WEBVTT 00:00:00.000 --> 00:00:02.410 align:middle line:90% [SQUEAKING] 00:00:02.410 --> 00:00:04.338 align:middle line:90% [RUSTLING] 00:00:04.338 --> 00:00:05.302 align:middle line:90% [CLICKING] 00:00:05.302 --> 00:00:10.830 align:middle line:90% 00:00:10.830 --> 00:00:12.210 align:middle line:90% DAVID HSU: My name is David Hsu. 00:00:12.210 --> 00:00:15.400 align:middle line:84% I'm a professor of Urban Studies and Planning at MIT. 00:00:15.400 --> 00:00:17.700 align:middle line:84% And this is another installment of my lecture 00:00:17.700 --> 00:00:21.407 align:middle line:84% series on urban energy systems and policies. 00:00:21.407 --> 00:00:23.490 align:middle line:84% Today, we're going to talk about renewable energy. 00:00:23.490 --> 00:00:25.920 align:middle line:84% And we've been talking in this class about consumption, 00:00:25.920 --> 00:00:29.130 align:middle line:84% how we consume energy in our personal transportation 00:00:29.130 --> 00:00:32.340 align:middle line:84% and our buildings and our consumption of material goods, 00:00:32.340 --> 00:00:34.650 align:middle line:84% quite often produced by industrial manufacturing 00:00:34.650 --> 00:00:35.820 align:middle line:90% processes. 00:00:35.820 --> 00:00:37.770 align:middle line:84% And I've emphasized in the class that we 00:00:37.770 --> 00:00:41.070 align:middle line:84% need to make all those uses more efficient in order 00:00:41.070 --> 00:00:43.328 align:middle line:84% for us to help decarbonize cities. 00:00:43.328 --> 00:00:45.120 align:middle line:84% But now it's time for us to turn to talking 00:00:45.120 --> 00:00:47.490 align:middle line:84% about renewable energy, the fundamental building 00:00:47.490 --> 00:00:50.790 align:middle line:84% blocks that'll enable cities to transition 00:00:50.790 --> 00:00:53.340 align:middle line:84% from their current energy sources, which mostly depend 00:00:53.340 --> 00:00:57.840 align:middle line:84% on fossil fuels, to renewable energy sources that will help 00:00:57.840 --> 00:01:01.170 align:middle line:84% cities decarbonize and avoid the worst consequences of climate 00:01:01.170 --> 00:01:02.260 align:middle line:90% change. 00:01:02.260 --> 00:01:06.210 align:middle line:84% So today, in the first part I'll talk about wind energy. 00:01:06.210 --> 00:01:10.140 align:middle line:84% The materials for today, if you have the PDF or hard copies, 00:01:10.140 --> 00:01:12.180 align:middle line:84% you can click on these pink links, 00:01:12.180 --> 00:01:14.500 align:middle line:84% and they'll take you to the various resources. 00:01:14.500 --> 00:01:18.130 align:middle line:84% These are the materials we'll be discussing today. 00:01:18.130 --> 00:01:21.560 align:middle line:84% And just to refresh our memory where we are, 00:01:21.560 --> 00:01:24.010 align:middle line:84% these are, again, the decarbonization pathways 00:01:24.010 --> 00:01:25.120 align:middle line:90% from the Williams et al. 00:01:25.120 --> 00:01:26.830 align:middle line:90% 2021 paper. 00:01:26.830 --> 00:01:29.810 align:middle line:84% This is the 100% renewable energy scenario. 00:01:29.810 --> 00:01:32.120 align:middle line:84% So on the left-hand side of the Sankey diagram, 00:01:32.120 --> 00:01:34.270 align:middle line:84% you can see that all of our primary energy sources 00:01:34.270 --> 00:01:38.380 align:middle line:84% are essentially decarbonized, renewable energy sources, 00:01:38.380 --> 00:01:41.650 align:middle line:84% solar, wind, and biomass being the three largest 00:01:41.650 --> 00:01:44.040 align:middle line:90% sources of energy. 00:01:44.040 --> 00:01:45.790 align:middle line:84% And what I want to emphasize in this class 00:01:45.790 --> 00:01:48.520 align:middle line:84% is that we're going to-- or the next few classes 00:01:48.520 --> 00:01:51.220 align:middle line:84% is we're going to talk about your renewable toolbox. 00:01:51.220 --> 00:01:54.280 align:middle line:84% Like, I define sustainable energy or sustainable 00:01:54.280 --> 00:01:59.050 align:middle line:84% production of energy as categories of wind, solar, 00:01:59.050 --> 00:02:03.520 align:middle line:84% hydropower, wave power, hydropower, geothermal power, 00:02:03.520 --> 00:02:06.760 align:middle line:84% and MacKay gives nuclear a question mark because it's not 00:02:06.760 --> 00:02:07.690 align:middle line:90% clear whether or not-- 00:02:07.690 --> 00:02:10.780 align:middle line:84% it's not clear to MacKay and still to me 00:02:10.780 --> 00:02:13.923 align:middle line:84% whether nuclear power counts as sustainable. 00:02:13.923 --> 00:02:16.340 align:middle line:84% But what I want to emphasize with your renewable toolbox-- 00:02:16.340 --> 00:02:17.882 align:middle line:84% and we're going to develop this theme 00:02:17.882 --> 00:02:20.540 align:middle line:84% in the next few lectures-- is that it has become increasingly 00:02:20.540 --> 00:02:24.530 align:middle line:84% cheap, increasingly clean, but these fundamental technologies 00:02:24.530 --> 00:02:27.140 align:middle line:84% require transitioning our energy system 00:02:27.140 --> 00:02:29.030 align:middle line:84% and how it works, because they work 00:02:29.030 --> 00:02:33.180 align:middle line:84% in different ways in our existing fossil fuel resources. 00:02:33.180 --> 00:02:36.180 align:middle line:84% And so just to give a definition of renewable resources, 00:02:36.180 --> 00:02:39.000 align:middle line:84% why we are focused on particular technologies, 00:02:39.000 --> 00:02:41.040 align:middle line:84% there are technologies that derive energy 00:02:41.040 --> 00:02:43.290 align:middle line:84% from natural processes, they can be 00:02:43.290 --> 00:02:45.540 align:middle line:84% regenerative over short periods of time, 00:02:45.540 --> 00:02:48.130 align:middle line:90% and they will not be depleted. 00:02:48.130 --> 00:02:50.230 align:middle line:84% We can talk about whether or not renewables 00:02:50.230 --> 00:02:54.850 align:middle line:84% are defined as clean, net zero, or carbon-free. 00:02:54.850 --> 00:02:59.380 align:middle line:84% All these definitions or these various descriptors 00:02:59.380 --> 00:03:03.540 align:middle line:84% have slightly different meanings. 00:03:03.540 --> 00:03:05.340 align:middle line:84% And of course, I want to emphasize 00:03:05.340 --> 00:03:08.040 align:middle line:84% energy efficiency is also necessary for us 00:03:08.040 --> 00:03:09.720 align:middle line:90% to achieve decarbonization. 00:03:09.720 --> 00:03:12.840 align:middle line:84% The 100% renewable scenario I showed you in the last slide 00:03:12.840 --> 00:03:14.580 align:middle line:84% and from the Williams et al. papers 00:03:14.580 --> 00:03:16.680 align:middle line:84% and many-- most of the decarbonization 00:03:16.680 --> 00:03:18.540 align:middle line:84% studies all emphasize the fact that we 00:03:18.540 --> 00:03:21.960 align:middle line:84% can't build renewable resources as fast as we need 00:03:21.960 --> 00:03:24.270 align:middle line:84% to to meet our mid-century goal, so it's 00:03:24.270 --> 00:03:26.820 align:middle line:84% going to be necessary to use energy efficiency. 00:03:26.820 --> 00:03:29.010 align:middle line:84% And that can be the technologies, products, 00:03:29.010 --> 00:03:32.310 align:middle line:84% services, or changes in behaviors or expectations 00:03:32.310 --> 00:03:35.520 align:middle line:84% that reduce the energy required for certain processes or tasks 00:03:35.520 --> 00:03:36.300 align:middle line:90% or services. 00:03:36.300 --> 00:03:40.430 align:middle line:84% And we also talked about that a few lectures ago. 00:03:40.430 --> 00:03:42.170 align:middle line:84% And the other thing I want to emphasize 00:03:42.170 --> 00:03:44.030 align:middle line:84% about your renewable toolbox is that it 00:03:44.030 --> 00:03:46.070 align:middle line:90% has different limitations. 00:03:46.070 --> 00:03:50.300 align:middle line:84% We have to think about key factors or key categories 00:03:50.300 --> 00:03:53.140 align:middle line:90% of problems to solve. 00:03:53.140 --> 00:03:55.780 align:middle line:84% First, there's the total potential of renewable energy 00:03:55.780 --> 00:04:00.340 align:middle line:84% that we can achieve in a meaningful period of time. 00:04:00.340 --> 00:04:03.700 align:middle line:84% Second, as you may have heard, many renewable technologies 00:04:03.700 --> 00:04:06.940 align:middle line:84% may be intermittent in terms of how they derive energy 00:04:06.940 --> 00:04:09.138 align:middle line:90% from natural processes. 00:04:09.138 --> 00:04:10.930 align:middle line:84% And something I've emphasized in this class 00:04:10.930 --> 00:04:13.870 align:middle line:84% and I think is particularly relevant to cities and land use 00:04:13.870 --> 00:04:17.829 align:middle line:84% is, how much land use or how much land take is required 00:04:17.829 --> 00:04:20.440 align:middle line:90% to build renewable resources? 00:04:20.440 --> 00:04:23.590 align:middle line:84% Renewable resources are quite often less energy dense 00:04:23.590 --> 00:04:27.170 align:middle line:90% than fossil fuel energy systems. 00:04:27.170 --> 00:04:29.560 align:middle line:84% But just to give you a sense of the intermittency 00:04:29.560 --> 00:04:34.480 align:middle line:84% or what the kind of sources of energy for wind and solar look 00:04:34.480 --> 00:04:39.220 align:middle line:84% like, there's a few kind of fun visualizations 00:04:39.220 --> 00:04:42.690 align:middle line:90% I'll click on here in a moment. 00:04:42.690 --> 00:04:46.650 align:middle line:84% If we look at the wind right now across the United States, 00:04:46.650 --> 00:04:50.310 align:middle line:84% that first link takes us to this wind map that you can see here. 00:04:50.310 --> 00:04:53.770 align:middle line:84% You can see that the wind has a directionality. 00:04:53.770 --> 00:04:56.490 align:middle line:84% It's concentrated in some places, 00:04:56.490 --> 00:04:59.790 align:middle line:84% quite clearly blowing in the Mountain West and the Midwest 00:04:59.790 --> 00:05:04.140 align:middle line:84% and Texas much more than it is here on the East Coast 00:05:04.140 --> 00:05:06.330 align:middle line:90% where I'm recording this video. 00:05:06.330 --> 00:05:09.570 align:middle line:84% If we look at the global map of wind, 00:05:09.570 --> 00:05:11.620 align:middle line:84% you can also see something very different. 00:05:11.620 --> 00:05:14.760 align:middle line:84% You can see that the wind is much stronger over the oceans 00:05:14.760 --> 00:05:16.980 align:middle line:90% than it is over the land. 00:05:16.980 --> 00:05:18.990 align:middle line:84% This is a pretty neat little visualization. 00:05:18.990 --> 00:05:21.510 align:middle line:84% You can actually see any part of the world 00:05:21.510 --> 00:05:22.980 align:middle line:90% and see where the wind is. 00:05:22.980 --> 00:05:24.600 align:middle line:84% And of course, these little vectors 00:05:24.600 --> 00:05:26.520 align:middle line:84% and these kind of field vectors show you 00:05:26.520 --> 00:05:31.000 align:middle line:84% that there may be a storm off of, I think, Mexico here. 00:05:31.000 --> 00:05:33.540 align:middle line:84% There may be some very strong winds in the upper North 00:05:33.540 --> 00:05:34.410 align:middle line:90% Atlantic. 00:05:34.410 --> 00:05:36.330 align:middle line:84% But you can see in almost all the cases 00:05:36.330 --> 00:05:40.500 align:middle line:84% that the wind is much stronger offshore than it is onshore, 00:05:40.500 --> 00:05:44.530 align:middle line:84% and that'll be a key theme we'll talk about today. 00:05:44.530 --> 00:05:50.470 align:middle line:84% So just going back to our slides on wind, again, 00:05:50.470 --> 00:05:53.860 align:middle line:84% to emphasize that your renewable toolbox is going to require 00:05:53.860 --> 00:05:55.673 align:middle line:90% deploying these at scale. 00:05:55.673 --> 00:05:58.090 align:middle line:84% It's going to require us to essentially build a new energy 00:05:58.090 --> 00:05:59.995 align:middle line:90% system to avoid climate change. 00:05:59.995 --> 00:06:01.870 align:middle line:84% And so we just want to focus on this building 00:06:01.870 --> 00:06:04.730 align:middle line:84% block for a second and the challenges. 00:06:04.730 --> 00:06:08.190 align:middle line:84% Our first building block is going to be solar. 00:06:08.190 --> 00:06:10.740 align:middle line:84% I'll talk about how solar technologies have 00:06:10.740 --> 00:06:13.410 align:middle line:84% become drastically cheaper in the next lecture. 00:06:13.410 --> 00:06:16.440 align:middle line:84% But we have to build approximately 47 times 00:06:16.440 --> 00:06:18.450 align:middle line:84% more solar in the United States to achieve 00:06:18.450 --> 00:06:20.100 align:middle line:90% our mid-century goals. 00:06:20.100 --> 00:06:23.910 align:middle line:84% Wind as another building block, that has been very successful. 00:06:23.910 --> 00:06:27.660 align:middle line:84% Probably our highest amount of capacity of renewable energy 00:06:27.660 --> 00:06:29.183 align:middle line:90% comes from wind right now. 00:06:29.183 --> 00:06:30.600 align:middle line:84% We still have to actually increase 00:06:30.600 --> 00:06:33.450 align:middle line:84% the amount we've built by 28 times over what we've 00:06:33.450 --> 00:06:36.210 align:middle line:90% built over the last 40 years. 00:06:36.210 --> 00:06:39.900 align:middle line:84% And storage, geothermal, and electrolysis, 00:06:39.900 --> 00:06:43.140 align:middle line:84% that can be used to create hydrogen 00:06:43.140 --> 00:06:44.678 align:middle line:90% from renewable resources. 00:06:44.678 --> 00:06:46.470 align:middle line:84% Those are fundamentally the building blocks 00:06:46.470 --> 00:06:48.690 align:middle line:84% that are going to be part of your renewable toolbox. 00:06:48.690 --> 00:06:51.120 align:middle line:84% But I want to emphasize this toolbox is probably 00:06:51.120 --> 00:06:53.520 align:middle line:84% the toolbox you'll be using for much of your careers. 00:06:53.520 --> 00:06:57.870 align:middle line:84% And to your credit or to your advantage, all these building 00:06:57.870 --> 00:07:00.510 align:middle line:84% blocks have gotten increasingly cheap over time, 00:07:00.510 --> 00:07:03.030 align:middle line:84% will probably get cheaper over time. 00:07:03.030 --> 00:07:06.300 align:middle line:84% All you have to figure out in your careers is-- 00:07:06.300 --> 00:07:08.610 align:middle line:84% I'll give you a to-do list for your careers. 00:07:08.610 --> 00:07:10.110 align:middle line:84% All you have to do is figure out how 00:07:10.110 --> 00:07:12.720 align:middle line:84% to finance these new technologies, which sometimes 00:07:12.720 --> 00:07:15.450 align:middle line:90% have higher upfront costs. 00:07:15.450 --> 00:07:16.950 align:middle line:84% All you have to do is figure out how 00:07:16.950 --> 00:07:21.720 align:middle line:84% to install the capacity, the 47 times more solar, 28 times more 00:07:21.720 --> 00:07:25.410 align:middle line:84% wind to generate electricity or energy. 00:07:25.410 --> 00:07:28.050 align:middle line:84% You have to figure out how to transmit this power across-- 00:07:28.050 --> 00:07:30.540 align:middle line:84% from the places that it's generated to the places 00:07:30.540 --> 00:07:31.633 align:middle line:90% that it's needed. 00:07:31.633 --> 00:07:33.300 align:middle line:84% You have to figure out how to distribute 00:07:33.300 --> 00:07:35.620 align:middle line:90% this power within cities. 00:07:35.620 --> 00:07:37.620 align:middle line:84% You have to figure out how to balance this power 00:07:37.620 --> 00:07:40.830 align:middle line:84% across the grid, because electricity can not 00:07:40.830 --> 00:07:43.950 align:middle line:84% very easily be stored, though we'll talk about storage. 00:07:43.950 --> 00:07:46.710 align:middle line:84% You have to figure out how to balance the system so that when 00:07:46.710 --> 00:07:50.580 align:middle line:84% you're generating power in one part of the continental US, 00:07:50.580 --> 00:07:52.800 align:middle line:84% like you saw the wind blowing in the Mountain West, 00:07:52.800 --> 00:07:56.460 align:middle line:84% it can be consumed elsewhere, like on the West Coast. 00:07:56.460 --> 00:07:59.100 align:middle line:84% You have to figure out how to make this grid reliable. 00:07:59.100 --> 00:08:00.517 align:middle line:84% You have to figure out how to make 00:08:00.517 --> 00:08:04.960 align:middle line:84% this grid resilient in the face of increasing climate changes. 00:08:04.960 --> 00:08:07.500 align:middle line:84% And of course, you have to site all these resources and all 00:08:07.500 --> 00:08:08.620 align:middle line:90% these transmission lines. 00:08:08.620 --> 00:08:11.130 align:middle line:84% So again, your renewable toolbox has 00:08:11.130 --> 00:08:13.650 align:middle line:84% some fundamentally really interesting, really 00:08:13.650 --> 00:08:16.800 align:middle line:84% increasingly cheap and cost-effective building blocks 00:08:16.800 --> 00:08:18.120 align:middle line:90% on the left-hand side. 00:08:18.120 --> 00:08:20.100 align:middle line:84% This is your to-do list to build a new energy 00:08:20.100 --> 00:08:22.760 align:middle line:90% system on the right-hand side. 00:08:22.760 --> 00:08:24.940 align:middle line:84% So the agenda for our next few classes 00:08:24.940 --> 00:08:27.490 align:middle line:84% is going to emphasize a series of different technologies. 00:08:27.490 --> 00:08:30.790 align:middle line:84% And I'll try to teach you a series of different concepts 00:08:30.790 --> 00:08:32.860 align:middle line:84% that are useful to think about the nature 00:08:32.860 --> 00:08:34.309 align:middle line:90% of those technologies. 00:08:34.309 --> 00:08:36.100 align:middle line:84% So today, we'll talk about wind basics, 00:08:36.100 --> 00:08:38.260 align:middle line:84% and we'll use that to illustrate capacity factors 00:08:38.260 --> 00:08:41.409 align:middle line:84% and the levelized cost of energy. 00:08:41.409 --> 00:08:44.140 align:middle line:84% On the next lecture, we'll talk about solar basics, including 00:08:44.140 --> 00:08:48.070 align:middle line:84% adoption costs, learning curves, and siting issues. 00:08:48.070 --> 00:08:49.930 align:middle line:84% And then the third lecture from now, we'll 00:08:49.930 --> 00:08:51.670 align:middle line:84% talk about storage and geothermal 00:08:51.670 --> 00:08:54.280 align:middle line:84% as examples of how we might develop new niches 00:08:54.280 --> 00:08:58.680 align:middle line:84% or new technologies in the existing energy system. 00:08:58.680 --> 00:08:59.950 align:middle line:90% Renewable energy potential. 00:08:59.950 --> 00:09:00.930 align:middle line:90% What is it? 00:09:00.930 --> 00:09:03.000 align:middle line:84% There's a potential amount of renewable resource 00:09:03.000 --> 00:09:04.390 align:middle line:90% that can be generated. 00:09:04.390 --> 00:09:07.260 align:middle line:84% If you want to see maps for pretty much every country 00:09:07.260 --> 00:09:09.750 align:middle line:84% in the world or globally, you can see the International 00:09:09.750 --> 00:09:12.000 align:middle line:90% Renewable Energy Agency. 00:09:12.000 --> 00:09:17.100 align:middle line:84% IRENA has a very good resource of renewable energy potential 00:09:17.100 --> 00:09:18.680 align:middle line:90% studies. 00:09:18.680 --> 00:09:20.340 align:middle line:90% IRENA was founded in 2009. 00:09:20.340 --> 00:09:23.310 align:middle line:84% It's the agency specifically focused on renewables. 00:09:23.310 --> 00:09:25.830 align:middle line:84% If you go to this link, you can see potential studies. 00:09:25.830 --> 00:09:28.860 align:middle line:84% And they have 10,000 studies on five major categories 00:09:28.860 --> 00:09:29.650 align:middle line:90% of renewables. 00:09:29.650 --> 00:09:32.640 align:middle line:84% And I think you can see which countries have been studied 00:09:32.640 --> 00:09:35.667 align:middle line:90% for your papers for this class. 00:09:35.667 --> 00:09:38.250 align:middle line:84% So getting back to this graph, I touched on this a little bit, 00:09:38.250 --> 00:09:40.380 align:middle line:90% I think, in the last lecture. 00:09:40.380 --> 00:09:42.630 align:middle line:84% The price of electricity from new power plants 00:09:42.630 --> 00:09:45.450 align:middle line:84% has drastically changed over time, 00:09:45.450 --> 00:09:47.760 align:middle line:90% a lot of these arrows in 2009. 00:09:47.760 --> 00:09:49.830 align:middle line:84% Nuclear has gotten more expensive. 00:09:49.830 --> 00:09:53.160 align:middle line:84% Solar thermal has decreased slightly. 00:09:53.160 --> 00:09:55.530 align:middle line:84% Coal power has not changed at all. 00:09:55.530 --> 00:09:58.950 align:middle line:84% Natural gas peaking plants and combined cycle plants 00:09:58.950 --> 00:10:01.800 align:middle line:84% have both decreased in the cost of electricity for new power 00:10:01.800 --> 00:10:02.670 align:middle line:90% plants. 00:10:02.670 --> 00:10:04.920 align:middle line:84% But of course, the two most drastic lines 00:10:04.920 --> 00:10:07.950 align:middle line:84% or the steepest slopes on this chart 00:10:07.950 --> 00:10:12.210 align:middle line:84% is the price of electricity from solar declining by about 90% 00:10:12.210 --> 00:10:15.660 align:middle line:84% over the last 10 years and the price of onshore wind 00:10:15.660 --> 00:10:19.113 align:middle line:84% electricity declining by 70% over the last 10 years. 