Wednesday, October 19, 2011

Industrial Wind - Really, and Proudly So

Heading east from Cleveland....

If you travel from east of Cleveland to west of Cleveland via I-90, there is a new sight that comes up in the town of Euclid, Ohio (which is a couple miles east of Cleveland). At the manufacturing facilities of Lincoln Electric, a brand new 2.5 MW wind turbine on an 80 meter tall tower just got installed this summer. Lincoln manufactures welding systems of all kinds, and a lot of welding is used in wind turbines, notably in the steel towers and in the nacelle. And so this might be blatantly self-serving, but this is also good business by Lincoln Electric - see http://www.lincolnelectric.com/en-us/company/Pages/company.aspx

For some nifty picture of the turbine, see http://tmi.digitalcolorinternational.com/index.php/2011/06/16/graceful-lincoln-electrics-wind-turbine/

The wind turbine is made by Kenersys (now an Indian owned company, as some Indians bought out the German Kenersys company). The Kenersys wind turbine was designed in Germany by some people who used to work at other wind turbine companies (and if any US company wants to, they can purchase these plans for a small fraction of the cost needed to design one from (more or less) scratch). Of course, you can also purchase a design for wind turbines from AMSC (formerly American Superconductor Company) and their European subsidiary, Windtec (see http://www.amsc.com/windtec/index.html). In fact, almost all Chinese and Indian wind turbine companies, or companies that make these (and to some extent, India's largest wind turbine company, Suzlon, who also own most or all of RE Power) have purchased European technology (notably German, Danish and Dutch). This can also come with the DESIGN OF THE FACTORIES needed to manufacture the towers/blades and/or nacelles, and some key major components.

So, the only excuse for American manufacturers not making more turbines is.... bad renewable energy pricing systems in the U.S. After all, who wants to plunk a bunch of money down and then lose it all? There is now over $2.5 TRILLION in corporate cash stashed in banks earning miniscule interest rates, supposedly "looking" for a viable investment opportunity, so lack of money does not cut it as an excuse, but the lack of a viable investment that this money could buy is VERY REAL. By the way, that $2.5 trillion would be buy 1,000,000 MW to 1,250,000 MW of wind turbine capacity (depends if it is "regular" or Low Wind Speed Turbine - LWST - designs), or roughly equal in output to the present average consumption of electricity in the U.S. Of course, if all that presently unused cash was actually used for something productive which increases the real wealth of our country (as wind turbine manufacture and installation does), then there is a multiplier effect on our national wealth and well-being, as well as some serious job creation that would take place if this "project" of using that stashed booty for something useful was to happen over, for example, a 20 year period.

Here is a bit about Kenersys: http://p57320.typo3server.info/KENERSYS-Profile.23.0.html and
http://p57320.typo3server.info/Synerdrive-Technology.21.0.html. According to this article (http://www.ien.com/ienblog.aspx?id=168128), the tower was made in Nebraska, the blades in Poland and the nacelle (and probably most of the parts in the nacelle) in Germany. The K100 x 2.5 MW unit ( see http://p57320.typo3server.info/K100-2-5MW.20.0.html) has a 100 meter rotor, and with a "power ratio" of 3.14 square meters per kilowatt of generator capacity, this qualifies as a regular to fast wind speed turbine. It is estimated to supply about 10% of that manufacturing facility's electric needs, or between 500 to 750 kw on average. This is a pretty large manufacturing site (5 major buildings), with a combined electricity usage averaging 5 MW to 7.5 MW, and about the size of a large auto manufacturing complex.

Welding is used in so many applications these days, and it is integral to modern manufacturing societies (ships, cars, pipelines, buildings, factories, roads, railroads, for example). Industry and our society as we know it is not possible without the ability to join metal parts together by welding, and just about every kind of metal can be welded under the right circumstances. So, Lincoln Electric and the community of Euclid are rightfully proud of their new addition (and the tax breaks to Lincoln for this installation aren't too shabby, either).

