Assiduous Reader JP brings the following to my attention, in response to the bit about renewables’ effect on utilities:
Europe’s drive toward a power system based on renewable energy has gone so far that output will probably need to be cut within months because of oversupply.
Network operators are likely to curb solar and wind generation at times of low demand to prevent overloading the region’s 188,000 miles (302,557 kilometers) of power lines, Entso-e, the grid association in Brussels, said last month. Renewable output is poised to almost double to 18 percent by 2020, according to Energy Brainpool GmbH & Co. KG, a consulting firm in Berlin.
Europe’s fivefold surge in green energy in the past decade pushed prices to a nine-year low and wiped out $400 billion in market value of utilities from Germany’s RWE AG to GDF Suez SA in Paris.
…
European governments handed out $57 billion in 2012 for green energy projects, more than half of the global $101 billion, according to the International Energy Agency in Paris.Investment in new European projects slowed to $43 billion last year from as much as $80.2 billion in 2012, according to Bloomberg New Energy Finance in London.
The spending came even as EU’s power demand peaked in 2008 and is poised to slide 0.3 percent this year, according to IHS Inc., a consulting firm based in Englewood, Colorado.
At some point, grid operators and power suppliers are going to have to come up with some way to store electricity, de facto if not de jure. My guess is that the best way to do this is to increase surge capacity in hydroelectric plants, so you just turn off the generators and let the water build up a little bit more behind the dam, until you need the power and can let things run flat out. This happens every day at Niagara Falls; surely the method could be extended to cover intermittent wind and solar supply with minimal tinkering.
Anybody with more insights into this … eMail me! I have posted a question on the Straight Dope Message Board, which is always a good resource.
What with it being close to election day and all, I thought I’d pass along Assiduous Reader JP’s note about promises, promises:
In what appears to be a first, the Lisgar GO station in Mississauga is going green.
As of about April 1 [2009], if plans stay on track, about 80 per cent of the busy train station’s electrical needs will be powered by the wind, courtesy of a brand new turbine that will generate roughly 56,000 kilowatts a day.
GO Transit spokeswoman Jessica Kosmack suggests the turbine’s $620,000 price tag will prove a bargain and perhaps become a prototype for other eco-oriented initiatives across the 8,000-kilometre GO network, which comprises 59 rail stations and numerous bus routes.
A wind turbine pilot project at a GO station in Mississauga, built for $620,000, is producing 91 per cent less electricity than originally projected.
The turbine, unveiled at Lisgar GO station in April 2009, was expected to produce 98,550 kilowatt hours (kWh) per year — enough to power 80 per cent of the station’s electricity needs.
More than four years later, it is only producing around 9,000 kWh per year, or about 9 per cent of projections.
That’s enough electricity to power a single typical household in Toronto for nine months.
Metrolinx blamed “inconsistent localized wind levels” and new development in the area for the turbine’s underperformance. A spokeswoman still called it a “marginal success.”
Other marginal successes include Enron, Chrysler, Bre-X and Nortel.
It was a good day for the Canadian preferred share market, with PerpetualDiscounts winning 14bp, FixedResets up 12bp and DeemedRetractibles gaining 8bp. Volatility was average and the Performance Highlights table is comprised entirely of FixedResets, which continue to adjust after the recent carnage and partial recovery. Volume was very low.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.2618 % | 2,513.3 |
| FixedFloater | 4.56 % | 3.81 % | 30,237 | 17.78 | 1 | 0.0000 % | 3,768.4 |
| Floater | 2.90 % | 3.03 % | 45,595 | 19.58 | 4 | -0.2618 % | 2,713.7 |
| OpRet | 4.38 % | -12.47 % | 27,822 | 0.08 | 2 | -0.1748 % | 2,713.2 |
| SplitShare | 4.81 % | 4.30 % | 64,716 | 4.14 | 5 | 0.1753 % | 3,114.4 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.1748 % | 2,480.9 |
| Perpetual-Premium | 5.52 % | 2.65 % | 82,715 | 0.08 | 17 | -0.0139 % | 2,398.7 |
| Perpetual-Discount | 5.27 % | 5.28 % | 107,160 | 14.97 | 20 | 0.1374 % | 2,542.2 |
| FixedReset | 4.51 % | 3.74 % | 220,259 | 6.78 | 78 | 0.1214 % | 2,525.9 |
| Deemed-Retractible | 5.01 % | 1.44 % | 148,691 | 0.21 | 43 | 0.0773 % | 2,526.2 |
| FloatingReset | 2.68 % | 2.52 % | 134,814 | 3.97 | 6 | -0.0199 % | 2,479.9 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.K | FixedReset | -2.21 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.32 Bid-YTW : 4.14 % |
| CU.PR.C | FixedReset | -1.13 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-06-01 Maturity Price : 25.00 Evaluated at bid price : 25.31 Bid-YTW : 3.61 % |
| MFC.PR.J | FixedReset | -1.10 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2018-03-19 Maturity Price : 25.00 Evaluated at bid price : 25.28 Bid-YTW : 3.66 % |
| BAM.PR.T | FixedReset | 1.10 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 23.34 Evaluated at bid price : 24.79 Bid-YTW : 4.01 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| BMO.PR.T | FixedReset | 239,548 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 23.15 Evaluated at bid price : 25.00 Bid-YTW : 3.75 % |