00:10:19.113 --> 00:10:20.280 align:middle line:90% Just, again, highlight that. 00:10:20.280 --> 00:10:22.410 align:middle line:84% The price of onshore, we'd love to see it decline 00:10:22.410 --> 00:10:24.840 align:middle line:90% by 70% in the past 10 years. 00:10:24.840 --> 00:10:28.580 align:middle line:84% And we have a very large installed base of wind. 00:10:28.580 --> 00:10:30.990 align:middle line:84% So just to look at our wind basics, 00:10:30.990 --> 00:10:33.600 align:middle line:84% these are all graphs from the Mackay chapter 00:10:33.600 --> 00:10:35.460 align:middle line:84% that you all read for this class. 00:10:35.460 --> 00:10:38.250 align:middle line:84% Wind power is essentially just taking a wind. 00:10:38.250 --> 00:10:41.940 align:middle line:84% You have some kind of volume of air hits your wind turbine. 00:10:41.940 --> 00:10:45.480 align:middle line:84% It gets slightly displaced by the obstacle of the wind 00:10:45.480 --> 00:10:47.400 align:middle line:90% turbine until it blows. 00:10:47.400 --> 00:10:51.390 align:middle line:84% And you're taking some amount of energy out of the wind. 00:10:51.390 --> 00:10:53.550 align:middle line:84% This rule of thumb in MacKay's book 00:10:53.550 --> 00:10:57.870 align:middle line:84% is that the wind turbines should be about five diameters apart. 00:10:57.870 --> 00:10:59.250 align:middle line:90% I think that's probably changed. 00:10:59.250 --> 00:11:01.770 align:middle line:84% It has gotten more sophisticated over time. 00:11:01.770 --> 00:11:04.110 align:middle line:84% Michael Howland, a new faculty member 00:11:04.110 --> 00:11:06.240 align:middle line:84% in the Department of Civil Engineering 00:11:06.240 --> 00:11:09.360 align:middle line:84% studies the operation of wind turbine blades 00:11:09.360 --> 00:11:12.010 align:middle line:90% and how to optimize them. 00:11:12.010 --> 00:11:14.860 align:middle line:84% And of course, the important point that MacKay makes 00:11:14.860 --> 00:11:17.440 align:middle line:84% is that the wind speed changes versus 00:11:17.440 --> 00:11:19.340 align:middle line:90% the height off of the ground. 00:11:19.340 --> 00:11:23.420 align:middle line:84% You can see that the wind speed comes quite a bit higher. 00:11:23.420 --> 00:11:26.260 align:middle line:84% And the power density that you can extract from the wind 00:11:26.260 --> 00:11:29.630 align:middle line:84% goes up actually nonlinearly off the ground. 00:11:29.630 --> 00:11:31.960 align:middle line:84% So in other words, the bigger you make the turbine, 00:11:31.960 --> 00:11:34.990 align:middle line:84% the higher off the ground, the more wind power is there, 00:11:34.990 --> 00:11:36.460 align:middle line:90% or the more wind speed is there. 00:11:36.460 --> 00:11:39.640 align:middle line:84% And the power density goes at a nonlinear function of the wind 00:11:39.640 --> 00:11:42.040 align:middle line:84% speed so more power can be extracted 00:11:42.040 --> 00:11:43.960 align:middle line:90% from this volume of air. 00:11:43.960 --> 00:11:45.820 align:middle line:84% That's going to be a recurring theme 00:11:45.820 --> 00:11:48.400 align:middle line:84% as we look at wind turbines and wind power 00:11:48.400 --> 00:11:51.040 align:middle line:90% and where it might go. 00:11:51.040 --> 00:11:53.590 align:middle line:84% Looking-- the Department of Energy in the United States 00:11:53.590 --> 00:11:57.610 align:middle line:84% produces a land-based wind market report in 2022. 00:11:57.610 --> 00:11:59.320 align:middle line:84% Here, they just map the wind speed 00:11:59.320 --> 00:12:01.360 align:middle line:90% at 100 meters off the ground. 00:12:01.360 --> 00:12:03.310 align:middle line:84% They map it against these different regions, 00:12:03.310 --> 00:12:06.640 align:middle line:84% which are tracked along different regional transmission 00:12:06.640 --> 00:12:08.320 align:middle line:90% or intersystem-- 00:12:08.320 --> 00:12:10.700 align:middle line:90% interconnected system operators. 00:12:10.700 --> 00:12:13.150 align:middle line:84% These are all different regions of the electric grid. 00:12:13.150 --> 00:12:14.680 align:middle line:84% It's relevant because wind is going 00:12:14.680 --> 00:12:16.930 align:middle line:84% to plug into regions of the electric grid that 00:12:16.930 --> 00:12:18.443 align:middle line:90% are governed in different ways. 00:12:18.443 --> 00:12:20.110 align:middle line:84% But the most important thing is that you 00:12:20.110 --> 00:12:23.500 align:middle line:84% can see that most of the power, wind power, or the wind 00:12:23.500 --> 00:12:26.110 align:middle line:84% speed in the United States is concentrated here 00:12:26.110 --> 00:12:28.780 align:middle line:84% in the middle part of the country. 00:12:28.780 --> 00:12:31.030 align:middle line:90% That's concentrated in Texas. 00:12:31.030 --> 00:12:33.640 align:middle line:84% This is the region of the Electric Reliability 00:12:33.640 --> 00:12:35.320 align:middle line:90% Council of Texas. 00:12:35.320 --> 00:12:38.680 align:middle line:84% The Southwest Power Pool constitutes much of the Midwest 00:12:38.680 --> 00:12:39.220 align:middle line:90% here. 00:12:39.220 --> 00:12:41.920 align:middle line:84% And the Midcontinental Intersystem Operator 00:12:41.920 --> 00:12:44.320 align:middle line:84% operates much in this part of the Midwest. 00:12:44.320 --> 00:12:47.620 align:middle line:84% So our wind power is clearly concentrated on land 00:12:47.620 --> 00:12:51.400 align:middle line:90% in the middle of our country. 00:12:51.400 --> 00:12:53.580 align:middle line:84% And if you look at the wind market report, 00:12:53.580 --> 00:12:56.190 align:middle line:84% it's been exciting to track it over the last few years 00:12:56.190 --> 00:12:58.810 align:middle line:84% because you can see over the last few years, 00:12:58.810 --> 00:13:03.390 align:middle line:84% these are the cumulative total capacity added. 00:13:03.390 --> 00:13:05.460 align:middle line:84% And the cumulative total capacity 00:13:05.460 --> 00:13:10.660 align:middle line:84% has, of course, gone steadily up over the last 22 years. 00:13:10.660 --> 00:13:13.410 align:middle line:84% But if you look at the capacity additions, 00:13:13.410 --> 00:13:15.360 align:middle line:84% you can see that every single year we're 00:13:15.360 --> 00:13:17.920 align:middle line:84% adding much more capacity of wind power. 00:13:17.920 --> 00:13:21.600 align:middle line:84% In fact, until this last year, until 2020, 00:13:21.600 --> 00:13:24.670 align:middle line:84% for four straight years the capacity had increased. 00:13:24.670 --> 00:13:27.510 align:middle line:84% And you can see that almost quite regularly we're 00:13:27.510 --> 00:13:30.060 align:middle line:84% starting to break records for how much capacity 00:13:30.060 --> 00:13:32.510 align:middle line:90% we're adding in any given year. 00:13:32.510 --> 00:13:35.690 align:middle line:84% 2021 slowed slightly, but you can 00:13:35.690 --> 00:13:37.190 align:middle line:84% see that a lot of this capacity is 00:13:37.190 --> 00:13:39.365 align:middle line:84% being added in certain regions, and those 00:13:39.365 --> 00:13:42.410 align:middle line:84% are those three regions I showed you the map before. 00:13:42.410 --> 00:13:45.290 align:middle line:84% Texas, the Southwest Power Pool, and the Midcontinental 00:13:45.290 --> 00:13:48.180 align:middle line:90% Intersystem Operator. 00:13:48.180 --> 00:13:52.710 align:middle line:84% If you look at where wind stands in our capacity additions, 00:13:52.710 --> 00:13:54.990 align:middle line:84% another exciting part of the story 00:13:54.990 --> 00:13:57.660 align:middle line:84% is that this is from the Wind Market report. 00:13:57.660 --> 00:14:00.870 align:middle line:84% It shows over years, well, how much capacity? 00:14:00.870 --> 00:14:03.960 align:middle line:84% How much capacity are we adding to the grid 00:14:03.960 --> 00:14:05.730 align:middle line:90% to generate electric power? 00:14:05.730 --> 00:14:07.950 align:middle line:84% You can see overwhelmingly it is coming 00:14:07.950 --> 00:14:11.670 align:middle line:84% from wind, solar, and storage over the last few years. 00:14:11.670 --> 00:14:16.530 align:middle line:84% Natural gas in light blue has had some years of growth, 00:14:16.530 --> 00:14:19.770 align:middle line:84% but is steadily becoming a smaller part of our capacity 00:14:19.770 --> 00:14:20.550 align:middle line:90% additions. 00:14:20.550 --> 00:14:22.980 align:middle line:84% Our capacity additions to our electricity system 00:14:22.980 --> 00:14:26.580 align:middle line:84% are almost entirely wind, solar, and storage. 00:14:26.580 --> 00:14:28.710 align:middle line:84% Wind for the first time has, I think, 00:14:28.710 --> 00:14:31.200 align:middle line:84% fallen in the second place from solar. 00:14:31.200 --> 00:14:32.190 align:middle line:90% It used to be-- 00:14:32.190 --> 00:14:35.140 align:middle line:84% a few years here, it looked like solar was actually larger, 00:14:35.140 --> 00:14:38.460 align:middle line:84% but now wind is clearly in the second position. 00:14:38.460 --> 00:14:40.980 align:middle line:84% Solar is the biggest capacity addition 00:14:40.980 --> 00:14:42.090 align:middle line:90% being added to the grid. 00:14:42.090 --> 00:14:44.010 align:middle line:84% This is the capacity, the ability 00:14:44.010 --> 00:14:46.680 align:middle line:90% to generate power in gigawatts. 00:14:46.680 --> 00:14:48.540 align:middle line:84% That doesn't necessarily mean that capacity 00:14:48.540 --> 00:14:51.420 align:middle line:84% is being used all the time, which we will talk about when 00:14:51.420 --> 00:14:53.870 align:middle line:90% we talk about intermittency. 00:14:53.870 --> 00:14:56.750 align:middle line:84% But finally, if we look at the different regions, 00:14:56.750 --> 00:15:00.860 align:middle line:84% again, wind is quite dominant in the middle of the country, 00:15:00.860 --> 00:15:04.070 align:middle line:84% in the Southwest Power Pool, in the Electric Reliability 00:15:04.070 --> 00:15:07.220 align:middle line:84% Council of Texas, and the Midcontinental Intersystem 00:15:07.220 --> 00:15:08.160 align:middle line:90% Operator. 