Nation's largest wind project approved
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Iowa is only 30th in population, but 2nd in the US for installed wind capacity. Why? This:
http://www.nrel.gov/gis/images/80m_wind/USwind300dpe4-11.jpg
Consistent strong winds, and reasonable proximity major population centers along the Lakes and the Mississippi means they make a lot of energy and have good market access.
I looked up a few existing major wind farms in Iowa via the EIA state profile page. All of them beat 35% capacity factor, and a couple topped 40%, which is very good performance for a wind farm. The monthly production figures are winter biased, which is good for supplying heating demand, but even the mid-summer production was typically decent.
http://www.nrel.gov/gis/images/80m_wind/USwind300dpe4-11.jpg
Consistent strong winds, and reasonable proximity major population centers along the Lakes and the Mississippi means they make a lot of energy and have good market access.
I looked up a few existing major wind farms in Iowa via the EIA state profile page. All of them beat 35% capacity factor, and a couple topped 40%, which is very good performance for a wind farm. The monthly production figures are winter biased, which is good for supplying heating demand, but even the mid-summer production was typically decent.
Ah, our friendly old Uncle Warren again....MidAmerican Energy is a subsidiary of Berkshire Hathaway Energy.
To his friends on the left he's a renewable energy hero.
To his friends on the right he says this:
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
http://www.usnews.com/opinion/blogs...buffet-admits-wind-energy-is-a-bad-investment
To Congress after they extended the Wind Tax credit in 2015:
“Berkshire Hathaway Energy commends Congressional leaders for including multi-year extensions of the wind production tax credit and the solar investment tax credit in the omnibus bill. These policies will provide a critical level of certainty and continuity that will encourage ongoing private investments in wind and solar energy resources at lower costs for customers.” – Kyle Davis, Director, Congressional Relations, Berkshire Hathaway Energy
http://www.awea.org/MediaCenter/pressrelease.aspx?ItemNumber=8254
Or in other words: 'Aw shucks, thanks for the $132M/year tax writeoff for the next 10 years',
(my estimate at 2 GW*35%CF*2.2cents/kWh.)
In other news, he was against the Keystone Pipeline (environmental hero), just after he cornered the market on trains to carry tight oil between the Bakken and the refiners. The ones that are so broken down and badly engineered for the task they tend to explode (environmental goat).
And don't forget Berkshire Energy is the one killing solar net metering in Nevada (and perhaps in other states soon):
http://www.greentechmedia.com/articles/read/berkshire-hathaway-skeptical-about-distributed-energy
Hero, or goat?
To his friends on the left he's a renewable energy hero.
To his friends on the right he says this:
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
http://www.usnews.com/opinion/blogs...buffet-admits-wind-energy-is-a-bad-investment
To Congress after they extended the Wind Tax credit in 2015:
“Berkshire Hathaway Energy commends Congressional leaders for including multi-year extensions of the wind production tax credit and the solar investment tax credit in the omnibus bill. These policies will provide a critical level of certainty and continuity that will encourage ongoing private investments in wind and solar energy resources at lower costs for customers.” – Kyle Davis, Director, Congressional Relations, Berkshire Hathaway Energy
http://www.awea.org/MediaCenter/pressrelease.aspx?ItemNumber=8254
Or in other words: 'Aw shucks, thanks for the $132M/year tax writeoff for the next 10 years',
(my estimate at 2 GW*35%CF*2.2cents/kWh.)
In other news, he was against the Keystone Pipeline (environmental hero), just after he cornered the market on trains to carry tight oil between the Bakken and the refiners. The ones that are so broken down and badly engineered for the task they tend to explode (environmental goat).
And don't forget Berkshire Energy is the one killing solar net metering in Nevada (and perhaps in other states soon):
http://www.greentechmedia.com/articles/read/berkshire-hathaway-skeptical-about-distributed-energy
Hero, or goat?
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I've made some of the same arguments elsewhere, and I'm not changing my tune on them. However, I'm upbeat about this and many other wind projects in the Midwest. Also, my thoughts and yours about Warren Buffett are tangential to the matter.
The developer says this project will cost $3.6 billion for 2 GW nominal - $1.80/W. This is near the low end of the current capital cost range ($1.50 to $2.70/W) - after rising for a while when demand for new hardware spiked around 2005, costs are on a downward trend again. The 35% capacity factor that seems to be typical in Iowa is a non-trivial amount above the average of 30%.
At a 5.5% interest rate for 20 years, that works out to $0.048/kWh. There should be another 1 to 1.5 cents in there for operation and maintenance costs (including the $1.2 billion in projected land lease payments another article on the project mentions) - putting the total estimated levelized cost at $0.058-0.063/kWh, before the production tax credit. That's in the ballpark of forecast levelized cost of energy for new coal or gas plants, although slightly above the forecast for existing plants.