| IFC.PR.A | FixedReset | 215,207 | RBC crossed blocks of 133,700 and 64,800, both at 23.75. YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.75 Bid-YTW : 4.38 % |
| BAM.PF.F | FixedReset | 135,410 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 23.14 Evaluated at bid price : 24.98 Bid-YTW : 4.39 % |
| RY.PR.H | FixedReset | 113,905 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 23.15 Evaluated at bid price : 25.01 Bid-YTW : 3.76 % |
| BAM.PF.C | Perpetual-Discount | 110,571 | Scotia crossed blocks of 58,200 and 30,000, both at 22.10. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 21.82 Evaluated at bid price : 22.12 Bid-YTW : 5.57 % |
| TD.PF.A | FixedReset | 106,020 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2044-06-09 Maturity Price : 23.15 Evaluated at bid price : 25.04 Bid-YTW : 3.74 % |
| There were 18 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| MFC.PR.K | FixedReset | Quote: 24.32 – 24.95 Spot Rate : 0.6300 Average : 0.4507 YTW SCENARIO |
| HSB.PR.C | Deemed-Retractible | Quote: 25.46 – 25.70 Spot Rate : 0.2400 Average : 0.1604 YTW SCENARIO |
| ELF.PR.H | Perpetual-Discount | Quote: 24.75 – 25.03 Spot Rate : 0.2800 Average : 0.2075 YTW SCENARIO |
| RY.PR.I | FixedReset | Quote: 25.12 – 25.33 Spot Rate : 0.2100 Average : 0.1390 YTW SCENARIO |
| VNR.PR.A | FixedReset | Quote: 25.65 – 26.00 Spot Rate : 0.3500 Average : 0.2827 YTW SCENARIO |
| ENB.PF.A | FixedReset | Quote: 25.10 – 25.33 Spot Rate : 0.2300 Average : 0.1648 YTW SCENARIO |
Looks like the straight dope discussion is going strong. I went to a lecture on this issue and from what I understand all the implications of renewable energy aren’t fully understood. I might be able to find the name of the lecturer around someplace. The basic issue is we’re going from an environment where there was absolutely no volatility in electricity supply, some volatility (but very predictable) in demand to significant supply volatility. The grid was never designed to support supply volatility – it was designed to distribute from a few generators to many customers, not a many to many situation.
For your hydro solution you need some time to spin up the turbines to generate more electricity. For predictable outages on the supply side like, it’s dark, it’s cloudy (weather is kind of predictable), or not really windy (again kind of predictable) this is entirely feasible. However the hydro generation has to be close to the demand for this to work well. My understanding is pretty much that Quebec & BC have enough hydro for this to work, but they don’t need the energy so implementing renewables doesn’t make much sense. Built hydro is free and the economics if you’re the owner of a hydro dam of being someone else’s backup are bad!
The volatility in supply is not only from when it’s dark and not windy it is also possible for it to be too windy and then wind generation shuts off suddenly and a cloud passing over a solar farm immediately slows electricity production. My understanding is that events like those, which are largely unpredictable make it hard to use hydro as backup generation or “storage”. To solve that problem Ontario keeps some generation capacity (petroleum based) “hot” at all times. That means that those generation stations are running as if they are producing energy but doing nothing but wasting energy in case its needed. In the current grid configuration my understanding is it’s either that or suffer from brown outs during the lag for start up of new generation. As of a couple years ago the impact of this inactive generation was poorly researched. We want to be green but not be inconvenienced!
I also understand that negative power pricing is partly a nuclear phenomenon. Where I live we don’t have any of that but it costs a lot to shut down those reactors and takes a lot of time and in many cases they would rather pay to offload generation than shut down their plants.
My 2 cents for what its worth!
Thanks for your comment! Sorry to be so long about approving it, things get a little hairy when a volatile market meets a PrefLetter deadline.
There’s another thread on the Straight Dope that I’ve gotten involved in: Most efficient way to store excess energy, which you might find entertaining.
from what I understand all the implications of renewable energy aren’t fully understood.
Sounds reasonable. And from what I can make out, no attempt was made to understand them before various governments started splashing out the subsidies.
the economics if you’re the owner of a hydro dam of being someone else’s backup are bad!
I can see that if you’ve got a plant that runs 7/24. One thing that came up in the Straight Dope discussion that I hadn’t appreciated before is that dams exist that only run for part of the day. It seems to me that these would be ideal candidates for load-shifting – you just need a bigger reservoir and you can use it for pumped storage.
immediately slows electricity production. My understanding is that events like those, which are largely unpredictable make it hard to use hydro as backup generation or “storage”. To solve that problem Ontario keeps some generation capacity (petroleum based) “hot” at all times.
OK, I follow that argument (I wasn’t aware that hydro needs some time to power up; you learn something new every day!), but still, I’d like to see some numbers. What are the specific issues that prevent pumped storage from being a viable (partial) solution to these intermittent supply problems.
