Wind Energy

Fri, 20 Nov 2009 10:44

Wind energy is the oldest form of energy known to mankind, being that it was around the dawn of civilisation when the tie between man, wind and cultural development was formed. Around 5 000 BC, human beings were pushed up the Nile River by the prevailing northerly sea breeze, while ancient architects used wind to naturally ventilate their buildings. By 200 BC, the Chinese were using windmills to pump water and the Persian's, among others, used reed sails to grind their grain.

Over time, man devised a variety of ways to utilise wind energy, which soon spread around the world courtesy of ocean-bound merchants and crusaders. The Dutch took the windmill, refined its design and began draining marshes, lakes and even seabeds. The idea was soon exported to the New World and, as a method of drainage, remains in use still to this day.

Americans developed the water-pumping windmill to a point whereby they could farm vast areas of land that were far from water. These water-pumps even spurred the growth of rail transport by moving water from wells to the new steam locomotives, and soon enough the tall, multi-blade turbines atop big wooden towers became a common sight across the American landscape.

In 1884, the American inventor and entrepreneur, Charles F. Brush, built a mansion in Cleveland. He powered it, via small bank of batteries, with the world's first automatically operated wind turbine generator. It was the first home in Cleveland to have electricity, and the turbine powered it for its entire lifespan of 20 years.

Meanwhile, in the 1890's, a Danish scientist, Poul la Cour, created wind turbines to generate electricity, which were then used to produce hydrogen. La Cour's turbines would evolve into the modern turbines seen today. Small turbines used to light isolated rural buildings were relatively common in the early 20th century, but in the 1940's, on a hilltop in Vermont, the world's largest turbine began operation. At 1.25 MW, it fed electricity to the local utility network for several months during World War II.

However, while various efforts were made to connect to distribution networks, it was only in 1979 when the modern wind power industry began. Danish manufacturers Kuriant, Vestas, Nordtank and Bonus began serial production of small 20 - 30 kW turbines, small in today's size but turbine growth - in physical size and worldwide reach - has expanded many times over.

Global Patterns

The popularity of wind energy, and every other form of renewable energy for that matter, has always fluctuated with the price of fossil fuels. When fuel prices fell dramatically after World War II, interest in wind energy all but disappeared. However, when the price of oil exploded in the 1970's, so did the market for wind turbine generators.

Research and development that followed the ‘Arab Oil Crisis' in the early 70's merely refined the existing knowledge, creating fresh methods of converting wind energy into useable power. Since 1979, there has been slow growth, stunted mainly by society's depressing reliance on fossil fuels. However, lessons learned from 25 years of progress and over a decade of operating wind farms, combined with continuous R&D, have turned wind energy into the fastest growing energy source in the world today.

Since 2005, global wind installations have more than doubled. Last year, global turnover of the sector topped R443 million, and the market for new turbines had a 42% increase, reaching an overall size of 121 188MW. Ten years ago the market for new turbines was
2 187MW. Something worth thinking about was the fact that, according to the International Atomic Energy Agency, not one single nuclear reactor started operation in 2008.

According to the 2008 World Wind Energy Report, the USA has now taken the global lead (25 170MW), ahead of Germany (23 903MW) and Spain (16 740MW). The surge in America's capacity may have had something to do with its new 781.5MW Roscoe Wind Complex in Texas, which spans four counties and 100 000 acres, powers 230 000 homes, involves 300 landowners, cost over R73 billion and is now the biggest in the world.

China overtook India for the first time, and together with the USA, accounted for 50.8% of all turbine sales last year. The pioneer country, Denmark, fell back to 9th place in terms of total capacity, but with wind generating 20% of the country's needs, Denmark remains a global leader.

An African Breeze

The continent holds massive potential, but as yet plays a marginal role with only 530MW of capacity. Some of the world's best wind sites rest in the Northern and Southern areas of Africa, but interest is slowly growing.

