Distinctions remain
Of course, the analogy between the wind energy and gas-fired power businesses can only be taken so far. Distinctions abound. Following are three.
First, there were really only four suppliers of large, F-class gas turbines to the U.S. market in the 1990s. A merger reduced that number to three by the latter part of the decade, but then a Japanese supplier entered with a new design. Today, there are between a half dozen and a dozen potential suppliers of wind turbines in the 2- to 3-MW size range. How many of them can truly compete in the U.S. is another issue.
Second, the U.S. wind industry is subsidized by the federal production tax credit and renewable portfolio standards that have been implemented to varying degrees in more than 20 states.
Third, a gas-fired plant really can operate like a traditional central power station with respect both to the grid and to a utility's resource portfolio. No one is talking about wind facilities with capacity factors higher than 40%. Without energy storage, wind is an intermittent energy and electricity source. Building transmission infrastructure is difficult enough under any circumstances today, but in remote areas is even harder to justify for a resource that, at best, will be productive only one-third of the time.
Heeding the lessons
What are the takeaways from this analogy? How do we prevent a repeat of the gas-fired merchant power debacle of 2002? Here are some issues to reflect on.
Get organized. Owner/operators of gas turbine and combined-cycle plants participate in user groups specific to their type of machines. Some are organized and administered by turbine vendors, others by user boards or technical associations. Perhaps wind farm owner/operators and developers should organize their own users" group now, before O&M issues with some of the new machines get out of hand. Finding out more about the work being done at Sandia would be a good first step in that direction.
Collect and use data. Many gas-turbine user sites share O&M and performance data that are filtered and made "generic" (for general trends) by an independent third party. That is, the data are collected, analyzed, and reported back to the facilities as "fleet" data. Building this capability into projects from the get-go might be a way to ensure that technology issues are analyzed and solved through data-driven processes. EPRI's Wind Turbine Verification Program and the Utility Wind Integration Group (UWIG) could provide a framework for such activities on a broad industry scale. In the meeting notes associated with the workshop referenced earlier and available on the Web, Sandia notes that the American Wind Energy Association and UWIG may be forming user groups.
Cooperate. Ten suppliers beating each other up isn't healthy for anyone. Developers and owner/operators should cooperate through industry-based groups to qualify and fully demonstrate new turbine designs. By the vendors" admission, gas-turbine technology development often took place with initial "commercial" units, not through traditional technology demonstrations.
Be wary of new technology creeping into machines. For example, the industry is currently focused on the premature failure or unreliability of mechanical components such as gearboxes and bearings. However, the new power electronics components that are being added to manage the grid interface may be the new frontier with respect to O&M and reliability (Figure 3). According to an article in the Spring 2006 EPRI Journal, power electronic controllers suitable for large, more complex generator designs provide power output smoothing and support variable-speed operation. Although falling costs will make these new components viable, there's precious little about their long-term performance to be found in the literature.
3. AC/DC plus. Power electronics packages for controlling a wind turbine's speed and output and interfacing it to a grid are becoming more sophisticated. Two examples are the doubly fed generator and power converter for a variable speed wind turbine (top) and full-conversion variable-speed generator and converter system (bottom). Source: California Energy Commission report CEC-500-2006-050 (May 2006).
Keep engineering ahead of financial engineering. The reality of today's power generation business is that it is driven more by private capital—either through utility company equities and bonds and private equity investment pools—than by the regulated rate of return construct. Engineers need to maintain oversight of the financial pro forma—vigilantly, not as a token gesture. There can be significant differences between theoretical and actual machine performance and between forecasted and actual wind energy profiles. Making sure that adequate reserves are available for unexpected O&M events is a must
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Consider adding energy storage to your wind farm. A variety of storage schemes are available to manage wind energy's interface with the grid. Having energy storage makes production more predictable and thus more attractive to grid operators, bilateral contracts, and others. With storage, you could even imagine selling a fuel- and CO2-free source of electricity into peak electricity markets as a structured product.
As stated at the top of this article, it would be a shame if wind power ends up getting a black eye from the same irrational exuberance that took down the gas-fired power business. Staying alert to the dangers of such exuberance is the best way to avoid its nasty consequences.
—Jason Makansi is president of Pearl Street Inc., a technology deployment consulting firm based in St. Louis. He can be reached at 314-495-4545 or jmakansi@pearlstreetinc.com.
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