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Clean Power average cost of wind energy in US 2013

Published on August 23rd, 2014 | by Tina Casey

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How Low Can Wind Energy Go? 2.5¢ Per Kilowatt-Hour Is Just The Beginning

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August 23rd, 2014 by  

The tubes have been buzzing over a new Department of Energy report on the US wind energy market, which came up with the low-low average cost for wind energy of $25 per megawatt-hour for a certain type of electricity purchase agreement (more on that later). According to some of our friends on the Internets that works out to 2.5¢ per kilowatt-hour, which certainly seems to spell doom for the long term prospects of coal, nuclear, oil, and even that “other” low cost fuel, natural gas.

Before you break out the pom-poms, though, the aptly named 2013 Wind Technologies Market Report contains some important caveats about that $25 figure as well as other findings. We covered the report’s wind tech export angle in brief earlier this week, so now let’s pick apart the cost angle.

average cost of wind energy in US 2013

2013 Wind Technologies Market Report (cropped) courtesy of US DOE.

The Average Cost Of Wind Energy

First off, the report repeatedly cautions that the 2013 sample size is small compared to previous annual wind energy reports. The 2013 sample size is also significantly smaller than this year’s crop of wind turbine installations, which will make up the 2014 report.

Looking first at the installed cost per MW (megawatt, not megawatt-hour) for wind turbines, the report comes up with an average cost of $1,630 per kW (kilowatt, not kilowatt-hour). That’s an impressive $300 drop from the 2012 annual report, and a whopping $600 drop from the 2010 average.

But, notsofast on that $1,630. Here’s the key qualifier included in the report:

With just 11 projects totaling 650 MW, however, the 2013 sample size is limited, perhaps enabling a few projects to unduly influence the weighted average.

The report goes on to note that the 2014 sample will be much larger, at 16 projects totaling more than 2 GW (gigawatts). Based on that sample, the report puts the 2013 average closer to $1,750 per kW. That’s still pretty impressive, but the small sample size is a red flag.

As the report emphasizes, wind conditions also vary from region to region, so when you start to break the average down you’re going to see that regional variation affect the cost of individual projects, with costs trending upwards once you get out of the nation’s high-quality wind interior.

Power Purchase Agreements And The Cost Of Wind Power

Power purchase agreements (PPAs) are quickly becoming the financing deal of choice for wind as well as solar power. The report notes that PPAs for wind energy reached a new low on 2013, pegging the figure at $25 per MWh or 2.5¢ per kWh. However, once again the report cautions that the 2013 sample size is small. On top of that, most of the projects in the sample are located in the aforementioned high-quality wind interior, where costs are lower. Here’s how the report expresses it:

After topping out at nearly $70/MWh for PPAs executed in 2009, the national average levelized price of wind PPAs that were signed in 2013 (and that are within the Berkeley Lab sample) fell to around $25/MWh nationwide — a new low, but admittedly focused on a sample of projects that largely hail from the lowest – priced Interior region of the country.

On the other hand, the report notes that within the low-priced Interior, new turbines are more likely to be installed in lower-quality wind areas. Since the cost of PPAs is nevertheless continuing to drop, this indicates that the latest generation of wind turbines is on a technology trend that enables a continued decline, even in less than optimal wind areas (see page 58 of the report for a more detailed discussion).

So, How Low Can Wind Energy Go?

Okay, so we cheated a bit with that headline. If the national average cost for PPAs is $25 per MWh, then it’s a given that in a number of places, costs are already lower.

If you guessed the Interior, that would be correct. The report pegs the average PPA at $22 per MWh in that region.

 

Even with the caveats, the report is confident that wind PPAs will give natural gas a run for the money over the next 25 years, at least in the Interior (see p. 60 for a detailed discussion):

Based on our sample, wind PPA prices are most competitive with wholesale power prices in the Interior region. The average price stream of wind PPAs executed in 2013 also compares favorably to a range of projections of the fuel costs of gas-fired generation extending out through 2040.

We’re going to go out on a limb and say that even if the national average cost of wind energy does not continue its recent track record of significant decline, technology improvements are still going to enable some downward movement in the national average, and wind will beat the pants off other fossil fuels in some regions.

In that tech category we’re going to include tweaks to wind turbine towers that will drive down shipping and construction costs, as illustrated by the new GE Space Frame turbine tower.

That’s not even counting the addition of offshore wind energy to the mix, which will be happening anydaynow despite some roadblocks to Atlantic Coast wind development that can be traced to the Koch brothers (yes, these Koch brothers).

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About the Author

Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



  • MrL0g1c

    Does the $25 per MWh include capital costs etc? Or are there other sums paid to the wind energy producers?

    • Bob_Wallace

      $25/MWh is a contract price (PPA – power purchase agreement) and that’s the total paid to the seller. PPAs usually run 20 to 25 years. Having one in hand means that there is almost no market risk for the farm owner. They are guaranteed a sale at a fixed price. Makes financing much easier. And it’s a good deal for the utility (if the price is right). They know what they will be paying for that amount of electricity for a couple of decades which frees them from the variability of fuel price.

      The farm owner, in this case, gets a 2.3 cent/kWh tax credit for the electricity they produce for the first ten years of service. That means about 1.15 cent/kWh value for the life of the PPA. (Worth a bit more because it’s paid during the first 10 years rather than stretched out to 20 or 25.)

      The PPA includes capital costs, real estate costs (purchase or lease), operating costs, some transmission costs, and profit for the farm owner.

      Taking out the subsidies and owner profit a 2.5c/kWh PPA price means that wind is being produced for less than 4c/kWh.

      • MrL0g1c

        Thanks, that’s what I thought. I’m currently debating with nuclear zealots that can’t believe that wind can be so cheap. I think the price of large turbines will continue to drop, competition is good etc.

  • http://www.beaufortrosemary.com Kevin Casey

    I believe the cost of wind, whether it is ultimately $25 / MWh (with PTC) or $48 / MWh (without PTC) or something else today, is competitive in many regions and it should be an element of a responsibly sourced, diversified portfolio of energy resources. Security of supply, including being able to have power 24 / 7 whenever we flip a switch, comes from having diversity in our electricity resources. If all we had was wind, we’d presumably want / need storage to augment it.

    • Bob_Wallace

      Storage will almost certainly play a large role in an all renewable grid. Few of the inputs can be turn on/off or up/down like one can do with a natural gas plant. Wind and solar will be available on nature’s schedule and we’ll have to work our way around that.

      We’ll have some hydro to fill in around wind and solar, but not enough. Storage is how we make everything fit together.

  • Mint

    Fast reserves are a tiny cost in our grid.

    When people say “renewables need backup”, they’re not talking about spinning reserves. They’re talking about wind’s need for FF capacity to take over when wind output is low.

    You claimed to me many times that over an area as large as MISO, wind output never goes very low, and that I should trust your personal observations of daily MISO output. Well, we finally have some public data:

    http://imgur.com/nimlsUq.png

    http://www.ieee-pes.org/presentations/td2014/td2014p-000222.pdf

    A min of 5% CF (600MW avg on a few days from 12GW of turbines) using daily CF (it would be even worse looking hour by hour), and that doesn’t even include July/August, when wind has its worst output and demand has the biggest highs.

    Large areas help, but they still don’t eliminate times of low output. It’s the same thing for large areas of Europe, or other US grids.

    Wind’s primary purpose is reducing fuel use, not giving us reliable capacity when we need it. At these PPA prices, though, I’ll freely admit it’s a very worthwhile purpose. Build away!

    • eveee

      With today’s system, wind is primarily fuel savings, only 15% more or less is capacity. It’s economical. As the mix changes that may change. There is potential for finding synergies between sources. Despite that, wind is displacing baseload power ( primarily coal and nuclear) in Germany and south Australia. How can it do that? In a present grid, about 1/3 is baseload, 1/3 load following, 1/3 reserves, roughly. Baseload diminishes and reserves and load following kick in. It’s not baseload that allows variable renewables. Contrarily, baseload is the first to go. What we need for reliable capacity is taller turbines, more offshore and near shore wind, PV solar, CSP with storage, geothermal. Some pumped storage, some gas turbines, better grid, and a unified, supranational and national upgraded grid like a superhighway. But this not new. It’s been predicted. Any advancements in tech along the way make it easier. Oh yes. One more thing. Endless exponential consumption growth must stop. Already has, but it must continue. GNP is uncoupling from consumption. But that is a longer tale.

      • Mint

        It’s not 15% capacity, just as I showed you with data. ELCC is not the final say in capacity. Twenty 100MW gas plants given 90% ELCC (1.8GW) will be far more reliable than 12GW of wind given 15% ELCC (also 1.8GW).

        Even if those 20 gas plants had crappy 10% EFOR, you’d have 99.8% chance of over 1.3GW output. I just showed you data that even in high output months, 12GW of MISO wind has nowhere near that certainty of output. Germany’s wind is even worse, sometimes dropping off to almost nothing on days of peak demand.

        But honestly, if wind can give you <4c/kWh PPAs w/o subsidy, reliable capacity from renewables isn’t even needed for them to maintain or lower overall system LCOE, even if NG plants raise prices.

