Oil Price Crash of 2014 / 15 Update

Towards the end of last year I had a couple of posts, the first explaining the oil price crash of 2014 in terms of a simple supply – demand model and the second using this model to anticipate where the oil price may head in 2015 and 2016. In light of the supply, demand and price action of the last six months both of these posts now need to be updated and revised.

The 2014 Oil Price Crash Explained
Oil Price Scenarios for 2015 and 2016

In my Price Scenarios post I forecast a Brent price of $56.50 for December 2015 and with Brent spot currently around $60 this is looking quite good. So far this is panning out in the right direction but for the wrong reasons which does not count as being correct in my book.

Figure 1

The raw oil price and production monthly data that lies behind the model can be divided into 7 legs. 1) Jan 2002 to April 2004 oil supply was elastic allowing demand to grow with little impact on price……

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Geothermal Energy in Perspective

Geothermal is presently a minor player in the field of renewable energy and for the reasons discussed here is likely to remain one, but Energy Matters has never featured it before and it deserves its fifteen minutes of fame. Besides, I worked in geothermal a number of years ago and haven’t revisited it since, so it’s time I updated myself on what’s been going on.

I start with a bit of personal memorabilia. Below is an aerial view of the Hudson Ranch 1 plant in the Salton Sea geothermal field, California, a three-stage flash plant with an installed capacity of 49.9MW that was commissioned in 2012. I show it because I bought the land the plant sits on for my then employer Kennecott Copper Corporation in 1980, knowing that a high-temperature geothermal resource was present there. What I didn’t figure on is that it would take 32 years to put it into production.

Figure 1: Hudson Ranch 1 plant, Salton Sea geothermal field, California (image credit Leidos)

But such is geothermal.
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Oil Production Vital Statistics July 2015 – equilibrium reached

During May and June the oil price has stabilised and both WTI and Brent spot prices have converged on $60 / bbl; the US oil rig count is still falling, but slowly; oil production from all regions is stable hence global total liquids production is trending sideways on the back of recent sharp rises. It appears that oil market equilibrium has been reached. Past experience tells us that this is unlikely to last long.

  • The IEA have once again revised US production upwards by around 300,000 bpd, backdated to March and this clouds recent movements in the global and US data.
  • World total liquids production down 150,000 bpd to 95.96 Mbpd. The recent trend remains sharply upwards.
  • OPEC production up 50,000 bpd to 31.33 mbpd (C+C)
  • N America production down 320,000 bpd to 19.48 Mbpd after upwards revisions of about 300,000 bpd in the USA
  • Russia and FSU down 30,000 bpd to 14.04 mbpd
  • Europe up 140,000 bpd to 3.32 Mbpd (compared with May 2014)
  • Asia down 50,000 bpd to 7.95 Mbpd (after revisions).
  • Saudi Arabia oil rig count was sharply lower, down 10 in May. The international oil rig count continues to decline while the US oil rig count has stabilised at around 628 units.

Figure 1 Daily Brent and WTI spot prices from the EIA, updated to 22 June 2015. The oil price has fallen asleep in June as both Brent and WTI have converged on $60, the spread has once again closed.

This is the July 2015 edition of Oil Production Vital Statistics. The June 2015 Vital Statistics is here. EIA oil price and Baker Hughes rig count charts are updated to end June 2015, the remaining oil production charts are updated to May 2015 using the IEA OMR data.

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Blowout Week 78

This week’s Blowout features an intriguing new power generation concept – the offshore floating nuclear plant, which in the example shown below would generate five times as much electricity as the Swansea Bay tidal lagoons while taking up only 0.01% as much sea room:

ECN Magazine:  The floating nuclear power plant

A novel nuclear power plant that will float eight or more miles out to sea promises to be safer, cheaper, and easier to deploy than today’s land-based plants. In a concept developed by MIT researchers, the floating plant combines two well-established technologies — a nuclear reactor and a deep-sea oil platform. It is built and decommissioned in a shipyard, saving time and money at both ends of its life. Once deployed, it is situated in relatively deep water well away from coastal populations, linked to land only by an underwater power transmission line. At the specified depth, the seawater protects the plant from earthquakes and tsunamis and can serve as an infinite source of cooling water in case of emergency — no pumping needed. An analysis of potential markets has identified many sites worldwide with physical and economic conditions suitable for deployment of a floating plant.

The proposed Offshore Floating Nuclear Plant structure is about 45 meters in diameter, and the plant will generate 300 megawatts of electricity. An alternative design for a 1,100 MW plant calls for a structure about 75 meters in diameter. In both cases, the structures include living quarters and helipads for transporting personnel, similar to offshore oil drilling platforms.