00:15:08.160 --> 00:15:11.130 align:middle line:84% You can see all of these areas are quite dominated by wind. 00:15:11.130 --> 00:15:12.650 align:middle line:84% Other parts of the country are more 00:15:12.650 --> 00:15:15.275 align:middle line:84% dominated by solar and natural gas. 00:15:15.275 --> 00:15:17.980 align:middle line:90% 00:15:17.980 --> 00:15:21.990 align:middle line:84% So just to give you an example of what these offshore wind 00:15:21.990 --> 00:15:26.070 align:middle line:84% turbines look like, this is actually a plane picture I took 00:15:26.070 --> 00:15:28.140 align:middle line:84% out of a plane window when I was flying, 00:15:28.140 --> 00:15:30.510 align:middle line:84% I think, over the North Sea in Europe. 00:15:30.510 --> 00:15:32.490 align:middle line:84% This is, I think, off the coast of Holland. 00:15:32.490 --> 00:15:34.470 align:middle line:84% And this just gives you a sense of what 00:15:34.470 --> 00:15:35.700 align:middle line:90% you can see from a plane. 00:15:35.700 --> 00:15:38.700 align:middle line:84% There's a little ship, probably not a little ship sailing 00:15:38.700 --> 00:15:40.360 align:middle line:90% between these wind turbines. 00:15:40.360 --> 00:15:43.170 align:middle line:84% But these wind turbines are simply offshore where 00:15:43.170 --> 00:15:45.970 align:middle line:90% we know more wind is blowing. 00:15:45.970 --> 00:15:47.600 align:middle line:84% I have to give you another picture. 00:15:47.600 --> 00:15:52.610 align:middle line:84% This is a picture of offshore wind turbines in Europe, 00:15:52.610 --> 00:15:55.600 align:middle line:84% which tends to have shallower waters than the US. 00:15:55.600 --> 00:15:58.030 align:middle line:84% But you have-- it looks like a ferry 00:15:58.030 --> 00:16:01.670 align:middle line:84% and you have a sailboat sailing through. 00:16:01.670 --> 00:16:06.130 align:middle line:84% And the reason why it's exciting to talk about wind offshore 00:16:06.130 --> 00:16:09.370 align:middle line:84% is that if you look at the average wind speed above North 00:16:09.370 --> 00:16:11.710 align:middle line:84% America, you can see that there is 00:16:11.710 --> 00:16:14.980 align:middle line:84% this concentration of wind power in the center of the country. 00:16:14.980 --> 00:16:16.630 align:middle line:84% But very importantly, you actually 00:16:16.630 --> 00:16:19.510 align:middle line:84% have very high wind speeds off the coast of the US. 00:16:19.510 --> 00:16:23.240 align:middle line:84% This probably doesn't go all the way out into the ocean. 00:16:23.240 --> 00:16:26.110 align:middle line:84% This is probably just mapped along the continental shelf. 00:16:26.110 --> 00:16:28.180 align:middle line:84% But you can see the concentrations of wind 00:16:28.180 --> 00:16:32.080 align:middle line:84% are just as high, if not higher than the middle of the country. 00:16:32.080 --> 00:16:35.350 align:middle line:84% But also, quite importantly, these wind towers or wind 00:16:35.350 --> 00:16:38.990 align:middle line:84% potential are located very close to the population centers 00:16:38.990 --> 00:16:39.490 align:middle line:90% of the US. 00:16:39.490 --> 00:16:41.770 align:middle line:84% We know most of the population of the US 00:16:41.770 --> 00:16:44.420 align:middle line:84% is actually concentrated along the coasts, 00:16:44.420 --> 00:16:47.020 align:middle line:84% and so it's important to be able to generate renewable energy 00:16:47.020 --> 00:16:49.780 align:middle line:84% close to the populations because it minimizes our need 00:16:49.780 --> 00:16:51.790 align:middle line:84% to transmit the power through the grid. 00:16:51.790 --> 00:16:54.850 align:middle line:84% So we will need more transmission lines for the grid 00:16:54.850 --> 00:16:56.640 align:middle line:90% also. 00:16:56.640 --> 00:17:00.300 align:middle line:84% So just to give you a sense of what these floating wind 00:17:00.300 --> 00:17:03.600 align:middle line:84% turbines would look like off the shore of the US, 00:17:03.600 --> 00:17:07.710 align:middle line:84% here's three different ways of anchoring a floating wind 00:17:07.710 --> 00:17:10.200 align:middle line:90% turbine to the ocean floor. 00:17:10.200 --> 00:17:13.230 align:middle line:84% You have one that has this big kind of counterweight 00:17:13.230 --> 00:17:14.490 align:middle line:90% to keep it upright. 00:17:14.490 --> 00:17:18.930 align:middle line:84% You have this kind of tripod system with three anchors. 00:17:18.930 --> 00:17:21.450 align:middle line:84% And you have a different tripod system, 00:17:21.450 --> 00:17:25.140 align:middle line:84% all meant to anchor wind turbines offshore. 00:17:25.140 --> 00:17:28.950 align:middle line:84% Of course, just to give you a sense of where this technical 00:17:28.950 --> 00:17:32.378 align:middle line:84% potential is located, according to the NREL study, 00:17:32.378 --> 00:17:34.920 align:middle line:84% if you look at places that have greater than seven meters per 00:17:34.920 --> 00:17:39.150 align:middle line:84% second wind speed, less than 1,000 meters in depth, 00:17:39.150 --> 00:17:41.580 align:middle line:84% less than 60 meters in depth-- the Great Lakes-- 00:17:41.580 --> 00:17:44.010 align:middle line:84% and if you try to avoid conflicting 00:17:44.010 --> 00:17:46.080 align:middle line:84% use and environmental exclusions, 00:17:46.080 --> 00:17:48.630 align:middle line:84% you can see that they break each of these bars 00:17:48.630 --> 00:17:51.390 align:middle line:84% into the places where the water depth is greater than 60 meters 00:17:51.390 --> 00:17:53.620 align:middle line:90% and less than 60 meters. 00:17:53.620 --> 00:17:55.590 align:middle line:84% And you can see surprisingly that one 00:17:55.590 --> 00:17:58.590 align:middle line:84% of the largest states for practical energy potential 00:17:58.590 --> 00:17:59.910 align:middle line:90% is Massachusetts. 00:17:59.910 --> 00:18:02.630 align:middle line:84% And then Florida, and then Texas, and so on. 00:18:02.630 --> 00:18:05.040 align:middle line:84% So these are all offshore wind potentials 00:18:05.040 --> 00:18:07.020 align:middle line:84% for different states, but this is also 00:18:07.020 --> 00:18:09.360 align:middle line:84% to give you a sense of why it's so important 00:18:09.360 --> 00:18:12.870 align:middle line:84% that Massachusetts is pursuing offshore wind energy. 00:18:12.870 --> 00:18:15.090 align:middle line:84% This is the chance that Massachusetts 00:18:15.090 --> 00:18:18.780 align:middle line:84% has to develop renewable energy resources. 00:18:18.780 --> 00:18:23.220 align:middle line:84% In a highly dense area of the country, a highly populated 00:18:23.220 --> 00:18:25.230 align:middle line:84% area of the country like Massachusetts, 00:18:25.230 --> 00:18:26.680 align:middle line:90% we're not going to build-- 00:18:26.680 --> 00:18:28.740 align:middle line:84% we're not going to be able to build as much solar 00:18:28.740 --> 00:18:30.150 align:middle line:90% as other parts of the country. 00:18:30.150 --> 00:18:32.490 align:middle line:84% And frankly, it's not very sunny in Massachusetts 00:18:32.490 --> 00:18:34.020 align:middle line:90% compared to Arizona or Hawaii. 00:18:34.020 --> 00:18:36.480 align:middle line:84% So offshore wind is probably going 00:18:36.480 --> 00:18:41.460 align:middle line:84% to be our biggest opportunity for building renewable energy. 00:18:41.460 --> 00:18:44.720 align:middle line:84% Now, what's really exciting is if you look at the DOE, 00:18:44.720 --> 00:18:48.620 align:middle line:84% the US DOE also does an offshore wind market report. 00:18:48.620 --> 00:18:50.250 align:middle line:84% Every year, I've been updating this. 00:18:50.250 --> 00:18:52.280 align:middle line:84% And so actually, it's interesting 00:18:52.280 --> 00:18:54.320 align:middle line:84% when you look at the graphics in this report, 00:18:54.320 --> 00:18:57.260 align:middle line:84% every year they change because offshore wind 00:18:57.260 --> 00:18:59.300 align:middle line:84% is growing, and in fact, basically 00:18:59.300 --> 00:19:02.430 align:middle line:90% exploding in its potential. 00:19:02.430 --> 00:19:04.580 align:middle line:84% So last year, I think when I looked 00:19:04.580 --> 00:19:09.230 align:middle line:84% at this map they had the entire Atlantic coast was on one map. 00:19:09.230 --> 00:19:12.620 align:middle line:84% And there was, I think, about 20 planned projects. 00:19:12.620 --> 00:19:17.600 align:middle line:84% Now there's about 20, 31 planned projects in the North Atlantic 00:19:17.600 --> 00:19:18.780 align:middle line:90% alone. 00:19:18.780 --> 00:19:20.060 align:middle line:90% They also-- actually, sorry. 00:19:20.060 --> 00:19:26.630 align:middle line:84% 32 because they show Lake Erie having a offshore wind project, 00:19:26.630 --> 00:19:28.100 align:middle line:90% a freshwater wind project. 00:19:28.100 --> 00:19:30.320 align:middle line:90% There's one all the way up in-- 00:19:30.320 --> 00:19:31.790 align:middle line:90% off the coast of Maine. 00:19:31.790 --> 00:19:34.070 align:middle line:84% And you can see on this graph that there's 00:19:34.070 --> 00:19:37.220 align:middle line:90% about 32 planned wind projects. 00:19:37.220 --> 00:19:40.550 align:middle line:84% They all are in different areas off the coast. 00:19:40.550 --> 00:19:44.060 align:middle line:84% You can see they occur at different bathymetric depths. 00:19:44.060 --> 00:19:46.130 align:middle line:84% They are-- some of them are leased. 00:19:46.130 --> 00:19:48.830 align:middle line:84% Some of them are dormant areas, but these 00:19:48.830 --> 00:19:52.940 align:middle line:84% are all areas that have been explored for offshore wind. 00:19:52.940 --> 00:19:55.580 align:middle line:84% If you look the Pacific Coast and the South Atlantic, 00:19:55.580 --> 00:19:57.680 align:middle line:84% now they have separate maps broken out just 00:19:57.680 --> 00:19:58.950 align:middle line:90% for these areas. 00:19:58.950 --> 00:20:02.720 align:middle line:84% You can see that on the West Coast off of Oregon 00:20:02.720 --> 00:20:06.590 align:middle line:84% and California, there's a number of offshore wind 00:20:06.590 --> 00:20:07.860 align:middle line:90% projects planned. 00:20:07.860 --> 00:20:10.580 align:middle line:84% There's offshore wind projects planned off of Hawaii now 00:20:10.580 --> 00:20:12.170 align:middle line:90% and these in the South Atlantic. 00:20:12.170 --> 00:20:14.600 align:middle line:84% These are all areas in the Gulf of Mexico. 00:20:14.600 --> 00:20:16.880 align:middle line:84% These are all areas that weren't even mapped 00:20:16.880 --> 00:20:20.060 align:middle line:84% in the last offshore wind market report from just last year. 00:20:20.060 --> 00:20:25.110 align:middle line:84% So clearly, this is an area that is growing very rapidly. 