Energy Tribune

Hugh Sharman is the founder and principal of Incoteco, an energy consulting firm based in Hals, Denmark. A native of the U.K., he received his degree in civil engineering from Imperial College, London, in 1962. Since then he has worked on energy infrastructure projects all over the world, including electric power plants in the Philippines, carbon dioxide injection projects in the North Sea, and the potential for electricity storage applications in Europe.

In 2005, he wrote two papers on windpower for Civil Engineering, the publication of Britain’s Institution of Civil Engineers. They discussed the limits of windpower capabilities in Denmark and Britain. Thus, while the U.S. media was slavishly depicting Denmark’s windpower sector as a great success and as a shining example of “green energy” production, Sharman was taking a closer look. And his analysis led him to conclude that in 2003, West Denmark exported about 84 percent of its electricity generated from wind turbines — a situation that reflects Denmark’s difficulty in accommodating the always-fluctuating amount of power the wind turbines pump onto the country’s electricity grid. He corresponded with ET’s Robert Bryce in early July.

ET: You have worked on many different types of energy issues. What motivated you to look at the Danish wind sector?

HS: I am a British “energy nerd” living in Denmark, bearing still painful memories of the failure of my own renewable energy company back in the 1970s. Renewable energy was then and still remains an area of enormous hype, so I am always suspicious about claims made by this sector. I read the groundwork documents produced, mostly by academics, that were the basis of Tony Blair’s first Energy White Paper in 2003. I was shocked by the rosy vision they painted of transforming the U.K.’s energy infrastructure by 2020 from a fossil energy and nuclear-based system to one increasingly reliant on renewable energy.

ET: Your research found that back in 2003, Denmark was exporting most of the windpower it generated to Germany, Norway, and Sweden via high-voltage transmission lines. Is Denmark still exporting a similar portion of its windpower?

HS: Yes.

ET: You found that Norway and Sweden were good markets for Denmark’s windpower because they could easily balance their electricity grids by ramping their hydropower plants up and down. Is hydro the perfect complement for windpower in terms of load balancing?

HS: Yes.

ET: In 2004, the Royal Academy of Engineering issued a report that said that windpower is more than twice as costly as electricity derived from nuclear, coal, or natural gas. Do you agree with those findings? Why or why not?

HS: Yes and no. I am sorry to say that the Royal Academy’s report was produced on the cheap (£35,000) and its results are patchy and not very authoritative. I have no idea why its terms of reference were written in the narrow way they were nor whether any attempt was made by the Academy’s senior luminaries to ensure overall quality control.

As just one example, in this report it is assumed that the load factor of windpower is 35 percent. The national average capacity factor for onshore wind has never been more than 30 percent and actually oscillates between 26 and 28 percent.

There is a huge variation in the cost of generating windpower across the U.K., depending mostly on how much the wind blows. You can get twice as much wind energy production from a turbine in Shetland (where the load factors are 40 to 45 percent) compared with a turbine (say) on a mountain top in Wales (LF = 23 to 28 percent). In turn, the turbine on the top of a Welsh mountain will produce much more energy than one in, say, the U.K. Midlands (LF = 15 to 20 percent). I am sorry to say that the R.A.E. accepted the blanket assumption, proclaimed against the facts, by a wind energy lobby group, the British Wind Energy Association.

The B.W.E.A. is a trade organization having enormous clout with the U.K. government and is there to protect the unseemly profits of very large investors in windpower who, with the subsequent rise (as I foresaw at the time) in the average price of gas, now really do not need the very large subsidies they get from U.K. consumers to generate windpower on despoiled Scottish and Welsh mountains, but scream blue murder whenever the continuing need for subsidy is queried.

The report completely failed to identify the rate at which hydrocarbon reserves were being depleted in the North Sea and so failed to foresee the political and economic consequences of the U.K.’s transformation from being a substantial energy exporter to becoming a large importer. The price assumption used for “future” natural gas was ludicrously low.

The failure of the report to note all the foregoing made its analysis and conclusions look plumb foolish to many friends and members of the Academy, even at the time. Many academicians are now ashamed of it.

ET: During our recent phone conversation, you said that as windpower capacity increases, there will be more need for spinning reserves, not less. Why?

HS: I must qualify that.

Windpower can be forecasted, but its actual output at any given moment was not known even a minute before, whereas demand is known within a fraction of 1 percent. The preservation of power quality requires that inputs and outputs in the grid system must balance the whole time.

The stochastic uncertainty of windpower has no consequences for the grid balance at low levels of penetration. But when this exceeds, say, 5 percent of penetration by energy, say 12 to 15 percent of power penetration, there must be sufficient balancing reserve in constant operation to keep the inputs and outputs to the grid in balance.

Thus, any increase in windpower needs an increase in reserve capacity. This is neatly solved in West Denmark, which has only 3 MW of hydropower, by relying on hydropower in Sweden and Norway and the 600 GW UCTE grid to the south.

ET: How have Danish electric power providers and government officials reacted to your findings? Have they reacted at all?

