Glenn's Comments

There is no reason that the grid operators cannot control demand.

WindFuels is a novel process that uses electric energy to recycle CO2 into liquid fuels - such as gasoline, diesel, and jet fuel.

The process begins with electrolysis to produce hydrogen, then uses the hydrogen in two subsequent chemical reactions with CO2 to produce hydrocarbon fuels. So any excess energy can effectively be "dumped" into the production of new gasoline...

If the grid operators were to contract a low price for electricity in exchange for control over the demand of the electrolyzer banks... then in the moment when 2800 MW of new residential demand turned on, then 2800 MW of electricity going to the electrolyzers could be shut off - they can be ramped up or down on a ms basis.

With sufficient WindFuels facilities in any given grid, there would be no problem handling even 75% wind penetration, or 100% nuclear penetration.

I thought I'd make a quick response to the root article before returning to the lab.

One thing that the EIA clearly did not factor into their projections is the potential for extreme events to change a person's risk assessment concerning the status quo.

In Texas this summer, the all time record monthly average temperature was beaten by ~2.5 degrees. As a result, there were several days of completely insufficient capacity on the grid. In North Texas, real time prices spiked over $2000/MWh ($2.00/kWh) during the afternoon for several days.

This was an extreme heat wave coupled with an extreme drought. The causes were random weather anomalies exaggerated by global warming... but it may in fact be many years before such an anomalous weather pattern is repeated (we just don't know how global warming will unfold, we know it makes anomalous weather patterns worse and more common... but this was an extremely abnormal event, so it's unlikely Texans will see its equal in the next decade).

HOWEVER,

Despite the fact that the event was an anomaly, many Texans will be traumatized by their power bills... It would not surprise me if there is a MASSIVE increase in distributed solar build-out all across the conservative state in the coming years, as a solar panel built in Texas last year would have saved a significant portion of its cost just in the summer of 2011.

Similarly, a single event in Saudi Arabia might cause oil prices to spike to $500/bbl for a year, or the drought could force multiple coal and nuclear plants to power down, sending average electricity prices over $1/kWh for several months thoughout the Southern Midwest...

Any such event would shift purchasing patterns for decades, and it's likely that these shifts will always lean towards a permanent conditioning towards increased purchase of sustainable energy or conservation.

That's just my two cents.

Jamie - this final point to Rogerkb is the reason why hydrocarbon fuels are inherently a better investment than ammonia. Ammonia is simply too cheap to consider in today's market. The capital cost for the electrolyzers and chemical plant and energy inputs would far exceed the market price for the product, which means the process would never be economically viable.

For WindFuels, capital costs would be ~$0.60/gallon, O&M costs would be ~0.20/gallon, energy costs would be ~$0.45/gallon, CO2 costs would be ~$0.30/gallon, and water costs would be ~$0.02/gallon. Total of ~$1.57/gallon. Today's pre-tax wholesale price for gasoline, jet fuel, and diesel all average just shy of $3/gallon, which implies a profit of ~$1.40/gallon before any other considerations (tax credits, fuel subsidies, grid integration subsidies, carbon offsets, etc). These numbers reflect the same price that we have for electrolyzers within our models... so if you incorporate Rogerkb's objections, the profit is reduced to ~$1.15/gallon.

But a theoretical ammonia plant would not be significantly less on capital or O&M expenses (or water, not that that matters), would be ~half as much on energy expenses, and of course would require no CO2.

The numbers work out to ~$1.00/gallon for ammonia. But today's market price for ammonia is $560/tonne, which works out to ~$1.40/gallon. So before any other consideration, with ammonia you are looking at a potential of only ~$0.40/gallon. If you then address rogerkb's criticism and use current pricing for electrolyzers, the profit drops to only $0.15/gallon.

One of these has a market potential to grow... and the other one is just another non-viable concept that requires infinite subsidies and support in order to keep investors interested.

Rogerkb,

A note on the electrolyzer costs. You are correct that the first several WindFuels plants would require prices that are substantially higher than they are today, as they chicken/egg problem you mentioned does exist to some extent.

However, our current economic models reflect prices that are ~2.5X the projected ultimate price that the DOE assumed. Our modeled prices are more than half of current prices for large systems that have been contracted this year... and even at today's very small electrolyzer market there has been considerable price reduction in electrolyzers within the past 3 years.

If you were to double the price of electrolyzers that we estimated within our economic models (which again would price the electrolyzers at today's prices), then the cost of producing a gallon of diesel fuel would increase by 26 cents. The cost of producing a gallon of gasoline and jet fuel would increase by 25 cents.

So we wouldn't be able to compete with oil at $50/bbl using current electrolyzer costs, but we would easily be able to compete with the cost of oil today, and would easily be able to compete with the cost of oil in ~6 years time, when we should be deployment ready. After the first year of deployment, we should see the electrolyzer market increase by an order of magnitude, which would likely reduce the cost of electrolyzer production by 60%.

While electrolyzers are expensive, the price of oil is more than high enough to make the impact on plant profitability negligible.

Rogerkb,

First, let me say thank you for reading our website and considering our approach... but there are a few things you've misunderstood, and we may wish to revise the wording of our website in light of that.

To start, we do plan on using the electrolyzers intermittently - between 33-50%. In regions with high wind energy penetration, you'll often see a great deal of curtailment during any hour of the day, so we cannot claim to know that we will only be electrolyzing water at night, in fact we probably won't.

The inclusion of the RTO market data was merely intended to show that, during any given day, the 8 cheapest hours of electricity average below $10/MWh (open market price), and this pricing has been maintained for over 3 years and held constant (in some cases even dropping). But those 8 hours are not contiguous, nor are they honest representations of any given minute, as in many RTO's and ISO's the energy is traded in 5-minute intervals, and the historic pricing data merely averages the price out by the hour.

So we were using market data to support our electricity price estimates in high wind regions, but we don't plan on simply running the electrolyzers for 8 contiguous hours at night, merely for an average of 8 hours/day every day... The grid managers would then use our electrolyzers as a "pressure valve" for the system - any time excess energy starts ramping up over a given 15-minute period they could direct it towards us at a fixed price rather than paying as much as $500/MWh for someone else to take that energy off their hands.

This would serve a region with high wind penetration (typical capacity factor >35%) by giving an artificial floor for real time energy trades, and eliminating the need to curtail their wind power. In 2009, the state of Texas alone curtailed more than 5 TWh of wind power, with not one day passing without some curtailment.

The technology would benefit wind power integration. That is the intent.

Steven,

I had a similar reaction when I saw the "almost 2%" stated for American wind generation. While the actual number is 2.3%... That's not a great error, but that happened to be a stat that I knew cold, so when I saw it recorded incorrectly, I was curious why the WWEA didn't know that number.

Thank you Clee,

For injecting some sense into the conversation.

I don't know why renewables advocates are so vocally opposed to nuclear energy. It's ultra-low carbon energy, which can be implemented everywhere... but it's far more expensive than wind energy (at least double the cost/MWh), and is subjected to an eventual price spike (peak uranium will likely happen within 30 years)...

So while being clearly much greater benefit to the planet compared to coal, nuclear power would only be preferred in regions that have poor renewable resources - such as the American Southeast. In those regions, it's costly... but nuclear power is a hell of a lot better than coal.

The panicmongering BS propaganda that this site indulges in to demonize nuclear is intellectually insulting.

Anonymous,

Transmission lines would only work if there was no further build-out. But even as low as 5% wind penetration in any region will result in curtailment issues... all transmission lines do is expand the region. But if that broader region is facing 5% or more of their energy being generated from wind, then you'll see curtailment.

The industrial Northern Midwest is remarkably well interconnected. There's no lack of transmission... but the total amount of wind energy that was curtailed in MISO nearly tripled last year alone.

Continued build-out for wind is more or less assured provided that there are sufficient integration solutions available.

For now, it seems that even without a solution for integration, wind will continue to expand for at least the next decade - building out at least 100 GW (a rough minimum estimate of additional wind power needed to meet the portion of state RPS requirements that will fall to wind). Right now, the only "solution" that the power companies are using for wind integration involves "curtailment" or pitching the turbines blades so that they produce less power.

A real solution is being developed.

If you are going to WindPower, and want to see how wind can continue to penetrate in grids that are facing overgeneration, stop by Doty WindFuels: booth #2699c.

