From The Economist 2017 Feb. 25

I have made major changes in the lay-out:
Mainly headings and line-shifts.
My additions and comments are marked as “indented text”.
Sometimes, I have used square brackets [ ]

Introduction

ALMOST 150 years after photovoltaic cells and wind turbines were invented; they still generate only 7% of the world’s electricity.
Yet something remarkable is happening.

  • Having less than say 10 % of the unstable renewable, this renewable can be incorporated in the system without major problems.
    Above this it starts to act as parasites.

From being peripheral to the energy system, just over a decade ago, they [the renewables] are now growing faster than any other energy source and their falling costs are making them competitive with fossil fuels.

  • As usually it is not discussed, how the varying and partly unpredictable renewables, should pay for the necessary backup.

BP, an oil firm, expects renewables to account for half of the growth in global energy supply over the next 20 years.
It is no longer far-fetched to think that the world is entering an era of clean, unlimited and cheap power.

About time, too

There is a $20trn drawback, though.
To get from here to there, we will require huge amounts of investment over the next few decades, to replace old smog-belching power plants and to upgrade the pylons and wires that bring electricity to consumers.

  • $20trn, as an investment, would bring us a long way towards nuclear with future clean and reliable power.
  • Here, as usually, it is “forgotten” that very little will be gained with a strong net to distribute what is not there.
    Or better: For obvious reasons, sunshine is synchronized.
    But in spite of green hopes, the wind is almost synchronized as well.

The dirty secret

Normally investors like putting their money into electricity because it offers reliable returns.
Yet green energy has a dirty secret.
The more [subsidized] renewables is deployed, the more it lowers the price of power from any source.
That makes it hard to manage the transition to a carbon-free future, during which many generating technologies, clean and dirty, need to remain profitable.
If the lights are to stay on.
Unless the market is fixed, subsidies to the industry will only grow.

Brakes

Policymakers are already seeing this inconvenient truth as a reason to put the brakes on renewable energy.
In parts of Europe and China, investment in renewables is slowing as subsidies are cut back.
However, the solution is not less wind and solar.
It is to rethink how the world prices clean energy in order to make better use of it.

  • It is difficult to understand why nuclear is excluded from being “clean”.

Shock to the system

At its heart, the problem is that government-supported renewable energy has been imposed on a market designed in a different era.

For much of the 20th century, electricity was made and moved by vertically integrated, state-controlled monopolies.
From the 1980s onwards, many of these were broken up, privatized and liberalized, so that market forces could determine where best to invest.
Today only about 6% of electricity users get their power from monopolies.

The pressure

Yet everywhere the pressure to decarbonize power supply has brought the state creeping back into markets.

This is disruptive for three reasons.
The first is the subsidy system itself.
The other two are inherent to the nature of wind and solar: their intermittency and their very low running costs.

All three help explain why power prices are low and public subsidies are addictive.

1: Substidies

First, the splurge of public subsidy, of about $800bn since 2008, has distorted the market.
It came about for noble reasons—to counter climate change and prime the pump for new, costly technologies, including wind turbines and solar panels.

  • No, it was not noble reasons.
    $800bn became available because we, in the West, had been brainwashed against nuclear.
  • Try to imagine how it would have been now.
    If these $800bn had been used for nuclear, instead of being lost down into a bottomless green hole?
  • If so, it would have been enough to pay for 160 new reactors as now exported by Korea to UAE

But subsidies hit just as electricity consumption in the rich world was stagnating because of growing energy efficiency and the financial crisis.
The result was a glut of power-generating capacity that has slashed the revenues utilities earn from wholesale power markets and hence deterred investment.

2: Intermittent

Second, green power is intermittent.
The vagaries of wind and sun — especially in countries without favorable weather — mean that turbines and solar panels generate electricity only part of the time.
To keep power flowing, the system relies on conventional power plants, such as coal, gas or nuclear, to kick in when renewables falter.

  • Much too often we see how it is assumed, that the (dirty) coal, and especially the (hated) nuclear, should just kick in and act as back-up for the (bellowed) renewables.
  • Here, it is necessary to come forward with the following:
    1) The physical lifetime of these plants will suffer with frequent ramp-up and down.
    2) After a ramp-down, a nuclear plant will suffer Xenon-poisoning. In this way, a quick ramp-up may result in an accident as at Chernobyl.
    However, “Western Reactors” are provided with a proper containment.
    Therefore a “Chernobyl Accident” will not cause damage outside the plat.
    3) The costs for power from coal, and especially from nuclear, are mainly fixed costs.
    Elementary economics will show that it is not the best to use coal and nuclear as back-up.
    Therefore:
    4) Back-up will usually be hydro or gas-fired plants.
  • Without subsidies,
    With very high economic penalties on pollution,
    And in an absolutely free market, nuclear would probably be able to manipulate the prices and kill the economics of renewables.
    Just as the subsidies to renewable is killing the economy of the rest.

3: Investors

But because conventional power plants are idle for long periods, they find it harder to attract private investors.
So, to keep the lights on, they require public funds.

Everyone is affected by this third factor:
Renewable energy has negligible or zero marginal running costs because the wind and the sun are free.

  • It is claimed, and usually neglected, that the wind-turbines, and especially the gears, have a limited life-time, which is markedly reduced during max loads.

In a market that prefers energy produced at the lowest short-term cost, wind and solar take business from providers that are more expensive to run, such as coal plants, depressing power prices, and hence revenues for all.

Get smart

The higher the penetration of renewables, the worse these problems get.
Especially in saturated markets.
In Europe, which was first to feel the effects, utilities have suffered a “lost decade” of falling returns, stranded assets and corporate disruption.
Last year, Germany’s two biggest electricity providers, E.ON and RWE, both split in two.
In renewable-rich parts of America power providers struggle to find investors for new plants.
Places with an abundance of wind, such as China, are curtailing wind farms to keep coal plants in business.

  • Wind farms in northern China are far away from stable regulated hydro.
    The necessary power lines are not cheap.

Re-regulate

The consequence is that the electricity system is being re-regulated as investment goes chiefly to areas that benefit from public support.
Paradoxically, that means the more states support renewables, the more they pay for conventional power plants, too, using “capacity payments” to alleviate intermittency.

  • Capacity payments has been introduced in England.
    In Germany the talk is about “scheduled black outs”.

In effect, politicians rather than markets, are, once again, deciding how to avoid blackouts.

Mistakes

They often make mistakes:
Germany’s support for cheap, dirty lignite caused emissions to rise, notwithstanding huge subsidies for renewables.
Without a new approach the renewables revolution will stall.
[See also http://wp.me/p1RKWc-11F ]

Technology

The good news is that new technology can help fix the problem.
Digitalization, smart meters and batteries are enabling companies and households to smooth out their demand — by doing some energy-intensive work at night, for example.
This helps to cope with intermittent supply.

  • Smart meters and variation in prices has been proposed, and rejected, some 40 years ago.
    See http://wp.me/p1RKWc-1tc
    Anyhow, whatever is done, it will have a limited effect.
  • For the time being, and for the foreseeable future, batteries will not be cheap enough to stabilize the grid for more than very short periods.
  • Much too often we are told, that “Small is Beautiful”.
    However:
    If larger plants cannot be economic, it will not be possible for smaller plants.

Small, modular power plants, which are easy to flex up or down, are becoming more popular, as are high-voltage grids that can move excess power around the network more efficiently.

  • Can smart grid save the fluctuating wind power?

  • In the discussion about wind power variation, it is often mentioned that ‘we just’ need to connect countries with a strong network of power lines.
  • April 2016 this problem was addressed by Sören Kjärsgaard.
    He provides a very thorough assessment of the energy situation, especially in Denmark and Germany.
    From this report is quoted as follows:
    It is evident that when you have said Wind power you have to say back-up too.
    Could this back-up be:
    European Wind Power connected by a super grid?
    ——– You find data from Austria, Belgium, Czech Rep.,
    ——– Denmark, Spain, France, Finland, Hungary, Poland,
    ——– Sweden and Germany:
    Over this huge area, the Wind Power fluctuates between
    56,512 MW and 3801 MW (7%).

    The answer will be NO – Unfortunately
    No matter, how much smart grid you get, it can not conjure a stable supply.

The power market

The bigger task is to redesign power markets to reflect the new need for flexible supply and demand.
They should adjust prices more frequently, to reflect the fluctuations of the weather.
At times of extreme scarcity, a high fixed price could kick in to prevent blackouts.
Markets should reward those willing to use less electricity to balance the grid.
Just as they reward those who generate more of it.
Bills could be structured to be higher or lower depending how strongly a customer wanted guaranteed power all the time—a bit like an insurance policy.

  • Sure, but as mentioned above, it will have a long way to go and will be of minor benefit.
    See http://wp.me/p1RKWc-1tc

In short, policymakers should be clear they have a problem and that the cause is not renewable energy, but the out-of-date system of electricity pricing.
Then they should fix it.

Postscript

Tysk solkraft variationFrom Germany: (right)
See http://wp.me/p1RKWc-f8
and
From the American “Sunshine-states”: (below)
Solenergi USA påvirker priser

If you say Chernobyl, then look at http://wp.me/p1RKWc-Dg
If you say Fukushima, then look at http://wp.me/p1RKWc-yI
Previously, I have tried to get to the same problem on the following:
Is “Western Nuclear” on its death-bead?
Why did nuclear end up to be so expensive?
Passionately, I claim that we have been cheated by “The Green”
Greenpeace’s Credibility is a Myth.

Mere KK mindre forureningIf you want to avoid (unnecessary) pollution.
Better do as in France.

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