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Grid Constraints on Renewable Energy | The Energy Collective


If renewable energy is ever to become truly subsidy independent and earn its keep in electricity markets, that means there is a natural stopping point at which a marginal increment of wind or solar will become unprofitable. The market revenues earned by these VREs will eventually fall far enough that it's no longer worth deploying more.

This is also why the idea of reaching "grid parity," or a levelized cost equal to the prevailing market price, is pretty meaningless. As soon as wind or solar penetration grows, the goal posts move further away due to this merit-order or market price effect. Wind and solar costs will have to keep falling to secure greater penetration levels and remain profitable at the ever lower and lower market prices caused by increasing VRE penetration.

Alternatively, if wind and solar are to remain subsidized, the amount of public subsidy per unit of energy supplied will have to keep growing in order to push VRE shares higher and higher. The total subsidy cost could rise sharply, as the price per MWh required increases alongside the quantity of electricity generated from these sources. 

(...)

Indeed, according to a major new study of the challenges of integrating wind and solar in the Western Interconnection of North America, the maximum production of variable renewables at any instant can't exceed about 55-60 percent of total demand without risking system stability.

In Ireland, which, as we saw in part 1 is the world leader in variable renewable penetration, system operators currently limit variable renewable production to 50 percent of demand at any given time, although operators are working to increase this limit.

In short, the capacity factor threshold may actually be generous: if the instantaneous penetration of wind and solar can't exceed half or two-thirds of power system demand in any given moment, system security concerns will begin to bind before the penetration of variable renewables reaches their capacity factor.


by Bjinse on Thu Jun 4th, 2015 at 04:11:44 PM EST
That is, uh, nonsense.

A fixed-price take-or-pay agreement is not a subsidy.

In every other freaking sector of the economy, you can write long-term, fix-price frame agreements for variable levels of production. But apparently this bog-standard instrument that every first year student of supply chain management should be familiar with suddenly becomes a puzzling novelty when applied to wind power.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 4th, 2015 at 04:25:29 PM EST
[ Parent ]
Some of the old arguments that were rolled out (intermittence, variability) have lost their potency in the face of experience in countries with a substantial share of renewables in the mix. The fact of lower electricity prices due to the merit-order effect is also taking the edge off the "renewables are hideously expensive" argument.

So here is the "thinking man"'s new sophistry: the merit-order effect puts a natural cap on renewables penetration.

It's a pretty convoluted effort. Will we see it trotted out much?

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jun 5th, 2015 at 01:13:27 AM EST
[ Parent ]
you think that's nonsense, you should have seen a segment on wind power on BBC this morning.

the presenter simply could not shake his obsession with wind power being subsidized and unable to pay its way, despite the Head of Scottish Power trying to tell him that it was not so, but the questions were perfectly framed to prevent him doing so effectively

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Fri Jun 5th, 2015 at 02:03:44 AM EST
[ Parent ]
There are extensive contributions from Bruce McF in the comments section.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jun 5th, 2015 at 02:54:09 AM EST
[ Parent ]
It should also be noted that the prime sponsors of this site are Siemens and Royal Dutch Shell, which Bjinse has neglected to point out.

And Bruce's comments are indeed detailed.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Fri Jun 5th, 2015 at 03:24:53 AM EST
[ Parent ]
And that the author is a longtime collaborator with the Breakthrough Institute (further comment), that argues against "environmentalism" and in favour of "making clean energy cheap". Which mostly means arguing against renewables and for gas + nuclear.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jun 5th, 2015 at 03:37:19 AM EST
[ Parent ]
Yeah because the etiquette to report sponsors of websites from which quotes are taken has been around since, wait, never. Grow up, CH.
by Bjinse on Fri Jun 5th, 2015 at 02:58:40 PM EST
[ Parent ]
When Royal Anglo-Dutch Shell pays money to a website that is spreading nasty lies about wind power, it does seem like the sort of fact which even the casual reader might consider pertinent.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Jun 5th, 2015 at 03:15:29 PM EST
[ Parent ]
These people have the right to propagate their views.

And the readers of this blog have the right to know who backs them.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Jun 5th, 2015 at 03:24:30 PM EST
[ Parent ]
Pity to see readers of this blog were kept so abysmally in the dark about that knowledge the previous times the website was quoted at ET and information from 'these people' was rated by you and others as "excellent".

I thought and think Bruce was onto something interesting with his outlines of discriminatory pricing systems. But off-putting response like yours teaches me to not attempt bringing adult conversation here again, I'll just stick to reading the experts from now on.

by Bjinse on Fri Jun 5th, 2015 at 05:54:35 PM EST
[ Parent ]
Talk about "off-putting" responses. The strawman about keeping people abysmally in the dark, I'll leave with you.

There's no reason why other writers reporting on other energy aspects on that site can't be considered useful or interesting. As for this article, I addressed it in my first comment. I think that, at base, it's a convoluted attempt to find new arguments against a roll-out of wind power. And I went on to point out the author's links to an anti-renewable think-tank.

If you wished to draw attention to Bruce McF's comments, you might have done so. But you didn't (I did).

So go away and play at being adult, if that's what you really think you must do. Personally, I find your above comment puerile.

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Jun 6th, 2015 at 01:31:22 AM EST
[ Parent ]
If you're interested in adult conversation, why did you choose to respond to the meta rather than the substative discussions? Adult conversation requires a thicker skin than that.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Sat Jun 6th, 2015 at 06:38:28 AM EST
[ Parent ]
I would have - except that I don't see any discussion. There are two plain rejections with little to no substantiated argumentation plus one response labelling it sophistry without arguing against the thesis itself. Oh well.
by Bjinse on Sat Jun 6th, 2015 at 04:28:34 PM EST
[ Parent ]
That's because it is sophistry, and there is no thesis underneath to argue against. Pointing that out is a substantive critique.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Jun 7th, 2015 at 04:12:44 AM EST
[ Parent ]
by Bjinse on Mon Jun 8th, 2015 at 03:23:23 PM EST
[ Parent ]
The examples of adult discourse that you give are edifying.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 9th, 2015 at 02:21:56 AM EST
[ Parent ]
They're not "experts." They're professional propagandists.

Mentioning you Bjinse was simply a statement of fact, not meant as a personal negative.  You'll also notice I didn't take it any further anywhere else.

The site is part of an concerted effort to break renewables, just as climate-denial is programmed to disrupt effective policy shifts.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Sat Jun 6th, 2015 at 11:31:21 AM EST
[ Parent ]
Not just because all the social and external costs are not included, which all of these energy economics ignore. (External health and environmental costs are huge. One might also attempt to calculate strategic and security costs to "level the playing field." But no...)

The Marketistas have won again. The end of the EEG feed-in tariff in Germany is already being negotiated: supplanted by tender or auction bids even for small onshore projects or solar installations. The new law will be finalized in 2016 to go into effect a year later. None of the details are now fixed. On first look there are both positive and negative aspects to this development, but one effect is clear: it's really complex.

By the way, Norway yesterday cancelled 1000 MW of windpower because of low prices. This after Sweden and Norway worked together to establish cross border tax and financial policies to make renewables work in the land of oil, hydro and nukes. Civilization, and its so-called leaders, remain blind.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Fri Jun 5th, 2015 at 03:12:48 AM EST
[ Parent ]
I guess the overlords are thinking, a rather little of sustainable energy is a dangerous thing.
by das monde on Fri Jun 5th, 2015 at 07:05:03 AM EST
[ Parent ]
Bjinse wishes to have substantive argument, even though the "experts" he prefers begin by calling renewables VRE, or variable renewable penetration, as if that wasn't a given since the dawn of time. The word penetration when referring to renewables has also been used by grid operators since the earliest days, when they had major reports saying 6% to 8% was the maximum a stable grid could handle.


In short, the capacity factor threshold may actually be generous: if the instantaneous penetration of wind and solar can't exceed half or two-thirds of power system demand in any given moment, system security concerns will begin to bind before the penetration of variable renewables reaches their capacity factor.

It now seems the previous threshold of 8% (i.e., only 12 years ago in Germany) has been exceeded greatly, since even the lower threshold of 50% appears on the surface to be a far greater number.

Would the instances of 100% "penetration" of wind alone in Spain or Denmark provide enough of an example to give lie to the "experts" argument?

