site banner
PaperclipPerfector  3mo ago (text post)   2355 thread views

Small-Scale Question Sunday for December 15, 2024

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

3
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

Despite the current new administration, energy transition is a good bet. Decarbonization, electrification, GenAI. Energy companies will continue with low carbon and distributed generation buildout for the next 30 years. Nuclear maybe get little bit of investment, but I expect it will not be material to overall new generation. Gas turbines will be the backbone but expect more renewables regardless of fed policy.

The problem with green investment seems to me to be that is it is so polluted with political money that you can't use market as a signal for anything. I.e. everybody invests in, I don't know, solar panels (just random example) and then it turns out the model is not viable, and all the political money is burned, which nobody (among politicians) cares about, and your money is burned with them. Sure, if US were a dictatorship like China, you could follow the political money just relying on inertia, but in the US the agenda could change every 4 years, and some investments may be so stupid that they don't survive even if the government wants them to. There will be viable projects too, the question is how you separate viable from unviable ones in a distorted market?

There's a fundamental issue with industrial policy where it's justified by government mandates and subsidies allowing nascent industries to develop locally. But once the justification for the power is made, they forget all about it and just throw money at things. Like how the economic concept of a non-exclusive, non-rivalrous "public good" gets repurposed to mean "goods I want the public to pay for"

Giving people money to buy solar panels from China didn't produce a local industry, it just gave certain people a ton of money at the expense of other people. Solar might be a great investment, but nothing about the government's policy did anything to influence that except add more slack for malinvestment and the nightmare of scams residential solar loans turned into.

Ironically the Biden tariffs and manufacturer subsidies are an actual piece of industrial policy, but decades too late and at odds with literally every other government policy pushing manufacturing off shore. Ironically harming the natural process of solar adoption more than.ending all solar subsidies would have.

Tempering this, most of the money in renewables is in shady grants, kickback schemes, and running scams. It's like investing in the Chinese stock market as a foreigner: all the value is harvested by 5 layers of insiders, and the iShares China ETF you can buy has only gained 20% since 2012.
(I seriously didn't realize it was that bad before looking it up for this post)

The profitable way to "invest in renewables" is by getting your non-profit a $50 million "inflation reduction act" grant to identify minoritized stakeholders and leverage indigenous community engagement for the equitable siting of utility solar (run an extortion and money laundering racket with ARM lawyers and a casino company, funneling kickbacks to certain political parties)

And you've got to be in the inner circle to keep the money flowing. Owning a residential solar installer has been a gold mine for years, but suddenly next year you're paying 50-100% tariffs so that some other guy's overpriced US solar panel factory can profit by getting a special tariff waiver on imported components

I didn’t realize this was an investment question. You are correct that there are not many good public companies out there for this industry. You’ve got scams on the low end and private capital at the high end.

I thought this was for career advice.

I mean, I am up for taking my HVAC contractor exam. If you know of a way to make money with that in the 'energy transition' I'm at least willing to hear it.

Heat pump installations?

Just to piggyback on this a bit. In Sweden, the median net profit margin for wind power operators has been less than -60 -38% the last 15 years, and its getting worse as time goes on, for what should be obvious reasons. The largest wind power farm in Europe is having a net profit margin of less than -400%.

This is in a market environment with substantial subsidies, favourable regulatory conditions, lots of hydro to combine wind with, manufacturing of wind power components being heavily subsidized by the Chinese state, not having to have a demolition fund and wind power not paying for any of the massive system effects it has due to intermittence and other related issues.

All new wind power projects in Sweden have been stopped by developers and they now want both the state to pay up towards ~30% of the cost of the parks and getting price guarantees like what is proposed for new nuclear plants, despite the well known and unsolved issues with intermittency and the like.

This is with record high power prices in northern Europe.

There are of course people making money here and that's the companies designing and constructing the wind power farms. Its always funny when there is some article saying something like "These people want to build a massive wind power farm!" and its just some project planning company looking for investors and journalists being taken for a ride (possibly willingly, possibly getting paid for running a covert ad).

Do you have more about this?

AFAIK, onshore wind in particular is by far the cheapest form of electricity available, most decent locations should be well below $20/MWh today.

Are Sweden's wind parks doing so poorly because those are all first-generation off-shore parks, using experimental turbine foundations and giant turbine prototypes (where scaling effects from mass production have not kicked in yet)? Has Sweden massively overbuilt wind capacity without investing in storage, and now the wind-parks collectively ruin the spot market for each other on windy days?

