In the earlier post I summarized my estimates on the limits to capacity utilization if production is done either with wind or solar power. Here I will (over)think implication a bit further. 
On their own wind and solar power implied strong restrictions on achievable utilization rates. Overbuilding generation capacity (and associated distribution system) could increase utilization rates, but at the expense of ever increasing amount of wasted power and underutilized power lines. Storage could also help, but smoothing out the production profile would require large amount of underutilized storage capacity. There doesn’t seem to be away around this. Low capacity factor of variable power source has cascading effects elsewhere. If not fixed capacity utilization of end users would be strongly constrained and most likely too low to enable profitable business. On the other hand attempts to fix the problem would imply underutilized generators, power lines, and/or storage. Technical developments will not change this since the problem is not due to specific technology or costs. Are there ways around these problems? Of course…
If you are planning to invest in a new plant producing for example solar panels and you find production to be unprofitable with utilizations rates implied by solar power, your first choice is simply not to invest. If economic preconditions do not exist, production never materializes even if we might find such production desirable or even critically important. Production would either not happen or move to a place where higher utilization rates are possible. Various shades of gray might also exists as they do today especially in the developing world. If production process is such that you could for example store some parts for later use, it might be possible to outsource only those phases which require reliable power elsewhere. Of course, this still opens up possibilities for those not saddled with the same constraints.
Another option is not to rely solely on variable renewables, but to have a fleet of dispatchable generators delivering the power services variable renewables cannot deliver. Today this most likely implies burning fossil fuels, but in principle hydro and nuclear power would work as well. This again implies overbuilding infrastructure and is unlikely to be economically optimal. However this fundamental reliance on existing infrastructure is the order of the day in the developed world.
Visions where variable renewables dominate are aspirational marketing material while on the ground unholy alliance seems to have quietly developed between many renewable and fossil fuel lobbyists. Cozy reliance on fossil fuels enables somewhat more variable renewables to be built before technical limitations become apparent. Supporting this modest buildup (with public money) buys fossil fuel industry social licence as well as removes long term threat of actual decarbonization. Petty about the climate, but the constituency for whom this is actually a priority is weak. This is welcome also for many politicians who are only too happy to project an appearance of activity (at relatively low cost) while their policies imply changes which have a marginal impact on the actual problem. This relates to deep decarbonization in a same way as “champagne socialism” relates to revolution of the proletariat.
I recently read a very interesting book “Fossil Capital” by Andreas Malm on the history of industrial revolution in the United Kingdom. (Note: book is only worth reading until chapter 12. There the author got tired of thinking.) Malm focused on the question of why coal and steam engine won over water power in the early decades of the 19th century. Remarkably coal did not win because water resource would have been insufficient. There was still plenty of untapped potential in the UK. Also coal did not win because it was cheaper. In fact, mechanical power from steam engines was more costly and many were of the opinion that it was also of worse quality. So what happened?
There were many overlapping reasons. For example, factories followed labour to the cities. In the early 19th century it was already clear from the demographics that labour was to be found in the cities. Water power was dispersed and getting meek labour to run the machines in the middle of nowhere was harder. In fact, owners of water powered factories were relatively more dependent on the apprenticeship system providing them with, what can apparently with some justification be called, slave (child) labour. Water power was also more variable than steam, which made it even more important to have well behaved labour that would be willing to work long and irregular hours.
However, it turned out labour did not think their position was optimal (go figure) and started to make noise. This resulted in legal (and actually enforced) restrictions on working hours and gradual improvement on workers position. (It also induced technological change that made large number of especially troublesome workers redundant, but let us not talk about that here.) Owners did not of course like these limitations and lobbied against them, but relatively speaking those using steam found it easier to adapt. They could live with the shorter and more regular working week since reliable power could enable high productivity during working hours. Coal became the backbone of british industrial might and the road was opened for more broadly shared economic growth.