HS: There is nothing I can teach my mentors in the Danish power industry about the situation I describe. In general, Danish politicians are no different [from] politicians elsewhere and seem to prefer the advice they receive from the highly active Green lobby. Thus, they conflate energy production with energy consumption and the myth continues that Denmark gets 15 percent of its energy from windpower!

ET: The recent CO2 emission numbers from the E.U. show that Denmark’s per-capita CO2 emissions are greater than those of the U.K. How much of that can be blamed on the wind sector?

HS: Don’t get me onto the subject of CO2 emissions! The power industry in both countries contributes roughly 25 percent of CO2 emissions. It is a visible source but not necessarily the most important contributor to CO2 emissions, most of which emanate from space heating and transport.

Windpower has played a very minor role in reducing Denmark’s CO2 emissions mostly because more than 75 percent of it is consumed outside Denmark. Windpower exported to and thus used in Norway and Sweden saves the consumption and use of hydropower!

ET: Put another way, has windpower increased Denmark’s CO2 emissions or lowered them?

HS: All windpower consumed in Denmark saves fossil fuel consumption. The following chart shows how wet and dry years in Scandinavia are much more influential on how much thermal production occurs in Denmark.

[insert chart]

ET: Like the U.S., it appears that the E.U. has been overwhelmed by the hype over windpower. And yet, it seems clear that windpower will never displace substantial amounts of fossil fuel or nuclear power plants. Why are so many people eager to swallow the hype about wind?

HS: The intelligent but not necessarily well-educated public has a right to be extremely concerned about the rapid depletion of oil and gas reserves and the growing dependence we developed nations have on the willingness of a diminishing number of net energy exporters to keep our chemical, power, and transport infrastructure supplied with affordable energy.

This concern is compounded when we have such excellent reasons for doubting the veracity of the published reserves. It is positively alarming that the inter-governmental authorities, like the I.E.A., on whose statistics, analysis, and judgments we should be able to rely, do not highlight the doubts about the claimed reserves properly.

There can be no doubt that the increase of the concentration of CO2 in the atmosphere from 270 parts per million a century ago to 370 ppm today is a direct consequence of the enormous growth in the use of fossil fuel. Today, the global economy is burning an average of 16,000 tons of carbon per minute, and this rate is set to increase as poor countries like China and India attempt, quite legitimately, to catch up with us. In this dark context, renewable energy, to replace such hopeless dependence, sounds so seductive. In particular, wind energy is a highly visible, and for some, iconic “can-do” energy source that “proves” we can switch from nuclear and coal to “free” emissionless energy if only we try hard enough.

Everybody in the sector is making lots of money, so for the time being there is a rare confluence of interest across society from left to right, from hippies to bankers.

As mentioned at the beginning of this interview, the practical difficulties of integrating windpower into the electricity system at low levels of windpower penetration are negligible and only become apparent when the amount of energy, and more crucially power, becomes significant. The sales policy of the wind industry could be likened to slash and burn farming methods. You move in and sell as hard as possible until the system into which you sell starts to show signs of strain. Then you simply move on to the next undeveloped market. As an example, almost no net wind capacity has been built in West Denmark since 2003. Almost certainly, this reflects the fact that wind capacity and inter-connector capacity are more or less exactly in balance and that there are still many hours every year when the market price of power in West Denmark is zero.

The growth of new windpower capacity in both Germany and Spain is slowing as the markets, transmission, and distribution grids and the authorities have been unable to cope with the pell-mell development of the last few years.

It is no surprise that the focus is now on the U.S., a huge energy market in which the share of windpower is invisibly small.

ET: The U.K. expects to get 15 percent of its total electricity needs from windpower by 2015. If you were a betting man, what are the odds of that target being met? A hundred to 1?

HS: I cannot answer this question as I would prefer, with a simple bet.

The U.K. has enormous energy problems. These are likely to become visible in the electricity sector, long before 2015.

I have done my own “doom and gloom” analysis and prognostications and these are highlighted in the report I helped write for the Renewable Energy Foundation last year, which you can download at www.ref.org.uk. Weight is added to these [prognostications] by the following chart, prepared by Electricité de France, an important player in the U.K., for example as the owner of London Electricity .

Put simply, the U.K. will have very serious problems just to keep the lights on, long before 2015.

Tony Blair’s government has had ten years to address the deep underlying issues of keeping the U.K. functioning. On energy, he has been deeply affected by every passing fad. In his 2003 White Paper, the passing into history of nuclear power was accorded a careless shrug. In 2007, there seems to have been a Pauline conversion as he insisted that nuclear power would play a vital role in keeping Britain warm and lit, while reducing CO2 emissions.

As chancellor of the exchequer, the new prime minister, Gordon Brown, has done everything that he could possibly have done to obstruct the construction of vitally needed, clean coal power stations that would capture CO2 and use this for the recovery of fast dwindling oil and gas depletion in the North Sea.

The Conservative opposition that might well be in power after the next election shows not the slightest understanding of the energy facts, and goes along with the Tony Blair mantra that climate change is the greatest problem that the globe faces today. We will see what happens when the lights actually go out.

