This post has been prompted by a discussion about wind power that I had recently. I have made clear that I am totally opposed to the construction of wind farms on ‘wild’ land. However, I am not opposed to wind turbines in principle. I think there is a place for a (relatively small) proportion of our energy supply to be met by wind energy. After making this point, it was recommended that I look at a number of articles which, it was claimed, ‘proved’ that wind power could never be economic.
I looked at these articles and the thing that I found most striking was that the authors looked at wind power in isolation rather than as part of a wider power generation system. They either were ignorant of or deliberately chose to ignore, critical factors that, in practice, meant their analyses are of no real value.
The energy supply system in a developed economy is a complex system. A complex system is one where there are a large and dynamically changing number of components with relationships between these components. Because of the dynamic nature of these systems, it is theoretically impossible to have complete knowledge of them so we can never produce a completely accurate mathematical model of their behaviour or other characteristics, such as whole life-cycle costs.
Complex systems generate enormous volumes of data. This data is rarely consistent and is frequently contradictory. Because of this, commentators with an axe to grind can usually cherry pick this data to support their own views. Hence, there are pro/anti nuclear articles which appear to be based on objective data analysis. When the alternative perspective is pointed out to those with one set of views, their reaction is often to ignore it or to rubbish the alternatives.
To provide a national energy supply, we cannot simply make decisions based on the cost of a generation technology – we must also consider at its availability (can it deliver power when needed) and its political and environmental risks. Availability is a key issue as continuity of supply is essential for the functioning of our society.
For example, we need to take into account the possibility of a nuclear accident, the possibility that political factors will cut off imported gas supplies, the possibility that weather conditions will mean that there is a widespread still weather so wind turbines don’t work and so on. There are lots of other issues and risks – some of which we DO NOT KNOW.
We can consider all of these other factors as RISKS – things that might happen which will lead to additional costs. A conventional economic approach tries to work out these costs and includes them in cost computations. However, if you try and do this in a large complex system such as energy supply, there are so many uncertainties that the resulting conclusions are completely unreliable.
In complex systems, there are things which are unknown and actually unknowable. Many classes of risk fall into this category. So, any assessment of the risk that e.g. Russia will cut off gas supplies to Western Europe so causing a huge spike in gas prices is no more than a guess. Therefore, because we cannot reliability assess risks or the consequences if these risks arise, we simply CANNOT accurately model the whole life-cycle costs of ANY power generation technology.
But we need to build a reliable power generation system so what do we do? We use two techniques that are fundamental to building any reliable system – redundancy and diversity. In power system terms, this means building more capacity than we need because we know we will have to cope with outages and using different technologies to generate electricity. This means that if there are problems that affect one kind of technology, then we don’t lose everything.
This need for diversity means that the Scottish Government policy that a very large proportion of our energy needs will be met from wind energy is highly risky and means that Scotland sometimes has to rely on imported energy. It also means that France’s reliance on nuclear energy is unwise, although less so because so much work has been done in understanding nuclear risk. It means that government energy subsidies for e.g. nuclear energy may make sense even although there seems to be ‘cheaper’ generation alternatives.
This post is already long enough and I don’t want to go into my opinions of what technologies we should be using or to go into more detail of complex systems issues. But there are two takeaways from this:
- Most so-called economic analyses of power generation technologies are incomplete and only consider the price of these technologies. These should be an input to the decision making process but should never be the sole driver of that decision making.
- There is no such thing as an objective view of a complex system. We all can only have incomplete views that are biased by our existing knowledge and prejudices. We cannot ‘prove’ that people who argue for/against wind power, nuclear power, etc are right or wrong. They see the system in different ways and simply don’t listen to contrary arguments because these do not fit in with their world view.
It is perfectly valid to write articles, papers and blogs which discuss the costs of power generation technologies. But, some people who write such articles then go on to draw more general conclusions about these technologies in a broader power generation system e.g we should never build wind turbines. If these articles don’t acknowledge systemic uncertainties and risks and take these into account, then I advise you to treat their conclusions with the contempt that they deserve.
So what do I know?
I worked in the engineering of reliable, safety-critical systems (e.g. air traffic control systems) from 1990 to 2005. From about 2003 until I retired in 2014, I studied and analysed large scale, complex socio-technical systems. My father, as a consulting engineer, worked on every large and many small power stations built in Scotland between 1950 and 1975. We had lots of conversations about power stations as I was growing up and I think he hoped I would be a power engineer. To his disappointment, I followed the siren song of software engineering. Sadly, he didn’t live long enough to realise this was probably the right decision.