Below the fold: OPEC market share at 12-year low, Baker Hughes rig count finally increases, electricity price riots in Armenia, Austria to file Hinkley suit next Monday, Indiana defies the EPA, how the wind is always blowing somewhere in Europe, Australia slashes its renewables target, a Dutch court orders the Netherlands government to cut emissions, Russia eyeing Balkans gas pipelines, the SNP feels betrayed, Lancashire rejects Cuadrilla’s fracking application and how civilization as we know it could end as soon as 2040.

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Renewable Energy Storage and Power-To-Methane

In recent posts here, here and here Euan Mearns and I have published estimates of the amount of storage needed to integrate intermittent renewable energy with the UK grid in meaningful quantities. All of them point to the same conclusions:

1. The volume of storage needed to convert intermittent renewable energy into dispatchable energy is very large, with estimates running in the 1 to 5 terawatt-hour range even at modest levels of renewables penetration. (Note that these estimates are confirmed by an independent estimate from David Mackay detailed in this comment.)

2. Pumped hydro is the only large-scale, commercially-proven technology that has the potential to handle such storage volumes, but there’s no realistic prospect that the UK could add anything like this much new pumped hydro (total UK pumped hydro storage capacity is presently only 0.03TWh).

In short, the UK will have very considerable difficulty integrating large amounts of intermittent renewable energy into the grid if a solution to the storage problem can’t be found.

And most other countries are in the same position.

Yet there are studies which claim to have developed scenarios that allow the UK and other countries to be powered largely or entirely by renewable energy by or before the middle of the century. The authors of these studies are aware that an energy storage problem exists, so clearly they believe they have found a solution to it. What might it be? To find out we will briefly review the results of two such studies, one for France and the other for the UK:

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Fossil Fuels and Mankind

It has become popular to demonise fossil fuels (FF). Pop stars, press, politicians and now Pontiffs speak with a single voice:

We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas needs to be progressively replaced without delay. Until greater progress is made in developing widely accessible sources of renewable energy, it is legitimate to choose the lesser of two evils or to find short-term solutions. But the international community has still not reached adequate agreements about the responsibility for paying the costs of this energy transition.

Page 122 paragraph 165 of ENCYCLICAL LETTER LAUDATO SI’ OF THE HOLY FATHER FRANCIS ON CARE FOR OUR COMMON HOME

In this post I want to take a brief look at what FF have done for humanity and the environment. I will argue that in the 19th Century, FF first of all saved the whales from extinction and then through averting whole sale deforestation of the planet’s surface FF saved multiple ecosystems from destruction and as a consequence averted the extinction of thousands of species.

Figure 1 Population growth (blue line), right hand scale. Fossil fuel consumption (million tonnes oil equivalent) left hand scale. The exponential growth in population would not have been possible without FF. We all therefore owe the fabric of our society and our very existence to the use of FF over the past century or more. 

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Blowout week 77

Energy storage has been a subject of discussion recently, so in this edition of Blowout we feature the entry of General Motors and Nissan into the battery storage market. Why buy Teslas, they ask, when you can use recycled EV batteries?

USA Today:  GM poised to challenge Tesla in battery storage

GM is proposing to power homes, businesses and utilities with recycled used electric car batteries from cars like its Chevrolet Volt, which has both batteries as a gas engine. Electric-car maker Tesla is going to enter the stationary power business with new, not used, units. GM says its approach is not only more ecological because it promotes reuse, but could be more cost effective. “Even after the battery has reached the end of its useful life in a Chevrolet Volt, up to 80% of its storage capacity remains,” said Pablo Valencia, senior manager of GM’s battery life cycle management. “This secondary use application extends its life, while delivering waste reduction and economic benefits on an industrial scale.” At its headquarters in downtown Detroit, GM executives showed how five Volt battery packs are already helping light offices at the company’s Milford, Mich., data center. A new solar array and two wind turbines feed the Milford data center’s circuit breaker panel, where the Volt batteries work in parallel to supply power to the building. The batteries also can provide back-up power to the building for four hours in the event of an outage and stores it when it’s unneeded. Excess energy is sent back to the grid that supplies the Milford campus. (Image credit Edmunds).

