demand was still reduced by more than 10% as compared to pre-Fukushima years.

Only time will tell if energy conservation is the new norm in Japan. But it seems likely that there will be at least some long-term impact on energy demand, particularly at those peak times for a few weeks in the winter and summer.

The lessons to be learned from radar speeding signs and the approach to public awareness regarding electricity usage in Japan are clear. The behaviour of the general public can be changed. But it takes a very visible and consistent communication strategy to bring about the change and sustain it over the long term.

The Japanese have demonstrated that a reduction in electricity demand of at least 10% is possible. That may not seem radical but in most countries it would translate into a lot less coal burned, a lot less CO2 going into the atmosphere, and a significantly more sustainable energy future. Personally I wouldn't mind seeing a flashing sign that said "Your usage - 3 KW - turn off the hot tub!"

Finally, if you really want to know what life will be like if we don't get our act together in terms of conservation and the development of utility-scale energy storage solutions you might want to check out the Toyko Electric Company instructions on what to do during a "blackout".

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Post-Secondary Institutions harvest underground energy

Mon, 18 Mar 2013 02:13:00 -0600

In an earlier blog posting I discussed ways that residential and commercial electricity consumers can reduce their draw on the utility grid either by generating some of their own electricity or by using geothermal heat pumps (now more commonly referred to as geoexchange systems) to provide heating and cooling. Recent news about large scale geoexchange systems highlights how Post-Secondary Institutions are showing leadership in harvesting the energy stored in the ground below us.

On March 3, 2013 the Board of Governors of the University of Maine at Farmington approved a $1.55 million geoexchange project which will replace aging oil-fired boilers and eliminate the burning of 28,000 gallons of oil yearly. The system will pay for itself in 8-10 years after which both heating and cooling of the campus will be essentially free for decades to come.

Perhaps the most encouraging aspect of the UMaine project is that it is built upon past successes with geoexchange. Earlier projects implemented this technology for the education center and a swimming pool and fitness center.

February 13, 2013 marked another geoexchange milestone as the Missouri University of Science and Technology closed on funding for a $2.5 million geoexchange project which will provide heating and cooling for 2/3 of the buildings on the campus in Rolla, Missouri.

Missouri S&T Chancellor Cheryl B. Schrader stated that “the system is one of the most comprehensive ever undertaken by a college or university”.

Post-Secondary institutions in Canada are also making use of geoexchange to reduce campus carbon footprints. The University of British Columbia plans to use geoexchange for its entire Okanagan campus home to more than 8,000 students.

In 2007 the British Columbia Institute of Technology formally adopted the concept of transforming BCIT's campuses into living laboratories of sustainability. Theory was transformed into practical application that year as the new Aerospace Technology Campus was opened incorporating geoexchange and other technologies designed to minimize the environmental impact of this state-of-the-art facility.

The same concepts were applied during the Gateway project which saw a major renovation of one of the most important BCIT campus buildings, again incorporating geoexchange.

Geoexchange technology has developed to the point where it represents the best solution for commercial and institutional heating and cooling. By reducing the electricity loads that cause almost all of the highest consumption peaks (heating on cold winter days and cooling on hot summer days) geoexchange can “clip” these peaks providing relief to regional generation and transmission systems.

Widespread adoption of geoexchange is such an obvious choice that I hesitate to characterize it as a “Black Swan”. However, the potential to dramatically smooth out power consumption curves makes this technology one that could radically change the electricity supply/demand balance – in a very positive way.

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Can we control our addiction to electricity? Should we?

Sun, 10 Mar 2013 12:52:00 -0600

If we really want to make renewable energy a critical component of the electricity generation mix I think we have to honestly face the fact that “instant-on” essentially unlimited power will no longer be the norm. I personally don’t think that is a bad thing, but it is something that deserves thoughtful consideration.

We can go a long way towards eliminating the variability of wind and solar by building out large “smart” grids which will use geographic “smoothing” based upon the fact that it is usually windy and/or sunny somewhere. We must also develop and deploy practical energy storage solutions. And we can implement more Concentrated Solar Power (CSP) facilities like the Solana plant in Arizona which will come on-line in the next 18 months. That facility can provide reliable base-load power for extended periods including well past sunset. The Gemasolar CSP plant in Spain generates electricity 7×24x365.

But in the end, having done everything we can to reduce variability in the supply of electricity from renewables we also have to change our usage patterns. As many observers have pointed out, the real problem with electricity generation comes only for a few hours per day for a few weeks a year; during the coldest winter days and hottest summer days. If we could “clip” this peak demand there would be a far better chance of meeting our electricity requirements using renewables. That is what “Responsive Demand” is all about.