The downside is wind is not scheduleable. That's why I mentioned the seasonal bias above. Because Iowa, I'm fairly certain, has strongly winter-biased demand (roughly 5x as many heating degree days annually as cooling degree days) to match wind's winter biased supply in the area, it looks like the region can integrate a fairly significant percentage of wind before the value takes a significant hit due to the challenges of integrating the non-scheduleable supply with a variable demand.
The overall point of this post is I think Iowa will be one of the regions of the country where it still makes financial sense to install wind turbines even after the production tax credit is phased out.
In the meantime, they're going to rake in a ton of money from that tax credit, as Buffet noted.
(some supporting data for my math came from here: https://www.irena.org/documentdownloads/publications/re_technologies_cost_analysis-wind_power.pdf )
The developer says this project will cost $3.6 billion for 2 GW nominal - $1.80/W. This is near the low end of the current capital cost range ($1.50 to $2.70/W) - after rising for a while when demand for new hardware spiked around 2005, costs are on a downward trend again. The 35% capacity factor that seems to be typical in Iowa is a non-trivial amount above the average of 30%.
At a 5.5% interest rate for 20 years, that works out to $0.048/kWh. There should be another 1 to 1.5 cents in there for operation and maintenance costs (including the $1.2 billion in projected land lease payments another article on the project mentions) - putting the total estimated levelized cost at $0.058-0.063/kWh, before the production tax credit. That's in the ballpark of forecast levelized cost of energy for new coal or gas plants, although slightly above the forecast for existing plants.
The downside is wind is not scheduleable. That's why I mentioned the seasonal bias above. Because Iowa, I'm fairly certain, has strongly winter-biased demand (roughly 5x as many heating degree days annually as cooling degree days) to match wind's winter biased supply in the area, it looks like the region can integrate a fairly significant percentage of wind before the value takes a significant hit due to the challenges of integrating the non-scheduleable supply with a variable demand.
The overall point of this post is I think Iowa will be one of the regions of the country where it still makes financial sense to install wind turbines even after the production tax credit is phased out.
In the meantime, they're going to rake in a ton of money from that tax credit, as Buffet noted.
(some supporting data for my math came from here: https://www.irena.org/documentdownloads/publications/re_technologies_cost_analysis-wind_power.pdf )
Thanks for doing the calculation.
To balance my earlier cynicism, here is some more upbeat wind news:
http://rameznaam.com/2016/08/17/wind-power-blowing-more-reliably-than-ever/
http://rameznaam.com/2015/08/30/how-steady-can-the-wind-blow/
It discusses an NREL study that says that as turbines get taller, their capacity factor increases as well as their power output. For current EU state of the art sized turbines, the study suggests that some US sites will have 60% CF (!!) and many will be at 50% or better. Also, the amount of the resource in the US, and its distribution are much larger than in studies from 10 years ago for shorter turbines. Since these are also cheap (already) who needs offshore?
In other words, costs have fallen since 2011 (when there was a little hiccup peak), can still fall further, CF can improve massively...wind is hitting its stride in the US.
Corollary: This suggest that the dinky turbines, like the ones I see in isolation all over southern New England, by the above logic are junk machines trying to farm the PTC, the local REC market or otherwise greenwash a project. This agrees with posters' stories here about these projects often losing money, being poorly engineered, resold after construction, etc.
Not all wind projects are created equal.
My guess would be that Uncle Warren did his homework, and those turbines will last at least 10 years, and he will make his investment back and a healthy return beyond the PTC.
To balance my earlier cynicism, here is some more upbeat wind news:
http://rameznaam.com/2016/08/17/wind-power-blowing-more-reliably-than-ever/
http://rameznaam.com/2015/08/30/how-steady-can-the-wind-blow/
It discusses an NREL study that says that as turbines get taller, their capacity factor increases as well as their power output. For current EU state of the art sized turbines, the study suggests that some US sites will have 60% CF (!!) and many will be at 50% or better. Also, the amount of the resource in the US, and its distribution are much larger than in studies from 10 years ago for shorter turbines. Since these are also cheap (already) who needs offshore?
In other words, costs have fallen since 2011 (when there was a little hiccup peak), can still fall further, CF can improve massively...wind is hitting its stride in the US.
Corollary: This suggest that the dinky turbines, like the ones I see in isolation all over southern New England, by the above logic are junk machines trying to farm the PTC, the local REC market or otherwise greenwash a project. This agrees with posters' stories here about these projects often losing money, being poorly engineered, resold after construction, etc.
Not all wind projects are created equal.