So can we learn something from this? I think we can since economic and social arguments for why coal won have not disappeared. If you listen to todays renewables promotion, you will be constantly bombarded with statements about how huge the potential energy resource is and how cheap it is…or is going to be any day now. Might it be a cause for concern that these two reasons were also promoted by water proponents in the 19th century Britain just when coal was taking over? Might there be a risk, we are discussing beside the point? If excessive reliance on variable renewables end up limiting capacity utilization, is there not a similar risk that water power faced in the 19th century? Who bears the cost of lower utilization? Labour? Lower salaries and/or more irregular working hours anyone? Vacations in the winter since solar power produces mainly in the summer? If push comes to shove and such questions have to be asked, I am quite sure any techno-fetishes we might have, will evaporate.
To me conclusion seems clear. It is unlikely humanity will ever be primarily powered by variable renewables. If fuel etc. costs for dispatchable generators are high compared to the cost of electricity from variable renewables, wind and solar might be economically justified as a part of a more diverse fleet of generators. However, it is also possible that on economic grounds they will remain niche producers whose existence is dependent on subsidies and political good will. Future will tell.
PassiiviIdentiteetti 
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02/04/2017 at 4:03 AM
puuheppa
In Nordic countries, by c. 2025 electric cars can provide about 200 GWh of fast acting bidirectional storage. At scales less than a week. And hydroelectric power has 121 TWh large scale storage capacity. Hydroelectric storage can balance the power generation difference over seasons and of course balance all week level storage requirements that are left from electric cars.
Today electric car batteries costs about 150 euros per kWh which means that 100 kWh electric car battery costs about 15 000 euros. This is significantly less than 15 years worth of gasoline and combustion engine maintenance costs. 15 years worth of gasoline costs about 15 to 30 000 euros. (depending on annual mileage and level of assumed carbon tax).
This is by far more than enough storage capacity to go 100% wind solar and hydroelectric power by 2030 Actually, hydroelectric power storage is so vast that there is enough storage capacity to be sold to England and Germany and other local grids.
Also, for new capacity solar power is already profitable investment in Nordic countries. All rooftops and parking lots could be covered with solar panels. This is because solar power generation and also distributed storage is done behind the meter. And local solar generators with electric cars as distributed storage, can sell grid balancing services for national grid and grid utility companies. All electric cars and solar panels behind single transformer could act as aggregated virtual power plant.
Although Trump is advocating coal power, there certainly is no renaissance of coal to be expected, similarly as there was no renaissance of nuclear power. These old technologies are just too expensive new energy generators. And every windmill and solar power plant reduce the profitability of these baseload generators and more hydroelectric power capacity can be reserved for storage instead of baseload generation.
And as a storage, electric cars and hydroelectric reservoirs have almost zero marginal cost. Acting as an aggreagted storage, does not affect on total lifespan of electric car.
02/04/2017 at 5:51 AM
Jani-Petri Martikainen
Vehicle to grid reduces battery lifetime, costs a lot, and implies also underutilized cars on top of the current massive underutilization. Hydro is nowhere near adequate and is typically needed in…let us say places like Norway. It seems that little of what you said actually relates to the topic of the post namely capacity utilization.
02/04/2017 at 6:54 AM
puuheppa
There is no empirical evidence that vehicle to grid reduces the lifespan of electric car battery, if properly optimized. On the opposite there is weak empirical evidence that for proper optimization of lifespan of lithium-ion battery, battery should be in constant light use. Storage without use harms electric car batteries, even if charge level is maintained at optimal storage voltage.
Vehicle to grid does not add relevant cost because it can use same inverter hardware as solar panels. Fortum is actually developing this kind of virtual power plant in Sweden where electric car and solar panels are using common hybrid inverter that is aggregated and controlled by Fortum.
Of course hydroelectric power can be used in Nordic countries. Nordic countries have common electricity market. Therefore you cannot separate Norway out from that common market pool. Of course it requires investment on transmission lines and new high peak power turbines need to be added to existing reservoirs. But electricity transmission over long distances is very cheap. Today there is about 40 GW installed hydroelectric capacity, but capacity need to be increased if hydrostorage is to be exported into England, Germany and France.
