Wednesday, April 2, 2014

Why NY State Need Wind in Big Way


For the last 3 months, we have seen the highest priced electricity in WNY’s Bulk market (NYISO) since Hurricane Katrina trashed our country’s natural gas supply in 2005. That was also the year of record profits for any power company running on coal or nukes in NY. It turns out that low production costs for old coal burners and paid off (but still really dangerous) nukes coupled to high methane prices is a recipe for printing money by the Megabuck then, and in 2008, and evidently in 2014, too. But with methane prices still in the proverbial pits and selling for less than what it often costs to produce it from expensive fracking based wells, well, what could be the reason for the big price spikes of late? Here are the gory details in a graph:

It turns out that when NRG mothballed most of its Dunkirk and about half of the Huntley facilities, WNY had to now IMPORT more than a third of the electricity consumed in this region, most likely from Homer City, Pa (a 2200 MW coal burning facility). But when the recent cold weather came and power demands in Pennsylvania used up the former’s “excess”, well we in WNY had to fend for ourselves. And this meant we had to use expensive methane based electricity from local and regional producers who were able to charge some pretty outrageous spot market prices (sometimes more than 50 c/kw-hr for some short periods of time). And because of the way the NYISO system prices things, even coal burners with a production cost near 3 c/kw-hr got to charge 50 c/kw-hr for that hour. What a neat racket, eh? Well, like they say, nice money if you can get it…

The net result is average prices that have been running at 3 to 4 c/kw-hr have for January through March from 2009 to 2013 now averaged near 9 c/kw-hr in Zones A and B (West and Genessee). But methane only averaged around $5/MBtu, and it should only cost around 6 c/kw-hr to make electricity for those periods of time that it was needed (which is not that often), before adding the profit  But did a 46c/kw-hr profit really have to be added?. This is what happens when an oligopy morphs into a de-facto monopoly – monopolists can get really high prices and some seriously large profits, because there effectively is NO COMPETITION. Which is fine for the corporations concerned, as they hate competition in the market for the product they make, but they love it for their suppliers…

Anyway, if you want to get reasonable electricity prices, this is where wind turbines could and should come in in a huge way. Wind turbines can tame monopoly prices in NYISO like markets like nothing else can, and there is a just history and mass of empirical data wrapped up in a concept called the “Merit Order Effect”. Wind sourced electricity has clobbered the rip-off profits obtained by coal burning power companies in Europe, and they could do it here, too. The reason is due to the fuel cost of wind turbines – which is zero. And we also have a pretty massive capability to store any excess electricity made via pumped hydro, (and to deliver 1680 MW from the two instate PH units plus 560 MW from some nearby across the border facilities). So buffering variable wind to variable demand is not a problem, and that does not even include tapping our hydro units or Quebec as needed in a pinch.

If we don’t start installing some competition to those incestuous fossil fuel twins – natural gas and coal – for our regional electricity supply, we are going to get royally screwed by some de-facto monopolies that supply some of our electricity. We will be paying prices over twice what Long Island averaged last year. Part of this is because both NRG and AES decided that they no longer want to “play the ponies” – gamble on future electricity prices – and that they will go where they can be assured of predictable future prices. Heck, as long as they get power purchase agreements that cover their costs and allow them to hit their profit targets, they will install (and have installed) PV (California) and especially wind turbines (Texas). They don’t care how they make electricity, just that they get a power purchase agreement so that they can sell this electricity at a known and knowable price. After all, lost they a lot of money or barely broke even in the last four years in a really competitive electricity market, even but definitely missed their profit targets. And they are not charities.

The present high prices are what happens when fossil fuels and nuke sourced power generators have no competition, and that gets coupled to fluctuating methane prices. But with a lot more wind turbine electricity installed not only we could provide that competition and get lower average wholesale prices, but we can recycle money locally that is now exported to pay for out of state sourced fuels, or exported to Entergy and Constellation for their inherently dangerous nukes that were bought on the cheap and have been long since paid for. That export of money makes all of us POORER, and that is really something most of us could do without in these trying Austerity driven economic times. And with wind turbines, there is the possibility of new job creation in both the installation and manufacturing of them, especially if we in NY own these turbine installations. Oh, by the way, there no chance of a Fukushima or Chernobyl style epic disaster repeat if wind is used as our major electricity source, and we won’t trash out planet’s climate control system via the CO2 pollution that comes from leaking methane and CO2 emanations, either.

So what is needed to get around the major hosing we are experiencing from pollution sourced electricity that provides next to nothing in the way of jobs for the over $350 million spent in just the last 3 months for our electricity? Actually, we just need long term price security for local and regional renewable electricity supplier owners – the local transmission monopolies need to offer up lots of long term Power Purchase Agreements (PPAs), as is done in states like Iowa, where Warren Buffet owns the local electric monopoly. And if neither Iberdola (NYSEG, RGE) nor National Grid will do it, maybe we can have the Peoples Power Company of NY (NYPA) put their (= OUR!) money where their mouth is. And whether those PPA’s are provided by Feed-In Tariffs or just long term contracts, well, getting the installations up and running is what is important. And that is not happening now, nor will it for AT LEAST the next two years unless we get some change for the better, soon.

So, it’s an election year. Time to squeeze some political hopefuls, perhaps, as this IS the best time to do it. If you also want reasonable and predictable electricity prices upon which we base our civilization, we have to move away from the Casino and 3 card Monty game that is NYISO and variable natural gas prices coupled to old, paid off coal burners and nukes. The actual cost to deliver wind based electricity in WNY WITHOUT SUBSIDIES is less than 9 c/kw-hr, as long as a reasonable and PREDICTABLE prices can be had for the delivered product. And it gets that way because wind turbine owners (and that could also be municipalities and NYPA, too) can lower the cost of borrowing money significantly if they could just know what their future cash flow was going to be. Variable pricing is meaningless with wind turbines, because the cost of production is set on the first day of operations. The money cost (reasonable rates for bank loans/bonds/investors or loan shark rates when future prices are always a gamble) is a really big deal for renewable energy. For the wind biz, varying fuel prices are irrelevant, as is the situation when the wells and mines deplete and do not get replaced. Fixed electricity prices - it’s such a 21st century thing. So when does WNY wake up and join the 21st century?

Sunday, March 30, 2014

A More Sensible NY Liquid Fuels Policy


Top image of Vette's at Watkins Glen Raceway from http://www.corvetteblogger.com/images/content/2012/070212_1.jpg. Race cars need  high compression engines to deliver maximum power per pound of weight, and ethanol delivers in a way that even pure and ultra toxic benzene can’t do. But of course, ethanol is best placed in the fuel tank, and not used to get the driver tanked. See also http://rtec-rtp.org/2012/09/08/high-octane/, http://www.americanenergyindependence.com/alcoholengines.aspx and http://www.edn.com/electronics-news/4372860/Indy-engines-still-pack-a-700-HP-punch. Getting 700 hp out of a 2.2 liter engine ONLY comes using high compression ratios, made possible via ethanol’s 113 octane and its greater cooling capacity due to it higher latent heat of vaporization that for hydrocarbons. See also http://www.epa.gov/otaq/presentations/sae-2002-01-2743-v2.pdf for an awesome article…..

It turns out that NY State residents, governments (we have lots of them, plus “quasi-governments" like the Port Authority of NY and NJ, too) and corporations collectively now spend around $25 billion per year for petroleum fuels. Since all of that comes from “elsewhere”, that means we import unemployment INTO NY State and export income and wealth in return for getting our fix of liquid fuels, which are almost exclusively used for transportation energy. And whether that is to Pennsylvania or North Dakota or a wretched kleptocracy like Nigeria or Equatorial Guinea, it really does not matter. Money and wealth go out, and we don’t get much of it back unless people and companies in those places are dumb enough to take that oil money and try their luck in “gambling” on Wall Street. Like WC Fields said when asked if that was a game of chance (he was playing cards with some others at the time), WC said “not the way I play it”, but after people and institutions get taken to the cleaners by the likes of Goldman Sachs and JP Morgan Chase and lots of others for decades, how long will they continue to play? Besides, an increasingly smaller portion of the “Golden Crumbs” are escaping the NY City metro region and more importantly, from the high rollers whose salary and bonuses are contingent of new or the same old suckers coming back for a further financial extraction - so what really does that benefit MOST NY’ers? We shovel out increasingly large amounts of money out of state, and some of that comes back and is extracted by a tiny portion of really rich people and some less rich people who worker for the owners of these “Gaming Houses”.