So to answer your question, long before 2015, the sheer problems of keeping the lights on will have focused the mind of the nation on the pressing need for firm generating capacity. It will have become clear to even the starry-eyed optimists that windpower plants produce no electricity when the wind is not blowing.

ET: Your 2005 paper on windpower in the U.K. made it clear that Britain might be able to use 10 gigawatts of wind turbines. But you said it also needs 40 to 50 GW of thermal power plants. What has been the response in the U.K. to your findings on wind?

HS: Despair among those many engineers and economists who actually understand the parlous situation created by 10 years of debate and inaction.

ET: You’ve been doing a lot of work on electricity storage. Why is storing electricity so difficult?

HS: Physics. Zillions of electrons are very hard to corral. For this reason, until very recently, we have stored bulk power as elevated water which can be turned back into power when it runs downhill and turns a turbine generator. The overall AC/AC efficiency of pumped hydro is in the range of 70 to 80 percent, which is more or less acceptable.

The lower, 50 to 60 percent efficiency of compressed air energy storage accounts for its relative lack of popularity among power system planners who understand that higher fossil energy costs, combined with the growing “unacceptability” of emitting CO2, puts a high premium on high efficiency storage.

ET: If an electricity storage machine were to appear on the market at a reasonable price, how big an impact could it have over the next, say, 10 years?

HS: I have been studying ways of storing electricity ever since my interest in renewable energy was re-ignited by my sojourn in Denmark. The Internet has made it possible to keep track of almost every technical and commercial innovation that takes place, in real time.

I am amazed at the continuing interest in hydrogen as a means of storing electricity. The round-trip efficiency from turning electricity into hydrogen, then storing and compressing this, then turning it back into electricity, is childishly simple to calculate. It is, at best, 26 to 28 percent; at worst, about 20 percent. And at huge capital cost. Yet the N.R.E.L. and many private companies are still betting on a hydrogen economy. Amazing!

Three years ago, I stumbled across a Canadian company, VRB Power (www.vrbpower.com) which has large-scale working flow batteries in the U.S.A., Australia, and Japan, under commercial conditions. I am now assisting them to develop commercial applications for this technology in Europe.

There are many locations around the world where these batteries are already economic. As an example, unconstrained wind energy in the islanded Shetland grid system [in the] U.K. costs roughly £30/MWh to give an acceptable return for its owner. The full-cycle power costs of diesel engines that supply more than 95 percent of the islands’ system is more than £100 per MWh. Yet, because of its stochastic output, the system operator, Scottish & Southern Energy, will not connect any more than the existing 4 MW of windpower into the system.

Windpower conditioned by the VRB battery can quite easily allow the further connection of up to 20 MW and produce a “pay-off” against saved fossil energy of under 5 years, depending on how you amortize the equipment.

On a much larger scale, Ireland, more than 70 percent reliant on imported natural gas, will soon be at the end of the longest supply route in history, starting in Siberia. As average gas prices converge with oil, possibly exceeding this at over $10 per mmBtu, the installation of hundreds of megawatts of battery will be a pre-condition for the expansion of windpower to replace expensive, scarce, and unreliable gas energy. The macro-economics of electricity storage in Ireland are truly compelling when you look at the lost cost of generating unconstrained wind energy. The economics of generating wind are completely destroyed once you need to constrain its output!

Finally, it is widely accepted among the Danish intelligentsia that Denmark’s ambitious plans, to develop a further 4,500 MW of offshore wind capacity by 2025, will fail in their objective of reducing dependence upon fossil fuels and reducing CO2 emissions without a concomitantly large installation of electricity storage.

So I see a golden future for VRB Power Services and only wish I had the money to buy the company.

No doubt its success will bring in competition, and really the world needs as many commercially operating storage technologies as the financiers are able to support.

ET: Just curious, what’s your take on global warming and CO2? Do you believe anthropogenic CO2 is causing global warming?

HS: I sit on the sidelines.

Over the last 8,000 years, since the Holocene Optimum, the average temperature of the globe has been in decline. Hannibal did not cross snowy Alps. Wine was grown by the Romans almost a thousand years later in Northumberland. Greenland was warm enough, just 1,000 years ago, to be called, well, Green Land. Fifteen thousand years ago, the ice was melting so fast that the sea level rose 30 meters in only 500 years. All this had nothing to do with anthropogenic causes.

I have a visceral mistrust of hype and it is truly sad to see so many scientists finding it more convenient to “join the consensus” than to express their own, properly thought-through analysis. However, CO2 emissions are high and the concentration of CO2 in the atmosphere is at a million-year record. It would therefore be surprising if this did not cause at least part of the recent and undoubted increase in temperature. Ocean acidification by CO2 may pose a greater and more immediate threat to our environment.

But all these longer-term threats pale into insignificance if our growing industrial society cannot be supplied with sufficient energy. But that’s a whole other story, brilliantly covered by Matt Simmons!

ET: Regardless of your opinion on that, what’s your view on the best way forward? Given that the E.U. (and now, the U.S.) appear to be eager to limit CO2 emissions, what electricity generation technologies are the most promising? Nuclear?

HS: With great reluctance, my answer is (probably) yes.

From EdF’s submission to the 2006 Energy Review Consultation