Welcome to the DNV GL Talks Energy Podcast Series. Electrification, rise of renewables and new technologies supported by more data and IT systems are transforming the power system. Join us each week as we discuss these changes with guests from around the industry.
MATHIAS STECK I’d like to welcome back Dr Andrew Garrad to continue our discussion from last week. Andrew, last week we discussed the impact of COP21 in Paris in December 2015 and the evolution of the wind industry over the years. Perhaps we could pick up where we left off in talking about the great advances in the level of supply to the electricity grids around Europe and the world.
DR ANDREW GARRAD Yes, we can maybe talk a little later about how that all started and who was involved in the early big turbines you mentioned.
You mentioned Growian which was of course made by MAN and there were lots of other people like that big industrial players, particularly aerospace players, involved in the early days and sadly almost none of them remain.
MATHIAS STECK Yes, this is actually one observation which I wanted to discuss with you as well was certainly at some point at least in Europe we started to do these things, wind and solar, to be greener. People like to spend money for this maybe also to make themselves look greener when companies invested in this. But whatever we developed in Europe was then later mass deployed by countries who really were in need of electricity and I’m thinking mainly here of China and to some extent India. And it’s an interesting combination that maybe the start of the engineering development is in Europe but it needs then an Asian country to actually bring the prices dramatically down. That happened in wind. That happened in solar. We see it now happening in Asia with storage and for some extent with regards to technology development at least we see now China taking a leading position in carbon capture. So while we are jumping on these countries sometimes because of their emissions, on the other hand they are actually making this technology financially viable or more affordable which is actually helping the whole thing. So I’d like to talk a little bit about this area where we say the different motivations for renewables in the different parts of the world which then also has an influence on the players who actually are in this field or then leave that space again because maybe it’s not an interesting market for them anymore. So maybe we can talk a bit about that one.
DR ANDREW GARRAD Yes. Let me just go back to where I was a minute ago. So, if you look at how the wind energy business started, it started in two quite distinct ways. It started with some very small companies, literally people in farm yards and back yards, in Germany and in Denmark making their own very small turbines. At the same time there were quite a lot of central government intervention with large scale capital grants to the likes of MBB and MAN, British Aerospace, GE, Air Italia, Messerschmitt, those people and the feeling then was by central governments, if this is going to work it has to work on a large scale. It turned out that they were right I would say, but they didn’t have the right mechanism to get there. So we had at the very beginning essentially in northern Europe with a bit of Californian activity, which was slightly different in its nature and I have to come back to that, very much driven by tax, and less by engineering integrity. And the two parallel powers in Europe developed side by side with almost no communication between them. And then there was a very important European programme called Wega and it was a Central European Commission activity which had decided that it was necessary to get commercial megawatt scale machines. And there’s a chap called Wolfgang Peltz who ran this programme and he got one, I think it was Vestas in the first instance, to commit to making a megawatt machine by giving them a good chunk of money, and then he was able to go around the others and say well Vestas is doing this, ought not you to join in, and they did. And it’s quite rare I think that a European initiative or a government initiative has quite such power as this thing, but the timing was perfect.
And so the result of that Wega initiative was to bring together the small scale turbines that were being produced and the big scale science that was being produced, which hitherto had not really met. And that I believe, those two or three years of that programme, was the beginning of the large scale wind turbines that we see now and incidentally, just as a side, we as Garrad Hassan were in an absolutely perfect position to benefit from this because in those days European projects needed to have at least three different nationalities; in this case there would be a manufacturer, a developer and somebody else, and we managed to be the somebody else for a very large number of different projects which made us become European very quickly, gave us a huge amount of experience in how these big turbines behave, and allowed us to develop our tools both predictive and measurement tools very very rapidly. And then the European effort got improved, certification business arrived of course, and I think they were very important and of course we ended up right in the middle of that because they instilled high levels of quality in what had previously been a pretty rough and ready business. So we saw the beginning of the mature wind energy business starting to be developed. And then gradually quite a lot of turbulent behaviour, in commercial terms lots of people going bust and starting again and merging and so on, we then got to the position where the likes of GE and Siemens appeared, because they had seen this as something now which was a viable way of making electricity. Until they arrived it was specialist companies. Vestas I suppose these days is still in that same category because it’s only making wind turbines, but Siemens and GE clearly are a different category. Now the technology, I would disagree a little bit with what you said, the technology for wind I believe is still very much centred in the West and particularly in Europe.
If we look back in those early days Boeing was in. Boeing is now out. GE is now in, but it had been out for a couple of decades. MAN, MBB out. So a lot of the people who were there at the very beginning didn’t survive into the commercial large scale exploitation that we now see. Then we got to the stage where the Asian countries started to participate, and I agree with you entirely on this different types of markets. I used to use two categories of market; I would say there was a conscience market, and a needs market. And the European market was very much a conscience market. We felt that we should do something more cleanly and so we developed this technology. We already in those days we had too much electricity. We didn’t need more electricity but we felt we should produce whatever electricity we had more cleanly. In India in particular there was a need. There were people without electricity and similarly in China. So those two markets are very much distinct in their motivation. And of course, now China is a market leader both in terms of installed capacity, and also in terms of manufacturer, although the market for the Chinese manufacturers is still very much in China, and India similar I suppose you could say, with quite a lot of imports. But their motivation is and I think remains different. The emissions which you talked about where we blame particularly India and China for high levels of emissions and of course that’s a big political discussion. So we’ve already had our emissions and now we’re blaming them for having theirs and that’s a very awkward political question.
An interesting thing on emissions though is so China has said that their emissions will peak in 2030 and you can say well that’s too long, or you can say well if China says they’re going to peak in 2030 they probably are. Whereas in the West we talk about a lot of that stuff and we may not deliver. If you look then at how the technology has developed in China itself, I have noted that there’s not surprisingly a huge cultural difference in engineering in Europe and, I say in Asia, but perhaps I should say specifically China. As you know we’ve done a huge amount of work in China. I think roughly a third of the turbines now operating in China, the types of turbine operating in China were designed by us, so we’ve seen the evolution of that Chinese market. For a Western engineer starting to work in China it was very, very interesting, because if you’re in the West there’s a huge stigma attached to failure for an engineer. If you design a turbine and it falls apart you are in disgrace because we go through a lot of design work, prototype work, testing, component testing, zero series, first series, and then eventually we make a commercial turbine. The stigma, and there is a stigma in China is attached to inactivity, and when we first got work in China we found that it almost didn’t matter what you did, as long as you did a lot of it very fast. And that gives you a completely different pace of development. Initially it’s quite frightening and then it becomes very exciting because the Chinese approach is, well if it doesn’t work then you will do it again, so what’s the problem. And that was a very, very exciting and refreshing thing to see, but I think they were in the early days at least just interested in getting the kit out into the field and not so interested in the R&D. I think the R&D is certainly now pretty well established in China but with a big input still from the West.
If we look at PV then that’s rather a different picture. I think the technology, although the technology will still be developed, I think future generations of PV may well come out of the West, either Europe or the States, the manufacturing and the mass production which is what’s driven down the cost of PV is very much an Asian thing. That in itself is an interesting thing just to discuss briefly. The evolution, the cost trajectory of wind and PV has both been firmly downwards. The learning ratio of wind is about 14% which means you get a 14% reduction in levelised cost of energy for a doubling in capacity and that’s a good but maturish mechanical engineering technology. The startling thing is for PV is probably a cost reduction of about a factor of three in five years, and if you’re a mechanical engineer that’s unthinkable. Now those reductions in cost have been achieved in completely different ways. Wind has got cheaper and cheaper by getting bigger and bigger and then now is huge, and PV has got cheaper and cheaper by making more and more of it. So if you make a million or ten million panels of the same panels, that’s a great deal cheaper than making a thousand or ten thousand such panels. So, we’ve seen the trajectory in exactly the same way; the speed a bit different but PV starting from a higher level, but both moving towards grid parity, and in a very exciting way. The last thing that’s happening now, which I think you mentioned very briefly if you can remember the question you asked me before I started talking, is about storage and I think the evolution of storage. Storage has been the holy grail for as long as I can remember and I think nothing much has really happened until let’s say five or ten years ago. Now there’s a huge amount of activity, and I mentioned the electric plane earlier on. That electric plane is only possible because batteries have become lighter. I bought an electric car last year, only possible because batteries have become lighter. But there are all sorts of other storage going on as well.
