Energy revolution: a problem or a path to brighter future?

Rapidly growing share of renewable energy sources in the production of electricity is turning the energy industry upside down. Some claim that this will lead to a catastrophe, large scale power outages known as “blackouts”. Others say that there is a bright future ahead of us.
Energy revolution: a problem or a path to brighter future?

Bełchatów power plant, Poland (Pibwl, CC BY-SA)

In August 2019, eastern England experienced a blackout. Thousands of people were left without electricity. Although the outage only lasted for an hour, the effects were still catastrophic. People were trapped in trains, tunnels and elevators. Some trains could not be restarted even after the electricity supply was restored — the newer models required an upload of software.

Without electricity we can’t use, for example, the automatic glass doors in office buildings, shopping centers and in public utility buildings. It is therefore easy to imagine what would happen if the power supply was suddenly cut off for a longer period of time in the entire city or region. This would be like Armageddon.

A growing risk of blackouts

According to the report prepared by National Grid, the British transmission system operator, the main cause of the blackout were small photovoltaic power plants. A lightning struck the Eaton Socon-Wymondley high-voltage transmission line, leading to a voltage collapse. This, in turn, led to the automatic shutdown of many micro power plants unable to function without external power supply, in particular photovoltaic power plants. The resulting sudden drop in electricity production caused a cascading failure in the entire power network: disruptions in the operation and the shutdown of subsequent power plants. The power system operator was not able to quickly regain control over its functioning.

Professor Władysław Mielczarski from the Łódź University of Technology warns that similar situations could also occur in other countries, including Poland. But he admits that this defect of photovoltaic panels and other micro-power plants (automatic shutting down in the event of voltage surges) can be eliminated easily and at a low cost. He cautions that if dozens of traditional power plants are replaced by thousands of small power plants and millions of micro power plants, it will be much more difficult to keep the entire power system in check and to maintain the appropriate level of electricity production. This leads to an increased risk of blackouts.

Renewable energy sources gain popularity

In many countries, including Poland, the share of renewable energy sources (which are considered distributed energy generation systems) in electrical energy production is rapidly increasing. However, the problem is that when it comes to renewable energy sources, the strongest growth is recorded in the numbers of new wind turbines and photovoltaic panels which are considered unstable and unreliable. In the case of photovoltaics, a genuine investment boom is taking place. At the end of 2018, the total generation capacity of photovoltaic power plants in Poland amounted to 200 megawatts (MW) but increased to 1000 MW by October 2019 and could even reach 1500 MW by the end of 2019. Wind power generation is also growing again.

Western countries fell in love with renewable energy sources already in the 1970s and 1980s. After two subsequent energy crises, caused by sharp increases in oil prices, the West became aware of the risks associated with excessive dependence on the imports of energy resources. This lesson was especially important for Europe, which had been forced to rely on imports from third countries due to the limited local reserves of energy raw materials. However, the Western Europe discovered that renewable energy sources, which are widely available in almost every country in the world, could provide a way out of this trap.

This was also a period of time when environmental awareness was rapidly spreading. On the one hand, there were fears concerning the future depletion of oil, coal, gas and uranium deposits. On the other hand, coal plants were being criticized for their negative environmental impact.

A difficult balance

At present, the coal-fired power plants utilize new technologies that, as a result, poison the environment less than they used to (although, of course, these technologies are very expensive and increase the cost of energy production). Already a few decades ago, it was considered desirable to gradually replace coal plants with “clean”, renewable sources of energy: wind turbines, solar power plants or hydroelectric power plants. And the renewable energy gained an even more powerful ally: global warming.

Western Europe recognized this phenomenon as the most serious environmental challenge almost two decades ago and identified the excessive concentration of carbon dioxide in the atmosphere as the primary cause. Since the very beginning, much of the blame was laid on coal-fired power plants, which are responsible for a very large percentage of the carbon dioxide emissions. This problem was to be solved through the replacement of coal plants with “carbon-free” renewable energy generation.

