Spanish Feed-in Tariffs: Killing the Golden Goose

Spain had a struggling issue in energy supply at the beginning of the 90’s. More than 70% of its primary energy sources were hydrocarbons and almost all of them were imported because there are not autochthonous reserves of oil, natural gas and only one third of all needs of coal. They were imported from countries like Russia, Libya, Algeria, Nigeria or Egypt, not very trustable from a geopolitical point of view. Moreover, the electrical markets were dominated by two vertical integrated utilities which had not been invested in new transmission capacity or new generation plants. Due to the growth of the economy, it was forecasted a important growth in energy demand (actually the demand doubled in 15 years), so the Government had to deal with a big problem, also aggravated by the environmental compromises with European Union in using renewable energy and reduce CO2 emissions.

Spanish FiT have been called as the fable of the golden eggs goose

So, the Government made important decisions to address the issue, fighting with numerous personal and private interests from utilities and the old school guys. Probably, the period from 1990 to 2010 was the moment with more energy laws and legislation passed in all the Spanish history. Following the California and UK examples, the market was liberalized, a new Independent System Operator (ISO) and owner of all transmission lines was created, Independent Power Producers were allowed to access to the grid, and important laws in supporting renewable energy sources were passed.

Nowadays, Spain is well known for being a country who is leader in the world in renewable energy technologies. Despite to be the 12th country by GDP, it achieved the fourth place in wind capacity installed, second in solar PV and it remains first in solar thermal. In 2011, the 36% of the electricity comes from renewable energies, a remarkable fact since the US only achieved 13%. In others indicators related with infrastructure (as transmission lines average age, miles of high-speed rail or miles of freeways) or with human development (mortality, education, etc), it is on the top five. Nevertheless, currently is also infamous by the struggling economic situation, difficulties to pay back the national debt and high rates of unemployment. Both achievements and failures are consequences of the decisions made, some of them related with energy. In the particular case of renewable promotion, the Spanish feed-in tariffs program (FiT) is one of the most commented, discussed and disputed energy policies in the recent years, specially the program for solar photovoltaic, who has been called for many people as the fable of Killing The Goose That Laid the Golden Eggs.

The promotion of the renewable energy, as solar, wind or biomass, is an issue of how to internalize the positive externalities into the market. These benefits are well known. The clean or renewable energies, do not pollute, do not contribute to climate change, do not imply resources depletion, do generate local employment, do promote the national industry, do improve the energetic independence, and more. All of these benefits are not included in the Levelized Cost of Energy (LCOE) or the price of the electricity. Because of that, these technologies are not competing in the same conditions as the conventional generation. That makes that the price of them is above the average price of the electricity in wholesale market, and as a consequence, the utilities do not want to build this expensive plants or to purchase expensive energy from others. This is because the benefits of the renewable energy do not go to them, but to society. That is a market failure and that is because they need the regulation or the support from the Government.

In the market, it is a basic principle that nobody, even the Government, can control the quantity and the price of a product at the same time. If you fix the price for the renewable generation (as FiT does) you do not know what will be the amount of renewable generation that you will obtain. The same, if you fix the quantity you want (as Renewable Portfolio Standards does); you do not know what will be the price for this generation. The price multiplied by the quantity is the key point, because that will be the cost for the electricity customers who are also your voters. So you have to be careful with that because otherwise you can make your citizens to pay so much for the electricity if the price by the quantity is too high, but you can make them not to gain the benefits of renewals if the renewals were not developed due to low prices which do not make the investments profitable.

In the FiT option, the government decides what will be the price of the renewable generation. That has enormous advantages for developing the renewable market because it is very easy for developers, investors and financial institutions to know what will be their retribution and the Internal Rate of Return (IRR) for their investments. It is easy to calculate the IRR and if the FiT is also well determined -the price will be a bit more than the cost of capital- then the development of renewable is smoothly and a reasonable cost for ratepayers, being society awarded with the benefits of clean generation. See Exhibit 1, with the case of wind.

Spanish wind feed-in tariff as an example of sucess
Exhibit 1. Electricity market Price (black), FiT for Wind (yellow and red) and Estimated cost for Wind (blue). This FiT was well calculated to make the investor obtain a 5-9% IRR.

