CAPE WIND: FIASCO IN THE SHALLOWS
CAPE WIND: SHALLOW PROMISES FROM DEEP POCKETS
Thanksgiving was a big day in the Kenney household in 1988. We awoke to find a foot of snow had fallen overnight but in spite of that all of the scheduled in-laws arrived for what turned out to be a riotous dinner. It was the first time their whole gang, all four generations had been together in years. Our 200 year old house in the woods survived both the early winter and the clan's antics. And, there was news - something no one of us ever imagined would become as important to the people of Cape Cod as it has.
Over dinner a brother-in-law talked enthusiastically about some wind energy pioneers he had met in Scandinavia while visiting the Norwegian office furniture manufacturer he represented here in the States. Little did I know at the time that I was hearing the beginnings of Cape Wind. His original vision was something called Ocean Ranch.
Brother-in-law had grown up, as had his siblings in a house on the beach in Yarmouth, overlooking the approach to Hyannis inner harbor, with fleeting views out onto Nantucket Sound. Growing up he and the whole family spent many hours daily on and around the waters of the sound sailing, fishing, swimming, leading an idyllic Cape Cod youth. He had always been interested in new technologies and renewable energy and his chance meetings with engineers who were developing ever advancing forms of wind power generation equipment seemed to fit perfectly with the waters where he grew up because the winds over Nantucket Sound appeared to be ideal for capturing silent, free, inexhaustible power to generate electricity with no toxic emissions; no pollution. What he proposed was a three-part project to include wind power, tidal power and a fish farm, an Ocean Ranch.
Vestas, the Danish company that is now the world's largest manufacturer of wind turbines with more than 35,000 in service was maturing back then and overcoming techical obtstacles one after another, each new generation of their turbines producing vastly more power per unit of cost and size than the previous models. Wind technology was taking giant leaps forward each year in Denmark, Germany and other countries. By the year 2000 offshore wind power appeared to be the new and most significant and promising path to clean, renewable energy on a commercial scale for the entire world. Claims for its future were extravagant but seemingly reasonable.
And, starting in the year 2000 an energy entrepreneur from Boston, James S. (Jim) Gordon began planning a major offshore wind development to be located on Nantucket Sound. The chosen site would be an area known as Horseshoe Shoal and Gordon wanted to be granted use of a twenty-five square mile patch of the water sheet to erect 170 wind turbines with a total maximum capacity of 420 megawatts (420MW). He made his first public presentation to Cape Cod during a public meeting held in a middle school auditorium in 2001 in Yarmouth, the town that would be closest to his proposed wind farm. The place was packed with mainly incredulous residents. The prevailing attitude was, "You want to build what....where?"
Remember the brother-in-law from Thanksgiving, 1988? Well, there he was on the stage of the very school he had attended as a teenager, now a partner in the venture known as Cape Wind Associates, LLC. Jim Gordon and he put on a good show. Gordon told the crowd that he did not need to be involved in Cape Wind, that he had done well in energy and had sold all his other energy interests, but that he was devoted to help America free itself of costly and polluting fossil fuels as a source of energy. While he stood before the crowd of locals with no guns, no coon skin cap and no horse or covered wagon he was nonetheless very much the pioneer, the selfless energy pioneer. At least that is what he would have people believe. As we shall see in later installments Jim Gordon has never been out of the fossil fuel energy business and was in 2001 on the board of directors of a company that owned 15% of a nuclear power plant.
According to Gordon Cape Wind would cost $650 million to build and would provide Cape Cod with 75% of its electricity at a slight savings in costs but at huge benefit to the environment. And, these new found benefits would not interfere with any of the traditional uses of Nantucket Sound by marine commerce, recreational boaters or commercial fishermen. All Gordon wanted was permission from the federal government to place 170 wind turbines mounted on steel columns across an area of Nantucket Sound the size of Manhattan Island. And, he was sure that we all would applaud him as a benefactor, an energy visionary.