Edie:  Nissan converts Leaf batteries into commercial energy storage

Used Nissan Leaf batteries will form the basis of commercial energy storage systems, under a new deal between the Japanese carmaker and energy storage provider Green Charge Networks. The two firms announced earlier this week that the first systems will be installed at an unspecified Nissan facility later this summer, with plans to make them generally available in the fourth quarter of 2015. “A lithium-ion battery from a Nissan LEAF still holds a great deal of value as energy storage, even after it is removed from the vehicle, so Nissan expects to be able to reuse a majority of LEAF battery packs in non-automotive applications,” said Brad Smith, director of Nissan’s 4R Energy business in the U.S. The 24kwh Nissan Leaf battery can reportedly retain up to 80% of its power for its commercial afterlife. The cost of the system has not been announced, but Green Charge has promised it will be “substantially less than new lithium-ion batteries”.

The usual mix below the fold, including a renewed focus on shale oil, Gatwick gets even bigger, a new Pemex discovery, Grafenrheinfeld and Killingholme plants to close, UK scraps onshore wind subsidy, Spain’s war on solar, war brewing in the Middle East, CO2 emissions from Drax, yet more problems at Hinkley, Minnesota to charge for residential grid hookups and how the Earth is already locked into its sixth major mass species extinction.

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China: post-industrial revolution

In this post I revisit the energy production and consumption data for China looking for clues about the future direction of global energy markets. China now consumes 23.2% of all energy consumed on Earth and clearly what happens in China will impact the whole world. Figure 1, lifted from the 2015 BP Statistical Review, shows how dramatically growth has slowed in China. Energy intensive steel and cement are barely growing as the era of industrialisation and building infrastructure comes to an end. So may this in part explain the 2014 oil price crash?

Figure 1 The dramatic slow down in energy intensive industries in China must surely impact demand for energy?
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Is the European Renewable Energy Bubble About To Burst?

Well, is it? You would certainly never think so from Figure 1, which shows renewables generation in the EU28 more than doubling between 2003 and 2014 and continuing to grow at a healthy clip (note that except for Figure 3 all the data used in this post are from the BP 2015 Statistical Review):

Figure 1:  Annual EU28 generation from renewables, 1985-2014

Nor from Figure 2, which shows the EU28 on track to meet its target of obtaining 27% of its energy from renewables by 2030 with room to spare:

Figure 2:  Percentage of EU28 energy demand met by renewables, 1985-2014

Nor from this quote from the European Commission, which less than two months ago expressed its complete satisfaction with the way things were going:

The current EU renewable energy framework has been successful in triggering a profound transformation of the European energy sector. Renewable energy is becoming mainstream – not only in the EU, but also in the rest of the world, and this is a result of determined European energy and climate policies. By being pioneers and leading in the deployment of renewable energy, Europe shows the rest of the world that decarbonisation is possible. Moreover, the significant programmes and projects initiated in Europe have converted renewables from a discrete contributor to the energy mix to a visible and reliable source of energy for everyone.

But on closer inspection things are not quite as rosy as they seem.

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The Cost of Dispatchable Wind Power

In a recent conversation with a politician I was told we needed a lot more pumped storage hydro to store surplus wind power from when the wind blows for use when it is calm.

We have now had several posts on the topic of storing wind power. Recently Roger Andrews was Estimating Storage Requirements At High Levels of Wind Penetration and presented 5 scenarios for the UK where storage varied from 700 to 5000 GWh. I have written a number of posts looking at different pumped hydro storage schemes from FLES O-PAC (8 GWh), Coire Glas (30 GWh) and the concept of Strath Dearn (6800 GWh).

In his post Roger put some numbers on the storage required to transform variable wind into dispatchable uniform baseload. In this post I take a different approach. I calculate how much storage would be required to deliver the diurnal peaks in demand from dispatchable wind – pumped – storage – hydro. I’ve taken this approach for a number of reasons:

  • The daily demand peaks fetch the highest prices and supplying these peaks follows the traditional finance model for pumped storage hydro – buying low and selling high
  • Servicing the peaks as opposed to base load minimises the amount of storage required (the demand peaks represent 18% of total demand in March 2015)
  • Supplying the demand peaks in the UK from wind + storage will allow about 20 GW of conventional generation to be retired
  • Allowing the fossil fuel generators to supply base load allows them to run at optimum efficiency and to minimise their CO2 emissions per unit of electricity produced. By way of contingency it leaves the door open for an all-nuclear base load supply.

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Blowout week 76

This week’s Blowout features the ongoing economic transition in China, which has potentially major implications for the world energy and natural resource industries:

Mining.com:  China’s steel, iron, coal industry growth collapsing

A new report shows China’s move away from industrialization and construction to consumption and services is happening much quicker than previously thought. China’s economic growth is expected to slow to 7% in 2015 and may even slip below that – the slowest pace since 1990. While slower overall growth has long been expected, the transformation of China from an investment-led to a consumption driven economy appears to be happening much quicker than previously thought. After the years of breakneck infrastructure investment, urbanization and industrialization that created the supercycle in commodity demand, Beijing is now shifting focus of policy to the services-orientated sectors of the economy. A chart from oil giant BP’s Statistical Review of World Energy 2014 report shows how the energy intensive sectors of the Chinese economy “virtually collapsed”.