Could it also be that these "experts" aren't yet aware that the power electronics of modern wind turbines are currently being used to provide grid stability, and low voltage ride-through?

Or that modern prediction of wind and solar out to 48 hours ahead is enough for planning by grid operators in industrial networks?


Alternatively, if wind and solar are to remain subsidized, the amount of public subsidy per unit of energy supplied will have to keep growing in order to push VRE shares higher and higher. The total subsidy cost could rise sharply, as the price per MWh required increases alongside the quantity of electricity generated from these sources.

Shouldn't the experts be aware that subsidies in most advanced grids decrease over time, mimicking the fact that electricity prices would be higher without "variable renewable energy?"

Fact is, these experts are wrong. Two scenarios: 1. They're wrong and they know it, but they're just doing their job: propaganda; or 2, they're wrong and they don't know it, meaning they believe their propaganda... despite all manner of real world data.

I sure wish I would grow up.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Jun 9th, 2015 at 03:43:23 AM EST
[ Parent ]
Thanks for that. I'm sure there are numerous examples of occasions with high wind output on the grid and that the grid can manage just fine, despite all kind of tales of woe and doom. I haven't seen any updates of last year's record on December 12, where wind contributed 37% of that day's electricity, has since been improved, so I consider that Germany's latest feat. Correct me when wrong.

The article's main hypothesis is this, though:

it is increasingly difficult for the market share of variable renewable energy sources at the system-wide level to exceed the capacity factor of the energy source.

If we take Germany as example, onshore wind has a capacity factor varying between 10 and 20 percent while the onshore market share in 2013 was 8,5 percent (with 50,8 TWh producing a third of Germany's renewable energy). I don't see how Germany's current progress could either prove or disprove the thesis proposed. If anything, onshore wind could at least grow a lot more, and when more offshore wind comes online, the figure can rise substantially further.

And to undo my own example, I don't think taking Germany (or another nation) as an example is ultimately sufficient - the scope is still too local for a systemic analysis.

by Bjinse on Wed Jun 10th, 2015 at 04:00:44 AM EST
[ Parent ]
You're welcome.

The concept to grasp here is that the "main hypothesis" you quote is meaningless. Capacity factor is a measure over time; instantaneous or short-term have zero meaning (except for those monitoring loads of wind turbines operating above nameplate capacity.)

What do the "experts" mean by market share? Do they mean short-term grid incursion? In which case you already cited one disproving stat, of which there are thousands. Or do they mean in some poorly worded financial sense, which is a failure of market design that has nothing to do with their "variable renewable energy" output thesis.

Like climate deniers, they've used complex meaningless gobbledygook to confound and confuse. They CLEARLY don't understand capacity factor, which has been a utility standard since long before renewables entered the picture.

"the scope is still too local for system analysis"

Grid integration actually becomes easier as the grid becomes larger, either geographically or in terms of generation scale. So taking more local grids (like Denmark or Spain) does actually prove the point.

Except there's actually no point to prove or disprove. I used the phrase complex meaningless gobbledygook before. I should have said your "experts" are full of shit.

Did you know we can change the angle of attack on modern turbines in the control algorithm within minutes (including measurement), so full capacity isn't reached if necessary. At our command, for all manner of reasons. Or at the command of the grid operators! Take that, "experts."

The difference between garbage full of shit and dangerous full of shit depends on the source and funding of the shit. But it's still SHIT.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Wed Jun 10th, 2015 at 04:42:03 AM EST
[ Parent ]
PS. Germany's average capacity factor includes really old turbines very poorly sited by greedy fringe capitalists. Modern turbines near 20% in the worst of sites, and well above 30% (topping perhaps 36%) in the coastal north. But even older turbines in the north reach 30% CF.

Offshore ranges from lower 40's to near 55%. In some cases better than gas plants. With no fuel costs, or CO2 damage, or small particles in the lungs, or national security issues.

Fuck the dangerous well-funded "experts" who will be judged as social criminals by future generations, should those future generations survive.