To some, people with a grasp of energy issues and technologies, the whole thing sounded far too good to be true. To most others it sounded as if Gordon was mounting an effort to seize priceless public domain for his private profit at the expense of the environment, ironically, and at the expense of the countless thousands of people who annually put Nantucket Sound to good use for commerce and recreation. Gordon had apparently assumed that because the words prophet and profit sound alike they are interchangeable, or would be in our simple minds. He was about to learn a simple truth about Cape Cod: both its climate and its people can be delightful or unrelenting in their fury and power.
Now, nine years after he first conceived his Cape Wind plan and eight years after formally beginning his quest for the numerous federal permits he will need Gordon has seen his estimated capital costs rise until they are close to $2billion. He has no power purchase agreement; no one has found his sales pitch convincing enough to agree to buy the power generated by Cape Wind, if ever built. He has shed his original partners, one of whom since leaving Gordon's shadow has become a major force in land based wind power nationally. General Electric no longer manufactures wind turbines for marine applications, but Gordon has failed to notify federal agencies reviewing his project of this fact and the description of the action contained in Cape Wind's environmental impact studies, both draft and final forms, remains the GE model 3.6s turbine.
Jim Gordon has spent, according to his claims, $40 million and still has not received the permits he needs to build his wind farm. And, a powerful, well financed and brilliantly led opposition group, the Alliance to Protect Nantucket Sound (also known as Save Our Sound or SOS) has fought Gordon at every turn. So far he has failed to convince federal authorities to permit his project. He has no financing for it, anyway.
The global economy has melted to a fragile shadow of its former self when Gordon was grinning about his prospects for mining money from Nantucket Sound. GE and Vestas both have discontinued manufacture of turbines for offshore use. This is significant because Vestas is the worl'ds largest turbine manufacturer and GE is the largest in the U. S. Globally wind power is in trouble as problems of grid congestion and distribution due to outdated grid systems become unavoidable and undeniable, driving up the cost of wind power to double the conventional mix and proving itself utterly unreliable. Spain, long a leader in wind power development, has shut down all of its wind facilities. T. Boone Pickens, American energy mogul, has curtailed the lavish plans for the massive wind power empire he boasted of two years ago. Babcock & Brown, the Australian banking giant has collapsed into bankruptcy, leaving its Blue Water wind unit up for sale. Blue Water's land based operations have been purchased but its offshore projects are still unsold. One of them is the DELMARVA project off the Delaware/Maryland coast, a project that already has a power purchase agreement that was debated and approved by the Delaware legislature, but has no financing and apparently no one interested in taking it over.
Times have definitely changed for wind power generally and Jim Gordon in particular. Stay in touch here for the rest of this incredible story. We shall meet international energy experts, Indian tribes (no kidding, sovereign tribes), pinstriped con-artists, a first cousin of George W. Bush (and former business associate of Gordon) and a host of menacing government figures. Plus, we shall see how the American press have largely blown this story by catering to supposedly green influences. You will not believe how intellectually corrupt the Massachusetts Audubon Society has been and continues to be. We shall even explore the rank stupidity and outright inaccuracy of a professor at the Harvard Business School, Prof. Richard H. K. Vietor. And then, as always, there is Jim Gordon. His story is amazing.
All for now...
Copyright 2010 By Peter A. Kenney
WIND POWER BASICS
Some basics are necessary to discuss wind power intelligently. For our purposes wind power means commercial scale wind power. This is wind power produced on a scale large enough to be a business. Commercial scale wind power means more than one turbine, usually several. It also means that the power generated is sent directly to the grid, or the distribution network through which power is delivered to the wholesale market. Generally, facilities producing commercial scale wind power are called wind farms. Wind farms now in operation range from fewer than a dozen units to hundreds.
But, the important differences to know are these, and they are simple: there is on shore wind power and there is offshore wind power. And, there are two types of offshore wind power; shallow water and deep water. There are simple reasons for keeping the two major forms of wind power, land based on shore and offshore separate when discussing wind power. One is that the siting and permitting issues are dramatically different and the other is that offshore wind costs twice as much on shore wind to install, sometimes even more. So, if it costs $1,000 in capital to generate one megawatt (1MW) of electricity on shore but $2,000 to produce the same MW offshore there will obviously be higher electric rates charged for offshore wind energy. Green is usually not cheap.
