Resource Documents — latest additions
Documents presented here are not the product of nor are they necessarily endorsed by National Wind Watch. These resource documents are provided to assist anyone wishing to research the issue of industrial wind power and the impacts of its development. The information should be evaluated by each reader to come to their own conclusions about the many areas of debate.
Author: Poser, Hans; et al.
Over the last decade, well-intentioned policymakers in Germany and other European countries created renewable energy policies with generous subsidies that have slowly revealed themselves to be unsustainable, resulting in profound, unintended consequences for all industry stakeholders. While these policies have created an impressive roll-out of renewable energy resources, they have also clearly generated disequilibrium in the power markets, resulting in significant increases in energy prices to most users, as well as value destruction for all stakeholders: consumers, renewable companies, electric utilities, financial institutions, and investors.
Accordingly, the United States and other countries should carefully assess the lessons learned in Germany, with respect to generous subsidy programs and relatively rapid, large-scale deployment and integration of renewable energy into the power system. This white paper is meant to provide further insight into the German market, present an objective analysis of its renewable policies, and identify lessons learned from Germany, and to a lesser degree, other European countries.
The rapid growth of renewable energy in Germany and other European countries during the 2000’s was due to proactive European and national policies aimed at directly increasing the share of renewable production in their energy mixes through a variety of generous subsidy programs. Two main types of subsidy programs for renewable power developed in Europe include feed-in tariffs (FITs), which very quickly became the policy of choice for Germany and many other European countries, and quota obligation systems.
FITs are incentives to increase production of renewable energy. This type of subsidy guarantees long-term (usually for 20 years) fixed tariffs per unit of renewable power produced. These fixed tariffs normally are independent of market prices and are usually set by the government, but can be structured to be reduced periodically to account for technology cost decreases. The level of the tariffs normally depends on the technology used and the size of the production facility. Because of their generosity, FITs proved capable of quickly increasing the share of renewable power, but since the FITs are set administratively, it is difficult to meet renewable energy goals in the most cost-effective way possible.
The quota system is the European equivalent to the Renewable Portfolio Standard used in the United States. Whereas FIT programs set the price for the resources and let the market achieve whatever level it can at that price, the quota system is a market based system that sets the desired amount of renewable resources and lets the market determine its price. Under the quota system, compliance is proven through renewable certificates that can usually be traded.
Germany used FITs to help finance its energy policy, “Energiewende” (the energy transformation), that calls for a nuclear-free and carbon-reduced economy through a vast deployment of renewable technologies.
Because FITs levels were administratively driven and slow to adapt to the evolution of the solar market, the incentive became excessively generous, which initiated an uncontrolled development of renewables, which, in turn, created unsustainable growth with a myriad of unintended consequences and lessons learned. Accordingly, this analysis will focus on Germany, whose FIT policies allowed it to realize the highest production of non-hydro renewable electricity (wind and solar) in Europe.
The most important lessons learned include:
- Policymakers underestimated the cost of renewable subsidies and the strain they would have on national economies. As an example, Germany’s FIT program has cost more than $412 billion to date (including granted and guaranteed, but not yet paid FIT). Former German Minister of the Environment Peter Altmaier recently estimated that the program costs would reach $884 billion (€680 billion) by 2022. He added that this figure could increase further if the market price of electricity fell, or if the rules and subsidy levels were not changed. Moreover, it is estimated that Germany will pay $31.1 billion in subsidies for 2014 alone. A recent analysis found that from 2008 to 2013, Germany incurred $67.6 billion (€52 billion) in net export losses because of its high energy costs, compared to its five leading trade partners. Losses in energy intensive industries accounted for 60 percent of the total losses. This was further highlighted by a recent International Energy Agency report, which stated that the European Union (EU) is expected to lose one-third of its global market share of energy intensive exports over the next two decades due to high energy prices, expensive energy imports of gas and oil, as well as costly domestic subsidies for renewable energy.
