The Blog - Wind energy market analysis

Posted 24/09/2018

Frances Salter

   

What happens when the wind doesn't blow?

Donald Trump’s recent comments on the unreliability of wind energy are a load of hot air. Frances Salter explains

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It’s a common question for people who are wondering about wind power - as well as the world’s most famous NIMBY, President Donald Trump. In a speech given in New York, August 2018, Trump identified the problem of low wind supply as being one his main reasons for dismissing wind power: 

“Think of it, coal is indestructible. You can blow up a pipeline. You can blow up the windmills. Bing, that’s the end of the windmill. That’s if the birds don’t kill it first. You look underneath some of those windmills, it’s like a killing field of birds. But that’s what they were going to. They’re going to windmills. You know, don’t worry about - when the wind doesn’t blow. I said, what happens when the wind doesn’t blow? Well, then we have a problem.”

We hate to break it to him but, according to the evidence, he’s wrong on both counts. 

As we’ve written previously on this blog, wind turbines are responsible for approximately 0.01% of bird deaths caused by human activity, according to a 2013 meta-study by the RSPB. People’s pet cats, meanwhile, account for nearly three-quarters. Not to mention the fact that non-renewable power projects are amongst the top 6 killers.

The issue of what happens when the wind doesn’t blow is a little less cut and dried. Wind farms do have ways of managing periods of low supply, though there are still technological improvements to be made. 

So how do wind farms cope with periods of low supply? 

The National Grid strategy for dealing with dips in renewable power provision currently relies on fossil fuel back-up generation. At the moment, fossil fuels are still a large enough part of the energy mix that they can compensate for dips in renewables production. As gas emits less carbon than coal or diesel, it’s a preferable back-up option as the government phases out coal power stations.

In the future, developments in energy storage, interconnection, and demand-side flexibility (shifting non-essential demand away from peak times) may make back-up fossil fuels redundant.

 

Does it matter for the energy grid as a whole?

Not really – there are systemic ways of managing less windy periods.

Times of limited wind supply can be balanced by other energy sources. A more diverse electricity grid means that if something goes wrong with one part of the system, it’s less likely to cause an overall outage. 

Climate change activism group 10:10 claims that Denmark, which sources 42% of its electricity from wind, is one of the most reliable energy systems in Europe, with four times fewer power cuts than the UK. This is because demand management, energy storage and interconnection (within the country and with other countries) are used to help manage times when wind supply is diminished. In the UK, interconnections already enable projects to provide over 4GW of wind capacity.

Does it matter for investors?

Low wind supply might not be a disaster for the National Grid, but what if you’ve invested in a wind project and you’re concerned about its profitability?

Well, you’re right to be aware of the risk. According to a 2017 study by GCube Insurance Services, resource risk is the most pressing concern for stakeholders in the wind energy sector, and this is not likely to change for a number of years.

In fact, it’s responsible for an estimated $56 billion shortfall in asset values around the globe.

But investors can protect themselves against these risks by putting in place good revenue protection mechanisms, such as Weather Risk Transfer. This means that periods of low supply needn’t affect the profitability of the investment overall. 

We think Trump’s question is a fair one – but he’s wrong about the answer. That will come as good news for consumers and investors alike.

 Download the report: 18 Predictions for Wind Investors in Europe

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