Power from water wheels for 100 million people?

The German magazine Der Spiegel has a article on new water wheel technology from Wasserrad Drews. Water wheels used to produce mechanical energy for ages before burning fossil fuel took over in the 19th century. New technology may bring back water wheels, in small installation next to a river, for electricity generation.



The concluding sentence claims an optimistic estimate of providing electricity for 100 million people world-wide. I was more interested in one section that spells out the costs for one installation:

[Mr Unger installed] a metal wheel with a nominal capacity of 11.5 kW [...]. Unger feeds the electricity into the grid and gets 9.67 cents per kWh. [...]. Unger invested roughly 60,000 Euro. Now he makes 10.000 Euro a year.

The numbers seem to add up: 11.5kW * 24 hours/day * 265 days/year * 9.67 c/kWh equals 9742 Euro/year. The capital costs are about 5000 Euro per kW.

Wind Power in the States

Already out since April, the Annual Rankings Report of the American Wind Energy Association (AWEA) is full of interesting tidbits of information. In short, wind energy is taking off in America with tremendous force.

About 1% of all electricity is generated by wind. What's fascinating is the regional distribution:



The wind states of the future in the mid-west, especially Iowa (5.5%) and Minnesota (4.6%) are reaching the levels of the best European countries. These, and also the Dakotas etc., should reach Danish levels (20%) quite soon. But even in the populous state of Texas (2.0%) wind power is starting to make a real impact. The state is host to the largest wind farm, Horse Hollow, with 736 MW capacity.

It is also interesting to note that wind power currently develops at quite different speeds in the various states.



Top states installed:
Texas 4,446 MW
California 2,439 MW
Minnesota 1,299 MW
Iowa 1,271 MW
Washington 1,163 MW

Top states added:
Texas 1,618 MW
Colorado 776 MW
Illinois 592 MW
Oregon 447 MW
Minnesota 405 MW

This makes me wonder: what is going on in California? The state has extensive wind power since the 1980s, but recently not much is happening (63 MW increase in 2007). Is it really not the best place for wind or are there problems with the regulatory environment?

Mood of the Times

The New York Times has an article on wind energy, especially Sweden's efforts to generate 10% of their electricity from wind. The article is drenched in skeptical phrases: promising power source, with flaws, use of wind power in many European countries has stagnated, no longer a quirky alternative favored by environmentalists in Denmark and Germany, wind energy is coming under sharper scrutiny, makes wind a shaky replacement for more dependable, if polluting, energy sources, areas most suited for wind turbines [are] far from the coastal population centers that need the most electricity, unpredictable surges, people tend to get hyped up about it, very emotional, ...

The facts are presented pretty fairly, though. Hand wringing about the intermittency is resolved at the end of the article by pointing out the use of hydro-electric energy storage.

Energy Policy and its Rewards

Germany embarked on an ambitious project to invest in all kinds of renewable energy. Next to direct subsidies of research, guaranteed prices for electricity from wind energy and solar energy were established. The guaranteed prices were set to decrease every year to first make renewable energy competitive, but also to create pressure to improve their efficiency. This worked incredibly well.

One payoff of such foresight? Export earnings. According to the Financial Times Deutschland, Germany companies is selling renewable energy technology worth €8 billion this year, an amount that is expected to double within three years. "Twenty years ahead of other countries", is the headline of the article. 74% of sales in the wind energy industry is for export, up from 58% in 2003.

When will we have Solar Energy?

Creating electricity directly from sunshine has always been the most attractive dream of a renewable energy. Where are we now? It is still a fringe energy source, but we are also at the beginning of a great boom, which is driven by technological advances along with a favorable regulatory environment, especially in Germany. Note that there are many definitions of solar energy, for instance wind energy is only possible because the sun heats the atmosphere causing the circulation of air. We are looking here at photovoltaic, the generation of electricity directly by converting the energy in sun rays.

According to a recent article in the Financial Times Deutschland, solar energy costs in Germany 40 euro-cents per KWh to produce, while the cost of traditional electricity is half as much. However, due to the more intense and more reliable sunshine, in California solar energy the costs are only 25 cents per KWh, which is almost competitive with end user prices.

The article reports of the current solar boom, with the consequences that currently the prices for solar energy installations is artificially high due to the high demand and limited production capacities. At the sam time, the solar energy industry is planning massive expansions, which may even be too optimistic and lead to a oversupply (and hence very low prices) in a few years.

Solarserver puts up this estimate of current and future costs from a study of the "Strategic Research Agenda" (SRA), apparently a project funded by the European Commission.

	1980	Heute	2015	2030	long term potential
Average installation cost (2006 €/Wp)	>30	5	2.5	1	0.5
Average production cost in southern Europe (2006 €/kWh)	>2	0.30	0.15	0.06	0.03
Energy return of investment in years (southern Europe)	>10	2	1	0.5	0.25

There are two ways to answer the question When will solar energy be competitive? If you are installing solar energy panels on your roof you are replacing your energy consumption from the grid, which puts you in competition with end user prices. According to the projection, the break even point for solar energy according to this measure is 2015 in southern Europe (at 15c/KWh). If you are building a large solar energy power station, you also have to deal with transmission costs etc., so the ultimate price will be higher. The projection sees the break even point for solar energy at wholesale prices in 2030 in southern Europe (at 6c/KWh).

There are many unknowns here: The cost of installing a solar energy power station is very different from a coal fired power station. Almost all the costs are upfront, while there is no fuel cost. Also, we do not know how the price for traditional energy prices develops - coal may be fairly stable, but there is reason to believe that natural gas prices will go up in the medium term.

Where are we now with actual installations? Half of all solar energy systems are installed in Germany, which is a bit of an odd choice. Germany is in a relative northern climate (even the southern German city of Munich is at the same lattitude as the US-Canadian border). Installed capacity in Germany has doubled in 2006 and delivered 0.3% of all electricity.

Growth of Wind Power

Jerome has an extended post over at the Oil Drum on the highly informative Annual Report on U.S. Wind Power by the The Department of Energy's Energy Efficiency and Renewable Energy (EERE).

Here the latest numbers on new and total installations:



The United States, the sleeping giant, awakes, with 27% growth in 2006. A trend that I expect to accelerate over the coming years given the economic competitiveness of wind power. The role of wind power in India (42% growth) and China (106% growth) is also encouraging.

Here is where the rubber hits the road. What part does wind energy play in overall electricity generation? By country:



Denmark is the size of a medium-sized postage stamp, so it is easy dismiss the 20+% number. This is not so easy with Germany, which still has a significant manufacturing base (famous for car production, but there is also a lot of heavy machinery production). 7% is a substantial number and current growth rates for wind energy imply that this percentage goes up by almost a point every year.

The U.S. number is also instructive. Wind energy has almost reached respectability and cannot anymore denied as exotic fringe. Of course this is done anyway.

Update on Saudi Oil

The Oil Drum has an extensive article underlining the same point from the earlier post: Saudi Oil might be running out. An interesting fact is the increase in oil rigs at the same time, indicating frantic production activity: