Book review: Great Texas Wind Rush

I just finished The Great Texas Wind Rush: How George Bush, Ann Richards, and a Bunch of Tinkerers Helped the Oil and Gas State Win the Race to Wind Power. The book is interesting because it shows what has to happen for wind power to work at all, e.g., someone needs to spend billions of dollars on transmission lines from where it is windy and people will tolerate noisy ugly windmills to where electricity consumers are most likely to live.

The author has a “nothing can happen without the government” attitude, which is substantially justified by the challenges of implementing wind power, e.g., forcing property owners to accept transmission lines across their land. The ability of consumers to respond to price signals is zero, in the author’s mind:

Americans, the most energy-guzzling people on earth, had finally figured out how to cut back. They bought more-fuel-efficient cars, under the government’s exhortations, and drove more slowly. They learned to turn off unnecessary lights. Some began buying more-energy-saving refrigerators, thanks to national appliance-efficiency requirements that came into effect in the 1980s.

The author suggests that the federal government is almost as useless as an individual American:

“The Department of Energy has a multibillion-dollar budget, in excess of $10 billion,” Reagan said in a debate with Carter in late October 1980. “It hasn’t produced a quart of oil or a lump of coal or anything else in the line of energy.” It certainly hadn’t produced much by way of wind energy, either. One of the oddities of the wind business is that the modern turbines of today are not descendants of the enormous experimental turbines that heavyweights like General Electric and Boeing and Alcoa and Westinghouse produced in the late 1970s, using millions of federal dollars. Those had experienced major technical problems and flopped.

Boeing struggled with dirt getting into hydraulic fluid. Alcoa, the aluminum giant, pulled out of the wind business soon after its solitary 500-kilowatt test turbine, shaped like a kitchen beater and erected in California’s San Gorgonio Pass, slung a blade at one of the wires holding it in place just a few hours after being turned on. Making matters worse, this occurred just before a high-profile wind conference featuring California governor Jerry Brown was due to convene. “I have some good news and some bad news,” Paul Vogsburgh of Alcoa announced to those assembled. “The bad news is that our wind turbine destroyed itself. The good news is that we did not have to evacuate Los Angeles.”

“It’s kind of strange,” says Vaughn Nelson, the retired director of the Alternative Energy Institute in Canyon. “The tract of development that led to the large megawatt machines today came from what we’d call the ground up of the small machines getting bigger [with] economies of scale, rather than starting with great big machines funded by government.

State governments, on the other hand, especially Texas, have managed to make things happen. Offshore wind in Texas has a much better chance of succeeding than in other states: “In a convenient quirk, Texas waters extend up to ten miles offshore, considerably farther than most states, due to historical reasons relating to how Texas joined the union. This means that developers like Schellstede had plenty of room to plant turbines without hitting federal waters and triggering a cascade of new rules. “

Investment in wind power has been extremely risky. The author chronicles the IPO of Kenetech, a California wind turbine company: “Merrill Lynch foretold a hundredfold rise in Kenetech’s sales over three years.” They went bust a few years later. T. Boone Pickens  plans the world’s largest wind farm:

A woman asked whether the giant windmills would make noise. “I’ve been a quail hunter since I was twelve, so my hearing isn’t worth a hoot,” Pickens told her. “If you’re getting royalties from it, it might have a real pleasant sound.” But the turbines have made no sound at all. Despite Pickens’s grand pronouncements, the Pampa wind project never got built, and in the corridors of wind conferences the mention of Pickens’s name soon brought snorts of irritation. A few months after his appearance at the Pampa auditorium, the price of natural gas began to plunge as the extent of the enormous new shale supplies became clear. As the price of gas fell it pulled the price of all forms of electricity down with it, and wind became less competitive. “When natural gas is $4.50 [per thousand cubic feet], it’s hard to finance a wind deal,” Pickens told the Texas Tribune in 2010, the same year he gave up the last of the leases on the Pampa land. “Natural gas has got to be $6.”

Do we really want this?

