Comment

Comment by Willem Post on September 25, 2023 at 3:53pm

US/UK 66,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY  

https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-off...

 

The US government has the fantasy of wanting to build 30,000 MW of offshore by 2030, i.e., just 7 years, but several companies, building projects for Massachusetts, will be allowed to walk away from the signed PPAs, and rebid at much higher prices next year.

 

The UK government has the fantasy of wanting to build 36,000 MW of offshore by 2030, i.e., in just 7 years,

 

That means placing in operation 66,000/7 = 9,428 MW of wind turbines/y, during 2024 through 2030

The continent-based European big wind companies currently have an offshore capacity of about 4,000 MW/y

 These companies prefer the U.S. market, because Biden’s "Inflation-Reduction-Act” (IRA) has higher subsidies than the UK.

The IRA has “bonus” subsidies for domestic content requirements to create US jobs and US wind infrastructures

 

However, the EU is urging Biden to ignore the domestic content requirements, so Europe would receive “bonus” subsidies to create European jobs to build factories, ports, cranes, specialized ships, etc., for manufacturing and erecting nacelles, towers and rotor blades, to increase EU wind turbine exports to the US, UK, and other markets in future years.

NOTE: The specialized ships and cranes, almost all owned by European companies, are very expensive and take 3 to 4 years to design and build. They are booked years in advance, with upfront cancellation fees in escrow. Their lack of availability, even at high fees, delays projects, which increases costs/installed MW, and increases subsidies/installed MW

NOTE: The US will have at least a $1.0 trillion trade deficit and about a $2.0 trillion federal budget deficit in 2023. The US is in no position to engage in giveaways.

 

NOTE:

About 7,000 MW of offshore wind bids were awarded by the UK 4^th Auction, in 2022, but some projects are “on hold”, because of various cost increases, unavailability of ships and cranes, etc., leading to billion dollar losses

Zero MW of offshore wind bids were submitted for the UK 5th Auction, in 2023, as a protest by Big Wind companies against too low UK subsidies.

 

Six Items of Interest

 

1) Vattenfall, Sweden, has put on hold 1,400 MW in 2023, and will re-evaluate its entire 4,200 MW zone, because its spreadsheets show a “net revenue shortage” of about 40%, meaning the prices, c/kWh, offered by the UK auctions are about 40% too low. 

https://www.offshorewind.biz/2023/07/20/breaking-vattenfall-stops-d....

 

2) OERSTED, Denmark, sees a $2.6 billion loss on its three US East Cost offshore wind systems, mainly due to high inflation, high interest rates, supply chain constrains and disruptions, and not being awarded “bonus” subsidies of the IRA.

https://www.reuters.com/business/energy/denmarks-orsted-anticipates...

 

3) EU big wind conglomerates want, on average, 40% more, because turnkey capital costs (foundations, turbines, cabling to shore, installation) increased to at least $5,500/installed kW, with interest rates 6.5% in 2023, from $3,500/kW and 3% in 2021

 

4) UK and New York State bureaucrats are grossly uninformed regarding market conditions. They display zero business sense. New York State bureaucrats calculated their estimates of offshore wind contract prices, but when the owners saw those numbers, they said, we need up to 66% more, for our spreadsheets to make business sense.

BTW, these contract prices are after 50% US subsidies. See Items 4 and 6

 

Oersted, Denmark, Sunrise wind, NYS estimate $110.37/MWh, needs $139.99/MWh, a 27% increase

Equinor, Norway, Empire 1 wind, NYS estimate $118.38/MWh, needs $159.64/MWh, a 35% increase

Equinor, Norway, Empire 2 wind, NYS estimate $107.50/MWh, needs $177.84/MWh, a 66% increase

Equinor, Norway, Beacon Wind, NYS estimate $118.00/MWh, needs $190.82/MWh, a 62% increase

https://www.windtaskforce.org/profiles/blogs/liars-lies-exposed-as-...

 

5)

- Lifetime Performance of World’s First Offshore Wind Farm 

https://www.windtaskforce.org/profiles/blogs/lifetime-performance-o...

 

- IRENA prepares glossy offshore wind reports, that 1) ignore industry cost data of offshore wind systems in the UK, 2) overestimates capacity factors, 3) underestimates decreases in output with aging, 4) underestimates O&M/MWh

IRENA is a government-controlled, offshore wind rah-rah site, that cannot be trusted

https://www.windtaskforce.org/profiles/blogs/irena-a-european-renew...

