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Hard Times for Wind Speculators (a silver-lining for serious AWE players)

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  • dave santos
    We have once again entered a era of of cheap oil; just as the 70 s Oil-shock passed, the Peak-Oil scare has given way to an extended period of oil-abundance.
    Message 1 of 2 , Aug 7, 2012
      We have once again entered a era of of cheap oil; just as the 70's Oil-shock passed, the Peak-Oil scare has given way to an extended period of oil-abundance. Its clear that there is plenty of oil, and the only cloud in sight is long-term environmental catastrophe. The silver lining for AWE R&D is the collapse of those ventures based on tech hype and the hope of easy "windfall" energy profits. Some groups will linger on military life-support, but don't expect hot products to emerge directly from mil-spec culture. What's left is the core community of dedicated AWE developers who love and understand kites and are happy to incubate the future in nice niche markets.
       
      Doug poses too stark a challenge; AWE able to generate electricity lower than the lowest industrial rates, lower than a nickel a kilowatt-hour. In fact, the average cost of a kilowatt-hour of experimental AWE is probably closer to a thousand dollars a kilowatt-hour, if you account for all R&D costs. This clearly untenable rate can only fall significantly when volume products emerge and run for extended periods. Government subsidies remain on-the-table as a "real-world" option to meet Doug's rhetorical goal.
       
      The critical-path to lower AWE utility rates will be a long fairly smooth curve, but you have to wait for it. Fortunately for AWE developers, existing market nickel-rates are the rare extreme, and the average world market cost is far higher. Energy costs ten times higher, or more, are common. High energy excise taxes are common. Low US regional rates are an anomaly; Hawaii pays forty-two cents, which this is not out of line with many advanced economies, like Japan and some EU countries, who increasingly shun the hidden (steal-it-forward) cost of nukes and unhappily import fossil fuel to keep the lights on. The developing world has some of the highest rates of all. In the Solomon islands, electricity costs over eighty cents a unit. Many a remote valley or island is in the same situation, with no electrical infrastructure and astronomic diesel-electric costs. High-cost electrical markets are vast enough for any small AWES developer to carve out sweet niches. Competing with nickel-rates is just a red-herring to bait AWES Forum debate.
       
      The AWE opportunity is clear; to create "artisan energy" at the highest rates for elites, with subsidized R&D to bring costs down for remote third-world populations. The well-educated respond to neo-liberal appeals to "save-the-planet" and subsidize energy R&D for the poor (Energy Equity). A multi- trillion dollar segment of the world energy market is under the political control of socially-progressive elites. There are also endless small pools of charity capital to tap, in the form of NGOs and high-net-worth individuals. Many of us are seeing revenue grow from these sources, despite the "windpower winter".
       
      Long-term (far longer than Doug ever seems to allow for) the upper wind resource will become a cheap resource. There simply is no other renewable so vast and powerful, and its dangling just overhead. Good riddance to carpet-baggers who jumped into AWE R&D, rode on hype, and now are now slinking out. The smartest toughest industry survivors are banding together and will thrive- slowly...
    • Doug
      ... ****Oil may never be cheap again, since new extraction techniques use more oil, to get oil out of the ground, and China is now building more cars per year
      Message 2 of 2 , Aug 8, 2012
        --- In AirborneWindEnergy@yahoogroups.com, dave santos <santos137@...> wrote:
        >
        > We have once again entered a era of of cheap oil; just as the 70's Oil-shock passed, the Peak-Oil scare has given way to an extended period of oil-abundance. Its clear that there is plenty of oil, and the only cloud in sight is long-term environmental catastrophe.

        ****Oil may never be cheap again, since new extraction techniques use more oil, to get oil out of the ground, and China is now building more cars per year than the U.S., keeping demand high But oil is mostly irrelevant since it's natural gas and nuke plants, hydroelectric, geothermal, and lately even solar, that wind energy competes against. Major power plants are not fueled by oil for the most part. So oil prices are largely unrelated to wind energy****

        The silver lining for AWE R&D is the collapse of those ventures based on tech hype and�the hope of easy "windfall" energy profits. Some groups will�linger on military life-support, but don't expect�hot products to emerge directly from mil-spec culture. What's left is the core community of dedicated AWE�developers who love and understand kites and are happy to incubate the future in nice niche markets.

        ****Unless success in AWE does not involve kites, in which case this entire line of reasoning would be irrelevant. How many years do you want to "incubate"? We've heard all the "superior" theories and predictions... Why no working products yet?****

        > �
        > Doug poses too stark a�challenge; AWE able to�generate electricity�lower than the lowest�industrial rates, lower than a nickel a kilowatt-hour. In fact, the average cost of a kilowatt-hour of�experimental AWE is probably�closer to�a thousand dollars a kilowatt-hour, if you account for all R&D costs. This clearly untenable rate�can only fall significantly when�volume products emerge and run for extended periods. Government subsidies�remain on-the-table as a "real-world"�option to�meet Doug's rhetorical goal.