“Never in the history of the world have we put up 400-foot-tall blinking behemoths everywhere,” West Texas landowner Dale Rankin, who sued to stop the march of wind turbines over hillsides near his Abilene-area home, told the Austin-American Statesman in 2007. Living close to hundreds of turbines, Rankin said, is like being “next to an airport where the jets are running their engines all he time.” But in a state that welcomes development, Rankin’s lawsuit, the first significant one of its kind in Texas, failed in 2006.

And once we get it, will it free us from digging up fossil fuels and setting them on fire?

Indeed, on some windy nights when the blades are turning but electricity use is low, or when the grid is congested with lots of different plants offering power, parts of West Texas see “negative pricing,” in which wind plants pay a modest amount to offload their power (the federal production tax credit ensures it’s still worthwhile for them to do this).

When the wind does blow, it’s not necessarily at the most useful times, which makes Texas grid operators, even armed with constantly improving forecasting tools, wonder how much more wind they can handle without unbalancing their system. Sometimes things work out. In February 2011 wind farms all across Texas got praise for pumping large amounts of power into the electric grid during a deep freeze that managed to knock out a quarter of the state’s coal and gas power-plant units and caused rolling blackouts throughout the grid, even though a few turbines did go offline due to dangerously high winds and hydraulic-equipment freezes. But three years earlier, when a cold front moved through Texas and the winds died, the Texas grid operator, ERCOT, barely averted blackouts. (The wind industry says the cold front was predicted and the grid should have been prepared for it.) And on at least one scorching August afternoon in 2011, wind farms produced only about 1.3 percent of the grid’s electricty, prompting the National Review to run a piece headlined “Texas Wind Energy Fails Again,”

I recommend this book for software engineers. It shows just how much money and patience you need to achieve an impact in the world of energy.

11 Comments

  1. Peter

    May 11, 2014 @ 10:20 pm

    1

    I recently took a road trip through the California desert last month. On the flight from Boston to San Francisco we flew over a gigantic solar thermal installation in the Nevada desert. On the approach to SFO, we saw a huge wind farm on the Altamont Pass. We traveled by car from Berkeley to the Salton Sea on the Mexican border. On the trip, we noticed a number of large wind farms, maybe ten or a dozen, each with maybe a hundred wind turbines all cranking away, all dead silent. We also passed a number of very large (hard to judge size – somewhere between ten and 100 acres) photovoltaic arrays. The region around the Salton Sea is an area of intense geothermal activity. There we saw a number of industrial structures – maybe 20 – that a local resident told us were geothermal plants. We were a little skeptical of this claim as we could see no power distribution lines around the plants. So, it seems that in the California desert, at least, they are generating a significant amount of energy from renewable sources with an environmental impact significantly less than that of coal or nuclear power.

  2. bigger bomb

    May 11, 2014 @ 11:03 pm

    2

    Half of Solar Energy that enters the Earth has
    to leave otherwise that is the definition of Global Warming.

    GREENHOUSE EFFECT
    380 TW less heat is escaping
    Planet wams until 120K TW is emitted again.

    WASTE HEAT EFFECT
    5000 TW extra heat generated on Earth
    3 degree C increase in temperature
    Planet warms until 125K TW is emitted

    If you convert free energy (Solar, Wind) into Heat
    that is also Global Warming. Solar has 15% efficiency.
    Nuclear has 30% efficiency, Wind has 40%.

    And When you burn oil, you are burning ancient solar energy.
    When you make Cement (Marble) that is also releasing store carbon.

    When you make Steel, you are releasing ancient oxygen stored as rust.

    When you make Nitrogen (fertilizer, bomb), you are doing something never been done by natural system.

  3. Anonymous

    May 12, 2014 @ 12:25 pm

    3

    How are consumers supposed to respond to a price signal when there is no price signal? The cost to society of greenhouse gas emissions is external to the price of fossil fuels because neither the entity selling the fuel nor the entity burning the fuel has to pay it. Instead, this cost is passed on to our children.

  4. philg

    May 12, 2014 @ 1:55 pm

    4

    Anonymous: “They bought more-fuel-efficient cars, under the government’s exhortations” is what the author wrote. You don’t think that the price of gasoline going from $1 to $4, for example, is a price signal that a consumer might be able to interpret?

