THIN FILM SOLAR PANELS

Archive for May, 2011

With the current price of diesel fuel stuck at around $4.00 per gallon, our diesel-dependent agriculture industry is in a fix. But thanks to a small grant from the U.S. Department of Agriculture, one farmer has invented a new device that chips away at some of that. At a cost of $100 or less, he came up with a hydo-powered system that replaces the diesel engine formerly needed to drive his irrigation system. At today’s prices, he estimates an annual savings of $3,500.

Crop Circles and Diesel Fuel

The farmer in question, Roger Barton, uses a center pivot irrigation system to grow alfalfa hay for his horses. This type of irrigation system is responsible for those distinctive crop circles you can see from up above. It conserves water compared to some other types but it requires a diesel engine to keep moving, and that’s where the trouble comes in.

A Simple Alternative to Diesel Fuel

Barton received a modest Conservation Innovation Grant from the USDA, which enabled him to work with a pump company and pick the brains of engineers from USDA’s Natural Resources Conservation Service. Together they came up with a low cost water-powered turbine that generates electricity for the irrigation system. Aside from saving money on fuel, Barton will save wear and tear on his irrigation equipment. His mountain-sourced water supply is under pressure high enough to damage the sprinkler heads, but now the turbine blades result in a reduced pressure that won’t cause damage.

Agriculture and Conservation

The consumer sector has a few things to learn from agriculture when it comes to conservation. Take water, for instance. According to the U.S. Geological Survey, water use in the U.S. has declined over the past 25 years or so, even though the population has increased by about 30 percent and average use by individuals went up. The savings is mainly due to improvements in the agricultural and power generation sectors.

More Energy Savings for Agriculture

The new irrigation invention is just a small part of a much broader government funded program to support more conservation and alternative energy at U.S. farms. One standout example is the U.S. EPA’s AgStar program, which encourages livestock farmers to generate renewable biogas at their farms. The USDA also has a renewable energy program to introduce more wind, solar, biomass and geothermal at farms, and it is offering loans and grants for efficiency improvements in targeted equipment such as grain dryers.

Update and clarification (thanks to reader James Brogdin, see comment below): The $100 estimate refers to annual operating costs.

Image: Farm crop circles by dsearls on flickr.com.

This is part of an ongoing project to create a comprehensive resource page on all things wind. Chime in if you’d like to contribute by dropping a comment below. Or send me a message on Twitter @zshahan3 or Facebook.

Following up on my overview post on the cost of wind power, here’s a little discussion on some more intricate matters related to wind power. (And don’t worry, for those concerned about the “intermittent nature of wind,” we’ll get to that in future posts.)

Wind Power is Making Electricity Cheaper in Texas & Europe

Is the rapid growth of wind power in Texas actually making electricity cheaper?

Yes, says Bernstein Research in a recent report, “Will Wind Power Blow Texas Generators Away?,” a follow-up to their own prior effort. The idea is that wind power is steadily replacing more expensive forms of power generation, essentially natural gas

Yes, that’s actually from an article in the Wall Street Journal.

There’s more to it than the fact that wind power is cheap, but we’ll get to that in a moment. First, let’s note that the same thing is happening in Europe.

‘Wind Energy and Electricity Prices’, a comprehensive assessment of studies of the impact of wind energy on electricity prices, was carried out by the independent consultancy Pöyry AS on behalf of EWEA. It brings together, for the first time, the findings of case studies in Germany, Denmark and Belgium.

The report finds that in the studies reviewed by Pöyry, electricity prices were reduced by between 3 and 23 €/MWh depending on the amount of wind power. It concludes that the studies “essentially draw similar conclusions” and that “an increased penetration of wind power reduces wholesale spot prices.”

“It has already been well-established that wind reduces CO? emissions,” said Christian Kjaer, EWEA’s Chief Executive. “But now we have stronger evidence than ever before that wind power also reduces electricity prices for consumers. The message is clear – if you want affordable CO?-free electricity, increase the amount of wind power in your electricity mix.”

How Does Wind Power Drive Down Electricity Costs?

Aside from the fact that wind power is cheap, there is another important factor at play here – merit order pricing.

Wind (and solar) have no fuel costs and low operating and maintenance costs (O&M). That means that once the systems are up and connected to the grid, they can afford to sell their power for very little money. In the case of wind, the O&M cost is about $0.01/kWh.

Check out this graph from the International Energy Agency (via Jerome de Paris/The Oil Drum):

When the call goes out for electricity, wind can sell it’s power for about a penny and not loose money (at that moment). And, with a $0.018 feed in tariff (FIT), wind can actually give its energy away and still make money! That means that wind is always going to be able to underbid any fuel-burning producer.

What actually happens is that a call goes out for X units of electricity. The least expensive providers get picked up first — that would be wind, then hydro might be next, followed by nuclear and coal. If wind, hydro and nuclear can provide all X units, coal gets left out. And same could go for nuclear if wind and hydro can cover it all.

Alternatively, coal and nuclear, which can’t be turned on and off quickly, might have to sell at a loss for that time block in order to be up and running when they can sell for a profit. I think this is what could eventually push coal, at the least, off the grid (and turn the energy tables even further).

What this effectively does, as well, is it lowers the price of electricity. This is a key reason why Texas, Europe, and other places with a lot of wind power are seeing reductions in the price of electricity (and people’s electricity bills).

Read much more on this topic in the following articles and reports:

• Wind Energy and Electricity Prices (EWEA)
• The cost of wind, the price of wind, the value of wind
• Wind’s latest problem: it … makes power too cheap

The Future

As mentioned above, wind has no fuel costs. That is an advantage today, but with peak coal coming in the not-too-distant future, this is likely to make wind increasingly cheaper than coal. (Of course, if we just cut our coal use now, we wouldn’t even have to run into peak coal, but it seems that we aren’t so foresighted.)

Natural gas has become much cheaper of late due to hydraulic fracturing (aka ‘fracking’ or ‘fracking horrible idea’), but there are numerous cases showing that this seriously threatens water supplies and, increasingly, projects are being put on pause as a result. Where this goes no one knows — some predict natural gas will continue to stay cheap and will boom (more than it already has), others postulate that new regulations and environmental costs will reverse the trend. Of course, wind will remain free.

As Jerome de Paris notes, there are numerous reasons to shift more to wind power and numerous reasons why it would help create a more secure, brighter future:

the reality is that you get cheaper electricity with wind – and oh by the way, wind requires no imports of fast-depleting fuels from unstable countries, spews no carbon and provides lots more domestic jobs. And it’s a perfect investment for our pension needs – safe, low risk, stable, decent long term returns…

It is just a policy decision, one very strongly opposed by powerful fossil fuel companies and their politicians, including, essentially, the entire Republican leadership/Congressmen at the moment .

Will wind be one of the top electricity sources of the future? I hope so. Fossil fuel Congresspeople would have to do a lot to stop it now.

ExxonMobil: Wind Cheapest Form of Electricity Generation

Now, to close out, from ExxonMobil’s yearly review of energy statistics and trends, Energy Outlook: A view to 2030, here’s an interesting chart (via European Tribune):

This 2025 prediction shows wind power being much cheaper than any other electricity source if a price is put on carbon (something that should obviously happen sooner rather than later, but which is being stalled in the U.S. by fossil-fuel-funded politicians — again, mostly the GOP — in Congress).

Even if a price were not put on carbon, though, wind remains one of the most economical choices. And this conclusion comes to us from an ExxonMobil report!

This is one part of our collection of ‘living articles’ on renewable energy.  It is our intention to update and improve these articles over time, making them the go-to source for reliable information.  Help us out by pointing out mistakes, providing better data, introducing new ideas.  We’ll periodically rewrite these pieces using community input.

Related Stories:

• World Wind Power
• Offshore Wind Energy Cheaper than Nuclear Energy, EU Climate Chief Says
• Installed Wind Power Capacity per Capita (Country Comparisons)

Top Image via aja

About a month ago, Facebook launched its Open Compute Project, which unveiled the nitty gritty of its energy-efficient data center in Oregon. The move is widely hailed as ground-breaking for an industry that keeps the location and size of its data centers top secret. But to me, Facebook’s touting of one specific efficiency metric shows just how a single snapshot of an energy-efficient data center can sometimes be misleading.

That efficiency metric I’m referring to is power usage effectiveness, or PUE, which looks at how efficiently a data center uses power and how much energy consumption is going to run its IT and servers. PUE rates data centers on a scale between one and two, with one being great and two not efficient. Think about it this way: If a lot of the data center’s energy is used for cooling and power conversion, the energy use is not very efficient and the data center will have a PUE closer to two; if very little of a data center’s energy is used for cooling and power conversion (and is instead mostly being used to power its servers), a data center is using energy much more efficiently and will have a PUE closer to one.

For Facebook’s data center in Oregon, the social network giant announced a PUE of 1.07 — one of the lowest I’ve heard about in the industry. But if you look behind the number, in actuality that number was just a snapshot of the data center in a prime energy-efficient state. The number was calculated over an eight-hour period during the data center’s commissioning stage. In an article on GigaOM Pro, I dig into why this is important.

Looking behind the scenes of the Facebook PUE number is critical because the Internet industry is only just starting to invest significantly into making its data centers far more energy efficient as a competitive advantage. According to the Environmental Protection Agency (EPA), data centers account for over 2 percent of energy consumption in the U.S.; that number is set to grow as more and more people buy up always-on gadgets and constantly connected computers. If an Internet company can cut its data center energy bill significantly, it can compete more effectively in the market by saving money, and also in smaller way, by being able to talk about its green ambitions.

Related content from GigaOM Pro (subscription req’d):

• Infrastructure Overview, Q2 2010
• By the Numbers: Greenpeace’s Green Data Center Report Card
• Infrastructure Q1: IaaS Comes Down to Earth; Big Data Takes Flight

While car sharing company Zipcar had a smash hit debut on the Nasdaq last month, how big of a market car sharing will become is still unclear — particularly to rental giant Enterprise. Enterprise Holding Chief Strategy Officer and EVP Greg Stubblefield told me in an interview that car sharing (or the automated local car rental market, as Stubblefield prefers to call it) is “in the early, early stages,” and it’s still unclear if it will become more than a niche market.

Right now, car sharing services like those from Zipcar and City Car Share tend to offer members the ability to rent cars in 15 minute integrals, and cars are parked around urban areas, can be unlocked using a key fob, and can be reserved on the web or a cell phone. In addition, car sharing services often include fuel in the service fee. In contrast, more traditional car rental businesses tend to rent cars through actual stores, mostly rent cars only during business hours, and most of the time, fuel isn’t included in the price.

Stubblefield told me he sees car sharing as an extension of what Enterprise is already doing: offering cars as a service to people who want them. But Enterprise has also been exploring the car sharing market with its own branded car sharing service WeCar, which it has launched in select locations including in Mountain View, Calif.; Nashville, Tenn.; and universities like Washington University, University of Missouri, and Tulane University.

However, Enterprise wouldn’t tell me how many cars were being shared in its WeCar service or how much money the division was making. That would lead me to guess that it’s a pretty small number in terms of both cars and revenues.

Overall, car sharing is still a tiny market compared to the car rental market. Stubblefield said out of the 1.6 million cars that make up the car rental market in the U.S., automated car sharing makes up around “one-half of one percent.” Enterprise itself has 850,689 cars in its rental fleet, while Zipcar had 8,541 cars in its fleet as of September 2010.

The economics of car sharing haven’t yet proven to be profitable, even for leader Zipcar. For the year ended December 31, 2010, Zipcar generated revenue of $186.10 million, with a net loss of $14.12 million. As of December 31, 2010, Zipcar had an accumulated deficit of $65.4 million, and in the company’s risk factors in its S1, it says, “We expect to incur a net loss in 2011. We do not know if our business operations will become profitable or if we will continue to incur net losses in 2012 and beyond.”

There’s the concept of car sharing and then the economic viability of car sharing, Stubblefield said:

There’s a whole litany of things that are associated with a vehicle that have to be played out from an economic viability point of view. There’s an asset that is fairly expensive that has to be paid for and utilized in a certain way. Is there an economic model that will sustain this [car sharing]? Or will it be a niche business that is in certain areas or for a non-profit?

It’s still too early to tell, said Stubblefield. In particular, car sharing based around having the company cover the cost of fuel is difficult, because the price of fuel has gone dramatic up in recent months, Stubblefield pointed out.

Another issue is whether or not the Zipcar model will work in many more cities. An investor who shorted the stock told Barrons in an article this weekend: “I think they’re going to rapidly run out of cities where this works.”

What’s more clear is that the rental car business is changing to become more automated and more distributed. Enterprise says its weekend local car rental business in cities like San Francisco — where a sizable portion of the population don’t own cars — is a very important business for them, and Enterprise is also incorporating more automated services.

Related content from GigaOM Pro (subscription req’d):

• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times
• Green IT’s Q4 Winners: Wind Power, Solar Power, Smart Energy
• Green IT Overview, Q2 2010

This is part of an ongoing project to create a comprehensive resource page on all things wind. Chime in if you’d like to contribute by dropping a comment below. Or send me a message on Twitter @zshahan3 or Facebook.

What’s the cost of wind power? Well, of course, it depends on where you are and who you ask. But I’m going to do my best here to share some reliable information and put it in a useful context for you. Overall, wind costs have dropped significantly in recent years, and while wind is at least cost-competitive with coal and natural gas these days, looking at its true costs indicates it is much cheaper.

How to Measure Cost

There are a few different ways you can measure electricity cost. For example:

1. Levelized Cost of Electricity (LCOE) — the utility way (the average cost over the lifespan of the project, initial investments plus operation and maintenance costs, not including externalities).
2. Wholesale price — hard to get complete numbers on this; many sources will not divulge them.
3. “All In” — taking into account externalities — health/environmental costs (yes, these are real costs that we pay that, of course, vary according to the energy source).

The figures you normally see and which are provided in most cases below are according to #1, LCOE, which artificially makes the cost of coal and gas cheaper than it should be. But don’t worry, I get into #3 a bit as well.

Now, a lot of people may bring in the issue of subsidies here. Taking subsidies into account, wind would fair even better, as total historical subsidies and current subsidies heavily favor fossil fuels. For more on this matter, check out this video of AWEA CEO Denise Bode taking on FOX News.

Wind Costs Compared to Coal & Natural Gas

The American Wind Energy Association (AWEA) announced at the beginning of the year that wind power was cost-competitive with natural gas in the United States.

“Wind’s costs have dropped over the past two years, with power purchase agreements being signed in the range of 5 to 6 cents per kilowatt-hour recently.” Elizabeth Salerno, AWEA Director of Industry Data & Analysis, said. “With uncertainty around natural gas and power prices as the economy recovers, wind’s long-term price stability is even more valued. We expect that utilities will move to lock in more wind contracts, given the cost-competitive nature of wind in today’s market.”

More recently, AWEA told investors at a wind finance workshop the same thing as well as the fact that wind is now beating coal in this category and a little more on why and what’s expected in the near future (generally).

AWEA figures show that the average wind PPAs are now being priced at about 6 cents per kilowatt-hour, the same price for energy procurements from a combined cycle natural gas plant. The group says wind is actually about 2 cents cheaper than coal-fired electricity, and more projects were financed through debt arrangements than tax equity structures last year, a possible sign that wind deals are winning more mainstream acceptance from Wall Street’s banks….

[AWEA chief economist Elizabeth] Salerno credits the breakthrough in cost to improved turbine design and performance, higher towers and longer blades, which have boosted the reliability and performance of wind power generation. Equipment makers can also deliver products in the same year that they are ordered instead of waiting up to three years as was the case in previous cycles, she said, calling it a sign of a mature supply chain.

The group estimates that 5,600 MW of new installed capacity is under construction in the United States, more than double the number at this point in 2010. Thirty-five percent of all new power generation built in the United States since 2005 has come from wind, more than new gas and coal plants combined, as power providers are increasingly enticed to wind as a convenient hedge against unpredictable commodity price moves, AWEA said.

While the above statements concern wind power in the U.S. (the lowest-priced wind power market), the trend is the same worldwide.

Wind Power Costs, Prices Dropping Worldwide

“Prices have dipped below €1m per MW for the first time since 2005, according to the latest edition of Bloomberg New Energy Finance’s Wind Turbine Price Index,” Bloomberg New Energy Finance wrote in February, 2011. For us Americans, that translates to about $1.48 million per MW.

“The cost of electricity generated from wind is now at record lows: several projects in high resource areas (US, Brazil, Sweden, Mexico) display a levelised cost of energy – excluding the impact of subsidies but after including the cost of capital and maintenance – below EUR 50/MWh ($68/MWh). This compares to current estimated average costs of $67 per MWh for coal-fired power and $56 per MWh for gas-fired power.” (In $/kWh, the figures would thus be less than $0.068/kWh for wind, $0.067/kWh for coal, and $0.056/kWh for gas-fired power.)