Dimitar,

I agree with the spirit of your assertion, but it isn't oil that is the direct competitor of PV - it's coal, gas, wind, hydro, and geothermal.

In windy areas PV will never compete with wind power. Period.

Outside of windy areas, PV's most direct competition is natural gas, which due to fracking has become very inexpensive again... and unless something changes with laws regarding fracking gas will remain inexpensive.

Oil would have to HOLD well over $200/bbl in order for EV's to make any sense.

Fireofenergy,

I had missed your last comment to me, which resulted in a long delay for my reply. Sorry about that.

As for your question, it will eventually be possible to extract the CO2 from the dilute atmosphere, but that will require far more energy than extracting it from a source emitter's smokestack. There should be plenty of CO2 for several decades, and we assume that membrane technology will continue to improve over that time - so by 2040 when the CO2 emissions decrease beyond the (then) large demand for CO2 from ever-scaling WindFuels plants... either they'll extract from the dilute atmosphere, or they'll have a reason to re-fire those ethanol refineries (a typical ethanol facility produces more than twice the mass of CO2 as it does fuel... Cellulosic ethanol produces more than 4 times as much CO2 as it does fuel, so a WindFuels plant would be able to produce several gallons of gasoline for every one gallon of biofuel ethanol).

Frank,

Sorry for the delayed response, but I didn't notice that you had responded to my last.

As to your response. It is not uncommon to have higher output from existing dams during periods of higher rains, and lower output during periods of lower rains. Similar to higher and lower output from wind farms during variable winds. There's nothing to get excited about concerning wind curtailment either... that happens all the time.

But assuming that the waters will remain high - that this is some indication of a trend that will remain constant. That is foolish.

2011 will see total hydropower yields between ~230 and 290 TWh (typical year-to-year weather variability). Still far less than what was seen in 1997 (~360 TWh). 2011 will probably see ~105-110 TWh of wind generation. In 2020, hydropower will probably generate between ~220 and 280 TWh. 220 will see wind generation of between 250-350 TWh.

One is growing, the other is not. If something new comes up and hydropower starts growing again, then I'll start cheering for it. But it hasn't done anything interesting in over a decade, so I don't have much enthusiasm for it anymore.
*shrug*

These prices are all significantly inflated.

There are VERY few wind projects that cost $2/W anymore, and none go up without significant state incentives. Modern costs are closer to installed $1.6/W, or 80% of your projections.

Furthermore, you didn't specify the projected capacity factor that was used here... but it's clearly pretty low. Capacity factors are increasing with hub height, so if you are using a 25% capacity factor then that is unsupportable. Capacity factors of 32-35% are more probable - at least before curtailment is considered.

Otherwise, this was a very informative discussion. Thank you.

Frank,

The exact extent of how rampant small hydro is can easily be seen - hydropower generation is dropping.

It's not enough to even keep a baseline in most states (Maine is doing a decent job of maintaining, on average, but they aren't increasing their generation... most other states are seeing generation drop).

As for tidal, deep ocean currents, etc... call me when you have something built, and I'll evaluate it. I'm not opposed, I'm just highly skeptical of the economics.
*shrug*

Until then, I'll watch as wind increases its generation by 20+
TWh/year, and hydropower drops by ~8 TWh/year, and I'll cheer the energy source that is making a positive difference.

(BTW, I don't represent wind. I'm working on a fuels synthesis process that uses electricity. We plan on USING wind, because wind is cheap and growing quickly... but we're happy to use any carbon neutral electrons if you have a better option. I just don't believe there is presently a better option).

Frank,

I apologize for using symbols or abbreviations that you are unfamiliar with. TWh is an abbreviation for terawatt-hour, or 1 million megawatt-hours.

I assure you that the information I provided is accurate, or at least as accurate as the information the DOE has on the subject.

I didn't look back all the way to 1991, but you're saying that in 1991 Maine produced 3.94 TWh, while the data for 2010 still stands at 3.66 TWh. So using your numbers, the total amount of energy produced has decreased by ~7% over the past 20 years.

This article was touting how much hydropower was GROWING, I contested that, saying that there's no growth in energy generation, and you refute me by showing data that energy production has decreased by ~7% since 1991.

I don't understand what it is that you are disagreeing with here.