Renewables Changing the Math of Energy Grid

March 13, 2013


Ever wonder what an unraveling paradigm looks like? The energy revolution that has been building for the last decade is now beginning to eat away at the assumptions that underly our antique electrical grid.

I’ve written here how in Germany, torrents of new renewable energy have outstripped the country’s transmission system, resulting in negative pricing of power in some regions.  We’ve seen it , here and there, in some renewable energy early-adopter regions in the US. Now its coming on in a big way, and starting to undermine the assumptions for the “hub and spoke” centralized system of large thermal power plants.  Near zero and negative pricing sounds like a good thing for you and me, but its an urgent signal that something fundamental is changing in the way we produce power, ready or not.

It’s an alarm bell for policy makers that the new energy technologies are going to change the energy business similar to the way the internet changed..well, everything.

The rumblings discussed here are a warning.  Wind energy prices in my moderate-to-good wind resource region are now about half of what they were just 3 years ago, and still heading south, as technology improves.  Wind energy observers tell us that wind-baggers in congress and elsewhere may slow progress down, but can’t stop the rush to wind energy.

Looking to the near future, solar photovoltaics will be the “new wind” of this decade.


We can learn a lot from looking at Germany to see how they reconcile the new logic a distributed energy systems with the legacies of the outmoded old grid.  What Germany will have to sell to the rest of us will be the expertise that they are building on now.  We can ignore the lessons and stumble on the same rocks, or we can learn, and perhaps leapfrog Germany’s huge lead in these areas.

Yesterday’s headline on Bloomberg news was “Nuclear Industry Withers in US as Wind Pummels Prices”, and raises a complaint about “government subsidized wind power” outcompeting (government subsidized) nuclear power, and even undercutting the much touted shale gas. Italics are mine.


A glut of government-subsidized wind power may help accomplish a goal some environmentalists have sought for decades: kill off U.S. nuclear power plants while reducing reliance on electricity from burning coal.

That’s the assessment of executives and utility experts after the U.S. wind-energy industry went on a $25 billion growth binge in 2012, racing to qualify for a federal tax credit that was set to expire at year’s end.

The surge added a record 13,124 megawatts of wind turbines to the nation’s power grid, up 28 percent from 2011. The new wind farms increased financial pressure on traditional generators such as Dominion Resources (D) Inc. and Exelon Corp. in their operating regions. That’s because wind energy undercut power prices already driven to 10-year-lows by an abundance of natural gas.

The wind power boom has benefited consumers in regions where wind development is fastest, contributing to a 40 percent wholesale power-price plunge since 2008 in the Midwest, for example. Yet the surplus is creating havoc for nuclear power and coal generators that sell their output into short-term markets.

On gusty days in the five states with the most wind power – – Texas, California, IowaIllinois and Oregon — this can flood power grids, causing prices to drop below zero during times when demand is light. Wholesale electricity during off-peak hours in Illinois has sold for an average price of $23.39 per megawatt hour since Jan. 1, after hitting a record low of -$41.08 on Oct. 11, the least since the Midwest Independent Transmission System Operator Inc. began sharing real-time pricing in 2005.

Michigan wind pricing is typical for the industry.

Michigan wind pricing is typical for the industry.

Meanwhile, nuclear and coal plants must continue running even as this “negative pricing” dynamic forces them to pay grid operators to take the power they produce.

“It is becoming more pronounced as more wind is coming on,” Christopher Crane, chief executive officer of Chicago- based Exelon Corp. (EXC), said in a phone interview.

If the push to “over-develop” subsidized wind continues, “there is a very high probability that existing safe, reliable nuclear plants will no longer be competitive and will have to be retired early,” according to Crane.

More development seems a certainty. Wind power got another boost when Congress, as part of January’s deficit deal, extended the production tax credit through Dec. 31, amending current law so that projects begun this year will receive the 10-year tax break regardless of when they come online.


