02.24.13

Lights Out: The coming crisis in electricity generation

Posted in Uncategorized at 8:47 am by Administrator

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 have outlined some of those in my Sustainable Energy Manifesto).  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!

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02.14.13

Arnold Goldman – A living, breathing “Black Swan”

Posted in Uncategorized at 9:16 am by Administrator

Most of us have heard the term “to have the courage of your convictions”.  According to usingenglish.com this idiom means that “you are brave enough to do what you feel is right, despite any pressure for you to do something different”.

As far as I am concerned Arnold Goldman is the epitome of that statement. 

Born in Rhode Island in 1943 Arnold moved with his family to California in the late 1950’s.  At the age of sixteen, working as a mop salesman, he came to the conclusion that if he had to work he wanted that work to be personally and socially valuable. 

He attended UCLA and the University of Southern California, earning degrees in engineering and computer science.  He had success with Lexitron, a startup company that developed the first American made word processor.  In the late 1970’s he relocated to Israel and turned his attention to the vexing problem of developing solar power into a practical source of energy for the generation of electricity.  

Shortly after its foundation Israel had become home to a sustained research effort into the use of solar energy through organizations such as the Research Council of Israel and the Technion institute of technology.  Amongst the background materials that had been gathered was information about a project developed in Egypt in 1912 by an American named Frank Shuman (described in detail in a NY Times article in 1916).  That project used parabolic mirrors to heat tubes containing water which was converted into steam used to drive irrigation pumps.  Goldman concluded that a variation of this approach could be used to power steam turbines in order to generate electricity.  In 1979 Goldman established Luz International and built a scientific team in Israel in order to commercialize the technology. 

After the oil crisis of 1979 that resulted from the Iranian Revolution the United States government was eager to support the development of renewable energy sources.  Goldman seized this opportunity and by 1984 Luz International was building the world’s largest Concentrated Solar Power (CSP) generation station in the Mojave Desert in California – the Solar Electric Generating Systems (SEGS). 

Goldman was determined to position his company first and foremost as a power generation company, able to consistently and reliably supply electricity when it was needed.  As a result, the SEGS plants incorporated natural gas as a secondary fuel to be used on cloudy days and at night. 

Even more innovative for that time was a commitment to continuous improvement.  Each of the SEGS plants incorporated information gathered from the preceding plants in order to increase reliability and efficiency.

Supported in part by tax credits and a guaranteed price for electricity (what would now be termed a Feed-In-Tariff) the facility was expanded year after year to the point where it had a capacity of 354 MW by 1991. That’s when this incredibly innovative project came to a standstill. 

Having overcome seemingly endless litigation and government jurisdictional disputes regarding environmental protection issues, Luz International was forced to declare bankruptcy when the property tax exemption that had been granted to the company expired.

Although that was end of Luz International it was not the end for SEGS.  Through various ownership changes the facility has been a dependable source of electricity for Southern California for more than two decades.  It is amazing that almost 30 years after the first SEGS plant became operational the complex is still the largest CSP facility in the world (although that is about to change). 

Goldman took the bankruptcy of Luz International in stride and went on to achieve success in a number of different fields.  But in 2004, the allure of solar energy captured his attention once more.  He founded a new company, now called Brightsource Energy, and after 6 years of developing new proposals, navigating regulatory mazes, and planning a future home for desert tortoises and Mojave ground squirrels, construction began on a new solar tower style facility near Ivanpah, California. 

The facility will use some 173,500 mirrors mounted on posts with dual axis motors to track the sun and focus the rays on a single point.  The intense heat that will be generated will produce high temperature, high pressure steam to drive steam turbines.

Goldman wasn’t content to simply replicate the technology that had been used at SEGS.  Rather than using massive and heavy trough mirrors with a single axis of rotation he switched to smaller, lighter units with flat mirrors that are less expensive to manufacture and install. 

Although the heating of a fluid in a tube suspended above the parabolic trough had worked at SEGS, the building and maintenance of the extensive network of tubing added both capital and operating costs.  Using the solar tower approach at Ivanpah avoids those costs.

Goldman has always put a great emphasis on building a team of talented individuals to successfully execute the projects he has been involved with.  There are many new faces on the Brightsource executive but it is a testament to the loyalty that Goldman garners that long time associates Israel Kroizier and Gabriel Kaufman continue to be part of that team.

With the Solana CSP plant nearing completion at Gila Bend, Arizona, and the opening of the small eSolar Sierra power plant in August, 2009, a new era in Concentrated Solar Power has arrived in North America.  Offering the promise of extended power generation through the use of Thermal Energy Storage, these plants will undoubtedly play a large part in getting us to a sustainable energy future. 

And from everything I have observed I think Arnold Goldman will have a major role in this resurgent industry. He had the courage to follow his conviction that solar power could be a very important source of renewable energy and the wisdom to engage a large team of experts to make it happen.  Although Mr. Goldman has now passed the baton to a new management team at Brightsource his vision will influence CSP developments for decades to come.

 

 

 

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02.08.13

Wind Energy Headlines Need Scrutiny

Posted in Uncategorized at 2:27 am by Administrator

I have to start this blog post by saying once again that I am a big supporter of wind energy. But the misinformation, half- truths 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.

Case #1: “Wind energy passes 30%”
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.

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.

Case #2: “Wind Blowing Away Coal in Ontario”

In January, 2013 numerous articles and blogs implied that increases in Wind energy production had allowed the government of Ontario to decommission its remaining coal-fired generation plants.

To suggest that the two are related in the case of Ontario is simply factually incorrect. Wind is a minor contributor to the generation mix in Ontario as shown by the graph below (data taken directly from the IESO site);

It is clear that the reason that the coal-fired plants can be closed is because total demand has softened and natural gas-fired plants and nuclear capacity have both increased. These shifts are not the result of wind being hugely successful but are directly related to refurbishment of several nuclear plants as well as a sustained period of low prices for natural gas that make those plants more attractive to operate.

Wind is actually causing problems in Ontario. The following passage comes from the 2009 Ontario Reliability Report;

“A weak economy combined with conservation efforts and mild weather have resulted in unusually low overnight and weekend demand, creating ongoing SBG (Surplus Baseload Generation) conditions. For the most part, excess generation is handled through exports. This spring, however, Ontario started to experience SBG on a weekly basis, resulting in nuclear unit reductions on 54 days, nuclear shutdowns on five days and water spillage at hydro facilities on 33 days. These actions impose additional costs on generators, increase wear and tear on equipment and result in an inefficient approach to managing the power system.”

Case #3: North America’s Largest Wind Energy Storage Facility Fires Up In Texas

In this case I agree that this January 24, 2013 headline is correct. However, I take exception to the following statement within this blog.

‘the new storage facility blows a Texas-sized raspberry in the direction of renewable energy nay-sayers, whose complaints about the “unreliable” nature of wind power are now, well, blowing in the wind.’

The clear implication is that energy storage is no longer a problem. Set up some batteries and you are good to go. What the author fails to state was the length of time that this $44 million facility can generate 36 MW.

The answer to that question is … wait for it … 15 minutes. After that it is lights out.

Wind is a great energy source and I am all for developing more of it. But without utility-scale energy storage the problems associated with integrating wind will prevent us from actually depending on it as a major source of electrical generation. And in the meantime we are rapidly destroying the economics of running thermal generation plants (more on that in a future blog).

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