        • eveee

          Yes. Capacity is not needed from wind. Plenty available and baseload plants are shuttering for lack of demand. I
          think we are meeting in the middle more. There has been no real attempt to make wind a capacity source. There is no real need right now. The future is different. And it can be made more steady than now with solar and other renewables. There is a lot of misunderstanding. CF is not a figure of merit. It’s just a number. If it were a figure of merit, baseload would be valued the highest. It’s not. That’s why solar has such value and merit. It follows load more. Solar CF is lower than wind and yet in the market it will get paid more peak hour rates. Offshore wind is more expensive. What about its ability to meet demand? That raises it’s value. It’s not just cost that matters. Wind capacity ( not factor) varies from 8% (texas legislated) to higher numbers. That’s today and not with taller towers and offshore, near shore wind. The system is a mix. It will adjust to the available sources, just like it already does. IMO, there will be much more solar. Renewables will be balanced by characteristics and some gas or FF will still be on the grid, but much lower amounts.

  • Mint

    He’s not talking about plain old transmission. He’s talking about those needed for wind only. You put wind where resources are good, and that can be much farther from demand than where you’d put other sources.

    Furthermore, if you have four regions with 10GW demand each and 12GW FF nearby capacity, they don’t need much inter connection (maybe 1-2GW). But if you want 20GW wind in each region, with surplus from one region going to the other, then you need fat transmission lines between the regions. This sort of reminds me of parallel processor design. Fast buses have a significant cost, and sometimes it’s better to just let computational units idle than improving the link between them for better utilization.

    In the end, though, I don’t think transmission cost will be a major factor, and certainly not in the short term.

  • TinaCasey

    Thanks as always for a lively discussion. Wimberly nails it. Natural gas is a finite resource and domestic prices will rise, especially now that the Obama Administration is loosening the safety valve on the export market. If the industry is ever called to account for cost factors such as water resource and fracking waste disposal, look out. Doubles on that if evidence of fugitive methane emissions results in tighter (as in, more expensive) regulation of the natural gas infrastructure.

  • https://www.facebook.com/chemonuclearfusionproject Inventzilla

    you should not have fudged the figures but that small sample does show what can be done if they put their minds to it. the rest of the industry might follow their example.

  • NRG4All

    Because they raise the issue of small sample size, there are probability curves for small sample sizes. I’d be curious, using those what the standard deviation about the mean is to be able to give any credence to the numbers.

    • Bob_Wallace

      I don’t have the numbers but I do have a picture.

      Looks to me that there are some small farms that contracted out at a higher price but there’s a big group of large farms that cluster around 2 cents and a bit.

      To me, the important point is not the median price but the lowest price point hit by a significant number of players. That tells where the industry is heading. The higher cost outliers during a strongly downward trend suggest someone not getting their stuff together.

      • Bob_Wallace

        I just looked more closely at the graph. The >2.5 cent prices are outside the windy Midwest. And three of the Midwest farm circles are sitting on the 2 cent ($20/MWh) line.

        Cruising on down below 3.5 cents, unsubsidized, is where I think we’re headed.

        • sault

          With the PTC expiration at the beginning of the year, we are already seeing “unsubsidized” PPA’s being written.

  • JamesWimberley

    Tina’s headline asks a good question: how much further can wind costs fall? The recent drop, from optimisation of design and electronic controls, is pretty much a once-off. Further gains have to come from greater height and swept area. Unfortunately basic physics means that a taller tower is heavier and more expensive – as it’s a 3D structure, the weight goes up more than proportionately. The same goes for rotor mass. It’s possible that these limiting factors can be overcome for a few more iterations, with space-frame towers and improved blades (vents or new materials), but it is a fight against growing odds. My guess is that 2.5c/kwh is as low as it will go, without PTC.

    Does it really matter? 4c/kwh makes wind the cheapest supply today, in the US Plains. Natural gas prices can only go up. Rational utilities will stock up on wind up to the point where grid integration costs steepen.

    Remember that solar pv faces no comparable inherent physical tradeoffs and limits, at least not for a good while. The panels won’t get any bigger, just cheaper to make and more efficient. The Shockley-Queisser efficiency limit can be got round by multi-layer cells. The layers will get thinner. Ultimately pv needs cost little more than the pane of glass it’s on.

    • globi

      That’s a good point.

      Thanks to efficient appliances, LEDs, laptops our household is currently at 300 kWh per year and person.
      2.5 cents/kWh = $0.6 per month.

      Granted hot water and heating is not included but how much health insurance does one get for $0.6 per month?
      Or can one rent a room for $0.6 per month?

      Renewable energy is very cheap already – the world doesn’t need to wait for an even cheaper energy machine.

      • Wayne Williamson

        globi, where do you live and do you actually have a life. I live in central Florida USA and have an average bill of 150 to 200 USD a month at around 0.10 a kilowatt hour. That means I actually use 1.5 Mwh to 2.0 mhw a month. I don’t think I could charge my cell phone for 0.60 a month.

        • globi

          We live in Europe where we don’t need air conditioning.
          We have a very efficient fridge, efficient appliances, only LED lighting etc. We are not missing out on anything and we are actually not even trying hard. Granted we currently don’t heat water and heat with electricity but we do have an electric stove.

          A cell phone has a capacity of 3.8V * 1.5 Ah = 0.0057 kWh.
          If you charge it every day you end up with 0.171 kWh per month. For $0.10 per kWh you can buy 6 kWh which is enough to charge dozens of cell phones per month.
          Besides I didn’t say that we pay 2.5 cents/kWh – I’m just saying that 2.5 cents/kWh is cheaper than the civilized world will ever need.

      • Vensonata

        So your family uses 1 kwh per person per day? ( or slightly less at 300 kwh per person per year) that’s very, very, good! That is what we use with an average of 15 people in residence in a 10,000sq ft house. It is not difficult nor do we miss anything.

        • globi

          Yes, 1 kWh per person per day. It is not that difficult.

          • eveee

            What refrigerator do you use?

          • globi
          • eveee

            Hi globi, thanks. That could go a long way towards lowering consumption. A fridge is one of the biggest loads.

          • Bob_Wallace

            225 l, ~8 cu ft? ~0.38 kWh/day?

            I’ve got an off the store floor 18 cu ft Kenmore that pulls 0.85 kWh/day. It seems about as efficient based on size.

            It’s also Sear’s cheapest 18 cu ft model.

          • globi

            We have a 4 minute walk to the next grocery store and delicious, cold tap water (coming from a pristine mountain – no need for Brita and what not) and there’s no Costco in these parts. (We don’t need a gigantic fridge).

          • Bob_Wallace

            It’s a 150 mile RT to the grocery from here. We have to stock a bit heavier.

          • eveee

            Great minds think alike.

    • Bob_Wallace

      And I’m guessing there is some more room for dropping prices.

      Looking at GE’s ‘space frame’ tower I can see large savings coming. The ability to deliver towers on regular 18-wheeler trailers. Assemble them on site like bolting together Erector Sets. No more transportation convoys needed to move oversized tower sections.

      http://cleantechnica.com/2014/03/06/grab-sneak-peak-at-new-ge-wind-turbine-tower/

      To take them up from 80 meters into the 160 meter ‘sweeter’ wind zone with minimal material use. Just spending relatively small money to put the same turbine and blades up into very much better wind should mean a nice cost drop.

      Sure there’s a bottom. But I think we have yet to reach it. Wind has seemed to reached the coveted ‘least expensive new power source’ position, but the more we can take the cost lower, the faster wind turbines will be installed. If you can build a very cheap wind farm and sell into merit order markets or compete for PPAs with more expensive technologies you’ll attract a lot of investment money.

  • Jouni Valkonen

    although these are subsidized prices it still tells something that the cost of wind power is steadily getting down and it is likely that we are not yet near the floor.

    Low cost of PPA could also be little bit bad sign, because grid operators might not anymore be ready to pay for more than 25 dollars on Wind power as it is difficult to use as wind power production only loosely correlates with demand cycles. On average nights are more calm than days.

  • http://orach24463.wordpress.com/ CJ

    How much would Wind and Solar Cost Without Government Subsidies Paid for By Poor and Middle Class To Line Pockets of Crony Green Capitalists? MostFoul For #Climate Bullies To Force Use Of High $ Wind and Solar That Use More Energy Than Make http://bit.ly/1vtGMBj pic.twitter.com/e9whs42p5h

    • Bob_Wallace

      In the US the price of wind and solar would be about $0.015/kWh higher without federal subsidies.

      If coal had to pay its external costs and nuclear didn’t benefit from federal subsidies their costs would be enormous.

      Wind pays back the energy used to manufacture it (lifetime) in 3 to 8 months depending on the wind resources where installed. Solar panels pay back in one (thin film) to two years (silicon).

      You do a lousy job spreading FUD. Much, much too obvious.

      • Alharbi

        I don’t think its worth it to comment on such a lousy comment. Just ignore.

        • Bob_Wallace

          The problem I have with ignoring these sorts of comments is that they might confuse someone who is just starting to learn about renewable energy.