In so many instances the term "Industrial Wind Turbine" is used in a pejorative manner. It is an insult, a way to instill fear and loathing, and a way instigate a knee-jerk automaton response of terror from key rural community members - especially those who approve PILOT agreements, and approve environmental reviews/zoning changes or who rule local communities. After all, most of the land needed to install wind turbines, and the windiest regions, too, happen to exist in rural areas. Just try to Google the term "industrial wind" and a litany of horrors upon "fact" and "scientific" method can be seen - or else classic examples of weaseling, propaganda, Orwellian language manipulation, framing, and how to misrepresent, confuse and obfuscate can be seen. Remember "infrasound?" How about the "spinning reserve" jive in a state like NY, where we have over 1680 MW of pumped hydro available in state (and lots more nearby) and another 1000 MW of instant hydro capacity at Niagara Falls. Wind turbine generators also have "spinning reserve", too... As for the avian arguments... mostly "gone with the wind". Now it's all down to something very subjective - sound, and more importantly, "perceived sound", and especially the argument over "who owns the view?" And as for who is financing anti-wind arguments, websites that tend to all look alike/use the same bloggers/authors and "fact tours"/slick talking points, well, sometimes you can find coal, oil, natural gas and nuke money, straight up or else often disguised as various non-profit "Institutes" (e.g. "Heartland", "Competitive Enterprise", "Cato"), "Foundations" (Bradley, Olin, Heritage) and the like. Oh well, so much for that digression...

Wind turbines that make electricity at the lowest cost are big, no doubt about it. Another term for wind turbines that make electricity at minimum real (subsidies not included) costs is "commercial scale wind turbines". Small units may be a lot less expensive (a few thousand dollars) as compared commercial scale units (a few million apiece), but when you examine the electricity production cost, small units make more expensive energy than the big boys. This Kenersys unit cost over $5 million to buy and install, and one of the key items in keeping the electricity production cost close to that made by large coal and old nuke facilities in Ohio (at about 3 to 5 c/kw-hr, also heavily subsidized and long since paid off) is the MACRS rapid depreciation tax deduction (Lincoln probably used the Section 1603 30% grant instead of the Production Tax Credit, or PTC). That MACRS incentive is worth over $2 million in avoided taxes in the next 6 years, but that is the way the U.S. chooses to make wind turbines economically viable, or at least less non-viable. However, the U.S. system is vastly inferior to pricing systems like Ontario's or Quebec's.

This new turbine at Lincoln will replace purchased electricity, as it is a "behind the meter" use displacing electricity that includes the connection and transmission cost, as well as the cost to make that electricity elsewhere. The electricity made by the K100 unit is still vastly less expensive on a real basis (subsidies ignored) than would ever be the case with solar PV, a biomass plant, or even new coal and nuke plants. And who's to say what the price for natural gas will be in 20 years, aside from "unpredictable"? However, the cost to make this wind sourced electricity will be perfectly predictable throughout the next 20 years, and probably for some time after that, too.

So, industrial wind and proud of it. If you don't like industrial, consider a place without "industrial", like, for example, Somolia. "Industrial" can buffer us from heat, cold and drought - for example, seawater could be made drinkable with either solar distillation units (welding, piping, pumps, motors, glass) or reverse osmosis plants (powered by wind turbine derived electricity) in a place like Somolia. Most of the people in that semblance of a country are now experiencing a horrible drought as well as a very uncivil "civil war" that is more or less a survival of those who have water access contest and weapons. This horrid conflict will kill millions (and perhaps the majority of those presently residing there) with either bullets, drought, famine, thirst and/or disease often brought on by those other perils. A little "industrial" could be very helpful with respect to potable water from the ocean, not to mention distributing it. "Industrial" also brings us modern forms of birth control, which prevents wild surges in human populations whenever they get food and water. "Industrial" definitely needs some societal supervison, but industrial also allows civilization as we know it to exist, including telecommunications and computers, so "tweet that!". Maybe civilization on a world awash with 6.5 billion human beings is really the target of those opposed to "industrial wind turbines". What do you think?

Tuesday, October 11, 2011

The 2011 Ontario Elections and Renewable Energy


http://members.shaw.ca/cjgaughan/prince_wind_farm_photo_gallery.htm
The Prince Wind Farm, on the shore of lake Superior, installed 2006, made possible with a 20 year Power Purchase Agreement (PPA) - owned by Brookfield Renewables:
http://www.brookfieldpower.com/_Global/5/documents/relatedlinks/730.pdf

Introduction
Last Thursday Ontario had their provincial elections, and about the only winner was Ontario's Green Energy Act (GEA). The liberals lost several seats to both the conservative Tories (PC) and to the New Democrats (NDP), who are actually a lot more liberal/progressive than the Liberals generally are.