So technology is still very much based in the West for wind, less so more in the East for PV. Storage has become important. Different motivations, needs, and conscience I think is a useful way of putting it. And now it’s become business and some deep green people I think still find that quite difficult to take. My view is that the fact it’s now become a business like any other for making electricity is absolutely vital in order for us to make big inroads. So the motivation for companies getting involved now may be primarily, well this is a good business in which to be involved, and by the way there’s a bit of a bonus that it’s low carbon.
MATHIAS STECK Andrew, we have time for one more question and I want to make it two. Continuing with your thoughts on technology, if we look at 2100 probably, do we still have horizontal access three blade wind turbines, plus will we have a world which is at least on the electricity side powered by renewables only?
DR ANDREW GARRAD This is two different questions. I think the answer to the first one, the three blade horizontal access, I’m sorry to say I think the answer is probably yes. I think we might have very different things inside the cell than what we’ve got now and the materials for the blades might be significantly different. We have I would say I blot on our particular copy book in terms of the recyclability of our composite blades, and so thermoplastics or something else might take their place.
So there’s still work to do on many, many of the details, but I think the basic configuration onshore will be the same. I think the basic configuration offshore might be radically different, and I’ve made some rather extravagant proposals myself in the past. And so we might have huge floating structures with space frames with 20 or 30 five megawatt wind turbines on them. So you might have a 150-megawatt turbine floating somewhere in the sea. Or there’s no need for those turbines to be three bladed anymore and they can look quite different. So I think we’re starting with the offshore technology which might look radically different. I think we’re getting something like a consensus on the basic architecture of onshore turbines, but the means of generation might be radically different. Then I think something different with PV. I gave a presentation the other day followed by someone who gave a presentation on PV. I talked a bit about wind energy becoming a commodity, and I also made the similar comments that I’ve just made now. And the guy who was talking about PV who was a physicist of course, he was talking about the possibility of real quantum leaps in technology so that there might be a completely different mechanism, a different basic mechanism to generate electricity from the sun to the one that we’re using now. And so that sort of quantum leap I think is no longer available to us, but I think PV could be in for another huge change along with storage. So those two things are different.
We haven’t talked about the longer lead items like wave and tidal geothermal. I think that they may well have a place. In 2100 will we have our electricity generated by renewables? Yes, we will and if we don’t then we’re in big trouble, and so we need to get going. And going back to the beginning with COP, having the COP meeting and having consensus at the COP meeting is an extremely important thing to do, but what came out of there was also the urgency of doing stuff, and not just talking about it. And so we have the means now to generate our electricity from renewables. We need the big system view that we talked about earlier on, and the technology will develop and the price will fall, but we have to get on and do it. So, yes, and I think it will be before 2100.
MATHIAS STECK Very good. That’s a very strong statement to close.
DR ANDREW GARRAD Yes.
MATHIAS STECK Thank you very much for this highly interesting conversation. I learnt a lot and I hope everybody who listened enjoyed it as well. Well, leaves me to just say thank you for joining, Andrew.
DR ANDREW GARRAD Sure, thank you for the opportunity.
MATHIAS STECK Thanks, and hopefully you listen to the next series coming up soon. Thank you very much. Thank you for listening to this DNV GL Talks Energy Podcast. To hear more podcasts in this series please visit dnvgl.com/talksenergy.