 

6) Bloomberg recently reported, citing figures from Bloomberg-NEF: “The all-in, turnkey capital cost associated with a typical US offshore project, before bonus tax credits of the IRA, has increased by 57% since 2021. The increased costs of materials, energy, components, labor, and supply chain disruptions and constraints (shortage of European-owned specialized ships, etc.,) explain about 40% of that, with 60% due to increased interest rates.

Increased financing costs are due to borrowing larger amounts/installed kW, at higher interest rates

Part 1

 

BIDEN 30,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY  

https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-off...

 

The Biden administration announced on October 13, 2021, it will subsidize the development of up to seven offshore wind systems (never call them farms) on the US East and West coasts, and in the Gulf of Mexico; a total of about 30,000 MW of offshore wind by 2030.

 

This is part of the “Inflation Reduction Act”, which CBO estimated at $391 billion, but Goldman Sachs estimated at $1.2 trillion, due to Biden’s handlers “liberally interpreting” the various open-ended measures.

This deficit spending will be added to the national debt, which would increase inflation. See URL for explanation.

https://www.windtaskforce.org/profiles/blogs/biden-s-green-energy-p...

High Prices of Goods and Services: Biden's offshore wind systems would have an adverse, long-term impact on US electricity wholesale prices, and the prices of all other goods and services, because their expensive electricity would permeate into all economic activities.

 

High Visibility: The wind turbines would be at least 800-ft-tall, which would need to be located at least 30 miles from shores, to ensure minimal disturbance from night-time strobe lights.

 

Damage to Fisheries, Whales and other Fauna: Any commercial fishing areas would be significantly impacted by below-water infrastructures and cables. The low-frequency noise (less than 20 cycles per second, aka infrasound) of the wind turbines would adversely affect marine life, including whales, and productivity of fishing areas.

https://www.windtaskforce.org/profiles/blogs/feds-finally-admits-offshore-wind-can-kill-whales

Offshore Wind Electricity Production and Cost

Electricity production would be about 30,000 MW x 8766 h/y x 0.40, lifetime-average capacity factor = 105,192,000 MWh, or 105.2 TWh

The additional production would be about 100 x 105.2/4000 = 2.63% of the annual electricity loaded onto US grids.

Electricity Cost: Assume a $55 million project consists of foundations, wind turbines, cabling to shore, and installation at $5,500/kW.

- Production would be 10 MW x 8766 h/y x 0.40, CF = 35,064,000 kWh/y

- Amortizing bank loan for 50% of the project at 6.5%/y for 20 years, 7.017 c/kWh.

- Paying Owner of 50% of the project at 9%/y for 20 years, 8.468 c/kWh (9% because of high inflation).

- Offshore O&M, about 30 miles out to sea, 8 c/kWh.

- All other items, 4 c/kWh 

- Total cost 7.017 + 8.468 + 8 + 4 = 27.485 c/kWh

- Less 50% subsidies (tax credits, 5-year depreciation, interest deduction on borrowed funds) 13.742 c/kWh

- Owner sells to utility at 13.742 c/kWh

Not included:

- Cost of onshore grid expansion/augmentation, about 2 c/kWh

- Cost of curtailment/counteracting/balancing, 24/7/365, about 2 c/kWh

- Cost of decommissioning, i.e., disassembly at sea, reprocessing and storing at hazardous waste sites

Floating offshore wind, as in Maine and California, about $7,500 per MW. Payments for Amortizing bank loan, Owner return, O&M, and All other items would be higher, and the c/kWh would be higher than offshore wind with foundations.The subsidies, added to national debt, would be higher.

- Amortizing bank loan for 50% of the project at 6.5%/y for 20 years, 9.568 c/kWh.

- Paying Owner of 50% of the project at 9%/y for 20 years, 11.547 c/kWh (9% because of high inflation).

- Offshore O&M, about 30 miles out to sea, 8 c/kWh.

- All other items, 4 c/kWh 

- Total cost 9.568 + 11.547 + 8 + 4 = 33.115 c/kWh

- Less 50% subsidies (tax credits, 5-year depreciation, interest deduction on borrowed funds) 16.558 c/kWh

- Owner sells to utility at 16.558 c/kWh

NOTE: If li-ion battery systems were contemplated, they would add 20 to 40 c/kWh to the cost of any electricity passing through them, during their about 15-y useful service lives! See Part 1 of URL
https://www.windtaskforce.org/profiles/blogs/battery-system-capital-costs-losses-and-aging

Five Major Items Not Mentioned by Wind/Solar Proponents

 

1) Cost Shifting the Name of the Game

 

The shifted costs and subsidies would result in:

 

1) Increased tax burdens on taxpayers

2) Increased household electric rates on ratepayers

3) Additions to federal and state government debts.

4) Additional burdens on the owners of traditional generators, because their power plants have to counteract/balance the wind output variations, 24/7/365; the more wind (and solar), the greater the electricity quantities, MWh, involved in the counteracting/balancing, plus their plants have to spend more time on hot and cold standby, and are required to have more-frequent start/stops. See URLs and Appendix

 

https://www.windtaskforce.org/profiles/blogs/grid-balancing-costs-s...

http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-na...

 

NOTE: Cost shifting and subsidies have not yet affected New England wholesale prices, because the percent of new RE (mostly wind and solar) on the NE grid is very small, after 20 years of subsidies.

The image shows the negligeable “contribution” of wind/solar to the NE grid load, during 2021

 

Wind and solar became significant in Germany and Denmark, resulting in:

 

- Politicians excessively allocating RE costs to households, thereby greatly increasing household electric rates.

- Politicians keeping industrial rates artificially low for international competitiveness reasons (a hidden trade subsidy). See URL

https://www.windtaskforce.org/profiles/blogs/german-household-elect...

.

. 

2) Wind/Solar Counteracting/Balancing Costs

 

Variable/intermittent wind and solar requires a fleet of quick-responding, counteracting/balancing power plants, usually combined-cycle, gas-turbine plants, CCGTs, and hydro plants, with adequate nearby fuel supply to cover all circumstances, fully staffed, kept in good working order, ready to perform service, on a less than minute-by-minute basis, 24/7/365, as demanded by the independent grid operator, such as ISO-NE, especially during:

 

1) Days with variable cloudiness

2) Days with panels covered with snow and ice

3) Days with foggy conditions

4) All days, from late afternoon/early evening to mid-morning the next day, when solar is minimal or zero.

5) All days, during peak demand hours of late afternoon/early evening, when wind and solar usually are minimal

6) Simultaneous wind/solar lulls, when the output of both is minimal for up to 5 to 7 days, sometimes followed by another multi-day wind/solar lull. See URLs of multi-day, simultaneous wind/solar lulls in Germany and New England

 

https://www.windtaskforce.org/profiles/blogs/analysis-of-a-6-day-lull-of-wind-and-solar-during-summer-in-new

http://www.windtaskforce.org/profiles/blogs/wind-plus-solar-plus-storage-in-new-england

https://www.windtaskforce.org/profiles/blogs/wind-and-solar-energy-lulls-energy-storage-in-germany

https://www.windtaskforce.org/profiles/blogs/playing-russian-roulette-with-reliable-electricity-service-to-new

 

Without the fleet of counteracting/balancing plants, variable wind/solar power could not be fed into the grid. 
That means, wind/solar power cannot function on its own. 
The more wind/solar fed to the grid, the greater the fleet capacity, MW, in counteracting/balancing mode.

 

The counteracting/balancing costs are almost entirely due to wind/solar output variations and intermittencies.

The fleet has to operate far from its preferred/more economical mode. The fleet experiences:

 

1) More up/down production at lesser efficiencies; more Btu/kWh, more CO2/kWh, more c/kWh

2) More wear-and-tear, due to up/down production and more starts/stops; more Btu/kWh, more CO2/kWh, more c/kWh 

3) A larger plant capacity in hot, synchronous (3,600 rpm), standby mode, to immediately provide power, if wind/solar generation suddenly decreases, or any other power system outage occurs.

