20% wind by 2030 not on track

Questions should be asked about the National Renewable Energy Laboratory relationship to the American Wind Energy Association's propaganda machine. The DoE report 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply acknowledges the reports dependency on data supplied by the wind industry.

The U.S. Department of Energy would like to acknowledge the in-depth analysis and extensive research conducted by the National Renewable Energy Laboratory and the major contributions and manuscript reviews by the American Wind Energy Association and many wind industry organizations that contributed to the production of this report. The costs curves for energy supply options and the WinDS modeling assumptions were developed in cooperation with Black & Veatch.

Black & Veatch cannot be regarded as an objective source on wind. In fact Black & Veatch boasts,

We helped launch the modern wind power industry in 1975 . . .

Questions must be raised about the validity of this DoE's "20% by 2030" report. One test of the objectivity of a wind study is how well it deals with the inflation of wind costs. Since 2004 the costs of wind projects have risen more rapidly than the underlying inflation rate. Yet the report chose to assume base line inflation rates in its future cost projections. This can only be described as a major error. The report states:

Black & Veatch analysts (in consultation with AWEA industry experts) developed wind technology cost and performance projections for this report (Black & Veatch, forthcoming 2008). Costs for turbines, towers, foundations, installation, profit, and interconnection fees are included. Capital costs are based on an average installed capital cost of $1,775 per kilowatt (kW) in 2007. After adjusting for inflation and removing the construction financing charge, this reduces to $1,650/kW for 2006.

Lawrence Berkeley National Laboratory maintains a data base on wind costs. The LBNL report for 2008 titled 2008 Wind Technologies Market Report provides a empirical basis for evaluating the accuracy of the 20% wind estimates. The LBNL study states,

Among the sample of projects built in 2008, for example, the capacity-weighted average installed cost rose to $1,915/kW, up $190/kW (11%) from the weighted-average cost of installed projects in 2007 ($1,725/kW), and up $630/kW (49%) from the average cost of projects installed from 2001 through 2004. Project costs are clearly on the rise.

The LBNL report also found that the cost of wind turbines have been rapidly rising:

Since hitting a low point of roughly $700/kW in the 2000-2002 period, turbine prices appear to have increased by approximately $700/kW (100%), on average, through 2008. Between 2007 and 2008, capacity-weighted average turbine prices increased by roughly $90/kW (7%), from $1,270/kW to $1,360/kW.

A second appearant flaw in the "20% by 2030" report is its estimate of wind capacity. The report states:

Technology development is projected to reduce future capital costs by 10%.Black & Veatch used historical capacity factor data to create a logarithmic best-fit line, which is then applied to each wind power class to project future performance improvements

The report then projects rising wind capacity for dollar spent. But the the LBNL data in the hands of LBNL reporters tells a different story,

Despite this general improvement among more-recently built projects, the capacity-weighted- average 2008 capacity factor for projects installed in 2007 (35.0%) is down slightly from that for projects installed in 2006 (35.2%), which in turn is lower than for projects built in 2004-2005 (36.9%).

Thus not only are "20% by 2030" projected cost estimates likely to be quite low, projected capacity increases may be quite high as well, and in fact the observed trend toward lower capacity may continue into the future. The LBNL 2008 report states,

performance improvements appear to have leveled off in the most recent time period, however.

Thus "20% by 2030" cost estimates for wind are likely to be off by a wid margin to the down side.

The "20% by 2030" report states

Based on the assumptions used to create the 20% Wind Scenario, providing 20% of the nation’s projected electricity demand by 2030 would require the installation of 293.4 GW of wind technology (in addition to the 11.4 GW currently installed) for a cumulative installed capacity of 304.8 GW, generating nearly 1,200 terawatt-hours (TWh) annually.

Given the 2008 wind cost of $1915 per kW, the 20% goal would cost at least $550 billion, but this estimate is undoubtedly low, because it does not take inflation into account, and it assumes that 18% of the wind capacity would come from offshore, and offshore wind is considerably more expensive. The 20% by 2030 assumes a capacity factor of 40, and that is very ambitious. Realistically overly ambitions perhaps. At any rate that means that the average nuclear plant will produce 2.25 times as much electricity per unit of rated capacity as the average wind mill will. This gives us a figure of 4,3 billion 2006 US dollars for a wind array that would produce the equivalent amount of power to a 1 GW reactor. This figure would match the reactors cost, but the actual cost of wind would likely be higher, because the 18% offshore wind would be more expensive, the capacity factor of the 300 GWs of wind would probably be lower. Transmission system additions, required to accommodate wind would cost at the very least another $100 billion. It is quite clear that wind is not going to cost less than nuclear power, and according to EIA estimates future onshore and offshore wind will cost more.

Unfortunately then, the National Renewable Energy Laboratory appears to serve more as a front for the wind industry propaganda than as a source of reputable scientific research on renewable energy. For example, the NREL appears to not be researching carbon mitigation impact. But wind carbon mitigation can be inferred from NREL sponsored research, and it does not present a happy picture. Wind displaces carbon efficient closed cycle gas turbines before it displaces coal, and most or all of the displaced power in the 20% scheme is likely to come from the CCGTs, In contrast nuclear displaces coal rather than CCGTs, thus money spent on carbon mitigation with nuclear is 3.5 times more effective than the equivalent sum spent carbon mitigation with wind. This fact is carefully hidden by the "20% by 2030" report.