In a typical scenario a residential or commercial consumer volunteers to allow a utility to raise the thermstat on a hot day or lower it on a cold day in response to peak demand conditions. In return the consumer usually gets their electricity at a discount. So the trade-off is relatively mild discomfort for predefined savings on the utility bill.

In theory this is a great concept and utilities all over North America have been busily installing smart meters and remote control technology to enable “Time-of-Use” (TOU) pricing and Responsive Demand.

The problem is, in most cases it hasn’t worked very well.

In 2002 the Long Island Power Authority spent $33 million on the EDGE program which involved installation of utility controllable thermostats in 36,000 residential consumer premises. The program was used rarely until 2009 and since that time it has not been used at all. During an extended heat wave in 2011 LIPA defended its non-use of the program by stating that there was no physical shortage of electricity. In other words, they chose to pay very high prices for additional power (costs which all of their ratepayers would actually absorb in the long run) rather than inconvenience consumers that had volunteered to be inconvenienced (for a price).

A comprehensive study done for the The National Association of Regulatory Utility Commissioners highlights some of the issues related to “dynamic pricing”. People find it difficult to change usage habits enough to make a difference. Suppers have to be cooked at “suppertime”, people shower and dry their hair mostly in the morning, air conditioners and electric heaters respond to the weather.

That is not to say that time-shifting as much electricity usage to off-peak times isn’t valuable or useful. It is. The question is, how much usage can realistically be time-shifted? And can the potential long-term savings for a utility (principally by not having to increase generation capacity) justify the $1,000-$2,000 or more per ratepayer that it costs to implement these systems.

Education is key. It is clearly not enough to possibly save $20-$50 month on an electricity bill. With rates rising for other reasons and the electrical appliances in a home changing on a regular basis as we replace old appliances with new I think it would actually be extremely difficult to really see a reduction in costs that could be definitively attributed to time-shifting usage.

But doing power-hungry tasks in off-peak times is the right thing to do. We all know that. And we could all probably live with a few degrees shift to higher temperatures in the summer and cooler temperatures in the winter.

Oklahoma Gas & Electric’s Smarthours is perhaps setting Demand Response on a more positive track. Supported by a positive Vision Statement and a focused consumer education program the utility was able to clip 72 MW (1%) from a total generating capacity of about 7 GW in the initial pilot project. Most of this reduction was at peak load times which would have required additional power purchases and ultimately would have influenced plans for new capacity additions. OGE hopes to reduce peak load by 210 MW using this program in 2014.

In order to achieve a sustainable energy future we will need every trick and tool we can get our hands on. Demand Response is an important one.

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

The Black Swan Blog: Hawaii Renewables Facing Cross-Currents and Headwinds

Sat, 02 Mar 2013 02:55:00 -0600

The state of Hawaii has a problem when it comes to supplying reasonably priced electricity to its citizens. Actually, it has a few different problems.

First, because there are no large rivers on the archipelago hydro power is not an option even though there is no lack of rainfall received at high elevations.

Second, because the islands are not joined by submarine transmission cables there is no ability to share either supply or demand.

Consequently, for reliable, base-load generation each of the major islands has one or more oil-fired steam generation plants. As you might expect, this is an expensive proposition costing upwards of $1.5 billion per year for fuel and resulting in average Hawaiian electricity rates that are almost triple those in the lower 48 states. The use of oil as the primary fuel for electricity generation also makes the residents of Hawaii amongst the highest per capita generators of CO2 in the country. Not exactly what you would expect from a state that is otherwise known for its stewardship of the environment.

But wait! The only thing a steam generator really needs is heat to boil water. The Big Island of Hawaii has active volcanoes which generate vast amounts of heat. Why not tap into that geothermal heat source to eliminate the need to burn fuel oil?

In fact, that is being done on a relatively small scale. The Puna geothermal facility on the Big Island began operations in 1993 providing 30 MW of electricity which was expanded to 38 MW in 2011. It now produces between 15% and 20% of the electricity for the Big Island. On February 28, 2013 the Hawaiian Electric Light Company (HELCO) issued a final request for proposals to add another 50 MW of geothermal generation.

That would seem to be a step in the right direction - but only a baby step. The Geothermal Energy Working Group concluded that the potential for geothermal on the Big Island is at least 500 MW. That would be enough to supply all of the electricity for the Big Island, Maui, and Molokai. And unlike solar and wind, geothermal has the ability to provide reliable base-load power indefinitely.

So why is it taking so long to develop a resource which has so many positive characteristics? Geothermal is reliable, renewable, and plentiful.

Well, to be honest, it's more complicated than it seems.