Now, you may want to rail on about the evils of liquid fuels, but it is tough to argue against their usefulness as a transportation fuel. Whether non-toxic (biodiesel, ethanol) or bad to the bone stuff made from that evil swill from the Alberta Tar Sands Sludge, it is liquid fuels as an energy storage system that now seems universal, available in most every place, and there are so many APPS for them….. This is energy easy to store, easy to use, easy to meter, easy to buy, and its a lot easier to deal with an empty tank than the horror that Frank Zappa described of when the batteries fail ....

And since the average price that oil is going up is 14%/yr on a long term basis (doubling every 5 years), few of us can keep up with that rate. This scheme to hoover up money from the vast majority of NY’ers (especially the bottom 80% of income earners) and shove it into the already stuffed to the gills bank accounts of the upper 1% is not only unsustainable and economically ruinous, it is also bad news for our climate. About 58% of the CO2 and CO2 equiv pollution (10.45 tons CO2 equivalent per NY resident - which is MOSTLY from burning fossil fuels) is petroleum based (2011 statistics - see http://www.nyserda.ny.gov/BusinessAreas/Energy-Data-and-Prices-Planning-and-Policy/Energy-Prices-Data-and-Reports/Energy-Statistics-and-Weather-Data/Energy-Statistics.aspx). For the 127.7 billion vehicle miles traveled using 168.7 million bbls of diesel oil and gasoline, our statewide average is 18 mpg, which is really pathetic (weighed down by trucks that get low fuel mileage).

So all this money (and in 5 years from now, likely to be $50 billion/yr) going out the exhaust pipe and down the proverbial drain has a double whammy - it fuels Global Warming related disasters like Frankenstorm Sandy and it makes us poorer. But hey, some of us do get to drive around in a car, and quite often experience the joys of traffic jams (too many cars, too few roads, even when we can’t really afford any new roads). And some of us might even get lucky in the car or via the car, so that’s got to make it all worthwhile, right? But can’t we get “lucky” without going broke and trashing the climate system of our planet in the process?

Well, perhaps we can. Worldwide, we are at a situation called “Peak Oil” - where the world can no longer pump out crude oil at faster rate. And the supplies are now coming from increasingly depleted oil fields, or from new ones that are costly (often in more ways than just money) to exploit. Right now about 85 million bbls/day are pumped out worldwide, but only around 35 mvd are available for export from countries producing more than they consume. The world experienced “Peak Net Oil Exports” of 40 mvd in 2006. This is important because the world oil price is not set by the total amount of oil pumped but by the total available for export. More buyers and less oil for export means higher prices. And it means we can pay $100/bbl for oil that costs $80/bbl to extract in North Dakota, $70/bbl for “Canadian Crud” tar sludge sands stuff or $15/bbl crude from the seriously depleted North Slope of Alaska oil. All oil is more or less priced at the same level (with some quality related variations) - but guess which is the most profitable?

But in NY State, we make no crude oil and we don’t even refine crude oil any more. We use around 138 million bbls/yr (mby) of gasoline, 31 mby of diesel, 17 mby of jet fuel (= kerosene) and 5 mby of “Bunker C” (mostly for ships), or 191 mby (8 billion gallons/yr). We do make about 165 million gal/yr of ethanol, but that is not quite 4 mby. Anyway, $25 billion/yr down the drain now, $50 billion/yr in 5 years, $100 billion/yr in a decade form now - that’s going from around 2.5% of state GDP to around 9% of state GDP a decade from now. Talk about Stupid on Steroids….. And it might just work out to be economically better off to pay a bit more for fuel if it happens to be renewable AND made in our state, too. It's that recycling of money effect..... so if you're looking to create more businesses and jobs WITHIN NY, this might be a promising way to go...

One way around this  predicament of our woeful liquid fuels state in NY would be a concerted effort to both get more transit out of what we use and also make what we use from renewable sources - mostly plants and trees grown in NY State. Given the way our society in NY has evolved (or devolved - and both can occur at the same time), we are not getting away from liquid fueled transport any time in the near future. And since a huge percentage of what used to be agricultural land is no longer that, growing energy crops at a much larger rate than is now done is quite possible in NY. This would also help reverse or at least slow the “population bleed” trend from rural to metro regions, and that now happens largely because there is no legal (and “meth growing” does not count) way to earn a  decent living in rural areas.

Actually, there is a way to “staunch the economic bleeding” that is the import of crude oil products into NY in return for ever larger quantities of money, and it is not as hard as it is made is made out to be. First there has to be a will to do this, and than there are lots of ways, some which may be less palatable than others, some that are job creation, and others that are continued Austerity for the bottom 80% of NY’s income pyramid.

One approach to do this is the “50% x 50%” approach, which would reduce liquid fuels consumption to 25% of present levels. In this, fuel mileage would be doubled (combined average of cars and trucks from 18 mpg to 36 mpg) and the number of vehicle miles traveled per year by fuel consuming vehicles would drop by 50% (to around 64 billion vehicle-miles/yr). And it is basic math that 50% x 50% = 25%. Raising the mileage is pretty easy and much of it means less truck traffic/more car diesel traffic. As it turns out, a lot of truck vehicle miles traveled are on long distance (especially Interstates), and it makes more sense to put the truck trailers on railroad cars, and then use trucks for local deliveries. It turns out that trains (especially freight trains) can be electrified (a diesel locomotive uses a diesel engine to power an electric generator that in turn powers an electric motor, so converting trains to non-pollution based wind turbine/hydroelectricity is easy. And it is also massively job creating, too. On the people transport aspect, the metro NY City region already has around 3.5 million train riders per day. That system needs not only expansion but other cities need to regain what they used to have - trolleys or “light rail” systems, ones subsidized seriously by state income tax (= mostly on rich people) monies. After all, a lot more people will ride public transit if a ride only costs 50 cents and a round trip is $1 and not $2 for a oneway and $4 for round trip. Odds are, most of that money would be recouped as economic gain because of who it is that uses public transit - poor and middle class people. Money not spent of public transit fares is money spent on food and beer (among other things) which gets recycled back up the money change but stimulates the economy just like an increase in the minimum wage would do. Eventually, as higher fuel prices collide with stagnant incomes, people will tend to more next to transit lines, or will do things like walk, ride bikes or just not drive/go anywhere. And more intercity rail means less airplane usage, which is a GOOD THING, fuel-wise. More people could also use electric cars, which also means less  fuel usage, though those tend to be expensive and are only good for zipping around in a local metro region.

So that could crunch the fuel DEMAND for cars and trucks down from 6 billion to around 2 billion gallons/yr or to 42 million barrels per year (mby), of which 4 mby is already “homegrown” (1.9% of present demand, versus around 10% nationally). So we might now need 38 mby of fuel to be supplied from NY’s farms. Can we do it, and quickly? Yes we COULD…. though remember, fuel prices are still likely to be set by oil prices, prices that will likely be a LOT higher in the future, and which bear little resemblance to the actual cost that it takes to get it out of the ground and refine it/deliver it. There really are no bargains in the fuels business any more….

For example, if we had ethanol plants producing in NY at the “national per capita level” (45 gal/person-yr), about half of our reduced demand could be supplied using modified existing corn to EtOH technology. The one change needed would be to use corn stover as the heat source to run these facilities, instead of natural gas (the current arrangement). EtOH has an octane rating of 113, and it can be used in high compression engines by itself or with “crap grade gasoline”. By using engines with 19:1 compression ratios instead of 9.5:1 ratios (limited by the octane rating of gasoline), engine efficiency can be close to doubled. Well, that solves THAT problem… We would only need 6.5  more EtOH facilities like the large one (110 mgy) we have. Of course, they would need a raw material supply - the present 2 EtOH plants use 57 million bushels/yr of corn, and to make 880 million gal/yr, 304 million bushels/yr would be needed. That means NY’s corn (or sorghum, or sugar beets, etc) crop would have to rise from ~ 325,000 acres (508 sq miles) to 1.73 million acres (2708 sq miles), which is around 5.8% of the area of NY’s land. In addition, if the CO2  by-product of this was hydrogenated/converted to EtOH (using wind turbines and water to make the H2 for the hydrogenation), another 360 million gal/yr of EtOH could be made. That means 70% of NY’s “future” liquid fuels are homegrown, and renewable. That would also be a serious stimulus to NY’s agricultural sector. And the extractable corn oil from these EtOH facilities would be worth roughly 1 million barrels of biodiesel/yr, especially if it was in its “ethyl” ester form.

