Wind turbines, once built, generate almost free electricity - they require only some basic maintenance and servicing. That means that they have a marginal cost of production close to zero (ie each additional kWh of production only requires more wind, but no actual spending); that also means that their main long term cost is the repayment of the initial construction cost, in the form of debt repayment and return on capital for the investors. This has two simple consequences:
Wind turbines, once built, generate almost free electricity - they require only some basic maintenance and servicing.
That means that they have a marginal cost of production close to zero (ie each additional kWh of production only requires more wind, but no actual spending); that also means that their main long term cost is the repayment of the initial construction cost, in the form of debt repayment and return on capital for the investors.
This has two simple consequences:
You are of course assuming that "Money" has a cost, and therefore that finance "Capital" has a cost.
But that need not be so.
If you simply "unitise" production (probably using a trust or other legal "wrapper" - but conceivably Preference shares bearing no interest, but redeemable for energy) and thereby create a "Pool" of units (eg MegaWatt hours) in future production, this pool is to all intents and purposes identical to an (un-geared) "Exchange Traded Fund" investing in energy.
These units may be sold at the existing market price, or at a discount, which would give an implicit return on capital. The market would decide what, if any, return that would be.
These "units" would be redeemable against energy consumed, and therefore comprise what is essentially an undated and ungeared futures contract allowing a "hedge" against energy price rises. ie if prices fall, the investor loses on his units, but pays a lower energy bill to compensate him.
Using this form of "asset-based" finance, the Cost of Capital is essentially zero, because you are "unitising" something that will cost you nothing.
Provided that the asset produces enough energy to redeem the units sold forward (an "Equity" risk for the investors, requiring the services of investment bankers and so on), then the project has been "self-financed" at zero cost. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Texas' near miss with rolling blackouts Tuesday night may appear at first blush to be a sign of the failings of wind power -- more than 80 percent of the state's wind turbine energy went offline when a North Texas cold front stilled the air. But the state's grid operators say a problem they could normally handle was complicated when a number of traditional power plant operators failed to provide the amount of electricity to the grid as promised. The details behind the close call may seem esoteric, but it's an important distinction to make in a state where wind power is the fastest-growing source of new projects and the margin between power supply and demand grows tighter.
Texas and Oklahoma and Colorado and Nebraska are big places, and there's lots of wind but no people, so the cost of the grid improvements and improved operational procedures need to be factored in as well.
Incidently, Colorado just got its first wind infrastructure company, Vestas Wind Systems blade factory. http://www.denverpost.com/headlines/ci_8414944
Ironically, this new plant is right down the street from the site of the failed 300 MW Fort Saint Vrain high temperature gas cooled nuclear plant, dismantled a few years ago due to unsatisfactory performance.
If you're down to relying on such a marginal incident to promote nuclear, you sound really, really desperate. Let's see: interruptible customers is how EDF (the most nuke-intensive utility in the world) deals with abrupt changes in demand or supply. That's how it's meant to work; it's not an emergency, it's a feature; a 1400 MW brutal change in supply is what you get if one nuclear plant is down, for whatever reason (and that happens occasionally). You then follow the same procedure, without hearing wind advocates crowing about how nuclear is UNRELIABLE!!!; from your example, it looks like several power sources were down, or unreliable or unavailable at the same time (since the system was nowhere near its full capacity). But it's so easy to put the blame on wind alone. I'm supportive of nuclear energy myself, because it's so much better than coal and because I agree that renewables are unlikely to provide enough baseload power for a while yet, but I just don't get the permanent sniping by pro-nuclear advocates against wind. I'm sure you agree that coal is a bigger danger than wind, so can we focus our efforts on getting rid of coal rather than on bashing wind? As to overall unreliability, the fact remains that each kWh of wind displaces a carbon-based kWh, even if the same is not true for MWs.
Let's see:
As to overall unreliability, the fact remains that each kWh of wind displaces a carbon-based kWh, even if the same is not true for MWs.
the fact remains that each kWh of wind displaces a carbon-based kWh
Yes, but it doesn't necessarily displace the fuel consumption and the CO2 emission at the same degree. It all depends on how reliably wind farms can commit to a specified production for up to the start-up time of the back-up fossil fuel plants. Otherwise, the fossil fuel plants must remain in hot stand-by with a very high fuel consumption while doing nothing.
