Wind Turbines' 50% Shorter Shelf Life // Chinese SMR Hits Installation Phase // Japanese Utilities Slapped With Antitrust Fines

Wind Turbines' 50% Shorter Shelf Life

How long does a wind turbine last? The ad copy says 25 years. But new research has chopped wind's life expectancy in half to 12 years.

"A study of almost 3,000 turbines in Britain – the largest of its kind – sheds doubt on manufacturers claims that they generate clean energy for up to 25 years, which is used by the Government to calculate subsidies," reports the Daily Mail. "Professor Gordon Hughes, an economist at Edinburgh University and former energy advisor to the World Bank, predicts in the coming decade far more investment will be needed to replace older and ineffective turbines – which is likely to be passed on in higher household electricity bills."

Hughes found that onshore and offshore wind turbines degrade differently. The monthly load factors, or the amount of electricity generated as a percentage of their nameplate capacity, drops from 24% percent in the first year to 11% after 15 years.

Offshore wind, meanwhile, declines more drastically from 40% in year one to 15% after ten years. This should not be surprising, as saltwater is an incredibly hostile environment.

Larger turbines fare worse than smaller turbines, Hughes says.

These are grim tidings for an already struggling wind industry. Recent images from Vestas and Siemens Gamesa presentations make clear just how difficult the market's gotten for wind.

Onshore wind orders from Siemens are cratering, and for Vestas it looks even worse. "Siemens just posted a net loss of 647 million euros, which was up from a 560 million euro loss in the previous year," writes Robert Bryce.

Even GE's in trouble. "In October, GE announced that its renewable energy business will lose a staggering $2 billion this year. Those losses are being driven in large part, by the surging cost of metals like zinc, nickel, neodymium, and copper," Bryce continues.

In other words, wind requires heaps of materials along fragile supply chains, lasts half as long as anticipated, with poorer performance than anticipated. No good news if you're a turbine company.

Correction: The information from the Daily Mail article is out of date. See Conversation Starter No. 1 from the subsequent newsletter for more info.

Chinese SMR Hits Installation Phase

China's ahead of the pack when it comes to advanced nuclear reactors. On November 30, the Chinese National Nuclear Corporation announced that its ACP1000 reactor had entered its installation phase.

"CNNC announced in July 2019 the launch of a project to construct an ACP100 reactor - also referred to as the Linglong One - at Changjiang," reports World Nuclear News. "The site is already home to two operating CNP600 PWRs, while the construction of the two Hualong One units began in March and December last year. Both those units are due to enter commercial operation by the end of 2026."

The ACP1000 is a history-making reactor. "Under development since 2010, the ACP100 integrated PWR's preliminary design was completed in 2014. The major components of its primary coolant circuit are installed within the reactor pressure vessel. In 2016, the design became the first SMR to pass a safety review by the International Atomic Energy Agency," reports WNN.

China continues to lead the world in building domestic nuclear capacity.

Japanese Utilities Slapped With Antitrust Fines

Japan's Fair Trade Commission will slap three utilities with record-high fines.

"Kyushu Electric Power Co., Chugoku Electric Power Co. and Chubu Electric Power Co. limited acquisition of power customers within another company’s region from 2018, which is against the nation’s competition laws," Bloomberg reports.

In 2016, Japan liberalized its power market, which let regional utilities expand into rivals' turf, thus creating potential for monopoly domination of certain areas. The fine totals in the tens of billions of yen--at least $71 million.

"A spokesperson for Chubu Electric said the company is not aware of the accuracy of the Nikkei report. A spokesperson for Chugoku Electric said the company couldn’t comment. Kyushu Electric and the JFTC weren’t immediately available to comment," reports Bloomberg.

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Conversation Starters

1. Nigeria hopes to increase its oil production next year. Reuters reports, "Nigeria is working to meet its OPEC oil production quota of 1.8 million barrels per day by the end of May next year, the minister for petroleum resources Timipre Sylva said on Monday."

2. The oil situation in Libya has improved. "Libya's Government of National Unity has lifted the force majeure on oil and gas exploration activities in the North African country and called on international oil companies to resume their operations amid an improvement in security," reports S&P Global. "The Tripoli-based GNU said in a Dec. 5 statement that it would provide the necessary support and ensure safety, while the state-owned National Oil Corp. also said IOCs with exploration and production agreements needed to restart exploration activities in the country."

3. Turkey is blocking millions of barrels of Kazakh crude from leaving the Black Sea due to a new policy that demands tankers show that they are properly insured. "The government in Ankara is insisting the ships have a letter from their insurer guaranteeing cover while in Turkish waters, something that's yet to happen. The move follows European Union and UK sanctions that only allow insurance of vessels carrying Russian crude if the oil on board is bought at or below $60 (€57) a barrel," reports The Independent. "The result is that at least 20 carriers holding 18 million barrels of crude oil have been waiting for several days to pass through the Bosphorus and the Dardanelles shipping straits. All bar one have cargoes from Kazakhstan on board and a local port agent report said the vessels are waiting for clarification of their insurance status."

Crom's Blessing