Am i beginning to make myself clear about what's at stake in the original article.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Wed Jun 10th, 2015 at 04:53:34 AM EST
[ Parent ]
Actually, for me the money quote is this one :

Grid Constraints on Renewable Energy | The Energy Collective

Instead, the fundamental economics of supply and demand is likely to put the brakes on VRE penetration.

Because it makes the ideological frame explicit. As Jake noted initially, the "fundamental economics of supply and demand" are subject to all sorts of constraints in the real world, and there is no reason the electricity sector should escape them.

One technical objection they raise concerns system stability with high renewables penetration; but North America is very much behind on these issues. In Germany and Spain, for example, active system management has pushed the frontiers considerably on this.

The main technical argument they make is clear : on a sunny windy day, generation may exceed demand! Too much energy, oh noes!

But as CH points out, over-capacity is not a technical problem -- modern wind turbines can spill excess energy; also, some industries in Germany are reconfiguring in order to increase energy-intensive processes when electricity is cheapest : demand elasticity will be much greater in the future. So the question is not of the "fundamental economics of supply and demand", but of the economics of the various generating technologies, and how to balance them to achieve the overall goals of public good.

This is where the consideration of who the site's backers are becomes pertinent; the merit-order effect has had a severe impact on the profitability of Europe's fossil-fuel generators, and increasing market share of renewables is likely to worsen that.

The solution is going to include subsidies for on-demand producers for keeping their plant available. These subsidies are philosophically no different from the fixed-price regime for renewables, neither good nor bad in themselves, but useful mechanisms.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Jun 10th, 2015 at 06:40:33 AM EST
[ Parent ]
The article's main hypothesis is this, though:
it is increasingly difficult for the market share of variable renewable energy sources at the system-wide level to exceed the capacity factor of the energy source.
There are two problems with that "thesis:"

First, there's the fact that they cannot possibly have calculated the theoretical maximum market share of anything.

The theoretical maximum market share of a volatile renewable depends on the extent of the harvestable resource (for offshore wind this is for all practical purposes infinite, but that is not true for all volatile renewables), the degree of correlation between the volatile output of electricity from the modality and the (also volatile) demand for electricity, and (crucially) the capacity and dispatchability of available storage solutions.

Calculating the theoretical maximum market share, even under the assumption that consumption cannot be moved* is a non-trivial exercise in applied statistics. Which they haven't done. What they've done is look at past data, come up with a rule of thumb to describe it which kinda-sorta works (if you're not too picky about the technical details of the industry they're "studying" and the comparability of the data they're comparing), and proclaimed it a law of nature. Which is bullshit.

Second, capacity factor (actual energy delivered divided by how much energy would be delivered if you were running at full nameplate capacity at all times) has nothing to do with market share (actual energy delivered divided by the total energy consumption of the market into which you deliver energy).

The capacity factor of a particular site depends on the average availability of the harvested resource and the capacity deployed to harvest it. You will notice that these two numbers, capacity factor and maximum market penetration, share precisely zero underlying variables. Which means that to get from one to the other, you have to make all sorts of sketchy assumptions about pricing regimes, correlation coefficients, market structures, and so on and so forth. Assumptions which are never clearly spelled out. That's also bullshit, and it's dishonest bullshit too.

- Jake

*This is a very ambitious assumption, since much consumption can in fact be moved. But if you allow consumption to move in response to prices, then you need to model the full equations of motion for the demand and electricity prices under your market structure of choice. Which is for most realistic (or even merely interesting) market structures not possible.

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jun 10th, 2015 at 07:01:45 AM EST
[ Parent ]
Thanks all for all your input. Unfortunately I don't have the time now or the days ahead to respond extensively. I have two quick comments, although view them more as reflections please.

  1. How come it wasn't possible to generate this level of insightful commentary the first time around, which would have spared all of us an earlier round of prickly back and forth?

  2. I fully expect the thesis to appear more frequently, including European media. If it is indeed the consensus around here that the idea proposed is nonsense, then your responses form the first draft of a commentary or opinion piece, though obviously in current form none would yet be acceptable for media. Perhaps you each could consider spending one more hour of your blogtime to gather your arguments into one proper post, straighten it out and have it ready at hand.
by Bjinse on Fri Jun 12th, 2015 at 08:23:25 AM EST
[ Parent ]

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