Cracks in the Ivory Tower

Environmental researchers from Harvard and Tsinghua Universities released a new study, published as the cover story in the September 11 issue of Science, suggesting that China could meet its entire future electricity needs through wind power alone. Studies that focus on a single technology as the silver bullet that solves all of our energy problems often ignore the practical side of their solutions, leaving mistaken impressions in the public mind.

This latest wind one-size-fits-all study posits that wind power can be used to supply all of China’s electricity needs today and into the future. In sum, this survey follows what is becoming increasing common: Assume a single answer and then construct the scenario that fits a predetermined answer. To modify a familiar idiom, those in their ivory towers should not do energy studies without first talking with those responsible for actually operating energy systems and understanding those systems’ strengths and weaknesses and, most importantly, their limitations.

This study begins by using meteorological data from specific regions of China and then linearly extrapolates that data to determine the theoretical wind generation capability of the entire country. So far, so good.

But once again, the researchers fall into the same trap that U.S. Secretary of the Interior Ken Salazar did in April when he spoke about the role offshore wind energy can play in the future: “With respect to renewable energy, there is tremendous potential concerning wind off the Atlantic.” He added, “there is over 1,000 GW of power or 1,000,000 MW of power developable off the Atlantic coast” that is “the equivalent of energy produced from 3,000 medium-sized coal-fired power plants.” Salazar’s hyperbole failed to note the enormous cost, technical complexity, and environmental impact of his proposed solution, as I discussed in a recent POWER editorial. The same analysis mistakes are now being replayed in this China study, except on a much larger scale.

Rhetorical Question

“The world is struggling with the question of how do you make the switch from carbon-rich fuels to something carbon-free,” said lead author Michael B. McElroy, Gilbert Butler Professor of Environmental Studies at Harvard’s School of Engineering and Applied Sciences (SEAS).  With China as the world’s leader in carbon emissions and second only to the U.S. (about 1,000 GW) in installed power generation at about 793 GW and expected to grow 10% a year, McElroy adds, “the real question for the globe is: What alternatives does China have?”

I disagree with McElroy’s analysis, especially when it comes to China. In my mind, a more appropriate statement should be: Where will these developing countries find the money to begin making the transition to less-carbon-intensive sources of power generation? China and India have been very clear that neither country is prepared to make firm carbon reduction commitments in the future if those reductions adversely impact their economic growth. To suggest that China could serve its rapidly growing appetite for all things electrical by 2030 by constructing a slew of wind turbines isn’t living in the real world, not only with regard to the incredible cost of the proposal but because the numbers don’t add up. Here is what I mean.

Today, China’s total electricity supply uses only 0.4% wind power. Yes, China has been encouraging to developers by ensuring that those building wind turbines are guaranteed a reasonable rate of return and can interconnect to the grid. However, the researchers concluded that an area equivalent to about three-quarters the size of Texas could supply all of China’s electricity needs by 2030 at a cost of 7.6 cents/kWh installed if populated by 1.5 MW wind turbines operating at a 20% capacity factor. Also, the researchers priced these wind turbine installations at only $900 billion at today’s costs. The turbines would generate 24.7 petawatt-hours annually, they estimated.

Pragmatic Numbers

Here’s where injecting a little reality into the study is helpful.

Is a 20% capacity factor reasonable? Yes, it is. But, now do the math for an all–wind turbine China. China has 800 GW of electrical capacity today that generates about 2.9 trillion kWh—about a 41% capacity factor. China’s energy consumption is also expected to double in 20 years, as postulated by the authors, the period covered by this study. So if 800 GW provides the energy now required at a 41% capacity factor, you’d need 2,900 GW of wind power installed by 2030 operating at a 20% capacity factor (as assumed by the authors).

For the wind study, a 20% capacity factor means that 1,450 GW of wind would be required today to meet current demand, and if demand rises linearly, 2,900 GW installed and operating in 2030 would be capable of supplying 100% of China’s energy needs then. This presumes that peak period demand can be shaved or shifted as fossil-fueled backup energy sources are not used, a key point left unaddressed by the authors.

The study also assumed that each turbine is 1.5 MW, which means approximately one million wind turbines must be installed today to replace current installed power, assuming perfect turbine reliability. If electricity demand doubles in 20 years, as assumed by the authors, then another 1,450 GW of wind turbines will need to be installed, which is equivalent to another million turbines, for a total of two million. If these two million wind turbines were installed over the next 20 years, then China must install about 10,000 wind turbines year—a serious challenge, considering the entire fleet of utility-scale wind turbines built over a decade in the U.S. numbers around 10,000. 

What about transmission? In Texas, the new power line contracts required to move wind energy from the Panhandle to main load centers are going at $2 million a mile. Perhaps China or other international contractors could install those transmission lines for less, but the amount of transmission required is staggering given the size of the country and given that China’s transmission infrastructure is essentially nonexistent. The cost of transmission in the U.S. for these new wind circuits is roughly 25% of the cost of the turbines. I’ll use that factor for this back-of-the envelope estimate.

What are the installation costs? I’m sure there would be some economies of scale, but a 1.5-MW wind turbine is conservatively estimated by Berkeley Labs at about $2 million installed in the U.S. in 2007 dollars. That means two million wind turbines will cost about $4 trillion over the next 20 years using this estimate. Add transmission and the total approaches $5 trillion. The authors estimated that the cost of these wind turbines installed was less than $1 trillion and stated in their study that they ignored the cost of transmission.

Counting the Costs

Perhaps these quick estimates are high and the economies of scale will push the costs down. However, even if the costs are pushed down by 50%, but then adjusted for inflation over the next 20 years, this quick estimate far exceeds the Harvard study estimates of $900 billion for the entire 20-year project by several times. The “right” answer is all about picking the most generous economic assumptions.

The researchers’ energy costs also don’t add up. At $5 trillion installed cost (my numbers) in 2009 dollars, using a 10% levelized annual capital cost, the amortized capital cost is $500 billion a year to pay for the wind turbines and transmission to produce double China’s current generation. Dividing those numbers results in electricity costs of 86 cents per kilowatt-hour for the capital cost alone—10 times the numbers the authors estimate to make the project attractive.

Another Answer

McElroy, however, did ask the right question: “What alternatives does China have?”

Here’s one suggestion. China can continue to build coal-fired plants to meet its annual 80-GW load increase at a cost of perhaps $60 to $80 billion a year and use its spare cash to buy more T-Bills from the U.S. Treasury. That is the more likely scenario.

If you were sitting in Hu Jintao’s seat, which option would you choose?

—Dr. Robert Peltier, PE is COAL POWER’s editor-in-chief.

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