For one thing all of the facilities to generate electricity from oil are already in place, paid for many years ago. Electricity demand is slowly going down throughout the Hawaiian Islands as a result of conservation and energy efficiency measures. Homeowners are installing residential photo-voltaic which is further reducing demand during the day. Given that there is already too much supply it is somewhat difficult to argue for a very large capital expenditure in the short term to switch to geothermal.

Another issue is that lack of inter-connection between the islands. There have been a few different feasibility studies into laying a submarine electricity transmission cable and although some of the channels are quite deep and plagued by strong currents it seems technically possible. The cost, however, is a bit daunting –at least $1 billion.

But there is another significant problem that I certainly would never have thought of. Hawaii has a very large requirement for aviation gasoline, not only to refuel aircraft that have dropped off joyful tourists in the Aloha state but also to refuel aircraft that are stopping over in Hawaii only for that purpose. Of course Hawaii also needs automobile gasoline and lubricants so it makes the most sense to import crude oil and refine it into the different petroleum products locally. There are two oil refineries in Kapolei on the island of Oahu to do that.

One unpleasant fact about refining crude oil is that once you have separated out the more valuable products such as jet fuel, gasoline and motor oil you are left with a very dense and viscous product referred to as "residual oil". In Hawaiian refineries this residual oil makes up about 25% of the input crude by volume.

There's not much you can do with residual oil. But one thing you can do is burn it in electricity generating stations.

If you reduce or eliminate the burning of residual fuel oil you have to find something else to do with it. Not an easy thing to do when you are in the middle of the Pacific Ocean.

And finally, when building a large geothermal facility and associated high voltage submarine cable terminating on an island with a couple of active volcanoes, there is always the possibility that something bad might happen – something involving millions of tons of red-hot molten rock for example. However unlikely that may be, the consequences would be devastating if much of the Hawaiian electricity distribution system was dependent upon Big Island geothermal

Taking everything into consideration it is no wonder that development of geothermal energy has been slow.

Utility scale wind is running into many of the same headwinds being faced by geothermal.

The Big Wind proposal would see hundreds of wind turbines built on the islands of Molokai and Lanai with a total rated capacity of approximately 400 MW.

As with Big Island geothermal, this proposal would also require the laying of expensive submarine cables. However, unlike geothermal, wind is not a reliable base-load generation source and the actual average output of wind farms is typically only 20-30% of rated capacity.

The variability of this much wind generation would also be very problematic given the small size of the Hawaiian grid.

So what is the optimal roadmap for the development of renewable energy in Hawaii? I believe that the time has come for a significant change in direction:

Accelerate the expansion of Big Island geothermal – the planned addition of 50 MW of capacity should be followed in short order by at least another 100 MW
Abandon the Big Wind project. For the $2-$3 billion price tag of this project it would be possible to build Concentrated Solar Power (CSP) plants with Thermal Energy Storage on each of major islands; plants that can reliably produce electricity 7x24x365
Turn the CSP projects on Lanai and Molokai into true "Black Swans" by incorporating desalination capabilities into these plants. A reliable fresh water supply would open up new possibilities for agriculture and tourism on these relatively arid islands.
Continue to encourage the installation of residential PV but reduce the Feed-In-Tariffs (rate-payer subsidies) significantly over the next five years. Too much PV will lead to instability in the grid and ratepayer/taxpayer subsidies are better directed towards geothermal and CSP projects.
Investigate new uses for the residual fuel oil that will no longer be needed including the potential to upgrade it to more valuable petrochemical products.

These initiatives will not happen quickly and there will be very significant capital costs. But in the end Hawaii could be a model for the rest of the world – a demonstration of how investments in overcoming significant obstacles can lead to a sustainable energy future and lower costs over time.

I have visited Hawaii 7 times in the last 25 years and have enjoyed the Aloha spirit on each and every trip. But it would be nice to turn on the air conditioning without having an image of an oil tanker pop into my head.

Other blogs in this series are available at http://www.debarel.com/blog1.
Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html
On twitter @davis_swan

The Black Swan Blog: The coming crisis in electricity generation

Sun, 24 Feb 2013 00:41:00 -0600

For more than 100 years electricity generation and distribution systems have evolved to become one of the most reliable services imaginable – at least in the developed world. Our society is totally dependent upon this and even relatively short and localized interruptions in the power supply (for example during the Sandy superstorm) cause major disruptions to everyday life.

The reliability of the system depends upon a rather delicate balance of supply and demand that varies throughout the day and throughout the year.

Huge thermal base-load steam turbine generation plants that can reliably provide the same power output 7x24x365 are the foundation of the system in most parts of the world. Historically these have been fueled by coal which generates “dirty” (in some cases toxic) ash and a lot of CO2. More recently single cycle and combined cycle natural gas plants have played an increasingly important role. These plants are cleaner and much more efficient than coal plants in that they transform more of the energy generated by combustion into electricity. The disadvantage of these plants is that natural gas has historically been much more expensive than coal.

In regions where there are large rivers that drop hundreds of meters in a relatively short distance it is possible to build hydro facilities. These were the earliest source of large scale electrical generation and are still used extensively. Unfortunately, most of the best hydro locations in the world have already been developed.

Starting in the 1950’s nuclear plants were added to the mix and generate a significant percentage of electricity in many countries (the highest being 75% of electrical output in France).

These base-load plants are designed to run all the time at a relatively constant output receiving a fixed price for the electricity generated. That is how they run most efficiently and a constant and predictable revenue stream underlies the calculations used to get the building of these plants financed and the operating costs paid. In most cases the payback on these facilities is achieved only after many years of operation.

When electrical demand starts to peak in the late afternoon and evening “peaking plants” come into play. These are typically single cycle natural gas turbine plants that can come on-line in a matter of 15-20 minutes or less. Because they run only during peak demand times the expectation is that the electricity they generate will command a higher average price. It is also assumed that they will be able to generate revenue most days although that varies with time of year and the weather. For example, very hot summer days and very cold winter days will result in higher peak demand than moderate days in spring and fall.

This complex balance of base-load and peaking power plants has been in place for decades and has resulted in a very reliable electricity supply. The most common source of power outages are storms that bring very strong winds, knocking down trees and branches that take down overhead electrical lines.

Over the past decade that balance has been disrupted by the introduction of renewable energy sources such as solar and wind. These are both unreliable in the sense that it is not possible to match supply with demand, and highly variable due to passing of clouds in the case of solar or frontal weather systems for wind. As an example, on Christmas day, 2012 Texas set a new wind generation record of 8.638 GW (26% of total supply) for a few hours. The very next day across the whole of Texas there was essentially no wind generated electricity available for 6 consecutive hours.

In most jurisdictions renewables are given priority access to supply the electricity grid regardless of whether or not there is demand. In order to balance supply and demand thermal generating stations have to cut back output, electricity is exported to neighbouring jurisdictions (typically at very low prices) or hydro stations “spill water” by redirecting the flow from generator sluices to spillways.

As long as renewables made up a relatively small portion of total generation capacity the physical problems could be handled. But the economic issues are now coming to the fore as the development of renewables continues.

With base-load and peaking thermal plants now sitting idle (as “spinning reserves”) for more and more of the time the economics of running these plants has been significantly eroded. Many of these plants are marginally profitable or are actually losing money. There is no realistic hope that this trend will do anything but accelerate in coming years. As a result it is becoming increasingly difficult to get financing for the construction of new thermal generation plants.

In the United States the situation is particularly dire. The MACT regulations issued by the EPA in December, 2011 will result in the closure of many older coal-fired plants (estimates run as high as 34 GW of capacity or more). Plans to replace this capacity are both vague and uncertain. For example, Georgia Power’s announcement that 2 GW of coal-fired capacity would be shuttered by 2015 was justified by the addition of 2 nuclear powered plants in 2017 – plants which may well run into significant construction delays. What happens between 2015 and 2017 (or later)?

Texas already has inadequate electrical generation reserves as highlighted in a strongly worded letter from the North American Electric Reliability Corporation.

In Europe various studies referenced in Paul-Frederik Bach’s excellent blog postings outline similar issues.

Beyond supply and reserve issues the economic disruption caused by renewables is producing some very strange consequences.

Declining reserve capacity and uncertainty regarding the economics of new thermal plants will destabilize the electric grid. Rolling blackouts and/or regional grid failures will occur on a more frequent basis. These are the unavoidable consequences of continued aggressive development of renewable generation.

There are public policy initiatives that could make the transition to renewables less risky and disruptive but these would take time to implement (I will outline some of those in a future blog). However, I personally don’t see any public support or political will to try and slow down the introduction of renewables in order to proactively protect the integrity of the electrical system, particularly in North America and Europe. Instead, I fear that we will have to experience repeated significant failures in the system before the scale of the problem is fully appreciated.

Sometimes it seems like we just have to learn things the hard way!

The Black Swan Blog: Arnold Goldman - a living, breathing "Black Swan"

Thu, 14 Feb 2013 01:31:00 -0600

Sometimes a single person with a clear vision can have an enormous positive impact.

