wind farm economics and impact - Page 2

Ronald Brak · #31 (**permalink**) 13-July-2008, 02:58 PM

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Actually, according to Wikipedia, proven natural gas reserves are 172 trillion m3. And the US DoE (Department of Energy) lists the world's reserves, as of 2006, at 220.4 trillion m3.

Sorry about that. I made a stupid error converting from cubic feet to cubic meters. I feel like a NASA mars probe. Consumption is about 2.9 trillion cubic meters a year.

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This is absolutely meaningly without referencing timelines and factoring in the time value of money and alternative energy sources, supplies and costs, cost of environmental impact and post-energy production costs for both as well as the alternatives...

$4,400 is the cost per kilowatt of capacity of the new reactors. It is the overnight cost, not including interest, as if the plant were built overnight.

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Let's take a look at your math...

You seem a little confused on this point. You might want to reread what I wrote.

mugaliens · #32 (**permalink**) 13-July-2008, 05:24 PM

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Originally Posted by Ronald Brak

Sorry about that. I made a stupid error converting from cubic feet to cubic meters. I feel like a NASA mars probe. Consumption is about 2.9 trillion cubic meters a year.

That gives us about 65 years, but only at current consumption rates. Since rates are expected to steadily increase to 150% of current rates by 2040, we're down to absolutely nothing (rock bottom) by the mid 2040s, just thirty years from now, and about the same time we run out of oil.

Instead of patting our backs about how "much" time we have left, wouldn't it be more prudent to realize fossil fuels are a rapidly approaching dead end and work towards eliminating our dependance on them well ahead of before when we need to do so?

I would think that a smooth transition would be highly preferential to chaotic, knuckle and back-scraping roll beneath the proverbial lowering gate just before it slams shut.

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$4,400 is the cost per kilowatt of capacity of the new reactors.

Ah. "Of capacity" puts a different spin on things...

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It is the overnight cost, not including interest, as if the plant were built overnight.

In finance and accounting terms, it's known as the "initial cost," and for long-term ventures, is usually small in comparison to ongoing operating costs.

Furthermore, initial costs by themselves are meaningless, and throwing costs out there as potential scare barriers is seen by some as disingenuous, unless they're appropriately associated with the rest of the balance sheet and income statement.

For example, I'd happily pay a trillion dollars in cost over a decade if my profit was a quadrillion dollars.

mike alexander · #33 (**permalink**) 13-July-2008, 05:50 PM

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Mugs noted about wind farms:
Yes, they're an eyesore. I say so and so do most who live near wind farms which have turned beautiful countrysides and visual landscapes into what looks like a toddler gone crazy with a stamp and some white paint.

Perhaps. But one generation's eyesore can become the next's quaint view. All those Constable paintings of the green and serene English countryside are the result of aggressive deforestation of Britain, followed by clearing and piling the native stones into moss-covered walls. The same holds true in New England, where the weathered buildings and lovely old mills represent massive local alterations of the serene original environment.

And on a visit to Texas once I asked my uncle how he felt about all those oil wells messing up the view, and his reply was, basically, how are they messing it up? He seemed to feel the only way to improve the view would be to add a bunch of cattle grazing among the pumps.

Demigrog · #34 (**permalink**) 14-July-2008, 02:55 AM

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Originally Posted by mugaliens

2. Nuclear - Jobs (and continued ones, too, as most windmills are all but maintenance-free).

Not sure where you get that idea; rule of thumb is 2 maintenance jobs per about 12 modern turbines or so (varies a lot, but about that on average). Maintenance is a nightmare on most wind farms. Getting better, but if you go a whole day without someone having to climb a tower it is a minor miracle. Just look at my avatar if you don't believe me.

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Originally Posted by mugaliens

For every "win" you come up with wind power, I can find two wins for nuclear, along with an advantage nuclear has that wind does not.

Wind's primary advantage (and it's a doozy) is its modularity. You don't have to sink $4 Billion into a wind farm all at once, you can buy small chunks of capacity. That mitigates risks considerably and makes it easy to invest in. Nuclear, on the other hand, requires a massive investment many years in advance of any rewards. Only a few large utilities can afford to build them, and usually only at pre-existing sites in the near-term.

All of this is moot, really, because both Nuclear and wind will be built in large numbers as fast as possible for the foreseeable future. It's all the same to me, really, as I am lucky enough to work in both industries.

Demigrog · #35 (**permalink**) 14-July-2008, 03:53 AM

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Originally Posted by Ronald Brak

There isn't a nuclear power plant in the world that isn't make to provide baseload power. Can you name one peaking nuclear plant? France exports base load power, including to the UK, and imports peak power. As for cost effective, France demonstrates that nuclear power is only economic for low emission base load power.

Not strictly true; some reactor designs like the ABWR can be turned down or used for load following (which I’ll grant isn’t peaking, but certainly isn’t pure baseload). It just rarely makes sense to do so, as existing nuclear plants are by far the cheapest things on the grid and there are not very many of them. You want to keep them at peak capacity as much as possible. France is the only real exception, as they have no choice but to use load-following; that is one reason that their capacity factor is a surprisingly low 77%.

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Originally Posted by Ronald Brak

The price of nuclear power is dropping. However, currently, the price of wind power is dropping faster. Note that the estimated cost of two new nuclear reactors to be built in South Carolina, without interest charges are $4,400 per kilowatt.

The thing you have to consider in nuclear construction costs is that we’re talking about first-of-a-kind designs and the first ones to be built in the US in a long time. Subsequent plants will cost less. Also, inflation affects PV coal and wind turbines as much as Nuclear plants. (You’d be surprised how much concrete goes into building a wind turbine.) The price of wind power also has a lot of variability; don’t forget that as we use up the best locations, the cost of wind per MW will go up significantly. That said, Wind still has plenty of room for improvement in O&M costs, economy of scale, and grid management.

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Originally Posted by mugaliens

Furthermore, initial costs by themselves are meaningless, and throwing costs out there as potential scare barriers is seen by some as disingenuous, unless they're appropriately associated with the rest of the balance sheet and income statement.

Overnight cost is the standard way of showing construction costs. If you want the total lifetime costs, you look for the levelized cost of energy. Unfortunately, LCOE is a pain to calculate and also very dependent on assumptions--which makes it hard to compare LCOE numbers from different sources. Generally though, new Nuclear has about the same LCOE as new pulverized coal, while Wind is comparable to natural gas.

Len Moran · #36 (**permalink**) 14-July-2008, 08:51 AM

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Originally Posted by mike alexander

Perhaps. But one generation's eyesore can become the next's quaint view. All those Constable paintings of the green and serene English countryside are the result of aggressive deforestation of Britain, followed by clearing and piling the native stones into moss-covered walls. The same holds true in New England, where the weathered buildings and lovely old mills represent massive local alterations of the serene original environment.

And on a visit to Texas once I asked my uncle how he felt about all those oil wells messing up the view, and his reply was, basically, how are they messing it up? He seemed to feel the only way to improve the view would be to add a bunch of cattle grazing among the pumps.

Yes, one generation's forced acceptance turns into the next generation's willing acceptance. So far our national parks have escaped the intrusion of wind farms leaving those mountainous areas falling outside of that protection easy prey to this form of urbanizing our few remaining open tracts of mountains and moorlands. It seems unimaginable to me now, but it is not impossible to think that a few generations down the road, even our national parks will fall prey to wind factories (that's a far more apt term I think than the rather quaint sounding "farms") simply because of what you say - one generation's eyesore can become the next quaint view. But it takes us several more steps down that road whereby we loose touch with the raw beauty of landscape, where less and less people will see and feel a landscape that is worth preserving in a form that is as much as possible free from the intrusions of our industrial society. Mountainous landscapes are our last retreat, true, many have changed their form from being heavily wooded in the lower regions to actively grazed clear areas, but they are still large open areas that allow one to escape now and then to a world that restores our link with landscape and the ancient past - a mountain peak, cliff, valley or lake are features (if you let them) that link you deeply to a time unimaginably distant from us, but it's a tenuous link, easily disturbed by intrusions from our industrial age. It's not just about the view being spoiled or not, it is about this intrusion of one world into another. The further we go down that road, the further we move away from a type of landscape that every generation should be entitled to sample.

mugaliens · #37 (**permalink**) 14-July-2008, 06:15 PM

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Originally Posted by mike alexander

Perhaps. But one generation's eyesore can become the next's quaint view. All those Constable paintings of the green and serene English countryside are the result of aggressive deforestation of Britain, followed by clearing and piling the native stones into moss-covered walls. The same holds true in New England, where the weathered buildings and lovely old mills represent massive local alterations of the serene original environment.

And on a visit to Texas once I asked my uncle how he felt about all those oil wells messing up the view, and his reply was, basically, how are they messing it up? He seemed to feel the only way to improve the view would be to add a bunch of cattle grazing among the pumps.

Excellent points, Mike. You have my applause!

I agree with your points (I've been to New England and have walked through English countryside, albeit albeit between the air base and a bar...).

However, I still think the skinny white plastic fans are an eyesore. And unnecessary given the available alternatives.

mike alexander · #38 (**permalink**) 14-July-2008, 07:43 PM

Speaking of windmills, I thought of all those Dutch School paintings full of them.

And to reply to Len Moran: Len, I was making an observation, not necessarily condoning it. Although I admit I personally find them attractive, or at least not offensive. Certainly less so than a large coal strip mine. And note that last statement is aesthetic, not necessarily practical.

neilzero · #39 (**permalink**) 14-July-2008, 08:02 PM

I've been following wind power, a few hours per year for 30 years. I don't think the first wind turbine instalation has reached pay back yet, but the ecconomics look good for the near future. Expensive failures were common until recently. With some subsidies, most of the present breed should make money for all concerned, before they need to be decomissioned.
I don't find them an eye sore, but I have a little sympathy for persons who don't want the view to change. Each turbine makes about as much noise as a typical home air conditioner, so they are not deadly silent, but neither are cows, birds, frogs, crickets nor airplanes. Large numbers of big turbines will require construction of more high tension power lines. Typical power companies may not want to pay more than two cents per kilowatt hour (average) as the wind and thus the electricity can stop with seconds warning. The big coal and nuclear plants are poorly adapted to supplying power in spirts. Gas turbines can be on line in one minute, but that may mean some homes loose power for a few seconds. Solar typically gives minutes instead of seconds warning that power will drop to near zero. Perhaps a hundred wind speed gages (surounding the wind farm) connected to a computer can predict most wind stopping 5 minutes in advance, but that will add significant cost.
North Dekota is an other great place for steady wind, but like New England, ice, snow and storms are significant hazards.
Wind shear or gusts to 70 knots put the investment at high risk, so the computer forgets about making steady electricity and concentrates on saving the wind turbine and it's tower. Neil

mugaliens · #40 (**permalink**) 14-July-2008, 08:57 PM

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Originally Posted by neilzero

Perhaps a hundred wind speed gages (surounding the wind farm) connected to a computer can predict most wind stopping 5 minutes in advance, but that will add significant cost.

Each windmill's turbine output is sent to a central computer, which monitors windmill's rpm, output, various strain guages, etc., and can override the windmill's programming and shut it or others down in a heartbeat. Thus, if an unexpected gust front slammed into one edge of a farm, central would automatically feather the blades and keep them pointed into the wind.

This flow of information obviates any need for any additional wind speed guages.

neilzero · #41 (**permalink**) 14-July-2008, 11:40 PM

I think my 100 wind speed, and wind direction gages are much better for both purposes. 100 chances to detect an approching tornado minutes before the first turbine is threatened. The computer can notify the regional load handler that power will be reduced in 4 minutes, perhaps to zero. 4 minutes may be long enough for the regional load handler to find power it can purchase to replace the power from the wind farm and/or start some off line gas turbines. In 2 minutes the computer may be able to guestimate how many wind turbines need to come off the grid, for how many minutes.
With only data from turbines, some wind turbines need to be taken off the grid with in seconds of first warning instead of 4 minutes. The shut down message will reach the regional controller about the same instant that his insturments show the megawatts from the wind farm is dropping. The wind farm contribution to the grid may be zero, by the time this is identified as a tornado, and the off grid time can be guestimated. The tornado can do a lot of damage even with the props featherd as the wind direction will not be predictable, until this is identified as a tornado. It will likely take more than a second to rotate the turbine 180 degrees to keep the blades facing into the wind. Neil

Len Moran · #42 (**permalink**) 15-July-2008, 12:55 AM

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Originally Posted by mike alexander

And to reply to Len Moran: Len, I was making an observation, not necessarily condoning it. Although I admit I personally find them attractive, or at least not offensive. Certainly less so than a large coal strip mine. And note that last statement is aesthetic, not necessarily practical.

Sorry, I didn't mean to imply that you were condoning the true observation that you made, I probably picked up on it rather strongly because I can see the aesthetic issues of wind turbines evoving in the way you describe - and this does disturb me for the reasons I gave in my post.

Demigrog · #43 (**permalink**) 15-July-2008, 03:54 PM

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Originally Posted by neilzero

I've been following wind power, a few hours per year for 30 years. I don't think the first wind turbine instalation has reached pay back yet, but the ecconomics look good for the near future. Expensive failures were common until recently. With some subsidies, most of the present breed should make money for all concerned, before they need to be decomissioned.

As somebody said earlier, the break-even point is usually 7 years at least according to plan. A large chunk of the cash flow to equity can be from tax incentives, though—both accelerated depreciation and the per-kWh tax incentive. For example:

90MW farm with a $1.15 million per MW cost,
38% capacity factor,
2.93 cents/kWh electricity wholesale price increasing 2% per year, 20 year life
10 year production tax credit of 1.8 cents per kWh,
50% bonus tax depreciation, and
$30k/year O&M

will break even in: 7.5 years. About a third of cash flow to equity in this scenario is actual sales of electricity. As you can see, a lot of assumptions have to go into any estimate of profitability.

(I pulled this example from a presentation which I cannot post, unfortunately. It was from 2003, so the exact numbers have changed a bit for a representative site).

Quote:

Originally Posted by neilzero

The wind and thus the electricity can stop with seconds warning. The big coal and nuclear plants are poorly adapted to supplying power in spirts. Gas turbines can be on line in one minute, but that may mean some homes loose power for a few seconds. Solar typically gives minutes instead of seconds warning that power will drop to near zero. Perhaps a hundred wind speed gages (surounding the wind farm) connected to a computer can predict most wind stopping 5 minutes in advance, but that will add significant cost.

We put anemometers on select towers in the wind farm to measure wind speed. That data is fed into the Wind Farm Management software, which makes decisions affecting the farm in general. More advanced WFM software tries to minimize impact on the power grid by using predictive algorithms to manage the farm in low and high wind situations. I’ll be doing more WFM stuff in the near future, but I’m still pretty green on the subject, or I’d get into more detail.

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Originally Posted by neilzero

I think my 100 wind speed, and wind direction gages are much better for both purposes. 100 chances to detect an approching tornado minutes before the first turbine is threatened.

In practice, tornados have not been much of a problem. The turbines are spread out enough that the tornado generally misses them completely. A large one would be fun, no doubt, but we have not yet had one hit a wind farm.

The rest of what you’re describing is what WFM software does, with varying degrees of maturity in design in different sites. The level of grid integration you’re talking about is the current cutting edge of the technology.

mugaliens · #44 (**permalink**) 15-July-2008, 08:18 PM

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Originally Posted by neilzero

I think my 100 wind speed, and wind direction gages are much better for both purposes.

Why would you think that, when each and every windmill on the farm does the same thing, for no additional cost? If there are 500 windmills, there are 500 sensors.

And keep in mind while a farm may be a bunch of windmills here, there's another farm with a bunch more over there, all of which are linked to a central computer programmed with various algorithms to take maximum advantage of the winds while minimizing any damage.

korjik · #45 (**permalink**) 15-July-2008, 08:26 PM

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Originally Posted by Demigrog

As somebody said earlier, the break-even point is usually 7 years at least according to plan. A large chunk of the cash flow to equity can be from tax incentives, though—both accelerated depreciation and the per-kWh tax incentive. For example:

90MW farm with a $1.15 million per MW cost,
38% capacity factor,
2.93 cents/kWh electricity wholesale price increasing 2% per year, 20 year life
10 year production tax credit of 1.8 cents per kWh,
50% bonus tax depreciation, and
$30k/year O&M

will break even in: 7.5 years. About a third of cash flow to equity in this scenario is actual sales of electricity. As you can see, a lot of assumptions have to go into any estimate of profitability.

(I pulled this example from a presentation which I cannot post, unfortunately. It was from 2003, so the exact numbers have changed a bit for a representative site).

We put anemometers on select towers in the wind farm to measure wind speed. That data is fed into the Wind Farm Management software, which makes decisions affecting the farm in general. More advanced WFM software tries to minimize impact on the power grid by using predictive algorithms to manage the farm in low and high wind situations. I’ll be doing more WFM stuff in the near future, but I’m still pretty green on the subject, or I’d get into more detail.

In practice, tornados have not been much of a problem. The turbines are spread out enough that the tornado generally misses them completely. A large one would be fun, no doubt, but we have not yet had one hit a wind farm.

The rest of what you’re describing is what WFM software does, with varying degrees of maturity in design in different sites. The level of grid integration you’re talking about is the current cutting edge of the technology.

The tornado question is an interesting one. Would a tornado taking out part of a wind farm be more expensive that a tornado nailing a coal plant?

Larry Jacks · #46 (**permalink**) 15-July-2008, 08:39 PM

The tornado question is an interesting one. Would a tornado taking out part of a wind farm be more expensive that a tornado nailing a coal plant?

That is an interesting question. Wind turbines are pretty tough and the blades can feather when the wind gets too strong. Still, a direct hit by a tornado would probably destroy the blades at least. As for coal plants, the ones I've seen look pretty rugged but they'd probably be off line for some time, especially if the cooling tower is damaged.

In addition to the cost of repairs, you have to consider the loss in electric sales while the wind farm or power plant is offline. One thing about wind turbines is that you don't have to wait until all of them are repaired before you can generate any electricity - as soon as the first one is operational, you're back in partial business. I doubt the same can be said for a coal powered plant.