My guess would be that Uncle Warren did his homework, and those turbines will last at least 10 years, and he will make his investment back and a healthy return beyond the PTC.
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I think we will have a lot of dispatchable loads (EVs, smart water heaters, etc) and cheap grid storage options within a decade, so I am not so worried about intermittency long term. I think it might hit the economics for the next decade, but those costs are in fact the opportunity that will lead to the solution...grid storage and dispatchable load development.
I also agree completely about the importance of seasonal loads....cost effective seasonal (versus diurnal) storage may still be a long ways off.
IMO solar is great and might be the cheap winner (eventually), and is vast in terms of the resource, but I think wind is better for several regions of the continent, like New England and Eastern Canada, that will want most of their energy (in a future RE-powered economy) in the winter, for heating legacy housing stock. I found the NREL info about wind (above) the be quite heartening. So, if that works out, we could imagine seasonal loading out east favoring VERY LARGE onshore wind turbines, with intra-regional transmission, instead of offshore wind (costs still unknown) or transcontinental solar PV energy coming in from the SouthWest.
Here is an nrell study showing the eastern us could get a third of its power from renewable energy
http://www.vox.com/2016/8/31/12721206/eastern-us-30-percent-renewables
There are some great graphics... looks like it will reqire new tranmission lines to dispatch excess from one iso to another..but no new technologies
From the graph it looks like most of the wind comes from the plains states
http://www.vox.com/2016/8/31/12721206/eastern-us-30-percent-renewables
There are some great graphics... looks like it will reqire new tranmission lines to dispatch excess from one iso to another..but no new technologies
From the graph it looks like most of the wind comes from the plains states
Turbines need a coupe of things to make them a good fit.
-Incentives tied with state renewable portfolio standards so the utilities have to buy the power
-Access to transmission lines that someone else is paying to upgrade (t Boone Pickens Wind plan wouldn't fly unless someone else pays for the transmission lines and the reason Texas has so much wind as they built transmission lines. Maine has great resource but they keep running out of transmission capacity
- Good wind resource (offshore wind is about the best and most reliable resource)
-Incentives tied with state renewable portfolio standards so the utilities have to buy the power
-Access to transmission lines that someone else is paying to upgrade (t Boone Pickens Wind plan wouldn't fly unless someone else pays for the transmission lines and the reason Texas has so much wind as they built transmission lines. Maine has great resource but they keep running out of transmission capacity
- Good wind resource (offshore wind is about the best and most reliable resource)
That's a thing that surprised me about the nrell study...very little offshore wind
I'm gonna disagree. The latest findings are that taller onshore machines (in good sites) have capacity factors just as good as many offshore sites, and are likely to always be cheaper.
I can think of several states that have a LOT of renewable energy, but weak RPS plans. If expensive RECs in MA just get people to build crappy, small turbines to get the RECs in crazy suburban sites, near I-95, etc, it risks turning off a lot of people there to the technology (not unlike the Cape Wind leadership of MA for offshore). Sometimes doing things badly is worse than not doing them at all.
I used to work for Northern Power one of bigger suppliers of the small 100 KWt urbines that have popped up all other southern new England. They offered a popular option to install an electric motor to turn the blades when the wind wasn't blowing. The sales folks held their nose and sold "boutique" machines to keep the cash flow going. It was great design for wind diesel solutions in Alaska but I agree that many of the turbines in southern New England are far more PR machines rather than actual generators.
I have seen the PR for the super sized land based turbines having higher capacity factors but I also see how Europe is deploying a lot more offshore wind. Large scale land based wind turbines are currently limited by the infrastructure used to deliver them and the limitations of the size of the cranes used to erect them. The nacelles are as big as they can be for over the road transport. There is also the limitation that the transmission loss gets high when the turbines aren't near the demand. There is no real limitation on off shore turbines on size as there is no highway infrastructure limiting the size of equipment. There is also a major demand for power along the coast so transmission losses are going to be less.
I have seen the PR for the super sized land based turbines having higher capacity factors but I also see how Europe is deploying a lot more offshore wind. Large scale land based wind turbines are currently limited by the infrastructure used to deliver them and the limitations of the size of the cranes used to erect them. The nacelles are as big as they can be for over the road transport. There is also the limitation that the transmission loss gets high when the turbines aren't near the demand. There is no real limitation on off shore turbines on size as there is no highway infrastructure limiting the size of equipment. There is also a major demand for power along the coast so transmission losses are going to be less.
Last big government news in Ma is a call for 1600MW of offshore wind...contractors are lining up... the republican governor signed off
Nothing crappy or small about these babies
http://nawindpower.com/mass-bill-calls-for-1600-mw-of-offshore-wind-opens-commercial-market
The construction cost of offshore wind is still too high compared to the US cost of energy to get much traction on their own. In Europe, things are a bit different. Their more limited gas and coal resources and higher political pressure (including energy taxes) keep the costs of those sources higher than in the US. A few countries there also have particularly good offshore winds and large coastal areas to build them on. The higher population density leaves fewer onshore locations where wind farms would not affect significant numbers of people.
All those factors together have made offshore wind much more viable in Europe than in the US.
As an example for cost, the largest offshore farm in the world so far is the London Array in the Thames estuary. This was a relatively good site, because although the bottom is silty, they were able to use relatively modest steel pipe monopiles up to 19 foot diameter x 210 foot long, driven into the seabed as foundations, the water depth was 80 feet or less, and it was close in so transportation costs were relatively low. The estuary is also somewhat sheltered from rough sea conditions that would have complicated the construction work.
It was 1.8 billion pounds in 2013 (conversion rate at the time worked out to $2.8 billion USD) for 630 MW. So at $4.4/W capital cost, it has a nominal cost/capacity of almost 2-1/2 times that of the Iowa farm we're discussing. On the plus side, it has been averaging 45% capacity factor, which is 1-1/2 times the typical level for onshore wind, but that's not enough to make up for the higher cost on volume alone.
All those factors together have made offshore wind much more viable in Europe than in the US.
As an example for cost, the largest offshore farm in the world so far is the London Array in the Thames estuary. This was a relatively good site, because although the bottom is silty, they were able to use relatively modest steel pipe monopiles up to 19 foot diameter x 210 foot long, driven into the seabed as foundations, the water depth was 80 feet or less, and it was close in so transportation costs were relatively low. The estuary is also somewhat sheltered from rough sea conditions that would have complicated the construction work.
It was 1.8 billion pounds in 2013 (conversion rate at the time worked out to $2.8 billion USD) for 630 MW. So at $4.4/W capital cost, it has a nominal cost/capacity of almost 2-1/2 times that of the Iowa farm we're discussing. On the plus side, it has been averaging 45% capacity factor, which is 1-1/2 times the typical level for onshore wind, but that's not enough to make up for the higher cost on volume alone.
"The construction cost of offshore wind is still too high compared to the US cost of energy to get much traction on their own."
Probably helps that Ma utilities will be required to purchase the 1600 MW of offshore wind over 20 years
Probably helps that Ma utilities will be required to purchase the 1600 MW of offshore wind over 20 years
Mr._Graybeard
Feeling the Heat
I was up in central North Dakota (Stutsman County) this month. They are building some spectacular wind turbines up there -- 300-foot towers with turbine blades 120 feet long. They're three times as big as the towers I see here in Wisconsin.
According to this story, the wind farm will generate 200 megawatts of electricity at a cost of $300 million. It's one of several massive wind farms going up in ND,
To gain a little perspective, I looked to the coal-fired Oak Creek (Wis.) power plant in my area, built in the last decade. It cost $2.3 billion and has a net summer generating capacity of 1,135 megawatts.
So for a basic cost/benefit, analysis, I look at the development cost of the wind project at $1.5 million per megawatt. The Oak Creek plant cost a little over $2 million per megawatt. The Oak Creek plant needs coal to function, of course, while the input cost of the wind turbines is zero. The farmers who let the wind towers go up on their property will get a nice check every year, but I suspect that expense will pale in comparison with trainloads of coal.
My cousins in Dakota know everybody up there (not that many people to know), so they drove us to the railhead where they were unloading the turbine components for a close-up look. The turbine blades were carried on two flatcars, one of which had an eccentric turntable on it to allow the blade to swing out when the train went around curves. Pretty impressive.
According to this story, the wind farm will generate 200 megawatts of electricity at a cost of $300 million. It's one of several massive wind farms going up in ND,
To gain a little perspective, I looked to the coal-fired Oak Creek (Wis.) power plant in my area, built in the last decade. It cost $2.3 billion and has a net summer generating capacity of 1,135 megawatts.
So for a basic cost/benefit, analysis, I look at the development cost of the wind project at $1.5 million per megawatt. The Oak Creek plant cost a little over $2 million per megawatt. The Oak Creek plant needs coal to function, of course, while the input cost of the wind turbines is zero. The farmers who let the wind towers go up on their property will get a nice check every year, but I suspect that expense will pale in comparison with trainloads of coal.
My cousins in Dakota know everybody up there (not that many people to know), so they drove us to the railhead where they were unloading the turbine components for a close-up look. The turbine blades were carried on two flatcars, one of which had an eccentric turntable on it to allow the blade to swing out when the train went around curves. Pretty impressive.
DBoon
Minister of Fire
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