Anyway, efficiency, conversion to electric powered transportation (especially freight trains and inter-city rail to minimize jet plane usage and lastly a lot more mass transit (electric) in urban areas) plus 6 large and one medium EtOH facility get us to a 70 % renewable fuels usage. The remaining fuel can be obtained from cellulose, probably via some mix of pyrolysis and/or pyrolysis-hydrogenation or else via cellulosic alcohols. On promising way to “loosen up” cellulose has been found via heating biomass (stover, hay, wood) in a slightly acidified glycerol-water mix. This process separates the protective lignin and hemicellulose from the cellulose part of wood. As it turns out, “unprotected” cellulose is then easily hydrolyzed into glucose with the cellulase enzyme. And glucose is easy to ferment into EtOH.

A strong push for biofuels would also create a demand for oil producing plants, such as canola an northern peanuts, soybeans and other oil-seed crops. These are really easy to convert into ethyl biodiesel, and the non-oil portion tends to be a high protein high notional value food, now made into a “lite” less fatty form. These allow more of a mix of crops to be grown and sold, and lots of food products and/or animal feeds can be made from them. And that is really great for NY’s economy and its rural areas. All of that food grown would also require fertilizer plants, and so maybe NY could get a “renewable ammonia” facility, where wind and hydropower plus water would supply the hydrogen for the ammonia. In that way we could free a lot of farmers from the addiction to petroleum - biodiesel and ethanol for tractors, wind power sourced ammonia for the fixed nitrogen fertilizer, electrified trains to haul crops to markets, lots of fuel crops to boost agricultural demand, wind power sourced hydrogen to reduce the CO2 by-product from fermentation, and corn stover powered EtOH facilities. Who knows, maybe some biomass to electricity co-gen facilities to balance out fluctuations in wind based electricity that can’t be easily accommodated by pumped hydro energy storage - especially in the summer.

Oh well, that’s a plan. And just remember, compared to gasoline (with its SIGNIFICANT benzene content) and diesel, EtOH and biodiesel are health food, Or compared to Tar Sands sludge based “dilbit”, even gasoline is pretty mild by comparison, and benzene containing gasoline is most definitely a proven carcinogen. But, if you have a better plan, lets us know, and don’t keep it a secret. And please, none of that jive about coal based syngas to fuels, or methane from natural gas made into liquid fuels or worse yet, using methane as a direct fuel. The only thing that makes less sense is the use of hydrogen gas as a fuel. If you want to go that route, why not just use ammonia, the “other” hydrogen fuel, but the one that gets no respect. But anyway, before NY is spending 10% of its GDP on imports of oil from hostile nations like in the Middle East or Texas, we’d sure like to hear a plan, man…..



End pictures from http://www.statoil.com/en/newsandmedia/multimedia/features/pages/hydrogensociety.aspx. This H2 and wind system on an island has been going since 2004.... And a fine source for the hydrogen needed to hydrogenate CO2 into EtOH.....

Saturday, March 29, 2014

Wind Starts Looking Pretty Good in a Crunch...


The Siemens B75 blade in manufacturing. Siemens recently announced it will build these in the British port city of Hull, also generating another 1000 jobs. Good for them….

The Ukraine is a funny place, sort of. For now, it is a place largely being run by competing "bad guys" - just villains. There are no heroes who wield any power or significant say in the outcome of things, and some of these villains seem to have a lot of Nazi baggage associated with them (actually, so does the US… see http://www.dailykos.com/story/2014/03/08/1282812/-The-Butcher-of-Lyon and http://www.thenation.com/blog/179057/seven-decades-nazi-collaboration-americas-dirty-little-ukraine-secret). And for a mostly landlocked nation located far from the Baltic Sea and Atlantic Ocean, it may have a dramatic effect on the offshore wind business in Western Europe, not to mention the onshore wind biz in Europe. The threat of getting about 25% or more of its methane supplies cut off not by the Russian suppliers of that gas but by Ukrainians desperate for money to pay for stuff imported from Russia (oil and methane) and Europe (manufactured goods, especially from Germany) SHOULD have European leaders worried. And it is via only wind turbines that they can free themselves from vulnerability to this Ukrainian hostage taking arrangement.