Therefore, we do not need to look peak kW power of wind and solar. But e. G. In Nordic countries we have demand for electricity about 400 TWh. Hydroelectric power can provide about 200 TWh of that. And therefore wind and solar need to provide another 200 TWh.
We can also subsidize existing nuclear power, so that Swedish and Finnish nukes are kept in use albeit they are unprofitable. This can provide about 80 TWh. Therefore we need to add 120 TWh wind and solar. And that’s it for 100% zero emission electricity. Hydroelectric power and electric cars are more than sufficient storage medium.
Also, please note that although marginal cost of electric car storage is low, it still adds considerable value to the grid because electric cars are cheaper as peaked power plants than fossil fuel generators. Therefore, this added value should be considered when people are buying electric cars with large battery and vehicle to grid support. Electric cars can also provide back up power if the local grid architecture is done as semi-independent microgrid. This kind of microgrid architecture saves also a lots of costs of grid utility companies.
Therefore, near future prospects are huge if you just want to accept the possibilities of new technology.
02/04/2017 at 7:12 AM
Jani-Petri Martikainen
“There is no empirical evidence that vehicle to grid reduces the lifespan of electric car battery, if properly optimized. On the opposite there is weak empirical evidence that for proper optimization of lifespan of lithium-ion battery, battery should be in constant light use. ” citation for this?
02/04/2017 at 3:32 PM
Syltty
Puuhella puhuu jälleen puutaheinää.
1) Auton akku kuluu käytössä, joten siitä saatava sähkö on todella kallista.
2) Syöttösysteemien rakentelu autoihin maksaa. Tällaiset autot ovat kalliimpia kuin sellaiset, joissa sähkön syöttöä ei ole.
3) Sähkön hajasyöttäminen verkkopn ei ole teknisesti niin yksinkertaista. Nostaa taas verkkojen rakennus- ja ylläpitokustannuksia.
4) Isot sähkön siirtolinjat ovat kalliita, ei halpoja. Hinta esim Fenno-Skan 2 kaapelissa (800MW) oli n. miljoona e per km. Näitäkään ei ikinä lasketa uusiutuvien kustannukseksi.
02/04/2017 at 4:35 PM
Syltty
“If we want to actually send energy back from the car to the electricity grid, this gets much more complex, and, you know, that’s something that I don’t see being a very economic or viable solution — perhaps ever, but certainly not in the near term. You know, the additional wear and tear and degradation on your vehicle battery has a fairly high cost, and many of the people and small businesses looking at this today, you know, don’t take into account fully that degradation cost, and also the additional interconnection cost, because if you interconnect your vehicle, you do have regulations that play a part — it has to interconnect in the same way that a solar system would on someone’s home or on a business, which have different standards so that they can protect line operators and people on the grid.”
http://reneweconomy.com.au/tesla-explains-evs-selling-electricity-grid-not-good-sounds-47156/
03/04/2017 at 12:34 AM
Proteos
One of the big differences between the days of yore and now, is that we have built extensive networks enabling the transfers of production in one place to another. In the case of electricity, it’s the high voltage lines. In the 19th century, they were forced to rely on more decentralized means. Which meant 2 choices were possible in the UK: being close to a river mill and having the people come, or go to the people and install a steam engine.
So is it easier to make people come or to come to the people? It depends on whether you depend on some relatively rarely found skills or not. The new factories relied on some engineers and qualified workers, so it was probably easier to come to them. Factories win because of specialization of (at least some) workers.
The big questions with intermittent renewables running the show are thus:
* Will there exist a technical possibility to have the same (approximate) quality of electricity as now?
* Will it be at a cost not too far higher than the current situation? Will the higher costs, not all financial, be accepted by the people?
Actually the utilization rate is not that important, the monetary/political/social costs are more important. After all if a solution with 1% utilization rate is cheaper and better considered than a 99% utilization rate solution, there’s no reason to shun it. That’s one of the main arguments of renewables enthusiasts: renewable electricity’s gonna be the cheapest option (not too cheap to meter, but you get the idea) even with lower utilization!
One of the big blind spots in most of the places is the built up of high voltage lines that would be entailed. They are massively unpopular! The only place where they have been forced to face the issue is in Germany, and some delays have been inevitably announced…
Finally on the lobbyists (in Europe):
* fossil fuel lobbyists know the public opinion is firmly against them, so they know thay have to show at least some goodwill. They also know they’re indispensable in the short and medium term. So they’ve no interest to rail against anyone else.
* renewable lobbyist know the public opinion is firmly behind them, so they can push whatever argument suits them! What they want is more business
* nuclear lobbyists are sidelined, because most public opinion is against them, worse than fossil fuels. And their tech can be dispensed with thanks to a mix of the other 2. They’ve only failures to speak up for new projects in Western Europe
So yeah proponents of renewable energy are virtually unopposed, speaking publicly at least.
03/04/2017 at 7:59 AM
Jani-Petri Martikainen
Good points! While I agree that the utilization rate for the power producers might not be relevant if “production is free” whether or not it is relevant for consumers is of course a different matter. They have other costs than energy costs as well and savings in energy costs would have to be larger than increased labour and capital costs from lower utilization. Now maybe there are examples of industries where both capital and labour costs are very low, but I would hazard a guess that these are exceptions.
03/04/2017 at 8:22 AM
puuheppa
Proteos, Microgrid architecture for electricity distribution provides higher quality electric grid with lower overall transmission cost structure. Today’s grid infrastructure is not exactly very cost efficient and we need to upgrade it no matter what you think about renewables.
For example, SolarEdge’s HD Wave inverter architecture pushes inverter cost to near zero, therefore DC to AC transformation is no longer cost barrier for seamless integration of DC and AC systems within microgrid.
03/04/2017 at 10:35 PM
Proteos
@puuheppa
I can not help but to be amazed by the localism boosterism popularity, more than by renewables enthusiasts. One of the things that is close to certain is that a big renewables expansion also requires a large expansion of the high voltage line network, to smooth local variations of production to some extent.
That’s where Jani-Petri’s point is basically spot on: no one’s gonna build stuff to have it standing doing nothing most of the time, at least at first. This means that some high voltage line build up is necessary concurrently to intemittent renewables. Microgrid can have some uses, but some realities of renewables production can’t be dealt with microgrids in the near to medium term.
To state the obvious, local is not necessarily better than global. I don’t expect my bananas to be produced in Europe (okay, there are the Azores and Madeira but it only gets you so far…)
04/04/2017 at 7:16 AM
puuheppa
Proteos, you are wrong with that. This is probably, because you do not have detailed understanding of modern and near future microgrid hardware and most importantly you lack understanding of the cost structure of modern grid infrastructure.
The point is that today’s grid infrastructure is not efficient at all but it wastes a lots of money on balancing grid frequency. And especially perhaps the largest cost train in modern grid is that local grids behind transformer need to be oversized so that they can carry on maximum peak load in Saturday evening when everybody hit electric sauna on simultaneously or cooking their Christmas dinner simultaneously.
Also huge waste for grid utility companies is that air cables are too unreliable, therefore it is required to dig transmission cables into ground. And this is a drain in resource use.
Therefore, you assume that current grid infra would be efficient but it is not. It is not at all efficient if you study transmission grid cost structure in detail.
Also, HVDC transmission is very affordable. It costs 200 million euros per 1000 km per GW. And more over, the cost is getting down rapidly as inverter technology is getting down.
Actually we should start to phase out three phase transmission grid altogether. And have only HVDC transmission grid that connects local microgrids. This would be the most affordable solution, but naturally, it is very difficult to start building completely new grid infrastructure above existing infrastructure. But meanwhile all new grid infrastructure investments should be done in terms of HVDC, microgrids, electric cars, distributed batteries and solar panels. Therefore we can start phasing out extremely expensive and extremely unreliable three phase grid infrastructure.
Although we have avoided continent wide blackouts in Europe, they have happened in America. And these blackouts have cost huge amounts of money. And preventing them in Europe has been hugely expensive.
11/04/2017 at 10:31 AM
Syltty
Puuheppa
Deep decarbonization scenarios (over 80% decarbonized) with 100% RE calls for overbuilding capacity 2…3 times peak demand. This is very, very expensive because overbuilding such vast amounts of generation capacity is expensive, but also grid expenses for this kind of overbuilding will skyrocket.
For example:
“Pleßmann and Blechinger (2017) present
a scenario for decarbonizing the European
power system by 2050 (achieving 98.4% below
1990 emissions levels) that relies heavily on
an expansion of wind and solar energy. Total
installed capacity in this scenario is 4.2-times
larger than the peak demand. ”
Whoa! Total capacity with 4x peak demand! You build everything FOUR TIMES so costs are going to be 4x LCOE! If wind power costs for exampla 50e/MWh, then it 4x that capacity will cost 200 e/MWh and this cost has to come from somewhere.
Click to access EIRP-Deep-Decarb-Lit-Review-Jenkins-Thernstrom-March-2017.pdf
11/04/2017 at 6:59 PM
puuheppa
Syltty, that scenario does not consider that in Nordic countries there is 121 TWh hydroelectric storage that is relatively affordable to make bidirectional.
Also it does not consider that majority of solar power production happens behind the meter. And it is not fed back to the grid.
Also it does not consider, that nuclear power plants in Nordic countries can be shut down in April and open again in August. This costs somewhat but cost penalty is acceptable.
And so on. It misses huge amounts of minor details, but together also these minor details makes it relevant. For example, today in Finland there is used lots of money on digging cables into ground. In smart grid with semi-independent microgrid architecture, there is no need to dig cables into ground. All these hundreds of minor cost saving details are missing from that scenario.
12/04/2017 at 4:07 PM
Syltty
” Nordic countries there is 121 TWh hydroelectric storage that is relatively affordable to make bidirectional. ”
Do you mean punped storage? No way.
“Also it does not consider that majority of solar power production happens behind the meter. ”
What? Overbuilding is good when it is not sold to grid? In what way does not connecting to grid cut costs (other than grid )?
“Also it does not consider, that nuclear power plants in Nordic countries can be shut down in April and open again in August.”
Maybe that is because using nuclear energy means that it would not be 100% RE-scenario?
And if you are going to use nukes, what is rationale behind shutting them down for summer? You just like to build more RE for fun?
“For example, today in Finland there is used lots of money on digging cables into ground. In smart grid with semi-independent microgrid architecture, there is no need to dig cables into ground. ”
Your microgrid will never work like that. Those semi-independent microgrid-architecture still needs electricity from somewhere and if you don’t have it just here, you just need to import it from places far far away and you need grid for this.
Or are you going to build distributed small scalable nuclear reactors all around to reduce need for long grid lines?
“All these hundreds of minor cost saving details ”
If they are minor, their total influence to overall costs will be minor as well.
02/05/2017 at 9:58 PM
Teemu Rovio
I find your analysis credible. However, your system consisted exclusively of two renewables and a large battery. This system is expensive and infeasible. The true sinks for excess wind and solar power are likely to be more varied, e.g. power-to-gas, carbon capture and storage, and manufacture of potable water. These are all useful and extremely insensitive to timing.
Without such sinks, solar and wind would have a very poor capacity value.
– Teemu Rovio
03/05/2017 at 5:05 AM
Jani-Petri Martikainen
CCS might happen, but indications so far do not seem encouraging. Synthetic fuels will be needed,but I am pretty sure they involve subtantial capital investment and would require high utilization rates if they are ever to be economically viable. For this reason something like nuclear (or fossil fuels with CCS or maybe hydro) will produce that same synthetic fuel more cheaply. This low capacity utilization of variable RES seems very hard to avoid.
27/11/2017 at 12:56 PM
Nuclear Energy Is the Fastest and Lowest-Cost Clean Energy Solution | Thoughtscapism
[…] utilization. Variability in an energy source inherently lowers the degree of that utilization. In another blog post, Jani-Petri draws interesting parallels from a point of history when coal power won out against […]