Two comments to start with. First, I am an unequivocal proponent of wind energy. I agree with most arguments about the not yet internalised costs of conventional energies, about wind energy being cost efficient today given a fair market. But life is not fair, and never less so than in the energy business. We must operate in the world as it is, not as it should be. Second, my view is from a European perspective. A non-European reader may have a different view. Please feel free to join this debate in the pages of Windpower Monthly. We need to learn from one another.
After hard years of struggle -- against conservative public authorities and established energy producers -- the wind lobby today is comfortable in the knowledge that wind energy is booming. Global capacity is approaching 50,000 MW and wind's production cost has been halved since 1990. On good windy sites, a kilowatt hour of wind power can be generated for less than EUR 0.04, comparable with new fossil power plants. Even if good unoccupied sites are becoming scarce in Central Europe, there is scope to continue Europe's wind energy success story in offshore wind power, the re-powering of old wind stations, and exports.
Such industry confidence is understandable. A decade ago, few had predicted the scale of wind energy's success today. But past experience is a bad substitute for an honest analysis of the future -- and that analysis reveals that the success story is hanging from a thin thread.
Terrestrial growth potential in Europe is limited. The best sites are occupied. Today, most new turbines are already operating in less than optimum wind conditions. The question is not whether a two or threefold increase in existing wind capacity is still possible. The fact is that land-based wind turbines in Europe will never deliver enough energy to put them on an equal footing with coal, gas, and nuclear power plants. That includes re-powering, which for many reasons is not able to fulfil the high expectations placed in it.
The offshore dream is fading. The closer project developers look into the details of offshore wind power construction, the faster additional requirements and cost estimates increase. The role of offshore wind in the European wind energy concept may be smaller than anticipated. Indeed, offshore wind is shaping up to be not so much an end goal, but a step on the way. Putting wind turbines offshore is a consequence of geography clashing with policy. In the countries which most keenly support wind energy financially, there is just one place where sites are windy as well as available -- the open sea. Without existing support regimes, few investors would place turbines in water depths of 20 and 40 metres, not accessible for dozens of days each year and connected to land-based substations by expensive sea cables.
Wind energy's contribution to electricity production is still marginal. In Germany, the world's leading wind country, it contributed 4.2% to electricity production in 2004. Within the enlarged European community, wind's share in 2003 was 1.4%. Globally it is below 0.5%. The story is similar for wind's share of new generation capacity. In the four years from 1999 to 2002, wind contributed about 9% of all new power plant capacity, most of it restricted to four or five countries. In terms of yearly energy production, wind's share shrinks to about 3%. The European Wind Energy Association is predicting that in 2010, Europe's installed wind energy capacity will reach 70 GW -- an increase of 40 GW based mostly on offshore growth. Globally, the International Energy Agency is expecting wind capacity to reach 120 GW by the same year. Within the same timeframe, many more new fossil or nuclear power plants will be built, especially in India and China.
Let's face it. Wind power is a niche energy primarily dependent on financial support mechanisms put in place by governments. It is still a tender green shoot in the large energy garden.
Wind is endangered
Every green shoot starts out small. Even huge Sequoias were once tiny saplings. Given enough time they can demonstrate their full capacity and size. Given enough time we can be sure that the falling cost of wind energy will meet -- and undercut -- the rising cost of fossil fuel and nuclear energy. So why care if it is all happening very slowly? Why don't we just wait until wind power, even at modest growth rates, eventually becomes fully competitive?
The reason is that strong forces are working against wind energy. I will skip the issue of wars against wind inexplicably being fought by public servants. Much more important is another force: the established energy lobby. It is a broad grouping, encompassing utilities, large energy producers, coal and gas producers, component manufacturers, energy trade unions, and so on. It is a lobby of such force that it puts renewable energies -- and especially wind energy -- under heavy and continuous fire. Yes, there are positive counter-examples, but those swallows do not make a summer.
From their point of view, there are good reasons to fight the rising tide of wind power. It poses a threat to utilities and other stakeholders in the energy industry. It does not fit well into an existing power system based on large, centralised power plants. Its production is neither demand-based nor easily predictable. The quality of wind power delivered to the grid does not yet match the standards of other power plants. Experience with wind power is still limited and the perceived risks of large scale wind power integration remain high. Why should any power system manager jump at a new, relatively unknown, more risky technology when there are plenty of working, well-proven technologies?
There are other, even more decisive reasons for the established power sector to keep wind out. They centre on power and profit. Wind energy reduces the market of utility-generated electricity. By being safe, environmentally friendly, CO2-free, local and sustainable wind energy puts existing power plants on the defensive. In the long run, wind power combined with other renewable energy sources threatens the existence of today's large energy producers.
