1500 gigawatts of wind power by 2020 and potentially much higher still

Faster and faster, renewable energy from wind power is becoming a means to global conservation. By 2020, 1500 Gigawatts of Wind energy capacity will be installed worldwide estimates Heinz Dahl of the World Wind Energy Association, and wind capacity could go much further than that still! Heinz also discusses the use of hydro and geothermal power to firm up wind power generation, and a new project in the U.S. where cost reductions in the energy coming out of the turbines is 40 per cent!

Heinz Dahl podcast

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Scott Bilby: Hello. Welcome to Beyond Zero. As you know, this is a program covering issues relating to climate change, including the latest news, science, solutions and community actions. This show is produced by Beyond Zero Emissions, an Australian based climate change campaign centre.

We differ from mainstream environmental groups on one important point: our understanding that human caused global warming has already exceeded safe limits and that we must act immediately to reduce our levels of greenhouse gas emissions to zero and below.

You're tuned to 3CR and the time is 8:32am. My name is Scott Bilby and panelling today is Ian Sheehy.

Now, this morning on Beyond Zero we're speaking with Heinz Dahl. Heinz is the managing director at NexTgen Wind. He's also the director of commercial operations and marketing at the World Wind Energy Association, formerly managing director at EHN Oceania, a wind power engineering company.   Good morning Heinz, are you on the line?  

Heinz Dahl: Good morning Scott. I'm here, thank you.  

Scott: It's great to hear your voice. Now, we're calling you, you're in Australia, so it's good to have someone from Australia as an interview for a change. And it's good to have an expert from Australia.  

Heinz: Oh thank you for those comments Scott. I'm currently living down in Ocean Grove, so it's a beautiful part of the world, and we'd certainly like to preserve that beauty that we have here.  

Scott: Certainly, and I'm very jealous in fact. Now, although it's a beautiful morning here, and the 3CR studio is not too bad a place; although, you know, there's not much of a window or anything. So, I think you're winning on the view stakes at the moment.  

Heinz: I think so, yes. No, it's beautiful here.  

Scott: Now Heinz, we'll start off by asking you how you got interested in renewable energy.  

Heinz: Yeah, interesting question Scott. I was working for a Swiss company in Southeast Asia from 1992 to 1998, and when the economies fell out of the Asian markets over there, came back to Australia and looking around for something to do and came across the statement by our then Prime Minister John Howard where he was saying that Australia was going to play an important role in the international climate change program. And I followed his policies around and what the Australian Government was aiming to do, and in that part, as we all know, the renewable energy target was mooted and the renewable energy technologies were defined.

And myself and a couple of my colleagues got interested in that and we basically sat down together and had a chat and said, 'Look, you know, what can we get involved with?' because at that stage I was sort of sitting back, looking for something to do. And we decided that the wind energy technologies was the most marketable commodity as far as the renewable energy technologies were concerned and then I headed off to Europe and my colleagues headed off to the States basically looking for technology that would qualify under the MRET (Mandatory Renewable Energy Target) legislation that John Howard's government was going to put into place in 2000.  

I came back with some technology from Europe that allowed us to basically build some wind generators here in Australia and place them domestically and also do some export work.  The export work went well. We got some good contracts to supply turbines back into Europe and Japan, et cetera, but unfortunately the domestic market at that stage was still very immature... and the demand side for locally produced turbines, we basically got the message that, you know, if you're quality is good enough and you're price is low enough, we'll think about buying off you. You know, 'We don't care whether it's Australian made or not.' Which sort of really enthused us with a great confidence of being able to develop a domestic market here.  

But we pursued that and we continued our program with the export market and when that contract finished we met some financial problems as far as being able to meet the costs of the overseas manufacturers. At that stage we were competing with an engineering company in Portugal and as we know the labour rates over in Portugal are a lot lower than here in Australia. And we had our base set up there in the Latrobe Valley, which was still very much union dominated with very high labour rates, so we weren't able to compete. So, in the end we abandoned the project of getting a manufacturing industry happening here. And the reason why we embarked on that was that we spent some time with John Howard's government, the various departments involved, and we were told that the Government would support the local wind industry, providing you get a local manufacturing industry up and running. And that came from Minister MacFarlane. And he basically, every time we met with him, he said, 'Look, you guys go to the bank today, you borrow $100 million, and tomorrow you sign a cheque to Denmark or Germany or somewhere like that for $80 million. So, you know, really the industry is providing work for overseas manufacturers. We want you to do it here'. And so that's how we started our manufacturing.

But unfortunately we were unable to compete on an international basis as far as the costs were concerned. And then my colleagues and I, we looked around and we got involved into developing wind farm projects, getting sites ready and selling them off to the developers around the place. And that worked very well. And so that's sort of really whetted my interest into the renewable energy industry here in Australia.

And just going back a little bit, in the late 90s we had a couple of wind conferences. The first conference that I attended was at Monash University here in Clayton, and another one in the University of Newcastle. And when we got together we viewed it that, look, you know we really need to have some form of association to promote wind industry here in Australia. So, we decided to form the  Australian Wind Energy  Association. I was one of the founding directors there and I served as president for a period of time and so that, you know, sort of gave us... we got some very good support from the Australian Greenhouse Office, the Australian Government, the Victorian Government, South Australian Government, Tasmanian Government.  They were all very supportive, and, you know, they left it up to us to basically promote and push the wind industry here in Australia.

So, that was how I got started in the renewable energy industry. It was probably more by luck than by design, but I'm very pleased that I've been able to play a role over the last 12 years, both domestically and internationally.  

Scott: And, was it your working for overseas wind companies or your role in the Australian Wind Energy Association that then got you involved with the World Wind Energy Association?  

Heinz: Yes. Back in, I think, July 2002 there was a World Wind Energy Conference planned to be held in Berlin. And that was under the guidelines of the Danes and the Germans. And at that stage - oh, prior to the running of the conference, and leading up to the preparation of the conference – it was basically decided, 'Why don't we form a world wind energy association?' And the formation was that they would select somebody from each region and give them the position of vice-president of the World Wind Energy Association responsible for that particular region. And I was president of the Australian Wind Energy Association at the time, and they invited Australia to join the World Wind Energy Association, and I was appointed as one of the vice-presidents.  

Scott: And, now, I was reading a World Wind Energy report about the worldwide capacity, and it reached 121 - over 121,000 megawatts in 2008.  

Heinz: That's correct, yes.  

Scott: Now, so with over 27,000 megawatts added in 2008, an increase of 29%. So, wind power is still growing, you know, by quite large figures every year. Can you give us any figures on how much growth there has been in wind power in 2009 so far?  

Heinz: Yeah, there's been a real surge over 2008. Late 2007 and all of 2008, plus this current year as well, there's been a huge resurgence of the installation of wind energy resources around the world. In particular, I think I  must note that the US is now number one in the world for its stored capacity. They overtook Germany last year. They have the highest installed capacity of any country, rate of any country, that's ever developed wind energy. And the success rate so far in 2009 has been probably better, will come out better, than in 2008.  

Scott: That's fantastic.  

Heinz: As you can see the total, the estimated total of world capacity by 2020 should be round about 1.5 million megawatts installed, which is a huge growth factor from our current 121,000.  

Scott: OK. Now – so that's interesting because, is that – like how – say if we're going for 1.5 million megawatts did you say?  

Heinz: Yeah, 1.5 million megawatts, yes.  

Scott: By 2020?  

Heinz: By 2020.  

Scott: OK. By 2020. So, just how much penetration does wind power have on, or how much wind penetration can wind power have by 2020. Is that like, surely you could go even further than that still?  

Heinz: Yeah. Currently we're sitting at around about 1.5% of the global electricity consumption, which is a very good response, considering there's really basically only the European Union and the US, or North America, and the emerging market of China, that's contributing to that figure.

So, part of the program of the World Wind Energy Association is to enable the Third World and underdeveloped countries to also participate in the installation and growth of wind energy installation. And this is part of out platform as far as the WWEA's concerned. To give access, or give knowledge and give the information and the connections and the networking to all those underdeveloped countries. So, we will see in the next, you know, four to five years a substantial growth in the Third World countries and also the underdeveloped nations around the world.  

Scott: And so there's been – because, you know, they say in Australia that China and India are really not doing much, they need to do more for global warming, but they've done a lot with wind recently in the last few years, and that's quite startling. But so, with Europe, what's happening with Europe at the moment?  

Heinz: In Germany the – oh sorry – the European Union, certainly we know that Germany has got an installed capacity which supplies around about 5% of the total consumption. In Denmark we're looking at, some regions have 100% reliance on wind energy. And the overall market in Denmark is about 20%, or the consumption is around about 20% from wind. Spain's growth is also increasing. Germany, of course, has a problem with the space available.

So, what's happening with the technology of the last couple of years is that the sub megawatt class machines that have been prevalent in installation in Germany over the past 10 to 15 years are now being replaced by more sophisticated technology and they're going up to 1.5 to 2.5 megawatts. So, that'll be their increase, their refurbishment, their replacement market. And also we know that there's a fairly dynamic program happening offshore in the European Union area.  

Scott: Now…

Heinz: Sorry… 

Scott: Sorry Heinz. Were you going to say something else there?  

Heinz: Yeah. I was just going to say, the Chinese market, I just spent a bit of time over in China recently and their renewable energy industry over there is becoming very, very dynamic. They now have a – which is not a really good thing – but they now have something like 70-plus manufacturers of turbines over there. And most of those are clones from the European manufacturers, of course. There are some joint ventures like Vestas and Siemens, et cetera, and GE have joint ventures over there. And then the locally grown Goldwind, very successful. And their markets over there, initially they had targets of ten gigawatts of installed capacity per year for the next ten years. That was their target, and they've just increased it over the last couple of months to 20 gigawatts per annum for the next ten years.

So, that's a huge program which they've got installed. And looking round, I spent a bit of time just south of, or outer Mongolia there, and the amount of space available for wind farm development, and also the land lie is perfect for wind development there. The wind regime is excellent.  

Scott: And so…  

Heinz: The only problem they will have, of course, is to take the generated energy into the consumption areas in the load centres.  

Scott: And I guess that kind of leads on to the next question. With that concern, just what percentage of wind can you have on a given grid, like just how high? Can you have like 50 per cent, 60 per cent? Obviously it depends on different geographic areas.  

Heinz: Sure. The theoretical capacity that you can put into grids is round about 15 to 20 per cent. And that depends on the grid maturity and also the sophistication of the grids. When you look at the European Union you've got, you know, from Portugal in the west right through to the Eastern Bloc countries and the Russian border there. And they have, each country has its own very sophisticated grid infrastructure. And then they've coupled it up to be a European Union grid, which is very sophisticated and very mature.

So, therefore you can put a lot more capacity into that, those sort of grids, than say a grid, for argument's sake, here in Australia. You know, where we have basically a grid running down the eastern seaboard through to Adelaide, and then we have Western Australia standing on its own. And so therefore the installed capacity that we could put into Australia here is lower than would be able to be put into the European Union grid.

And the same comment can be made for the US. They have a very sophisticated state-by-state grid as well. And if you follow the developments of the wind industry in the US, back in the mid 80's there was a lot of money put on the table for the wind industry installation program and there was a huge installation growth happen. And then the money's dried up, and so did the turbines, unfortunately. And under the Bush, ah, under the Clinton regime, this was reinvigorated and the wind industry certainly took off over in the States. And unfortunately under the Bush regime the industry started to stagger a little bit as a federal national-based development program, but certainly the state-by-state. And also regions within the states themselves, took up the programs themselves and started developing and we have a lot of states with some very large increases in capacity, installation capacities.

And under the Obama regime I think, from what I've been reading and hearing about his policy and how he's going to push it, it's got a very, very bright future.  

Scott: Yes. It's good to hear that. Because we did have some very sorry vacuums with certain presidents of the United States….  

Heinz: [Laughs]  

Scott: ...but we won't go into that.

Now, I'll just say we're speaking with Heinz Dahl. He's managing director at NexTgen Wind, and he's also the director of commercial operations and marketing at the World Wind Energy Association.

Now, Heinz, we've interviewed quite a few people here about solar thermal power with molten salt storage which can provide either base load or dispatchable power. Now, it's the dispatchable power the solar guys really love 'cause they can just put it onto the grid and get maximum price at peak demand and stuff like that. Now, having those storage options and being able to put it out at certain times, wouldn't that nicely complement lulls in output from wind farms and stuff like that? So, is there a natural kind of marriage between you guys there?  

Heinz: Oh most certainly. Ever since my involvement started in the wind industry, there's always been a very strong synergy that existed, or that should exist, between hydro in Tasmania and the wind industry. Because, you know, with the storage capacity down in Tasmania and the way they've set up their hydro generation down there, it was a perfect fit for the wind industry to come in as well.

And the same can be said for a lot of the geothermal technologies which are currently starting to bud out. And also the storage of the carbon block which they are doing down on King Island. Vanadium Redox battery technology which they're exploring down there. And many, many other storage technologies.

And I think that, you know, certainly over the next five to ten years there should be some really sophisticated developments in the storage capacity of energy. And the coupling of the technologies which you've just mentioned, perfect for wind, and we certainly look forward to working very closely together with those technologies. In fact if I can just add….  

Scott: Yes?  

Heinz: My company is involved at the moment with a small start-up operation whereby we're buddying up with a geothermal company, and we're going to link, we're going to couple that together with a wind farm and basically have a base load capacity generation.  

Scott: Well, Heinz, take a minute or so to tell us a little bit more about that.  

Heinz: I'm still locked under a little bit of secrecy agreement there. We haven't quite announced the project yet.  

Scott: OK. Well when you do, come back and tell us about that.  

Heinz: Most certainly. Yeah, I'd be very pleased to.  

Scott: OK. Because we want to hear more about how other renewable energies and wind complement each other.

Now, so, obviously in Australia we've got a good resource, potentially fantastic resource, for solar thermal plants with storage that could complement wind. And, as you said, there's hydro in Tasmania that could complement wind as well. And in New Zealand, I assume. Now, in Tasmania, because of all the hydro they do have, I also know, obviously, they've got a great wind resource down there and that's why they're quite moving ahead with wind power I guess, but is another reason that wind is kind of seen to be doing well there and has a good future because of the hydro storage that's down in Tasmania?  

Heinz: Most certainly Scott, yeah.

Well, one of the biggest drawbacks,of course, in Tasmania is the linkage to the mainland and their load centre supply. With the current Basslink cable, it's got 600 megawatt capacity coming from Tasmania to the mainland and 300 megawatts going back. And, you know, that's been exceeded, and I think there is certainly a very strong claim to put in a second Basslink, and once that second Basslink does occur, the wind industry in Tasmania should certainly blossom. Because they have very limited capacity down there - oh sorry - consumption down there, and most of their power gets transferred across to the mainland anyway at this stage. And the limited 600 megawatt carrying capacity of the current Basslink is probably a little bit small for many large scale developments of wind in Tasmania at this stage.

But the wind resource in Tasmania is excellent. In fact, the Woolnorth wind farm at Cape Grim has been claimed to be one of the most efficient, if not the most efficient, wind farm currently operating in the world today.  

Scott: And so that, as you say, with Basslink, most of the power seems to be going from the mainland down to Tasmania when in reality it should be, ideally, the idea was that it was going to go the other way.

So, what sort of feasibility and how realistic is it that we could get a second Basslink in soon to get greater capacity from Tasmania up into the mainland?  

Heinz: It'll certainly need the strong support of the Federal Government plus the Tasmanian State Government and the Victorian and South Australian state governments. They must get involved in this.

One of the big problems was initially when they planned the first Basslink the cost, I think, tripled by the time the project actually started carrying energy across to the mainland. So, that's one of the factors that's certainly got to be brought into the picture there. The cost and actual installation of the DC cable across the Basslink. But if we can, you know, if we can get enough generation capacity in Tasmania, and certainly the load centres are certainly here in the Eastern Seaboard and the southern part of Australia, Adelaide, Melbourne et cetera, that it would be a feasible project, but it certainly needs the support of government at this stage.

And if we have a look at some of the grid infrastructure developments that are happening in the US and also the European Union, a lot of them are government supported and, you know, our government certainly must get behind such projects as this.  

Scott: And I guess – time seems to be flying –but I guess coming up to putting up a bit more money for these sort of infrastructure projects to push renewable energy. I know that South Africa, was it earlier this year?, they introduced a feed in tariff and quite a few countries have feed in tariffs for wind, what's the situation in Australia?  

Heinz: I mean, if you look at all the successful wind industry installations around the world, countries, they have all got feed-in tariffs. And the European Union, or Germany certainly started it. And the figures that, I know they vary from country to country and region to region, but the feed-in tariff in Germany, for argument's sake, gives you a 93 Euro dollars per megawatt hour. And here in Australia the maximum we can ever achieve under our current system, or under old MRET legislation, is that we get around about 75 to 85 dollars, Australian dollars, per megawatt hour, which is less than half of what they get over in Europe.  

U.S. have got the production tax credit which works on a similar basis to the feed-in tariff and countries like South Korea, Japan, and South Africa as you just mentioned, they all have feed-in tariffs, and we certainly need feed-in tariffs here in Australia.

And the cost of the energy to the consumer increases will be minimal, and that's been proven. And if you have a look at all the major... one of our biggest criticisms of renewable energy is the cost of, but when you look at the countries like, say Japan is a very large industrialised nation, their energy costs are the highest in the world and they're a very successful manufacturing-based country. Germany for argument's sake as well, they've also got a very, very huge industrial infrastructure and their energy costs are up in the top 10 per cent of the world as well. And they haven't suffered because of their high energy costs.

Here in Australia, we're probably the second lowest around the world, South Africa being the lowest cost of energy. And really, you know, it won't make any difference to our manufacturing base. I think one of the things, and I think we've got to give the Government a little bit of credence here, is that there's a big fossil fuel industry with our brown coal reserves here in the Latrobe Valley and also the black coal reserves up in New South Wales and Queensland, but there's a huge export market there and the Government really does not want to lose that.

But at the same time they should certainly have all the generation costs in the fossil fuel industry to be externalised (read 'internalised') so that we know exactly what the costs are, and have some of these subsidies that are currently given to the fossil fuel industry redirected, or at least made equivalent, to the renewable energy industry.

And the cost of our current wind power per megawatt hour here in Australia roughly averages around about 70, 75 dollars a megawatt hour. So, you can see that our profitability and the generation industry here is very skinny and if the winds don't blow obviously there's a huge gap in the revenues. And we certainly need to have some form of long-term guarantee and we will then see a lot of international monies being invested here in Australia from the development of, and we certainly do need a feed-in tariff.  

Scott: Now, just one last question before we go. I just want to ask you quickly, the World Wind Energy Association wrote an open letter to the International Scientific Congress on Climate Change which occurred in Copenhagen back in March this year, urging them not to downplay the potential of renewable energies in the Congress's concluding statements. Can I ask you why you needed to do that?  

Heinz: I think we, we certainly needed to increase the profile, or highlight the profile, and get us on the top lines of the agenda, program there. And we now, I think if you have a look at the International Renewable Energy Alliance, we now have wind, we have solar, we have geothermal, and we also have the other biomass technologies all under one body now. Instead of having the individual wind, the individual solar and the individual thermos, we now have one alliance which speaks as one voice, and which is what's required certainly.  

Scott: And now, Heinz, I think we've run out of time, but I'd like to get you in again to talk about some other facets of wind power because...  

Heinz: Sure...  

Scott: ... I really think in Australia the general public just does not really quite understand the huge potential of this stuff. And I'd also like to talk about, you know, all this stuff that's been installed right along the south coast of Australia, which we didn't even get a chance to mention at all.  

Heinz: Sure. Scott, if I can just add that one of the big issues of the wind industry is that it really hasn't matured as a technology to any extent over the last 40 or 50 years. Now, we still basically have the same sort of construction in our turbines as we did have, you know, 30, 40 years ago. And one of the things that the Howard Government certainly made very clear to us in the early stages was that you need to reduce your costs and you need to become more efficient, and of course, have a local manufacturing base.  

And one of the projects that we've been working on over the last couple of years is the reduction in the cost of the energy produced through wind turbines. And we now have a system which has been run in the States for over 2000 hours now, which reduces the cost of the energy coming out of the turbines by 40 per cent. And we're very excited about being able to bring that to commercialisation. And, you know, that's one of the factors that'll really stimulate the growth of wind all round the world.  

Scott: Thank you very much Heinz, and I would very much like to talk about that reduction of 40 per cent coming out of the wind turbines.  

Heinz: Love to. Thanks very much Scott.  

Scott: Cheers mate.  

Heinz: OK. Bye.  

Scott: We've just been speaking to Heinz Dahl, managing director at NexTgen Wind, and he's also the director of commercial operations and marketing at the World Wind Energy Association. Their website is at….I wrote it down somewhere….wwindea.org.   If you want to learn about Beyond Zero Emissions, go to beyondzeroemissions.org .. See you.  

Transcript by Jenny Gibson