Are we about to run out of wind?

In debates about how much it will cost to expand the use of renewable energy in Australia, at least in the next decade or two, it often comes down to differing opinions about the potential to expand wind power. 

I've lost count of the number of arguments where I've been told that the amount of suitable sites for wind farms are about to dry up, that wind turbine technology can't improve any further, and that the grid will go into meltdown the moment you install any more than a small quantity of wind because of its intermittency. 

Just the other day I found myself in a discussion with a critic of the renewable energy target, who felt its costs would be extremely high. This inevitably got down to assumptions about the electricity price a wind farm required to be financially viable. I pointed out that a number of wind farm developers would be very pleased to proceed with a project if they were offered $100 per megawatt-hour (MWh).  The quick response back was, “sure that might be the case now, but sites with good wind speeds are drying up and inevitably the cost will rapidly rise”.

While costs may eventually rise above $100 it is highly unlikely to rise rapidly (provided NSW doesn't do anything stupid with planning approvals). What sceptics of wind often fail to realise is just how far wind turbines have improved in their ability to extract power from lower wind speeds.  As turbines have improved their conversion efficiency, the amount of land area viable for wind farms doesn't increase in a linear, but rather an exponential fashion.

To illustrate the principle you need an appreciation of Australia's wind resource with the map below illustrating average wind speeds for areas of Australia. The areas of Australia that are dark red with wind speeds in the region of 8 metres per second are relatively small (ignoring the oceans). But there is an almost exponential increase in the amount of land available that is coloured orange to light red with wind speeds above 7 metres per second.

Australia's wind resource assessed by metres per second

Source: ABARES and Geosciences Australia (2010)

In terms of the economics of wind power, the number one cost is the upfront capital cost of building the plant. Once it's built the ongoing costs of the plant are pretty small as there's no fuel cost and little need for staff to operate it. So the more electricity output you can manage for a given set of megawatts of capacity installed the better.

Several years ago wind farm development in Australia was largely concentrated on sites with wind speeds above 8 metres per second (m/s) as these could enable developers to get average output in the realm of 30 per cent to 40 per cent of the installed capacity (known as the ‘capacity factor'). But with new longer turbine blade designs it is now possible to get this same kind of output, and possibly even higher, from wind speed sites of 7 to 7.5 m/s.

The chart below from the US National Renewable Energy Laboratory illustrates how reductions in the cost of turbines, combined with improvements in conversion efficiency means the economics from a 7m/s site today are now slightly better than what was possible with a site of 8m/s a decade ago.

Total cost of energy from wind – 2002 technology vs 2012-13 technology

Note Australian costs are higher than those estimated by NREL for US conditions due most likely to a combination of Australia having lower construction sector productivity and greater equipment transportation costs. Source: US National Renewable Energy Laboratory (2012)

These advancements in wind turbine technology and cost mean that Australia is at little risk of drying up of good wind farm sites.

This is supported by highly detailed analysis by ROAM Consulting of Bureau of Meteorology wind data for the Australian Energy Market Operator.

Taking into account a range of geographical constraints on where wind farms could be located (e.g. distance from residential housing, agricultural land use, national parks etc.), ROAM estimated that the available wind resource and suitable land area could support 879 gigawatts of wind power within the NEM while still maintaining a capacity factor greater than 35 per cent. The table below provides a breakdown by state.

Source: ROAM Consulting (2012)

To provide a feel for how large that is, Australia's entire electricity generation (both fossil fuels and renewables) is about 55 gigawatts.

According to ROAM:

“These build limits are a conservative estimate on many counts, including the fact that the totals only include sites with estimated capacity factors ≥ 35 per cent. In addition, since the maximum build density is based on the densities of existing wind farms in Australia and the UK, wind farm installations meeting these build limits would be no closer to dwellings than they currently are in existing wind farms.”

Now yes it is true that a very large amount of this physically possible wind capacity would be nowhere near suitable transmission infrastructure. But even if you just took the Victorian estimate, you're still left with more than enough capacity to fill the RET many times over.