In a nutshell: Peaks and troughs (Garrad)

Another of my favourite talks at the Royal Society’s ‘Peaks and Troughs’ workshop is ‘Lessons from the wind energy industry’. Andrew Garrad (as in Garrad-Hassan), describes what worked for onshore wind, as well as what didn’t, and suggested what marine renewables could learn from this experience. His seminar is essential reading (or listening: the sound recording is available) for anyone who is interested in what is driving the current investment climate, and what can be done to weather it.

Here is a summary of the points that stood out for me:

Incentives determine the nature of the market.

Andrew described how completely different markets arose from minor differences in incentives [listen from 12:30 in audio recording]. The following worked for the wind industry:

1. Protectionism rather than capitalism:

• Countries where planning permission strongly favoured domestic manufacturers (Spain, Denmark, Germany) now have a thriving wind turbine manufacturing industry [9:10]. 
• UK lost promising domestic manufacturers by having an open market. Developers not supported locally [11:30] pulled out of wind due to unfortunate circumstances, including the dollar exchange rate (their market was in California) [37:00]. 

2. Consistent, stable, production tariffs:

• China: capital grants were given for installed capacity. This does not incentivise operation; therefore much of the installed wind capacity is not working (insufficient grid capacity, or unrepaired) [10:00]. 
• USA: The intermittent production tax credits lead to sporadic installation, and a boom and bust industry. This encouraged imports, rather than a domestic industry [8:15]. 
• Spain: A stable long term production tariff built an industry from scratch in a decade [9:10]. 

3. Growing from small beginnings:

• UK: planning permission was given initially for the windiest sites. These were also the most environmentally sensitive, and this has subsequently lead to difficulties in planning permission [12:00]. 
• USA: Only big industry could benefit from the tax credits; this lead to a small number of big players [12:30]. 
• Germany: incentives resulted in doctors and farmers buying wind turbines [12:55]. 

Going too big, too early, did not work

• In the 1980s commercial turbines were ~15m in diameter [15:20] and were being welded together in backyards [16:50]. 
• Central government R&D programmes funded ‘macho’ turbines, built by aerospace companies. This major capital expenditure was decoupled from the market [15:45]. None of the macho turbines or associated development programs remain active. Giving large capital grants to companies used to having large amounts of government money will not start an industry [22:10]. 
• Meanwhile, small, highly motivated companies ‘with big egos’ grew commercially [22:30]. 
• They slowly increased turbine diameter; in 1990s diameter levelled off to ~50m. A successful European commission project (WEGA) encouraged small developers to co-operate on tackling technical barriers to further upscaling [17:45]. 

Failures are essential for cost reductions

Types of failure [26:50]:

• Failure is understood and anticipated (e.g. not following best practise) 
• Failure is understood but not anticipated (e.g. extreme loads higher than design load) 
• Failure is not understood and not anticipated (e.g. unexpected behaviour) 

It is only the first type of failure which should cause embarrassment. The second and third types of failure are where you learn something; they are vital and healthy.

Wave is where wind was 25yrs ago – do we need to go through all the agony?

• Survival is success: 25yrs ago, the availability of wind turbines was 55% [27:30]. 
• A proven operation and maintenance strategy can make or break the financial case: Andrew did not believe that any wave developer had this yet [34:00]. 
• Studying the price history of (3-bladed) Bonus wind turbines suggests that the biggest reductions were due to volume production, rather than technology improvements. Andrew believes that wave focuses too much on cost reductions due to technology: instead technological improvements should focus on reliability [23:20]. 
• It is difficult for wave to mimic wind’s successful slow growth, as it is harder to build a backyard wave energy prototype [19:50]. 
• However, by the time wind was successfully upscaled (WEGA), there was 1.7GW installed capacity: a lot more than the installed capacity of marine renewables now. This suggests the value of developing the technology alongside development of installed capacity [18:50]. 
• In the early days of wind there were co-operative deals and technical exchange. It is difficult to repeat this with wave as it is so commercial [21:30].Wave lacks a spirit of co-operation. There has been too early an injection of too small an amount of venture capital: this stops people talking to each other [28:00]. Andrew believes this has slowed development [28:40]. 
• Money alone is not enough: Andrew suggests that wave needs industrial partners with commercial experience and a long-term outlook [36:10]. 
• Scientific advances were important for wind. Virtual tools are essential. It is important that non-linearities are modelled by these tools, and that the tools are validated with physical tests. Andrew did not believe that measurements being made on marine energy prototypes were adequate for validating these virtual tools [31:00]. 

Wave is worth it 

• The scale of the resource justifies the development of  the technology [37:30]. 
• It is hard to tell in the long term what the winning technology will be. The sensible answer is an eclectic energy mix [38:00].