Tuesday, 19 January 2016

What a smart response! - wind cheaper than fossil fuels

In amongst the very partial comments you here about winds obvious variability, few point out that onshore wind also has great benefits which cannot be wished away. People frequently point out occasions when there isn't much wind power and say how we need other fuels. What they don't mention is the other half of the coin - how often wind power saves the day by stepping in when power plant break down and power would otherwise be very expensive.
There was a neat exchange on this point in the House of Commons on Jan 18th:

Nigel Adams: I am very grateful. I apologise to my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who is far more senior than I am.
The hon. Gentleman talks of how cheap onshore wind is as a renewable. Does he not accept that it must be backed up by fossil fuels, which are not so cheap? If the full system cost of onshore wind is taken into consideration, it is one of the least affordable renewable technologies that we have.
Callum McCaig: So we are backing up the cheap renewables with fossil fuels that are not so cheap, and the solution to that is to use the fossil fuels that are not so cheap all the time? That sum does not quite add up. I am not sure that I have worked out the equation.
See Jan 18th debate column 1170 http://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm160118/debtext/160118-0002.htm
Also see my earlier post at http://realfeed-intariffs.blogspot.co.uk/2015/11/the-untold-story-of-how-windfarms-help.html


  1. Come on, Dr T, this is just debating society stuff. 'Levelized costs' are too complex and contentious to get into here & now, but:

    - "the other half of the coin - how often wind power saves the day by stepping in when power plant break down": that's just disingenuous. To say wind 'steps in' is to imply a purposeful action it is incapable of. Wind, of course, may happen to be providing some energy when something else breaks down, but only by pure good fortune. It can't be used to 'step in' to a shortfall.

    (Oh, and using the phrase 'other half of the coin' neatly & subliminally suggests a wind load factor of around 50% whereas, as we all know ... 'random quarter of the coin' might be closer to the mark)

    To quote, apparently approvingly, the exchange between Adams and McCaig, is also disingenuous. The sense in which fossil fuels are clearly more expensive than wind is SRMC, which no-one ever doubted but it's the wrong comparison. (Use of fossil fuels for back-up does of course often result in sub-optimal efficiency, we know that too.) McCaig is taking an apple and an orange, and declaring the apple to be more green. So what?

  2. Well, the whole point is that the comparison of levelised costs (over 15/20 year contracts or PPAs) DO suggest that a lot of the windfarms currently denied any option of competing for contracts for difference (CfDs) would beat any prices offered by developers of new fossil fuel generators - effectively CCGTs. As you can see in the latter part of this Telegraph article CCGT developers are estimating the cost of a new CCGT at £72 per MWh. http://www.telegraph.co.uk/news/earth/energy/11925444/UK-energy-crisis-Trafford-gas-plant-in-doubt.html
    You could get quite a lot of onshore wind and even some solar farms with a price like that (£72 per MWh). Wind and solar farm prices have been coming down a lot recently - and yes, that price would include costs of balancing ('back up)'. What people often overlook is that developers under the Renewables Obligation whose schemes are being installed now have to take care of their balancing costs - the value of the electricity they sell on wholesale power markets is discounted to take account of this.

    1. If CFDs of £72/MWh were offered to onshore wind and solar, I think there would be massive amounts deployed. 500MW of solar was awarded contracts in Germany during 2015, with prices between approximately £60/MWh and £70/MWh - the higher price being in the first auction and the lower price in the last one. I think the reason the government are no longer running CFD auctions is because they realise just how cheap solar and wind will be which will destroy their justifications for Hinkley, fracking etc.

    2. Hinkley, yes indeed. CCGTs? That's the question. A CCGT offered a CfD on the same terms as for wind generation (guaranteed £££ whenever you feel like it, we expect about 25% LF from you, but it's up to you) - I think you'd find a lot of takers for that

      (Fracking, not really relevant)

  3. It is indeed a neat riposte, but of course fossil fuels are relatively cheap as baseload if they do not pay for their externalities; in contrast standby plants are more expensive because they don't run very often. We encountered this problem in a rather stark form in the third Zero-Carbon Britain report, where we needed 45 GW of backup capacity, used for only a few percent of the time. Workable yes, but very expensive.

  4. To Nick Drew: but the govt refuses to allow renewables to compete on an even playing field with fossil fuels and nuclear for new contracts. What we have now is that new (and old) fossil fuel plant get capacity payments but onshore renewables get nothing and even the capacity payments aren't enough to get new ccgts - they are, in reality more expensive than a lot of onshore wind.