Scale Effect

Scale Effect is the latest mantra of the alternative energy community.  If we can just make things bigger, the costs will decrease.  I hear it a lot lately.

GE and Siemens both have prototype wind turbines in demonstration programs that are designed at 2.3 to 4 megawatts of peak power.  The real key to the new machines is the elimination of gear increasers to make the low speed propeller shaft turn a high speed generator.  It’s much more efficient to go to direct drive.

A permanent magnet generator with high pole count can be designed to operate very efficiently at the direct speed of the propeller.  By using powerful Neodymium permanent magnets, high power levels of electricity can be generated.  And this type of generator is efficient, simple to deal with electrically, and the winding constant can be varied for specific ideal wind speed.  It’s a great improvement and some in the industry are claiming a 25% increase in overall system efficiency.

But the improved performance and the increased size are not really connected.  I think there are two ideas that are getting mixed up.  One idea is that scale effect can have an impact on performance.  By simply making something bigger, we should expect it’s cost, or cost per kilowatt to be reduced.  But it is important to keep in mind what parameter we are measuring.  Generator efficiency? System efficiency? or overall cost effectiveness?

The goal of any proposed technology replacement should be to lower cost.  Steam engines cost less than using horses, given all the costs of feeding, stables, etc.  Steam engines were more reliable and could do more work than horses at lower cost, so they took over the market.  And yes, they were much cleaner than having a bunch of horse poop in the workplace.

If a technology is “green” or “clean”, and it costs more than the technology it seeks to replace, then it cannot enter the market unless consumers are willing to pay more for the technology.  But if a State Legislature enacts a law that directs the local utility company to use “green” power as part of it’s mix of energy sources, then prices will go up.

What is being mixed up is the nature of “economy of scale”  and scale effect.  In electronics manufacturing, the more of something you make, the lower it’s unit cost.  The economies of scale in electronics have brought the cost down on flat screen monitors, computers, hard disk drives, cell phones, and everything else electronic.

This argument might apply to converting light to electricity, but it isn’t entirely true in this arena either.  But that’s another discussion (which I will pursue in a future post).  Many who desire to see a large conversion of US energy sources to solar argue that if the electronics industry can achieve its typical economy of scale, that the cost of solar power will fall below the cost of coal fired or nuclear powered electricity.  But there’s a big problem for the solar community, it only works when the sun is out and skies are clear.

Coal power and nuclear power work all the time.  So there is basic measure of “uptime” that solar has to overcome.  And that makes it very difficult.  Plus, you can’t store the power easily to use it when you need it.  And that’s another problem working against widespread use of solar power.

I gladly grant that there is an increase in efficiency and overall performance to be had from direct drive permanent magnet wind turbines.  But there is nothing in making a bigger turbine that results in more megawatts per million dollars of cost.  Making wind turbines bigger doesn’t improve the cost per Megawatt,  it just makes them lose money faster.