Wind's Major Market Failure Moment // Wind Lull Revs EU Gas Prices // FERC's New Transmission Tack

Wind's Major Market Failure Moment

Despite the hype wind energy is stumbling. A recent piece from Bloomberg captures what's going on and some surprising consequences. 

Here's the rundown:

• All the major heavyweights are struggling--Vesta, General Electric, Siemens Gamesa.

• High raw materials prices, changes in subsidy structures, years of turbine price pressure, and "an expensive arms race to build ever-bigger machines."

• “What I’m seeing is a colossal market failure. The risk is we’re not on track for net-zero [emissions] -- and the other risk is the supply chain contracts, instead of expanding," said Ben Backwell, chief executive officer of trade group Global Wind Energy Council on government targets vs. the reality on the ground.

• "The companies say they’ll compete for fewer projects in fewer markets, raise prices, streamline their product lineups, and cut manufacturing costs. That comes just as surging fossil fuel prices should be making renewables more competitive."

• The inability of western wind firms to compete might create an opening for Chinese firms to muscle in and gobble up more of the market like China's done with solar panels.

Wind Lull Revs EU Gas Prices

European gas prices shot up due to bad forecasts: colder weather with low wind speeds. 

Oilprice.com reports, "The day-ahead gas price at the Dutch TTF hub, the benchmark gas price for Europe, jumped early on Monday by $5.26 (4.90 euro) to $103.54 (96.45 euros) per megawatt-hour (MWh), while the front-month futures contract for May increased by $0.43 (0.40 euro) to $104.60 (97.35 euro) per MWh."

Much of that gas flowed through the Nordstream 1 pipeline from Russia to Germany. Though Europe is contemplating banning Russian gas, moments like this make it seem highly unlikely they'll actually commit. 

FERC's New Transmission Tack

The Federal Energy Regulatory Commission laid out new ground rules for transmission projects last week. Their solution to solving regional interconnection problems is to kick responsibility down to the states, who will work it out amongst themselves. The hope is that this will bring more accountability and better representation into the process.

The commission voted 4-1 to approve the proposal. FERC hopes it will increase reliability and affordability on the grid by making it easier to move power around regions. Chairman Glick said, “It’s also going to address our nation’s changing resource mix and the changing role of electricity in our society, and that’s clearly coming with electrification."

A comment to Utility Dive from Chaz Teplin of the Rocky Mountain Institute (Amory Lovins's anti-nuclear organization) put a finer point on it. “This type of planning is much more likely to connect the regions of the U.S. with valuable, low-cost wind and solar to our load centers,” Teplin said.

Only Commissioner Danly opposed the change. He worries that it was made to encourage certain types of generating resources over others and to socialize the costs of state and local policy choices. Glick and Teplin's comments make it difficult to rebut his concerns.

In truth, regional integration has been a hot topic for at least one hundred years. Several plans were bandied about at the outset of the 20th century for the same reasons: affordability, reliability, thrift. Back then it was a demonstrable problem that due to a complete lack of integration utilities overspent on generation. Getting utilities to link up, the structure of the states' relationship with the federal government, and a lack of bureaucratic muscle kept the integrated grid dreams of yore from fruition. 

Things have changed now with the dawn of power pools to ensure reliability after the 1965 blackouts and now the RTO regions put under FERC's aegis. There's now a deeper framework for interconnection. Another difference is that unlike in the early 20th century, interconnection wasn't suggested so as to onboard intermittent generators. 

Conversation Starters

• Fires broke out at a Russian oil depot close to the Ukrainian border. The first fire lit up a civilian facility holding around 10,000 tons of fuel and the second fire about 15 minutes later at a military depot with around 5,000 tons of fuel. No word on casualties yet.

• I have published a piece on the insanity of Germany's nuclear closures and the ideological origins of their misguidedness in Compact. You can read it here. 

• The American Midwest is reporting record lows in its regional gas storage.

Word of the Day

Intermittent electric generator or intermittent resource

n.

An electric generating plant with output controlled by the natural variability of the energy resource rather than dispatched based on system requirements. Intermittent output usually results from the direct, non-stored conversion of naturally occurring energy fluxes such as solar energy, wind energy, or the energy of free-flowing rivers (that is, run-of-river hydroelectricity). (source)

Crom's Blessing

In 2019, Rogue Fitness recreated the Wheel of Pain from Conan the Barbarian for the Arnold Classic's strongman competition.