The cost of carbon mitigation with renewables

The National Renewables Energy Laboratory appears to be doing or sponsoring some decent quality research. inadvertently some of that research seems to undercut the case for renewable energy, or at the very least provide what should be a very sobering picture for renewables advocates. Last week I pointed to the Eastern Wind Integration and Transmission Study which appeared to demonstrate that the cost of electricity would rise as wind penetration increased on the Eastern Interconnect. Although the Western Wind and Solar Integration Study has not been completed yet, Some preliminary findings have been reported. I recently reviewed a preliminary study, How do Wind and Solar Power Affect Grid Operations: The Western Wind and Solar Integration Study, by D. Lew and M. Milligan of the National Renewable Energy Laboratory, and G. Jordan, L. Freeman, N. Miller, K. Clark, and R. Piwko GE. The WWSIS

examining the operational impact of up to 35% wind, photovoltaics, and concentrating solar power on the WestConnect grid in Arizona, Colorado, Nevada, New Mexico, and Wyoming.

I was particularly interested in the operational analysis, which was based on a computer simulation by GE. The simulation looked at 5 scenarios. In the first no wind was assumed and all electricity was generated by four generation sources, Nuclear, Coal, Combined cycle gas turbines, and hydroelectric generation. The second simulation assumed 11% renewables, 10% wind, and 1% solar. The third simulation assumed 20% wind and 3% solar, and the 4th simulation assumed 30% wind and 5% solar. Finally a simulation was run with the same 35% penetration, but using data from a week in July 2006, rather than the week in April 2006 assumed by the other studies. Peter Hawkins has argued that renewables penetration tends to displace Combined Cycles 'gas turbines, rather than coal fired steam plants, and that Open cycle Gas Turbines would be preferred to backup wind, because they would respond more quickly to sudden loss of generation or increased electrical demands. The GE simulations offer a chance to test Hawkins thesis, and the data suggests that indeed the GE simulations supported Hawkins hypothesis. At 11% penetration, only CCGT were displaced, but coal use was completely unaffected. At the 23% penetration level, most of the displacement effected CCGTs, but a small amount of coal displacement began to emerge. At the 35% penetration level for the week in April 2006, a considerable amount of coal generation was displaced, while CCGT use disappeared completely.. Finally the July 2006 simulation suggested that the summer wind problem was adversely impacting wind performance, at the same time electrical demand increased. The shortfall in wind performance had to be made up with CCGTs, and there was no coal displacement.

Estimates of CO2 emissions from CCGTs indicate that they produce about 0.8 pounds of CO2 per kWh of electricity generated. in contrast coal burning generators produce about 2 pounds of CO2 per kWh. Thus when CCGTs are displaced by renewables about 800 pounds or 0,4 tons of CO2 emissions are prevented per MW of electricity generated. When coal is displaced, about 1 ton of CO2 emissions are eliminated. Clearly then it is far more desirable from he viewpoint of carbon mitigation to displace coal burning plants, rather than CCGTs.

As with all National Renewables Energy Laboratory reports, the WWSIS made no attempt to compare renewables costs and performance with nuclear power. But a relatively simple thought experiment can yield some very telling results. First we can assume that nuclear power will displace coal rather than CCGT. The Energy Information Agency estimates that the levelized cost of Advanced Nuclear will be 119.0, or about 12 cents per kWh. If nuclear displaces coal at that cost, the cost of displacing one ton of CO2 would be $119. Now let us take the 11% renewables case. The 2016 levelized cost of wind is 149.3, while the levelized cost of solar thermal is 256.6. Thus the average levelized cost of the 11% renewables is 159.08, and the cost of displacing a ton of CO2 with renewables is $159.0 + transmission costs and other hidden cost of wind generation systems, and the added CO2 emissions of fossil fuel wind backups kept spinning. plus the added CO2 efficiencies of fossil fuel generators used in load leveling and load following roles. Since wind is displacing relatively carbon efficient CCGTs rather than carbon inefficient coal fired generating plants. each MW of CCGT power displaced would produce 800 pounds of CO2, rather than a ton of CO2 produced by the equivalent electrical output of a coal fired power plant. Thus carbon mitigation with the 11% wind April scenario will cost about $400 + hidden costs or over three times as much as nuclear power would costs.

In the April 35% penetration case, wind becomes the predominate source of electricity on most days, and it displaces 2/3rds of coal generation capacity and all the CCGTs. Yet for the July 35% penetration case, wind failed to displace most CCGTs and no coal. Thus the WWSIS study data reported provided in sufficient information for understanding the the potential carbon mitigation costs . However it should be noted that the DoE study, Eastern Wind Integration and Transmission Study(EWITS) found that the cost of total system electrical output increased
dramatically as wind penetration rose to 30%. (Note scenario 4 in figure 8,2)

Note that the cost of electricity is about 13% higher in the 20% penetration scenario 2, but 40% higher in the 30% Scenario 4.

Clearly then increasing wind penetration in the west will increase the level of carbon mitigation as well as its costs. It is also clear that wind displaces CCGTs before it displaces coal, and this increases the cost of carbon mitigation by wind significantly. Carbon mitigation with conventional nuclear would thus appear well over 3 times more cost effective compared to carbon mitigation with wind. The true cost effectiveness advantage of nuclear cannot be gaged until we know more about the hidden costs of wind, but the hidden costs appear to extract greater cost penalties at higher levels of wind grid penetration.