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Denmark Faces a Tricky Transition To 100 Percent Renewable Energy
HughPickens.com writes Justin Gillis writes in the NYT that Denmark is pursuing the world's most ambitious policy against climate change, aiming to end the burning of fossil fuels in any form by 2050 — not just in electricity production, as some other countries hope to do, but in transportation as well. The trouble is that while renewable power sources like wind and solar cost nothing to run, once installed, as more of these types of power sources push their way onto the electric grid, they cause power prices to crash at what used to be the most profitable times of day. Conventional power plants, operating on gas or coal or uranium, are becoming uneconomical to run. Yet those plants are needed to supply backup power for times when the wind is not blowing and the sun is not shining. With their prime assets throwing off less cash, electricity suppliers in Germany and Denmark have applied to shut down a slew of newly unprofitable power plants, but nervous governments are resisting, afraid of being caught short on some cold winter's night with little wind. "We are really worried about this situation," says Anders Stouge, the deputy director general of the Danish Energy Association. "If we don't do something, we will in the future face higher and higher risks of blackouts."
Environmental groups, for their part, have tended to sneer at the problems the utilities are having, contending that it is their own fault for not getting on the renewables bandwagon years ago. But according to Gillis, the political risks of the situation also ought to be obvious to the greens. The minute any European country — or an ambitious American state, like California — has a blackout attributable to the push for renewables, public support for the transition could weaken drastically. Rasmus Helveg Petersen, the Danish climate minister, says he is tempted by a market approach: real-time pricing of electricity for anyone using it — if the wind is blowing vigorously or the sun is shining brightly, prices would fall off a cliff, but in times of shortage they would rise just as sharply.
Environmental groups, for their part, have tended to sneer at the problems the utilities are having, contending that it is their own fault for not getting on the renewables bandwagon years ago. But according to Gillis, the political risks of the situation also ought to be obvious to the greens. The minute any European country — or an ambitious American state, like California — has a blackout attributable to the push for renewables, public support for the transition could weaken drastically. Rasmus Helveg Petersen, the Danish climate minister, says he is tempted by a market approach: real-time pricing of electricity for anyone using it — if the wind is blowing vigorously or the sun is shining brightly, prices would fall off a cliff, but in times of shortage they would rise just as sharply.
Solar panels still generate electricity under cloudy conditions. In fact, it actually increases the diffuse radiation. Sure direct normal radiation decreases, but the cloud cover allows for reflection of radiation back down from the sky that is not insignificant. I live in an area that is regularly overcast and PV performs quite well in this area. In this situation I would be more concerned about obstructions (shading).
Cost is one factor, a 50kWh battery is about over 25,000 USD -- about $500 per kWh for lithium ion car batteries. Projected cost by 2025 is about $160 per kWh, so only $8,000 in in 2025
It does not last a few days of intensive use either. Avg US household use is in 2012 was 10,837 kWh per year, or about 29.7 hWh per day, so 50kWh is less than 2 days..
The round trip efficiency of hydrogen storage is only 30% to 50%. That means that you would have to put in two to three times the energy that you get out. In the base of that electricity stored in hydrogen will cost 2 to 3 times as much a usual.
Secondly hydrogen is difficult to store in large quantities. It leaks through solid steel and unless cryogenicly stored has a very low energy density.
Take a look at real figures from Germany. They have an installed solar capacity of 38.124 GW. In January 2014 they produced about 800GWh of electricity. With even 5 hours of sunlight they should have produced 5.8TWh. That means that the actual production is only 14% of installed capacity. Daylight does not mean full output.
I believe Nissan has stated that those are sold at a loss. They are only available for leaf owners as a service basically to avoid scaring away new buyers and give value to secondary sales.
Worldwide Military budgets: $2100 billion. Worldwide Space Exploration budgets: $38 billion. Really, world? Really?
This is a permanent problem, and one that they were warned about, repeatedly. Greens in the government just pretended it doesn't exist until it's now hitting them square in their faces. Germany is hitting the same problem with Energiewende right now.
The situation is this. Denmark produces mostly wind power nowadays. Wind power is installed mainly offshore. That means that they have huge peaks and huge offtime. Europe had wholesale electricity prices set on electricity exchanges for years now. What that means is that large producers and users buy and sell energy based either off current price, or long term contracts that usually take those peaks into account.
For actual producers, this means that free market sets the price. I.e. when wind blows and everyone is creating a huge peak, electricity price can actually dive into negative for reasons I'll outline in a moment. And when it's down due to too much or too little wind, you have a huge demand for electricity to replace the lost load driving the prices up.
Now for the reason for negative pricing on electricity. Normally renewables like wind functioning in fully free market would be massively unprofitable when installed in sufficient numbers because they would all produce at once > price collapses due to massive supply and lack of demand > they never get a good price on their electricity. And at the same time when they cannot produce any energy, only base power kinds of power plants produce energy and get to net a premium.