- Retail prices to many electricity consumers have increased significantly, as subsidies in Germany and the rest of Europe are generally paid by the end users through a cost- sharing procedure. Household electricity prices in Germany have more than doubled, increasing from €0.14/kilowatt hour (kWh) ($0.18) in 2000 to more than €0.29/kWh ($0.38) in 2013. In Spain, prices also doubled from €0.09/kWh in 2004 to €0.18/kWh in 2013 ($0.12 to $0.23) while Greece’s prices climbed from €0.06/kWh in 2004 to €0.12/kWh in 2013 ($0.08 to $0.16). Comparatively, household electricity prices in the United States average $0.13/kWh, and have remained relatively stable over the last decade.
- The rapid growth of renewable energy has reduced wholesale prices in Germany, with adverse consequences on markets and companies. Large subsidies and guaranteed interconnection to the grid for renewable energy led to unexpected growth over the last 10 years in Germany and elsewhere. The merit order in Germany’s wholesale markets switched as renewables, with a zero variable cost of production, take precedence over thermal plants. As a result, wholesale prices in Germany for base load have fallen dramatically from €90-95/megawatt hour (MWh) in 2008 to €37/MWh in 2013. This has created a large amount of load and margin destruction for utilities that built and financed thermal plants. Many new gas-fired power plants have been rendered uneconomical, leaving owners to shore up their balance sheets by undertaking large divestitures of some of their holdings, as well as by reducing their operational costs. The impact to utilities’ shareholder value has been dramatic and has come on top of the impact of the global financial crises, and, in the case of Germany, the decommissioning of nuclear power. The German utilities have seen their stock plunge by nearly 45 percent since 2010. Some power plant operators in Germany and other countries, like the United Kingdom, are now calling for capacity payments to ensure that reliability is maintained and not threatened by the shutdown of various thermal power stations.
- The wholesale pricing model has changed as a result of the large renewable energy penetration. In the past, wholesale prices followed the demand curve, but in Europe they now react to the weather; going down when the sun shines and the wind blows, and up when—at times of high demand—the sun does not shine and the wind does not blow. Price forecasts and power trading require more skill sets and different know-how, including weather forecasting.
- Fossil and nuclear plants are now facing stresses to their operational systems as these plants are now operating under less stable conditions and are required to cycle more often to help balance renewables’ variability. Investments in retrofits will be required for these plants in order to allow them to run to these new operational requirements. Moreover, renewable resources are dramatically changing thermal plants’ resource planning and margins. As a result, many of these plants are now being retired or are required to receive capacity payments in order to economically be kept online.
- Large scale deployment of renewable capacity does not translate into a substantial displacement of thermal capacity. Because of the variability of wind and solar, there are many hours in the year during which most generation comes from thermal power plants, which are required to provide almost complete redundant capacity to ensure the reliability of the system. In turn, grid interventions have increased significantly as operators have to intervene and switch off or start plants that are not programmed to run following market- based dispatching. For instance, one German transmission operator saw interventions grow from two in 2002 to 1,213 in 2013. It is higher amounts of renewables with low full load hours relative to the total portfolio of power production that creates greater variability and strains on the grid. In the case of Germany, it is the large-scale deployment of both wind and solar that has impacted the entire system.
- Large-scale investments in the grid are being required to expand transmission grids so they can connect offshore and onshore wind projects in the north of Germany to consumers in the south of the country. The total investment cost for the build-out of German onshore and offshore transmission systems is estimated to be around $52 billion (€40 billion) over the next 10 years. Moreover, the grids are now being challenged to meet the dynamic flows of variable renewables and require significant additional investment to accommodate increased penetration of renewables. All of these costs will ultimately be passed on to electricity consumers. This has not gone unnoticed in Germany or in the EU. A report was released in late February 2014 by an independent expert commission mandated by the German government, which concluded that Germany’s current program of incenting renewables is an uneconomic and inefficient means to reduce emissions and therefore should be stopped. Moreover, the European Commission released new guidelines on April 9, 2014, with effect starting in 2017 that will correct market distortions. It will essentially ban all FIT subsidies and introduce technology agnostic auctions as the only incentives for renewables.
- Overgenerous and unsustainable subsidy programs resulted in numerous redesigns of the renewable support schemes, which increased regulatory uncertainty and financial risk for all stakeholders in the renewable energy industry. As the lessons above show, some European renewable energy regulatory regimes were inappropriately structured, gamed by market players, or made obsolete by market conditions. As a result, governments and regulators corrected unsustainable regulatory regimes by reducing the level of subsidies, sometimes retroactively, and modifying the rules of the programs. These changes often resulted in significant value destruction to various renewable players and their respective investors. This continued regulatory uncertainty across Europe is increasing the cost of capital to European renewable companies, which the rating agency Fitch just recently highlighted as the most likely sector in the European energy market to receive a downgrade in 2014.
These lessons learned are important and provide factual analyses to assist other countries’ electric industry stakeholders’ in creating more technically-efficient, cost-effective and sustainable ways to integrate renewable energy.
U.S. stakeholders should take into consideration the lessons learned from Germany and Europe:
Utilities should incorporate those lessons into their strategic planning, load forecasting, financial planning, trading, and regulatory affairs organizations. Decisions about current and future investments should then be made with this new analysis in mind.
Renewable companies should calculate appropriately the true costs of grid enhancements, capacity, and other important measures when submitting their plans to commissioners, investors, and other stakeholders.
Legislators and regulators should use the lessons learned from large scale integration of renewables in Germany and elsewhere in Europe to ensure a stable transition of renewables as part of the overall power portfolio while ensuring high reliability of power, stability of pricing to all users, as well as minimal value destruction to both utilities and renewable companies.
Finally, consumers must be made aware of the tradeoffs to a large portfolio of renewables and the necessary requirement for a smooth transition as part of the overall power portfolio.
In conclusion, the lessons learned in Europe prove that the large-scale integration of renewable power does not provide net savings to consumers, but rather a net increase in costs to consumers and other stakeholders. Moreover, when not properly assessed in advance, the rapid, large scale integration of renewables into the power system will ultimately lead to disequilibrium in power markets, as well as value destruction to renewable companies, utilities, and their respective investors. The U.S. has the opportunity to incorporate these lessons learned to ensure the sustainable growth of renewable energy over the long-term, for the benefit of all customers.
Felix ab Egg
FAA Financial Advisory (Finadvice), Adliswil, Switzerland
Author: Martuzzi, Marco; and Kriebel, David
Better health, better environment, better science: better use the precautionary principle.
Article 174 of the Amsterdam Treaty of the European Union says “Community policy on the environment […] shall be based on the precautionary principle”. European law, at its highest level, is explicit and uncompromising. As promotion and protection of human health is one of the key motivations of environmental preservation, the provision of the Treaty is good news for public health too. In fact the importance and relevance of the precautionary principle in the health domain has been attracting growing interest. Ministers of health, together with ministers of environment of the Member States in the World Health Organization (WHO) European Region (52 of them in 2004) declared: “We reaffirm the importance of the precautionary principle as. a risk management tool, and we therefore recommend that it should be applied […]”. These are only two of many acts or laws where the precautionary principle is referred to. So what is this principle and why is it important for public health as well as the environment?
Born in the environmental domain in the 1970s, the precautionary principle gained political profile in the 1980s and 1990s, and has attracted the attention of many involved in matters of environmental protection. Despite its resonance, there is no unanimously agreed definition of the principle. Quite simply, it is usually taken to state that lack of scientific certainty must not be used as a reason to ignore or postpone preventive or remedial action when there are other good reasons to do so, as has happened many times in the past. The prescription to err on the side of caution, the “better safe than sorry” approach, may seem little more than common sense. Indeed it is implied by the principles of clinical medicine, in particular by the principle of non-maleficence, more familiar to the public health profession. The concept of precaution is deeply rooted in the history of public health, and environmental health is no exception. Several established risk factors, such as air, water and soil contaminants, are known for their adverse effects on human health. The best strategy for dealing with these is prevention, and some prudence in, for example, setting protection standards, as when safe levels are divided by factors of 10 or more to allow for possible inaccuracy in risk estimates. But this is not the crucial area of application of the precautionary principle. Prevention applies to known causes; precaution, strictly speaking, is more relevant for uncertain determinants, complex scenarios, suspected risk factors, unpredictable circumstances.