Spain has become a leader in renewals thanks to FiT. The government support has been very strong and determined. The country started to use FiTs in 2000, and ten year later, the 35% of the total electrical generation is using renewals (2010). Spain has been successful implementing some FiTs, for instance in the case of wind, but has made huge mistakes in solar PV. The law ‘RD661/2007’ in 2007 was the most important piece of legislation because the most important FiT prices were determined. Prior prices were not enough for launching the market.

The key point of FiT is to determine the price of the premium. But that is difficult for a pioneer Government (and more in 2007 without other experiences) because a civil servant is not usually a solar PV developer, he does not know what are the real cost of solar modules, wires racking, etc. So the Government decided to ask the local solar PV generators associations to estimate the right price for the premium. Obviously, as much price, much profitable for the companies in the association, so they finally convinced the Government to fix a solar PV FiT that was 10 times higher than the average electrical price, and almost twice that the LCOE for Solar PV (at that time it was not so clear what was the real LCOE for PV, that, in fact, it has been strongly decreasing in the past five years). The business was so profitable (IRR above 20%) that it attracted investors from all over the world, and because it was pay by the Government, it was secured by the country bond with used to have an AAA rating, so practically at no risk.

The Government objective was 400MW of solar PV, but in only two years they got more than 3000MW. See Exhibit 2. Only the over cost of the solar PV FiT for the ratepayers is more than 2 billion of Euros every year, and considering all renewable technologies more than 6 billion. The reason why the Government did not realized before what was happening, it is because they relied on local administrations (similar to counties) for granting the permits for the solar facilities. Since local governments earned a lot with solar PV installations (jobs, taxes, votes), they did not informed the Central Government about the number of projects in the cue. In fact, they was not going to pay for the FiT, so they tried to host and grant permits for as many projects as they could.

Spanish Solar PV boom
Exhibit 2. Solar PV Objective (red) versus Solar PV actual development (blue).

Moreover, the Government decided not to increase the electrical rates, because the benefits of renewable should be paid not only for the current consumers but also by the future consumers, since renewals benefits are for different generations. So the electrical system generates every year a huge deficit that has the creative name of ‘rate deficit’, and which is accumulated as public debt (and accounted as more public debt for rating and country risk). Basically it is a debt from the ratepayers (aka citizens) to generation owners (generating companies). That debt was by the end of 2011 of more than 25 billions of Euros.

So, as the model was unsustainable, the Government finally decided, in January 2012, to cut off or suspend the FiT program, with a lot of complaints from investors and generators with projects on the way. So, since some of the causers of the over costs of the FiT model and the final breakdown of it were the own solar PV generators (trough the associations), they have been accused of killing the golden goose.

The renewable program has had additional benefits as 100,000 new employees, total contribution to GDP around 8 billion €, total exports: 3 billion €, reduction in 10,7Mtep in fuel imports (2 billion €) and savings over 370 million of € in CO2 emissions. Nevertheless the excessive cost finally collapsed the system. Now the renewable sector is accused of contributing to the tough situation of the Spanish economy. That is a good example as how careful has to be a Government when they decide the energy strategies and policies.

Visito la planta termosolar de eSolar Sierra Sun Tower

Sierra Sun Tower Generting Station

Gracias a una asignatura del certificate que estoy haciendo en UCLA, tuve la oportunidad de visitar la planta termosolar de eSolar Sierra Sun Tower. Sus 5MW de demostración se suman a los casi 500MW termosolar que hay en el país a en el verano del 12, aunque pronto sumarán casi el doble con los proyectos en desarrollo que hay.

Calor y sol en Sierra Sun Tower Generting Station

Sólo existen dos plantas con su tecnología en el mundo, la que fuí visitar en el increíblemente caluroso desierto de Mojave cerca del pueblo de Lancaster, y la otra en India. La tecnología es solar de concentración, pero el pequeño tamaño de los espejos (planos) y su generación directa de vapor aportan ciertas características nuevas a la generación termosolar. A continuación se puede ver un generador de vapor desmontado, donde se pueden ver los tubos instrumentados con su especial recubrimiento. La tecnología de la torre la suministra los viejos expertos del vapor Babcock&Wilcox que también aporta algo de equity a la compañía.

Generador de vapor solar Sierra Sun Tower Generting Station

Una planta interesante aunque quizás algo fuera de la tecnología actual, ya que no permite almacenamiento (clave para hacer interesante la termosolar), con una eficiencia más que dudosa, un mercado complicado en el corto y medio plazo y mejores competidores (los españoles entre ellos¡)

Generador de vapor solar Sierra Sun Tower Generting Station

 

Shale Gas: The Black Revolution

Introduction

In the last 40 years, important changes were occurred in the traditional scenario of the energy sources. First, the crisis of petroleum in 1973 was the first warning about the problems of fossil fuels. More closely, the important economic development prior to 2008 pushed the markets of energy resources due to the growing demand. With traditional sources of energy as oil, gas and coal raising prices, alternatives sources which were unprofitable before, started to seem more attractive. Also, the dependency of the developed countries on the resources of foreign countries, many of them not very trustable, converted the issue in terms of national security.

Among these alternative sources, renewables, especially wind and solar, have been the main character of the play. Not absolutely new, since they had a little bright in the 80’s, now they have experienced a very strong development worldwide. A new industry has been created only five years ago. The benefits of the renewables are tremendously obvious. They do not consume fuels susceptible to expire to get energy from nature, and they almost do not affect the environment, do not pumping CO2 or other gases into the atmosphere or compromise any region with nuclear risks. On the other hand, these technologies are still not cheap enough to compete with the conventional sources. The price of energy is a key variable in the economic growth and any country try to keep it low for achieving more competitiveness and more economic expansion.

But these efforts in finding alternatives to traditional sources, also has applied to investigation in fossil fuels. Since the end of the 19th century, it is known that there are fuels buried into the ground which are not in the conventional geologic formations. These fuels are in structures which permeability is very poor to make the normal drilling process profitable. They are called non-conventional fossil fuels. Many research resources have been expended in investigating new techniques or technologies to get these fuels from earth in a profitable way. Now, it seems that it has been achieved.

These difficult geologic formations, which until very recent years were unprofitable, have different names as shales, tights or sands. From them, currently gas natural and oil are being obtained, and because of its origin, they receive the nickname of shale gas, tight gas or shale oil. At present, the most important one is the Shale Gas, because there are huge reserves of natural gas in shales and because this last 5 years the production of Shale Gas has shooted up. The raise of these new sources of fossil fuels is being named for some people as, ‘The Black Revolution’.

In this paper, it is going to analyze why the Shale Gas is so important in the new era of energy, what are the important environmental and social issues of its production and what can we expect in the evolution of the energy mix in the US and worldwide.

What is the Shale Gas?

As it has been introduced, Shale Gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich sources of petroleum and natural gas and whose porosity and structure does not permit to get the fuels with the traditional ways.

The advent of large-scale Shale Gas production did not occur until Mitchell Energy and Development Corporation experimented during the 1980s and 1990s to make deep Shale Gas production a commercial reality in the Barnett Shale in North-Central Texas. They used a combination of techniques invented for other purposes, the horizontal drilling in conjunction with hydraulic fracturing.

 Extraccion del Shale Gas

As it can be viewed in the figure, natural gas is incorporated into the Shale Gas formation, not is in a bag as conventional gas. Moreover, shales are ordered in horizontal layers. Conventional drilling is totally useless in these formations. The new drilling technique consists of:

  1. A vertical well is drilled
  2. The drill turns to continue horizontally. In this manner, the horizontal drilling permits to make a hole along the shale
  3. Water, lots of chemicals and sand are pumped into the well to unlock the hydrocarbons trapped in shale formations by opening cracks (fractures) in the rock and allowing natural gas to flow from the shale into the well.

As the success of Mitchell Energy and Development became apparent, other companies aggressively entered the play, so that by 2005, the Barnett Shale alone was producing nearly 0.5 trillion cubic feet of natural gas per year. As producers gained confidence in the ability to produce natural gas profitably in the Barnett Shale, with confirmation provided by results from the Fayetteville Shale in Arkansas, they began pursuing other shale plays, including Haynesville, Marcellus, Woodford, Eagle Ford, and others.

Economic vitality

Although Shale Gas production started ten years ago, only in the past 5 years has been recognized as a “game changer” for the U.S. natural gas market. The proliferation of activity into new shale plays has increased dry shale gas production in the United States from 1.0 trillion cubic feet in 2006 to 4.8 trillion cubic feet, or 23 percent of total U.S. dry natural gas production, in 2010. Wet shale gas reserves increased to about 60.64 trillion cubic feet by year-end 2009, when they comprised about 21 percent of overall U.S. natural gas reserves, now at the highest level since 1971. Oil production from shale plays, notably the Bakken Shale in North Dakota and Montana, has also grown rapidly in recent years.

Something is considered as a ‘game changer’ if it has the ability to change the price of good. That has happened in the case of the Shale Gas.

As you can see in the figure on the left, due to the more offer of gas natural in the market, and also the contraction of the demand, the price of natural gas has dramatically fallen down between 2005 and 2010. Moreover, the projection shows that thanks to the influence of the Shale Gas, the evolution of the prices (blue line) will be below the prior projections which did not considered the new gas. That has huge implications in energy markets. For example, less natural gas prices imply less electricity prices and more difficulties to renewables to achieve grid parity.

To better understand the importance of this new source of gas, let compare it with the actual figures of the natural gas market in the US. Of the total natural gas consumed in the United States in 2009, 87% was produced domestically; thus, the supply of natural gas is not as dependent on foreign producers as is the supply of crude oil (only 51% domestic), and the delivery system is less subject to interruption. The availability of large quantities of Shale Gas will further allow the United States to consume a predominantly domestic supply of gas.

According to the EIA Annual Energy Outlook 2011, the United States possesses 2,543 trillion cubic feet (Tcf) of potential natural gas resources. Natural gas from shale resources, considered uneconomical just a few years ago, accounts for 862 Tcf of this resource estimate, more than double the estimate published last year. At the 2010 rate of U.S. consumption (about 24.1 Tcf per year), 2,543 Tcf of natural gas is enough to supply over 100 years of use. Shale Gas resource and production estimates increased significantly between the 2010 and 2011 Outlook reports and are likely to increase further in the future. The Shale Gas represents about 37 years of supply considering the US consumption of 2009.

Reservas de Shale Gas de EEUU

The US plays of Shale Gas are spread around the country but there are some formation especially important located in Barnett shale (Texas), Bakken Shale (North Dakota and Montana), and the most important is Marcellus Shale (Pensilvania, New York and others).

The Shale Gas is being extracted in rural zones, and that is causing important changes in these villages. There are some important environmental implications, due to the extraction of Shale Gas is not perfect and can affect aquifers. Moreover, the social equity in the villages is changing since the owners of the lands where the gas is extracted are earning much money for royalties they had imagined feeding cows and growing plants.

Ecological Health

Local effects

The extraction of Shale Gas is not as simple as it was presented above. As many industrial activities, important bad externalities are generated. The amounts of water and chemicals pumped for the hydraulic fracturing are huge. Drilling a typical deep shale natural gas and oil well requires between 65,000 and 600,000 gallons of water. Not only the consumption of tons of water is something to be considered from an environmental position, also the composition of the chemicals is important. The problem is that the actual composition has not been revealed because is considered an industrial secret. About a 2% of the mixture is chemicals. They are crucial for the Shale Gas extraction and include acids, anti-bacterial agents, breakers, clay stabilizers, corrosion inhibitor, crosslinker, friction reducers, gelling agents, iron controls, pH adjusting agents, and scale inhibitors, between others.

The huge amount waste water of the process, full of chemicals, sand and muddy has to be treated. Analysis performed to this waste water shows that it contains some components that are carcinogenic and even nuclear radioactive. The treatment of this water is done in the States with the more lax regulation. Many of them do not have equipment to remove these chemicals out of the water, which is pumped in rivers. Nobody knows what will be the effects of these chemicals in the environment in a long term, because this new type of extraction is almost new.

But maybe, this is not the worst problem. When the drill punches the land, in many cases, some of the layers crossed are aquifers. In some places of Pennsylvania and other States, the tap water has been contaminated by the waste water and even by the gas. The problem was shown in the documentary ‘Gasland’ by Josh Fox, where it is possible to see incredible images of taps running with flammable water. Also, it presents some cases of people living near the drills with terrible and strange diseases, animals dead, bad water contamination and other health issues. A ‘silent law’ seems to be happening because many people of these farms are earning lots of money with the royalties of the gas and also they have disclosure contracts with the drilling companies.

As named above, the Shale Gas production started in Texas ten years ago. I had the opportunity to speak in October 2010 with Keith Sheedy, Chief Engineer’s Office from the Texas Commission on Environmental Quality. He basically explained that in Texas, no water contamination have occurred in this ten years of commercial exploitation. The cases of Pennsylvania are due to bad practises in the drilling process. When the hole is not properly cemented, then some of the gas running through the hole can pass to aquifers and contaminate the tap water.

Anyway, drilling has been doing for decades in similar industries, so regulations should have existed about water uses and disposal, but why is not the Shale Gas drilling regulated by environmental rules as the rest of industrial activity? Because, The Congress, pushed by Vice President Dick Cheney, exempted gas drilling from EPA Clean Water Act regulations in 2005. It is something curious that Cheney was former CEO of the Halliburton Company, one of the biggest driller and Shale Gas extractor in the US. After 2005, Shale Gas drilling boomed.

There are other collateral effects in Shale Gas extraction. Fracturing is changing the structure of the geologic formations. In the drilling zones some earthquakes has been occurred in recent years, and the seismic activity is above the average. In addition, the great amount of water used, generates large truck traffic to this normally quiet populations.

Global effects

The global effects of the boom of Shale Gas are similar to the rest of fossil fuels usage. As fossil fuel, CO2 are generated in its combustion. The CO2 is a greenhouse gas that contributes to the global warming, which diverse effects in the environment. Even, during the Shale Gas extraction, many other greenhouse gases, more powerful, as CH4, are liberated due to bad practises in the drills and the lack of regulation.

Moreover, it is an exhaustible fuel. That means that there will be a day when there will not be more.

The usage of fossil fuels generates strong externalities for the rest of the world, and they are not incorporated in the cost of its use. As indirect effect, the boom of the natural gas or the reduction of its price is bad for renewable energy because is a substitutive product. As lower is the price of fossil fuel generation, more difficult is for renewables to achieve grid parity and be competitive by their own.

At the end, the more usage of natural gas, despite is greener as other fossil fuels as coal or oil, address our world to a very tough scenario, with a society dependant of scarce fuels and an earth that had suffered non-return changes in its ecosystem.

Social Equity

In the past five years, many drills have been done. In the next figure it is possible to see the evolution of the Shale Gas drills (red spots) in the Barnett shale during the last decade.

 

The economic benefits for the owners of the land have been important. Signing its gas lease about $1,000 per acre and a royalties of 12.5% for the gas produced, can make them to earn between $1,500 and more than $500,000 per year during the term of the extraction, which can last some years. This is much money for people used to feeding cows and growing plants for fringe benefits.

This disparity of earnings is generating some social equity problems within farmers but more between ‘county folk and city people’. The city people are not earning anything with the drilling but they suffer the problems of water contamination, truck traffic and risks from the unknown effects of the activity. They are against drilling but farmers, in general, are in favor of it. Disputes are increasing in these, up to now, calm and little populations.

A good impact of the drilling activity is the job creation. According to a recent study by Pennsylvania State University, the industry has created 23,000 jobs, including employment for roustabouts, construction workers, helicopter pilots, sign makers, Laundromat workers, electricians, caterers, chambermaids, office workers, water haulers and land surveyors.

Another controversial topic is the unequal tax policies to the drilling activity. Currently, companies operating in Pennsylvania pay no tax to extract gas. (Governor Tom Corbett reportedly received at least $1 million in campaign donations from gas interests). Corbett recently introduced legislation that would levy fees that critics say would amount to a tax of 1% per well on gas extraction, significantly lower than Arkansas (3.45%) and Texas (5.4%). It is not very fair to tax differently the activity between States, since the basins extends along vast territories of different States and the problems of the activity are affecting people in the same way.

Conclusions: my personal vision

An important change in the energy world is happening. The important economic implications of the availability of domestic natural gas are something to be considered for any country. The US has been the first country to exploit the benefits of the Shale Gas, but it is expanding through the world. You can see in the next figure the worldwide reserves.

 

The new distribution of the sources of energy changes the game of power. No dependency from Middle East could be a fact that changes the course of international policy.

Apart of the good benefits from the economic point of view, there are other aspects in the sustainability analysis that have to be considered. The local effects on the environment are not trivial. Public health and environment ecosystem is endangered. Nobody knows what will be the effects of the chemicals used for extraction in the long term but, my impression is that many companies are working as fast as they can to get the maximum amount of gas before the effects will be public. Responsibility from the Government must be priority to avoid this, but as another market failure, the current democracy system permits the regulator be supported by the companies which he has to regulate.

At a local scale, the social problems of inequity will convert stronger in future years. Ronald Coase, a famous economist, states that if trade in an externality is possible and there are no transactions costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights. In this case, this bargaining is not happening and that will push unfortunate people to fight for its rights.

From a global sustainability point of view, the raise of the fossil fuels has huge impact on the world. If the fossil fuels come to be cheap again, the efforts in renewables will stop and we will experience something similar to the 80’s, when the first renewable plants were built and no more were set up until 20 years later. At the end, it is to delay the inevitable, but in a worse scenario. We will have a warmer earth, more population and more bubble, because we have been growing with more energy than we can produce in our present time.

In a more practical way, the implications for the US energy mix or the electricity energy mix are obvious. The current 45% of coal will be substitute by gas, cleaner and not much more expensive now. If you see the predictions of new electrical capacity added from EIA, you can figure out:

 

 After knowing more about the Shale Gas, I understand better the words by President Obama during the State of the Union discuss in 2011, when he claims for a new goal for America’s energy future, saying 80 percent of electricity should come from clean energy sources by 2035. He considers clean, among others, wind, solar, nuclear and natural gas. 

References

 

Energy Information Administration (EIA): www.eia.gov

Josh Fox, Gasland, the movie: www.gaslandthemovie.com

The Economist, ‘We will frack you’ November 22, 2011: www.economist.com

Chesapeake, Hydraulic Fracturing Facts: www.hydraulicfracturing.com

New York Times, ‘The Fracturing of Pennsylvania’ November 17, 2011: www.nytimes.com

 

Energía marina: aprendiendo a nadar

Acabo de venir de un evento organizado por la Harbor Association for Industry & Commerce sobre energía marina. El seminario reunía a varios de los expertos más importantes en este área en SoCal. Se ha celebrado en Long Beach, muy cerca del Queen Mary, un barco-museo en una zona portuaria preciosa.
La impresión que me ha quedado sobre el desarrollo de la energía marina en EEUU es que está todavía en fase experimental y comenzando la de demostración. Nada diferente a España, aunque nosotros estamos un pasito adelante con proyectos como el de Santoña, de Iberdrola.

Generador marino de OPT en Santoña, para Iberdrola
Generador marino de OPT en Santoña, para Iberdrola

Las ventajas de este aprovechamiento energético son similares al resto de las renovables, aunque quizás la gestionabilidad y el factor de capacidad de la marina sea mejor que el resto de las renovables. El potencial en EEUU se estima de 49.000MW, lo que supondría un 17% en el mix actual.
Los invenientes son, aparte de los que tiene en el resto del mundo, los propios de EEUU iguales para todas las renovables aquí. Se resumen en dos, capacidad de evacuación y permiting. El primer issue, no solo implica la adecuación de las actuales líneas (que están infra dimensionadas) si no también la creación de nueva infraestructura para transportar la energía desde las plantas a la costa. El segundo problema, es la inmensa burocracia que hay que vencer para realizar un proyecto de estas características. Y en este caso, se puede decir que es incluso peor que para el resto de las renovables, dado el desconocimiento y la novedad. En EEUU, las aguas hasta 3 millas son competencia estatal y a partir de hay federal. Así que lo más probable es que haya que lidiar con los dos estamentos, ya que la mayoría de este tipo de plantas se instalan mar adentro. En el lado federal, el responsable es la FERC.
Lo que si es fascinante es la capacidad de invención en los distintos devices que se están desarrollando para transformar la energía del movimiento del agua en electricidad. Muchos de los artefactos son bastante ingenuos, pero otros tienen bastante buena pinta.
Mi conclusión, es que formaran parte del mix, no tanto como el 17%, pero si paree más razonable entre un 2 y un 6% de aquí a veinte años. De momento sigamos disfrutando del mar con el respeto que se merece, ya que por ahora no conseguimos doblegar su potencial de forma rentable.

Bonitas vistas desde el puerto de Long Beach
Bonitas vistas desde el puerto de Long Beach

Nevada Solar One and Hoover Dam, two great champions¡

If you go to Las Vegas, it is sure you will have a great time. But if you have enough time, I recommendo you to visit the Hoover Dam and Nevada Solar One.
The two plants are a very good examples of how we can obtain energy for free. In fact both plants are distant only 10 miles, and are two examples of how Americans can be the leaders if they want.
Hoover Dam was built in 1936 during the Great Depression, (in Spain we have finishing our inglorious war by the time), and cost over 100 lives. It was named in honor of President Herbert Hoover. It is placed between Arizona and Nevada, in fact there are different times zones in each side of the dam¡
From Hoover Dam
The size of the canon is awesome and the construction is anyway beautiful. The two jet-flow gates are one of the most well-known images of hydraulic engineering of the world. By the time of constructuion, such a large concrete structure had never been built before, and some of the techniques were unproven, so they was pioneers in the engineering limits.

Compensation towers Hoover Dam
Compensation towers Hoover Dam

The maximun capacity of the power plant is 2080MW, amazing¡ The intakes provide a maximum hydraulic head (water pressure) of 590 ft (180 m) as the water reaches a speed of about 85 mph (140 km/h). The entire flow of the Colorado River passes through the turbines.

In the other side, Nevada Solar One is also a type of innovation. It is a Concentrate Solar Power Plant built and operate by a Spanish Company, Acciona, and it represent the first big CSP facility built after the Kramer Junction plants in the 80’s. It was finished in 2007 and has a capacity of 64MW.

Nevada Solar One
Nevada Solar One

When I visited it, I felt like in a museum of energy enginnering. It was an absolutely honor to stay so close of one of the plant I have much admired before. This plant sells its electricity to Arizona Public Service (APS), which is estimated to be 134 million kilowatt hours per year. The CO2 emissions avoided is equivalent to taking approximately 20,000 cars off the road annually.The project required an investment of $266 million USD.
At the door of Nevada Solar One
At the door of Nevada Solar One

These two plants are the best example of the human willing to dominate the forces of nature to do whatever we want.

Shale Gas, vuelven los fantasmas

Otra de las conclusiones que saqué de Windpower es que el mercado eolico está algo parado. En el 2010 se instalaron la mitad de ‘megas’ que en el 2009, y las perspectivas para el 2010 no son muy alagüeñas. Para el 2012 y siguientes, dependerá bastante de si se mantienen las ayudas federales en exención de impuestos (PTC, ITC y Cash Grant).
Aunque si haces una visión más profunda, te das cuenta que el verdadero enemigo de la energía eólica es el Shale Gas, o gas de esquisto. La eólica empezaba a ser competitva con el gas, es decir que alcanzaba la grid parity, y eso es algo que aqui gusta, que sea rentable por si misma ( sin tener en cuenta las externalidades de la contaminación o de consumir un recurso escaso, que no es problema de los americanos, por supuesto) y por eso las utilities se animaban a apostar por los aeros. Además tenia la ventaja de tener un coste de generación estable y no dependiente del exterior.
Sin embargo, con el Shale gas, ambas cosas dejan de ser tan importantes. El Shale Gas es realmente una nueva forma de extracción. Se basa en la unión de dos técnicas, la perforación horizontal y la fractura hidráulica. La perforación horizontal permite llegar a estas capas, mientras que la fractura libera el gas que de otra forma estaría retenido en la estructura morfológica del esquisto. De esta forma se puede extraer de forma rentable el gas de las capas de este mineral, que hasta ahora eran descartadas. En el gráfico adjunto se entiende perfectamente:
Extraccion del Shale Gas
¿Y que implicaciones tiene esto para la energía eólica? Pues que según las estimaciones, los recursos autóctonos de gas de EEUU se van a duplicar de aquí al 2020, con lo que la dependencia energética es ahora relativa. También se estima que el precio del gas se ha reducido a un tercio gracias a este nuevo tesoro enterrado. Ver el mapa de los recursos norteamericanos asusta:
Reservas de Shale Gas de EEUU
Y también asustan las pruebas que los detractores de esta técnica de extracción mostraron en el documental ‘Gaslands’. La fractura hidráulica requiere grandes cantidades de agua y genera inmensas cantidades de agua contaminada con productos químicos que pueden llegar a los acuiferos. Además se liberan otros gases como el metano, que contaminan el agua corriente de las personas que habitan en las zonas de extracción (que son inmensas). El video de grifo que echa arder, es increible:

Como siempre, siempre hay quien dice que estas pruebas son un montaje, etc etc. Pero viendo la historia de este pais, y casi del resto de los paises, me parece muy dificil que en este caso predominen los criterios de sostenibilidad, energía limpia, etc frente al interés económico. Tanto los políticos (cortoplacistas por definición), como los CEOs de las utilities y los de las agencias de energía (PUCs, ISOs, FERC), deben de tener los ojos como platos con el Shale Gas: seguir manteniendo el inmenso consumo, sin subir precios, sin modernizar las redes, con ciclos combinados de regulación electrica sencilla, con contaminación perfectamente enterrable y con el orgullo de decir que es producción nacional, made in america y sin depender de los árabes. Y encima venden que el gas es ‘limpio’, como Mr. Obama cuando propone en 2035 el 80% ‘limpio’ incluyendo el gas. Señores, que nos van hacer la 1314¡. Y eso que solo el Shale gas aumenta las reservas 30 años más… dentro de 30 años le diré a mi hijo que estudie renovables, que entonces lo mismo si…

Spain: A Renewable Kingdom :: POWER Magazine

I have been mentioned in this article from POWER Magazine, by Sonal Patel. I think it sum up very well the current situation in the spanish electricity market, however, they are not mentioned some details which could be important for understand all the problem. The Government is not the unique guilty for the struggling tariff deficits.

Spain: A Renewable Kingdom :: POWER Magazine :: Page 2 of 6.

Shut down San Onofre!!

Easter is a great week if you are Spanish, a long holiday weekend and lot of places for pray free for the salvation of the bad economy recession. As a good spanish, I had the opportunity to rest for four days and I decided to travel to San Diego. The city is awesome, you can see seals in La Jolla beach and other incredible sea life in Sea World; having lunch tasty pasta in Little Italy and go clubbing like in Madrid in the Gas Lamp District.

In the middle of the way between LA and San Diego, you can also experiment a bit scare in a such-theme-park about energy production. Thats happend when you pass by San Onofre Nuclear Power Plant. It is striking that in a country as US, so concerned about security issues, you can get so close to a Nuclear Plant. It would be very easy for a terrorist to attack the installation and cause thousands of deaths. It is not only dangerous because that, also because it is just by the coast. And with Fukushima example so recent, I think it is not crazy to think about substituting this plant for other one more safety. San Onofre belongs to Southern California Edison utility.

If you know something about the risks of Nuclear Power, and probably you know now with the recents news from Japan, you will really get scare on the road to San Diego!

Concentración Fotovoltaica, con el banco hemos topado

Con motivo de la feria Solar Power International 2010, celebrada el pasado mes de octubre, tuve la oportunidad, gracias a Pedro Banda, amigo de ISFOC y gran experto en fotovoltaica, de visitar una planta de Concentración Fotovoltaica. La planta está diseñada y construida de SolFocus, de las pocas empresas en el mundo que ya es capaz de construir este tipo de centrales. La planta es aproximadamente de 1MW de potencia y representa actualmente la planta más grande del mundo en esta tecnología. Se encuentra en Victorville, pueblo a mitad de camino entre Los Angeles y Las Vegas, donde ya comienza el desierto, pero en territorio todavía de California.

Panel concentracion fotovoltaica

La planta vende la energía a un instituto cercano, y está ubicada en los terrenos de esta. Al ser una instutución pública el permiting les resultó más fácil, pero están de acuerdo en que en California es una autentica pesadilla. La energía sobrante la venden a la red, no dijeron precios, pero me imagino que el PPA no será alto. La instalación es comercial pero casi de demostración, ya que no existen más de cinco en todo el mundo. Otra de ellas está en Puertollano, construida también por SolFocus para ISFOC.

Las ventajas de la CPV (Concentracion Fotovoltaica) es la reducción de costes que implica el uso de menos silicio para la misma potencia de salida, ya que a través de unos pequeños espejos se concentra la luz solar en las pequeñas placas fotovoltaicas. Por tanto para el mismo área de captación que un panel normal, se emplea menos silicio, que es el elemento más costoso de un panel. No obstante, para ello, el seguimiento o tracking ha de ser más exacto que un panel estandar de doble eje, ya que ha de ir perfectamente alineado con la radiación normal directa. Ello implica estructuras y cimentaciones más robustas.

Concentracion fotovoltaica

A pesar de ello, el impedimento más grande de esta tecnología por ahora, es la “maldita” bancabilidad (mala traducción de bankability), es decir que alguien tenga narices a financiar un proyecto con una tecnología tan nueva. Los bancos, en un contexto de restricción de crédito y pánico al moroso, cada vez actúan más como ingenieros, y analizan todos los componentes de un proyecto fotovoltaico, mirando la calidad de los módulos, del inversor, las garantías, y sobre todo los años de experiencia probada. Y ahí es donde la CPV falla. Frente a la gran experiencia en fotovoltaica tradicional, la CPV sólo tiene unos cuantos proyectos en su historia. Por tanto es complicado que un banco financie estos proyectos por ahora. Tiempo ha de pasar y trabajo, como el de ISFOC y el de SolFocus, se ha de realizar para que esta tecnología llegue a ser un opción.