Wind power forecast backs “Lift-on” rare earth recycling movement
It is rare that we sound like Donald Trump but recently he made the claim that “wind power is obsolete”. For Republican candidates of days gone by Russia or Iran or North Korea have been classified as the Great Satans in candidates’ debates. It is however perfectly understandable that with the comb-over to end all comb-overs, The Donald should be an enemy of wind power! However there is an element to wind power of obsolescence and it is that which I shall discuss in this research piece.
What Goes around Comes Around
Our interest in the fate of the current fleet of wind turbines was piqued by a report in the Financial Times in recent weeks. Wind turbines have spread dramatically in this century as a cheap(ish) source of renewable energy. The main criticisms have been that they are eyesores and that they harm wildlife, particularly birds. The former criticism has been dealt with in some places by moving the wind farms offshore which in turn has exacerbated criticisms on the second issue with seabirds having to run the gauntlet of densely packed offshore farms such as exist off the coasts of Germany, Holland and Denmark.
The negative backlash now means that some areas are now withdrawing approvals for renewals of turbines particularly when they are standalone or in small clumps on highly visible hillsides. In some places there are pushes to disband offshore farms or at least to replace dense occurrences with larger turbines that are spread farther apart. Turbines are designed to last 20-25 years, and increasing numbers will reach the end of their serviceable life.
To make matters worse the first bloom of enthusiasm from taxpayers and governments has gone off the rose. The FT reported that energy companies have warned that subsidy cuts from the UK government will prevent them from replacing old wind farms as almost 1,000 turbines approach the end of their lives over the next decade. According to industry body RenewableUK, the UK has 924 turbines that have been operating since before 2004.
It was hoped that improving farms in prime locations would be a convenient way to increase energy capacity without building in new areas, but funding uncertainty is making companies reluctant to plan projects without government support.
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Since May of 2015 the UK government has changed planning laws and cancelled access to the main subsidies for onshore wind, the first steps in a plan to completely phase out renewables subsidies.
In the US, the sceptics are more in abundance because in the land of “overdoing things”, wind turbines in some places were led by enthusiasm rather than reality. In maybe an apocryphal story in Hawaii the 37 turbines at the Kamaoa Wind Farm stood derelict for more than six years after it was discovered that repairs were more expensive than replacements. This is just one of six abandoned wind farms in one of the most wind-ideal places on the planet. While as many as 4,500 wind turbines have been built, and abandoned, in California alone. Wild claims circulate that as many as one in four wind turbines in the US do not work. Certainly a frightening failure rate if it’s true. It leaves one wondering whether construction and siting has been driven by tax breaks rather that local wind velocity considerations.
If nothing else the wind farms that will never reach production, or at least never be replaced, provide interesting scavenging fodder for those who believe, as our Jack Lifton does, that recycling is going to be a major force in the permanent magnet space.
Repowering – Word Play?
The industry refers to improvements as “repowering,” but advances in technology mean this often involves completely decommissioning and replacing old turbines, making costs comparable with new developments. Some of this repowering means upsizing while in the minds of some it means repositioning outmoded turbines in the Third World or in community energy generation projects.
Modern wind turbines are more than three times the height and provide 10 times more output than turbines from the mid-1990s.
But where do old wind turbines go to die? We hunted around and found an interesting report from a local authority (Aberdeen in Scotland) that commented: “The successful implementation of wind energy in Europe has led to a developing market for second-hand wind turbines. Repowering of wind farms after 5 to 15 years of operation releases a large number of turbines into the market. For developing countries, this is an opportunity to gain experience in working with renewable energy sources, to establish their own wind energy industries and to profit from technology transfer with low capital expenditure. For many developing countries, projects with new wind turbines have proven unaffordable and cheaper used turbines provide an option. Used turbines have also been attractive for community- led schemes in Scotland and the UK”.
This may indeed be wishful thinking, combined with rose-tinted spectacles. The University of Edinburgh found “for onshore wind, the monthly ‘load factor’ of turbines – a measure of how much electricity they generate as a percentage of how much they could produce if on at full power all the time – dropped from a high of 24 per cent in the first year after construction, to just 11 per cent after 15 years.” This implies that sending old wind turbines to Uganda (not known for its wind anyway, but that’s a mere detail) because it helps developing nations, may just be sending them more problems with largely exhausted collection of tired old turbines.
On the commercial front, the FT reported that in October the large infrastructure group John Laing purchased the biggest repower project in Germany. Ross McArthur, managing director and head of renewable energy, said he expected to see more projects across the EU in the coming years: “It’s a no-brainer; you get more bang for your buck with more energy from fewer turbines. Even from a visual impact point of view, you’re replacing larger numbers with fewer, albeit taller, turbines.” Fourteen repower projects have been completed or approved in the UK since 2010, but Mr McArthur said the UK market was now “more or less gone”.
RWE Innogy, the renewable arm of Germany’s RWE Group, commented that: “We have a site in Cumbria (in North East England) that’s currently 12 turbines, and we have a planning application to turn that into a six-turbine site that delivers three times more output. The decision we’ve got though is, it may be more sensible given the current climate to eke out the life of a 20-plus year-old asset, with technology that’s 20 years out of date.”
Less is more, they say, but maybe less is actually less in absolute terms for the consumption of REEs in the magnets used in the turbines. Moreover a steady flow of scrapped turbines to the breakers yards (and the inevitable REE recycling facilities – even if these aren’t in North America) will in some ways negate the demand scenarios some REE miners use to undermine their growth projections.
We should remember that in technology things always change. We have seen this in chips and cellphones and computers and TV sets. The item gets cheaper as it gets more powerful and smaller (or bigger and flatter in the case of TVs). Wind turbines have been around for quite a long while now so it is strange that many view the first flush of last decade as setting some sort of high water mark for technology when in fact like everything that eventually wears out, redundancy is not only built in, but guaranteed. The assumption that with obsolescence whatever had been built before would just be replaced with more of the same is fallacious.
Thus we have an interesting new aspect to the permanent magnet trajectory playing out. It is quite possible that quite a substantial amount of the current wind turbine fleet at the global scale may not be replaced on a like-for-like basis and that there may indeed be a net shrinkage in permanent magnet usage in replacement of existing turbines, as some of the current fleet will not be reauthorized in their existing locations and those that are replaced might be substituted with fewer, yet larger, turbines.
Renewable energy is itself being renewed. Get used to it!
Christopher Ecclestone is the EU Editor for InvestorIntel and is a Principal and mining strategist at Hallgarten & Company in London. Prior to founding Hallgarten ... <Read more about Christopher Ecclestone>