On the attack
For any organism under threat, attack is the best form defence. Utility managers are paid to drive their companies forward, not to support renewable energies. It is not surprising that the thought of renewable energies collapsing into insignificance appeals to them -- and they are working towards that goal.
The traditional tactic is to attack wind energy directly: expensive, unreliable, kills birds, destroys the landscape. Over time all of those claims have been disproved (although beauty will always be in the eye of the beholder). The arguments are used over and over again, but with declining impact. Growth of wind energy is made more complicated by the barrage, but not stopped.
A newer tactic being adopted is much more dangerous. This is to announce that there are technologies that fit into the existing utility concept and that are superior to wind energy in the long run. One of these is the fail-safe nuclear reactor. Another one is the emission-free coal power plant. According to Klaus Rauscher, CEO of Vattenfall Europe, a CO2-free coal power plant could be commercially viable in 2020. The impact of such statements cannot be overestimated. Whether they are based on solid technical insight or are just a marketing smoke-screen, the effect is the same: the impression is created that there are -- or will be -- much better technologies than wind energy.
Even if there is a reasonable probability that wind energy will finally make its way, on no account is there certainty. In essence, it is all about gaining public acceptance. As long as governments have the endorsement of voters, they will keep up the present level of support. But wind energy may lose its positive standing in the public eye, whether due to the energy establishment's pretence of better technologies, due to its own failures, due to scare stories of blackouts on windless days, or due to a totally unforeseen development. Once public support wavers, governments will be inclined to listen to the tempting recipes of wind opponents.
Just a few laws and directives need be changed and European wind energy will have lost all its momentum. Most probably the consequences will not be fast and savage. It will be a gradual phase-out: more difficult financing, fewer new installations, higher prices, worsening service, manufacturers leaving the market. The argument that politicians cannot withdraw support for wind energy because there are too many jobs involved does not hold. In the beginning, the reduction of the work force will be slow and subtle; the real negative impact will only be felt some years later.
Wind energy's future is endangered as long as the cost of conventional energy is below the cost of wind energy. Energy managers are not particularly concerned with just the cost of generation. The industry's levelling rule is the fully loaded production cost per "secured" kilowatt hour. In other words, guaranteed delivery at any point in time.
Let us assume that time goes on and nothing and nobody succeeds in stopping the growth of wind energy. One day, irrespective of how cost is being defined, the price curves of non-renewable energies and wind energy cross over, with no ifs, buts, requirements for good winds, subsidised transmission or "fair" markets. At today's rate of progress in Europe, that could possibly take a decade or even two.
From that point, wind energy creates profit and energy managers will go for wind. We then enter a zone of business re-orientation (graph). Players in the power business will switch to wind energy on a grand scale. The risk of swinging back to pre-wind times is still there, but as wind gets cheaper than non-renewable energies, the number of pro-wind companies increases. The bulk of energy companies will adopt wind as an integrated part of their energy portfolio. In the end some hesitant players will remain, but they will be considered to be as exotic as the early movers were once viewed. Wind energy will attract a large part of those billions to be invested in new power stations. It will be an irreversible and indispensable part of our energy production.
Players outside the established energy industry will be attracted into it. Multinational investors will enter the scene, less experienced in wind, but rich in cash. We will see a race around the world for large siting areas for hundreds of turbines with excellent wind conditions and reasonable distance to consumers. Small groups of wind turbines are outside the scope of those investors. No longer will we see a comparatively unified front against wind energy, but a series of large energy producers and energy investors competing with each other for access to the best projects.
Securing the future
The danger is that wind will never get that far. There may be economic recessions, there may be political turmoil, there may be some seduction of the public by fabulous technology miracles. I believe that to minimise the risk of wind energy being de-railed we have to shorten the time period between now and its entry into the stage of macro business re-orientation. Whether the period facing us at today's rate of progress is ten or 20 years, it is an awfully long time during which we have very limited control over what happens. A lot can happen that might nullify wind power.
The faster the price differential between wind energy and non-renewables falls below a critical threshold, the sooner re-orientation towards wind starts. As well as reduced wind energy costs, increases in the cost of fossil-fuel generation (and most probably nuclear from today's claimed levels) will contribute to that development. No further activity is needed here. Another fossil-fuel price push will happen when further external costs are internalised beyond the first Kyoto-based emission caps; others may follow. Renewable energy associations as well as other organisations are active promoters of those developments. Those fronts seem well covered.