Back in 2000, solar revenues were only $2.5bn and prices were set to reach so-called grid parity – costing the same as conventional energy sources – by 2020. Solar costs have already fallen from $7.50 per watt to $2.50 and are projected to reach $1.50 within five years, equivalent to between 5 and 12 US cents per kilowatt hour.

“$1.50 really is the holy grail,” said Pernick, who said that extending US tax incentives already available to the oil and gas and real estate industries could drive up investment even further.

Looking to the future, the report suggests innovation can continue to improve the performance of renewable technologies, including using biomimicry ideas to imitate nature. Curved wind turbine blades inspired by humpback whale fins have increased wind energy capture over flat blades by 25%, while mimicking photosynthesis using dye-sensitised solar cells based on titanium oxide instead of silicon is proving effective in low-light situations. In addition, energy efficiency developments like Nest’s ‘learning thermostat’ and smartphone apps for thermostat control will help connect web and smart-grid technologies.


9 Responses to “Renewables Changing the Math of Energy Grid”

  1. Because of The House (US)

    Forecast Dims for Future Growth in Wind Power
    Last year, developers rushed to build new wind power capacity largely because a federal tax credit so not many new projects in the pipeline and 2013 is likely to be slow for the wind industry.

    Click to access 2011_wind_technologies_market_report.pdf

    According to the Wind Technologies Market Report, published by the Department of Energy, the absolute best-case scenario for 2013 is that the wind industry sees level growth. More realistically, new wind power installation will be just a fraction of what was built in 2012 and we may not see another big year until 2014 or 2015

    So we need to push more.

    • tottenmichael Says:

      Peter, you say “Meanwhile, nuclear and coal plants must continue running even as this “negative pricing” dynamic forces them to pay grid operators to take the power they produce.” It is not because these types of power plants cannot throttle down – they most assuredly are capable of doing so. See, for example, Wind Power’s Displacement of Fossil Fuels By Charles Komanoff April 21, 2009, Komanoff Energy Associates, 11 Hanover Square, 15th floor, New York, NY 10005,, points out,

      “..rule of thumb: to accommodate diurnal variations in aggregate demand, large, modern coal-fired units could be banked down from 100% load to as little as 25% of full capacity, and then back up again, without incurring “thermal stress” that could lead to tube leaks, pipe cracking, or other damage, so long as the transition was gradual rather than abrupt.”

      Komanoff goes on to note, Most nuclear power plants also have considerable load-following capability, despite an additional level of complexity (e.g., the need to maintain a constant neutron flux distribution within the reactor core). A recent paper by the Electricity Policy Research Group at the University of Cambridge (U.K.) found that most pressurized water reactors — the dominant reactor technology in both the United States and worldwide — “are capable to [sic] follow loads in a power range of 30-100% at rates from 1 to 3% per minute … [with] exceptional rates of 5% per minute or even 10% per minute … possible over limited ranges.” (The other reactor type in large-scale use, boiling water reactors, is less flexible with respect to load.) The paper goes on to note that in France, with nuclear power accounting for more than 80% of electricity supply, “most NPPs [nuclear power plants] have to often operate occasionally at part-load and some plants must be sufficiently flexible to load-follow to ensure grid stability.”

      Pouret, L. and Nuttall, W.J. (2007) “Can nuclear power be flexible?” Electricity Policy Research Group Working Papers, No.07/10. University of Cambridge. The quoted passages are on pp. 8 and 16, and the paper is Web-available at .

      • ontspan Says:

        Disclaimer: this is hearsay!

        On is a reputable user AlanFromBigEasy who looked into the load following by nuclear plants in France. Even though you’d expect a nuclear fleet with such a high impact to perform load balancing quite well but essentially he says that the reactors do vary their output a little over the day but that they apparently do this quite random. I.e. they nearly always miss the high/low demand peaks.

        This calls into question how well older reactors are really able to perform accurate (and with enough amplitude) load following on a day to day basis.

  2. Bruce Miller Says:

    New sciences to the rescue! nano carbon super capacitor systems for energy storage:
    “”The new device has a specific energy density of 85.6 Wh/kg at room temperature and 136 Wh/kg at 80 °C. These are the highest ever values for “electric double layer” super capacitors based on carbon nanomaterials.
    Lack of “Internal Resistance” of capacitors over batteries yields considerably more power to the load, and inductive energy return can conserve energy. This requires less current storage, and relieves the greater higher voltage losses. We are witnessing the birth of pulsed DC systems, motors and wiring all very much reduced in size.””
    These devices now approach gasoline in energy storage density.
    Soon enough cars will be fuelled this way, and ready to “Ballast” Solar, Wind, Wave, Tidal variations, and even ballast reactor systems. Imagine fleets of these vehicles, all able to charge over-night at below peak times, and able to be used during peak demand hours. China already has the “Chreos” car in the works – Google this and see the nano carbon super capacitor claims.
    With power generation decentralized as it is rapidly becoming in Germany, and with the sharing down of the generating power to the peons, and returns on their investments, we are witnessing the birth of a new type of economy altogether, where peons once only stake holders, become shareholders – this is a new form of true and pure Capitalism that abruptly and sharply curtails the harmful “corporatization” by large conglomerates, oligarchies and plutocrats, and can only bring health to the country.

    • Soon enough cars will be fuelled this way

      Soon enough? We have been hearing about this for > 5 years. When is it going to hit the market is the question? Got an answer?

      Here is a clue:

      “Silex Group of Companies, 51, Church Street, Nadur, Gozo Mr. Johnaton Grech – CEO

      Silex Group of companies is a multinational organisation targeting cutting edge technologies and developments. At Silex we research and develop new technologies including high efficiency photovoltaics
      Company Year of Foundation 2004
      Number of Employees 20
      Turnover > €5 million

      Type of cooperation sought
      We are looking for distributors in various countries for our products and services, including:
      – Photovoltaic systems – sales of products and services
      – Electric vehicle distributors – for national distribution and servicing of our electric vehicles
      – LED lighting distributors for national and regional distribution of our various products
      – Real estate developers and investors with an eye on innovation and sustainability”

  3. […] against the backdrop of the recent news that the US added a bit over 13 gigawatts of new wind power capacity last year, with 3.3 GW of solar power installations, and efforts to show how New York state could […]

  4. Oh no. Not the capacity factor, load following game again. So which is better, high capacity factor or load following? You do realize that if you must follow the load and you cannot throttle all sources, some source must lower its capacity factor? You do realize that throttle able sources are worth more, but capacity factor goes down because you have throttled back? Let’s not be coy here. Except in France, utillity operators do not throttle nuclear power plants, they throttle gas turbines, wind, solar, etc. Why is that? So guess what, nuclear power factor is lower in France where they have much higher percentage of nuclear sources and have to throttle them to follow load. Capacity factor is not an inherent virtue of the energy source. Otherwise, peaking sources would be worthless. Capacity factor versus load following arguments are like arguing that a thin and tall box has less area than a short wide one. Also, when you quote nuclear load following, quote the amount and the rate of speed they can change load. You can argue nuclear throttling in a blog, but real plant operators choose wind, gas turbine, or solar for peaking because they can throttle much more (up to all the way off) and much faster, from minutes to seconds. What Peter says is true. Nuclear is losing out, and wind is surging ahead. Goodbye. Its a fact. Get over it. The nascent wind business with choppy tax breaks is pushing aside the heavily subsidized mature nuclear industry. It was already like rotten timber ready to collapse. The real waste is the much bigger subsidies spent on nuclear power plants that frequently have cost over runs or are cancelled before construction is completed. The success rate of nuclear projects given their extreme capital risks is appalling.

  5. […] Renewables Changing The Math Of Energy Grid. Things are a changin’. […]

  6. […] 2013/03/13: PSinclair: Renewables Changing the Math of Energy Grid […]

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