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America's first big offshore wind farm sets record low price
- amerine 8y agoPretty great for those folks seeing their monthly costs go down and a successful project! Congrats
- ashooner 8y ago>Bloomberg reports that the 800MW Vineyard Wind project – a yet-to-be-built joint effort of Avangrid and Copenhagen Infrastructure Partners – is expected to provide electricity and renewable energy credits for 6.5 cents a kilowatt-hour (8.5c/kWh AUD) over the life of its 20-year contract. Seems maybe a little premature to call it successful.
- 8bitsrule 8y agoOTOH, great to see the US getting off the dime after much of Europe has tackled this - with sterling results. That our regrettable resistance is ending is in itself a great success.
- hcurtiss 8y agoThe article does not mention whether this price includes the cost of the peaking facility necessary to cover wind intermittence. The PPA price usually would not. Unless you have excess peaking capacity, bringing a big new wind farm online usually means you need a new big gas peaking facility.
- Retric 8y agoCoal power plants also need peaking support as base load power is not load following. Yet, because they are cheap enough that's not been a problem in the past. Wind/Solar is thus filling the exact same base load niche of cheap power.
- sp332 8y agoCoal only needs peaker plants when demand spikes. Wind and solar additionally need peakers when production slumps.
- Gibbon1 8y agoSolar though produces power roughly in phase with the demand curve. Wind tends to wreck havoc on base load operations because it often produces a lot of power at night. Since wind is cheap the solution is to retire coal fired plants.
- theptip 8y ago> Solar though produces power roughly in phase with the demand curve. I don't think that's true -- load peaks in the evening, while solar peaks in the early afternoon. This issue (as pertains to the mismatch between solar/wind production and grid demand) has a name: https://en.wikipedia.org/wiki/Duck_curve https://en.wikipedia.org/wiki/Duck_curve
- Retric 8y ago1,000 miles of power lines east or west pushes solar power +/- 1 hour earlier or later at the cost of ~3% efficiency. It's only nighttime that's a real problem but again, night time has lower overall demand. Which means the duck curve is mostly a non issue over any large land mass. Alt least relative to coal / nuclear base load power plants.
- patrickg_zill 8y agoPlus the cost of the power lines and related equipment.
- gandreani 8y agoExactly! That's probably %40-25 of the cost in our utility bills. The maintenance of these is never considered
- lukeify 8y agoIf only coal and gas-fired power plants factored in health & climate externalities into their levelized cost per kWh too...
- deleted 8y ago[deleted]
- Animats 8y agoFor oil, we should add in all the US spends on Middle East wars.
- ars 8y agoAnd Russia. It's amazing how many opponents of the US have economies that are dependent on Oil.
- ph0rque 8y agoSheer coincidence, I tell you!
- fein 8y agoWhere's all the oil we acquired from destabilizing the ME? It would make sense if the US currently controlled all the oil fields in Iraq and Kuwait, but we don't.
- Brakenshire 8y agoOil is fungible, it doesn’t matter whether it is burnt in America or sold by American companies, it matters if the market price is cheap.
- hueving 8y agoThat's irrelevant. Unless you can show that the in place regimes would not have extracted the oil (something not even Norway can resist), the wars had no impact on its presence in the market (other than perhaps a delay during instability).
- safgasCVS 8y agoShun the non-believer! But you're not wrong. These articles give false hope. Average capacity of an offshore farm sits at 40% annually in best case scenarios while a typical LNG plant would be what around 80-90% capacity. So you need to build the same LNG plant locally anyways as a backup and switch it on and off as the wind changes. How is this sensible? Ok maybe you wouldnt need to build the additional coal/gas plant if USA had a good network to shuffle electricity across states but even with your terrible infrastructure everyone complains about you cant seem to get a basic spending bill passed to fix potholes, so these people think you're going to be building these trans-continental cables to trade electricity? No luck.
