Another Burr Under My Saddle -- August 8, 2015 -- Intermittent Energy, Nameplate Capacity, And The Capacity Factor

Updates

August 14, 2015: capacity factor appears to be all the rage right now; "greenies" tell us future wind farms will reach 65% capacity.

The National Renewable Energy Laboratory (NREL) recently released data showing that the capacity factor (CF) for wind power can reach 65 percent -- comparable to the CF of fossil-fuel-based generation.

While the headlines aren’t as sexy as Tesla’s "Ludicrous mode," the transformative implications for climate change dwarf Elon Musk’s latest accomplishment. Increasing a generator’s CF can increase its value in a variety of ways, including: reduced cost of energy, improved transmission-line utilization, and often, reducing stress on the grid by providing more power at times of peak demand. It will also likely reduce the amount of storage and natural gas needed to manage the grid under scenarios of high renewables penetration. Implicitly, NREL’s new report positions wind to become a dominant and possibly the primary source of electricity in the U.S.

Iowa will lead the way.  

Original Post

 

There will be nothing new in this post that you haven't already seen somewhere else on the blog. I'm doing this for my own benefit -- please skip this if  you came here looking for the Bakken.

A number of articles on "the unseen costs of intermittent energy" have been published in disparate media outlets over the past few weeks that seem a bit more than simply coincidental. I linked the various articles in various spots on the blog but now I'm going to try to put them in one spot for archival purposes.

I'll begin with this "cut and paste" from one of my posts:

Personally I have learned a lot about energy by following the intermittent energy story. Prior to the blog, I did not understand "nameplate capacity" and, now, all of a sudden there's another "old" concept that is getting a lot of attention: "capacity factor" which is very closely related to "nameplate capacity."They may be synonyms. I recently posted a story from The Lead for the archives and now it turns out that Forbes has a long article on the very same subject: "The Clean Power Bill Will Collide With The Incredibly Weird Physics Of The Electric Grid." Coincidence?

According to wiki:  Nameplate capacity, also known as the rated capacity, nominal capacity, installed capacity, or maximum effect, is the intended full-load sustained output of a facility such as a power plant,a chemical plant, fuel plant,metal refinery,mine,and many others. Nameplate capacity is the number registered with authorities for classifying the power output of a power station usually expressed in megawatts (MW).

The other day a reader sent me the link to an article from an Australian publication, The Lead (linked above) in which the wind energy apologist was writing about the "best wind farm" in Australia:
Hornsdale is touted as Australia's "best'' wind farm project due to its high capacity factor of almost 50 per cent when compared to other wind farms in Australia which operate between the high 30s or low 40s.

I did not recall seeing that term before, and it was not one of the wiki synonyms for "nameplate capacity." But now that I have had time to think about it, that makes sense. At its simplest, nameplate capacity and capacity factor are measured in different units. The former is often measured in MW while the latter is almost always a percentage.

Be that as it may, within hours of seeing "capacity factor" in that Australian publication, I saw it in a linked article from Forbes, sent to me by a reader. Very coincidental.

Here are some data points from the Forbes article:

The idiosyncratic physics of electricity will ultimately doom the aspirational goals of the new 1,560 page [Obama] Clean Power Plan, more than will an army of lobbyists, lawsuits and laborious studies. It is an inconvenient truth that electricity is profoundly different from every other energy source society uses; it is, in fact, weird.

In energy equivalent terms, the nation’s electric utilities deliver 5 oil supertankers every day. This feat is performed on a network where operational dynamics and disasters can happen at near lightspeed. And here is the critical singular fact: Over 99 percent of all electricity has to be generated at the same instant that it is consumed.  Try doing that with wheat, steel, or oil.

Thus the problem: The [Obama] Clean Power Plan (CPP), as by now everyone knows, sets a course to radically increase the use of wind and solar power everywhere in America. And, cost aside (which it never is in the real world), it should go without saying that neither wind nor solar are available all the time.

“Availability” is not a semantic nicety. It is a specific and critical technical feature of power plants.

In order for the grid to deliver power continuously and nearly instantaneously in the face of inevitable challenges (plant failures, or the highly cyclical nature of demand), operators must have access to unused capacity that is available to be called upon, any time.

While wind and solar have very low average availability compared to conventional power plants, what is more important is that they have zero availability for many hours at a time every day.

And similarly neither are available, even when operating, to increase output to follow normal daily and hourly demand surges.

The Capacity Factor

It bears noting that “availability” is distinct from another technical, non-semantic, feature of power plants, the “capacity factor” which is a measure of total energy delivery. Unsurprisingly, wind and solar also have low capacity factors compared to conventional power plants: over a year, a megawatt of wind, on average, can deliver less than one-third as much energy as a megawatt of gas turbine. If one rated automobiles this way, for example, capacity factor would measure how often, on average, you were actually able to use your car for all reasons, regardless of how big the car or its engine. Availability is the if, when and how long each day at any given time your car would actually start.

When it comes to cost of capital, capacity factor matters. Simplistically, you need to build three wind or solar megawatts of capacity to equal the energy produced by one megawatt of turbine capacity. (Obviously the exact ratio depends on how windy or sunny the locale.) That means it is just nonsensical to claim a solar or wind plant with a capital cost per “nameplate” megawatt equal to a conventional power plant has achieved the Holy Grail of “grid parity.” And even if you build extra wind and solar capacity, the extra capacity is worthless if it’s not available when needed.

It is availability that matters when it comes to the engineering, and derivatively economic challenge of keeping a grid continuously operating and stable (the latter no small feat). A stable continuous grid is utterly essential for modern society and the hallmark of modernity. Just ask anyone in India, or dozens of other countries plagued with episodic grids.