The breakdown of votes is starkly geographical. The NDP won the north country (very industrial - mining and forestry) and some industrial areas like Hamilton, the Tories (alias PC) won the suburbs and most of the farming regions in southern Ontario, while the Liberals won big in the cities of Toronto/urban/some industrial regions in metro Toronto, Windsor, Ottawa and London. Here is a map of this: http://www.nationalpost.com/news/canada/politics/ontario-election/results.html. The net results were 53 seats (37.6% of vote) for the Libs, 37 seats (35.4% of the vote) for the PC's, 17 seats (22.7% of the vote) for the NDP, and no seats for the Greens, with 2.9% of the vote.

But, taken another way, 64.6% of the people voting in the province were in favor of the Green Energy Act/renewable energy (though many may have quibbles with it). Only the Tories were profoundly pro-pollution (coal, nukes, natural gas), nominally because this is lower cost electricity, and especially when most of the external costs of these are dumped on society and taxpayers in obscure and oblique manners.

Discussion
The GEA has proven to be a very successful way of generating manufacturing jobs, bringing in new investment and also replacing coal and natural gas sourced electricity. The bill for the GEA was passed in the spring of 2009, and officially went into effect in October of 2009, so it has only had about 2 years of application, and much of that time was spent getting contracts, doing the fieldwork needed for resource analysis and environmental permits, as well as ordering the equipment. It was particularly focused on finding jobs for the more than 100,000 auto workers who were put out of work in Ontario in the Great Recession, especially with the bankruptcy of GM and Chrysler and the squeeze on Ford. The near term goal was 50,000 new jobs in the renewable energy and energy efficiency (home and building insulation, especially) sectors.

In many cases, the factories to make major wind turbine components and solar PV panels are themselves still being constructed or are just becoming operational, such as the new wind turbine tower plant (for Siemens turbines) in Windsor that will use steel plate from the Sault St. Marie (Ont) steelworks. Next year, Ontario will install more PV panels than will states like California, which has a significantly better solar resource than does Ontario. In 2010, Ontario installed 168 MW (DC), second in North America only to California, which installed an estimated 180 MW (DC) that year; in 2011, if supply keeps up with demand, Ontario is likely to install around 600 MW (DC) of PV capacity, worth an average of about 70 MW on a continuous basis, but worth a lot with regards to supplying summer peak electricity. However, the difference that allows a poor solar resource area like Ontario (it's not a desert) to do better than a place like California is in the pricing systems employed and in the strong emphasis on the manufacturing/job creation/wealth creation in Ontario's Feed-In Tariff versus the subsidy and tax avoidance based systems in the US, especially California and New Jersey. (see http://www.ases.org/index.php?option=com_myblog&show=Ontario-jumps-to-second-in-North-American-PV.html&Itemid=27).

While PV electricity is mostly about job creation and less about average electricity production (most PV electricity in Ontario will be made in May, June, July and August, with very little in the remaining months), wind electricity is where the bulk of the new renewable energy (expressed as (MW-hrs/yr)/(hrs/yr) = MW) will be made. It is mostly wind that will replace the electricity formerly made by Ontario's coal burners, or which will make up for the avoided natural gas consumption as a result of the cancellation of two gas to electric facilities that were proposed near Burlington. Their present 1656 MW worth of wind turbine installations (see http://www.canwea.ca/farms/wind-farms_e.php) include about 495 MW (30%) installed under the GEA pricing system/after October of 2009, and with another 3946 MW lined up and "in the queue" (see http://www.canwea.ca/farms/PDF/Pipeline-List.pdf). Combined, these should displace an average of 1600 MW of average delivered energy derived from polluting sources. In addition, several billion dollars worth of long distance transmission lines are also being built to tap a hydroelectric and several wind farms located near or north of Lake Superior. The new turbines will represent an investment of near $8 billion and support tens of thousands of jobs. If half of the jobs go to Canadian workers/companies, that is 64,000 job-years of direct employment over a four year period. There is an estimated 13,000 MW of wind turbine capacity also awaiting FIT contracts (longer term projects); the major excuse for the delay is in getting access to transmission lines to the Toronto metro region.

