2021 Energy Trends #2 and #3: Scale and Capacity Factor
This is the second in a series of brief articles outlining trends rapidly moving the energy industry.
European Union decarbonization initiatives, new Biden administration policy, and advances in wind technology and logistics are accelerating the fielding and scaling of renewable energy. Unlike the initiatives of 2010–2020, renewable energy in 2021 brings the low energy costs and high capacity factors needed to produce green hydrogen and green ammonia at landed prices comparable to fossil fuel-derived alternatives. Production of low-cost green hydrogen and green ammonia will enable states to decarbonize their economies beyond electricity, including their cement, steel, and manufacturing industries, and meet their 2050 targets for decarbonization.
2021 Energy Trend #2: Scale. Whereas large renewable projects of 2010–2020 were measured in megawatts (MW), new projects for wind and solar are measured in multiples of gigawatts (GW). This represents a thousand-fold jump in scale of measurement (1 GW = 1,000 MW), which is also the scale of energy transition required to meet global carbon targets. A typical coal-fired power plant achieves 600 MW of power output, and one GW is enough energy to power 300,000 homes. The double-digit GW scale of projects, plus a large number of projects at multi-GW-scale in every region will be need to accelerate decarbonization beyond electrification, and to enable states to meet their 2030 and 2050 decarbonization targets.
The Asian Renewable Energy Hub (AREH) in Western Australia will initially build 15 gigawatts of hybrid wind and solar capacity for the production of green hydrogen, and over time expand the plant to 26 GW. The plant’s full capacity is over 2.5 times the amount of power that Australia generated in 2019. The site in the Pilbara is twice the size of Luxembourg.
Similarly, Saudi Arabia’s Neom joint venture will field 15–30 GW of wind and solar over the next 10 years, which is 50–200% more than the total current installed capacity of wind and solar in the Middle East and North Africa. These two large-scale projects represent the scale of investment that are required for states to achieve 2050 targets for decarbonization.
2021 Energy Trend #3: High Capacity Factors. Large solar projects of the last decade added daily and seasonal surges of renewable electricity into power to grids that replaced some fossil-fuel generation. However, these projects did little to replace fossil fuels in the baseline electrical load. In 2021, states need renewables to take center stage in electrical generation, not as additive capacity to cap a fossil-fuel-dependent baseline.
The need for high capacity factors means adding more wind than solar. While solar generates very low-cost power, the electricity it provides is varies widely across days and seasons. Solar’s high variability is reflected in its low capacity factor of 25%.
Meanwhile, the large wind turbines currently being fielded in new off-shore developments deliver the high power volumes, steady power, and high capacity factors needed to decarbonize the greater portions of the economy. These new turbines’ larger blades generate more electricity, taller towers access higher areas of stronger and steadier wind, and together deliver more steady power and higher capacity factors. These high capacity factors are especially important to feed electrolyzers needed for to generate green hydrogen to decarbonize areas of the economy beyond electricity, including cement, steel, and manufacturing.
Article 1 highlighted the trend of renewables. Further articles in this series will highlight 2021’s energy of trends of resilient renewable energy production and the important role that green ammonia will play in connecting the new green global energy system.
