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A strong economy, good defense capabilities, and expensive energy produced in an unreasonable manner don't fit together in the same equation, electrical engineer Priit Tammeraid writes.
Living in the chilly, globally warming Nordic winter, and awaiting the upcoming decoupling from the eastern neighbor's grid and connecting to the grid of continental Europe, the average person in Estonia rightfully has a number of unanswered questions and burdensome concerns. However, the future remains as opaque as the thicket where Ivo Schenkenberg's men were hiding when Agnes asked Gabriel what will become of us.*
Are we facing a personal cataclysm before we reach the brink of a global climate catastrophe, even before the sky falls to the earth and the climate warms by the next one and a half degrees?
The production assets that provide energy to the energy system differ significantly in terms of the energy source, and based on this, it is reasonable to divide them into two main types. Plus there are energy storage devices, the input and output of which is electricity.
First, there are dispatchable assets, which produce electricity according to our needs, i.e. convert the energy stored in primary energy carriers into electrical energy through a technological process. This includes all power plants that emit carbon dioxide (thermal power plants, gas power plants) and nuclear power plants. By their nature, nuclear power plants are also thermal power plants.
All energy storage methods entail production costs, notably investment and operational costs, along with losses in the storage process.
Second, intermittent generating assets, which convert intermittently available energy into electricity within the limits of the input energy currently available to them. This list includes solar power plants, wind power plants, as well as hydroelectric power plants. While the amount of water available in nature for the latter to operate can be predicted and the water flow is continuous, solar and wind are intermittent and there can be significant mismatches between their availability in time and the time when consumers need energy.
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Third, energy storage. Once we have accumulated kinetic or potential energy, produced hydrogen, or stored chemical energy in a battery, we can produce electricity within the limits of the amount of energy stored. However, significant losses occur in the process, and essentially, we are producing energy a second time, bearing all the production-related costs once again.
In actuality, electricity cannot be stored. What can be stored is energy, meaning storage devices are pieces of equipment that convert electrical energy into a storable form of energy, from which electricity can be produced later. Whether the stored energy is kinetic energy in a flywheel, potential energy in a hydroelectric dam reservoir, or «chemical energy» in a battery, all these energy storage methods entail production costs, notably investment and operational costs, along with losses in the storage process.
It is important to point out that a dispatchable energy asset can be dispatched only if there is a primary energy carrier, or fuel, that supplies it with energy. In our country, dispatchable power generation equipment is thermal power plants, which require oil shale.
By scheduling the operation of a thermal power plant to act as a substitute for a storage device for intermittent energy, we make the price of every unit of produced energy unreasonably expensive.
However, oil shale mining is only efficient if it is a continuous process and sufficient amounts are being extracted.
By scheduling the operation of a thermal power plant to act as a substitute for a storage device for intermittent energy, we make the price of every unit of produced energy unreasonably expensive. This is especially true when considering the emissions charge added on top of it.
If preference is given to intermittent energy production assets, which produce energy intermittently, according to the possibilities, and not in accordance with the current energy demand, the total capacity of the production units must be significantly oversized. This approach is inefficient, since a large part of the production capacity is not used due to the low capacity factor of intermittent energy.
In addition, storage devices are needed to accumulate the energy that is surplus in the grid and to pass it on at a time when intermittent production assets are unable to produce. Nevertheless, in a system like this, dispatchable production assets are also essential to cover periods when intermittent energy and stored energy do not cover the needs of the system.
Each production asset has a capacity factor that measures its ability to produce electricity relative to its maximum theoretical annual output. For solar panels, this is optimistically 10-15 percent, with most of the production occurring during periods of grid overproduction. Wind turbines have a capacity factor of 25-30 percent.
When considering wind turbines and solar panels together, it can be assumed that they significantly reduce each other's marketable production potential. However, connections and networks need to be built for all of them based on their maximum production capacity. Furthermore, the arbitrary oversizing of production assets does not mean that the entire energy demand will be covered; on calm days, all wind farm turbines stand still, and solar parks do not produce electricity at night, regardless of their size.
In addition to causing a risk of deficit for the system containing large amounts of intermittent energy production, randomness also leads to situations where production spikes, but there is not enough consumption.
It is also necessary to invest much more in storage systems. Unfortunately, we cannot avoid deploying dispatchable energy assets that would supply us with energy during periods when intermittent energy happens to be not available.
In addition to causing a risk of deficit for the system containing large amounts of intermittent energy production, randomness also leads to situations where production spikes, but there is not enough consumption. The best examples of this are the moments of negative or zero price on our summer days.
The situation in the renewable energy market reminds me of a situation in my home village a few decades ago. Back then, I was looking for someone with a tractor to help me work my small potato field. I found someone to help, but with a broken tractor. So, in addition to preparing the potato rows, the responsibility also fell on me to take the generator off the tractor and do all the repair work with my own tools.
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All this time, the tractor driver and the village electrician sat nearby, drinking the vodka I had bought for my own money, which they considered an advance payment, and praised the «smooth» progress of the work. In the end, I had to pay the tractor driver a hefty sum in addition to the half-liter bottle. The job of preparing potato rows got done, but it was an expensive and laborious undertaking.
Today, too, the electricity buyer pays for the energy they consume and the unreasonable structure of the system, along with the costs of ensuring its stability. Meanwhile, politicians and officials claim that intermittent energy is the key to our competitiveness and affordable energy in the future, which will ensure favorably priced energy in the system. This is obviously a lie, as an energy system like this will continue to be inefficient in the future, with network charges making up a significant part of the electricity price.
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In Estonia, only the processing industry, which buys the necessary inputs for production and exports products after their valorization, can play the role of the driver of the economy. The price of energy plays a key role in this. This requires clearly predictable and affordable energy, which cannot be guaranteed at the expense of private consumption. An investor will not believe politicians' promises that ignore the basic laws of nature and cannot risk a situation where their factory only operates in sunny weather or with moderate winds, but not during a storm.
An investor will not believe politicians' promises that ignore the basic laws of nature and cannot risk a situation where their factory only operates in sunny weather or with moderate winds, but not during a storm.
Such a system can certainly be made to work, but without cost-effectiveness. Besides, without a strong buffer, there is a higher likelihood that in case of certain failures, the system will be temporarily paralyzed. Has anyone calculated the cost to the economy of being without electricity for a few days? For industries, it's a disaster.
If we accept the fact that a strong economy and maximum competitiveness are also essential to ensure taxpayers can keep up with ever-increasing defense spending, then ensuring a reasonable electricity price is a matter of security. Because a strong economy, good defense capabilities, and expensive energy produced in an unreasonable manner don't fit together in the same equation.
* A famous scene from the 1969 Estonian film «Viimne reliikvia» («The Last Relic»)
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