Active Energy Management via Solar And Wind Technology
“Wind and solar PV capacity has grown very rapidly in many countries.. By the end of 2015, these technologies had reached double-digit shares of annual electricity generation in ten countries..in all cases without compromising the reliability of electricity supply. “
IEA, Getting Wind and Sun Onto the Grid, 2017
The remarkable thing about wind and solar power is how mature it has become, and how quickly it continues to grow.
So much so, that it is now forcing a strategic decision to be made in many nations: to move further ahead with wind / solar and actively manage power generation through the new technology – or to remain dependent on legacy fossil fuel systems with key risks such as import dependence and fuel prices.
Ultimately, nations with less legacy production of fossil fuels, such as China and India, are likely to lead the way in manufacturing energy via wind and solar.
Wind and Solar – Out of the Lab, and Changing the World
At the end of 2016 the world had over 780GW of solar and wind capacity at its disposal, generating about 1,400TWh of global electric power, or about 6% of the total.
That represents an increase of over 350% from 2010.
source: Forecast International
If, as expected, solar / wind power generation doubles over the next 5 years, the total could reach over 2,600TWh, 11% of the global total, and greater than global nuclear.
If you assume each 3GW of deployed solar / wind equals one medium-sized nuclear plant, then each year from now until 2021 the equivalent of 30-40 nuclear plants of power generation will be installed using solar and wind technologies.
As the IEA notes above in the quote, this means that not only have certain countries deployed wind and solar for a large part of their electricity generation – in certain instances they have a majority of their generation dependent on it.
And so a major decision looms for many cities, regions and governments about how far and quickly to deploy wind and solar.
Because now it is not about the technology, or even cost: both of these have been brought to equality with incumbent energy.
It is more about how regions and countries want to manage this new bounty of local energy supply, and what level of risk they want to retain in their future energy portfolios.
Technology – 1000GW of Experience
Wind and solar will have 1000GW of deployed technology between them by the end of next year, or about 15% of the world total.
This technology is way beyond its formative stages, and is reaching a far more mature phase of deployment and integration into national and regional grids.
To accelerate this, the IEA has recently published a short guide for policyholders looking to deploy solar and wind efficiently on to the grid. It relies on the latest expertise and information gleaned from the actual experience of countries running with large amounts of solar/wind.
The report also aligns well with an earlier analysis published in 2015 by the National Renewable Energy Laboratory (NREL), reviewing the state of solar and wind deployment from the US perspective.
These reports are pragmatic and objective about how to make the technologies work, with the IEA suggesting a four stage approach to grid integration. They summarise it thus:
Note –the IEA report also mentions Phases 5 & 6 where 100% or even greater than 100% solar / wind energy levels can be achieved. This will be the subject of a future post.
A summary of the electricity generation deployment in selected countries is shown in the IEA chart below (note VRE stands for variable renewable energy, solar and wind)
Whatever the level of maturity, the first action is critical for any city, region, state or nation: look at the new, viable reservoirs of energy in your own backyard, and plan accordingly.
Although seemingly a simple statement, many regions and countries have moved into solar / wind without this planning, leading to many of the issues reported in Germany, Australia and elsewhere.
But such preparation is increasingly simple: as the IEA notes, plenty of sophisticated technical tools are now available, such as IRENA’s Global Energy Atlas of global wind speed and irradiation levels.
Stakeholders can then organise how to integrate from there: for example, designing the optimum mix of solar and wind, the location of turbines and PV panels, transmission extension investments, grid voltage DC management and so on.
From the extract below its clear to see why Ireland chose to derive over 25% of its total energy from wind alone, with plans to reach 40%.
From there, it’s an evolutionary process, with an increasingly detailed set of power system rules, governance procedures, organizational requirements, and political and commercial issues to resolve.
The working problems are myriad. But the technological and commercial issues are increasingly being overcome as more countries move on to the grid and share relevant experience: the benefits, as we have discussed many times, of a scalable, standardized , globally manufactured technology.
And along the way the IEA and NREL reports debunk most of the main myths surrounding wind and solar power – not ideologically, but via data from implementation experience.
So, the evergreen issues of grid stability, back-up requirements, transmission costs, storage and intermittency are all assessed with current (and future) solutions analysed, in a calm, objective manner.
For example, the intermittency issue is dealt with in this way:
“Firstly, power demand itself shows random, short-term fluctuations; in consequence all power systems already have a mechanism to deal with this variability. When wind and solar PV deployment is beginning, the fluctuations in their output will tend to be “lost in the noise” of demand fluctuations.
As more wind and solar plants are added to the system, a second effect comes into play. The short-term fluctuations in output of different plants, located in different locations in a power system, tend to cancel out. This means that remaining variability is less pronounced and large changes tend to happen on the hourly timescale rather than seconds.”
But variability and uncertainty need to be addressed in a much more strategic, rather than just technical way when thinking about energy systems.
Beyond Technology and Beyond Cost: Active Energy Management
As solar / wind technology and robustness matures, the focus moves to costs.
The usual metric for power generation systems is the Levelised Cost of Energy, which attempts to cover the direct and indirect costs of the various technologies.
The Lazard report summarized here, and industry benchmark, shows how the costs for wind and solar continue to fall toward grid and even “socket” parity with fossil fuel systems.
However, the NREL and IEA reports suggests even this is an increasingly narrow way of looking at energy generation.
They note that costs also need to be viewed in the context of longer-term energy system risks and investments – or System Value:
“Sophisticated energy planning and investment decision-making often seek to balance short- and longer-term risks. In the case of electricity generation, risks that directly affect project economics include fuel supply, demand and price changes, a price on carbon, electricity price changes, construction and capital costs, operating and maintenance costs, and decommissioning and waste.
Increased solar / wind in a portfolio of generation resources offers many potential optimization benefits in these contexts.
For example, one key driver of electricity generation economic attractiveness is fuel price risk. Solar / Wind technologies have risk profiles that are different than (but complementary to) most conventional resources because they have low operational costs and are immune to fuel price risk. “
This is an important point.
Assuming we have reached effective parity in terms of technology and cost, and that we have increasingly robust systems for high levels of solar / wind integration – what now determines the direction for power generation strategy?
Active and Passive Energy Management
Cities, regions and nations now have an energy choice they did not have just a decade ago.
The viability of scalable, robust and cost-effective solar and wind technologies, plus the learning experiences and tools outlined by the IEA, NREL, IRENA and others offers a vast new energy resource available at global scale.
Up to 15% power generation can be achieved at minimal effort and cost with existing solar and wind technologies and legacy grids, and it’s increasingly easier to go beyond this figure to 30% plus.
As technology and costs are now broadly equal with thermal fuels, the decision to move to more solar and wind deployment should be based on long-term energy strategy and risk management.
For those regions and countries with limited fossil fuel resources, the decision to install and use more wind and solar looks obvious.
The deployment of these new technologies and processes allows a new, active, scalable management of energy: the capture of local energy resources with utility-scale energy conversion technology, and the incremental, managed integration with existing power sources and infrastructure.
In addition, the tools and processes to push this integration to ever higher levels are increasingly available.
The active management strategy also arrives with the co-benefit of local job creation and potential revenue enhancement from technology and service skills related to the high-growth markets for solar and wind supply chain manufacturing and system integration.
The alternative is a more passive preference for reliance on legacy imported fuels, which carries with it long-term fuel price risk, and the capital risks of new project developments eg nuclear, environmental risks eg carbon taxes and abandonment and decommissioning costs eg oil and gas.
The Active and Passive energy management strategies are summarized in the table below:
Taking Control of Energy
Ultimately, regions or nations heavily dependent on imported fuels are more likely to embrace the more active and home-grown utility-scale energy conversion system that wind and solar technology provide.
For example, both China and India have less legacy dependence on home-grown fossil fuels than some developed nations, and are likely to embrace the new technologies as a way of actively managing their energy risks.
A Trusted Sources investment strategy article here has a more detailed analysis as to why China and India will likely therefore leap-frog more developed nations – and gain the benefits of leading technology development for global export.
For example, the chart below from from the NREL report shows how such necessity to avoid thermal fuel dependence begats beneficial invention, with China developing world-level expertise in solar PV manufacturing, and wind turbine production, along with Denmark and Germany.
The US has an ambivalence toward these new technologies as it has a wide array of energy choices: this may hinder its future progress in the new industries.
National US champions such as GE may therefore have a larger challenge than their EU or Chinese counterparts, who can initially exploit local markets for demand and expertise.
A New Energy Choice – and its Consequences
Everyone now has a choice.
By the end of next year, 1000GW of wind and solar will have been deployed, and the expertise and experience of nations that achieved this will be transparently available on the internet.
Energy policymakers can now choose to leverage and deploy this major new energy source and knowledge arriving on their doorstep, or they can decide to stand back and depend on legacy systems.
They can bet on a future of improving, cleaner, more local and less risky technology portfolios – or they can hold to the past dependencies and growing hazards of fossil fuels.
Meanwhile, the sun continues to shine, and the wind continues to blow.