An equally important fact is that wind power is not base load power, it is not constant not reliable. Every wind turbine has a cut-in speed and a cut-out speed. Obviously there will be no power made when the wind is blowing at zero MPH. At the other end of the scale is the fact that when the wind reaches a certain velocity all turbines are designed to shut down so that their blades do not simply disintegrate when speeds exceed design capacities. So, for example, very efficient turbines cut-in or begin rotating when the wind reaches 5MPH and they may shut down, cut-out, when the wind reaches 55MPH. These wind speeds are hypothetical but close to the average operating experience of turbines currently in service. Different trubines have different cut-in/cut-out speeds.
Because there will often be too much wind or not enough, wind power is not constantly available. Base load power is electric power that is always available, always reliable. Wind is not base load power and because of this there will always be the need for some other, reliable and quickly available power to replace it when there is too much or too little wind. Claims made by some wind developers, such as Jim Gordon, that large wind farms will enhance system reliability within the electric grid are simply untrue, technically incorrect and not helpful in our debate over how to make our energy production safe, affordable and clean.
Wind power is more expensive than energy produced by using coal, natural gas, oil, hydro or nuclear for fuel at the generating plant. Behind the glowing reports of clean, sustainable energy flowing from European wind farms is the reality of huge cost premiums paid to build and operate wind farms. This is true both on shore and off shore. But, many European countries have very different economies from ours in that they are nearly if not completely socialized. Enormous subsidies using public funds are more the rule than the exception. And, in my opinion, many European countries have committed vast resources to developing wind power and are not about to tell the world frankly how expensive the wind revolution is, or how unreliable wind turbines have actually been. Remember, wind turbine manufacturing was mainly developed in Europe and many of the world's larger and better turbine makers are still to be found in Europe. Our friends across the sea have two reasons to be less than candid about their wind power experiences: they have a lot of wind installed in their own countries and they make much of the world's total turbine count.
Spain, which was until not many years ago leading the world in new wind power installations recently shut down all of its wind power production. And, the true cost of their wind program has recently been revealed in a report written by professor Gabriel Calzada of King Juan Carlos University. Professor Calzada is an economist who examined the actual record of wind power in Spain. What he reports is stunning and scary:
1. Spain installed wind power with a faceplate capacity equal to 10% of its total national electric load or requirement.
2. Actual capacity (production) was only 10% - 30% of the faceplate capacity, meaning that Spain actually derived 1% 0 3% of its electricity from wind.
3. Calzada estimates that most of the fifty-thousand jobs created by the wind industry were for the installation of wind turbines and each of these jobs cost the national treasury over $70,000 in subsidies.
4. With an unemployment rate of 17% (still rising) Spain, according to Calzada's analysis, lost slightly more than two mainstream jobs for every so-called green job created and now even the green jobs are disappearing with at least 20% of the wind industry jobs already lost and thousands more to follow.
Even separating wind power into its land and marine components and further dividing marine wind into shallow and deep water we still have certain common issues to discuss and deal with. One is capacity. This series will try to avoid using too many technical terms and mathematical details because not everyone has either an engineering degree or the author's eight years of immersion in wind power facts. The basic units of electric power are kilowatts (KW), megawatts (MW) and gigawatts (GW). The term faceplate capacity means the maximum capacity for a given turbine, similar to the horsepower rating for an automobile. The workhorses of the wind turbine world seem to be machines with a faceplate capacity of 1.5MW - 2.0MW.
But, since wind is not constant in speed or even available at all for periods of time, faceplate capacity is meaningless. A 2MW machine operating at 25% efficiency produces 0.5MW of power and depending on how often and for how long it generates power its overall megawatt hours sent into the grid will be far lower than what we are led to believe when the developer is telling us how wonderful his wind farm will be and how devoted he is to our clean energy future. Actual operating experience reports are so scattered and different that it is difficult to accept an average expectation. We use 25% reliability as a benchmark globally. Remember, since no one can give a reliable capacity projection before actual operation of a given wind farm it is virtually impossible to determine how much the power will cost from that wind farm. $1,000 per MW at 50% capacity is $2,000 per MW at 25%. It's only money. Right?