I also understand that negative power pricing is partly a nuclear phenomenon.
I have difficulty understanding this, given that nuclear is the ultimate baseload power. I can sort-of see that if you have nuclear at, say, 75% of the required power and suddenly renewables start generating 30% of required power then you have an immediate problem, but I don’t see how that can be ascribed to nuclear’s sins.
I was operating mostly on memory in my first comment and still haven’t found the presentation I mentioned. I had a read through some of the discussion on those other message boards and I think you can get some hard data from the grid operator in Ontario. It’s difficult to get to exactly what I think you’re looking for but I would think it’s possible. The website is http://www.ieso.ca if you haven’t been there in your search yet. I think they have the ability to answer your question, but I wonder if they are allowed!
They have a lot of reports on the status of the system.
On power production held in reserve:
IESO provides a report called dispatch area operating reserve which I take to be that production ready to go at a moment’s notice. The system is paying for those plants to be ready to go according to their individual agreements and submitted bids. Trouble is that it’s not broken down by generation fuel so you can’t approximate what is hydro and what is not. There is around 3,000 MW of production on standby now. It would be interesting to know how much that has increased since the IESO started operating and the correlation to the increase in renewable production.
On using Hydro generation as reserve:
One of the details that falls out of the reporting above is that production held in reserve is much more local than scheduled production. There are 27 regions listed with a material deviation between regions. I would guess you would need a dam in each of those regions to drive a purely hydro response to that demand.
On the economics for a hydro producer:
I suspect that the reason Dams engage in timing their production is economic rather than operational most of the time. They are paid more to produce power during the day than they would be during the night. So they adopt the rational strategy of running the reservoirs down during the day and filling them up during the night (within their individual operating parameters). I suspect that in order to get them to act as storage providers IESO would have to implement a pricing program that transferred some of the premium daytime pricing they would normally receive to them to remain remain offline. Is that cheaper than paying for a gas generator to be in a ready to generate position? I don’t know. However narrowing the peak to trough price of electricity would be the benefit available to storage providers, provided they didn’t have the alternative of just generating during the day. As a result you probably need a to find a dam that has capacity but limited water flowing into it to make the economics consistent with operating as storage.
On the composition of supply:
There’s also a great supply “Stack” chart showing how demand is being met. It’s at http://ieso-public.sharepoint.com/Pages/Power-Data/default.aspx#supply.
On another form of energy “storage”:
The IESO has structured demand arrangement with some large consumers that gives IESO the ability to instantly change the amount of energy they are consuming. Such that if the grid in that area enters an excess demand or limited supply condition those consumers will temper their consumption. I can’t think immediately of any business willing to sign up for that but they are provided with better power rates in exchange for making their demand dispatchable. It’s kind of the same thing as the smart grid concept, just implemented with large consumers. I agree with your sentiments that it’s probably not worth the implementation cost at the household level but for some big producers it could probably work.
Some more thoughts for you even though you’ve probably moved on!
I don’t know why your comment was held for moderation – it was made after I approved your first comment. I find this all very mysterious.
However, I have now added a ‘plug-in’ to the PrefBlog software, whereby spam-bots get confused and place all their garbage in the wrong fields, resulting in an automatic rejection of the spam. I’ve held off on adding plug-ins, because I feel that in general they will add to the vulnerability of the software, as well as making updates potentially more complex, but the amount of spam received was reaching ridiculous proportions – over 100,000 spam comments in the last six months! I just can’t do it by hand any more.
Anyway, I really like the supply chart at http://ieso-public.sharepoint.com/Pages/Power-Data/default.aspx#supply ! For some reason, Ontario is consistently exporting power in the wee hours of the morning – that sounds like a good opportunity for anyone who wants to run an energy-storing system right there!
I can’t think immediately of any business willing to sign up for that but they are provided with better power rates in exchange for making their demand dispatchable.
My father, a mining engineer, liked to tell me of one mine he worked at that had a time-of-use power billing system and management went nuts minimizing their power cost. As a result, all the skipping [bring ore up from underground] was done on a weird schedule and it proved extremely inconvenient to the miners … who received a significant proportion of their pay in the form of production bonuses.
Eventually, management had to try other methods, because they couldn’t hang on to their good staff – people would just quit and go to a mine where scheduling was a little more worker-friendly.
On using Hydro generation as reserve:
Yes, you’d probably need lots of little dams rather than just a few central ones, but I’d really like to see a paper on the economics of this. Storage at an existing hydro dam is really only a variation of pumped storage and it would be very interesting to see some hard numbers.
At any rate, it seems to me that the future wind/solar installations should really be required to include storage as part of their proposals.
It would be interesting to know how much that has increased since the IESO started operating and the correlation to the increase in renewable production.
I agree, although making these figures public might prove politically unpopular!
OK, I figured out why your comment was held, even though you had a previously approved comment:
One of the administrative options is ‘hold for moderation if the comment contains more than X links’, which is a spam-fighting feature. I had set X to 2, so your comment was held. I have now reset X to 5 so … link to your heart’s content!