Stories below the fold include OPEC pumping more oil than ever, bargain-hunting in the North Sea, lack of progress at the Bonn climate talks, coal plant closures in Australia, EPA to regulate airline emissions, new renewables records set in UK, planning permission granted for the Swansea tidal lagoon, the decreasing competitiveness of nuclear electricity in France, nuclear to the rescue in drought-stricken California, and how global warming is forcing polar bears to eat dolphins while climate change ruins your weekend.
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Global Energy Trends – BP Statistical Review 2015

The BP Statistical review of World Energy was published on Wednesday 10th June. Last year I published a short post summarising Global Energy Trends and this post up-dates those charts with the newly published data for 2014.

  • Global primary energy consumption continues to grow though there are signs the rate of growth may be slowing, especially for fossil fuels (FF) (Figure 1). I suspect this may be due to a combination of high energy prices (that persisted through much of 2014) and the end of double digit growth in China.
  • Consumption of every fuel type grew in 2104, including nuclear.
  • In 2014, FF accounted for 86% of total energy consumption compared with 88% in 2004 (Figure 3). There is still a long way to go to end our reliance on FF. Much of the substitution comes from biomass and biofuel. Burning living plants instead of dead ones (FF) will probably have a net negative impact on Earth ecosystems.
  • In 2004, new renewables (wind, solar, geothermal, biofuels etc) accounted for 0.87% of total primary energy and by 2014 this had grown to 2.98%. In 2004, nuclear power accounted for 5.91% and this has fallen to 4.42% in 2014. The 2.1% growth in share of new renewables is largely offset by the 1.49% fall in the share of nuclear power. On the CO2 account, low emissions nuclear power has been replaced by “low emissions” renewable energy (burning biofuel and timber does produce CO2). The actual energy substitutions are a little more complex.
  • The most significant statistic I’ve spotted in the new BP report is the 2.6% fall in Chinese coal production. Coal consumption is unchanged from 2013 hence China is importing more coal. China produces just under half of global coal from underground mines that are often remote from market and there has long been speculation about how long they could maintain production growth. This may be a sign that the coal era is turning in China.

Figure 1 Global FF consumption expressed in million tonnes of oil equivalent. Note how growth in oil+gas+coal is slowing. The new renewables, despite exponential growth in recent years, remain largely insignificant at less than 3% of the global total. Growth in biomass and biofuel consumption is not sustainable. Solar is likely to be under represented since domestic roof top installations are probably not included. Click all charts to obtain a large version that opens in a new browser window.

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The Difficulties Of Powering The Modern World With Renewables

In the May 12, 2015 “G7 Hamburg Initiative for Sustainable Energy Security”, the energy ministers of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, plus the European Commissioner for Climate Action and Energy, said this:

An increasing number of countries are following the path of a rapid expansion of renewable energy. There (are) a number of challenges as energy systems change and related greenhouse gas emissions are reduced, one of which is how to integrate growing shares of variable renewable energy into electricity systems.

The G7 energy ministers are correct in their assessment. Integrating growing shares of variable renewable energy into electricity systems is indeed a challenge – and so far one without a good solution.

A few quick facts before proceeding. In 2013 renewables supplied the world with 21.7% of its electricity, according to BP. Take out hydro and they supplied the world with only 5.3% of its electricity. Then take out “other” renewables such as biomass and geothermal and the percentage falls to 3.3%.

Why take out hydro and “others”? Because their growth potential is limited by resource availability – too few good hydro sites, too few high-temperature geothermal fields, not enough wood to make biomass pellets etc. – and for these reasons they may never make a significant contribution to future global energy needs. Their growth performance since 1997, the year the Kyoto Protocol set the renewables bandwagon rolling, has certainly been less than impressive, as illustrated in Figure 1. “Others” have gained market share, but at a painfully slow rate, and hydro has actually lost ground:

Figure 1:  Percentage of world electricity generation contributed by different renewable sources, 1997-2014 (data from BP)

Not so, however, for wind and solar, which aren’t resource-limited (the amount of solar energy hitting the earth in a year, for example, vastly exceeds annual global energy consumption). They show rapid growth since 1997, although from small beginnings.  Clearly they are the energy sources the world must concentrate on developing if it is ever to “go green”.