With the survival of the GEA, more wind power can now be developed in Ontario, and at a pretty significant rate, especially compared to NY State, which has very similar wind energy resources compared to the inhabited portions of Ontario. To date, most turbines have been installed in southwestern Ontario, near the Lake Erie and Lake Huron shorelines (these are where the best onshore winds that are near the major population centers are located between Windsor to Kingston happen to be, with the major electricity demand especially centered on the Toronto-Burlington-Hamilton region). The existing transmission lines in the province are mostly monopolized by nuclear facilities (3 complexes, 20 reactors in total) and the coal burners (those lines will soon be freed up), though the new $2.3 billion line from the Lake Superior region will allow wind power from that region to be shipped to southern Ontario/Toronto.

Wind turbines are not easily hidden, though on the plus side, they also produce electricity at reasonably affordable prices. PV systems, especially rooftop or small 10 x 10 meter units located in back yards and farms do not have a large "visual presence", but their electricity sells for 78 c/kw-hr, which is between 10 to 20 times present "market rates" and about 6 times more than large wind turbines. The PC party tried to use wind turbines as well as the price of PV electricity as a major campaign issue, but that appears to have failed, even though their tactics were well received in the farming/suburban zones that they carried. There was also a huge contingent of "anti-turbinites", well financed and well coordinated with similar organizations in the U.S. odds are, these Canadian groups also got backing from the oil, natural gas, nuclear and coal based industries and owners. And unfortunately for them, but fortunately for the vast majority of people, time is not on the polluter's side.

For the time being, corn production (very big in southern Ontario) is actually profitable due to high corn prices that are cause by ethanol prices that are set by the world petroleum prices. Most farmers can be ambivalent about wind turbine income under those conditions. However, wind turbines can supplement a farmers income to a significant degree, because lease payments are a direct profit, and do not significantly affect their crop yields (at 180 bushels/acre, the 1/8th of an acre covered by roads and the turbine and would be about 23 bushels, worth roughly $161/yr (lease payments are between $5,000 to $10,000/yr). Similarly, local property tax revenues will also be at least those levels. Each 1000 turbines installed across Ontario is also a transfer of $20 to $25 million/yr from urban to rural areas. If corn prices or corn yields slide for some reason, wind turbines will be quite welcomed by farmers. In 5 years (the time for the next election), these transfer payments of $100 million/yr in return for electricity to urban zones will become a major economic factor in rural Ontario politics. The removal of the Green Energy Act would be a direct threat to such activities and to such steady income that so many will appreciate.

Similarly, as employment in renewable energy manufacturing, and especially wind turbine manufacturing keeps expanding, this will also start to develop a constituency of its own - voters (workers, and those who employment depends on those workers/businesses) and businesses, as well as major banks that are financing these developments. This snowballing effect is called a "virtuous economic circle", where the social and political feedback mechanisms lead to even more renewable energy development. In 5 years, with hundreds of thousands of people who know someone working in the renewables business and close to 50,000 people actually directly employed, the pro-renewable voting block will be significantly stronger. After all, it was only 2/3rds of the Ontario voters this year who supported the GEA. The Liberal-NDP coalition needed to run the Ontario government will actually force the ruling party to adopt more progressive positions, such as no more expansion of the dreadfully expensive Ontario nuke business (it is responsible for most of Ontario's existing debt). And that is a good thing...

2011 was an extremely bad year for any politician to run for office, since the rotten economy that was unleashed by George Bu$h and Company via the sub-prime fiasco/mortgage based bond frauds/assessment frauds has left a lot of people ready to vote out anyone in office, assuming they even bother to vote (historically low election participation this time). The fact that the Green Energy Act has a constituency of three of Ontario's four major parties (Libs, NDP, Greens) and a strong majority of the voters seems pretty impressive, though you would never know it based on the grumpy corporate owned media in Canada (similar to the U.S. right wing, corporate philosophy/belief system).

And for NY businesses looking for growth anywhere, you can at least look to Ontario (and to a lesser extent, Quebec). After 2012, wind turbine installations will effectively cease and desist with the end of the US tax avoidance based incentives. But, the renewables gold rush will still keep on kicking strong in Ontario, thanks to the FIT requirements of guaranteed primary access to the grid and a fixed price based on the cost of production plus a reasonable, socially determined average profit rate for the investors.

Too bad NY's state government won't take the hint, and get FIT, at least in the near future.

Also of note, see http://www.cleanbreak.ca/2011/10/07/liberals-re-elected-in-ontario-green-energy-act-and-feed-in-tariff-program-live-on/ and http://www.reuters.com/article/2011/10/07/us-ontario-energy-idUSTRE79651420111007.

DB

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