  5. Lon Sobel

    May 12, 2014 @ 2:46 pm

    5

    One of the most memorable lines in the movie “The Graduate” was the one about plastics being the future. If the movie were to be remade today, that line would be changed to say that batteries are the future. If batteries could efficiently store wind generated electricity, it wouldn’t matter when the wind blew. The only thing that would matter is that it did blow. I’m hopeful that we’ll get to that day.

  6. Anonymous

    May 12, 2014 @ 3:24 pm

    6

    philg: Point Taken.

    I was referencing the sentence “The author has a “nothing can happen without the government” attitude, which is substantially justified by the challenges of implementing wind power, e.g., forcing property owners to accept transmission lines across their land.”

    Here you have an energy source whose environmental costs are internalized (one must compensate land owners for the inconvenience of hosting power lines) competing with an energy source where (absent governmental action) some environmental costs can be externalized (by dumping CO2 into the air and forcing future generations to deal with the consequences).

    And of course, the fossil fuel industry also benefits plenty from direct government action:

    http://www.washingtonpost.com/blogs/keystone-down-the-line/2012/07/27/property-rights-and-the-pipeline/

  7. paul kramarchyk

    May 12, 2014 @ 4:18 pm

    7

    No one alive today will live to see “renewables” contribute more than 50% electrical power generation in the United States. If you live to see renewables provide more than 20% you will live a long, long, time. Renewable (wind, solar, bio mass, etc.) electrical power is more religion than science and engineering. This is not an open question for those who know what a megawatt is. And what it takes to generate 1 megawatt of power, on demand, to satisfy the needs of society/economy.

    Consider this: The average nuclear plant generates 1000 megawatts of electrical power 24 hours per day, 7 days a week. Let’s assume a windmill can generate 2 megawatts during best wind conditions. Further, assume 1 windmill requires 1 acre of land. Therefore, 1000/2 = 500 windmills at full power to replace 1 nuclear plant. However, the average windmill operates a peak power less than 30% of the time. So, it’ll take at least 1500 windmills to replace 1 nuclear plant. Or said another way, 1,500 acres of windmills. I believe all my assumptions are very charitable to windmills. And, I’ve not touched on the question of energy storage.

    Big oil companies play around with renewables to humor the green crowd and make public relations videos. General Electric builds windmills because the United States government subsidizes their use.

  8. Peter

    May 13, 2014 @ 11:45 am

    8

    And the government doesn’t subsidize nuclear plants? From Wikipedia (the Undisputed Source of Truth):

    “A 2011 study by the consulting firm Management Information Services, Inc. (MISI)[18] estimated the total historical federal subsidies for various energy sources over the years 1950–2010. The study found that oil, natural gas, and coal received $369 billion, $121 billion, and $104 billion (2010 dollars), respectively, or 70% of total energy subsidies over that period. Oil, natural gas, and coal benefited most from percentage depletion allowances and other tax-based subsidies, but oil also benefited heavily from regulatory subsidies such as exemptions from price controls and higher-than-average rates of return allowed on oil pipelines. The MISI report found that non-hydro renewable energy (primarily wind and solar) benefited from $74 billion in federal subsidies, or 9% of the total, largely in the form of tax policy and direct federal expenditures on research and development (R&D). Nuclear power benefited from $73 billion in federal subsidies, 9% of the total, largely in the form of R&D, while hydro power received $90 billion in federal subsidies, 12% of the total.”

    So nuclear and renewables receive roughly equal subsidies. So far, the nuclear industry’s safety record has a few spots on it: Chernobyl, Three Mile Island and Fukushima, for a few instances. I would imagine that a prudent energy policy would be to investigate renewable, safe and non-polluting alternatives vigorously while continuing to rely on conventional energy sources until alternative technologies are sufficiently mature to replace them. A problem is, each energy technology generates large sums of money in addition to energy, and so has a constituency that is blind to the externalities of their particular technology.