It looks like this is what happened to Texas. They got caught with their pants down, the wind on strike and no planning between wind producers and fossil-fuel producers.
Even the fastest combined cycles gas plants take more than four hours from a cold start to come on-line at their full rated power if you want to remain within somewhat acceptable NOx discharge levels and stress on the turbines (General Electric US patent 6978620B2 2004).
I genuinely have no clue what's the reality of committed power reliability for a wind farm so I'm not going to throw the book but that's something wind proponents need to address seriously with hard numbers.
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Regarding nukes, when a serious modern plant aka Areva EPR or MHI APWR goes off line, it's 1,650 to 1,800 MW that go MIA, not 1,400 MW. Don't be demeaning to nukes :)
That being said, unplanned and unwarned outages for internal causes are really a rarity with nukes. They are very reliable on that respect.
Out-of-the-blue outages are in the largest majority from external causes like what happened in Florida few days ago: a glitch on the grid, load shedding, loss of grid and the reactor scrams for safety reasons.
But that's more a regulatory requirement and a legacy from the integrated operator days than a technical necessity. Nukes were built at a time when the grid was assumed to be extremely stable and operated under a single operator. Hence this type of event was considered very rare and addressable in a centralized manner. Hence the regulatory requirement for immediate scram on loss of grid and the fact there is no provision in the plant for load bypass.
A variable steam bypass on the secondary circuit around the turbines directly from the steam generators to additional high-temperature condensers would solve that issue with no additional cooling requirement in the case of air cooling towers. For sea-water or on-the-flow cooling, a larger cooling provision is required to maintain acceptable discharge temperature. If the load drops or goes away, the plant just pisses the unused heat away. A bit stupid but fast and not very problematic given the very low cost of nuclear fuel. The real issue would be changing the regulations to allow that.
Otherwise, most of the remaining unplanned outages are related to things like limits on water discharge temperature but that kind of outage takes places over hours or days and gives enough time to start back-up fossil-fuel plants from cold (US context) or ramp-up other nukes (France). The rest - mechanical breakages, false alarms and the like - are really rare past the shakedown period on a new plant.
Of course, the broader the transmission range, the greater the reliability of wind power, as wind farms at widely separated locations have higher system availability than each individual wind farm. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
http://www.eurotrib.com/comments/2008/2/22/132124/905/36
In the case of Texas, it seems at first blush it actually works pretty poorly. Somewhat flat, at least from the meteorology point of view, hence a very large weather pattern, the same pretty much everywhere. Plus an adverse correlation between seasonal and intra-day wind frequencies and consumption (lower winds overall in summer and lower winds in the evening at peak load).
It can make sense overall but it really requires tight coordination between the different sources.
And pumped storage, sure - it helps any type of generation - but where?
Anyone dabbling in electricity needs to remember that "acceptable" for grid availability means 99.99%, less than an hour of load-shedding a year. The fact that the grid itself is falling apart in the US by lack of maintenance and investment doesn't help. But even with lowered US expectations, any solution that reaches only 96% or even 99% has a problem. 99% means nearly 4 days without juice a year. That's 3rd world.
I've only driven through that territory once, but from the national topographic map its looks like there are ample useful elevations pretty much anywhere from the Llano Estacado west ... and of course, more in New Mexico. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Pumped hydro works when the geography is right.
The investment is more or less a function of the reservoir sizes (cost of the dams) and of the distance between the two reservoirs (cost of the penstocks). But the energy you store and recover for a given volume of water/investment is proportional to the altitude difference between the two reservoirs. And it has to be really steep to make sense.
A good example of pumped hydro is the Grand'Maison (data view) / Verney (data view) pair in the French Alps. The altitude differential is more than 3,000 ft between the two reservoirs spill-way levels (928 m : 1698 m for Grand'Maison, 770 m for Verney) but they are less than 8 miles apart (Verney is SW of Grand'Maison). You don't find everywhere.
Great Battery of Kimberley
doodle of a Diary I did a while ago....
Wherever there's a big hole, there's potential... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Traditional pumped hydro has to be either added to an existing hydropower facility or faces far higher regulatory hurdles than modular pumped storage hydro would, since traditional pumped hydro has to be connected into the watershed.
You raise an important point. The power industry has demands for power generation that focus on what is most convenient to the power industry, and sets aside costs external to the market, such as reckless experimentation with the world's climate or exposure to risks of political sabotage. It is the responsibility of government to impose the framework upon the power industry that ensures that it can pursue its own commercial interest without acting counter to the public interest .. that reflects those external costs to the power industry so that it pursue the lower full cost technology rather than the strongest free ride technology. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Texas has a huge wind resource and a strong will to exploit it.
Texas has plenty of baseload gas.
Texas is planning about 10 new nuclear reactors.
The reactors will displace the baseload gas which can be converted into balancing load for the wind farms.
Win-win-win. Peak oil is not an energy crisis. It is a liquid fuel crisis.
It all depends on how reliably wind farms can commit to a specified production for up to the start-up time of the back-up fossil fuel plants. Otherwise, the fossil fuel plants must remain in hot stand-by with a very high fuel consumption while doing nothing.
The "high fuel consumption" is all relative - it's high per kWh produced, but no so much in overall terms, so it's an acceptable trade off.
And you might find this text interesting. In the long run, we're all dead. John Maynard Keynes
How much? I don't have hard numbers so I'd like you to come up with them as this is a wind problem :)
But my limited knowledge of rotary and thermal machines tells me at least 20% from rated power consumption to maintain pressure, minimal flow and, most important, temperature. Maintaining a stable temperature is absolutely essential. Otherwise you break things like exchangers or turbine blades on fast ramp-up. Maintaining a stable temperature profile is also vital in the flue system for pollution control or you start spewing NOx and, if there any halogen in the fuel, dioxins.
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Your link is too long to do it justice and properly eviscerate it.
It's BS. The guy is simply projecting his British incompetence on the French system.
He's flat out wrong about nuclear "inflexibility". Wrong as in "just plain wrong". EdF performs load following with its nuclear power plants and even shuts down some of them over weekends to kick them back online in the wee hours of Monday mornings. That's why the capacity factor of French nukes is pretty low - 75% vs. 90 to 95% in the US - but their availability is much higher - 85% to 95%.
He's also completely off-base on EJP. It's about grid reliability and the fact that EdF - by virtue of being a well-run monopoly with high technical know-how - has been in a position to do load management way, way before it was cool.
EdF is simply taking advantage that for many industrial clients, even the level of reliability offered by EdF is not enough. So those clients MUST have a backup no matter what. When an industrial oven looses juice, you don't lose just the melt and a day of production. You loose the oven. The clean up is done with circular saws, jack-hammers and cutting torches and the oven has to be rebuilt pretty much from scratch. For things liek aluminum refining, a lose of power for more than a few hours is simply catastrophic. The entire plant is lost. So EdF is giving those clients with backup that deal so it can shed load very quickly if something goes wrong. And some other customers with high electricity bills make the math and jump on board. The result is a very stable grid.
When I was in Paris, nearly two year, I've had all in all 0 blackouts. Zero. I was in the 15ème. I know that there are more problems in some of the inner arrondissements because of the age of the local distribution equipments and the difficulty to maintain and replace them (very cramped sheds, low accessibility, street work is a nightmare, etc.). But EdF reliability for consumers is pretty amazing.
In comparison, since I've been back in the US in the tender care of PG&E - not even two years - I can count at least 6 times without juice at home or at the office. Actually I even had to buy a special alarm clock with an integrated battery backup, one that rings the alarm even without grid juice, not just to keep the hour. And thanks God, there are showers at the office.
And the rant about overnight water heaters. Please...
At this level, I'm not sure if it's Anglo disease or Mad Cow disease.
Yes, but it doesn't necessarily displace the fuel consumption and the CO2 emission at the same degree. It all depends on how reliably wind farms can commit to a specified production for up to the start-up time of the back-up fossil fuel plants. Otherwise, the fossil fuel plants must remain in hot stand-by with a very high fuel consumption while doing nothing. It looks like this is what happened to Texas. They got caught with their pants down, the wind on strike and no planning between wind producers and fossil-fuel producers.
Well, that seems to be Anglo de-coordination at work again.
