Paul Manson goes where the wind takes him.
Not necessarily because he’s a free spirit, but because the wind is his business.
And even though he’s convinced it’s a financially viable industry, Manson still spends a fair bit of time explaining how that business works.
“One of the core concepts to understand about renewable energy is called the capacity factor,” Manson recently told Business in Vancouver.
The conversation centred on the economic viability of wind power, and took place just days after his company, Vancouver-based Sea Breeze Power Corp., landed a major investor to build its 99-megawatt Knob Hill wind farm on Vancouver Island’s blustery north coast.
About capacity: if a plant has a 100% capacity factor, it could dispatch power whenever needed.
“But that’s not the case because a plant always needs a certain amount of downtime for refits or whatever.”
A modern natural gas plant, he said, would have a capacity factor of 95%, meaning it’s down 5% of the time for maintenance or other reasons.
A coal plant would have an 85% capacity factor because it needs more service than a gas plant.
“When you get into renewables the capacity factors are much lower because there are very few situations where the generating source is available most or all of the time,” Manson said.
In other words, some days the wind doesn’t blow.
A run-of-river hydroelectric project would typically have a capacity factor of about 40% or 45%, he said, while a wind farm in a gusty part of the world would have a capacity factor ranging between 25% and 40%.
In those terms, natural gas and coal plants are more viable than renewable power sources because they can deliver power more consistently. But in B.C. where the government demands new forms of clean power, renewable energy projects have an added lustre.
The Liberal government recently introduced the Clean Energy Act, which, among other things, would have the province generate 93% of its electricity from renewable power sources.
Among clean-power projects, Manson believes wind farms have the upper hand because they’re larger than run-of-river projects.
“Throughout the world there’s going to be a far, far higher availability of wind turbines in greater concentration allowing wind farms of perhaps 100 megawatts [rather] than run-of-river sites, which depend on really rare topography and meteorological conditions,” he said.
He may be onto something.
Twenty-seven projects were recently awarded electricity purchase agreements (EPA) under BC Hydro’s latest clean- power call.
Altogether the projects will produce 3,266 gigawatt hours of electricity per year.
Although 18 of the EPAs went to hydroelectric projects, the six wind farms that received EPAs will produce 1,528 gigawatt hours of electricity.
According to BC Hydro’s calculations, 1,528 gigawatt hours of electricity could power approximately 135,725 homes per year.
“The fact that almost half of the gigawatts of annual electricity we’ll be purchasing comes from wind shows they’re viable and highly competitive,” commented BC Hydro spokeswoman Susan Danard.
And in B.C. wind power remains cheaper to produce than solar and geothermal power, added Ren Orans, founder of San Francisco-based Energy and Environmental Economics Inc. (E3). Over the years, E3 has advised a slew of North American utilities and government agencies (including BC Hydro) about the electricity and natural gas industries.
Gas producers say recent advancements in shale gas extraction have opened up a plethora of new power opportunities. The argument is that natural gas is plentiful, cheap to produce and more environmentally friendly than coal.
Orans has studied both the renewable energy and natural gas markets. He told BIV the cost to deliver natural gas power, based on today’s prices, ranges between $0.06 and $0.09 per kilowatt-hour.
The cost to deliver wind power, Orans said, ranges between $0.09 and $0.16 per kilowatt-hour.
The savings are obvious, but Manson argues that renewable power is a safer bet than natural gas because price contracts last decades.
“Most gas contracts never go out more than five or six years … so an investment made in a new natural gas plant is predicated on a long-term price stability, which may or may not be there,” Manson said. “That contrasts with more or less guaranteed cost stability for anywhere from 20 to 25 years for a wind site.”
He called the shale gas business a “ticking time bomb” and predicted an impending environmental backlash, referring to the amount of water it takes to displace the gas from the earth.
“I think it’s a problem of epic proportion,” he said.
But Orans pointed out other flaws with wind power.
Because wind can’t be summoned on demand, and when it does blow the power it produces isn’t always needed, storage and transmission technologies need to be advanced so power can be held until it’s needed.
The solution, said Orans, is a sophisticated transmission system with multiple consistent power sources that can pick up the load when Mother Nature settles down.
“You’re going to have poor- quality service if you integrate too much [intermittent power] and you don’t have the backup to support it.”
1,528 – the gigawatt hours of electricity B.C.’s six new wind projects will produce annually when built
46% - the share of electricity produced via wind under BC Hydro’s latest clean-power call
$0.06 to $0.09 – the average cost to deliver a kilowatt-hour of natural gas power to customers
$0.09 to $0.16 – the average cost to deliver a kilowatt-hour of wind power to customers