So how do you make renewables make money when they can only sell when price is cheap and not when it's more expensive? The answer in Denmark and Germany has been to legislate priority tiers depending on your "greenness". Essentially, not a single watt of non-renewable energy can be sold on exchange until all of renewable capacity has been sold. At the same time, same legislation prevents reliable non-renewables and renewables from spinning down their plants while they legally cannot sell anything they produce. The result is absurd. They end up paying just to get someone take the power they have to produce off their hands. Hence negative electricity prices during peak times for non-renewables who can sell their electricity on the exchange after renewables took all the offers with actual money on the table.
This obviously leads to the problem where it's unprofitable to keep the non-renewable plants operating, so operators just shut down the plant. Except that woops, if they do, you have grid blackouts as a regular occurrence because there's not enough base power when wind isn't blowing and you actually stand to lose the entire grid to a blackout. Something that is unheard of in modern Northern Europe.
TL;DR Essentially, the reality is that the market is functioning too well, and as a result to make renewables profitable legislators had to massively shaft everyone else with punitive measures. And now that everyone else has been penalized into unprofitability and want out of the business, the brutal reality of the fact that wind is dysfunctional as base power is starting to hit everyone in their faces.
Somewhat OT, but... Denmark is very reliant on the tax revenue derived from "green taxes" to pay for it's vast social programs. So much so, that acting green is left to your conscience, and may actually cost you dearly. A few examples:
Taxes on cars are at roughly 180% this means that cars with new fuel-saving features become unfeasible, hybrids like the Toyota Prius is simply too expensive and almost none are sold in Denmark. 100% electric cars were excluded from the 180% tax, but this is bound to change as the Tesla S is selling well, and is generally considered a luxury car (which socialists generally hate, regardless of how "green" they are).
There is virtually no financial incentive to charge your Tesla at off-peak hours, because the tax on electricity is flat, and the market price of the electricity only make up 20%-30% of the price. For all intents and purposes, the cost of charging your tax-free Teslas batteries are the same whether you charge it at 7 pm (peak consumption, and powered by coal), or at 3am (when subsidized electrical wind power is sold at a loss to neighboring countries). In more developed countries, washer/dryers are set to run at off-peak hours, but no such advancements have been introduced in Denmark. It would be an easy thing to introduce, but the loss of tax revenue makes it impossible to introduce such a scheme.
A supermarket will generally let the hot air from the refrigeration systems into the atmosphere, because if they recycle the heat (to heat the store), they are labelled an energy producer, and will be levied with bureaucracy and taxes that far surpass any savings.
Installing solar panels is limited to 6K Watt per house for some reason.
Generally Denmarks ambition to be green is severely limited as the taxation levied on various services are (as you do) with the catch-all argument that the tax is added to "benefit the environment".
Look, energy production is hard stuff, and the reporter here clearly didn't understand ANY of the intricacies.
Basically the situation is this: you have a consumption curve that you need to meet at every instance. It is important to understand that this is a curve with daily peaks. These peaks MUST be met or you get riots in the streets.
If you erect a wind turbine it will produce power as the wind blows. Same with solar and the sun. When you match the resulting production curve up against the consumption curve, there will be gaps that you need to fill in some other way.
Nuclear power is a bad way to fill the gaps. Due to high capital costs, to stay economical a nuclear plant usually needs to produce 100% all the time until it needs refueling (which takes a month I think) where it will produce 0%, in other words a flat line with some clearly defined gaps. But we need to match a curve with gaps, so a flat line doesn't help much.
Instead you need something you can dispatch relatively quickly without costs going through the roof. Currently stuff like hydro, biogas, biomass, etc.
In Denmark, besides all the wind turbines we have a bunch of big coal plants. These plants are currently being transitioned to biomass (i.e. wood pills and chips) and will fill in the gaps, as well as produce heat for district heating (which is really big in Denmark, winter's cold up here).
If these plants get into financial trouble, the national grid operator Energinet can increase a fee on each kWh (the PSO) and use the extra income to pay some of the plants for standby services. Besides this, we have really good grid connections to Norway where they have a ton of quickly dispatchable hydro. The connections to Norway are a two-way street - they get cheap wind turbine power in return which makes it easier for them to get through the winter without running out of water (very little water flows to the dams in winter because it's frozen).
Hence, apart from the transportation sector where we're waiting for Tesla and the like to come up with better electric cars, there really isn't anything tricky or hard about the transition away from fossil fuels in Denmark.
It was tricky in the past because wind turbines used to be expensive, but the industry has matured and wind is now the cheapest source of new (undispatchable) kWhs. Really, the only political question left is whether we should try to save some of the biomass by building more off-shore wind turbines.
It's also true that our current path is a bit more expensive than a fossil-based base scenario - I think it's supposed to be around 100-200 USD per inhabitant per year in 2050. So not overwhelmingly expensive.