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  1. I don’t get this:
    The Public Utilities Commission voted unanimously on Tuesday to reject a proposed agreement by Deepwater Wind to sell power from eight turbines proposed off Block Island at more than twice the price National Grid pays for electricity from current sources.
    http://www.businessweek.com/ap/financialnews/D9EP4O8G0.htm
    According to this source, the wholesale rates in CT average around 4 c/kWh annually:
    http://www.iso-ne.com/markets/mkt_anlys_rpts/mnly_mktops_rtps/2010/2010_02_monthly_market_report.pdf
    Am I missing something?
    CNET says something different:
    The state’s Public Utilities Commission on Tuesday blocked a power purchase agreement to purchase electricity from an eight-turbine installation off the coast of Block Island. Regulators ruled that the proposed purchase price–24.4 cents per kilowatt-hour in 2013, which is almost double the retail rate in the state–was too high, a move which casts doubt on whether the project will move forward.
    http://news.cnet.com/8301-11128_3-20001369-54.html
    Did AP confuse retail price with the wholesale (purchase) price?

    1. There is probably some price confusion. In Vermont, “feed-in tariffs” for big wind are 12 cents per kWh. I would expect that local wholesale is 5 to 6 cents, (4 all day is unlikely, though it dipped that low during the worst of the downturn), Big Wind has made a deal for 10-12cents, and the retail price is 24. OFten, transmission and distribution and billing and dispatching and all that double the wholesale price 12 to 24. Of course, with a 12 cent wholesale price, t and d may not double it…more like adding 7 cents, I would think. This is just a guess from what is happening around here. I really don’t know exactly. I should check the ISO NE prices, I guess. They are on the ISO website, but so detailed that it takes a while to figure them out.

  2. Glad to hear this. I enjoy the sailing in the sound and around block island. Would hate to have my view ruined by giant toys.

  3. So many questions, so little time. What kind of warranties do wind turbine manufacturers give (I heard it was about 5 years, not exactly 40-to- 60).
    Are there funds for decommissioning? I remember those turbines at Altamount Pass in CA. As far as I know, they are still there, the good (new ones) the bad (old ones) and the ugly (the ones that don’t work any more.) Anybody know about this?

  4. As usual with wind, one compares apples and oranges. wind and solar just provides an energy service, whereas nuclear, hydro and fossils provide an energy service AND a storage service ( in the form of postponed production, or burst capacity). In lots of area of the economy, the storage service is very valuable, often worth more than the production service itself (Think milk !). The economic reality of feed-in tariffs is not only that they forces customer to buy energy produced at a higher average price that nuclear, hydro and fossils, but also that it forces the latter to provide the storage service for FREE. This is misappropriation on a grand scale ! The natural gas industry is complicit of this scheme because their storage cost is variable (their postponed production costs are low, but their burst capacity price are high) whereas the storage cost of nuclear and hydro are fixed (as they are provided only by postponed production, that is more expensive due to the interest costs of the upfront investments). So even if they loose out some production to wind, it is still beneficial for them because it hurts nuclear and hydro more.
    The California example with Enron showed that the “best theoretical answer” (a full electricity market with no guaranteed price for spot electricity and full compensation of externalities) runs into practical implementation problems. A good step toward sanity would be at least to set a conventional realistic price for storage (between a lower bound at pumped hydro and a higher bound at large scale battery packs) per unit of time that wind and solar plant should pay.
    If they cannot fly with such a constraint, they shouldn’t be built.
    Note that on a long term basis, the “postponed production costs” of fossils may not be that low, as they are a lot of investments involved in gas rigs, pipelines, LNG facilities and the like (and I could also include the maintenance of an expensive imperial army to secure foreign energy sources…). The advantage of the gas industry is that it can spread this fixed cost to more energy consumers (such as fertilizer makers) who are effectively captive and that they accustomed the public to swallow huge price increases from time to time because of the “fluctuating prices of fuel”, as if it was an act of god ! If you try to get the quotation for a 20Y contract for natural gas at a FIXED dollar price, not only it will be very hard to find, but it will be quoted at a level that implies more expensive electricity than nuclear (even at Okiluoto cost), without even costing for greenhouse gases externalities ! Compare that to the cost of buying 20 years of nuclear fuel on site and store it (something that is actually possible to do only with nuclear…)
    The nuclear industry rallying cry should be “stop robbing us, pay the real price for storage, pay the real price for predictability !”

    1. This is an interesting way of looking at it. I like it. However, there is a third factor here for unreliable generation that imposes hidden externalities on other market participants, a second hidden intermittency cost.
      —–
      Another way of looking at it: Say the fire department in town gets on average 8 calls a day from various people for fires of various types. Now, say, that a new industry sets up shop in town – perhaps a refinery – that catches on fire 20 times a day. So, the fire department has to run out to the new refinery 20 times a day. Should the other users of the fire department – those who are responsible for 8 calls a day – have to pay for both the cost and the risk that the fire department incurs every time they respond to the 20 fire calls the refinery generates a day?
      Indeed, it would be rational for them not to do so, as the refinery has special needs for fire protection. So, it would be logical for the fire department to require that the refinery pay for their full share of costs for fire protection.
      Say the refinery refuses to do so, and the fire department says, “fine, we won’t come put it out.” Here’s the problem with that, though. If the fires that occur 20 times a day at the refinery aren’t responded to by the fire department, they can catch the rest of the town on fire. So, the refinery, in essence, whether they pay for their fair share of fire protection or not, has managed to force the fire department to respond to their fires whether or not they pay for the cost of that response, because if the fires at the refinery aren’t responded to, everyone else around them is endangered by them.
      This is a market failure, as the refinery has managed to get everyone else to pay for the cost of the response to their fires.
      So, to respond to the frequent fires at the refinery, it might be smart for the fire department to charge the refinery the full cost of the response to every fire – as well as the full cost of any damages the fire department might suffer in those responses.
      —–
      The more variability and unpredictability of an electrical source there is, the more other market participants have to plan their operations around the unreliable generating source rather than the characteristics of their own generating source.
      When an intermittent power source that does not correlate with demand goes offline, it requires that other grid participants who have control over their supply start supplying. Of course, with all generating equipment, there is a modest potential for failure that can come at any time. As such, a fair part of the generating units on the grid are what we call “spinning reserve”, or units that are kept ready to generate while other units are generating – e.g. their boilers/turbines are powered at low output and their generators are turning, but are not actually generating much power. This is in case another generating unit has to go offline. The amount of random failures of most electricity generators is very predictable, so spinning reserve is allowed to be kept low, perhaps 15% or so on a large grid, in case several power plants drop off the grid at once due to equipment failures. By keeping a fair part of idle capacity, the grid remains reliable, because it is very unlikely that a lot of generators will fall off the grid at once.
      Solar and wind are not like this. They drop off the grid many, many times a day at a high rate, and return to the grid just as unpredictably as they drop off. So they have to be constantly backed by not 15% spinning reserve, but by 100% spinning reserve. They have to be backed up by other generators at all times, because they could disappear at any minute. This means that grid dispatchers spend lots and lots of time dealing with solar and wind dropping off and coming back to the grid, by telling other plants to generate in their stead. This means that other plants have to produce at less than their maximum output at all times just to maintain the reserve requirements for solar and wind. In essence, solar and wind require that others be reliable for them, just like the refinery that has 20 fires a day requires that others pay for their enormous fire protection costs.
      (…continued…)

    2. (…continued…)
      Not only this, but when a plant drops off the grid, this requires very fast starts of generating equipment. The most wear and tear on equipment generally occurs when there is a rapid start-up and heat-up required of it. This imposes major wear and tear costs on equipment that is required to respond quickly to failures of other generators to generate. Solar PV and wind both can rapidly fail to generate in a very unpredictable fashion that no one else comes close to in terms of intermittency and unreliability. So, not only are solar and wind preventing other generators from generating at their full capacity, they are increasing the maintenance and wear and tear cost of other generators by requiring that they vary their output every time solar and wind drop off or come back to the grid.
      This imposes externalities on other market participants, because if the grid dispatcher said “who cares about solar and wind” and gave them the same 15% spinning reserve requirement that other market participants have, if solar and wind dropped off the grid rapidly, then the grid becomes far less reliable and you could have either rolling blackouts (as in California) or the entire grid – if it was near the limit of capacity – could even be forced into a mass load shedding mode or a complete cascading failure mode, where the various components of the power grid have to delink from one another so as to protect themselves from overload. Basically, in a cascading failure, generators are forced into the choice of either attempting to supply the grid and risking their equipment being turned into junk or disconnecting from the grid and saving their equipment to generate another day, in essence, saving themselves, but speeding up the failure of the rest of the grid. A process called islanding – where the grid is broken into smaller subunits in the event a cascading failure is ongoing – allows for this choice to be averted, but islanding requires that automated control systems function to break the grid apart.
      Cascading failure of the grid is precisely what occurred in the Great Northeast Blackout of 1965, I think it was, along with the Northeast Blackout of 2003. If one wants to see a demonstration of cascading failure, there is one online, a Java applet at this URL: http://vlab.infotech.monash.edu.au/simulations/networks/cascading-failure/demo/
      This is just like if the fire department said “who cares about the refinery”, and refused to respond to the refinery fires, they would be threatening the whole town with being burnt to the ground, a perfect example of a cascading failure. So solar and wind manage to not only be unreliable, but they threaten others when they are on the grid in large numbers.
      Basically, as solar and wind need others to stand behind them at all times, they impose their costs of reliability on others. The only way to deal with solar and wind is therefore to penalize them monetarily every time they drop off the grid without adequate notice. So as to be fair to all market participants, all generating sources should be penalized for dropping off the grid without notice. Therefore, the real cost of solar and wind would be recovered as they would pay a fine every time they dropped off the grid. Everyone else would pay fines every time they dropped off the grid without warning as well.

  5. You mention the offshore turbines being in a nasty environment – what about the wave power devices? To me, that even more difficult.

    1. Agreed. That could be one reason why there are so few actual devices that are powered by waves. The topic makes for some interesting engineering projects for students, but has little practical value.

  6. Rod Adams wrote:
    The agreement, which was for the output of 8 large turbines installed off of Block Island, was that National Grid would pay 24.4 cents per kilowatt hour when the turbines began producing power in 2013 and that rate would increase by 3.5% per year. Ostensibly, that escalation clause was to account for the effects of inflation, but I am not sure what is supposed to get more expensive each year for an off-shore wind power system where nearly all of the money for the project is spent before operation starts.
    The 3.5% per year increase is to cover the increasing cost of the fuel, of course! 😉

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