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Article filed under Energy | Written by John Farrell | No Comments | Updated on Feb 28, 2011

U.S. Wind Projects Get Bigger By Building Up (Not Adding Turbines)

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/us-wind-projects-get-bigger-building-not-adding-turbines/

Have U.S. wind projects hit a size sweet spot?  While average project capacity continues to grow, it’s largely because of increasing turbine size rather than adding more turbines to a wind farm.

The following chart illustrates, showing how the capacity of the average American wind project has more than doubled in a decade (to nearly 90 MW in 2009), but that almost all that growth can be attributed to a more than doubling in the average turbine size (from 0.71 MW to 1.74 MW). 

Although the American definition of distributed generation may differ, it may be that the U.S. isn’t so different from Germany, where the country’s 27,000 MW of wind power is spread over 3,300 wind projects with an average project size of 9 megawatts. It may be that smaller wind projects are encountering fewer political and transmission barriers than their larger neighbors.

 

Caveat.  The linked post shows an average of all installed German wind projects, and it would be interesting to see how Germany’s size progression compares to the U.S.

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Feb 2, 2011

Southern California Edison Buys 250 MW of Distributed Solar PV for Less Than Electricity from Natural Gas

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/southern-california-edison-buys-250-mw-distributed-solar-pv-less-electricity-natural-gas/

Updated 3 PM: Preliminary numbers had suggested that Southern California Edison’s distributed rooftop solar PV purchase would be among the most cost-effective solar projects in the world, and data released yesterday confirmed that:

Southern California Edison has selected 250 MW worth of solar bids from companies able to produce solar electricity for 20 years for less money annually than the 20 year levelized cost of energy of a combined-cycle natural gas turbine power plant.

SCE’s bidding process for smaller renewable projects is smart. These small projects do not face the multi-year bureaucratic delays for extensive reviews, like most utility-scale solar, so each small unit can be built as quickly as normal commercial rooftop solar projects. They are made up of multiple distributed solar installations of under 20 MW, which in combination total a power plant-sized 250 MW.

…The requirement is that the renewable energy has to be priced to cost no more than the Market Price Referent (MPR) – which is an annual calculation of the 20 year levelized cost of energy of a combined cycle gas turbine.

The MPR has recently been around 11 cents per kilowatt-hour, so the solar PV projects will produce electricity for less than the retail rate in southern California.  There’s indication of enormous distributed PV demand, because SCE received bids for up to 2,500 MW of projects, but only accepted 250 MW.

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Article, Resource filed under Energy | Written by John Farrell | No Comments | Updated on Jan 7, 2011

John Farrell Talks Economies of Scale on the RenewableEnergyWorld Podcast

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/john-farrell-talks-economies-scale-renewableenergyworld-podcast/

The title of the link won’t give it away, but I was interviewed on Stephen Lacey’s most recent REW podcast on superconducting technology for transmission.  He generously provided me some time to contrast the lead topic (centralized renewable energy reliant on transmission) with the economics of distributed renewable energy sources. Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Dec 16, 2010

Change in Tax Credit Policy Drives 24% Drop in Residential Solar Price

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/change-tax-credit-policy-drives-24-drop-residential-solar-price/

Update: It’s important to note that this refers to the net installed cost.  In other words, the installed cost dropped because residential solar customers were now getting an uncapped federal tax credit. We wrote in this 2009 report about the perverse problems created by the $2,000 cap on the federal residential solar tax credit.  The… Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Dec 9, 2010

More Evidence on Solar PV Economies of Scale

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/more-evidence-solar-pv-economies-scale/

We’ve discussed the unconventional wisdom that economies of scale are limited for wind and solar (and likely other renewable energy technologies).  Another piece of evidence comes from a December 2009 report by the Electric Power Research Institute (EPRI): Solar Photovoltaics: Status, Costs, and Trends. This chart, taken from page 14, illustrates the percent of the… Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Dec 2, 2010

Eight Reasons Distributed Power Generation Is Superior To Central Power Station Expansion

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/eight-reasons-distributed-power-generation-superior-central-power-station-expansion/

Key benefits of distributed power generation (DP). Proven technologies for DP are widely scalable. Obvious example: a wind farm can be incrementally built in multiples of approximately 1.4 MW. Bigger doesn’t necessarily mean “cheaper” for DP. Customers can match the DP capacities to precisely known needs and not have to over-buy equipment. (see Figure 1… Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 30, 2010

Distributed Concentrating Solar Thermal Power? Yes.