          There are far too many ‘friends of fossil fuels’ distorting things and spreading misinformation.

          I spend a lot of time trying to tell “the other side of the story”. I figure that the more people we educate the faster we’ll fix our problems.

    • AltairIV

      Wow, I’m impressed. Is there even one factually correct thing in those mis-infographics? I especially love poorly photoshopped image of the Japanese anti-nuclear protesters re-labeled as anti-greenpeace.

      There is one thing I can certainly agree with though. The poor and middle class shouldn’t be forced to bear the brunt of subsidies for cleaning up the current fossil fuel mess. Let’s get the 1% to cough up more of the burden. Considering that (non-hydro) renewables comprise less than 10% of total energy subsidies, it shouldn’t inconvenience the owners of a third of all U.S. wealth all that much.

      http://en.wikipedia.org/wiki/Energy_subsidies#United_States
      http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States#Statistics

    • MrL0g1c

      To produce as much energy as a conventional 1,000 megawatt power plant using solar power would require a 127 square mile field….

      Comes to about 8square miles actually. The US currently has about a TW of electricity capacity, it would take roughly 1% of US’s desert area covered with solar panels to match that.

      Global warming doesn’t exist because there was a drought in Europe in 1540? How does that make any sense at all?

      Spain has high electricity because of decades of mismanagement, ridiculous levels of profits by power co’s (up to 600%!!!) and a large debt burden – Spain underpaid energy co’s for years, then they borrowed money to pay the energy co’s, now they have increased everybodies electricity bill to pay that debt, the debt is probably being paid at high interest rate.
      http://elpais.com/elpais/2014/01/01/inenglish/1388590410_230748.html

  • JamesWimberley

    In a curious reversal of the situation in solar, wind energy is considerably cheaper in the USA than in Europe. A recent post at Renewables International (link) put the onshore cost in Germany in 2012 at €68/mwh, or $90: over twice Wiser’s latest US number.

    I don’t know why. As with solar, the equipment is sold on a competitive global market, so it’s unlikely that’s the cause of the difference. Land acquisition and rent, permitting, labour, and grid connection costs are all possible factors, along with good old-fashioned lying. (If the government knew how much money we are really making, they would cut the FIT.) Many turbines in Germany are installed on forested hilltops, with extra-tall towers; in Britain, on remote moorland.

    • Bob_Wallace

      US wind resources.

      It blows stink in middle-US.

      • JamesWimberley

        Oops. Yes. Obviously that’s a large part of it. The cost of onshore wind in the less windy Eastern US states and California should be fairly similar to Europe. Though I wonder if the European costs take full account of the very recent revolution in turbine design fro light winds.

        • globi

          At least Germany is employing advanced wind turbines:
          The Windpark Hohenahr has Nordex N117 (2.4 MW) wind turbines with a rotor diameter of 117 m and a tower height of 140m:
          http://de.wikipedia.org/wiki/Windpark_Hohenahr
          http://www.nordex-online.com/en/produkte-service/wind-turbines/n117-24-mw.html

          But the US has simply far better wind resources than Germany.

        • Bob_Wallace

          I expect advances in turbine design for lower wind speed areas is going to cause much better prices going forward.

          But the thing that is most interesting (exciting) me is the idea of using taller towers in order to get into stronger wind.

          We assumed the SE US had poor onshore wind potential. Until someone did a new wind map that covered 96 to 110 meters as opposed to the old 80 meter map. And it looks like the wind industry is moving into the 160 meter range.

          Here’s the extra wind available in the US if one goes only 16 to 30 meters higher.

        • Mint

          Solar is cheaper in the US, too. Germany may have lower installation costs per watt for rooftop solar, but the difference is less for utility solar, and German solar CF is ~10%, while US is almost 20% in CA, AZ, etc.

          In the end, US solar works out less per kWh.

      • eveee

        One can ask the same question about why China has more capacity and yet US is still number 1 in generation. Outside of Scotland, maybe Denmark, there are few places blessed with such wind. When you consider the vast area, the Midwest is considered the Saudi Arabia of onshore wind. Largely overlooked is the lucrative, steady, untapped offshore wind potential.

  • gametheoryman

    These costs do not include those for new transmission infrastructure.

    Much of the best areas for wind power are in seemingly deserted areas from the Dakotas to west Texas. Wind farms there require transmission lines to major consumption areas. These transmission lines can cost as much as the wind farms themselves, less so for really large wind farms.

    Also, to reduce the number of natural gas plants needed as backup for when winds provide little power, transmission that connects these wind farms is necessary. (This has the same effect on the uncertainties from individual wind farms as having a diversified stock portfolio has on the uncertainties of returns from individual stocks.) This cost too is huge.

    • Bob_Wallace

      The falling price of wind means that it makes even more sense to build transmission. Remember, those transmission lines will serve us for 100 years or more. (Our railroad investment hauled coal for a long time.)

      Now, let’s take your claim that transmission doubles the cost of electricity from Midwest wind. What does that mean? That wind, delivered to the utility, is cheap. New coal, including external costs would be more in the 20 cent range. New nuclear, without subsidies, would be well over 15 cents.

      As for backup NG plants, we don’t need any. We already have plenty. When the wind blows we can shut off fossil fuel plants and save money.

      Later on, when wind and solar are very large contributors to our grids (likely more than 50% of total generation) we’ll need storage in order to further increase penetration. But wind/solar with storage should still be cheaper than replacing our wearing out coal and nuclear plants with coal and nuclear.

      • gametheoryman

        The price of power to a utility includes the cost of producing the power (the subject of this article), the cost of any extra transmission capabilities, and the cost of any necessary mechanism to match supply with demand.

        Right now, almost anywhere in the US, the cost of power from natural gas is by far the lowest. The cost of producing power from natural gas is not far from the costs given in the article. But natural gas plants require almost no new transmission to get the power to the local utility and they already come with the capability to turn them up or down to match changes in demand, while the cost of transmitting power from wind to the utility may be substantial and the cost of backup power may be substantial. We must compare the sum of all three of these costs and the article describes only the first.

        Right now, wind farms that have been built are in areas where extra transmission costs are not huge, say on agricultural land not far from existing transmission lines and not way out in the prairies. The newest ones, and many on draft boards, are reaching towards these prairies where the winds are stronger, so the cost of producing power from them falls, but the cost of necessary transmission also rises. While it may change in the future, right now the sum of all three types of costs with wind power are still quite higher than the three costs with natural gas.

        • Bob_Wallace

          “The price of power to a utility includes the cost of producing the power (the subject of this article), the cost of any extra transmission capabilities,”

          Correct.

          “and the cost of any necessary mechanism to match supply with demand.”

          Incorrect. Those costs are grid operation costs. When we talk about the cost of coal or nuclear we never include the need for large amounts of spinning reserve that must be maintained in the event that a large plant suddenly drops off line.

          “Right now, almost anywhere in the US, the cost of power from natural gas is by far the lowest.”

          Sort of correct. Wind is edging under NG. Plus we can’t depend on the price of NG staying low. It’s apparently a bit under the cost of drilling/fracking new wells at the moment.

          (And I’ll bet you aren’t figuring in the climate change cost.)

          We will spend some money on new transmission lines. Just like we spent money on railroad to haul coal.

          Those transmission lines will serve us for decades and generations of wind turbines. It will be money very well invested in cleaner air and less planetary warming.

          • eliboston

            “Incorrect. Those costs are grid operation costs. When we talk about the cost of coal or nuclear we never include the need for large amounts of spinning reserve that must be maintained in the event that a large plant suddenly drops off line.”

            This is a brilliant point. Changing wind can be predicted and is not disruptive. In Denmark that wind penetration is over 30% they calculated the extra cost of managing the grid as tiny % of one cent, or it simply trivial.

            But disruption from sudden loss from a coal power plant going unexpectedly down is huge and so is the cost for needed back up capacity for such an event.

          • Bob_Wallace

            The Texas grid, ERCOT, reported in 2011 that the cost of integrating wind cost about $0.50 per MWh. That’s about $0.0005/kWh. A penny for every 20 kWh.

            They don’t have large amount of solar to manage yet but expect the costs to be similar.

            As for large thermal plants – “Contingency reserves, the super-fast acting energy reserve supply required of grid operators in case a large power plant shuts down unexpectedly, are a major cost.”

            http://www.greentechmedia.com/articles/read/Grid-Integration-of-Wind-and-Solar-is-Cheap

          • Mint

            I need to see some figures to agree that those are a “major cost”.

            If spinning reserve does cost a lot, battery systems (30-min) will soon replace them, as they can ramp up in a couple seconds, and will give plenty of time for operating reserve to kick in. A 1MW system would only need 500kWh of batteries, costing $100-150k, plus electronics. I doubt it’d be even 2% of total generation cost.

            Wind doesn’t need more spinning reserve than nuclear or coal for equal amounts of generation, but it does need more standby backup. Not only is the CF lower, but outages are correlated.

          • Bob_Wallace

            I don’t have those numbers. You could try contacting ERCOT. That’s where the statement came from.

            I suppose you might say that wind needs more backup than nuclear or coal at times. But then you’d have to say that it needs less at others. On average a MWh of wind needs to be backed up just the same as a MWh of coal or nuclear.

            As for outages being correlated, don’t forget that extending the ‘harvest area’ lowers variability.

            I find this paragraph from the linked GTM report interesting…

            “They also have pretty large balancing areas,” Goggin added. “If one wind project is going off, another is probably going on somewhere, providing an overall more stable output. Larger areas also simply have more resources to accommodate variability. In MISO, wind’s variability is just something in the noise. It is not showing up in their reserve needs.”

            See the MISO part? Wind’s variability is just something in the noise.

          • Mint

            On average a MWh of wind needs to be backed up just the same as a MWh of coal or nuclear.

            For spinning reserve, or fast acting backup, you’re probably right (I say probably because in studies MW is the basis of comparison as opposed to MWh). Your quote is definitely referring to spinning reserve only.

            But for general backup, you’re definitely wrong.

            MISO unfortunately doesn’t provide data history unless you pay for it, but I found this from a recent conference:
            http://www.ieee-pes.org/presentations/td2014/td2014p-000222.pdf

            http://i.imgur.com/nimlsUq.png

            And that doesn’t even include August, when MISO wind output averages half of these months. I hope eveee sees this, as he keeps claiming MISO wind has little fluctuation because it’s a big region (without any data beyond a single day).

            It’d be astronomically rare to see a collection of FF/nuclear plants have force outages simultaneously like this.

            ——————————-

            Now having said all that, it really doesn’t matter at this price. Even if we back up 95% of wind capacity with natural gas, the fuel savings (in particular the NG price insulation) are worth it when PPA+subsidy is below 4c/kWh.

            I wouldn’t mind a 5-year 2.5c/kWh PTC for perpetuity now.

          • Bob_Wallace

            The issue is more complex than most discussions try to make it.

            Were we building a grid from zero then we would need to install fill-in (storage or dispatchable gen) as we added wind and solar.

            But we aren’t building new grids, we’re transforming existing grids. Grids that already have a lot of dispatchable generation (NG and hydro) as well as thermal plants which can be shut down during times of high wind and/or solar supply. The cost of backup generation for renewables is a “2035 and onward” issue.

            And, then, you bring in something that I’ve been meaning to talk about. The real cost of wind/solar with NG backup vs. coal or nuclear.

            Let’s return to our ‘brand new grid’. We need reliable sources. Our choices are:

            1) Coal. Aside from very significant health/climate issues new coal is expensive and has a continuing fuel cost.

            The EIA sets the median overnight cost of new coal at $2,950/kW. Coal plants take years to build so ramp that up to $5k or more. (Back of envelope math is occurring.)

            2) Nuclear. Ignoring safety and waste disposal issues and going straight to overnight cost the EIA says median is $5,300/kW. Double up for during construction accumulated interest, so probably over $10k.

            3) Natural gas. EIA median overnight $1,090/kWh. Installs fast so not much accumulated interest. Call it $1,200?

            4) Wind. External costs and risks basically zero. EIA median is $3,950 and installation is fast. Furthermore I’ll argue that we should use a lower number than median cost because wind costs are rapidly dropping.

            How about we use $3,000 as a capex + finex total?

            5) Solar. I’m going to skip right to end of year average utility solar costs for 2013. Under $2,000. Installs very fast so $2,000 finished.

            Now NG gets killed by fuel prices, but still comes in cheaper than coal and nuclear and about even (today’s gas price) with wind.

            What makes sense to me, when building a new grid, would be a combo of wind and solar with NG backup. It’s very unlikely you’d need to backup every kW of wind and solar with a kW of NG capacity. There are probably zero hours in which one is not performing some.

            But pretend there are a large number of those hours. A kW of wind solar would be $2,500 (half and half) and a kW of NG would be $1,200. You’re in for $3,700. If you’ve got good wind and solar resources then you aren’t going to burn a lot of gas.

            Compare $3,700 with some fuel costs to $5,000 plus fuel and high external costs (coal) and to $10,000 with unresolved radioactive waste issues (nuclear).

            (That math make sense to people? First time through on the thought process.)

            I’ve left out the cost of backup and spinning reserve for coal and nuclear.

          • Mint

            You didn’t have to write all that :)

            I agree with you that we’re not building a new grid, and that we don’t need new backup for wind. But that applies to all new sources.

            For a new grid, I also agree that coal and nuclear can’t compete with NG+wind right now in the US. If you recall, I had seceded the nuclear point to you ages ago, saying we should keep existing nuclear online as long coal hasn’t yet been flushed out, but not build any more nuclear (not current generation, anyway).

            I think nuclear’s future role will be for small modular reactors providing industrial heat, and if successful, that will proliferate to a cheaper alternative to coal for countries that don’t have cheap NG.

            But that’s another story. As I summarized at the end of my previous post, wind is now cheap enough that displaced fuel alone makes it worthwhile. Capacity/backup issues really don’t matter now that we’ve passed that threshold.

          • Bob_Wallace

            “You didn’t have to write all that :)”

            Yes, I did. I needed to work through it for myself an (hopefully) someone one else find mistakes I made.

            “If you recall, I had seceded the nuclear point to you ages ago,”

            I don’t. I have a poor memory. Google Docs is my friend.

          • Gary

            I look at it like this:
            NG plants use around 10GJ of gas to produce 1MW of electricity. That means at an international (uncompressed) price of around $7/GJ the fuel costs of NG are around $70/MWh.
            Transmission line costs are in the order of $1000/MW.km for large capacity lines (3GW-500kV). That means every 100km of transmission lines adds around $100/kW to the capital cost of wind power. (That’s in Australia – might be different in the US)

          • Bob_Wallace

            So with US NG prices recently around $4 the fuel price from a CCNG should be around $0,04/kWh? If so that means that Midwest onshore wind has likely taken the lead away from NG.

          • Mint

            You’re jumbling units of energy and power, and your figures are wrong. Average heat rate is 8000 BTU/kWh (8GJ/MWh), while new CCGT is 60% efficient (6GJ/MWh), and Australia/US have far lower costs than $7/GJ for domestic natural gas, too. It’s $5/GJ in the US, less in AU (remember that it costs $5+/GJ to make it LNG for exports).

            But thanks for the transmission line info. Good to know.

          • Bob_Wallace

            OK, can you do a price chart for the fuel cost of electricity in new CCNG plants by cost of NG?

          • Mint

            A chart is too much work, but I’ll give you a few figures.

            At $5/GJ (1000 cubic feet, or 1mcf, has roughly 1.08 GJ), 60% efficient CCGT has a fuel cost of 3c/kWh. At $7/GJ, it’s 4.2c/kWh.

            NREL WWSIS found that at $4.25/mcf, and lower average efficiency of existing NG capacity, wind displaced fuel costs of ~$30/MWh, or 3c/kWh. So I guess that’d be 3.6c/kWh at $5/mcf.

            Henry Hub price is currently $3.85/mcf, and avg price for electric power according to EIA is $5.08 per mcf. Probably a fair amount of local price variation, too, depending on demand and pipeline flow.

          • Bob_Wallace

            OK, so by the time one added in fixed costs (capital, etc.) and some profits for the owners it looks like a very tight race between wind at a bit under 4c delivered.

            Signing PPAs for wind at this price would, I think, make sense. One would be purchasing relief from variable and likely rising NG prices.

            Henry heads upwards with time, for what that’s worth.

          • eveee

            “It’d be astronomically rare to see a collection of FF/nuclear plants have force outages simultaneously like this.”

            This is how rare.
            http://en.m.wikipedia.org/wiki/Northeast_blackout_of_2003

            “And that doesn’t even include August, when MISO wind output averages half of these months. I hope eveee sees this, as he keeps claiming MISO wind has little fluctuation because it’s a big region (without any data beyond a single day).”

            It’s better not to paraphrase, but to go to the source. By now, you realize that present MISO wind has lowest output in July/August. The comments I made were to address no wind for weeks comments. This is MISO only. There are two other ISOs south of there in a 1000 mile corridor. If you view. ERCOT, you see a similar seasonal profile, but the daily profile has distinct diurnal characteristics. Not so MISO. And ERCOT is largely independent, only now getting more connection outside. There has been no attempt to mix wind regimes and/or types of renewables to steady output. And yet wind electricity is approaching 30% in Iowa. Wind in the

          • eveee

            Wind in the nearby southwest power pool correlate less with MISO. The Great Lakes offshore would be a good adjunct. I see no great effort beyond statewide or a little more to integrate renewables at high penetration and smooth output. It’s too easy to add renewables with little or no extra costs or impact today. Inroads in wind are ramping up quickly in areas like Minnesota, Dakotas, and Iowa so that more transmission is beneficial. Same with Texas. Southwest Power Pool is catching up to them. It would be better to have a more coordinated system with better planning. FERC opens the door to that. FYI, California has the opposite seasonal variation and diurnal, totally opposite of MISO. You can either look and find problems, or find solutions, or perhaps both. Time was when the word was, wind was too expensive. Not anymore. The list of objections is dwindling. We are still nowhere near the full potential.

          • Mint

            The 2003 blackout cascade was a grid problem, not a generator problem. AFAIK, only a single plant lost ability to provide power. The rest disconnected from a faulty grid. Wind generators would have to do the same to avoid damage.

            I don’t think offshore will make much difference. It’s weakly anti-correlated to onshore, and there will still be times that both onshore and offshore simultaneously have low output. Even the diurnal characteristics you speak of in ERCOT and CAISO are not guaranteed every day of the summer. Seasonal matching is meaningless without day-to-day matching, unless you have gobs of storage.

            So that will retain the need for other backup capacity, like NG & peak-shaving batteries. In such an environment, LCOE is all that matters, and I can’t see offshore ever competing with onshore for that (at least in the US).

          • eveee

            Yes. I get the point. To be fair, its not entirely the generators fault. Power system is just that, a system. Everything is interactive. In most cases, some other event triggers a cascade of failures, like a high heat load condition, or ice on the lines, many kinds of problems that stress the system. The point here is that many generators, especially large thermal centralized ones become much more troublesome once things go bad. They can trip out or fail, and when they do, they are no longer much help because they take a long time to get back on line.

            I think you are quite wrong about offshore. The reference I gave on California North Coast shows that wind is steady year round, all day. Thats not all offshore, but that one in particular. Other places I can’t say. We have to be careful about over generalizations. There are all kinds of meteorological conditions and regimes. I might add, watching ERCOT and MISO, there are daily differences, but they are similar seasonally, and beside diurnal, Texas looks better in summer. Southwest Power Pool and PJM don’t match MISO, either. The point is that in the future a mix of renewables, storage, transmission, some FF, and demand management has to be blended for success. Its really the as same today, but more renewables in the future. There is no one solution for all circumstances and the panorama is changing. For example, turbine heights have changed CF, capacity allowance, and the range of feasible sites. Offshore has barely started here, so we don’t know what will happen yet. The odd thing, and I think you see this now, is that the market is saying two things, we don’t need storage, and we don’t need base load (as much). That is today. The problem with the market is that it has poor look ahead. We see the benefit and need for storage. We see the same for things like CST with storage and geothermal. But the market does not. Its really only saying, we don’t need them yet. Thats where its best to keep up the research in those areas realizing that they will be of great benefit later. It is quite pernicious the way the system recognizes the benefit of expensive peaker plants now, but doesn’t get those other things yet. It may be a matter of adaptation and people getting used to the ideas and concepts.

          • Mint

            I can’t find your reference for California’s North Shore, but I googled and found this:

            web.stanford.edu/~dvorak/papers/dvorak-archer-jacobson-2009-california-offshore-wind-energy-potential-in-press-2009-12-14.pdf

            It most definitely is not steady all day, every day. It’s only when you average over a whole month that you get ‘steady’ charts, and that’s 100% irrelevant to real world implementation. So I still maintain that offshore is highly unlikely to give you reliable capacity, and LCOE will rule wind choices for at least a couple decades.

            About not needing storage or baseload, that’s all related to cost. If wind’s LCOE is significantly more than just the fuel cost of FF, then w/o free storage it will raise the cost of electricity generation. If not, as is the case now in the US, it won’t raise costs. But storage was never “needed”. It just makes lack of reliable capacity irrelevant, like in New Zealand where they have gobs of ultra-cheap storage.

          • eveee

            This is the third time in less than a week. Here it is:

            Start here:

            google “wind power in calfornia”

            http://en.wikipedia.org/wiki/Wind_power_in_California

            Find the link at the bottom to

            18

            California offshore wind energy potential

            Which brings you to:

            http://web.stanford.edu/~dvorak/papers/dvorak-archer-jacobson-2010-california-offshore-wind-energy-potential.pdf

            Last sentence before acknowledgments

            “Unlike most of California land based wind farms which peak at night, the offshore winds near Cape Mendocino are consistently fast during day and night for all four seasons.”

          • Mint

            Your link goes to the exact same paper that I linked to. Of course, I shouldn’t be surprised that you didn’t notice.

            “consistently fast” does not mean what you think it does. Go look at the actual data and analysis where he says that. It’s about Fig 5, where “winds were averaged by hour over the eight seasonal months”.

            That is a 100% useless observation. No grid can accumulate the wind energy at, say, 5pm of each day in July and then use an even amount of that energy every day.

            There is no day to day consistency with offshore wind. LOOK AT THE RAW DATA.

          • eveee

            You come to the conclusion that off shore wind at a single site at Cape Mendocino has too much daily variation for your tastes. Did you notice that the wind pattern does not vary the same way as the one in Tehachapi? Why are you drawing conclusions about yet another single site after being told repeatedly that it is not a valid way to assess an implementation over a wide area necessary for a steadier result. There is no disputing that a single site has variation. You must consider the integration of renewables over a wide area to achieve a goal of high renewables penetration. NREL, and many other researchers have done so already however and concluded that it its possible with varying degrees of storage.
            I realize that the hourly data is averaged over the months in question. Fig 5. shows that the pattern is not diurnal and does not vary by season in contradiction to your earlier statements regarding wind in California which were uninformed about more than 50% of wind from a single site in Tehachapi. The point is that your statements regarding seasonal and daily patterns are rebutted by this single instance, not that this single instance which is only 800MW is the balancer for the entire wind system in California. A thorough investigation of the subject should include all the forms of renewable generation and the scenarios embodied in those particular papers. If you have a problem with them, make some specific comments on them. Your comments so far lack some basic knowledge necessary to do the assessment already done and peer reviewed by experts in those respective fields. I suggest that rather than try to piecemeal object according to your limited knowledge, that you start by informing yourself by reading a broad range of these sources. That will not make you an expert in the field, but it may prevent you from coming to wrong conclusions about these subjects, like the incorrect conclusions you drew from wind resources in California while ignorant of their lack of geographic dispersal.

          • Mint

            You come to the conclusion that off shore wind at a single site at Cape Mendocino

            Wrong. The raw hourly data in Fig. 3 is from four different buoys, not a single site. According to the author, they’re “representative samples” from the 16 buoys spanning CA’s entire coast.

            Yet again you prove that it is YOU who has little understanding of what is written in reports and papers on the subject.

            What statement of mine is contradicted by offshore patterns not being diurnal?

            50% of CA’s wind is from Tehachapi, and therefore CA’s wind variability is irrelevant? What else is new. Yet again you’re pretending unavailable data will support your position, just like you did when claiming MISO has steady output before I found a data record longer than a day to prove you wrong. So do you have a similar excuse for MISO? The 7 countries in Europe? How about the optimally chosen sites in Budischak using the benefit of hindsight? They all show wind has very little capacity handling at the 99.9% level.

          • eveee

            Four buoys?. :) LOL. Thats your idea of assessing the variability of wind? Doubling down on your errors? You blew it with your statements about wind variability in California while you were totally ignorant of the wind geographical dispersal. Now in a tizzy about being embarrassed by your ignorance, you respond with more nonsense by pointing to the variability in four buoys. You have no clue how to assess wind over a wide area and find out what the aggregate looks like over time, and yes I mean hour to hour, every day of the year. Please try calming down and reading some of the seminal papers by Milligan, if you are really interested in learning and not just arguing.

          • eveee

            What else is new is that you had no idea more than 50% of the wind in California was from a single site and yet you continued to blather on about it as if it didn’t matter to an assessment of wind power variability.

          • eveee

            You are going on a little emotional hissy fit now that you have been caught napping. Misquotes and a fusillade of retorts do not a meaningful dialogue make. You say what else is new, but were woefully ignorant of Californias lack of wind geographical dispersal otherwise you would never used that data as a test case of wind variability. Use direct quotes. Don’t paraphrase what you think I or Milligan, or Budischak, or anyone else said, or we get nowhere. Stop being so emotional and immature and start being more scientific and logical, then we can get somewhere. Instead of responding emotionally to your ignorance, educate yourself. Just how do you expect anyone to respond to such a reference free, jumbled, emotionally outburst? Show some dedication to research and understanding by reading Milligan. Then come back and discuss with some intelligent insight. And try to set aside your preconceived notions and assess the data as dispassionately as possible.

            Here is what you should have done with the buoy data:

            “a methodology to generate a qualified estimate of the time series of the aggregated power generation from planned wind turbine units distributed in an area where limited time series are available.”

            from the abstract of

            A Multi Turbine Power Curve Approach

            Norgaard, Holtinnen

            http://www.wilmar.risoe.dk/Conference%20presentations/Nørgård%20&%20Holttinen%20NWPC2004%20Multiturbine%20Powercurve%20paper.pdf

            Its a way of estimating smoothing from a small number of points to estimate the effects of a larger group of turbines.

