The Quest: Energy, Security, and the Remaking of the Modern World

by Daniel Yergin

  One problem is just getting the large turbine to the site. If a turbine is too big, it does not fit on a truck; it is not easy to move a 25-story tower, lying on its side, down the highway with a police escort. Lifting it into position and securing it is another challenge. If the turbines get much larger, the roads they travel down will have to be reinforced. Then there is concern about the stresses on the large blades and other components. Currently, the typical turbine is 2.5 megawatts. Many think that sheer logistics will not allow them to get much bigger than 3 megawatts, at least on land. Today’s efforts are focused on improving blade designs and power electronics and overall efficiency, and on the development and use of lighter, tougher materials.

  Cost is another constraint. In order to utilize lesser-quality wind resources, either the costs of the turbines have to come down or technology has to find ways to capture more of the wind’s energy. While the wind is free, the windpowered electricity system is not. Delivering it to consumers can be expensive. If the cost of additional backup generation is included in the calculations, wind can become more expensive than competitive sources, and thus can require continuing subsidies.

  THE CHALLENGE OF “INTERMITTENCY”

  A reason for this disparity emerges out of the interaction of electricity demand and the way wind is produced. The demand for electricity is continually fluctuating, as people turn their lights and computers on and off, as factories run their motors, and as temperatures rise and air-conditioning kicks in. To respond almost instantaneously, the grid requires power sources that, in industry parlance, are dispatchable. That is, they can be turned on and their power dispatched within seconds. Most generating capacity is dispatchable with a 95 percent assuredness.

  But wind is not dispatchable. This intermittency makes it difficult to compare with other sources. As with solar cells, a megawatt of installed wind capacity does not turn out the same amount of electricity as a megawatt of coal-fired capacity. Because of intermittency, the actual electrical output of a wind turbine—its net capacity factor—is only about a third of its rated capacity. Even where the wind resource is very good, turbines usually generate electricity only 30 to 40 percent of the time, perhaps in a few areas up to 50 percent. Moreover, the profiles of winds and overall power demand do not necessarily match up well. In many locations, winds tend to be at their best at night and in the spring and autumn. But peak demand is in the daytime, and in the summer and winter. During one heat wave in California, for instance, the California Energy Commission found that only 6 percent of the rated capacity was available.28

  This intermittency is the great challenge to substantial future growth. Public Service Company of Colorado, a subsidiary of Xcel Energy, currently has the largest share of its total electricity coming from wind of any utility in the nation, almost 15 percent. It has found that it can integrate this wind electricity into its grid without having to build additional backup by changing the way it operates its other power sources, including coal, bringing them up and down to balance the wind. But Colorado is also blessed with high-quality wind resources that are not too far from population centers.

  Others argue that one cannot build enough wind farms to stamp out intermittency as a big problem. An executive of one California utility summed it up this way: “Wind tends to blow when we don’t need it, at night. And when it gets hot, it’s not blowing.” In the view of many utilities, every new megawatt of wind needs a good deal of backup from other new generation. In the United States, that means that a wind-fired generation system generally needs to be accompanied by a parallel gas-fired generation system. Which means a substantial increase in costs. As wind power grows in China, intermittency will become a more significant challenge. As a result, Liu Zhenya, the president of China’s State Grid, has observed that the multiple “Three Gorges of wind” that are to be built will have to be “bundled” with natural gas, coal, and nuclear.29

  A second source of high costs comes from what are called the integration costs. Wind farms, by their nature, are highly spread out and are often in remote regions. “There’s great wind in Wyoming, but there are only 500,000 people in the state, and it’s an awfully long way to California,” said an executive from one of the major turbine companies. As a result, a great deal of additional investment in transmission lines is needed to get the wind to the grid and on to consumers, and at the same time balance out the variability of the load. That will require hundreds of billions of dollars in new investment and an enormous amount of regulatory procedure, battles over right-of-ways, and contention among the many different owners of transmission lines.30

  The number one priority, above all others, in operating the grid is to keep it stable. Without that, this complex entity called the grid goes down, regions are blacked out, and people lose their power. Wind is not a stable source, and thus connecting it to the grid creates additional challenges, the mitigation of which adds further to the costs.

  However, some argue that these obstacles of intermittency and integration can be effectively dealt with through expanded and improved transmission and a more flexible grid that can take advantage of high-quality wind resources that are spread out from one another. “The dependability of wind is enhanced by its geographic dispersion,” says James Dehlsen. Jon Wellinghoff, chairman of the FERC, said that “diversity of wind along the coast” means that the United States can “provide that wind on almost a constant basis.”31

  There is one further constraint: Environmental opposition. Many environmental groups strongly support wind. Others do not. They do not want wind farms on federal lands and in wilderness areas. Opposition also comes from local residents who do not like either the sight of these new towers intruding into their lives and their vistas or the whooshing noise of the blades.