Steve Jobs was one of those people. But when I think about what a sustainable energy future might look like I give a lot of credit to Arnold Goldman. His work on the development of Concentrated Solar Power has given us a renewable option that holds out the promise of 7x24 365 days a year electricity generation ...continued

The Black Swan Blog: Danish Wind Meets 30% of Electrical Demand in 2012 - More Twisted Numbers

Sun, 03 Feb 2013 13:09:00 -0600

I have to start this blog post by saying once again that I am a big supporter of wind energy. But the misinformation, partial facts, and outright lies distributed by the wind energy industry and its supporters really annoy me. I also think that this lack of truth and transparency is undermining the credibility of the wind energy community.

In year-end reviews a number of blogs and news articles heralded the claims by Denmark that it generated 30% of its electrical demand from wind. Only if you are willing to live in a reality distortion field is that statement factually correct. At best it is incredibly misleading.

Denmark and Danish taxpayers and ratepayers have made very large investments in the development of wind energy for more than a decade. Wind capacity and wind generation have both increased dramatically as a result. So what is my complaint?

The following two graphs illustrate the point quite well (data source the CIA World Factbook).

As wind power generation has ramped up so have both the exports and imports into the Danish grid.

Why is that? The short answer is that much of the electricity generated by Denmark's 5,000 wind turbines is essentially useless.

At night Denmark's wind turbines continue to generate electricity when there is very little demand. In order to balance the transmission grid this electricity is essentially given away at extremely low prices to Norway and Sweden. Not that Norway and Sweden need this electricity. They both have surplus hydro capacity that was built by and large for export to countries like Denmark and Germany. But they both have the ability to either refill their hydro reservoirs or release water over their spillways without generating electricity at night. So, being good neighbours, they take the useless electricity off of Denmark's hands.

But this arrangement isn't as altruistic as it sounds. During the day Denmark's unreliable wind farms are often unable to generate electricity when people actually need it. As a result Denmark is forced to buy power back from Norway and Sweden. But the price paid is not that mid-night deep discount price that was paid for Denmark's excess wind energy. It is peak demand market price.

A comprehensive study by the CEPOS independent research institute provides a more detailed analysis of the situation but the bottom line is this. Wind energy is supplying something closer to 10% of actual electrical demand in Denmark. Even more worrisome is the fact that quite often wind energy provides almost no electrical generation. That means that Denmark has to maintain all of its thermal assets as spinning reserves. Less coal and natural gas is being burned but no thermal plants can be shut down. They have to be kept running, intermittently and inefficiently, to be ready to step up production when wind farm generation drops.

If Denmark wasn't conveniently located near countries that have large surplus hydro generation capacity the real contribution of wind would be more obvious.

What is painfully obvious at the moment is the price that Danes are paying to maintain the green energy illusion. The highest electricity rates in Europe and heavy wind energy subsidies contribute to the largest tax burden of any country in the world according to the OECD.

Do I think that what Denmark is doing with wind makes sense? Yes and no.

Given that they have the backup provided by Norway and Sweden they can afford to continue to develop wind energy which is, in fact, reducing the amount of hydrocarbons they burn to generate electricity. So that is a good thing. But they will pay a steep price now and for a long time into the future. And at some point quite soon Norway and Sweden will no longer have enough excess capacity to bail Denmark out on calm days. From a number of perspectives the future of wind in Denmark looks to be quite stormy.

As an experiment on how to make wind the primary source of energy for a whole country, developments in Denmark are immensely useful to those of us committed to a sustainable energy future. But Denmark is a small country in a unique situation. It will be fascinating to see how larger jurisdictions such as Texas and Germany fair as they incorporate increasing amounts of wind generation into their systems.

The Black Swan Blog: Solar Power 7x24 365 days a year - Believe It Or Not

Sat, 26 Jan 2013 11:57:00 -0600

Everyone knows that renewable energy in the form of solar and wind has big problems when it comes to providing reliable electricity generation.

Photo-Voltaic (PV), the solar technology being installed at a frantic pace all over the world supported by Feed-In-Tariffs is notoriously variable. Wind is even worse, even when averaged over a large geographic area.

For example, Texas set a new wind energy generation record for the state on Christmas day, 2012 – 8.63 GW for a few hours. The very next day, between noon and 6:00 pm all the wind farms in Texas combined produced less than 0.3 GW.

But there is a source of renewable energy that can be relied upon to produce electricity 7x24, 365 days a year. That is Concentrated Solar Power (CSP) supplemented by molten salt Thermal Energy Storage (TES) ... continued

Other blogs in this series are available at http://www.debarel.com/blog1.

Background documents used in the writing of this blog are at http://www.debarel.com/BSB_Library/index.html

On twitter @davis_swan