          • eveee

            “What statement of mine is contradicted by offshore patterns not being diurnal?”
            Have you forgotten?
            “I don’t think offshore will make much difference. It’s weakly anti-correlated to onshore,”
            The whole point of the discussion is that offshore winds help with variation because they do not have the same diurnal pattern and have less seasonal pattern than the onshore winds at Tehachapi that dominated the California wind resource behavior. In fact, since wind is so little dispersed, there is a great deal of potential for improving its steadiness. As we already discussed, economic incentive to do so is not recognized at this time, which is the real reason we see variability in California wind. I claim, and you can quote me on this, that most of the wind resources (and solar) in the world to date have been utilized without a great deal of attention to variability because of the same dynamic discussed, to wit, the very small and relatively cheap extra reserves required for variability and the abundance of reserves available and the low levels of penetration. For this reason there has been little incentive to reduce system variability until now. Going forward, as penetrations increase, the incentive to reducing system variability by mixing different resources and geographical dispersal will increase. Logicacally, this will be done as a mix of all available system resources, their characteristics, and economics. The entire range of possibilities, including demand management, distributed thermal storage, solar, wind, geothermal, gas,.. you name it.

          • Mint

            Once again, you show that you don’t understand the meaning of anti-correlated. Hint: It’s not the same as uncorrelated.

            And mere “help” with variation is not good enough. Capacity handling needs to be 99%+.

          • eveee

            You seem to be obsessed by anticorrelation. So stop griping and place a definition we can agree with. Like this:
            “Negative correlation (a relationship in which one value increases as the other decreases).”

            Good example is diurnal wind plus solar. One goes up other goes down.

            Stop making unfounded assertions about what you think I know. Apparently, I occasionally know something you don’t. Like knowing that over 50% of California wind is at one location.

          • Mint

            You said the lack of a diurnal pattern in offshore disproves my claim of weak anti-correlation.

            That is 100% false. It proves only one thing: onshore and offshore do not have a high positive correlation coefficient. That is it.

            When you quoted “It’s weakly anti-correlated to onshore”, you disingenuously (as usual) truncated my sentence and left out “, and there will still be times that both onshore and offshore simultaneously have low output”. That is the context of my statement, which is why it was part of the same freakin sentence.

            The only way you can disprove that central assertion is if offshore and onshore had a strong negative correlation coefficient. Even if two coins (call them ‘offshore’ and ‘onshore’) are 100% uncorrelated, they still both show tails 25% of the time. Wind power gives reliable capacity if output is not low 99% of the time.

            Your poor understanding of statistics is further proved by you citing that paper about offshore in Denmark. As if a correlation coefficient of 0.4 for farms 500km apart is a good thing…

          • eveee

            You are dodging the fact that offshore wind does not display the same diurnal and seasonal patterns as the single large source at Tehachapi. You seem to want to undo the conclusions of scientific peer reviewed papers in a blog about renewable energy? Does that make sense? All these sources are wrong and you, an anonymous shall we liberally call, researcher, have found the defect? So why aren’t you going public with your real name and your own peer reviewed paper so you can reap fame and fortune? Could it be that there is just a little bit more they know and just a little bit more time and effort they spent researching? Like a method of extrapolating surface wind velocities from a limited set of buoy data to outputs at 80m height of a large wind farm. And exactly whom is not reading? You may have read some of the paper, but not the references. I don’t have unlimited knowledge or time. I think I will go with the researchers and their conclusions.

          • Mint

            You seem to want to undo the conclusions of scientific peer reviewed papers in a blog about renewable energy?

            Why do you keep on lying? I am not dodging anything, nor have I contradicted a single thing in any peer reviewed paper.

            None of your sources show that offshore+onshore provide reliable capacity. That’s the bottom line. If they were strongly anti-correlated, then offshore could be significant in giving wind reliable capacity. But they’re not.

          • eveee

            FYI, Cape Mendocino is not weakly anti correlated to onshore at Tehachapi or the current grid. The data proves it. There is no strong diurnal pattern in this data. There is much less seasonal pattern as well. That is entirely the point made by Dvorak. You made that comment without reference. I linked a reference that refuted it.

          • Mint

            Do you even know what anti-correlated means?

          • eveee

            You seem to be mesmerized by storage. There are places that have hydro where storage can be utilized. Thats fine. There are places where storage is less necessary. There is no one size fits all, and analysis of the power grid will have to step beyond the boundaries of a country like Germany, for example. Still, there are some examples of very deep analysis of 100% renewables scenarios. This one from Germany includes a wide scenario of all energy, not just electricity.

            Its in German, and shows an hour by hour result. This one posits some storage.

            http://www.kombikraftwerk.de/100-prozent-szenario/leistungsflussanimation.html

            Diesendorf, in a different location and scenario, like Budischak comes to a different conclusion, that storage is not necessary, and overcapacity is cheaper.

            http://www.dailykos.com/story/2013/08/11/1230558/-Sunday-Train-The-Myth-of-Baseload-Power#

            There are studies that show no new storage breakthroughs are necessary, also.

            We are covering a lot of ground here. Best to pause.
            Bottom line, there are a wealth of scientific papers discussing high renewables penetrations from 50% on up. There is no need to couch the issue in extremes of storage breakthroughs and 100% renewables, their just happens to be papers on the subject. What the literature shows is that there are many ways we can get to high percentage renewables in a reasonable amount of time and at reasonable cost.

          • Mint

            I’m not mesmerized by storage. Storage is only needed if you want reliable capacity handling from PV or wind energy.

            Your examples just prove me right repeatedly.

            A) German data proves that wind+PV has next to zero capacity handling.

            I’ve already shown this with actual data from the Fraunhofer Institute, and that in January you can have no soar or wind output on days of high demand. As for your kombikraftwerk link, go click on the graph. There are plenty of times that Germany gets little cumulative power from solar, offshore, and onshore combined.

            B) Diesendorf also shows that wind+PV has zero capacity handling.

            Did you even look at the Diesendorf paper? His cost optimized system needs 38.2GW of dispatchable capacity handling from solar thermal storage, gas turbines, and PuHS combined in order to handle the peak demand of 35GW (note: no reserve handling was modeled).

            What does that tell you about the reliable capacity handling of PV+wind? Obviously, it’s virtually zero.

            C) Budischak proves that wind+PV has next to zero capacity handling.

            You clearly did not read the Budischak paper with any effort. It most certainly does not conclude that storage is not necessary.

            He unfortunately doesn’t disclose the demand peak (only existing PJM capacity of 72GW including reserves) and instead only gives us demand average (31.5GW). But he does tell us that even in the 90% renewable scenario, he needs 69GW capacity handling from storage and 59GW capacity from FF (running at <4% CF) to fill in the holes left by even heavily overbuilt wind/solar

          • eveee

            Have you created a new term, capacity handling? Why? At least define it. Do you know what dispatchable means? It means you can order it. It might come on in a minute, an hour, or maybe days. Guess which sources take the better part of a day or days to start up? Nuclear. Coal. Baseload. And it’s even worse if it shuts down. They are inflexible. You might start dealing with reality by admitting that in the real world, in SA, coal got dumped and gas remained. Only flexible, agile sources can follow demand and augment renewables. I don’t know what point you are trying to make about those renewable papers with your invented term. Didn’t those papers conclude that high renewables were feasible and economic? If so, what is the point of inventing a new term and spreading FUD? Do those papers prove there is an insurmountable amount of storage needed and breakthroughs. Nothing of the sort. You are attempting to revise those papers, but it doesn’t appear too meaningful. I showed you one hour by hour analysis for Germany for all energy, not just electricity. That one does use power to gas. Lovins hour by hour analysis is another. You are treading against a swift stream going against the volume of papers showing high renewables futures. Do you really propose that all these authors have made serious errors and have failed to notice concepts that render renewables unusable in the future?

          • Mint

            Stop changing the topic. I never said anything about nuclear or coal. And with you telling me how accurate PV/wind forecasts are, ramp time won’t be an issue anyway.

            There’s no new concept there. I’m being clear because if I said 69GW storage capacity, you may wonder if messed up units. California’s recent storage mandate caused a lot of confusion on the matter. But if you’re going to whine about it, then I won’t use it any more.

            You are attempting to revise those papers

            Hey, look at the pot calling the kettle black yet again.

            YOU are the one who falsely claimed that both Diesendorf and Budischak found “that storage is not necessary”. That’s a blatant lie. They found no such thing.

            I’ve now given you FIVE data sources to disprove your assertion that PV and wind can substantially reduce the capacity needed from other sources. Flocard (seven European countries), Ruud (MISO), Fraunhofer Institute (Germany), Diesendorf (Australia), and Budischack (PJM). All of them show that PV+wind, even at high integration levels, cannot provide reliable capacity, and thus cannot reduce the capacity needed from the sum of FF+hydro+storage.

            Wind’s role is not capacity. It’s reduction of fuel use. That is the point I have been making from the beginning, and I have given you a mountain of evidence to support it. It therefore reduces system cost if and only if LCOE is below fuel cost.

            As for existing coal, it will not shut down from wind alone. It needs either mandates to kill it (or, equivalently, environmental standards) or cheap natural gas (e.g. North America & Australia, and possibly neither if LNG exports take off or fracking is stopped). A few years ago it looked like coal was going to die due to $130+/ton coal prices, but now it’s below $70/ton again.

            Do you really propose that all these authors have made serious errors and have failed to notice concepts that render renewables unusable in the future?