  Local opposition to wind development is an international phenomenon. Germany has been very open to siting wind turbines. Not Britain. Although it has the best wind resources in Europe, Britain also has very strong opposition to on-land development on visual and noise grounds. “I tried to put together a project in Britain for five years,” said a European wind developer. “It was hell.”32

  Some worry that, if pushed too fast, the additional costs of wind (and other renewables) could result in a rate shock, which would create a backlash against renewables. Some countries, like Spain, have already experienced rate shock from the high cost of subsidies for investing in renewables.

  Certainly, the costs can be modified by innovation, and much effort will go into that. Also putting a cost on carbon would change the relative economics in the energy marketplace in a way definitely favorable to wind. And some nations may also decide the cost differential is something they should assume in order to generate growing amounts of electricity, carbon-free. But there is an important distinction: carbon-free certainly does not mean cost-free.33

  “MARINIZED”: THE OFFSHORE FRONTIER

  These cost issues become most stark when considering the new frontier of wind technology: Offshore. Planting turbines in ocean waters provides access to stronger and more frequent wind. There are no obstacles to break up the flow—no mountains, no valleys, no buildings, no trees. The European Union has embraced offshore wind as the essential element for achieving its “20 percent by 2020” renewable target. In 2010 the world’s largest offshore wind farm—a $1.2 billion project that includes 100 wind turbines with a total capacity of 300 megawatts—opened in the U.K. off the coast of Kent. Currently, offshore wind makes up only a tiny fraction of Europe’s wind capacity, but the targets are very big. The U.K. is aiming for 33 gigawatts of offshore wind capacity by 2020, and Germany is targeting 10 gigawatts over the same time period.34

  Offshore turbines can be much bigger because they do not have to be transported over roads. They can be assembled, like oil platforms, in docks and then floated out to sea on barges. Thus, while three-megawatt turbines may be the limit on land, seven or even ten megawatts may be doable at sea. So big are some of the ones now planned that they wi
ll actually have heliport landing platforms atop them.

  Yet the EU targets constitute a tremendous challenge. Costs are estimated at two to three times that of onshore wind. Also, the technical difficulties are much multiplied offshore because the environment is so harsh.

  Planting these giants securely into the seabed is no easy thing. To operate in marine settings, turbines have to be redesigned in order, in the new lingo, to be “marinized.” They need to be able to withstand the enormous, relentless stresses from the tides and waves, from the salt, from the winds themselves, and from the storms that, with no mercy, will pound and assault them. Corrosion is a big problem. So is the risk that water will get in through the vents and damage the electronics. Also they are much harder to repair. It may take as much as six weeks to get out into a turbulent sea to fix a damaged gear box, which would mean a substantial loss of production. “It’s ironic,” said a turbine manufacturer. “You look for the windiest places you can find. But then you have to wait for the wind to die down, and the weather to improve, to work on them.” The integration costs are also higher. Extra-durable cables have to be laid that will connect each of the turbines to a substation and to the land. These cables will have to be much tougher than on land, and that will add to the integration costs.35

  The one industry that offshore wind will have to turn to for the skills and capabilities to operate in the demanding offshore environment is the industry that has learned over many decades how to withstand the onslaught of winds and waves and storms: the offshore oil and gas industry. Indeed, while a new class of vessels is being built for the construction of offshore wind farms, when they are not available, vessels for building oil platforms can also suffice.

  The operating experience from the first wave of offshore wind farms shows how big are the challenges. But Europe will push ahead. Good onshore sites are being exhausted, and thus its climate-change objectives leave it no choice. Yet even coming close to achieving Europe’s overall goals on offshore wind will not be easy, especially in the projected time frame. But in order to promote offshore wind, high feed-in tariffs and other subsidies will be put in place along with regulatory policies. “Offshore wind will happen,” said one longtime European wind developer. “The force of will of government will make it happen.”36

  In the United States, the prospects are less developed and more uncertain. Nothing more clearly demonstrates that than the struggle over Cape Wind, the proposed 130-turbine wind park in the Nantucket Sound between Cape Cod, Martha’s Vineyard, and Nantucket. This battle—fought between landowners, sailors, Native American tribes, and local residents on one side, and developers and clean energy advocates on the other, with various environmental groups arrayed on both sides of the struggle—has been going on now for more than a decade in both Massachusetts and Washington, D.C. The project was long opposed by the late Massachusetts senator Ted Kennedy. In 2010 the state’s senior senator, John Kerry, proclaimed that the project would mean “jobs and clean energy for Massachusetts”; the state’s junior senator, Scott Brown, worried that the Cape Wind project would “jeopardize industries that are vital to the Cape’s economy... [and] impact aviation safety and the rights of Native American tribes in the area.”37

  At this point the main offshore frontier remains the waters off Europe.

  Despite all the development, and all that has been learned over more than three decades, it is still early days for wind as a scalable industry. But its share will certainly grow as governments and publics seek carbon-free electric generation. It is one alternative that can clearly deliver today. New research programs are seeking ways to drive technological development, optimize operations and manufacturing, increase flexibility in relation to the grid, and push down costs.

  It has certainly taken a long time. But wind today is part of the landscape of the electric power industry. Indeed, so much is already happening today that—though it might pain some of the pioneers and they might even regard it as the most backhanded of compliments—wind has reached a stage where it is no longer really an “alternative.” It is becoming a “conventional” energy source—still relatively small and facing its own constraints and challenges, but increasingly visible on the landscape of electric power and surely still on a fast track to growth.

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  THE FIFTH FUEL—EFFICIENCY

  One energy resource has the potential to have the biggest impact of all, at least in the next several years. It may seem the simplest in terms of its rationality, and yet the hardest to wrap one’s mind around. After all, it does not flow like a liquid through a pipeline, or like electrons over a wire. You can’t pump it into your car, or store it in a tank. It lacks the imposing scale of a 25-story wind turbine or the heft of a power plant. It has neither the panache of an electric car nor the longer-term promise of renewables.

  Some call it the “fifth fuel.” Many would not even think of it as a fuel or an energy source. Yet in terms of impact, it certainly is. It goes by different names—conservation, energy efficiency, energy productivity. It could even be called energy ingenuity—applying greater intelligence to consumption, being more clever about how energy is used—using less for the same or greater effect. Whatever the name, it is a high-quality resource in a world of rising income, greater mobility, and a growing population. But capturing it is not all that easy. Nor is it free. It requires investment, measured in both time and money.

  Over the years, conservation was sometimes seen as a penalty, a heavy cost, a cutting-back, a reduction in living standards, a form of self-denial. Developing countries sometimes suspected it was a ruse to deny them the opportunity for a higher standard of living. That has all changed. A global consensus is emerging around the key—and essential—role of energy efficiency, and about its scale. Call it a “C-change” in attitudes.1

  The traditional reasons for emphasizing conservation were in response to costs and high prices, and in order to increase energy and reduce stress on the environment. Greater efficiency was embedded in good engineering practice.

  But in the last few years, two new imperatives have reinforced this C-change. One is climate change. The more efficient the use of energy, the less carbon is released into the atmosphere. The other is economic growth itself. Rapid economic expansion in emerging market nations means a major surge in world energy consumption, and thus in the call on energy resources. The new consensus recognizes that improved energy efficiency is required for sustaining this economic growth without putting unsustainable burdens on the world’s energy supplies and its capacity to invest in a timely way.

  As a result of all these factors, the C-change is happening around the world. China has explicitly put energy efficiency at the top of its energy policy, with a goal of doubling efficiency. The European Union has set a target for a 20 percent improvement in energy efficiency by 2020. In Russia President Dmitry Medvedev has set a goal of reducing the energy intensity of the Russian economy by 40 percent by 2020. In the United States the Obama administration has focused on energy efficiency investments as an engine of economic growth. “One of the fastest, easiest, and cheapest ways to make our economy stronger and cleaner,” said President Obama, “is to make our economy more efficient.”2

  REAL EFFICIENCY GAINS

  One reason for confidence about the potential of energy efficiency is that a great deal has already been achieved, more than many recognize. The United States uses less than half as much energy for every unit of GDP as it did in the 1970s. A good part of the improvement is certainly pure efficiency. A new car in the 1970s might have averaged 13.5 miles to every gallon. Today, on a fleet average basis, a new car is required to get 30.2 miles per gallon. Insulation and heating controls in a new house today are much more effective than in previous decades. Some of the gain also reflects structural changes in the U.S. economy. The economy has gotten “lighter,” as Alan Greenspan put it. In his words, “Today it takes a lot less physical material to produce a unit of output than it did in generations past.�
� Less of the economy—and thus of measurable GDP—is devoted to energy-intensive manufacturing, and those processes have gotten much more efficient in themselves. More of the economy is devoted to services and to information technologies and lighter industries, much of which did not even exist in the 1970s. Part of the structural change also represents the shift of energy-intensive manufacturing to countries with lower costs. U.S. iron and steel output actually declined by almost half in the last three decades.3

  But various studies suggest that somewhere between half and two thirds of the change in the energy ratio represents real efficiency gains (as opposed to the structural changes in the economy); that is, greater energy ingenuity, less energy needed to accomplish certain activities, whether it is to move people about, heat homes, or turn hydrocarbons into chemicals and plastics.4

  This is a global phenomenon. Japan has doubled its energy efficiency over the same period, although it started off being a much more energy-efficient country to begin with. Europe has improved as well, though in percentage terms not as much as the United States. But, like Japan, it started from a more efficient base.

  For the country with what is now the second-largest economy in the world, the challenge is different. For the first two decades of economic reform, China was becoming increasingly energy efficient. However, at the beginning of this century, as it went into high gear as the workshop of the world and its industries went into overtime to supply global markets, it became less efficient. Both because of that and because of the absolute growth in its energy consumption, the Chinese government has raised conservation to be a national priority. To ensure that both Chinese economic decision makers and the public paid attention to the significance of that goal, Premier Wen Jiabao went out of his way to emphasize the importance in the title of a speech, “Attach Great Importance, Pay Close Attention to Implementation, and Further Strengthen Energy Conservation and Emission Reduction.”5