00:20:25.110 --> 00:20:28.740 align:middle line:84% If we look at the pipeline for offshore wind, 00:20:28.740 --> 00:20:31.260 align:middle line:84% the striking thing about it to you 00:20:31.260 --> 00:20:34.290 align:middle line:84% should be this classification from what we actually 00:20:34.290 --> 00:20:36.720 align:middle line:84% have operating, from what's under construction, 00:20:36.720 --> 00:20:39.120 align:middle line:84% from what's financially closed, what's been approved, 00:20:39.120 --> 00:20:41.130 align:middle line:84% what's waiting for permitting, areas 00:20:41.130 --> 00:20:44.580 align:middle line:84% that are under site control, and areas that are being planned. 00:20:44.580 --> 00:20:46.650 align:middle line:84% If you add all of these parts up, 00:20:46.650 --> 00:20:49.950 align:middle line:84% you get the total pipeline of offshore wind expected. 00:20:49.950 --> 00:20:51.810 align:middle line:84% What you should notice about this 00:20:51.810 --> 00:20:57.330 align:middle line:84% is that we have about 40,000 megawatts of offshore wind 00:20:57.330 --> 00:20:59.190 align:middle line:90% that's in the pipeline. 00:20:59.190 --> 00:21:04.360 align:middle line:84% That's up from about 35,000 megawatts just last year alone. 00:21:04.360 --> 00:21:06.990 align:middle line:84% But the really striking thing to you 00:21:06.990 --> 00:21:10.500 align:middle line:84% should be that of the 40,000 megawatts we have planned, 00:21:10.500 --> 00:21:13.380 align:middle line:84% we only have 42 megawatts operating. 00:21:13.380 --> 00:21:16.860 align:middle line:84% That's actually, I think, exactly seven offshore wind 00:21:16.860 --> 00:21:20.550 align:middle line:84% turbines in the US right now, five off of Rhode Island 00:21:20.550 --> 00:21:22.890 align:middle line:90% and two off of Virginia. 00:21:22.890 --> 00:21:25.170 align:middle line:90% That's all we have operating. 00:21:25.170 --> 00:21:27.420 align:middle line:84% When we go to under construction, 00:21:27.420 --> 00:21:28.980 align:middle line:84% we're going to effectively, I think, 00:21:28.980 --> 00:21:31.590 align:middle line:90% increase that by a factor of 20. 00:21:31.590 --> 00:21:36.060 align:middle line:84% A lot of that looks like in Massachusetts. 00:21:36.060 --> 00:21:39.420 align:middle line:84% And we have very little that's been financially closed 00:21:39.420 --> 00:21:41.320 align:middle line:90% and financially approved. 00:21:41.320 --> 00:21:44.190 align:middle line:84% But if you look the states that are permitted offshore wind, 00:21:44.190 --> 00:21:48.570 align:middle line:84% it's New York, Massachusetts, New Jersey, North Carolina, 00:21:48.570 --> 00:21:50.820 align:middle line:90% Virginia, Maryland. 00:21:50.820 --> 00:21:52.470 align:middle line:84% All up and down the East Coast we 00:21:52.470 --> 00:21:55.740 align:middle line:84% have a lot of permitting, a lot of permits that 00:21:55.740 --> 00:21:59.760 align:middle line:84% need to be expedited or need to be achieved or approved 00:21:59.760 --> 00:22:01.980 align:middle line:84% for these projects to go forward. 00:22:01.980 --> 00:22:04.650 align:middle line:84% In terms of areas that have people, 00:22:04.650 --> 00:22:07.410 align:middle line:84% developers have achieved site control, 00:22:07.410 --> 00:22:11.970 align:middle line:84% a large majority of that is in New York and Massachusetts. 00:22:11.970 --> 00:22:13.860 align:middle line:84% And then in terms of planning, we 00:22:13.860 --> 00:22:17.430 align:middle line:84% have quite a bit of planning for offshore wind in California. 00:22:17.430 --> 00:22:21.330 align:middle line:84% But again, if you add this whole pipeline together of the 40,000 00:22:21.330 --> 00:22:24.090 align:middle line:84% megawatts we have in our total pipeline, 00:22:24.090 --> 00:22:29.850 align:middle line:84% we only have 42 megawatts operating, which is 0.1%. 00:22:29.850 --> 00:22:33.030 align:middle line:84% So we obviously have big ambitions for offshore wind, 00:22:33.030 --> 00:22:39.760 align:middle line:84% but we haven't realized 99.9% of the actual wind capacity yet. 00:22:39.760 --> 00:22:43.670 align:middle line:84% If you look at the states and the wind pipeline by state, 00:22:43.670 --> 00:22:45.490 align:middle line:84% you can also think about how this 00:22:45.490 --> 00:22:47.740 align:middle line:90% fits into the energy policies. 00:22:47.740 --> 00:22:50.620 align:middle line:84% Currently, quite a bit of New York's potential 00:22:50.620 --> 00:22:54.610 align:middle line:84% is under site control, and quite a bit is being permitted, 00:22:54.610 --> 00:22:58.620 align:middle line:84% and a very small portion is under construction. 00:22:58.620 --> 00:23:03.760 align:middle line:84% And Massachusetts has less total wind offshore pipeline, 00:23:03.760 --> 00:23:07.420 align:middle line:84% but has less under site control, more in permitting, 00:23:07.420 --> 00:23:09.280 align:middle line:90% and more under construction. 00:23:09.280 --> 00:23:12.340 align:middle line:84% New Jersey is almost entirely in the permitting phase, 00:23:12.340 --> 00:23:15.480 align:middle line:90% and so on and so on. 00:23:15.480 --> 00:23:19.040 align:middle line:84% But just to give you a sense of how big these wind turbine 00:23:19.040 --> 00:23:23.630 align:middle line:84% blades are, this is a graphic of the Haliade-X turbine, 00:23:23.630 --> 00:23:27.860 align:middle line:84% a new turbine introduced by GE just a couple of years ago. 00:23:27.860 --> 00:23:29.720 align:middle line:84% And just to give you an example, this 00:23:29.720 --> 00:23:32.450 align:middle line:84% is the Statue of Liberty at 305 feet, the Empire State 00:23:32.450 --> 00:23:34.280 align:middle line:90% Building, the Eiffel Tower. 00:23:34.280 --> 00:23:38.690 align:middle line:84% The average onshore turbine is 466 feet tall. 00:23:38.690 --> 00:23:41.780 align:middle line:84% The tallest US turbine, the tallest turbine you've probably 00:23:41.780 --> 00:23:45.110 align:middle line:90% seen onshore, is 574 feet tall. 00:23:45.110 --> 00:23:50.000 align:middle line:84% The new GE Haliade-X is 853 feet tall. 00:23:50.000 --> 00:23:52.580 align:middle line:84% The current-- the five wind turbines 00:23:52.580 --> 00:23:54.920 align:middle line:84% we have operating in the US off Rhode Island 00:23:54.920 --> 00:23:56.810 align:middle line:90% are only 590 feet tall. 00:23:56.810 --> 00:23:59.300 align:middle line:90% So GE can build these turbines. 00:23:59.300 --> 00:24:01.610 align:middle line:84% They've introduced this as a product. 00:24:01.610 --> 00:24:04.220 align:middle line:84% But clearly, these turbines are very large. 00:24:04.220 --> 00:24:09.560 align:middle line:84% I think each of those blades is one or two aircraft wings long. 00:24:09.560 --> 00:24:15.920 align:middle line:84% So just to give you a sense, the total height 00:24:15.920 --> 00:24:18.260 align:middle line:84% of the new Haliade-X wind turbine 00:24:18.260 --> 00:24:20.960 align:middle line:84% is three times the Flatiron Building. 00:24:20.960 --> 00:24:24.710 align:middle line:84% The diameter is equivalent to the Golden Gate Bridge tower 00:24:24.710 --> 00:24:26.060 align:middle line:90% height above the water. 00:24:26.060 --> 00:24:28.070 align:middle line:84% And the surface of the blade sweep 00:24:28.070 --> 00:24:31.580 align:middle line:84% is equivalent to seven American football fields. 00:24:31.580 --> 00:24:36.020 align:middle line:84% A single one of these turbines can generate 67 gigawatt hours 00:24:36.020 --> 00:24:37.910 align:middle line:90% annually, which is-- 00:24:37.910 --> 00:24:40.762 align:middle line:84% I guess that's enough for 16,000 European households 00:24:40.762 --> 00:24:42.470 align:middle line:84% per turbine, which I guess is maybe about 00:24:42.470 --> 00:24:44.990 align:middle line:90% 8,000 American households. 00:24:44.990 --> 00:24:47.360 align:middle line:84% The key point, though, is that because of the map 00:24:47.360 --> 00:24:50.990 align:middle line:84% I showed you before, wind speeds are higher offshore. 00:24:50.990 --> 00:24:53.300 align:middle line:90% The wind is steadier offshore. 00:24:53.300 --> 00:24:55.790 align:middle line:84% If you put one of these turbines offshore, 00:24:55.790 --> 00:24:58.700 align:middle line:84% it'll generate much more power than onshore turbines. 00:24:58.700 --> 00:25:01.970 align:middle line:84% But again, we have yet to realize the technology. 00:25:01.970 --> 00:25:06.208 align:middle line:84% American waters are deeper and stormier than European waters. 00:25:06.208 --> 00:25:08.000 align:middle line:84% Europeans, I think, have deployed something 00:25:08.000 --> 00:25:10.760 align:middle line:84% like 5,000 or 6,000 offshore wind turbines. 00:25:10.760 --> 00:25:12.530 align:middle line:84% We've only deployed seven in the US. 00:25:12.530 --> 00:25:15.110 align:middle line:84% We have a lot of obstacles and barriers 00:25:15.110 --> 00:25:18.500 align:middle line:84% to overcome such as the right kinds of ships 00:25:18.500 --> 00:25:22.625 align:middle line:84% and the right kind of workforce and the port capability 00:25:22.625 --> 00:25:25.790 align:middle line:84% that are all necessary to build these offshore turbines, 00:25:25.790 --> 00:25:29.870 align:middle line:84% let alone the undersea wiring required to transmit 00:25:29.870 --> 00:25:32.240 align:middle line:84% the power from offshore to onshore 00:25:32.240 --> 00:25:35.760 align:middle line:90% and connect it to our grid. 00:25:35.760 --> 00:25:39.480 align:middle line:84% I'll skip over more GE marketing literature. 00:25:39.480 --> 00:25:42.390 align:middle line:84% One key point or kind of elemental concept 00:25:42.390 --> 00:25:44.910 align:middle line:84% I want to talk to you about is the idea of intermittency. 00:25:44.910 --> 00:25:47.610 align:middle line:84% You've probably heard that renewable energy technologies 00:25:47.610 --> 00:25:50.820 align:middle line:84% are intermittent in that the wind doesn't always blow. 00:25:50.820 --> 00:25:52.740 align:middle line:90% The sun doesn't always shine. 00:25:52.740 --> 00:25:56.910 align:middle line:84% But what we use to measure the output of these technologies 00:25:56.910 --> 00:26:00.840 align:middle line:84% is a calculation called the capacity factor. 00:26:00.840 --> 00:26:04.170 align:middle line:84% The capacity factor is defined as the ratio of actual power 00:26:04.170 --> 00:26:07.260 align:middle line:84% produced divided by the maximum possible power 00:26:07.260 --> 00:26:08.947 align:middle line:90% over a period of time. 00:26:08.947 --> 00:26:11.280 align:middle line:84% So the key point I want to make is that it's a unitless. 00:26:11.280 --> 00:26:12.965 align:middle line:90% It's a percentage. 00:26:12.965 --> 00:26:15.090 align:middle line:84% This is the number or percentage that's empirically 00:26:15.090 --> 00:26:17.250 align:middle line:84% determined in real-life operation, 00:26:17.250 --> 00:26:19.290 align:middle line:90% and it changes seasonally. 00:26:19.290 --> 00:26:21.300 align:middle line:84% The wind blows differently in different 00:26:21.300 --> 00:26:23.790 align:middle line:84% places in the summer than the winter. 00:26:23.790 --> 00:26:27.090 align:middle line:84% Obviously, it's determined in real-life operation. 00:26:27.090 --> 00:26:30.210 align:middle line:84% Seasonally, solar operates-- has different 00:26:30.210 --> 00:26:31.800 align:middle line:84% intermittency or different capacity 00:26:31.800 --> 00:26:33.250 align:middle line:90% in different times of the year. 00:26:33.250 --> 00:26:35.190 align:middle line:84% So we measure the capacity factor, 00:26:35.190 --> 00:26:39.090 align:middle line:84% and we use capacity factor as kind of a general ratio 00:26:39.090 --> 00:26:42.030 align:middle line:84% that we use to calculate how much energy we're 00:26:42.030 --> 00:26:44.440 align:middle line:84% going to produce from a given technology, 00:26:44.440 --> 00:26:48.120 align:middle line:84% given that the resource that is harvesting the wind or the sun 00:26:48.120 --> 00:26:50.960 align:middle line:84% are not necessarily always there. 00:26:50.960 --> 00:26:53.470 align:middle line:84% So just to give you a few other kind 00:26:53.470 --> 00:26:56.630 align:middle line:84% of key terms, the nameplate generation capacity. 00:26:56.630 --> 00:26:59.140 align:middle line:84% This is what the manufacturer says 00:26:59.140 --> 00:27:00.880 align:middle line:90% the technology can generate. 00:27:00.880 --> 00:27:04.670 align:middle line:84% That's what the GE diagram in the previous few slides 00:27:04.670 --> 00:27:05.170 align:middle line:90% showed you. 00:27:05.170 --> 00:27:07.330 align:middle line:84% That's the nameplate generation capacity. 00:27:07.330 --> 00:27:09.220 align:middle line:84% And the nameplate generation capacity 00:27:09.220 --> 00:27:11.260 align:middle line:84% varies for different technologies. 00:27:11.260 --> 00:27:14.110 align:middle line:84% Just to show you two fossil fuel technologies, 00:27:14.110 --> 00:27:17.650 align:middle line:84% a coal-fired power plant or a natural gas turbine. 00:27:17.650 --> 00:27:26.730 align:middle line:84% If we skip to the tables put out by the US Energy Information 00:27:26.730 --> 00:27:29.610 align:middle line:84% Administration, when I clicked on the link 00:27:29.610 --> 00:27:33.120 align:middle line:84% from the slides for the EIA tables 00:27:33.120 --> 00:27:35.790 align:middle line:84% from the Electric Power Monthly, what you're looking at here 00:27:35.790 --> 00:27:39.930 align:middle line:84% is a table of capacity factors for utility scale generators 00:27:39.930 --> 00:27:41.850 align:middle line:90% primarily using fossil fuels. 00:27:41.850 --> 00:27:45.160 align:middle line:84% So just look at the kind of aspects of this table. 00:27:45.160 --> 00:27:46.710 align:middle line:90% You have the annual data. 00:27:46.710 --> 00:27:48.540 align:middle line:90% This is annualized data. 00:27:48.540 --> 00:27:51.600 align:middle line:84% You have the various fossil fuel-generating technologies. 00:27:51.600 --> 00:27:53.070 align:middle line:90% Coal, natural gas. 00:27:53.070 --> 00:27:56.280 align:middle line:84% Natural gas is broken into combined cycle, gas turbines, 00:27:56.280 --> 00:27:58.455 align:middle line:90% and peaking gas turbines. 00:27:58.455 --> 00:28:01.590 align:middle line:84% And you have petroleum steam turbines, gas turbines, 00:28:01.590 --> 00:28:03.610 align:middle line:90% internal combustion, and so on. 00:28:03.610 --> 00:28:05.850 align:middle line:84% These are all categorized in different ways. 00:28:05.850 --> 00:28:07.410 align:middle line:84% But then the important thing to note 00:28:07.410 --> 00:28:09.420 align:middle line:84% is that there's a time-adjusted capacity, 00:28:09.420 --> 00:28:11.400 align:middle line:90% and it varies across years. 00:28:11.400 --> 00:28:12.870 align:middle line:90% And here's the capacity factor. 00:28:12.870 --> 00:28:16.350 align:middle line:84% It's a percentage of the time that the resource is actually 00:28:16.350 --> 00:28:17.800 align:middle line:90% producing power. 00:28:17.800 --> 00:28:20.310 align:middle line:84% So you can see that coal has a relatively 00:28:20.310 --> 00:28:24.153 align:middle line:84% high-capacity factor, I guess, around 50% or 60%. 00:28:24.153 --> 00:28:25.320 align:middle line:90% But that's still much lower. 00:28:25.320 --> 00:28:27.180 align:middle line:84% When we talk about coal as a base load 00:28:27.180 --> 00:28:29.260 align:middle line:84% resource, a lot of advocates will say, 00:28:29.260 --> 00:28:31.770 align:middle line:84% well, we need coal as a baseload resource 00:28:31.770 --> 00:28:34.110 align:middle line:84% because it's always providing power. 00:28:34.110 --> 00:28:37.260 align:middle line:84% This capacity factor could be relatively low at 50% to 60%-- 00:28:37.260 --> 00:28:39.660 align:middle line:84% 50% or 60% of the time, it's only 00:28:39.660 --> 00:28:42.485 align:middle line:84% providing resources or energy for a couple 00:28:42.485 --> 00:28:43.360 align:middle line:90% of different reasons. 00:28:43.360 --> 00:28:46.560 align:middle line:84% It could be because it's coal power plants are actually 00:28:46.560 --> 00:28:48.510 align:middle line:90% frequently down for maintenance. 00:28:48.510 --> 00:28:50.880 align:middle line:84% It could also be that coal-fired power plants are simply 00:28:50.880 --> 00:28:53.790 align:middle line:84% outcompeted in certain seasons of the year. 00:28:53.790 --> 00:28:56.130 align:middle line:84% For example, if you at the year 2020, 00:28:56.130 --> 00:28:59.130 align:middle line:84% you look at the capacity factor, coal-fired power plants 00:28:59.130 --> 00:29:03.030 align:middle line:84% look like they have a capacity factor around 50% or 60% 00:29:03.030 --> 00:29:05.760 align:middle line:84% still in the summer because in July and August, 00:29:05.760 --> 00:29:07.560 align:middle line:90% we have peak electric demand. 00:29:07.560 --> 00:29:11.340 align:middle line:84% But the capacity factor gets as low as 25% or 30% 00:29:11.340 --> 00:29:14.940 align:middle line:84% for these kind of shoulder seasons and the winter seasons, 00:29:14.940 --> 00:29:19.110 align:middle line:84% probably because coal is simply not as necessary as for, 00:29:19.110 --> 00:29:22.242 align:middle line:84% quote, unquote, "baseload power" in those seasons of the year. 00:29:22.242 --> 00:29:23.700 align:middle line:84% And it's probably being outcompeted 00:29:23.700 --> 00:29:26.040 align:middle line:90% by natural gas power plants. 00:29:26.040 --> 00:29:28.890 align:middle line:84% And if you look at combined cycle gas turbines, 00:29:28.890 --> 00:29:30.930 align:middle line:84% capacity factor has been relatively steady 00:29:30.930 --> 00:29:34.440 align:middle line:84% over the previous years, let's say around 50% to 60%. 00:29:34.440 --> 00:29:35.940 align:middle line:84% And you can see, again, that they're 00:29:35.940 --> 00:29:37.980 align:middle line:84% much more utilized in the summer when 00:29:37.980 --> 00:29:40.590 align:middle line:84% we have electricity demand very high because of air 00:29:40.590 --> 00:29:41.650 align:middle line:90% conditioners. 00:29:41.650 --> 00:29:45.690 align:middle line:84% But it actually dips also in the spring 00:29:45.690 --> 00:29:48.870 align:middle line:84% and fall simply because there's not as much electricity demand 00:29:48.870 --> 00:29:51.580 align:middle line:84% when it's not very hot or very cold. 00:29:51.580 --> 00:29:54.570 align:middle line:84% If you look at another kind of gas turbine, natural gas gas 00:29:54.570 --> 00:29:56.610 align:middle line:84% turbines, these are probably peaking plants 00:29:56.610 --> 00:29:57.990 align:middle line:84% that are used to meet electricity 00:29:57.990 --> 00:30:02.370 align:middle line:84% demand for certain peaks or for regulation of the grid, 00:30:02.370 --> 00:30:04.590 align:middle line:84% keeping the grid at the right frequency, 00:30:04.590 --> 00:30:06.570 align:middle line:84% you can see that the demand utilization 00:30:06.570 --> 00:30:08.800 align:middle line:84% for these technologies is relatively low. 00:30:08.800 --> 00:30:12.450 align:middle line:84% It's like 15%, 16% in July and August. 00:30:12.450 --> 00:30:15.780 align:middle line:84% It dips as low as about 9% or 10% in the rest of the year, 00:30:15.780 --> 00:30:17.670 align:middle line:84% simply because these turbines are mostly 00:30:17.670 --> 00:30:22.110 align:middle line:84% used to meet kind of the peaks or the reserve 00:30:22.110 --> 00:30:24.810 align:middle line:84% or the regulation of the grid itself. 00:30:24.810 --> 00:30:27.350 align:middle line:84% Now, I'm going to show you a different slide. 00:30:27.350 --> 00:30:30.270 align:middle line:90% One moment. 00:30:30.270 --> 00:30:32.970 align:middle line:84% If we go back to the slides, the handout, 00:30:32.970 --> 00:30:36.480 align:middle line:84% and I click on this table for Electric Power Monthly Table 00:30:36.480 --> 00:30:44.230 align:middle line:84% 6.07B for nonfossil resources, what you now see are capacity 00:30:44.230 --> 00:30:47.620 align:middle line:84% factors for utility-scale generators primarily using 00:30:47.620 --> 00:30:48.880 align:middle line:90% nonfossil fuels. 00:30:48.880 --> 00:30:50.650 align:middle line:84% So we should just note right off the bat, 00:30:50.650 --> 00:30:52.870 align:middle line:84% this is for utility-scale generators. 00:30:52.870 --> 00:30:55.360 align:middle line:84% This is what the US EIA, the Energy Information 00:30:55.360 --> 00:30:56.770 align:middle line:90% Administration, collects. 00:30:56.770 --> 00:30:59.807 align:middle line:84% This doesn't include necessarily rooftop solar. 00:30:59.807 --> 00:31:02.140 align:middle line:84% But if you look at the different types of technologies-- 00:31:02.140 --> 00:31:05.410 align:middle line:84% geothermal, hydroelectric, nuclear, biomass, 00:31:05.410 --> 00:31:09.100 align:middle line:84% other kinds of gas, solar photovoltaic and solar thermal, 00:31:09.100 --> 00:31:10.690 align:middle line:90% and wind and wood-- 00:31:10.690 --> 00:31:12.190 align:middle line:84% these are kind of what I've referred 00:31:12.190 --> 00:31:14.200 align:middle line:90% to as our renewable toolkit. 00:31:14.200 --> 00:31:16.840 align:middle line:84% If you look at the capacity factor for geothermal, 00:31:16.840 --> 00:31:17.940 align:middle line:90% it's actually quite high. 00:31:17.940 --> 00:31:19.343 align:middle line:90% It's around 70%. 00:31:19.343 --> 00:31:21.760 align:middle line:84% Geothermal, because it comes from the heat from the Earth, 00:31:21.760 --> 00:31:23.500 align:middle line:90% is quite steady. 00:31:23.500 --> 00:31:25.690 align:middle line:84% Hydroelectric is actually surprisingly 00:31:25.690 --> 00:31:29.430 align:middle line:84% low from 30% or 40%, probably because 00:31:29.430 --> 00:31:32.550 align:middle line:84% hydroelectric technologies often require water 00:31:32.550 --> 00:31:35.460 align:middle line:84% to be behind a reservoir, and then it flows through a turbine 00:31:35.460 --> 00:31:36.900 align:middle line:90% and generates electricity. 00:31:36.900 --> 00:31:40.080 align:middle line:84% So hydroelectric plants may not be run all year, 00:31:40.080 --> 00:31:42.180 align:middle line:84% or they may be run certain times of the year. 00:31:42.180 --> 00:31:44.910 align:middle line:84% Again, let's say in July and August. 00:31:44.910 --> 00:31:47.040 align:middle line:84% Actually, it's relatively low here. 00:31:47.040 --> 00:31:50.138 align:middle line:84% But you might imagine hydroelectric power plants 00:31:50.138 --> 00:31:52.680 align:middle line:84% being run for various reasons in different times of the year. 00:31:52.680 --> 00:31:56.130 align:middle line:84% For example, where there's more spring runoff or snowmelt 00:31:56.130 --> 00:32:00.122 align:middle line:84% in the spring, it might actually have higher capacity factors. 00:32:00.122 --> 00:32:02.580 align:middle line:84% Nuclear power plants look like they have very high capacity 00:32:02.580 --> 00:32:05.760 align:middle line:84% factors, around 90% consistently. 00:32:05.760 --> 00:32:08.130 align:middle line:84% And then solar photovoltaic you can see only 00:32:08.130 --> 00:32:11.735 align:middle line:84% has a capacity factor of 25% over many years. 00:32:11.735 --> 00:32:13.860 align:middle line:84% That doesn't seem to change a whole lot, though you 00:32:13.860 --> 00:32:17.250 align:middle line:84% can tell in the year 2020 it does change 00:32:17.250 --> 00:32:18.870 align:middle line:84% throughout the year, because obviously 00:32:18.870 --> 00:32:21.480 align:middle line:84% some parts of the year the days are longer, notably 00:32:21.480 --> 00:32:23.980 align:middle line:90% summer than they are winter. 00:32:23.980 --> 00:32:26.890 align:middle line:84% Wind, you can see the capacity factors are 00:32:26.890 --> 00:32:30.295 align:middle line:90% around 30%, 35% over the years. 00:32:30.295 --> 00:32:32.170 align:middle line:84% And you can actually see the capacity factors 00:32:32.170 --> 00:32:34.300 align:middle line:90% go down slightly in the summer. 00:32:34.300 --> 00:32:36.430 align:middle line:84% They're slightly higher in the spring 00:32:36.430 --> 00:32:38.960 align:middle line:90% and the winter and the fall. 00:32:38.960 --> 00:32:41.170 align:middle line:84% So this is just to give you a sense of even 00:32:41.170 --> 00:32:44.920 align:middle line:84% though certain technologies have a nameplate capacity like GE 00:32:44.920 --> 00:32:48.820 align:middle line:84% markets their Haliade turbines, it's not necessarily 00:32:48.820 --> 00:32:50.680 align:middle line:84% the energy or the electricity that we 00:32:50.680 --> 00:32:52.550 align:middle line:90% derive from these technologies. 00:32:52.550 --> 00:32:56.210 align:middle line:84% That's a percentage of the possible capacity. 00:32:56.210 --> 00:32:59.150 align:middle line:84% So going back to our slides, just to show you, 00:32:59.150 --> 00:33:01.160 align:middle line:84% again, the capacity factor changes. 00:33:01.160 --> 00:33:05.030 align:middle line:84% You can see that nuclear has relatively high capacity. 00:33:05.030 --> 00:33:08.270 align:middle line:84% Hydropower, wind, solar PV, solar thermal all 00:33:08.270 --> 00:33:10.440 align:middle line:90% have lower capacity factors. 00:33:10.440 --> 00:33:14.090 align:middle line:84% And of course, our landfill gas, our biomass, coal, 00:33:14.090 --> 00:33:17.100 align:middle line:84% and natural gas power plants have higher capacity factors, 00:33:17.100 --> 00:33:19.190 align:middle line:84% so geothermal is also quite high. 00:33:19.190 --> 00:33:22.310 align:middle line:84% A noticeable thing I want you to observe in this graph 00:33:22.310 --> 00:33:25.670 align:middle line:84% is that offshore wind has no capacity factor because we 00:33:25.670 --> 00:33:27.500 align:middle line:84% haven't empirically determined it yet, 00:33:27.500 --> 00:33:30.470 align:middle line:84% or we haven't observed this technology in action. 00:33:30.470 --> 00:33:32.600 align:middle line:84% As I said to you on the earlier slides, 00:33:32.600 --> 00:33:36.380 align:middle line:84% there's only seven offshore wind turbines operating in the US. 00:33:36.380 --> 00:33:39.680 align:middle line:84% Even though we are planning to build about 100% 00:33:39.680 --> 00:33:43.160 align:middle line:84% or 1,000 times more offshore capacity, at the moment 00:33:43.160 --> 00:33:45.230 align:middle line:84% it's a unproven technology that we still 00:33:45.230 --> 00:33:47.660 align:middle line:84% need to understand what the actual capacity is going 00:33:47.660 --> 00:33:51.470 align:middle line:84% to be so we can plan to build our grid or forecast how 00:33:51.470 --> 00:33:55.050 align:middle line:84% effective this technology is going to be in the future. 00:33:55.050 --> 00:34:02.300 align:middle line:84% So another key metric for the cost of these technologies 00:34:02.300 --> 00:34:04.430 align:middle line:90% is the levelized cost of energy. 00:34:04.430 --> 00:34:05.640 align:middle line:90% In a simple way-- 00:34:05.640 --> 00:34:08.780 align:middle line:84% I just call it here the simple levelized cost of energy-- 00:34:08.780 --> 00:34:13.100 align:middle line:84% it's taking the fixed cost, the fuel costs, 00:34:13.100 --> 00:34:16.310 align:middle line:84% and then variable operations and maintenance and dividing it all 00:34:16.310 --> 00:34:19.199 align:middle line:84% or amortizing it over the length of life of the technology. 00:34:19.199 --> 00:34:22.159 align:middle line:84% In other words, taking the average cost of technology 00:34:22.159 --> 00:34:24.650 align:middle line:90% averaged over its full lifetime. 00:34:24.650 --> 00:34:28.290 align:middle line:84% To show you in another way, you have the capital cost times 00:34:28.290 --> 00:34:30.840 align:middle line:84% recovery factor plus the fixed cost. 00:34:30.840 --> 00:34:32.690 align:middle line:90% This is the fixed cost term. 00:34:32.690 --> 00:34:37.100 align:middle line:84% You divide it by 8,760 hours in a year 00:34:37.100 --> 00:34:38.840 align:middle line:84% and multiply it times the capacity factor 00:34:38.840 --> 00:34:41.520 align:middle line:84% because you're not getting the full capacity of the technology 00:34:41.520 --> 00:34:42.860 align:middle line:90% all the time. 00:34:42.860 --> 00:34:45.290 align:middle line:84% You can add on this additional fuel costs. 00:34:45.290 --> 00:34:48.710 align:middle line:84% This is kind of the cost you're incurring throughout the life 00:34:48.710 --> 00:34:49.850 align:middle line:90% of the technology. 00:34:49.850 --> 00:34:52.580 align:middle line:84% So you take the fuel cost to average over time 00:34:52.580 --> 00:34:54.739 align:middle line:84% and multiply times this heat rate, which 00:34:54.739 --> 00:34:57.470 align:middle line:84% is the exact amount of energy you're actually getting out 00:34:57.470 --> 00:34:59.300 align:middle line:84% of the heat energy of the technology. 00:34:59.300 --> 00:35:01.730 align:middle line:84% For example, with a coal-fired power plant 00:35:01.730 --> 00:35:05.565 align:middle line:84% if it has a low heat rate around 30% or 40%, 00:35:05.565 --> 00:35:07.190 align:middle line:84% the heat of the technology may actually 00:35:07.190 --> 00:35:08.900 align:middle line:84% be going out in the smokestack and you 00:35:08.900 --> 00:35:11.720 align:middle line:84% wouldn't factor that into the energy of the fuel 00:35:11.720 --> 00:35:13.070 align:middle line:90% that you're getting. 00:35:13.070 --> 00:35:15.260 align:middle line:84% And then you might add on some variable operations 00:35:15.260 --> 00:35:16.700 align:middle line:90% and maintenance costs. 00:35:16.700 --> 00:35:20.600 align:middle line:84% I think a more exact way or a better but more complicated 00:35:20.600 --> 00:35:23.510 align:middle line:84% formula for the levelized cost of energy, 00:35:23.510 --> 00:35:26.240 align:middle line:84% Wikipedia actually has a surprisingly good article 00:35:26.240 --> 00:35:26.990 align:middle line:90% on this. 00:35:26.990 --> 00:35:28.770 align:middle line:84% They call the levelized cost of energy 00:35:28.770 --> 00:35:31.430 align:middle line:84% the sum of costs over the lifetime divided 00:35:31.430 --> 00:35:34.980 align:middle line:84% by the sum of electrical energy produced over the lifetime. 00:35:34.980 --> 00:35:37.460 align:middle line:84% So you have various terms like the investment expenditure 00:35:37.460 --> 00:35:40.580 align:middle line:84% in year T. That's this term here. 00:35:40.580 --> 00:35:42.590 align:middle line:84% Plus the operations and maintenance expenditures 00:35:42.590 --> 00:35:45.170 align:middle line:90% in year T. That's the MT here. 00:35:45.170 --> 00:35:48.440 align:middle line:84% Plus the fuel expenditures in a given year T here. 00:35:48.440 --> 00:35:52.130 align:middle line:84% You add it up across all the years and starting at T 00:35:52.130 --> 00:35:53.210 align:middle line:90% equals 1. 00:35:53.210 --> 00:35:56.600 align:middle line:84% But the more complicated formula has a discount term, 1 00:35:56.600 --> 00:36:00.050 align:middle line:84% plus R over T where R is a discount rate. 00:36:00.050 --> 00:36:03.170 align:middle line:84% That's a way of taking all the financial costs 00:36:03.170 --> 00:36:05.930 align:middle line:84% and discounting it over the discount rate. 00:36:05.930 --> 00:36:08.940 align:middle line:84% And then what you do on the bottom is you have the energy. 00:36:08.940 --> 00:36:11.240 align:middle line:90% So this is the cost per energy. 00:36:11.240 --> 00:36:15.020 align:middle line:84% And you take all the energy over each-- the periods T. Again, 00:36:15.020 --> 00:36:17.750 align:middle line:84% sum it up over n terms and discount it. 00:36:17.750 --> 00:36:20.300 align:middle line:84% So you discount it because the value 00:36:20.300 --> 00:36:22.190 align:middle line:84% of the energy or the cost of the energy 00:36:22.190 --> 00:36:25.430 align:middle line:84% may not be the same in the future as it is now. 00:36:25.430 --> 00:36:27.440 align:middle line:84% Like the time value of money, you're 00:36:27.440 --> 00:36:30.170 align:middle line:84% valuing the energy and the costs upfront 00:36:30.170 --> 00:36:34.660 align:middle line:84% more than you are the energy and cost in the future. 00:36:34.660 --> 00:36:36.900 align:middle line:84% And of course, this note down here is useful. 00:36:36.900 --> 00:36:39.270 align:middle line:84% Some caution must be taken when using formulas 00:36:39.270 --> 00:36:43.260 align:middle line:84% for levelized costs as they often embody unseen assumptions 00:36:43.260 --> 00:36:45.360 align:middle line:84% like neglecting the effects of taxes 00:36:45.360 --> 00:36:48.520 align:middle line:84% or maybe specified in real or nominal terms. 00:36:48.520 --> 00:36:50.940 align:middle line:84% In other words, other versions of the above formula 00:36:50.940 --> 00:36:54.330 align:middle line:84% like the previous slide do not discount the electricity stream 00:36:54.330 --> 00:36:58.680 align:middle line:84% in the way that the Wikipedia formula discounts it. 00:36:58.680 --> 00:37:02.910 align:middle line:84% But this is why we look at the Lazard levelized cost of energy 00:37:02.910 --> 00:37:03.600 align:middle line:90% analysis. 00:37:03.600 --> 00:37:06.540 align:middle line:84% I think all the assumptions are stated upfront in the report. 00:37:06.540 --> 00:37:08.880 align:middle line:84% This is a fairly industry standard report 00:37:08.880 --> 00:37:10.842 align:middle line:90% that gets reported every year. 00:37:10.842 --> 00:37:12.300 align:middle line:84% Last year, it came out in this week 00:37:12.300 --> 00:37:15.870 align:middle line:84% in October, so we may get a new version this week. 00:37:15.870 --> 00:37:18.060 align:middle line:84% You can see the cost of renewable energy 00:37:18.060 --> 00:37:21.360 align:middle line:84% up here in the top boxes and the cost of conventional, quote 00:37:21.360 --> 00:37:24.160 align:middle line:84% unquote, "conventional" or fossil fuel technologies 00:37:24.160 --> 00:37:25.120 align:middle line:90% at the bottom. 00:37:25.120 --> 00:37:28.320 align:middle line:84% And the reason why I say your renewable toolkit is getting 00:37:28.320 --> 00:37:30.610 align:middle line:84% cheaper and cleaner all the time, 00:37:30.610 --> 00:37:33.390 align:middle line:84% look at the relative costs of each of the technologies. 00:37:33.390 --> 00:37:38.520 align:middle line:84% Solar PV on a cost in dollars of a megawatt hour 00:37:38.520 --> 00:37:42.780 align:middle line:84% is the same thing as the cost of cents per kilowatt hour. 00:37:42.780 --> 00:37:48.540 align:middle line:84% That's $147 per megawatt hour at least for solar PV 00:37:48.540 --> 00:37:50.160 align:middle line:90% in the rooftop residential. 00:37:50.160 --> 00:37:53.580 align:middle line:84% But it's much cheaper for a commercial industrial rooftop 00:37:53.580 --> 00:37:54.720 align:middle line:90% installation. 00:37:54.720 --> 00:37:58.620 align:middle line:84% It's actually about 2.5 times less. 00:37:58.620 --> 00:38:02.620 align:middle line:84% A solar PV in a community solar installation is even lower, 00:38:02.620 --> 00:38:05.220 align:middle line:84% but none of these other solar installations 00:38:05.220 --> 00:38:09.030 align:middle line:84% are as cheap as solar installed at the utility scale using 00:38:09.030 --> 00:38:11.790 align:middle line:84% different technologies like crystalline, photovoltaic 00:38:11.790 --> 00:38:15.240 align:middle line:84% panels, or thin film photovoltaic panels. 00:38:15.240 --> 00:38:17.220 align:middle line:84% If you look at solar thermal tower, 00:38:17.220 --> 00:38:19.650 align:middle line:84% that's also called a concentrating solar tower. 00:38:19.650 --> 00:38:23.070 align:middle line:84% This is like out in the desert in California. 00:38:23.070 --> 00:38:24.570 align:middle line:84% This is still relatively expensive 00:38:24.570 --> 00:38:26.580 align:middle line:84% and has not gotten cheaper over time. 00:38:26.580 --> 00:38:28.950 align:middle line:84% Solar PV is the technology that's 00:38:28.950 --> 00:38:31.020 align:middle line:84% gotten cheapest most quickly, and we'll talk more 00:38:31.020 --> 00:38:33.120 align:middle line:90% about that in the next lecture. 00:38:33.120 --> 00:38:36.440 align:middle line:84% Geothermal is relatively cheap, but it's also 00:38:36.440 --> 00:38:38.630 align:middle line:84% important to note in the context of this class 00:38:38.630 --> 00:38:40.880 align:middle line:84% that wind is the cheapest resource 00:38:40.880 --> 00:38:42.470 align:middle line:84% among the renewable technologies. 00:38:42.470 --> 00:38:47.270 align:middle line:84% It's at least at the lowest point $26 per megawatt hour. 00:38:47.270 --> 00:38:50.600 align:middle line:84% That can vary and be as much as $50 per megawatt hour, 00:38:50.600 --> 00:38:54.650 align:middle line:84% probably for an older wind farm that has smaller wind turbines. 00:38:54.650 --> 00:38:56.480 align:middle line:84% The important thing to note is that wind 00:38:56.480 --> 00:39:00.260 align:middle line:84% at $26 per megawatt hour on the low end of the scale 00:39:00.260 --> 00:39:02.390 align:middle line:84% is actually much cheaper than our other technology. 00:39:02.390 --> 00:39:05.780 align:middle line:84% It's cheaper than a gas peaking natural gas plant. 00:39:05.780 --> 00:39:08.510 align:middle line:84% It's much cheaper than a nuclear power plant. 00:39:08.510 --> 00:39:10.730 align:middle line:84% It's cheaper than a coal-fired power plant. 00:39:10.730 --> 00:39:14.390 align:middle line:84% And it's basically cheaper than a combined gas cycle turbine 00:39:14.390 --> 00:39:16.120 align:middle line:90% power plant. 00:39:16.120 --> 00:39:19.330 align:middle line:84% If we look at the sensitivity of these various costs 00:39:19.330 --> 00:39:23.470 align:middle line:84% to federal tax subsidies, these levelized cost estimates 00:39:23.470 --> 00:39:26.890 align:middle line:84% from Lazard clearly include federal tax subsidies 00:39:26.890 --> 00:39:28.150 align:middle line:90% in some of the calculations. 00:39:28.150 --> 00:39:30.250 align:middle line:84% You can see that federal tax subsidies make 00:39:30.250 --> 00:39:33.100 align:middle line:84% solar PV on the rooftop cheaper and make 00:39:33.100 --> 00:39:36.340 align:middle line:84% solar PV on the commercial industrial buildings cheaper. 00:39:36.340 --> 00:39:39.880 align:middle line:84% It makes community solar cheaper and makes utility scale 00:39:39.880 --> 00:39:43.615 align:middle line:90% cheaper by about 25%, 30%. 00:39:43.615 --> 00:39:46.300 align:middle line:84% It makes solar thermal towers cheaper. 00:39:46.300 --> 00:39:48.550 align:middle line:84% It makes geothermal technology cheaper. 00:39:48.550 --> 00:39:50.650 align:middle line:84% And it makes wind much, much cheaper. 00:39:50.650 --> 00:39:56.660 align:middle line:84% At the low end, $26 per megawatt hour to $9 per megawatt hour. 00:39:56.660 --> 00:39:59.200 align:middle line:84% If you compare that to all the conventional or fossil 00:39:59.200 --> 00:40:01.300 align:middle line:84% technologies in the previous slide-- 00:40:01.300 --> 00:40:03.490 align:middle line:84% and none of these things compete because we 00:40:03.490 --> 00:40:06.160 align:middle line:84% don't offer as many overt federal tax 00:40:06.160 --> 00:40:09.190 align:middle line:84% subsidies for these technologies in terms of energy production, 00:40:09.190 --> 00:40:12.880 align:middle line:84% even though these technologies or these industries 00:40:12.880 --> 00:40:15.460 align:middle line:84% do receive a lot of subsidies in other ways. 00:40:15.460 --> 00:40:19.420 align:middle line:84% But Lazard doesn't calculate those levelized costs. 00:40:19.420 --> 00:40:21.820 align:middle line:84% Just to show the sensitivity of this 00:40:21.820 --> 00:40:24.730 align:middle line:84% because the federal tax subsidies for renewable energy 00:40:24.730 --> 00:40:26.650 align:middle line:84% have been much more debated and are, 00:40:26.650 --> 00:40:30.880 align:middle line:84% frankly, sometimes a little less secure or less entrenched 00:40:30.880 --> 00:40:33.540 align:middle line:90% than the fossil fuel subsidies. 00:40:33.540 --> 00:40:36.220 align:middle line:84% But if we do this comparison again, 00:40:36.220 --> 00:40:38.820 align:middle line:84% the key point from a lot of energy analysts 00:40:38.820 --> 00:40:40.710 align:middle line:84% and a lot of renewable energy advocates 00:40:40.710 --> 00:40:43.590 align:middle line:84% is that if you compare the levelized cost 00:40:43.590 --> 00:40:47.190 align:middle line:84% of new billed wind and solar versus the marginal cost 00:40:47.190 --> 00:40:49.990 align:middle line:84% of selected existing conventional generation-- 00:40:49.990 --> 00:40:52.720 align:middle line:84% in other words, the right-hand side here for coal, nuclear, 00:40:52.720 --> 00:40:55.350 align:middle line:84% and combined and gas cycle turbines, 00:40:55.350 --> 00:40:57.078 align:middle line:84% we already have that fossil fuel system. 00:40:57.078 --> 00:40:57.870 align:middle line:90% It's already built. 00:40:57.870 --> 00:41:00.120 align:middle line:84% What we're trying to compare is, should we 00:41:00.120 --> 00:41:03.240 align:middle line:84% continue to operate the fossil fuel system that we have, 00:41:03.240 --> 00:41:05.790 align:middle line:84% or should we new build wind and solar? 00:41:05.790 --> 00:41:08.940 align:middle line:84% And so the point of this graph is to show that onshore wind, 00:41:08.940 --> 00:41:10.950 align:middle line:84% if you subsidize it, it's cheaper 00:41:10.950 --> 00:41:15.390 align:middle line:84% to build a whole new onshore wind turbine or farm 00:41:15.390 --> 00:41:17.100 align:middle line:90% and provide power that way. 00:41:17.100 --> 00:41:20.370 align:middle line:84% Subsidized wind outcompetes all these fossil generation 00:41:20.370 --> 00:41:21.450 align:middle line:90% technologies. 00:41:21.450 --> 00:41:24.270 align:middle line:84% And unsubsidized solar PV, unsubsidized wind, 00:41:24.270 --> 00:41:27.090 align:middle line:84% and subsidized solar PV are getting to the point 00:41:27.090 --> 00:41:29.460 align:middle line:84% where they're starting to outcompete coal and nuclear, 00:41:29.460 --> 00:41:32.490 align:middle line:84% and will probably soon outcompete 00:41:32.490 --> 00:41:33.900 align:middle line:90% gas and combined cycle-- 00:41:33.900 --> 00:41:36.240 align:middle line:84% combined cycle gas turbines also. 00:41:36.240 --> 00:41:38.300 align:middle line:90% Thank you very much. 00:41:38.300 --> 00:41:55.000 align:middle line:90%