But that will not be enough. Bigger steps are needed to increase the market share and the price competitiveness of wind power. Both activities are closely related (graph). The virtuous circle, however, is partly conditional: volume growth definitely leads to cost decreases. Cost decreases, however, require enough large windy land areas to be converted into volume growth.
One entry point into the stage of business re-orientation is increased focus on research and development (R&D). Wind turbines offer considerable room for further innovations and associated cost savings. Few can honestly claim that an infant technology like wind energy, with not even the first product generation having ended its life cycle, has achieved what car manufacturers have failed to do after 100 years of business. Yet the wind industry has neither the financial means to invest heavily in R&D, nor is it willing to increase its existing risk level by additional innovations. Convincing governments to invest even more R&D money into the only renewable technology that is close to profitability is a tough job, however. Investors are even less so inclined. They are not interested in potential breakthroughs, but hard guarantees for their investment, backed up by watertight business plans.
The big leap
A more promising entry point is the development of very large wind power stations of two and three thousand megawatt apiece: to take existing well developed wind turbine technology and to use it in a more cost-effective environment of mega wind stations.
In densely populated Europe there is no room for such immense construction, but there are places where wind can be utilised on a very large scale. Work by Gregor Czisch, at Germany's Institute of Solar Energy Technology, and by researchers at the Danish national laboratory at Risø have identified locations in northern Russia, north-west Siberia, north-west Africa (southern Morocco and Mauritania) and Kazakhstan. All three areas offer hundreds of thousand of square kilometres with wind speeds way beyond European values. They are extremely sparsely populated and would allow for the installation of huge wind power stations (table).
To minimise transmission losses of such high energy volumes, the experts propose high voltage direct current connections (HVDC). They recommend considering at least two different areas, for example, north-west Africa, where peak production occurs during the summer months, and Russia or Kazakhstan, where the highest production is in winter time.
Wind power production costs will be driven down ferociously in projects of this scale. Turbine manufacturers will achieve huge batch sizes, drastically lowering the price per unit. Today, the cumulative capacity of the two most successful turbine types so far installed is about 3 GW each. In mega wind stations, that could be the capacity of just one site. Onshore turbines are also less expensive to install and make than offshore machines of similar size. Large siting areas enable investors to build "utility-sized" production capacities, 500 MW per site or much more. The high and constant wind speeds at these sites reduce the volatility of wind energy production. Planning costs, operational expenses and maintenance will be much lower per MWh than in any small-scale wind plant.
Successful realisation of mega wind stations has the potential to quickly close the cost gap between conventional energies and wind energy. Detailed calculations will have to prove whether price parity with fossil fuel technologies is possible with today's machines or whether the next turbine generation is needed first. But it will be achieved much faster than without such a project. The day when the utility members of the mega wind station planning group sign the implementation contract is the first day of business re-orientation towards wind.
Discussion has not even started on how to initiate and structure mega wind parks. Should they be another version of utility owned and utility controlled power plants? Or could they be massive citizen-owned power plants, built by small to medium companies? Or, my preferred approach, should they offer a general framework allowing unconstrained co-existence of all possible implementation models?
Who should drive such project? In today's market, neither the established energy industry nor other investors will take the lead. They would consider the risk too high. And the wind energy industry is too financially small, its marketing position too diverse.
The success of mega wind power stations, however, is in the best (supra)national interest. Successful implementation will raise the volume of renewable energy supply and reduce emissions of greenhouse gases; it will reduce Europe's dependency on finite supplies of imported oil and gas; it will enlarge the portfolio of countries delivering energy into Europe. For all these reasons, the participation of national or supranational governments is necessary. The sheer size of mega wind stations puts them beyond the capabilities of individual companies. Governments are needed for macro coordination from the beginning. There is no small scale start-up for mega wind stations -- they are either big, or they are not. They have to be part of national and international energy concepts. Governments have to work out an encompassing contractual framework to clarify the many issues of such a multi-billion project.
If we proceed with today's concepts for wind energy, there is a fair chance that wind energy will make its way. But this is an assumption without guarantees and the consequences of failure are horrifying. Pushing the concept of mega wind stations is an ambitious but promising approach to reduce the risk of wind never realising its full potential. All necessary components are already in existence. No vague technological miracles are needed. It is just another large, sophisticated engineering task with a huge upfront investment. The result can be a win-win situation in which the confrontation between business-oriented utilities and ecologically oriented wind power supporters will have been finally overcome.
The initial steps have to be taken now. As wind energy supporters, we are responsible for promoting the vision.