4) A larger plant capacity in cold standby mode, to provide power after a plant’s start-up period.  

https://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reductions-due-to-wind-energy-less-than-claimed

 

Curtailment/Counteracting/Balancing Costs of Wind/Solar in the UK: When wind and solar were small percent of the electricity loaded onto the UK grid, these costs were minimal, i.e., “buried in the data-noise of the grid”

 

However, wind/solar became 28.4%, or 88.6 TWh, of the 312 TWh loaded onto the UK grid in 2020; excludes net imports

These costs were £1.3 billion ($1.65 billion, or 1.9 c/kWh) in 2020, likely greater in 2021, 2022, 2023.

The 1.9 c/kWh would exponentially increase to 6 – 7 c/kWh, at 50% wind/solar

 

https://www.windtaskforce.org/profiles/blogs/grid-balancing-costs-sky-rocket-in-the-uk-due-to-increased-wind

https://www.statista.com/statistics/514874/energy-mix-uk/

 

Those costs should have been charged to the Owners of wind and solar systems (the grid disturbers), but, in reality, they were politically shifted to taxpayers, ratepayers, and government debts.

Those costs are in addition to the various government subsidies, which are also politically shifted to taxpayers, ratepayers, and government debts.

 

NOTE: On a pro-rated basis, the US cost would be about 4000/312 x 1.65 = $21.2 billion, if 28.4% wind/solar loaded onto the US grid.

3) Wind/Solar Grid Extension/Reinforcement Cost

 

Variable/intermittent wind and solar requires a significant extension/reinforcement of the grid.

The estimated capital cost of upgrading the UK grid for Net Zero by 2050 is about £200 Billion, which would be at least $2.0 TRILLION for the US, on a pro-rated basis, such as based on grid load or GDP.

https://www.windtaskforce.org/profiles/blogs/the-200-billion-bill-f...

 

A significant portion of those costs should be charged to the Owners of wind and solar systems (the grid disturbers), but, in reality, they will be politically shifted to taxpayers, ratepayers, and government debts.

 

Those costs are in addition to the various government wind/solar subsidies, which will also be politically shifted to taxpayers, ratepayers, and government debts.

 

4) CO2 Reduction, due to Wind, less than Claimed

 

Ireland: In Ireland, with 17% wind loaded onto the Irish grid in 2012, the officially claimed CO2 reduction of grid CO2/kWh was 17%

 

However, analysis of 15-minute grid operating data, and corresponding fuel consumption data of each power plant connected to the grid, showed, it was only 0.526 x 17% = 8.94%, due to inefficient operation of the other power plants, when counteracting/balancing the variable output of wind, as above described.

 

The only reason the Irish government finally had to admit to the lesser CO2 reduction, is because public pressure forced the government to hold hearings on why Irish gas imports had not decreased with increased wind; “the smoking gun that did them in”

 

After 2012, Brussels gave money to Ireland to put in major capacity connections to the much larger UK and French grids. The Irish wind output variations were only a very small percent of the electricity loaded onto those grids, i.e., “buried in the data noise of the grids”

 

The UK: The UK, with 28.4% wind/solar in 2020, has a CO2-reduction factor significantly less than 0.526, because even more curtailment/counteracting/balancing is required.

 

Ireland, the UK, US, Germany, Spain, etc., have been over claiming CO2 reduction from wind/solar for decades, with connivance from Brussels. See explanation in URL

https://www.windtaskforce.org/profiles/blogs/fuel-and-co2-reduction...

 

5) Germany, Denmark, etc., Using Nearby Grids to Counteract/Balance Variable Wind/Solar 

 

Germany and Denmark have been doing that for decades, as they increased their wind/solar buildouts. 

 

Germany has strong connections to the grids of nearby countries, including Norway, which is connected to Norgrid, which has lots of hydro in Sweden and Norway and nuclear in Sweden, all steady, traditional sources of electricity.

 

There was quite some panic in 2021, well before Ukraine events, which started in February 2022, when, because of low water and low wind in Europe, Norway and France could not export electricity to Germany, which had to restart coal plants and keep its 3 remaining nuclear plants in service longer than intended. 

 

Germany cannot counteract/balance its own wind/solar, and when wind was lacking, it did not have a sufficient fleet of traditional counteracting/balancing plants, staffed, fueled, and with adequate fuel storage to provide 24/7/365 electricity. Germany had to impose rationing measures on its industry and households.

 

NOTE: Solar Panels Are Much More Carbon-Intensive Than Experts are Willing to Admit

https://www.windtaskforce.org/profiles/blogs/solar-panels-are-more-...