Storage Doesn't Work For Electricity

Elon Musk has given us a way to illustrate the challenge to store power at grid levels. The astoundingly big $5 billion Tesla battery factory under construction in Nevada, the so-called “gigafactory,” is slated to produce more than all of the world’s existing lithium battery factories combined. For battery cognoscenti, that represents a quantity of batteries each year that can store 30 billion watt-hours of electricity. A big number. But the United States consumes about 4,000,000 billion watt-hours a year. Thus the entire annual output of the gigafactory can store about five minutes worth of U.S. electric demand.

Consider one more example of the scale challenge for storing electricity. Cushing, OK, is home to one of the nation’s preeminent, and numerous, tank farms to store oil. In order to build a ‘tank’ farm to store kilowatt-hours equivalent to the energy stored at Cushing, we’d need a quantity of batteries equal to 40 years of production from 100 gigafactories. Electricity is hard to store.

Good, one burr under the saddle removed. I finally read that article. Putting Elon Musk's gigafactory into perspective was worth the read.

President Obama is pretty smart they say. The Economist is a fairly respected publication. Almost two years ago, The Economist had the European experience with intermittent energy figured out: how to lose half a trillion euros.

On June 16th, 2013,  something very peculiar happened in Germany’s electricity market. The wholesale price of electricity fell to minus €100 per megawatt hour (MWh). That is, generating companies were having to pay the managers of the grid to take their electricity. It was a bright, breezy Sunday. Demand was low. Between 2pm and 3pm, solar and wind generators produced 28.9 gigawatts (GW) of power, more than half the total. The grid at that time could not cope with more than 45GW without becoming unstable. At the peak, total generation was over 51GW; so prices went negative to encourage cutbacks and protect the grid from overloading.

The trouble is that power plants using nuclear fuel or brown coal are designed to run full blast and cannot easily reduce production, whereas the extra energy from solar and wind power is free. So the burden of adjustment fell on gas-fired and hard-coal power plants, whose output plummeted to only about 10% of capacity.

These events were a microcosm of the changes affecting all places where renewable sources of energy are becoming more important—Europe as a whole and Germany in particular. For established utilities, though, this is a disaster. Their gas plants are being shouldered aside by renewable-energy sources. They are losing money on electricity generation. They worry that the growth of solar and wind power is destabilising the grid, and may lead to blackouts or brownouts. And they point out that you cannot run a normal business, in which customers pay for services according to how much they consume, if prices go negative. In short, they argue, the growth of renewable energy is undermining established utilities and replacing them with something less reliable and much more expensive.

Germany has built a low-carbon energy business to the point where new solar power needs few subsidies; where wholesale energy prices are falling and threats to the reliability of the grid have not materialised. What’s the problem?

There are several. First, utilities have suffered vast losses in asset valuation. Their market capitalisation has fallen over €500 billion in five years. That is more than European bank shares lost in the same period. These losses matter in their own right. For pension funds and other investors, they represent lost capital and lower future earnings. For employees, they translate into lower wages and lost jobs. The losses—many of which predate the boom in renewable energy—have come on top of the huge sums Europeans have also spent on climate-change policies. Subsidies for renewable energy are running at €16 billion a year in Germany (and rising); the cumulative cost is around €60 billion. [A disconnect? See previous paragraph.]

Next, utilities have lost their investment role. Once they were steady, reliable and inflation-resistant, the US Treasuries of the equity markets. Pension funds need such assets to balance their long-term liabilities. But utilities no longer play this role, as evinced not just by collapsing share prices but by dividend policies. Until 2008 the yields of RWE and E.ON tracked German ten-year bonds. Since then, they have soared to around 10%, while government-bond yields have stayed flat. Renewables are not the only risky energy investment.

Most important, the decline in utilities’ fortunes raises disturbing questions about the future of Europe’s electricity system. To simplify: European countries are slowly piecing together a system in which there will be more low-carbon and intermittent energy sources; more energy suppliers; more modern power stations (replacing coal and nuclear plants); more and better storage; and more energy traded across borders. All this will be held together by “smart grids”, which tell consumers how much power they are using, shut off appliances when not needed and manage demand more efficiently.

And there it was! The Economist calling wind and solar energy what it is: intermittent energy.

Americans prefer reliable, continuous energy, not unreliable, intermittent energy. On top of that, this new unreliable, intermittent energy will be more expensive.

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The Suicide of Liberal Arts

A Note to the Granddaughters

One of the best gifts I received while in high school was an 8-week summer course (between my junior and senior years) in liberal arts at St Olaf College in Northfield, Minnesota. This op-ed piece in today's WSJ was of interest:

Liberal arts has not been killed by parental or student philistinism, or the cupidity of today’s educational institutions whose excessive costs have made the liberal arts into an unattainable luxury. In too many ways the liberal arts have died not by murder but by suicide.

To restore the liberal arts, those of us who teach should begin by thinking about students. Almost all of them have serious questions about major issues, and all of them are looking for answers. What is right? What is love? What do I owe others? What do others owe me? In too many places these are not questions for examination but issues for indoctrination. Instead of guiding young men and women by encouraging them to read history, biography, philosophy and literature, we’d rather debunk the past, deconstruct the authors and dethrone our finest minds and statesmen.

When properly conceived and taught, the liberal arts do not by themselves make us “better people” or (God knows) more “human.” They don’t exist to make us more “liberal,” at least in the contemporary political sense. But the liberal arts can do something no less wonderful: They can open our eyes.

They show us how to look at the world and the works of civilization in serious and important and even delightful ways. They hold out the possibility that we will know better the truth about many of the most important things. They are the vehicle that carries the amazing things that mankind has made—and the memory of the horrors that mankind has perpetrated—from one age to the next. They teach us how to marvel.