This still remains the case today. The share of renewable energy sources in electricity production is growing rapidly. For example, in Denmark 41 per cent of the demand for electricity is already covered by wind power plants.

However, all these developments have serious consequences. It’s not just the increased risk of failures because for the time being the energy sector is doing fine (the number of major failures is not growing) and should also be doing well in the future, thanks to its growing experience in handling the new operating environment and the implementation of the relevant safety technologies. But coal-fired power plants — which are cooled using water from the rivers in Poland — could also experience blackouts, for example, due to the increasingly frequent droughts. This almost happened once already. Back in August 2015, due to a severe heatwave and extremely low water levels in the rivers, the authorities introduced restrictions on the supply of electricity to manufacturing plants while households were asked to reduce their energy consumption.

Coal-fired power plants have a major advantage over wind farms and solar power plants. Maintaining electric power production at levels corresponding to the demand was a difficult task even when we were not using renewable energy. This is due to the fact that the consumption of electricity fluctuates heavily depending on the time of the day and the season of the year.

Nowadays, when electricity generation is increasingly dependent on wind farms and photovoltaic power plants, whose operation depends on the weather, it is becoming ever more difficult to balance electricity production with its consumption.

Energy storage is difficult

Most of the states guarantee the receipt of electricity generated from renewable sources. As a result, the producers of renewable energy are pushing conventional power plants out of the market. The more electricity is generated from renewable energy sources, the less energy can be produced by coal-fired, gas and nuclear power plants. For this reason, many of them are already utilizing only a part of their capacity. Due to that they are generating losses. As a result, the construction of new conventional power plants, not only coal-fired, but also gas or nuclear power plants, is becoming unprofitable.

Due to wind farms and photovoltaic power plants dependence on weather, it is necessary to maintain backup conventional power plants producing enough energy to fully satisfy the demand for electricity. This means, that at present only the coal-fired, gas, and nuclear power plants can play this role.

This is a very serious problem. It would be solved by a technological breakthrough in the electric power storage (today we are not able to cheaply store it on a large scale), because then the unstable production of electricity by wind farms and solar power plants would no longer be an issue.

So far, there has been no such breakthrough, so we still need to build new coal, gas or nuclear power stations and power plants, especially considering that many of the already existing Polish plants are so old that they will soon have to be decommissioned.

Expensive transmission lines

Special mechanisms that are currently being developed guarantee the profitability of investments in conventional power plants and the maintenance of the existing ones. In Poland, these measures include the so-called “power market” or “capacity market”. The main principle is that energy companies receive a certain kind of a subsidy in order to maintain “readiness” for the stable and continuous production of a certain amount of electricity. As a result, they can build new power blocks and maintain the existing ones, which would be unprofitable without the subsidies.

Meanwhile, so-called “contracts for difference” are applied for the construction of new nuclear power plants. Pursuant to this mechanism, the state guarantees that these plants will be able to sell the generated electric power for a predetermined price (higher than the market rate) and that this price will be maintained for many years, during the investment entire payback period.

The problem is that the use of such mechanisms is expensive and their costs are generally passed on consumers. The greater the share of unstable renewable energy sources in the overall power generation mix, the more it costs to balance their production with the conventional power plants.

This is why electricity prices for households are the highest in those EU member states that have the most wind turbines and photovoltaic panels, such as Germany and Denmark. The prices are slightly lower in Spain because that country has the most sunshine and therefore less of a need for backup conventional power plants.

Once offshore wind farms are built on the Baltic Sea, then billions of the PLN will have to be spent on the construction of new transmission lines that will deliver electricity to the country’s interior (the most densely populated and the most industrialized “southern belt” consumes the most electricity in Poland). The costs of building such lines will be included in the electricity prices and will certainly not be covered by the companies investing in offshore wind farms.

Coal and nuclear energy will be consigned to history

All of this does not mean, however, that we should attempt to resist the popularization of renewable energy. This is especially true considering that the EU climate policy forces us to take action. Due to the fees imposed on carbon dioxide emissions, and their elevation to exorbitant levels (in conjunction with increasingly strict environmental standards concerning air pollution) the costs of coal-fired power plants increase significantly and then it is reflected in the price of the energy they produce.