            I have never written a single sentence to imply such a thing. I dare you to even try finding a post of mine that suggests otherwise.

          • eveee

            You need to do a few things here. You need to make a clear, precisely defined assertion, with numbers preferably. And you need to make direct quotes from sources with links. Without that, there is little to discuss. If you create or use a term, define it. Please define capacity handling.

          • eveee

            “A) German data proves that wind+PV has next to zero capacity handling.”

            Again. Geographic area is too small.

            “B) Diesendorf also shows that wind+PV has zero capacity handling.”

            “What does that tell you about the reliable capacity handling of PV+wind? Obviously, it’s virtually zero.”

            How much capacity credit then? Please use professional terms like ELCC so we can talk with some accuracy. Its not zero. And again, it does not matter as long as the mix of sources does the job.

            The capacity of even two sources is no the point. Its the full mix of sources for the whole system that counts.

            “His cost optimized system needs 38.2GW…”

            This is based on 2010 data. It does not mean that is the only way to do it or is the way we will do it best in 2025. Its goal was to compute the most economical mix based on data at that time. Conclusions drawn from that have to take into account the goals of the study..

            Now,…. about pumped hydro..

            2.1% ?

            They came to the conclusion that reserves were easier and cheaper.. and based on 2010 data. Well, duh…
            Just what I have been saying.

            Need for storage? mmmmm.

            Ok. Storage not necessary is not an exact statement. Large percentages of storage are not necessary. like 50%. 6 to 8%, depending on whether reserves or storage are cheaper or more preferred. I also recently gave an example of how 6% of capacity could be storage in US. Thats enough for storage.

            Point is the same. All these studies point to not just a few, but many options for integrating both variable and steady renewables into the grid at percentages well above 50%. What some of the papers say is, its cheaper to integrate renewables and spill the excess than to store it, and it may be cheaper to have very low use FF reserves.

            I will say this. All this hand wringing about renewables and capacity at high penetrations misses the boat. What about the goal right in front of our noses? We are nowhere near to even 30% average across the globe, only in some places. There is a lot of untapped potential.

          • gametheoryman

            You’ve missed the point.

            First, the major question underlying the article is whether the cost of being served by NG power could soon be lower than other sources even without subsidies. That means not including an appropriate response to climate change.

            Second, the third element of costs concerning backup includes much more than spinning reserves, which only addresses quite short term demand/supply mismatches within just a few minutes. (I was largely ignoring spinning reserves because, as your other comments state, these costs are small.) Unlike other power sources, a wind farm often may provide a substantial amount of power today, but little tomorrow or even all next week. Costs necessary to adjust to this must be included to compare apples to apples.

            One way to adjust is to have extra NG power capacity nearby and another, preferable in the long run, is to have the capability to regularly transport large amounts of power over large distances to multiple areas, so that a utility could draw from many wind farms even 3-5 states away. Our existing network is currently too fragile to do this regularly in large amounts. With large amounts of wind power, this approach would require substantial upgrades to our existing transmission network including more elements of a smart grid. Other sources of power do not require as substantial an upgrade.

            Finally, the long life of transmission equipment does not change this analysis. Just like transmission lines and railroad tracks, the economic lives of natural gas, coal, and nuclear plants are typically presumed to be 40 years or so, even though their physical lives may exceed a 100 years because of a substantial probability that changes in demand, technology, or regulatory treatment will drastically reduce their economic value. (Many perfectly good railroad tracks have very little traffic after a couple decades, some even abandoned and made it bike paths; others are sustained for centuries.) Nothing new here for our comparison.

            If there is something new here it would be a shorter than 40 year economic life for wind farms, primarily because of technology change. How many existing wind turbines are going to be pulled down within a couple decades and replaced with taller ones?

            At the end, if all three types of costs are included, right now, almost anywhere in the US, the cost of power from natural gas, not including any response to climate change, is by far the lowest. Wind will not overtake NG in this sense for some time. Its adoption depends upon our govts. response to climate change, so this discussion will remain in the public arena for some time yet. I believe climate science supports a faster continued development than we now have of wind energy plus an upgraded, smarter transmission network, but it’s likely to remain politically contentious for some time.

          • Bob_Wallace

            “First, the major question underlying the article is whether the cost of being served by NG power could soon be lower than other sources even without subsidies.”

            The median LCOE of electricity from a CCNG is 4 cents. The range is 2 cents to 7 cents.

            http://en.openei.org/apps/TCDB/

            Unfortunately I can’t find a gas price to electricity price. My guess is that 2 cents is a price generated when we had a huge surplus of NG and prices plummeted. Four cents might be closer to what CCNG generation now costs.

            My guess is that wind has at least tied NG and likely beat the price if one uses a longer term average price rather than a historical low.

            (Those who don’t consider the cost of climate change are being extremely foolish.)

            “Second, the third element of costs concerning backup includes much more than spinning reserves….”

            The fact is, we have plenty of dispatchable generation and storage on line now to allow wind and solar to become well over 30% of our supply without needing to add more storage or dispatchable generation. By using what we have in a different fashion we enjoy the economic advantages of wind and solar, saving fossil fuel money.

            Wind and solar don’t require the cost of spinning reserve. That’s what we see ERCOT and MISO both reporting.

            Years down the road we’ll need to add storage, but that is years away. And by then it’s very likely that NG will be priced out of the market.

            ” draw from many wind farms even 3-5 states away….”

            Overkill. Even a couple hundred miles makes wind input much less variable.

            http://www.stanford.edu/group/efmh/winds/aj07_jamc.pdf

            ” How many existing wind turbines are going to be pulled down within a couple decades and replaced with taller ones?”

            It’s happening in Germany before turbines have reached 20 years because onshore wind ‘real estate’ is limited. Those removed turbines are being refurbished and sold on to countries with less space restrictions.

            We’re now taking down the 30 year old turbines at Altamont Pass due to rising maintenance costs, bird kills, and limited resource space. That won’t likely happen in wind rich areas like the US Midwest.

            ” the cost of power from natural gas, not including any response to climate change, is by far the lowest.”

            Would you please share your source?

            “Wind will not overtake NG in this sense for some time.”

            We’re preparing to sell our NG on the world market. That pretty much guarantees that domestic prices will rise in the direction of world prices, perhaps held back some by shipping limitations.

            “European Union Natural Gas Import Price is at a current level of 9.27 (US dollars), down from 9.77 last month and down from 11.60 one year ago….”

            https://ycharts.com/indicators/europe_natural_gas_price

            US futures prices are less than half that amount. Raise the cost of gas and NG generation will clearly soar above the cost of wind.

            Utilities are purchasing 5 cent solar PPAs as a hedge against NG prices.

            (Hope I hit all your points. You packed a lot of stuff in there.)

          • eveee

            Look. Maybe you don’t get it. NREL has done the studies. The amount of additional reserves needed for wind up to the 30 % integration level is very small. Nothing more is added. There are no extra costs. See western wind and solar and it’s eastern counterpart. The cost of transmission is included in the eastern study. The answers are there. Globi showed references to the Texas grid where conventional required more reserves than wind.
            You are paraphrasing the article when it comes to NG, natural gas.
            “According to some of our friends on the Internets that works out to 2.5¢ per kilowatt-hour, which certainly seems to spell doom for the long term prospects of coal, nuclear, oil, and even that “other” low cost fuel, natural gas.”
            “Based on our sample, wind PPA prices are most competitive with wholesale power prices in the Interior region. The average price stream of wind PPAs executed in 2013 also compares favorably to a range of projections of the fuel costs of gas-fired generation extending out through 2040.

            We’re going to go out on a limb and say that even if the national average cost of wind energy does not continue its recent track record of significant decline, technology improvements are still going to enable some downward movement in the national average, and wind will beat the pants off other fossil fuels in some regions.”

            Notice the emphasis is on the future. NG is not going down in price long term. That must be calculated in any estimate of energy. The gist of it is, the costs are similar today, FF prices are going up, wind prices down. What’s the big deal? There is little reason to suspect contradiction to that. Today wind is unsubsidized and NG has subsidies and exemptions from regulation

          • Hans

            This whole discussion is a lot of handwaving by all participants. Hand waving is nice to get some feel for the issues that play a role, but does not help you to get to the numbers. You need a a quantitative statistical analysis to get to the real numbers. Luckily there are people called scientists who do such a thing. The last few decades many studies have been carried out on the grid integration of renewables. The general conclusion is that at least 20% of variable generators can be added with only small extra costs. However, these studies assume that wind and solar are added as add-on to the existing system. A new IEA study finds that at least 45% is possible with little extra costs if the grid, production and market system is optimised to accommodate renewable energy sources:

            http://www.iea.org/newsroomandevents/pressreleases/2014/february/name,47513,en.html

            http://www.iea.org/Textbase/npsum/GIVAR2014sum.pdf

            http://www.iea.org/newsroomandevents/speeches/140225_GIVAR_PC_Slides_final.pdf

          • eveee

            Hans- thanks for the links. More proof added to the NREL WWSIS and Eastern studies. No significant extra reserves or costs to add solar or wind.

          • Bob_Wallace

            Good stuff. Thanks.

            45% means that we can go full speed ahead and figure out how best to take it to 100% over the next decade or so.

    • globi

      http://www.aweablog.org/blog/post/fact-check-winds-integration-costs-are-lower-than-those-for-other-energy-sources

      “Texas grid operator data show that the integration costs for
      conventional power plants are far larger than the integration costs for
      wind generation. Because changes in wind output occur gradually over many hours
      and can be predicted, while failures at conventional power plants occur
      instantly and without warning, more reserves and more expensive
      reserves are required to reliably integrate conventional power plants.
      For example, the Texas grid operator ERCOT holds 2800 MW of fast-acting reserves
      24/7/365 to keep the lights on in case one of the state’s large fossil
      or nuclear power plants experiences an unexpected failure, as all power
      plants do from time to time.”

  • Matt

    From GE space frame story. “The commercial version that GE will launch next week is 139 meters tall, and the company foresees demand for turbine towers in the 150-160 meter range” The wind map at 160m verse 80m is night and day different. And while the on site construction cost is higher. There are roads that you can’t get even the current towers to. So no has anyone done computer models on adding 160 meter tower between the existing 80m towers in the high quality sites? Ok I can’t find link to that map, but …

    • Bob_Wallace

      I’d love to see the 160 meter map, don’t know if one exists.

      It’s not far back in the past when we were looking at 50 meter wind maps. Then someone (wasn’t it Mark Jacobson?) pointed out that there were much better resources at 80 meters.

      Recently a 95 to 110 wind map has been produced for the US. It’s opened up wind potential in the SE where it was assumed wind would not be a significant source of electricity.

      160 meters. The resources could be massive. The GE space frame and a portable blade factory might mean that we could build some onshore giants.

      • eliboston

        I know Rhode Island did wind maps for wind development and only the coast and offshore are economical at 70 meters. At 130 meters 100% of Rhode Island has economic wind.

        I am sure Stanford’s Mark Jacobson will do such a map if he has not already done so. His early calculation over a decade ago proved the US we have enough for 100% of our electricity needs as well as those of Canada and Mexico.

        • Bob_Wallace

          I can’t find any 160 meter maps on the web. If you come across one, please share.

          I do find some tall towers.

          Fuhrländer – a 2.5MW turbine on a 160m lattice tower in 2003.

          Vestas V164 is the tallest wind turbine, standing in Østerild, Denmark, 220 meters tall, constructed in 2014

          http://en.wikipedia.org/wiki/Wind_turbine#Records

          And -

          ” The commercial version (lattice tower) that GE will launch next week (March, 2014) is 139 meters tall, and the company foresees demand for turbine towers in the 150-160 meter range.”

          http://cleantechnica.com/2014/03/06/grab-sneak-peak-at-new-ge-wind-turbine-tower/

          I suppose we can assume getting up that high isn’t out of the question.

      • Mint

        Were resource limits ever an issue?

        I’m more interested in the cost vs CF tradeoff you get with height.

        • Bob_Wallace

          Sure. It was generally assumed that much of the SE would not have usable onshore wind resources.

          If we’re discovering a lot more wind just 30 to 80 meters higher then that changes the transmission cost. Right now several SE states are purchasing/running wire to purchase electricity from Oklahoma. They might be able to make that power at home.

        • Jenny Sommer

          Cost can be reduced with technology. Kiteplants are believed to have an EROEI between 350 ( Kitegen Stem, Skysails Power, X-Wind) and 1500 (10GW Kitegen carousel).
          No need for towers and huge concrete foundations.

      • eveee

        Wind speed at height depends on surface roughness. A common equation estimates the speed in creases with height according to the one seventh power.
        http://en.m.wikipedia.org/wiki/Wind_profile_power_law

    • globi

      Apparently higher towers are mostly beneficial in regions with lower average wind speeds (not high quality sites).
      The wind turbines which were installed close to the German shore (2014) had an average tower height of 84 m and the wind turbines which were installed in central and southern Germany had an average tower height between 133 m and 138 m: http://www.wind-energie.de/sites/default/files/attachments/page/statistiken/fact-sheet-onshore-statistik-halbjahr-2014.pdf (page 4)

      As a rule of thumb this document says that each additional meter results in an energy gain of 0.5% to 0.7% (above 100 m of tower height):
      http://uka-meissen.de/dokumente/upload/33b4b_uka_prospekte2013_wald.pdf (page 5)
      The document above also has a comparison of 3 actual wind turbines with different tower heights (page 2).

      This document claims increasing the tower height from 90 m to 160 m increases the energy yield by 45%:
      http://www.efiwind.de/fileadmin/user_upload/downloads/nh_und_ertraege_deu.pdf
      Increasing the tower height also reduces strain due to turbulences provoked by trees.

      • Bob_Wallace

        Excellent information.

        I’ve just started to dig through the links. The last one is in German and Google won’t translate it.

        Any interest on your part (or anyone else’s) to turn this into an article?

        I think we’re about to see some new thinking about where to build wind farms. We may see a lot taller towers and less money spent on transmission going forward.

        I’ll post the US 96 to 110 meter wind map once again. It show the SE opening up to local wind farms rather than importing from Oklahoma and other parts of the Midwest.

        I’l love to see a 160 meter map….

        • globi

          I’ve translated the first and last paragraph. You can use google translate if you copy paste the text (but the google translation stinks).

          Uncertainty
          of wind conditions:
          Conventional wind assessment, based on the Wind Atlas Method has significant uncertainties in excess of 100 m. In Wind assessments, deductions from 20 to 30% are done for safety reasons because the extrapolation of surface wind speeds at altitudes 100 m and above appears to be imprecise.
          SeeBA is a manufacturer and distributor of wind turbines using tall hubs. As part of a thesis at the Fachhochschule Flensburg an investigation of wind conditions up to 200 m altitude has been conducted.
          In this study, wind data of measurement masts in Hamburg and Dannenberg in
          Lower Saxony were compared with results of the Sodar-measurements conducted by Dr. Stefan Emeis (IFU Garmisch Partenkirchen).

          Conclusion:
          Higher wind speeds and their favorable Frequency distribution in the Ekman-layer lead to higher energy yields for wind turbines with larger hub heights.
          Especially in today’s and future systems with large rotor diameter a high tower is necessary to permit the entire rotor to work in the Ekman-layer.
          In this layer the Wind conditions are predominantly affected by the upper wind and less by the turbulent layer caused by a rough surface (e.g. forests) and obstacles.
          In addition, the lower wind gradient in these heights lead to a lower load of the rotor and thus of the entire system.

          • globi

            I think important to note is following:
            1. The rule of thumb (0.5% to 0.7% energy gain per meter) which is noted in one document coincides with the findings in the last document.
            2. A higher tower is mostly beneficial in areas where the turbulent layer on the ground is thicker (wind farms far away from the coast or flat lands).
            At least the installation data in Germany indicates that the additional costs of a higher tower were not justified for wind turbines close to the shore.
            3.Thanks to higher towers some regions in Germany appear to have started to install wind turbines in locations which were previously thought to not be economical.

      • eveee

        Globi- thanks. The uka reference is about how tall towers help in Germany, because of forests.

      • Jenny Sommer

        It has also been suggested that the output could be doubled by forecasting gusts via laser. That technology is explored by “Uprise”.
        When using kites the hardest limitation would be airspace rights I guess.
        Skysails just entered the market with their ship towing kite technology.
        That would get us above 400m.

  • spec9

    I’m amazed by this. How is it possible? Is it really 5 cents . . . 2.5 cents plus a 2.5 cent production tax-credit? (which they should get IMHO.) I assume this is just for onshore wind.

    If it is really down to 2.5 cents, they should be building them like CRAZY. Consumers pay 10 to 35 cents for electricity in California. My self-installed solar PV system is just below 6 cents per KW (Not including my labor).

    • Bob_Wallace

      The non-subsidized price is around 4 cents.

      The 2.3 cent/kWh PTC applies to the first 10 years of production. That means that for the typical 20 year PPA it averages out to about 1.15c/kWh.

      2.5c PPA + 1.15c PTC = 3.65c. I think that’s now the cheapest new electricity source. (Natural gas combined cycle plants may be cheaper during gas price dips.)

      We’re really close to the point at which subsidies may not be needed. In fact, there currently are no federal wind subsidies.

      And, yes, only onshore. Offshore, when we finally get some, will cost more. It may never get as cheap as onshore but has more value since it produces more during daytime.

    • eveee

      If like crazy you mean, 14,600MW, then yes.
      Another 109 projects were underway at mid-year, representing up to 14,600 MW of additional capacity.
      Another 109 projects were underway at mid-year, representing up to 14,600 MW of additional capacity.

  • eveee

    According to data from the National Renewable Energy Laboratory (NREL), Texas’ land-based wind potential at an 80 meter hub height is 1,901,530 MW, the best resource in the United States and the equivalent of 18 times the state’s current electricity needs.

    http://windcoalition.org

    But according to the article, new wind farms are likely to be built in low quality wind sites. It does not seem like highest wind quality sites have been used up.

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