        ****Nickel electricity is the challenge wind energy faces every day - I mean the actual art of wind energy that has to fit into the real world. Don't forget the supposed reason for AWE is to economically outperform the existing art. Well-funded wannabe innovators often target only industrial-scale solutions, since the perceived impossibility of creating them forms an excuse to waste everyones' time and investment money for years without a useful result, while yet maintaining a plausible story. If they had to create power for a single house, and failed week after week, transitioning to months and then years, with still no home powered by AWE, they'd more quickly be flagged as having no idea what they were doing. The large scale has a built-in intimidation factor that ceartes a degree of doubt that serves to obfuscate a lack of a truly workable solution.

        On the one hand they say "We HAVE to compete with big wind to realize the economy of scale to make it meaningful" yet on the other hand they say "you can't POSSIBLY expect us to compete with all these bigtime experts who actually know what they are doing! - there;s no WAY we could EVER compete with the simple requirements of the existing wind energy industry." I say "pick a lane" - if you want to wallow in an endless, open-ended, perpetual excuse-driven fantasy, at least make your excuses line up so they are not self-contradictory*****

        > �
        > The critical-path to lower AWE utility�rates�will be a long fairly smooth curve, but you have to wait for it.

        ****If I even had a few weeks of spare time I could have a working system in the air. Several months could have many types of working systems in the air. There is nothing stopping anyone from making working AWE systems right now except either laziness or having no idea what they are doing, starting with no knowledge of wind energy. There are no technological barriers at all. Working systems can be constructed immediately using off-the-shelf components. Anyone purporting to be developing AWE that has demonstrated no working system simply has no excuse. And as we know, the most important thing in this modern, virtual lack-of-a-world is to have "an excuse". Reality: missing in action *****

        Fortunately for AWE developers, existing�market nickel-rates are the rare extreme, and the average�world market�cost is far higher. Energy costs ten times higher,�or more, are common. High energy excise taxes are common.�Low�US regional�rates are an anomaly; Hawaii pays forty-two cents,�which this is not out of line with many advanced economies, like Japan and�some EU countries, who increasingly shun the hidden (steal-it-forward)�cost of nukes and unhappily�import fossil fuel to keep the lights on. The developing world has some of the highest rates of all. In the Solomon islands, electricity costs over eighty cents a unit. Many a remote valley or island is in the same situation, with no electrical infrastructure and astronomic diesel-electric costs. High-cost electrical markets are vast enough for any small AWES developer to carve
        > out sweet niches. Competing with nickel-rates is just a red-herring to bait�AWES Forum�debate.

        ****Fine then, show us your 50-cent/kWh solution. You're right - there is a market for it. Just not a typical Wind Energy Utility-scale PPA in the U.S. On the one hand you hear the AWE innovators say their systems can only compete at a utility-scale, (excuse #1) and that in fact the MAIN REASON for AWE is that it CAN be done cheaper that existing wind energy systems, but then the next AWE innovator says meeting the same utility-scale costs as existing wind energy is impossible. (excuse #2). Excuses #1 and #2 are mutually contradictory. If you have a 50-cent/kWh solution, yes there's a limited but definite market. What are you waiting for?****

        > �
        > The AWE opportunity is clear; to create "artisan energy" at the highest rates for elites, with subsidized R&D to bring costs down for remote third-world populations. The well-educated respond to neo-liberal appeals to "save-the-planet"�and�subsidize energy R&D for the poor (Energy Equity).�A multi-�trillion dollar segment of the world energy market is under the political control of socially-progressive elites. There are also endless small pools of charity capital to tap, in the form of NGOs and high-net-worth individuals. Many of us are seeing revenue grow from these sources, despite the "windpower winter".

        ****Decent, reliable wind energy solutions are routinely implemented at various COE levels depending on location, cost of competing energy sources, and budgets. It's not hard to find great markets for reliable small wind energy systems. It IS hard to find the actual reliable systems however... If you had one, there would be no trouble finding buyers. key words: "energy" (not empty words) and "reliable" ****
        > �
        > Long-term (far longer than Doug ever seems to allow for) the upper wind resource will become a cheap resource. There simply is no other renewable so vast and powerful, and its dangling just overhead.

        **** Yeah I think I heard that somewhere before. I can think of about 10 simple ways to harvest it but don't see anyone identifying them, much less pursuing them. Well you have one thing right: repeating the name Doug enough times is the magic solution to AWE. keep repeating my name and maybe you'll get something working*****

        Good riddance to carpet-baggers who jumped into AWE R&D, rode on hype,�and now are now�slinking out.

        ****Easier to fixate on the perceived failure of others than to make progress yourself. I'd forget about what others are doing and if you have something that works, get it out there!****

        The�smartest toughest�industry survivors are banding together and will thrive- slowly...

        ****Wow whenever I hear of another team with no current solutions, with promises to revolutionize the wind energy industry, announcing how "smart" they are, I say "Oh boy, more "smart" people. SO far I have not seen one such team come up with anything except telling everyone how smart they are then never coming up with a workable solution at all. You can quote me on this: "If you have to tell people how "smart" you are, you probably aren't."
        When you are smart, the evidence speaks for itself. Better to let others remark how smart you are, after seeing the evidence, than to announce your own smartness in advance of, or in lieu of, any evidence. ****
        :)
        ****Doug Selsam*****
        >
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