In theory, onshore wind parks are cheap to built and cheap to run. Wind in Sweden should have a capacity factor >40%, with barely any hours per year where it goes below 10%. In an ideal location like this, wind should even beat solar (in an ideal location) for the next couple of years - and solar is now cheap as dirt.

The energy in the wind scales as the cube of the wind speed. It looks like it ought to be the square of the wind speed, because kinetic energy is one half m v squared. But what is the mass here? It is the mass of air passing the wind turbine, so that is proportional to the wind speed.

This makes intermittency a huge problem. When the when is blowing at half speed, you only get one eighth of the energy. Imagine planning for low winds by over provisioning by a factor of two. You have built twice as many wind turbines as you need for a day with the designed for wind strength, expecting that you will make it through low wind days without black outs. But when the wind strength dips to 79% of design nominal, you are already down to half power, taking up the entire margin provided by over provisioning. The wind drops to 78% and you have to start shedding load :-( Or at least drawing on storage.

I keep seeing critics of wind power asking "what do you do on calm days?". That is a bad question. It leads to boosters and critics both worrying about the occasional calm day when the air is still. But we need to worry about the half strength days. And those are common place days when the wind is still blowing and we expect the turbines to turn and the electricity to stay on.

A credible wind power system would have eight fold over provision, and weeks of storage. The occasional day when the wind is above design strength all day would be a cause for celebration: we have captured a weeks worth of energy in a day! And we could start feeling that we had a secure energy supply. We are nowhere near facing the challenge of intermittency nor the expense of intermittency.

The energy in the wind scales as the cube of the wind speed.

This is true in theory, and a decent model for small wind turbines in relatively slow winds.

It's not useful for large modern turbines (let's say 3 MW and up), since it assumes that higher wind speed automatically results in faster rotor RPM. But since rotor RPM is critically limited by blade tip velocity, a large turbine reaches max RPM in ultra light wind. After that point, power scales linear with wind speed. See this power curve, first example I found

Add to that, that a large turbine reaches nameplate capacity at around 10 m/s wind speed (and goes linear at around 3 m/s, shuts down at around 30 m/s), and it's really not that much of a problem in a modern park.

In short, oversupply (but there are other problems as well) and its not limited to Sweden, it afflicts all surrounding countries. Its both a local, national and regional problem. Although there are some smaller areas and projects are profitable where market penetration is low and there are areas where wind could be profitable but the local popu

Newer projects aren't meaningfully less negatively profitable than older farms due in part to lessened subsidizes but mostly due to the underlying problem of oversupply.

Now, what constitutes oversupply? In Sweden about 20% of the electricity currently comes from wind and this in an energy system where 35-45% comes from hydro and effectively constitutes storage for at least parts of the year.

This is as far as I'm willing to engage on this topic at this time, I might make a top level post in the main thread after Christmas if I get time with more information and sources. Everything is public access through company annual reports and the like.

Has Sweden massively overbuilt wind capacity without investing in storage,

As far as I'm aware no scalable storage is even remotely financially viable, even when it's a byproduct of some other related industry and all non-neglible projects in Europe have been cancelled as far as I'm aware (not that anything got out of the planning stages anyway).

Grid storage may not be economical without subsidies, but a ton of it is nevertheless being built in California and Texas.

My impression is that this is small scale (on a grid level) and intended for high variance energy arbitrage. The same business idea exists in Europe and battery parks are being built.

This cannot scale under current conditions due to the financial viability of the idea depends on extreme variance in spot prices. If battery capacity was to expand beyond a few percent of the grid the profitability would drop through the floor. In this way it's similar to wind it self in that it quickly self cannibalises.

You’re right that grid scale storage is not very economical, but I was thinking a bit about this: doesn’t Norway have good geography for large scale hydro storage? Basically, dam up the fjords, and pump them high with water.

This is as far as I'm willing to engage on this topic at this time, I might make a top level post in the main thread after Christmas if I get time with more information and sources.

Please do, I look forward to it!

Currently, I'm still bullish on wind. I think there's a reason why the Chinese are installing massive new capacity. Also, I've seen forecasts that global Li-Ion production capacity will be 8 TWh next year, several hundred percent percent above demand. If this is true, the bottom will drop out of the market and grid scale battery storage will suddenly become very feasible.

Can you post this in the CWR tomorrow?

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats