Tuesday, September 11, 2018

how to sell an industrial wind turbine

The lovely thing about policies such as 60% renewables by 2030, and 100% carbon-free by 2045, is they provide easy messages to broadcast.

In my previous post I quoted David Roberts', "in what is effectively a climate Dark Ages in the US, California is carrying a torch." I've argued the state hasn't accomplished much to date, its additions of variable renewable energy resources (vRES) had been chunky and the rapid addition of solar over the past 5 years is unlikely to be sustained. My intent with the post was to show the path to 60% is not clear, but it's a lot narrower without broadening the connections with other states. Cost concerns are better addressed in this twitter thread, within which Cody Hill neatly summarizes the looming issues:
1. In-state wind is essentially built out already, leaving practically nothing but solar to build locally, which leads to major value deflation 
2. The fossil fleet is already struggling to stay solvent, and it is unclear what the best option is to maintain resource adequacy
California's goal is simple, but problematic.

Australia's former Prime Minister tried to sell a National Energy Guarantee (NEG) that was not simple - and that was a problem for him. I liked it a lot more than policies like 60% renewable, but The Australian noted, "Malcolm Turnbull risks all with NEG policy"

And then he was gone. Replaced by Scott Morrison (seen in "This is Coal").
New Prime Minister Morrison appointed Angus Taylor as energy minister (seen here addressing a sparse crowd at a 2013 National Wind Power Fraud Rally).

I find this astounding. I've been raising the alarm on the impact of industrial wind policy on Ontario rates for many years (ie.), and ran a blog for Wind Concerns Ontario for about 18 months. I understood the general population's support for renewables which appeared in poll after pool, but it appears that support may be a mile wide but less than an inch deep.

Opposition to wind may not be so wide, but it's passionate. Among the most disdainful of the industry is Australia's Stop These Things.

Ontario and Australia did not do well with cost containment while increasing vRES supply, and Stop These Things explains how Roger Pielke Jr.'s Iron Law presented itself in Australia:
The nonsense being spouted about adding more chaotically intermittent and heavily subsidised wind and solar to bring down power prices is a reflection of the desperation that’s spread amongst renewable energy rent seekers and the zealots, charged with marketing the purported merits of nature’s wonder fuels.
Panic is not a strategy, but what follows when it’s revealed that what was thought to be a strategy, turns out to be a one-way ticket to oblivion. And oblivion is where Australia’s wind and solar industries are headed.
The "nonsense" here may not be that renewables could bring down prices, but that the same people who have been promising that, as prices rose, continue marketing their product on that basis.

graphic from Stop These Things


Which brings me to the Canadian Wind Energy Association (CanWEA).

From CanWEA Responds to Ontario's Renewable Energy Announcements here are 4 quotes I'll demonstrate to be as nonsensical as anything Australia's wind salers could possibly have produced:

  1. Ontario’s wind energy projects are providing long-term, stable pricing for Ontario ratepayers.
  2. Wind energy is now the lowest-cost option for new electricity supply in Ontario, across Canada, and throughout much of the world.”
  3. "Wind energy and Ontario’s electricity prices – let’s destroy the myth" discusses how wind energy is a relatively small contributor to Ontario’s electricity bills. More importantly, wind energy’s costs continue to fall...
  4. Ontario will have a need for new electricity generation in the 2020s and recent procurements have demonstrated that wind energy is the lowest-priced option.
1, Ontario has not had long-term stable pricing, so wind, or anything else, providing it is impossible. The current rate relief being delivered to residential and other regulated price plan consumers in the form of the [un]Fair Hydro Plan comes at the expense of funds borrowed from future ratepayers.

2. Wind, by itself, is not an option for new electricity supply in Ontario - or Alberta. Everybody once knew sometimes it is windy and other times it is not before vRES proponents claimed it was always windy, and/or sunny, somewhere. Increasingly smart people are once again realizing it isn't always windy somewhere their grid reaches. So in Colorado, for instance, a utility puts together a package to replace 660 megawatts of coal capacity with 383 MW of gas, 275 MW of storage, 707 MW of solar and 707 MW of wind. Nobody should care what the 707 MW of wind, in itself, will cost - as it alone is not an option for electricity supply.

3. Wind is not a small contributor to Ontario's electricity bill increases, and its cost have not fallen in Ontario so they could not possibly continue to do so. Wind is now directly adding close to $2 billion a year to Ontario's electricity costs, and is obviously responsible for much of the cost increase during the last decade. Less obviously, it's per unit cost continues to rise.

As I concluded years ago in debunking bad commentary (which CanWEA continues to cite), "There’s not only a perception that renewables have been driving up bills, it’s really quite obvious that they have been."

4. Wind alone cannot be cited as the "lowest-priced" option for fulfilling a need "for new electricity generation" because wind alone cannot fulfill that need.

I have to wonder if CanWEA is using nonsensical sales pitches because its leadership doesn't believe there is a compelling value proposition. Annual capacity addition numbers indicate CanWEA's stale value proposition is no longer compelling to others, having plummeted from their peak in 2013-2014.

There are only two provinces that plan on adding wind where a genuine value proposition exists. 

Selling wind as fuel displacement generation is possible at the $37/MWh pricing seen in Alberta recently. While consumers will find $37 looks wonderful in comparison to what the wind lobby takes in Ontario, since 2008 even that price has been above the fuel displacement value where the avoided production is from an efficient natural gas fueled generator. According to a reference case from the National Energy Board, the $37/MWh would remain above fuel displacement costs in coming years too, but account for greenhouse gas emissions and the $37/MWh price will indeed provide consumers with value. 
To be clear, there is little value in VRES, in Canada, where there is no fuel displacement. That includes Newfoundland, B.C. Manitoba, and Quebec. Nova Scotia's energy minister has said they have no room for more wind, and Ontario, which often runs with no gas-fueled generators to displace, has a new Premier who campaigned on cancelling wind projects, and has acted on those promises. Alberta and Saskatchewan are the provinces with fuel to displace in the electricity generating sector, but it won't be easy to convince jurisdictions with coal and gas resources that displacing them deserves premium pricing.

CanWEA's membership might reconsider its leadership before their October conference. The talents that gathered exorbitant contracts from 2008-2012 are unlikely the same needed to lead a mature industry in delivering a product of genuine value.


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