Caution may be common sense, but such common sense seems to be badly needed, and in big supply, at times when we are faced with increasing complexity and uncertainty, when potential health threats can be far-reaching and irreversible; when technological development and societal organisation evolve fast enough to outpace, in numerous cases, the accumulation of data, knowledge .and evidence; when the adverse consequences of policies may be felt at great distances, or by future generations. In areas such as climate change, chemical safety, genetically modified organisms and nanotechnologies, to mention just a few, the potential for health damage is great. The deterioration or loss of life support systems, the persistence of ubiquitous endocrine-disrupting chemicals, the cross-breeding of genetically modified species, the introduction of nanoparticles in human tissues, for example, may be harmful to health through direct but also indirect effects; some of these effects can be difficult to detect and measure, but with serious consequences, perhaps borne by the most vulnerable, or elsewhere, or tomorrow. Pointing out that many of us live longer and better than never before is of limited relevance: we are highly uncertain of what scenarios we might be facing, and we do not know how likely different outcomes are; furthermore, we do not know what these outcomes might be at all. Often, we do not know what we do not know.
The precautionary principle, however, is not only about uncertainty, ignorance and caution, but also about policy and action. Applying precaution does not result in systematically rejecting new technologies or in a “zero tolerance” attitude. On the contrary, despite the lack of a universally accepted definition, several implications on how to exercise precaution while dealing with uncertainty emerge in several formulations of the precautionary principle and can be seen as its distinctive elements: (1) the principle suggests to adjust the balance of burden of proof from the need to prove that agents or technologies are harmful before they are removed or controlled (an onus usually borne by recipients) to the duty (for the proponents or beneficiaries) to demonstrate that they can be used safely; (2) it stresses the fundamental importance of participation, openness and transparency in decision making under uncertainty, recognising that participatory models of decision-making are an almost inevitable response to high uncertainty and complexity; (3) it recommends that, when faced with a possible threat, alternative courses of action should be considered and explored, preferably before arriving at the awkward evaluation of acceptable levels of risks, where one might have, for example, to assign monetary values to life and death. After all, the precautionary principle was born as the German Vorsorgeprinzip – that is, the “foresight” principle, a more positive concept than precaution, which emphasises a proactive, anticipatory, imaginative attitude according to which preventing or bypassing exposures and possible adverse effects is preferable to mitigating them or analysing whether they are worth the benefits.
What about scientific evidence? Science has a central role to play to achieve these goals, especially when used critically. Invoking the use of sound science to support decisions is ambiguous: “evidence-based” policy, meant to imply “evidence-determined” decisions, is not a realistic option in modem governance. The direct translation of evidence into wise decisions is, in fact, fraught with difficulties. First, defining and framing the policy question is a social process, not an expert task. Second, the same evidence can have different implications depending on the underlying ethical viewpoint, especially when a utilitarian framework clashes with a deontological one. Third, evidence on the problem may be solid and abundant, while evidence on the solutions (costs and acceptability of policies, for example) may be scant. Fourth, the expert-driven process of identifying optimal decisions in the light of available knowledge is vulnerable to manipulation by vested interests. And so on.
Rather than determining univocally the preferable course of action, available evidence and scientific reasoning must be part of the deliberative process, perhaps on par with the other interests and values at play. The literature on the precautionary principle has paid considerable attention to these questions. For a start, the assumptions and limitations of science must be realised and made explicit. For example, epidemiological enquiry following the Popperian scheme, of hypothesis generation and testing typically has high specificity and low sensitivity – that is, false positives are penalised more heavily than false negatives. As taught in textbooks, the recurrent snags of epidemiological studies, such as measurement error, exposure misclassification and many forms of bias, push risk estimates towards the null more often that the other way around; complex questions on broad health determinants are broken down into workable operational research goals – an often necessary reductionist strategy that makes it difficult to recompose the full picture. These intrinsic characteristics, per se, are not a good reason for rejecting the current scientific paradigm (in the Kuhnian sense), if only because a new paradigm has yet to be articulated. Nonetheless, enhanced methods are needed for knowing, describing and dealing with uncertainty. Innovative tools are desirable for more comprehensive risk assessment and comparison of alternatives, for studying upstream health determinants, multi-causality, complex systems. Thus, precaution requires more and better science. As precaution can also stimulate technological innovation and create new markets through the development and production of cleaner alternatives, the precautionary principle is best seen as an overarching concept, which “has relevance to the whole risk assessment, management and communication process”, as declared by European Ministers in the 4th Ministerial Conference on Environment and Health.
The debate on these themes is instructive, sometime controversial, but fascinating, and has been instrumental for reflecting critically about public health, its environmental determinants, the relevance of scientific evidence and its use in decision-making-generally speaking, about science and society. We hope that the debate continues and involves more people engaged in public health.
Occupational and Environmental Medicine, 2007;64:569-570. doi: 10.1136/oem.2006.030601
Dr Marco Martuzzi
WHO European Centre for Environment and Health, Rome Office, WHO Regional Office for Europe
The reactionary principle: inaction for public health
Martuzzi’s commentary on the precautionary principle is welcome and timely. I will make a few largely supportive comments while perhaps anticipating and addressing some concerns that readers may have.
The 1998 Wingspread consensus statement characterised the precautionary principle this way: “when an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically”. The statement went on to list four central components of the precautionary principle:
- taking preventive action in the face of uncertainty;
- shifting the burden of proof to the proponents of an activity;
- exploring a wide range of alternatives to possibly harmful actions; and
- increasing public participation in decision-making.
A skeptical reader may ask: isn’t this just a fancy new name for what any responsible public health scientist has always done?
On the contrary, precaution brings important new insights into occupational and environmental health policy and the science which informs it. To illustrate this, it may be useful to give a name to the policy framework in which occupational and environmental health research currently operates: it is the reactionary principle. Under this system, anyone is free to introduce a new hazard into the environment, and governments must wait until an overwhelming body of evidence is accumulated before intervening. Each new regulatory action is challenged with the objective of slowing down or stopping public oversight of production and distribution of chemicals and technologies. We can see reactionary principle inaction in the unconscionable delays in regulating a long list of hazards whose risks were clear long before effective actions were taken to control them: asbestos, benzene, dioxins and PCBs. While these are “old” hazards, a reactionary approach is evident as well in many current controversies in our field, including the potential health risks from: hexavalent chromium, artificial butter flavouring, and the antimicrobial agent triclosan.
The reactionary principle operates through these key components (referring back to the list for precaution may be useful):
- requiring incontrovertible evidence of harm for each hazard before taking preventive action;
- placing the burden on the public (or government agencies) to show that each chemical, material or technology is harmful;
- not considering potential health and environmental impacts when designing new materials and technologies; and
- discouraging public participation in decision-making about control of hazards and introduction of new technologies.
Perhaps framing the status quo this way helps the reader to see the kinds of changes in the science/policy interface which Martuzzi and others are advocating.
What can be done to shift from reaction to precaution? One important step would be to reduce. the corrupting influence of economic interests on; the evidentiary base of environmental health regulation. Recent evidence documents how some corporations seek to impede regulation through the intentional manufacturing of uncertainty about the hazardousness of their products. Clearly, removing conflicts of interest and intentional manipulation of data would make it easier to act in a more precautionary way. But there is more that we can do as responsible public health scientists. I will mention two examples.
Causal inference is a critical step in the recognition and control of hazards, and epidemiologists play an important role. We are taught to distinguish causation from correlation using guidelines like those of Bradford Hill. A precautionary approach would emphasise that this judgement is not purely scientific; our public health responsibility requires that we ask “when do we know enough to act as if something is causal?” This will depend not only on the strength of evidence but also on the availability of alternative ways of achieving the same social good (how essential are artificial butter flavour and antimicrobial socks?), and on the consequences of inaction or acting in error.