Several major wind farms can be found in some of the North African countries like Morocco, Egypt and Tunisia. However, in 2009 and 2010, significant increases are expected from projects already in the development stage. Ethiopia is set to build a R2.4 billion, 120MW wind farm, which would have been Africa's largest if Kenya had not decided to commission a R6.5 billion, 300MW farm in its Lake Turkana district. Kenya's farm, to be completed in 2012, is designed to provide up to 30% of its energy needs.

In March this year, South Africa - whose electricity is the second most greenhouse gas intensive in the world - became the first African country to introduce a renewable energy feed-in tariff (REFIT). This means that customers generating energy receive cash back for selling power to the grid. This very positive move, widely praised by industry players, should enable independent power producers (IPP) to invest and play a pivotal role in tackling the dire energy crisis.

In determining the tariff, one needs to understand that South Africa is competing for investment on an international scale. Spain, for example, has a massive expanse of suitable land, a stable economy as well as a stable government. In order to direct attention to the local market, the National Energy Regulator of South Africa (Nersa) had to construct a very robust REFIT programme, which in the minds and eyes of the industry, it has certainly done.

The resultant tariff, at R1.25 p/kWh, is now one of the most attractive in the world. And that, coupled with the rapidly increasing electricity prices, means the time is ripening for foreign investment, and foreign investment is exactly what we need. The barriers to entry, from an investment angle, are literally immense.

A typical 100MW wind farm would start at R2.1 billion. South Africa's renewable target for wind is 3 000MW by 2020. Putting these figures together, one ends up with a foreign capital expenditure (because very little will come from inside the borders) of more than R60 billion over 10 years. Essentially, it would be foreign money buying foreign turbines, all of which is geared towards developing South African industry without upsetting our own balance of payments. Eskom can keep its hat on.

Francois Roux, CEO of Sarge, a leading wind energy developer in South Africa, says, "I think we'll see three waves of industry progression. The first wave being the pioneers and developers who have identified land, but won't yet have the in-depth knowledge or experience to run them efficiently."

An example of this would be the Darling wind farm in the Western Cape, spearheaded by Dr. Herman Oelsner. While there is little debate that it was a step, if not a leap, in the right direction, many believe he jumped the gun and was a little premature to the market. The truth is that South Africa's electricity prices were still too low when Dr. Oelsner launched the project, depressing the incentive for investors. Coupled with that was the lack of technical and operational experience, which is apparently reflecting in the maintenance of the wind farm.

Francois adds, "This will crystallise into the Second Wave. Once the Power Purchase Agreement (PPA) is consolidated, and the REFIT has been underwritten, then we'll see big power utilities - think Siemens, General Electric or E.ON - enter the scene. These companies will have the knowledge and experience to pick their projects, as well as the capital to run with them.

The third wave will give rise to real skills development and community involvement. By this stage the industry would have developed and there will be service capacity on the land. We should see a ready supply of technical support for the turbines, blades and towers, some of which will start to be made locally because of the stabilised market.

Once the industry reaches this point, individuals or individual groups will be in a position to form communities of wind buyers. For example, 10 people may buy a wind tower and run it as a business, particularly when there is a functioning local manufacturing capacity.

Turbine technology is already very sophisticated but there will be significant advancements over the next 10 years. I see the third wave pushing through within the next 15 years, which is relatively soon. Once the industry really starts moving, which should happen within the next year, we might even see some big farm going up before the end of 2010."

Blowing Minds

An important fact to remember is that fossil fuel and nuclear energy resources are mostly exported, often at huge cost. The fundamental advantage of wind energy is that it replaces that expenditure with human capacity and labour. The bottom line - it creates more jobs than centralised, non-renewable energy sources.

Globally, between 2005 and 2008, the wind sector nearly doubled the number of jobs from 235 000 to 440 000. These highly skilled employees now contribute to the generation of 260TWh of clean electricity.

South Africa is naturally a fledgling in terms of job generation, but consider the following.
Around 350 part-time and eight permanent jobs are created per 100MW of wind energy. The national target is 3000MW, in turn producing 240 highly qualified individuals in technical operation, and up to 10 500 part-time employees.

