Blain’s Morning Porridge April 27 2022 – Wind, Carbon Life-Cycle Costs, and Why we need other renewables..
“If you chuck everything into the same basket, you can bet the handle will break!”
This morning: Wind power is the not the renewable energy panacea we are told it is. It is part of the climate change solution, but we need to understand it’s limitations, and not allow it to distort energy transition. More should be spent on alternatives like tide, hydro and thermal.
I’ve written many times how ESG investment principles threaten to distort markets – like many good intentions ESG is creating as many problematic consequences as it solves. Today, across the World’s investment desks, fund managers are struggling to comprehend International Sustainability Standards, fill in IFSR Climate-related Disclosures, EFRAG Climate Standard reporting, and a host of other stuff that induces narcolepsy… Occasionally, if they are very lucky, they even find time to address inflation and war threats on the investment portfolios they now can’t run due to the regulatory and reporting burden set upon them.
Fear not. Help is at hand. A whole new nomenklatura of ESG experts and consultants have emerged, ready to feast upon the regulatory opportunity. They will do an intimate examination of investment committee minutes, study deal analytics in fine detail, and cross reference them to reporting standards.. At the end of a very expensive process they will pronounce: “You need to invest more in renewable energy… I suggest a course of wind power.”
That’s the prescription for curing what ails the global environment. Long-term I expect its about as likely to work as a course of medieval leeches.
The reality is…. Wind Power is a miserable business.
Last night GE Renewable Energy posted a widening first quarter loss on the back of slowing offshore wind-sales in the US, and rising materials costs. Vestas, one of the largest OEMs (Original Equipment Manufacturers), is trying to hike its prices by 20% as inflation bites. Just a few weeks ago Siemens Gamesa, the Siemens part-owned manufacturer of some of the largest offshore wind structures, gave its third profit warning in less than a year, saw its stock tumble, and warned of rising costs and supply chain issues. The company is struggling to buy out minority shareholders refocus the business.
Meanwhile, the latest 11 MW wind turbines are 225 meters tall with 200 meter rotors. They require a super-ship to transport them around the globe to site. Its big. It’s kind of spectacular.. but so was the Spruce Goose… which aviation buffs will know singularly failed to lay any golden eggs.
Regular readers of the Morning Porridge will know….. I am the Grinch. While everyone else is happy with the latest New, New thing, I have to ask awkward questions, express doubts and raise issues like how the “emperor’s new clothes” are apparently invisible.
Windfarms have issues..
As they get larger and larger to produce the amounts of “clean” renewable power we so anxiously desire, they get harder and harder to build, transport and install. They are incredibly difficult to dispose of – although you can recycle the steel and electrical stuff, the blades were built to last, and they probably will – as landfill.
We also don’t have nearly as much data as we should. Nothing is transparent about performance and maintenance. Early windfarm turbines are being replaced with bigger, more “efficient” models well before their expected end-of-service dates. I am told there is probably a compromise to achieve a most-efficient size for a wind turbine. This would optimise the high carbon costs of its construction, installation, maintenance and disposal against its long-term energy production – but at the moment, the wind industry isn’t interested in small – it’s all about bigger and (apparently) better…
The struggles of Wind Turbine makers sounds counter intuitive… WindEurope says Europe could be carbon neutral by 2030 if we just installed more of them. When everyone wants renewable energy, surely Windfarms must be making off like a butcher’s dog with the sausages? After all, we keep getting told that Windfarm are the global climate change solution, they will save the planet, and everyone wants to invest in them because it will enable owners to boast how ethically green their investment policies are.
What if they aren’t the solution…?
There was a fascinating article on Bloomberg yesterday: Wind Power’s “Colossal Market Failure” Threatens Climate Fight.
How I smiled reading it. It’s all about failure to deliver the wind turbines we apparently desparately need. (Lot of “apparentlys” today, apparently.) The argument is: if we don’t build 390 Gigawatts of wind farms every year, then we won’t avoid being fried by rising temperatures. And to build more we need more subsidies, permits and NIMBYs (Not in My Back Yarders) to be silenced. It warns: if the West doesn’t built them, then we will be swamped by cheap Chinese imports and lose energy security.
As always, let me stress I am not a climate change sceptic, and I want clean renewable power. But I want renewable power that makes sense, is long-term efficient, and won’t prove a massive disappointment in terms of how little carbon they actually save over their life-cycle. At the moment I’m a massive sceptic on lithium battery solutions, and would prefer to see more investment in hydro, thermal and tidal power. I support Nuclear.
And… I am thinking Wind Farms have become a distorted racket.
I can’t help but wonder if there is a parallel to the 1830s when Canals were the preferred transport infrastructure solution, while the much more efficient and ultimately successful railways were dismissed as too fast and dangerous.. Wind is hardly new.. the ancient Egyptians were using windmills 7000 years ago.. its tech that can go so far.. There is a time and place for them, and an efficiency curve where less might be more.
A few years ago, after expressing doubts about wind farms on a early morning TV slot, a BBC producer told me I was “Pale, Male and Stale” and I never got invited back. I got “cancelled” by Bloomberg – and I suspect it was due to my heretical thought-crime of suggesting Wind Farms might not be the perfect solution to Global Climate Change everyone was claiming them to be.
I’d reached my epiphany on Wind after going over the higher than-expected maintenance costs and lower than forecast energy sales, from a small UK site with a disappointed investor. The numbers didn’t add up. He wasn’t buying the windfarm developer’s explanations of how a larger than expected number of wind turbines had suffered unexpected blade problems, while the wind hadn’t blown quite as much as expected. These were dismissed as an unusual “3Sigma” type event, and wouldn’t be repeated – the developer said…
We’ve all seen spectacular videos of collapsing windfarms. I first raised the maintenance and cost issues of windfarms, the difficulties of smoothing their intermittent supply to National Grids a number of years ago. I then highlighted information showing large Wind Farms not only affect the wind speed and that windspeeds are reducing (its called friction). It’s actually become quite difficult to find information on current failure rates, and by just how much windfarms are underperforming in terms of energy delivery. We need transparency – not renewable hype.
There still isn’t enough transparency about their life cycle total carbon cost. If anyone has such data – I will delighted if will post it on the site for everyone to see. I would love to be proved wrong about windfarms.
Please remember, I am not a full time wind power analyst. I am just a concerned party – admittedly an increasingly sceptical one. I know enough to worry myself.
The number one reason Wind Turbines fail is because of cracks in the Turbine Blades – caused by the fibers in the glass or carbon debonding, or gel-coat cracks letting in water. Apparently there are in excess of 4000 fails per year. A few years ago I was shown drone technology that can detect hairline cracks before they become critical, but the only answer is then to feather (shut-down) the turbine – and wait for a replacement slot. That’s a problem when the industry is working flat out (but still unprofitably), especially at sea where all the available boats are booked to instal new turbines. Such a feathering is a massive lost generation issue, and can damage the other parts of the turbine.
Generators fail less often – but operating in low and high winds can cause bearings to seize, while high and low temperatures (as experienced up mountains or out to sea) can cause expansion of the joints causing excessive vibration. Often, I am told, the only solution is a complete rebuild. Generators need regular maintenance – which isn’t easy in stormy places like the North Sea on a 200m high rig.
The third source of failure are gear boxes. They are designed for a 20-year service life, but apparently few make it that long. Anything out at sea rots.
Yet still wind gets the focus. We need to spend as much energy investigating other forms of renewable power. Unlike wind, the tide is utterly reliable – I know that because I was swimming against it earlier this morning. Hydro energy is also reliable. And so is geo-thermal – but none of them attract a fraction of what is squandered and bigger windfarms.
Time for a rethink on Wind I think…
(No time for five things this morning.. .)
Out of time and back to the day job…
Strategist – Shard Capital