The offshore wind industry claims that offshore winds are higher in velocity and more reliable or consistent. However, these same snake oil salesmen seem fond of ignoring the enormous additional capital costs as well as the true Achilles Heal of offshore wind...reliability. Cape Wind is a perfect example: Jim Gordon claims that his Cape Wind wind farm will operate 130 GE model 3.6 (3.6MW) turbines at a39% of faceplate capacity. Since 2003 he has said he will use the GE model 3.6 and he has never, ever frankly said anything different. This is a problem because by 2007 both academic journals and independent business publications were listing that turbine as being discontinued and even GE admitted this fact to the New York Times in May of 2009. Even allowing that Gordon will have a 3.6MW turbine available his capacity claim of 39% far exceeds actual operating experience worldwide which shows 20% - 35% to be more realistic. GE is the largest maker of wind turbines in the U. S. and Vestas is the largest in the world: they both told the New York Times that they are out of the offshore turbine business because the capital costs of building offshore wind farms is too high.
Now do we understand why it is important to separate on shore from offshore?
Adding to this dilemma is the mechanical disaster that offshore wind power has proven itself to be. The marine environment is brutal on machinery of any kind. A typical wind turbine generator (WTG) is a huge, complex machine with eight - to -ten thousand individual parts, mostly metal. Many metals do not survive long in an environment of salt spray. Constantly changing and extreme climate conditions pound on offshore turbines to the point of causing frequent and often major mechanical failure. Added to the frequent mechanical problems in operation is the difficulty of reaching these beasts to service/repair them and we have an energy nightmare.
Capital costs twice those of onshore wind, known reliability problems and operating and maintenance (O&M) costs at least double those of onshore turbines combine to make a toxic cocktail for the energy consumer. So far, offshore wind has been developed only in shallow water, at depths ranging from 3 meters to twenty meters. A recognized industry expert told me recently that the smart money is being spent developing huge new turbines for deep water installations. He believes that we will soon see turbines in the 5MW to 7MW range and indeed REpower of Germany is now claiming it has a 6.15MW trubine available for offshore use. But even at these larger sizes, perhaps especially at these sizes, the wind turbine's constant flaw is only magnified: transmissions.
Wind turbines have transmissions that adjust gearing according to wind speed and load. They break with reliable frequency on virtually all commercial scale turbines. Even the mighty Vestas company has not completely solved this problem. It appears that the larger the turbine, therefore the more weight, load and friction, the more of a problem the transmission becomes. Even the United States Department of Energy acknowledges this issue as they have issed a request for proposals for private industry to collaborate with the government in a development effort to design reliable transmissions for turbines in the 5MW to 15MW range. The cost of this project runs into the tens of millions of dollars. Available 5MW and 6MW WTGs stand well over five hundred feet in overall height with a blade span of 120 or so yards. One can only imagine the dimensions of a 15MW wind turbine.
The new, larger turbines are being designed principally for deep water installation. Placing them in water 30 - 150 meters is planned, or desired. The only way to make these new projects economically feasible is to use enormous turbines. In several reports going back as far as 2005 even the Renewable Energy Laboratory of the U. S. Department of Energy has said that the future of offshore wind is in deep water where the wind is stronger and more reliable and where issues of interference with shipping and other uses of our coastal waters are lessened if not eliminated. There is even new technology that uses a floating turbine, developed by a Dutch company, Blue H. A subsequent capsule will discuss this development.
So, now we have some ground rules. Discuss wind power in its correct perspective. Understand that it is and will probably always be more expensive than most other forms of energy, that it has capacity problems and is not base load power.
We close this capsule with an example: here on Cape Cod a private business recently installed a Danish model wind turbine (that is a turbine with three blades). It is rated at 1KW and its total cost was slightly more than $400,000. After tax credits and two public subsidies the cost to the owner came down to just over $100,000 which will be paid off in a very short time due to electricity savings and accelerated depreciation plus tax. But, based on this WTG's actual capacity and real cost its cost per kilowatt of electricity is double the standard rate for a small commercial electric customer --- 23 cents/KW!
Jim Gordon is fond of saying that the wind is free. What he means is that he will not have to pay for it....but the rest of us will pay, and pay, and pay.