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Peabody Energy Corporation Message Board

  • bluecheese4u bluecheese4u Aug 19, 2013 9:46 AM Flag

    Graph of the Day: How wind displaced coal in Spain

    Graph of the Day: How wind displaced coal in Spain

    By Giles Parkinson on 18 August 2013

    Today’s graph is sourced from the recent Goldman Sachs analysis of the thermal coal industry, and its conclusion that the window for investment is closing rapidly – thanks to reduced demand, and because of the rise of renewables and other cleaner energy sources.

    Goldman Sachs says there are three big themes governing the outlook for thermal coal; the first is environmental regulation, be it air quality or greenhouse gas emissions (which lead to more expensive coal); the second is energy efficiency (which leads to less consumption of coal), and the third is the growth in renewables.

    To illustrate the point about how growing amounts of renewables impact coal generation, the Goldman Sachs analysts looked at the recent experience of Spain.

    Goldman Sachs says Spain is a good example of how increases in renewable energy production has to be offset by a lower average load among fossil fuel plants. “Rising generation from solar plants in particular (whose output often coincides with the time of peak power demand) can result in lower peak power tariffs, undermining the profitability of many conventional power plants,” it says.

    The first graph

    (exhibit 33) of daily power output statistics show the variability of wind power on a day-to-day basis, while solar power output varies during the day as well as on a seasonal basis. Goldman says despite this, the Spanish grid operator has been able to manage successfully the intermittency of solar and wind power, partly by leveraging the spare capacity of gas and coal-fired plants.

    Screen Shot 2013-08-18 at 9.10.58 AM

    Goldman noted that over a 12-month period to September 2012, wind power contributed roughly 17 per cent of total Spanish power generation (although in some months it contributes significantly more) and is on track to match and even exceed the share of coal (20 per cent) in coming years.

    Because daily wind output varied be

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