  9. SenorP

    May 13, 2014 @ 3:45 pm

    9

    The advantage of wind and solar is they’re environmentally benign(as far as we know), and the “fuel” is free. The upfront costs are going to be higher, in contrast to fossil and nuclear which have deferred costs which are unknown not to mention potential environmental costs and impact. The prices for fossil and nuclear fuels are increasing since their supply is finite. As Phil likes to point out about long term health insurance pension benefits, there’s no idea what the cost will be in the future. Also, as has been pointed out, nuclear is a tremendous gamble. Is a local electric company going to foot the bill IF something catastrophic happens? No, the people will. That’s a huge looming subsidy in the way of a potential disaster. The San Onofre nuclear generating station in southern California is being shut down due to a botched heat exchanger maintenance compliments of Mitsubishi Heavy Industries. Estimates to decommission the plant range from about $4-8 billion. That’s a taste of the deferred liability nuclear plants hold under the best of circumstances(they all have a limited lifespan).

  10. paul kramarchyk

    May 13, 2014 @ 10:07 pm

    10

    I’m against all market subsidies, milk, corn, nuclear, oil, wind, solar. I’m am for the government partially funding some R&D. Maybe up to the point of proof of principle prototype. Than let private enterprise and the market determine suitability and cost.

    Depletion Allowance is nothing new or unseemly. Here in Connecticut I pay a yearly personal property tax on my car. If I keep the same car the tax goes down each year because the value of the car depreciates, therefore tax is less. Same-oh, same-oh with oil fields, as you pull oil out of the ground the value of the field depreciates. Same with timber, same with mining coal, same with quarry stone, yadda. If they remove depletion allowance, the price of all the above will go up.

    I assume they depreciate windmills like all other capital equipment. But that’s not the “subsidy” that make windmills attractive to investors. The Production Tax Credit (PTC) pays wind generators 2.2 cents per kilowatt-hour for electricity generated. The PTC was originally designed to get startup renewable energy sources off the ground. Now, more than 20 years later after having “temporarily” extended the PTC seven times, wind is still substantially more expensive than coal, natural gas and nuclear power. And, taxpayer subsidies often account for more than one-third of the retail price for electricity. (source Forbes)

    Between 2009 and 2013, federal revenues lost to wind power developers are estimated to have amounted to about $14 billion, including $6 billion from PTC and another $8 billion from an alternative energy subsidy provided in the Obama stimulus package. Wind and solar each receive more than 50 times more subsidy support per megawatt hour than conventional coal, and more than 20 times more in terms of average electricity generated by coal and natural gas. According to a 2008 Energy Information Agency (EIA) report, the average 2007 subsidy per megawatt hour for wind and solar was about $24, compared with an average $1.65 for all others. (source Forbes)

    Nuclear power has problems. Agree. One of the biggest problems is lousy public relations – this is the nuclear industry’s fault. A sophisticated technology needs an equally sophisticated public to understand the risks. Since Three Mile Island (1979):
    1) More than 1,225,000 people have been killed in auto accidents in the United States (rough estimate, very conservative and understated)
    2) More than 3500 killed in airline crash. (rough estimate, very conservative and understated)
    3) Zero killed in nuclear accident, including the TMI accident. None.

    Global ubiquitous use of nuclear power, fission or fusion, is an inevitability. Probably not in my lifetime. But it will come.

    I am not against wind or solar. Each has its application where siting conditions are suitable (remote locations, very sunny, very windy, no alternative). The problem is the “new age boloney” that claims wind and solar is our exit path away from fossil fuels. It’s an expensive detour and hopefully some lessons learned. But eventually the engineering realities will prevail.

    fyi.. The banking/subprime mortgage fiasco of 2008 cost orders of magnitude more than Three Mile Island, Chernobyl, and Fukushima put together.

  11. Anonymous

    May 14, 2014 @ 12:11 pm

    11

    Even if current market conditions could be corrected (zero out subsidies and account for externalities), the incumbent energy sources all benefit from substantial network effects which were partially built using previous governmental subsidies and externalized environmental costs.

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