Francois adds, "During the next 10-year development phase, the industry could employ about 1000 people, which pales in comparison to the stadium projects, but we can't forget the road transport that has to happen. Depending on which towers one puts up, you need four trucks to carry a single rotor, three trucks for the tower, and a couple more for the remaining parts. This means you need at least 12 trucks per tower. At 3000MW, you're looking at 1500 turbines and more than 18 000 truckloads.

Then we turn to the highly specialised cranes, which need to rise 80m into the sky and are delivered on three enormous trucks. The logistics are immense, in every sense of the word. I'd think that a good deal of the resources going into our stadiums could very well be absorbed by these wind farms."

Hurricane Turnarounds

As the global tides turn towards clean, sustainable energy, the long-term view is that wind energy will strengthen significantly. Investments are low-risk due to the fact that generation costs are fixed for the major portion of the turbine's lifecycle. There are no expenses on fuel or operation, and maintenance costs are generally predictable and often marginal in relation to the overall investment.

Moving swiftly along, in much the same way as the turbines themselves, it takes only nine months to put one up. A variety of factors need to be in place before a wind farm can be built, such as PPAs, environmental assessments, rezoning and one year's worth of wind data. But once those factors are in place, construction is incredibly quick, especially when compared to coal and nuclear power plants.

Brush aside - for just a second - the vastly different generation capacity of Eskom's coal-fired Medupi power plant, and recent reports detailing its potentially catastrophic environmental impact. Note that it will take five years before the first unit begins producing energy, and another three years before it is finished, at a total cost (for now) of R78.6 billion. Now imagine 3000MW of clean energy before 2020 at cost nearly R20 billion less.

Furthermore, it takes upward of 15 years for investors to make returns on coal and nuclear plants. South Africa now has a very favourable REFIT policy, and the turnaround times for investors are quick to say the least. Then, once they are up and running, turbines offset their carbon footprint in around three years. The factors in favour of wind are indisputable.

As it stands, the only major argument against wind farms is the aesthetic one, and research has shown that people, more often than not, find horizons of turbines quite pleasing and the motions of the spinning blades cathartic.

Buying In

Animosity toward Eskom is running high at the moment, and it is hard to accept the onset of its new pricing regime. If a wider public voice is anything to go by, one would think that Eskom is battling to do anything right. One must be careful to assume ground level operations are a reflection of the top office debacles.

Francois says, "Eskom is very responsive right now. I honestly think people are misinformed - at their own peril - about Eskom's capabilities. The people I've been dealing with on the ground are very knowledgeable and extremely smart. They know exactly what's going on in the sector, and have capitalised on international expertise. A consultant from Germany was recently here to help with the grid strength, wind feasibility and all the sub-stations across the country. As it stands, Eskom is very far advanced in the field of renewables, especially where wind is concerned."

Furthermore, the Government appears very supportive as well. In an intelligently structured series of tours, Germany invited South African lawmakers, followed by municipalities, and then entrepreneurs, to investigate their setup. NERSA has been there as well, so we'll have many of the same initiatives and strategies as Germany, and there is no debating their successes. The result is a local support system, built from a deep well of knowledge, and now, a healthy drive toward renewable energy in general.

"I personally think that if you can make a difference to the environment, and make money at the same time, you have a very strong incentive. Coupled with solar and based on the fact that we can make most of the components locally, this could very well be the next growth phase of our economy."

In light of the three global crises facing humanity - financial, environmental and energy - it becomes increasingly obvious that wind energy offers solutions to each of these dilemmas. It offers a localised, reliable, sustainable, investor-friendly and clean energy supply. In a South African context, wind energy now falls into a low-risk and stable policy framework based on a strong feed-in tariff.

Stepping back and looking at the sheer scale of wind farm development around the world, one soon realises that these projects are not being launched out of altruistic motivation or to meet Kyoto goals - investors are jumping in because it makes economic sense.

The television tycoon, Ted Turner, said it so eloquently.

"Clean energy is the greatest opportunity the world has ever seen."