Case large public engagement and political goodwill towards

Case Study for Denmark1

In the early 1970s imported oil supplied 92 percent of
Denmark’s energy. 2The
fist oil crisis in 1973-74 changed this perception. Highly dependent on
imported energy, the crises of the early 1970s lead to increasing electricity costs
in Denmark and as a result, wind energy as well as other alternative energy
sources re-emerged. The wind industry that arose in the late 1970s was a result
of a large public engagement and political goodwill towards the development and
expansion of wind energy. The share of wind in the Danish electricity
consumption has increased steadily during the last years: 18% in 2004, 33% in
2013, 42% in 2015 and 37.6% in 2016. By 2021, it is expected that wind energy
will cover over 50%.

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The Danish wind industry employs more than 31,000 people and
the industry’s turnover was EUR 11.8 billion (DKK 87.7 billion) in 2015.
According to a study by the Danish Energy Agency, onshore wind energy has
become one of the cheapest energy sources for new electricity generation in
Denmark, undercutting coal and natural gas.

As the first country in the world, Denmark has decided to
lead the transition and become entirely independent of fossil fuels by 2050.
One element in reaching this target is to expand the share of renewable energy
harnessed from wind, and this encompasses driving the development of an
intelligent energy system capable of managing the fluctuations of renewable
energy.

Denmark was the first country to install a commercial
offshore wind farm 30 years ago and has been first mover in the wind industry
for decades. In 2016, onshore and offshore wind turbines provided around 40% of
Denmark’s electricity consumption and we plan to go further with over 50% of
electricity consumption to be generated by wind energy by 2021.

Approximately 4,750 turbines supply more than 5 GW of
electricity to Denmark. The 5 GW constitute more than a third of the overall
Danish production capacity. The large-scale wind energy integration is made
possible by a well-developed transmission infrastructure, capable of handling
the fluctuating wind energy resource. The Danish grid is connected to the
neighboring countries, enabling the import and export of energy during peak
periods.

In a search for even more efficient and lower costs of
energy, the size of the turbines has grown steadily over the years and while
most turbines in the early 1990s had sizes of up to 225 kW, the newest
generations of wind turbines now reach 9 MW. The larger turbines make it
economically feasible to harness wind offshore, where the higher wind speeds
make up for the larger costs. The upcoming Danish offshore wind farms, Horns
Rev 3 and Kriegers Flak, will reach sizes of 400-600 MW.

We were once afraid of what would happen when wind energy
generation reached 5% of the total consumption. We then worried about
approaching 10% – would the system be able to cope? Some years later, we said
that 20% had to be the absolute limit! However, in 2016, Danish wind turbines
produced more than the total electricity consumption for 317 hours of the year,
and we barely give this any thought.

We are reminded of the extraordinary success of Danish wind
energy generation when, year after year, we ascertain that it has increased to
33, 39 or 42% of total Danish electricity consumption. This makes the world sit
up and take notice.

Denmark is part of a well-functioning Nordic and European
electricity market. Danish producers sell electricity to consumers in
neighboring countries when they can generate electricity at favorable prices –
often in windy conditions. And we import Norwegian hydroelectric power, German
wind and solar energy, Swedish nuclear power etc. during hours in which
producers in our neighboring countries have the best prices.

Distribution grids are rarely the center of heated public
debate. However, they have a crucial role in facilitating a transition towards
cleaner and more distributed energy sources. Over half of the Danish
electricity production is now delivered at lower grid levels directly into the
distribution grid from wind turbines, CHP plants and solar cells. And the
volumes are increasing year on year. Danish distribution system operators
(DSOs) have enabled the smooth integration of this rising level of
decentralized production.

All electricity systems transitioning away from fossil fuels
will experience tremendous upheaval and to handle it, the DSOs must participate
in innovation projects with their expertise in grid operation and with new
technical installations. Grid companies are the only ones who can test new ideas
such as flexible electricity consumption close to the customers, which is
essential in bringing research results out of the laboratory and into real
application. In this context, Danish DSOs are at the cutting edge of this transition.

Less is more when it comes to suppliers and in reaction to
this relatively new tendency, Danish suppliers are teaming up to pool services
and products into actual systems. By delivering a complete technical system or
packaged solutions to end consumers such as wind turbine manufacturers or wind
farm owners, collaborating companies can strengthen their own strategic
position.  This entails an even closer
cooperation between Danish wind turbine manufacturers and the clustered
sub-suppliers, enhancing maneuverability in technological innovations and the
ability to bring down costs.

The wind sector has adopted many standards and best
practices from other sectors. In recent years, the matter of standardization in
the wind industry has taken a big leap forward in Denmark and companies and
business organizations are coming together to form standards that are designed
specifically for application within the wind industry alone. By adhering to
common standards, suppliers need fewer manufacturing and quality controlling
processes, leading to fewer product failures. Standardization can be expanded
to numerous areas within the wind industry and the development and deployment
of standards is expected to increase in the coming years. In this process, the
strong tradition for cooperation in Denmark will be very relevant.  Having a well-functioning supply chain is of
paramount importance when it comes to making wind energy even more competitive
in the race to be first with the newest, best and most competitive products.

 

Case Study for USA

The U.S. wind industry reported 29,634 megawatts (MW) of
wind capacity under construction or in advanced development as of the end of
the third quarter of 2017, a 27% year-over-year increase and the highest level
reported since AWEA began tracking both categories at the beginning of 2016.

Utilities announced new plans to develop and own 3,040 MW of
wind capacity during the third quarter, and project developers announced 1,337
MW of power purchase agreements (PPA) signed. Six corporate customers signed
PPAs during the third quarter, accounting for 62% of total project capacity
contracted.

Project developers installed 534 MW during the third
quarter, bringing year-to-date installations to 2,892 MW. There are now 84,944
MW of installed wind capacity in the United States.3

Some of the most common questions about renewable energy
focus on how wind and solar can be reliably integrated into the power system.
Many people are unaware of technological advances that allow wind and solar to
provide grid reliability services as well as or better than conventional power
plants. The following report answers 14 of the most frequently asked questions
with lessons learned from grid operators’ experiences reliably integrating
large amounts of renewable energy.

U.S. wind energy provides enough electricity to power the
equivalent of over 25 million homes. Iowa and South Dakota reliably produced
more than 30% of their electricity from wind last year, and a total of nine
states are above 15%. At times, wind has supplied more than 60% of the
electricity on the main utility system in Colorado, and more than 50% of the
main Texas power system and the Southwest Power Pool system. These power
systems have seen electric reliability increase.

While U.S. and European grid operators have already reliably
integrated large amounts of wind energy, studies indicate that we can go far
higher. Studies examining obtaining 50% or more of our electricity from wind
and solar have found no major obstacles to doing so. Ten years ago, some
utilities and grid operators were concerned about reaching 5% wind; the
technology advances and lessons learned that have allowed that to be exceeded
over the last decade are likely to continue in the future.

Instead of using the term “baseload,” it is more accurate to
talk about the three main services the grid needs to operate reliably: energy,
capacity, and flexibility. Energy is the production of electricity, capacity is
the ability to produce power during periods of high demand, and flexibility is
the ability to change output to keep supply and demand in balance.
Cost-effectively obtaining all three services requires a division of labor
among a diverse mix of energy sources, as no resource excels at providing all
three. For example, coal and nuclear plants typically do not provide
significant flexibility, and other resources can provide energy and capacity at
lower cost. Wind energy fits well into this mix as a low-cost source of energy,
though it also provides some capacity and can provide flexibility when it is
economic to do so.

Other plants provide energy at those times, in the same way
that all power plants back up all other power plants. Portfolio diversity is
the key, as no resource is available 100% of the time. All power plants have
reduced output at times, and grid operators plan for wind’s contribution using
the same tools they use to evaluate the contributions of other resources.
Adding wind power never increases the need for power plant capacity, but rather
reduces it. During a number of events wind has demonstrated its contribution to
a more diverse and resilient energy portfolio by stepping in when other
resources failed unexpectedly.

Cheap natural gas, not renewable energy, is the primary
factor undermining the competitiveness of coal and nuclear plants. Wind and the
production tax credit (PTC) are compatible with well-functioning electricity
markets. Wind’s impact on other generators is market-driven and the same as
that of any low-cost generator, and small compared to other factors.

As wind energy has grown to provide a larger share of our
electricity mix, renewable energy technology has matured so that modern wind
and solar plants are able to provide the same grid reliability services as
conventional generators, including voltage and reactive power control, frequency
and inertial response, active power control, and voltage and frequency
ride-through. In some cases, the reliability services provided by renewables
exceed those of conventional generators, while in other cases conventional
generators can provide those services more economically than wind generators,
but wind generators can provide those services if it becomes economic to do so.

Variability and uncertainty are nothing new for grid
operators, as they have always dealt with large and unexpected fluctuations in
electricity supply and demand by changing the output of power plants. Most
changes in wind output are canceled out by other offsetting changes in
electricity supply and demand, and any remaining variability is accommodated
using the same flexible reserves that grid operators have always used. In fact,
because changes in wind output occur gradually and can be forecasted, they are
less costly for grid operators to accommodate than the abrupt failures of large
conventional power plants. Contrary to most people’s intuitive experience that
winds are variable and electricity demand and supply is stable, the opposite is
actually true at the grid operator scale.

Grid operator data show that increasing the use of existing
flexible resources to accommodate wind and solar amounts costs only pennies on
a typical electric bill. In fact, the cost of accommodating the unexpected
failures of large conventional power plants is far higher.

No. One of main reasons why an integrated power system was
first built more than 100 years ago was so all power plants could back up all
other power plants. Because most sources of variability cancel each other out,
having a dedicated backup source for each would be highly inefficient and
counterproductive.

Market-based grid operating reforms and transmission
upgrades are by far the lowest hanging fruit for making the power system more efficient
by using more of the flexibility that already exists on the power system. These
grid operating reforms provide major net benefits to consumers and improve
reliability even without renewable energy on the power system, so they should
be implemented anyway.

No, but it can be helpful. Very large amounts of wind energy
can be reliably integrated at low cost without a need for energy storage.
Energy storage provides a variety of services and is therefore best viewed as a
system resource and not a resource for renewable energy. Energy storage is
typically a more expensive source of flexibility than grid operating reforms
that allow greater use of the flexibility that already exists on the power
system.

In some areas the growth of wind energy has outpaced the
addition of transmission. At times this has required reducing, or curtailing,
the output of wind plants until new transmission is added. However, as
long-needed grid upgrades are completed, wind curtailment is being virtually
eliminated, as are occurrences of negative electricity prices. Wind energy
always has high economic value, particularly once the environmental and public
health costs of fossil fuel generation are taken into account.

European nations have demonstrated that wind energy can
reliably provide a large share of our electricity, with Ireland, Spain, and
Portugal obtaining around 20% of their electricity from wind on an annual
basis, Germany at 25% from wind and solar, and Denmark at nearly 35% wind.
Carbon emissions have fallen drastically in all of these countries, while
electric reliability has been maintained at world-leading levels and in many
cases improved.

Wind energy greatly reduces emissions of carbon dioxide and
other pollutants after all impacts on other power plants are taken into
account. 4

Pros and Cons of Wind Energy

Pros and cons of Wind Energy have been discussed above in
Case Study for USA. Further they were discussed in earlier report and
reproduced hereunder;

Cost

Often, we compare the unit cost of electricity produced from
wind versus conventional sources like oil. Although technological advancements
and economy of scale has significantly reduced the cost of wind energy and
almost make it comparable. In fact, if we talk about Pakistan then wind energy
tariff is less than conventional power sources. Economical electricity
generation is more a regional matter than a global. For example, some region
may rich in oil and therefore, they naturally are inclined to produce energy
from oil than any other source.

However, when we talk about cost then we are not used to
consider the hidden costs associated with thermal generation like air
pollution, T costs, climate change, health impacts on local and global
community. These hidden costs are difficult to assess however, careful
estimates have revealed that cost of per unit electricity shall be almost
doubled if accounted in tariff petitions. 5

Conventional thermal plants emphasize central generation and
then distribute to small and large consumers through transmission and
distribution system. Whereas wind energy has induced a unique concept of
distributed generation. Wind plant can be standalone for largely dispersed
communities and therefore do not required extensive T system.

Further, as per recent report published by NREL, science
driven innovation can reduce the cost of wind energy further to 50% by 2030. It
is in addition to previous cost reduction of 66% with current technology since
2009.6

Intermittency and Grid Issues

Intermittency with wind energy has always remained a
challenge, resulting utility operators to argue for thermal plants so that
demand of base loads can be fulfilled 24/7. The difficulty associated with integrating
variable sources of electricity stems from the fact that the power grid was
designed around the concept of large, controllable electric generators. Intermittent
renewables are challenging because they disrupt the conventional methods for
planning the daily operation of the electric grid. Their power fluctuates over
multiple time horizons, forcing the grid operator to adjust its day-ahead,
hour-ahead, and real-time operating procedures. While renewables disrupt the
grid’s operation in a number of ways, it is not impossible to compensate for
the additional intermittency and uncertainty.

The key is to have a mix of sources spread over a wide area:
solar and wind power, biogas, biomass and geothermal sources. In the future,
ocean energy can contribute too. 7
Moreover, if we apply the Law of Large Number to renewable energy, it dictates
that the combined output of every wind turbine connected to the grid is far
less volatile than the output of an individual generator. In a study
commissioned by the Electric Reliability Council of Texas, General Electric
calculated that an additional 15,000 megawatts of installed wind energy shall only
require an additional 18 megawatts of new flexible reserve capacity to maintain
the stability of the grid. So, the intermittency issue is often exaggerated out
of proportion and it can be coped with additional measures by system operators.8

One conventional way of energy storage system is using
batteries which is still expensive and inefficient from many aspects. Although
market demand is forcing manufacturers to bring innovation and make usage of
batteries more efficient. Investment in R&D sector has produced larger size
of batteries which are more efficient also.

Further, many new energy storage methods like pumped water,
flywheel, compressed air etc. are under development. 9It
is just a matter of time that these solutions shall be available commercially
and solve the intermittency issues.

Climate Change

Global climate change has already had observable effects on
the environment. Glaciers have shrunk, ice on rivers and lakes is breaking up
earlier, plant and animal ranges have shifted, and trees are flowering sooner.
Effects that scientists had predicted in the past would result from global
climate change are now occurring: loss of sea ice, accelerated sea level rise
and longer, more intense heat waves. 10

Pakistan makes a tiny contribution to total global
greenhouse gas (GHG) emissions, less than 1% (among the lowest in the world)
but it is among the countries most vulnerable to climate change, and it has
very low technical and financial capacity to adapt to its adverse impacts.11

The Paris Agreement’s ratified by 170 countries is to
strengthen the global response to the threat of climate change by keeping a
global temperature rise this century well below 2 degrees Celsius above
pre-industrial levels and to pursue efforts to limit the temperature increase
even further to 1.5 degrees Celsius.12
It sounds a good commitment, but we cannot achieve it unless we pursue clean
energy sources and replace the use of oil.

Pros of Oil based power Plants

High Energy Density – Oil has one of the
highest energy densities which means that a small amount of oil can produce a
large amount of energy. This makes it very useful as its high energy density
has made it the preferred choice for use as fuel in automobiles.

Easy Availability, Infrastructure for Transport and Use –
Oil is widely distributed in almost all parts of the world and one of the most
abundant energy resource13.
Also, there exists a massive infrastructure to transport oil to other places
through ships, pipelines and tankers. This means that oil is available
throughout the world.

Easy to Produce and Refine – Oil is not very
difficult to produce though most of the low-cost locations have already been
depleted. Now Oil is being mined off the coasts in seas and also tar sands. Oil
Refinery Technology is also quite old and mature which implies that refining of
oil to get valuable products like diesel, petrol is also quite easy.

Constant Power Source and Reliability – Unlike
solar and wind energy, oil can produce power 24/7 and is highly reliable.
Oil engines are a mature technology and highly reliable to work with.14

 

1 https://ipaper.ipapercms.dk/Windpower/Englishpublications/Wind_Energy_Moving_Ahead/

2 https://cleantechnica.com/2016/03/09/denmark-the-little-country-with-big-renewable-energy-goals/

3 http://awea.files.cms-plus.com/3Q%202017%20AWEA%20Market%20Report%20Public%20Version.pdf

4 http://awea.files.cms-plus.com/FileDownloads/pdfs/AWEA%20Renewable%20Energy%20Builds%20a%20More%20Reliable%20and%20Resilient%20Electricity%20Mix.pdf

5 http://www.greenpeace.org/international/en/campaigns/climate-change/energyrevolution/renewable-energy-myths/

6 https://www.nrel.gov/docs/fy17osti/68123.pdf

7 http://www.greenpeace.org/international/en/campaigns/climate-change/energyrevolution/renewable-energy-myths/

8 https://blogs.scientificamerican.com/plugged-in/renewable-energy-intermittency-explained-challenges-solutions-and-opportunities/

9http://mragheb.com/NPRE%20475%20Wind%20Power%20Systems/Energy%20Storage%20with%20Wind%20Power.pdf

10 https://climate.nasa.gov/effects/

11 https://en.wikipedia.org/wiki/Climate_change_in_Pakistan

12 http://unfccc.int/paris_agreement/items/9485.php

13 http://homepages.spa.umn.edu/~larry/ADVANTAGE_DIS_ENERGY.pdf

14 http://www.greenworldinvestor.com/2011/07/07/advantages-and-disadvantages-of-oil-cons-disregarded-by-powerful-lobbies/