Ever since the Ukraine "went into play" thanks to a combination of lots of US and European Union "investment", lots of hatred of Russians by some Ukrainians, lots of pilfering of the Ukraine by a few Ukrainian "oligarchs" and the inevitable response by the Russians to NATO's expansion plans into the Ukraine, once again energy became a big deal. The Ukraine's claim to fame is that it is the troll on the bridge between Russian crude oil and natural gas and the demand for that stuff in western Europe, without which prices for oil and gas would skyrocket. And while world oil prices would go up around $20/bbl is Russia's 7 million bbls/day exports got cut back by half, the effect on the rest of the world if gas deliveries got curtailed in Europe would mostly be a European phenomena. For example, North America would probably benefit if methane prices rose suddenly in Europe, as our stuff could be made at lower costs and stuff made in Europe would get more expensive. And since LNG prices would also go up, Japan would also be at a disadvantage compared to the US and Canada.

So, those in Europe charged with keeping supplies used for chemical manufacture, heating and electricity made from methane got a big wake-up call. It does not matter that they who helped instigate the Ukrainian coup - they also were also going to be the ones to plunge the Ukraine into a massive recession/economic depression via imposition of "Austerity" measures/Shock Doctrine economics. That is because the "deal" that the previous pro-Russian leader and all around crook passed on was going to do the following:

1. Raise oil and methane prices in the Ukraine
2. Cut the pensions (and this affects about one third of the country) and welfare benefits significantly of Ukrainians
3. Close "uneconomic" factories that also compete with European manufacturers, largely wiping out most manufacturing in this country, and unemploying millions in the name of "efficiency"
4. Sell off much of the prime agricultural land to foreigners, which is the Ukraine's most valuable asset, especially if EWl Nino trashes the world wheat crop this year....
5. And with massive NEW unemployment on to of the massive EXISTING unemployment levels, balancing the national budget will be impossible. Think Greece's present massive socio-economic slide but on steroids (The average Greek's standard of living has DROPPED by at least 25% in the last 3 years steroids - see http://www.nakedcapitalism.com/2014/03/know-greeces-present-state-affairs-update.html). And since the Ukraine is already technically in default on $US 75 billion worth of debt….

If you were starving and freezing (and odds are, there will be winters where it does get really cold in spite of Global Warming) and you only had one way to get money (via ransoming the oil and gas pipelines between Russia and Europe), what would you do? Willingly starve and freeze to death, or watch your children, older relatives and neighbors die off while Europe lives large? Especially after you country is used to enrich the already rich of Europe, and to employ otherwise unemployed Europeans making stuff that was formerly made in the Ukraine? What would you do if you were in their shoes?

So, Western Europe is going to be looking at having to pay more for the delivery of methane and oil. And they will have to be the ones paying Russia for any gas and oil that crosses the Ukraine-Russia borders. Of course, such arrangements decay quickly into a very toxic arrangement, and this will only make the already legendary corruption in the Ukraine even more prominent. Plus, what if the Russians, for example, "buy back" the more industrialized portions of the eastern and southern Ukraine, just leaving a deindustrialized rural land controlled by ever poorer, ever more desperate and ever more right wing (and with associated Nazis) in control. Well, wouldn't that be special…?

Of late, the fossil fuelers (and right wingers) were more or less exacting a revenge against the wind industry in Europe, because it had gotten too darn successful. The profits of Germany's "big 4" electrical generation companies have crashed of late due to wind replacing so much natural gas which prevents leectricity prices from spiking. Without spiking prices (especially in the afternoon where solar can kick in on those rare days when it is sunny), coal and nuke based electricity generation is no longer super-profitable, or even a break-even proposition. In Spain, wind is the largest source of electricity (about 21% of the national supply - see http://www.rtcc.org/2014/01/06/wind-power-generated-largest-part-of-spains-electricity-in-2013/) - at times wind provides 60% of Spain's electricity. In Denmark, wind now supplies close to 33% of the country's electricity, and at times is completely wind powered (http://www.energinet.dk/EN/El/Nyheder/Sider/2013-var-et-rekordaar-for-dansk-vindkraft.aspx). The recent stormy winter has shown that wind power fits the British Isles "to a tea". But that trend has been stopped with the almost complete cessation of new wind turbine deployment in Spain and Portugal, delays in France, right wingers in control in the Netherlands and ditto for Italy (along with that dreaded Austerity. In Britain, a hyper expensive nuke option was conjured up by the Conservatives, in spite of popular hatred of nukes in Britain (see http://stophinkley.org/NewsIndexNNB.htm). Evidently, the offshore wind success was extremely threatening to "the power establishment". Things like this - 1000 new jobs in Hull to make 75 meter long offshore wind turbine blades (246 feet, so big that barges are the only way to move them) - kind freak out the nukies who seem to think that they own the country…. http://www.theguardian.com/business/2014/mar/25/siemens-wind-turbine-production

In Germany, the offshore wind push (a $100 billion capital investment/massive economic stimulus) was supposed to be funded by (mostly) large power companies and utilities. These are the only private entities with the balance sheets and financial strength/resources able to do the billion to four billion Euro investments needed for offshore wind farms (a 400 MW project costs around $US 1.8 billion). However, these companies can no longer afford these because their rip-off profits via the Merit Order Effect have turned on them. Their high profit rates were based on supplying "base load" power from coal and nukes for 2 to 4 c/kw-hr and using natural gas priced so that 8 to 12 c/kw-hr is needed to cover those costs. Whenever the gas burners turned on, prices for electricity would spike while costs for MOST of their electricity made would stay flat. It was a money machine (NY has the same problem). But with wind and PV dropping daytime prices and wind often pushing prices into negative realms during high wind-low demand periods, profit rates AND stock prices have plunged. Oops. So now these massive companies cannot do as much offshore wind (their only edge in the very competitive German electricity market) development with its massive capital outlays without their stock price taking a beating. And we know that won't be allowed…

Recent experience with new offshore wind farms has shown that capacity rates in the 45% to 55% can be expected. as the wind resource seems to be even better than estimated. In addition, offshore winds are incredibly steady, and for many months of the year, these wind turbine arrays will never stop generating electricity, even for a minute. In effect, a widely dispersed set of arrays becomes "baseline power". And because of the Feed-In Tariff system, this electricity displaces both nukes AND coal based electricity. So there goes the profit model upon which they became such massive companies, worth several tens of billions in some cases. In fact, they are now being forced to shout their all paid off investments, and they are NOT happy about it, at all. They have called in their favors to the conservative politicians that, in effect, they own, and until the Ukraine situation spewed upon the world scene, they were becoming very successful. Many investments in offshore wind projects were being delayed, Spain and Portugal have essentially killed off their wind businesses and domestic installations, Britain had gone insane with their twin nuke agreement (at 16 c/kw-hr plus over-runs for 35 years!). Germany was in the process of killing off onshore wind (where big companies have close to zero presence) and paring back offshore wind via fiddling with their FIT prices.

But, what if their gas ration gets cut back? The supplies from the North Sea and the even bigger Ormonde field offshore of the Netherlands are depleting faster than new ones can be found in a significant manner. Evidently the iranian gas supplies (or from Qatar) will not be available to Europe via pipeline. And LNG supplies are still super pricey, with high prices for the world market set by Japan, India and China. So, if Europe wants to keep its workers employed in manufacturing that requires a lot of electricity, and to also replace methane used for heat with electricity powered heat pumps, where will its LOW COST electricity come from? Solar won't cut it, and biomass will be increasingly diverted into liquid fuels.

Well, as Bob Dylan did prophesy, the answer to that particular problem is truly blowing in the wind. Nothing else has the capacity to supply the bulk of Europe's electricity at anywhere near as low a cost, and the hundreds of thousands of people employed in the businesses making the supplies, assembling the parts and installing them is definitely a blessing. It's also a great export business. Europe is presently THE leader in the wind turbine technology. Even Chinese slave-labor based turbines cannot compete in the European market, where quality counts and cheapness is like an addictive drug, and not a sustainable habit. Nukes are SO passé these days thanks to Chernobyl, Fukushima and massive cost over-runs that cause financiers to flee in horror at the mere mention of new nukes.

Of course, in the land of free and the home of the pee test, where we have one of the most awesome wind resources in the world (on and offshore) compared to the population size, we aren't doing so good with respect to installing wind turbine, either, but then we don't have the prospect of desperate, bankrupt, freezing and starving Ukrainians holding a big chunk of our methane supplies ransom until they get a better cut of the "Euro action". Necessity can be a mother with a bad attitude, but it sure can put an end to complacency, fast.

End Picture - the test version of the Siemens 6 MW wind turbine (75 meter blade, 100 meter tall tower) being installed in Scotland. These puppies cost around $24 to $30 million installed offshore, each. A $1 billion football stadium is equivalent to around 40 of these, which would make enough electricity to supply all of the people, industries and government entities in the City of Buffalo. But we sort of suspect that good choices are in short supply around these parts. And it turns out that we are not alone in that characteristic. Go figure…..  






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