Electric trains have always been a relatively sustainable mode of transport, with much lower emissions than cars, but as of the 1st of January, 2017, all electric train rides in the Netherlands have become even greener. They are now entirely powered by clean, renewable, wind energy.
Dutch railway companies, of which NS is by far the largest, teamed up with energy company Eneco in 2015 to cut train ride emissions drastically. Originally, 2018 was set as the target for changing to 100% renewable power sources. After having reached 75% in 2016, though, the 100% transition was completed one year ahead of schedule.
The NS alone transports 600,000 people per day, for which it needs 1.2 billion kWh of electricity a year.
Wind farms have made a significant impact in limiting carbon emissions from other sources of power generation in Great Britain. Power from wind farms prevented the creation of almost 36 million tonnes of greenhouse gas emissions from sources such as coal and gas, in a six-year period. This is the equivalent of taking 2.3 million cars off the road, University analysis of nationwide output shows. The study, published in Energy Policy, was supported by the Engineering and Physical Sciences Research Council.
A transformation is happening in global energy markets that’s worth noting as 2016 comes to an end: Solar power, for the first time, is becoming the cheapest form of new electricity.
This has happened in isolated projects in the past: an especially competitive auction in the Middle East, for example, resulting in record-cheap solar costs. But now unsubsidized solar is beginning to outcompete coal and natural gas on a larger scale, and notably, new solar projects in emerging markets are costing less to build than wind projects, according to fresh data from Bloomberg New Energy Finance.
The chart below shows the average cost of new wind and solar from 58 emerging-market economies, including China, India, and Brazil. While solar was bound to fall below wind eventually, given its steeper price declines, few predicted it would happen this soon.
“Solar investment has gone from nothing—literally nothing—like five years ago to quite a lot,” said Ethan Zindler, head of U.S. policy analysis at BNEF. “A huge part of this story is China, which has been rapidly deploying solar” and helping other countries finance their own projects.
Half the Price of Coal
This year has seen a remarkable run for solar power. Auctions, where private companies compete for massive contracts to provide electricity, established record after record for cheap solar power. It started with a contract in January to produce electricity for $64 per megawatt-hour in India; then a deal in August pegging $29.10 per megawatt hour in Chile. That’s record-cheap electricity—roughly half the price of competing coal power.
“Renewables are robustly entering the era of undercutting” fossil fuel prices, BNEF chairman Michael Liebreich said in a note to clients this week.
Those are new contracts, but plenty of projects are reaching completion this year, too. When all the 2016 completions are tallied in coming months, it’s likely that the total amount of solar photovoltaics added globally will exceed that of wind for the first time. The latest BNEF projections call for 70 gigawatts of newly installed solar in 2016 compared with 59 gigawatts of wind.
The overall shift to clean energy can be more expensive in wealthier nations, where electricity demand is flat or falling and new solar must compete with existing billion-dollar coal and gas plants. But in countries that are adding new electricity capacity as quickly as possible, “renewable energy will beat any other technology in most of the world without subsidies,” said Liebreich.
The world recently passed a turning point and is adding more capacity for clean energy each year than for coal and natural gas combined. Peak fossil-fuel use for electricity may be reached within the next decade.
Thursday’s BNEF report, called Climatescope, ranks and profiles emerging markets for their ability to attract capital for low-carbon energy projects. The top-scoring markets were China, Chile, Brazil, Uruguay, South Africa, and India.
When it comes to renewable energy investment, emerging markets have taken the lead over the 35 member nations of the Organization for Economic Cooperation & Development (OECD), spending $154.1 billion in 2015 compared with $153.7 billion by those wealthier countries, BNEF said. The growth rates of clean-energy deployment are higher in these emerging-market states, so they are likely to remain the clean energy leaders indefinitely, especially now that three-quarters have established clean-energy targets.
Still, the buildup of wind and solar takes time, and fossil fuels remain the cheapest option for when the wind doesn’t blow and the sun doesn’t shine. Coal and natural gas will continue to play a key role in the alleviation of energy poverty for millions of people in the years to come.
But for populations still relying on expensive kerosene generators, or who have no electricity at all, and for those living in the dangerous smog of thickly populated cities, the shift to renewables and increasingly to solar can’t come soon enough.
Deepwater Wind announced today that the Block Island Wind Farm has completed its commissioning and testing phases and begun commercial operations, delivering electricity into the New England region’s grid on a regular basis. The energy produced from the Block Island Wind Farm is linked to the New England grid by National Grid’s new sea2shore submarine transmission cable system.
The Block Island Wind Farm consists of five 6-MW “Haliade” wind turbines made by GE. The wind farm will be able to provide 90 percent of the electricity needs of the island, located three miles off the coast of Rhode Island, replacing diesel generators the island’s residents have relied on until now.
A multi-year study led by an Iowa State University scientist suggests the turbines commonly used in the state to capture wind energy may have a positive effect on crops. team installed research towers on a 200-turbine wind farm between Radcliffe and Colo. The research towers collected data from 2010 to 2013 on wind speeds and directions, temperature, humidity, turbulence, gas content and precipitation.
turbulence produced by wind turbines leads to temperatures about a half degree cooler during the day and between a half to a full degree warmer at night. That’s because the turbulence mixes air at different elevations. That mixing cools the ground level during the daylight hours, like a fan blowing on a wet surface. But at night, as the ground loses heat, the mixing brings warmer air aloft down to ground level, resulting in a net warming effect. The turbulence also suppresses the formation of dew and dries the crops, which could combat harmful molds and fungi.
associated changes in air pressure at ground level, also may enrich the carbon dioxide content in the air surrounding crops, which could make the plants grow more efficiently.
Wind energy is changing the economy of the Midwest. Wind is the fastest growing source of electricity in the United States, and about 70 percent of wind power is located in low income counties. These counties are typically rural, often Midwestern areas, where the dominant industry for decades has been agriculture. Increasingly though, many farmers are finding that leasing space to wind turbine operators is more lucrative than growing corn. That trend is likely to continue going forward, and it should alter the way energy companies and investors alike should think about wind power.
Wind power represents an important economic boost in many areas of the U.S. and as a result local farmers and communities welcome wind turbine developers. Farmers benefit directly from wind turbines to tune of between $7,000 and $10,000 per turbine in annual leasing fees. A farmer who could lease land for 10 wind turbines would likely receive between $70K and $100K in annual lease income with essentially no overhead for that income.
Farmers are not the only beneficiaries however. Communities as a whole benefit directly from wind farm development as well. A two MW wind turbine can carry a tax assessment value of $720,000. If a community can host 100 turbines across farms throughout the county, that equates to an additional $72 million in property tax values which in turn provides an enormous influx of cash for renovating schools, upgrading infrastructure, and adding new services for local residents. The average U.S. property tax rate is around 2 percent, meaning that 100 two MW wind turbines would generate $1.4 million in property tax revenue annually – enough to pay for more than $40 million in local improvements at typical muni cap rates.
Nationally, there are more than $100 billion of wind farm investments with more on the way, and rural land owners will likely receive around $1 billion in lease payments annually by 2030 according to some estimates. Against this backdrop and given the value that wind power provides to rural communities as a whole, it is little wonder that wind power projects are quite popular in most rural towns.
Related: OPEC Deal Still Wobbly, But Oil Investment Takes Off
The popularity of wind projects with the residents of these areas is important because, unlike most other forms of power production (including solar power in some areas), wind turbine developers get significantly less pushback from local NIMBY protesters. Add to that the extension of the five-year wind tax credit which passed Congress last year, and the wind power business looks likely to continue to be strong for years to come. Congress’ tax credit pays wind power producers $0.023 per kwh of power produced for a 10-year period. Bloomberg estimates the credit will lead to a doubling of the current ~83 GW of wind power by 2030.
Add together the supportive regulatory environment and clamor by local residents for more wind turbines, and its little wonder that wind is one of the best areas of the power generation markets right now. Investors can capitalize on the trend either with large diversified conglomerates like Berkshire Hathaway which owns wind power producer MidAmerican Energy, or with pure play power producers like Alliant Energy. Both approaches have merit depending on one’s investment philosophy, but investors should look closely at one path or the other because strong secular growth stories in the energy business are in short supply at present.