In a normal country,
But warm start (start after overnight shutdown, NOT from running on standby) can be as low as 40 minutes. *Lunatic*, n. One whose delusions are out of fashion.
Not under normal conditions for a CC plant. Either you kill the plant and you pay the bill later in maintenance or you spew pollution in huge amounts by using abnormal mix or PC to speed up the approach to temperature.
And there's no time scale on Siemens pretty chart...
The best GE can do with a CC plant is a ramp-up to 100% in 90 minutes on a hot start after 8 hours shutdown.
Siemens must be endowed with some unknown form of genius. What they propose is really outside of the norm and they state a 20 years expected life time on their systems. I'm curious to see in what shape their Benson boiler will be after 7,000 fast ramps.
I'll believe Siemens in four or five years when there is a little bit of experience on those types of procedures.
Those babies run at 250 bars and 600°C. They were all the rage in the late 50s, early 60s when they were first introduced and then they started to spring cracks everywhere due to static stress and temperature cycling and a lot of plants switched back to subcritical boilers with the traditional drum and superheater. The technology has clawed its way back and is now the norm in new coal and CC plants and is really efficient. But the industry has learned to be very gentle with supercritical boilers. Not your average cooking pot.
Well, apart from some... *Lunatic*, n. One whose delusions are out of fashion.
But you yourself admit you don't:
Unless I'm mistake, the "return" on capital is a "cost" of capital.
You assume, again, that investors are interested in lower energy bills. They are not. They are interested in a return on capital, and the sale of the natural hedge you mention to outside parties is not so simple over the very long term required for capital-intensive investments like wind farms. That wasprecisely the point I was trying to make in my diary above.
Provided that the asset produces enough energy to redeem the units sold forward (an "Equity" risk for the investors, requiring the services of investment bankers and so on), then the project has been "self-financed" at zero cost.
That "provided" is the biggest project risk, and you just push it aside casually. It doesn't work like this. In the long run, we're all dead. John Maynard Keynes
Investors are interested in a return on Capital for sure: but it's a "Real" return on Capital after inflation that they are after.
Whether bankers choose to recognise it or not, it is the deficit basis of Money as Debt which is one of the direct causes of inflation - whether it is created ex nihilo by governments or by the banking system itself.
Why do people buy gold? There is no "return" on that other than the fact that it may offer a "Real" return by holding its value.
The same applies to energy, commodities and all the rest: Exchange Traded Funds invested in energy and commodities are a rapidly growing asset class, as are Real Estate Investment Trusts.
What I am proposing is simply a new take on the vehicles which "frame" these asset classes, through the creation - inter alia - of "Energy Pools" and "Land Rental Pools" structured in a way which, I believe, may eliminate conventional conflicts and complexity.
Such a "Flight to Simplicity" in asset classes, would of course be resisted by those who profit from complexity and conflict, but they will not be able to stop a phenomenon which builds "from the ground up", and moreover one where those of their number who "break ranks" will profit at the expense of the later adopters.
I certainly do not push aside the risk of major projects: I believe as you do, I think, that the public - collectively (and that need not mean the Jacobin "State", but something more participative)- should be involved in sharing that risk through a rational Public/Private enterprise model.
I believe that the future of banking lies not in credit intermediation but in service provision. A completely new architecture is not just needed, but is evolving as we speak as an inevitable consequence of the "Telluric" shifts driven by "Peer to Peer" connectivity.
I'm not saying I have all the answers: but I do think that I have identified a possible new architecture which between us we may be able to use to build the necessary new system.
As NBBook's latest shows, the (deficit-based) system is fucked, and IMHO the answer is an (asset-based) alternative - "Debt/Equity swaps" on a massive -indeed national and global - scale. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Tying this in with NBBrooks' excellent diary, how would one go about calculating the "actual profits" made by investors asking for their 10%+ as inflation rises higher--I'm thinking: if you are right then about now is a good time to produce figures showing that ALL investments will run behind inflation (inflating away the $1 trillion--have I got that right? That we're now all paying our part of the debt via an across-the-board rise in prices starting with food, now raw materials, and then items produced using said raw materials?)--
Not sure that makes sense, but it would be a useful graph for investors if one existed showing that their actual 10%+ extra money was now lagging behind (systemically) the necessarilyl over 10% rise in costs.
Then two points:
