He vuelto a conseguir publicar otro artículo en la revista de Colegio de Ingenieros de Madrid Nº57, esta vez sobre la situación del mercado eólico en Estados Unidos. Se repasa el estado del mercado y se comentan los retos a los que se enfrenta, a corto plazo la renovación del PTC y a largo plazo, la falta de capacidad de transporte eléctrico y la competencia del shale gas:
The electricity generation has important externalities issues. An externality happens when the price of a good doesn’t reflect all the costs that are generated in its manufacturing. That is because some of affections of the product manufacturing has no cost for the company because the price is zero, for instance, there are no price for the clean air or for a not-nuclear-risky generation. In the electrical generation, the product is very homogenous: electrical energy, measured in kWh. But, obviously, it is not the same for the planet how you obtain this energy. But the market, the wholesale market by own, doesn’t reflects all of these affections. So, in electricity markets, both negative externalities and positive externalities happen at the same time. In these two pages, I will analyze the two most popular methods of internalizing the benefits of the positive externalities of the renewable generation: Feed-in Tariffs (FiT) and Renewable Portfolio Standards (RPS), and I will focus on two country examples: Spain (FiT) and the US (RPS). There are also methods for internalize the negative externalities as the carbon cap and trade for CO2 emissions, but I will not consider them in this article.
So, the promotion of the renewable energy, as solar, wind or biomass, is an issue of how to internalize their 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 include 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 expansive plants or to purchase expensive energy to 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 a market, even the Government can not 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 RPS does); you do not know what will be the price for this generation. The price plus 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 plus the quantity is too high or 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. The two methods are good if they are well designed, but that is not the common case.
The Feed-in Tariffs
In the Feed-in Tariffs option, the government decides what will be the price of the renewable generation. That has enormous advantages for developing the 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 well calculated -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 the society awarded with the benefits of clean generation.
Spain has become a power in renewals thanks to FiT. The government support has been very strong and determined. Spain has been successful implementing some FiTs, for instance in the case of wind, but has made huge mistakes in solar PV. Spain started to use FiTs in 2000, and ten year later, the 35% of the total generation is using renewals (2010).
In the following graph you can see the average cost of electricity in the wholesale market (black line), the LCOE of wind power (blue line) and the FiT (yellow and red line). As long as the FiT is above the cost, the investment is interesting. This FiT was well calculated to make the investor obtain a 5-7% IRR.
In the following graph you can see the objective in wind (red bars) and the actual development (blue bars). As you can see, the development has been constant and progressive.
That is the successful example. But what did it happen in solar? In the following graph you can see the average cost of electricity in the wholesale market (black line), the LCOE of solar power (red line) and the FiT (yellow line). As you can see, the FiT was much more than the cost, so the investors obtained more than 11% IRR.
What was the result? An over investment in solar PV power. Government wanted 400MW and they obtain more than 3,000MW. That implied a huge cost for citizens, and, as a result, the FiT has been reduced dramatically.
Renewable Portfolio Standards
With this method, the Government fixes the quantity of renewable generation that it wants, but not the price. That makes that the developer, the investor, and the most important, the financial institution that is going to put the money on the table, they do not know what will be their IRR before they start to promote a plant. So they have to deal with a lot of risk if they want to build a renewable plant. That is crucial, because at the end, the development of the renewals results too slowly.
You can see the example of the US. The US was the first country in building renewable plants in the 80’s, but now, only the 10% of the total generation is renewable (being 7% big hydro). So they have thirty years of expertise in renewable and only 10% as a result.
The US uses the RPS. That is an objective that some states try to achieve. For example, California has a RPS of 33% renewable in 2020. This objective becomes an obligation for the utilities, which have to provide a 33% of their portfolio using renewals.
Not bad, but then why have they achieved so few renewable generation up to now? Because two things: first of all, they make auctions to know the price of generation (trough Request for Proposals) and due to the competition, many of the bidders offers a price below the real cost, thinking that when they will build the plants, the technological development will made the cost reduced. But that not happened, and now there are a lot of projects that will not be ever built because the developers offered a very low price. Second, because, in fact, the utilities are not penalized if they do not comply with the RPS. So they do not have real incentives to buy more expensive energy that will make their ratepayers to pay more. As a result, the real price of renewals is not revealed.
We have seen to examples of trying to internalize a positive externality. But it is not easy because it is extremely difficult for a legislator to put a price for all of these things that are not in the market. Nevertheless, from the errors, we learn, so, these experiences will improve Government thinking. Benchmarking is also good thing to do for legislators to learn from the errors of the neighbours.
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:
¿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:
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…
Windpower is the most important exhibition in the US in wind market. It will take place from May 22 to May 25, in Anaheim, California.
Unfortunately, this year there will not be an official Spanish pavillion, but we have worked on arranging meetings with important key players of the sector and with four States representatives: Kansas, Missouri, Oklahoma and Arkansas. These four states are neighbour and they are in the ‘wind belt’. They probably want to follow up the sucessful way of Texas, the State with the 60% of wind power generation within US. Some of the most important Spanish companies in wind, represented by their CEOs, are going to come with us, so I imagine, the next week will be a great chance to make top-networking and learn more about wind market in the US. And a long week of working days and endless meetings…
I promise I will tell you all the conclusion that I learned, with some tricks and secrets from the companies and the States¡