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/distributed-concentrating-solar-thermal-power-yes/

When discussing centralized v. decentralized solar power, there’s an inevitable comparison between solar thermal electric power and solar photovoltaic (PV).  But the fact is that solar thermal power – or concentrating solar power (CSP) – can also be done in a distributed fashion. In fact, of the 21 operational CSP plants in the world, 18… Continue reading

Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 15, 2010

Modest Wind Farms Play Better With Expiring Cash Grants and Credit Crunch

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/modest-wind-farms-play-better-expiring-cash-grants-and-credit-crunch/


Federal tax credits for wind energy projects are due to start expiring at the end of this year, which means developers face the prospect of dishing up proposals for wind farms that can’t be financed, said White, president of Project Resources Corp., a Minneapolis company that does ‘community wind’ development.

The answer, he and others in the community wind industry say, is to go smaller. Smaller projects, which are a hallmark of most community wind projects, are easier to finance and easier to connect to the power grid, they say.

Ironically, the smaller projects (5-20 megawatts) are also the least expensive per kilowatt of capacity

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filed under Energy | Written by John Farrell | No Comments | Updated on Nov 12, 2010

Economies of Scale are “Bullshit”

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/economies-scale-are-bullshit/

I spoke with a Minnesota-based wind developer in late 2010 and in a wide-ranging conversation about developing distributed wind projects, he remarked:

“Economies of scale are bullshit”

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Article filed under Energy | Written by John Farrell | No Comments | Updated on Nov 11, 2010

Renewable Energy Economies of Scale are “Bullshit”

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/renewable-energy-economies-scale-are-bullshit/

I had a conversation with a wind developer yesterday and was talking about the difference between putting together large projects (over 80 MW) compared to distributed generation wind projects (80 MW and under).  I mentioned that we have a deep interest in understanding the economies of scale of renewable energy projects and he replied, “economies of scale are bullshit.”  He noted that large wind projects require significant development costs that smaller projects don’t encounter (including many more landowner negotiations and permits) and that installation and maintenance services are sufficiently widespread for any sized project to find services. 

It’s not entirely true that bigger projects have no economies of scale, but these two charts illustrate the larger point: Most economies of scale in solar PV and wind power are captured at a relatively small size.

The first chart is from the California Solar Statistics website, and draws on data from over 70,000 solar PV installations in California since 2005. 

Clearly, solar PV installations of 10 kW have captured more of the economies of scale for solar PV.  Costs may fall slightly for much larger projects, but the smaller number of projects makes it hard to see trends (interesting note: there seem to be as many > 100 kW solar projects costing over $10 per Watt as there are under $8 per Watt).

The second chart comes from the 2009 Wind Technologies Market Report by Ryan Wiser and Mark Bolinger (which is a must-read). 

The wind data is even more striking, with the lowest average project cost found in the projects with just a handful of turbines (5-20 MW of capacity), with costs steadily rising for larger projects.  Certainly there’s an advantage to having more than one turbine, but less so for growing the project much larger than 10 turbines. 

This data should inform renewable energy policy.  If modest-scale, distributed renewable energy projects capture most (or all) economies of scale, then the opportunity to place these projects close to load may reduce the need for new, long-distance, high-voltage transmission lines.   It means more renewable energy can come online faster and with fewer political battles. 

These smaller-scale projects are also the appropriate size for local ownership (which provides twice the jobs and 1-3 times the economic impact of absentee ownership), allowing more the economic benefits of renewable energy development to accrue to the host community.

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