- gandreani 8y agoThey exist actually. For example, when California wind drives prices down to <0, it gets given away to nearby states (I think mostly Nevada)
- hueving 8y agoA wind plant that burst between not enough and too much is not the same thing as a constant source. Giving away energy to Nevada is an example of a failure, not a stable source.
- gameswithgo 8y agoif you insist on your limitations, they will be yours to keep.
- gehsty 8y agoThe price given is the subsidy, not the cost of construction. I’ve worked on multiple European offshore wind farms and no new gas facilitiy was constructed.... The switching on these things is insane, I think in the UK the nationa grid can switch off an entire +500MW facility in a couple of seconds.
- giarc 8y ago>This was confirmed by the CEO of the project, Lars Thaaning Pedersen, who said in a statement that federal tax credits and a long-term power-purchase agreement had helped the wind farm “offer an attractive price” to consumers. Would it not make more sense to include the federal tax credits since they would be at the cost of the tax payer?
- phil248 8y agoAt the "cost" of federal debt perhaps. Not collecting taxes on something that might otherwise be taxed is not the same as someone taking your money via taxes and using it to pay for something. What does it cost you if the government doesn't tax your local church?
- EvilEndures 8y ago> Not collecting taxes on something that might otherwise be taxed is not the same as someone taking your money via taxes and using it to pay for something. What does it cost you if the government doesn't tax your local church? Debt increases -> interest payments increase -> interest is paid at public expense from the general pool of taxpayers. I know this sort of causal relationship isn't immediately obvious but it is there as it squeezes services for everyone else if you don't raise taxes to cover the difference.
- vkou 8y agoBut the taxpayers are beneficiaries of these higher debt payments, through their pension funds and 401k accounts. Or so we are told, every time taxes are cut for the wealthy.
- EvilEndures 8y agoThe research on the subject has shown otherwise. Even if it wasn't: https://www.google.com/amp/s/www.washingtonpost.com/amphtml/opinions/trickle-down-economics-is-a-nightmare-kansas-proved-it/2017/06/12/c2d7aae0-4fa6-11e7-91eb-9611861a988f_story.html https://www.google.com/amp/s/www.washingtonpost.com/amphtml/... Kansas showed how well it works in practice. And even if you believe neither of those things: https://www.npr.org/2017/03/01/517975766/while-trump-touts-stock-market-many-americans-left-out-of-the-conversation https://www.npr.org/2017/03/01/517975766/while-trump-touts-s... 52% own any stock, so you are still effectively stealing from the other 48%
- brij0102 8y agoI wonder if some of these savings should be set aside to directly go towards cleanup operations - processes to scrub CO2, reduce ocean acidification etc
- agumonkey 8y agoFinally something else than coal. If the current admin could jump on the opportunity to diversify into renewables.
- rmason 8y agoI thought the project was dead due to lobbying by the Kennedy and Koch families (talk about strange bedfellows) in 2017. Has it been resurrected under a different name? https://www.bloomberg.com/news/articles/2017-12-01/cape-wind-developer-terminates-project-opposed-by-kennedys-koch https://www.bloomberg.com/news/articles/2017-12-01/cape-wind...
- nicwolff 8y agoCape Wind was proposed for Nantucket Sound, north of the islands and just 5 miles south of Cape Cod. Vineyard Wind will be 15 miles south of the islands.
- sp332 8y agoYeah, just in April. https://arstechnica.com/science/2018/05/america-your-offshore-wind-is-coming-1-2-gw-in-contracts-awarded/ https://arstechnica.com/science/2018/05/america-your-offshor...
- JKCalhoun 8y ago> talk about strange bedfellows I get what you're saying but ... two aristocrat families? Not strange at all.
- tomcam 8y agoIt hasn’t been built, the “low” price is supported by federal tax credits which means all the taxpayers of United States, and its results are only “expected”. This is hardly a news article, it is more of a propaganda piece.
- GCA10 8y agoCan we size these tax credits, please? Lots of argument in both directions without any sense of scale. If the tax credits artificially cheapen the price by 10% (i.e. 7.2 cents/kwh becomes 6.5 cents/kwh), they're not a major distortion. If they cheapen the price by 50% (13 cents/kwh becomes 6.5 cents/kwh), then that's a big thumb on the scale. Until there's more clarity on this, it's hard for me to take a side.
- mikeyouse 8y agoThe wind energy production tax credit was $0.023 per kwh in 2016 -- It's indexed to inflation and then stepped down by 20% per year from there. So for projects initiating in 2018, the PTC should be $0.023 x 1.03^2 x 60% . (3% inflation for 2 years, 40% discount). So this project should expect to see ~$0.0146/kwh or 1.46 cents/kwh in subsidy.
- InitialLastName 8y agoAs opposed to its competitors (the points of price comparison) who get tax credits via the government not appropriately charging them for their negative externalities? How's that for the taxpayers of the United states supporting a low price?
- IanDrake 8y agoI wonder how many piping plovers these will kill.
- deleted 8y ago[deleted]
- JTbane 8y agoI'm not a fan of wind- big, ugly, noisy, and deadly to birds. Why is nuclear not considered an option to fight climate change?
- pm90 8y agoBecause of 3 mile Island, Fukushima and Chernobyl. If we had invested the same amount of effort in making Nuclear energy safe as we did in lobbying against it, we would probably have reduced our carbon footprint enormously already. Weirdest/Biggest missed chance for climate change.
- tormeh 8y agoNuclear is unsafe for the same reason software is unsafe. Because absent obvious signs of lack of safety, there will always be a drive towards lower cost. It's sociology, not technology.
- tpm 8y agoIf you did that, you would end up with unbelievably expensive nuclear power plants, which is exactly what is happening (see Hinkley Point C). And that still does not solve the dismantling and long-term safe storage after the plants end of life, so you are pushing additional expenses to the future.
- pm90 8y ago> so you are pushing additional expenses to the future. Is that a necessarily bad thing? Serious question. The nuclear waste that we generate is concentrated in the Nuclear Reactors and thus can be tracked and managed (I'm assuming a reasonable amount of competency and lack of natural disasters etc.). We could just store it locked away in concrete containers far from any human population centers. Perhaps in the future we discover a use for all that waste. Or perhaps space travel becomes cheap enough that we start jettisoning the waste to the Sun, or any other low-cost orbital trajectory. Right now, the CO2 generate from fossil fuels is just dumped into the environment and we know that is causing climate change and is a clear, immediate and existential threat to humanity. Is the decision really that hard to make?
- gammateam 8y agoMiners flocking
- api_or_ipa 8y agoAs others have pointed out, the title is highly misleading because the facility has yet to be built. Moreover, projecting a cost-per-kwh over 20 years is a measure in futility. It's impossible to project energy prices 20 years in the future-- it's very possible another energy source will trump this facility's cost per kWh. In addition, cost per kWh amortizes the cost of construction where money is spent today for benefits to accrue in the future. How you determine this discount rate has a massive impact on the supposed value of the facility. As PG himself has pointed out, behind every significant news article is a submarine pushing public opinion[0] http://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
- daurnimator 8y agoCould they buy/sell options/futures that mature over the next 20 years to get some certainty about it?
- ajcodez 8y agoIt sounds like they already did some kind of 20yr swap - 'a long-term power-purchase agreement had helped the wind farm “offer an attractive price” to consumers'
- dav43 8y agoYes, that is essentially what a PPA sets out. There are several structures that can be deployed, but fundamentally its fixing the future revenue streams of the asset. The buyer of the PPA wins, as they get a fixed cost. The seller wins, their revenues are fixed and known, and they can get more leverage from debt finance because of this - thus, they get a better return on their equity investment.
- Dylan16807 8y ago> Moreover, projecting a cost-per-kwh over 20 years is a measure in futility. It's impossible to project energy prices 20 years in the future-- it's very possible another energy source will trump this facility's cost per kWh. You don't have to predict any prices to predict the costs of a specific facility. > In addition, cost per kWh amortizes the cost of construction where money is spent today for benefits to accrue in the future. How you determine this discount rate has a massive impact on the supposed value of the facility. Sure, but it's easy to take the construction cost and run your preferred discounting math on it. > behind every significant news article is a submarine This ain't a submarine, it's clearly promoting the specific installation...
- blunte 8y agoCompletely misleading title: "sets record low price" indicates that it has done something, but the article says it has not been built. This, it has not set any price. Someone has projected a price.
- ggm 8y agoSomeone has struck a contract for future, on a price. The price is the highest the energy will cost, for the lifetime of the contract absent force majure. Why would the owner sign? The contract gives certainty. The contract means the owner can now get funding, they have a guaranteed income stream across the life of the contract.
- guessthejuice 8y agoIt's called clean energy evangelism. reneweconomy's self-description. "Australia's best informed and most read web-site focusing on clean energy news and analysis, as well as climate policy." It's an advocacy organization probably funded by clean energy lobby. There are quite a few of these climate advocacy "news" organizations being spammed on social media along with their supporters in the comment threads.
- gehsty 8y agoThe subsidy has been awarded at a fixed rate for the next 20 years, this subsidy is described as being a record low (not necessarily correct), so the title just about correct.
- JKCalhoun 8y agoI'm curious why wind power is in vogue now and wasn't, say, two decades ago. Solar-electric I assume required some sort of scale or manufacturing advances to be competitive. But modern wind turbines seem to have been do-able decades ago. Was coal just so damn cheap until recently?
- jseutter 8y agoWind power is becoming cheaper relative to other sources of electricity, so it is becoming more popular. But why? Primarily, we figured out how to build bigger wind turbines. Bigger turbines give you: - Wind higher up that is stronger and more constant - Bigger turbines with longer blades that harvest more energy - Fewer bigger turbines are cheaper to install and maintain than more numerous smaller turbines Frankly, these things are well into the size of sky scrapers and isn't the sort of thing you just create overnight. Each generation incorporates learnings from the previous generation and gets iteratively bigger. This Vox article does a better job of explaining things than I ever could: https://www.vox.com/energy-and-environment/2018/3/8/17084158/wind-turbine-power-energy-blades https://www.vox.com/energy-and-environment/2018/3/8/17084158...
- jillesvangurp 8y agoMaterial science breakthroughs have improved the efficiency and cost effectiveness of turbines. Simply put, less friction means higher output and less maintenance. There are a lot of exotic ceramics and other materials available now that simply did not exist only a few decades ago. Also, economies of scale have matured the industry around this to the point where installation and maintenance cost are down and much more predictable. With solar, panel efficiency has gradually improved and economies of scale is driving panel production and operation cost down as well. Coal prices have been kind of stable since there is plenty to be mined. But since clean alternatives dipped below the coal prices a few years ago, coal has become a lot less attractive. That combined with heavy pollution means that coal plants are slowly being shut down and most plans for building new ones have been shelved. Meanwhile a lot of the remaining coal plants that are still operating are facing likely shut downs over the next decade or so because they won't be able to make a profit as clean alternatives drive prices down as they come online.
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- mattygh 8y agoI am loving this new love affair with cleantech and climate change from HN. So much good stuff in the front page last few weeks.
- pjc50 8y agoYes, although I wish there was a blog/aggregator as good as theoildrum was. The quality of discussion there was terrific.
- Karishma1234 8y agoNumbers are a complete suspect. 20 years to save $1.8B ? People might be able to save more money because of more efficient electronic and air conditioning systems that we will see coming in next 20 years. It is pointless to do any kind of price projection over that horizon. This sounds like California's slowest bullet train scam. 18% cheaper ? Thats nothing. You might see a slump in Oil prices and normal thermal power-plant might be able to reduce prices well more than 18%. There might be many desirable things with such farms though, like a knowhow and experiment. We might learn more about their long term costs and savings but economic reasons are not much in favour.