When we continue to study the same known hazards while thousands of widely dispersed chemicals remain without basic toxicology, we may inadvertently be promoting inaction by implying that more must be learned before action can be taken. To avoid this, environmental and occupational health scientists can learn from colleagues in climate science. There is now a (nearly) global consensus that human impact on climate is likely to have serious negative consequences. Climate scientists have managed to communicate an important yet complex message: much more needs to be learned about climate AND we know enough that we cannot remain silent about the need for action. These scientists have stepped out of their roles as data gatherers and analysts, and spoken publicly about the need for action.
While striving to do the best science possible, we should be aware of the potential impact of our research and of our social responsibility to do science that protects human health and the environment. The precautionary principle is useful in focusing attention on the need for this balance.
Occupational and Environmental Medicine, 2007;64:573. doi: 10.1136/oem.2006.031864
Dr David Kriebel
School of Health and Environment, University of Massachusetts, Lowell
Author: Uadiale, Solomon; Urbán, Évi; Carvel, Ricky; Lange, David; and Rein, Guillermo
The wind energy industry is one of today’s leading industries in the renewable energy sector, providing an affordable and sustainable energy solution. However, the wind industry faces a number of challenges, one of which is fire and that can cast a shadow on its green credentials. The three elements of the fire triangle, fuel (oil and polymers), oxygen (wind) and ignition (electric, mechanical and lighting) are present and confined to the small and closed compartment of the turbine nacelle. Moreover, once ignition occurs in a turbine, the chances of externally fighting the fire are very slim due to the height of the nacelle and the often remote location of the wind farm. Instances of reports about fires in wind farms are increasing, yet the true extent of the impact of fires on the energy industry on a global scale is impossible to assess. Sources of information are incomplete, biased, or contain non-publically available data. The poor statistical records of wind turbine fires are a main cause of concern and hinder any research effort in this field. This paper aims to summarise the current state of knowledge in this area by presenting a review of the few sources which are available, in order to quantify and understand the fire problem in wind energy. We have found that fire is the second leading cause of catastrophic accidents in wind turbines (after blade failure) and accounts for 10 to 30% of the reported turbine accidents of any year since the 1980’s. In 90% of the cases, the fire leads to a total loss of the wind turbine, or at least a downtime that results in the accumulation of economic losses. The main causes of fire ignition in wind turbines are (in decreasing order of importance): lighting strike, electrical malfunction, mechanical malfunction, and maintenance. Due to the many flammable materials used in a wind turbine (eg. fiberglass reinforced polymers, foam insulation, cables) and the large oil storage used for lubrication of mechanical components, the fuel load in a turbine nacelle is commonly very large. The paper finishes with an overview of the passive and active protection options and the economics (costs, revenue and insurance) of wind turbines to put in context the value of a loss turbine compared to the cost and options of fire protection. We hope that this paper will encourage the scientific community to pursue a proper understanding of the problem and its scale, allowing the development of the most appropriate fire protection engineering solutions.
SOLOMON UADIALE, ÉVI URBÁN, RICKY CARVEL, School of Engineering, University of Edinburgh, UK
DAVID LANGE, SP Technical Research Institute of Sweden, Sweden
GUILLERMO REIN, Department of Mechanical Engineering, Imperial College London, UK
Fire Safety Science 11: 200 (2014)
Author: McMurtry, Robert
The first public meeting to describe the proposal for a 75 MW wind energy generating system on Amherst Island, dated December 2011, put forward a single document to address the potential adverse health impacts, a paper by Knopper and Ollson (2011) “Health effects and wind turbines: A review of the literature.” Other references have been added to the company website but no further document has been prepared in advance of the second public meetings to be held on March 5th and 6th, 2013. Drs. Knopper and Ollson have been retained as consultants by Algonquin Power Co.
The purpose of this commentary is to evaluate the Knopper and Ollson (2011) paper on its own merits, including strengths and weaknesses, errors of commission and omission (Part I) as well the existing state of knowledge as of January 2013 18 months after Knopper and Ollson’s (2011) publication (Part B). A considerable amount of new information continues to evolve (Part B and Appendix C) which appears to have been passed over by Algonquin Power Co.