The renewable energy industry, free from such burdens, uses “fuels” that are available for free, and enjoys rapidly declining investment costs. As a result, the first wind power plants that are now being constructed will not require any subsidies, because they will be profitable without any aid. The same also applies to photovoltaic energy. So in the future the renewable energy industry may produce energy even cheaper than conventional power plants. It could then compensate or start paying back for the cost of maintaining backup capacities which are still necessary so far.

Nuclear and coal-fired power plants will lose the most on the transition to renewable energy sources, at least in the EU. Why is that? Let’s start with coal. The existing lignite mines are nearing depletion and the construction of new mines generates strong public opposition that blocks investments, also in Poland. Besides, lignite is a fuel causing the highest emissions which reduces the cost-effectiveness of new open-pit mines.

Hard coal has lower emission levels but Poland is the only country in the European Union that still extracts this fuel on a large scale. Almost all of the hard coal mines are located in the Upper Silesia region (southern Poland). They have been struggling to maintain profitability for many years, so they invested too little, especially in the exploration of new deposits. The ones that are already mined are also nearing depletion and the launch of production from new deposits requires huge investments.

Taking into account the deteriorating condition of the coal-based energy industry and the political climate around it, obtaining these investment funds could be difficult. Local communities in the Silesia region are protesting against the construction of new mines.

Contrary to popular opinion, nuclear power plants — which Poland has been planning to build for decades — are not a good alternative to coal-fired power plants, even though they are classified as “carbon-free” by the European Commission. Experts point out that in nuclear power plants it is very difficult and expensive to change the energy production levels. When that level is reduced, it resembles a situation where someone is simultaneously pressing the brake and the accelerator pedals while driving a car.

Meanwhile, as the production of electricity increasingly involves the use of unstable renewable energy sources, the national energy system primarily needs power plants that not only ensure the continuity of production but also enable quick and easy changes in the production levels. This condition is not fulfilled by nuclear power plants and this is why Germany, one of the world leaders in the development of renewable energy, decided to phase them out.

Environmental protection is expensive

It seems that there is no turning back from the rapid development of renewable energy. Many experts expect that within the next dozen years there will be a technological breakthrough in the area of energy storage, which will make it possible to store it cheaply on large scale. If this happens, the world will be able to switch to renewable sources of energy also in the area of road transport, where gasoline and diesel cars will be replaced by electric vehicles.

The only problem is that before this happens there will be a transitional period, a period of energy transformation, which will certainly require enormous investment expenditures. As a result, at least for some time, energy will be much more expensive than it is today.

Of course, costs can be reduced. In the first place, by implementing energy-efficient solutions. This path was taken by Denmark which did not increase its energy consumption for many years despite continued economic growth.

Instead of building new coal blocks and power plants we should consider replacing them with combined heat and power plants that are more energy efficient and more economical, because they waste less energy (the energy efficiency of classic coal-fired power plants currently reaches 45 per cent, which means that up to 55 per cent of the energy from the burned coal is wasted). The same applies to gas-fired power plants.

We should also promote those renewable energy sources which ensure continuous supply: biogas plants, geothermal energy and heat pumps. There is huge potential for development in these areas but it has only been utilized to a very limited extent thus far. Meanwhile, by investing more resources in these technologies we would not only decrease the cost of energy transformation, but also improve the quality of the air.

The climate change that we are witnessing is not due to the fact that we are emitting carbon dioxide and other greenhouse gases but that we are emitting too much of them. Meanwhile, the EU authorities believe that abandoning the use of coal is an essential part of the plan to achieve so-called climate-neutrality by 2050. We should keep in mind, however, that in the EU member states, vehicle transportation is responsible for a greater percentage of the CO2 emissions than the coal-fired power industry.

Bełchatów power plant, Poland (Pibwl, CC BY-SA)

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