Low-cost renewable electricity shows that climate-protecting measures may improve industrial competitiveness and prosperity.
While ABB was still busy trying to sell nuclear reactors, coal-fired power plants and various large turbines for hydro and gas power plants, there was an engineer who had a different idea. Gunnar Asplund was heading development at ABB Power Systems in Ludvika, Sweden and designed a vision for a 100-percent renewable electricity system for Europe: 700 GW of solar electricity mainly in southern Europe and northern Africa, 300 GW of wind power mainly in the North Sea, the Baltic Sea and west of France. 200 GW of hydro power, 1,000 TWh of energy storage and a lot of high-voltage transmission lines made up his vision.
When this vision began to spread on an ABB-branded slide in 1992 it was not appreciated by everyone at ABB. What was wrong with all the fantastic power plants ABB had already supplied, some asked. The vision could “upset” existing key customers and spread the notion that ABB was not a serious company.
Others, including most economists at the time, dismissed the vision as economically impossible. Among the electric power companies, renewable energy was rejected as too expensive, “intermittent” and not up to normal standards, and the distributed power plants did not fit the business models of 20th century power companies anyhow.
At that time the economic arguments seemed strong: solar and wind power cost several times as much per kWh as conventional thermal nuclear or thermal power plants. But Asplund was an engineer. He did not look at current prices at the time, but at what skilled engineers and industrial experience would be able to achieve in the future. One of the key factors was to look at how much material resources were actually needed to build the power plants.
Today, we can see that Asplund’s vision was well founded. The engineering opportunities have been demonstrated at low costs. Now, electricity from solar and wind are the cheapest sources of new electricity in almost the whole world. In Europe, in particular, during 2016 and 2017 costs fell dramatically for offshore wind. In the middle of summer 2016, Danish Dong (now Ørsted) made headlines with a “record low” offer to build offshore wind power near the Dutch coast at a price of €72.7/MWh. A couple of months later Vattenfall won a bid at €60/MWh by the Danish coast, and another two months later in November won the bidding at Kriegers Flak in the Baltic with a price below €50/MWh.
Just a few months later the first subsidy-free offshore wind power was offered to Germany by Dong and Energie Baden-Würtemberg. Soon more subsidy-free offshore wind power was offered by others.
Unsubsidised wind electricity projects, both onshore and offshore, are under construction in northern Europe. While Asplund’s vision included solar power, mainly in the Mediterranean area, costs have fallen so far that solar power is installed without subsidies in Germany and even in Britain.
There are many industrial developments that have resulted in the falling cost of solar and wind. In the solar field, the most important developments have been achieved in the production of solar cells and panels, where material intensities have kept dropping, while automation of manufacturing and economies of scale in manufacturing have contributed further. Installation speed has increased due to more specialised equipment.
In wind power, the size and height of turbines have increased, resulting in more electricity produced per site and foundation, and an increasing number of full-load hours from the generators. The size of onshore wind farms is limited by the transport capacity of roads and the erection capacity of cranes, and is now typically between 2 and 5 MW. At sea there are no such limitations and the plants are continuing to grow, and 12 MW turbines are now undergoing full-scale testing.
But this is not all. The fact that offshore wind farms are growing in size and numbers has resulted in better utilisation of the special ships and equipment used, while more rational utilisation of operation and maintenance staff is also envisioned for the future.
The Arcona wind farm on the German Baltic coast, which opened in April 2019, has a capacity of 0.4 GW. The Hornsea 2 project, in the British North Sea is envisioned to have an installed capacity of 1.4 GW and will deliver more electricity that many of the world’s nuclear reactors.
Further growth will yield further industrial experience and lowered costs, making continued development even easier.
We still have not reached 700 GW of solar and 300 GW of wind power in Europe, but we are no longer far away. Total installed wind capacity in Europe at the end of 2018 is close to 200 GW and solar capacity is close to 100 GW.
Unlike Gunnar Asplund’s vision, the distribution of renewable energy plants has not yet exploited the largest resource potential. Most of the wind farms are onshore, while Asplund envisioned utilisation of the vast offshore potential of the Baltic and North Sea. Most solar capacity is in Germany, while Asplund saw the main resources as northern Africa and the very south of Europe.
This discrepancy has several explanations. The first is that, until the last couple of years, development has been dependent on subsidies that have been offered by just a few countries, with Germany as the champion. Secondly, Asplund saw the value of a high-capacity, high-voltage transmission system in Europe. This has also been recognised by the European institutions.
But despite high ambitions, the growth in transmission capacity within the European Union, and even within some countries, has been too slow to allow utilisation of the full, low-cost renewable potential. The challenges in obtaining permission to build new lines have proven to be way more difficult than the technology itself.
Most offshore wind potential is still there, waiting to be utilised. In the Baltic Sea, a project operating under the Baltic Sea Region Energy Cooperation, BASREC, identified a technical and economic potential of 300 GW in the Baltic alone, though they concluded that competing interests could block most of this potential, leaving only 35 GW as their target potential.
In the North Sea the potential is greater. Several hundred GW appears to be available. At the Clean Energy Ministerial in Copenhagen in 2018, The North Sea Power Hub Consortium presented a vision for 70–150 GW by 2040 , . The idea is to build a grid and subsea cables between the North Sea countries, and to establish a hub on an artificial island in the North Sea.
It appears feasible to provide significantly more solar and wind electricity in Europe than in Asplund’s vision in the 1990s. It also appears to be do-able at much lower costs than implicitly assumed in his vision, which included large-scale hydrogen storage and an extensive power grid.
The scope today is more ambitious. It is not just a matter of making electricity 100% renewable. It is also about used low cost electricity to substitute fossil fuels in other sectors, and to produce gaseous and liquid fuels from electricity. This will require more electricity than current use, but on the whole the primary energy figures may decrease as solar and wind electricity substitute electricity based on inefficient conversion of fossil fuels.
Most important is that an electricity system used for producing fuels can use the fuel production as a means to balance power production of solar and wind with primmer electricity demand. Producing fuels will be the most important storage system.
Development is still slow as few have understood the economic opportunities after costs have dropped.
Establishing power grids at sea between many independent countries will require international cooperation, which should be possible within the European Union.
The opportunities to substitute all fossil fuels and emission with low-cost renewable electricity for the first time shows that climate protecting measures may improve industrial competitiveness and prosperity.
Tomas Kåberger
Tomas Kåberger is an energy policy scientist who has worked as Director for the Energy Agency in Sweden, is chairing the Renewable Energy Institute in Japan and is a professor at Chalmers Technical University.