And why shouldn’t continued rapid growth in wind and solar allow the world to go green? I’ve discussed the reasons piecemeal before. Here I summarize them all in the same post:

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A New Peak in Conventional Crude Oil Production

Since May 2005, global conventional crude oil + condensate production (C+C) has been constrained to a bumpy plateau of around 73.2 Mbpd. That limit was breached in December 2014 with a new high of 74.28 Mbpd (Figure 1, blue area is conventional C+C). This comes on the back of a prolonged period of record high oil price. It seems likely that the reason for the new high is OPEC abandoning constraint rather than an actual expansion of global conventional C+C production capacity.

Figure 1 The EIA report various categories of hydrocarbon liquids production including a category for combined crude oil + condensate. This category includes Canadian syncrude (tar sands) and light tight oil (LTO previously known as shale oil). Conventional C+C production is estimated by deducting the unconventional sources from the C+C total and shows a new peak of 74.28 Mbpd for December 2014. The chart is not zero scaled and is updated to December 2014, the date of the last report from the EIA. Data from [1, 2, 3, 4].

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Blowout Week 75

Our lead story this week features a remarkable discovery by NOAA climate scientists. The global warming “pause”, or “hiatus”, that everyone thought had been going on for most of the last 20 years never happened. Global warming has in fact continued unabated:

Sydney Morning Herald:  Global warming ‘slow down’ did not happen

A much discussed “slow down” in global warming did not actually happen and the heating up of the planet has continued apace since the turn of the century, a new assessment by the lead United States meteorological body has found. Scientists from the US National Oceanographic and Atmospheric Administration (NOAA) have instead pointed to biases in thousands of global temperature observations as a reason why the rise in global temperatures was thought to have slowed over the past 15 years. Data biases that NOAA says it has now corrected include differences in how temperatures were recorded over the oceans by ships and floating buoys. It has also included newer, more complete temperature records from across land and accounted for incomplete records in the Arctic. NOAA’s new analysis finds a warming trend from 1950 to 1999 of about 0.113 degrees a decade while the warming trend over the period 2000-2014 was 0.116 degrees a decade. In its 2013 major assessment the IPCC observed that global surface temperature had “shown a much smaller increasing linear trend over the past 15 years than over the past 30 to 60 years.” But the latest NOAA paper says that statement is now no longer valid.

More below the “More”, including no change in OPEC output (but North Dakota isn’t worried), low oil prices threaten “big oil”, Libya on the way to becoming a failed state, the UK wind industry threatens the government with legal action, beautiful nukes, German doctors want a moratorium on wind turbines, ex-IPCC chairman Rajendra Pachauri found guilty in sexual harassment case and yet another Antarctic sea ice record.

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Rooftop PV Panels Point Where the Roof Points

On several previous occasions Euan Mearns has fulminated about this photo he took of roof-mounted solar PV panels in Aberdeen. If you’re going to do something as dumb as installing solar panels at latitude 57N, he argues, at least point them south. Don’t point them east.

So why are these panels pointing east?

Because that’s the way the roof points.

One would think that in Aberdeen, where solar PV load factors are less than 10% to begin with, PV panels would be pointed in the direction that gives maximum output, which according to NREL’s PVwatts calculator (which allows for local weather conditions as well as sun angles) is ten degrees west of south tilted 35-40 degrees south, an orientation which allows the panels to generate 27% more kWh/year than they will when pointed east. But few rooftop PV panels in Aberdeen or anywhere else for that matter are optimally aligned. Most are bolted flat onto the roof regardless of which way it points.

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Flat-land Large-scale Electricity Storage (FLES)

A few weeks ago I attended a small, commercial, energy storage conference in Brussels organised by Energywise where I heard a most intriguing talk on building a large pumped storage hydro scheme in Holland. The talk was delivered by Dr Jan Huynen, the president of SOGECOM who struck me as being a very serious energy engineer. The project is nearing fruition, with a €1.8 billion price tag and 1.4 GW of supply for 6 hours yielding 8 GWh per daily cycle, this is no toy. Holland is of course totally flat!

Is this just another Green pipe dream? Or does it offer a solution to the apparently intractable problem of energy storage? There is of course nothing new about pumped storage hydro. But all existing schemes use natural relief and elevation to create the head required to store gravitational potential energy that creates pressure and power. What makes Flat-land Large-scale Electricity Storage (FLES) unique is that the whole system is located underground (Figure 1). This of course adds cost but also, as we shall see, it offers substantial benefits.

Figure 1 FLES employs a small surface reservoir and deep lower reservoir with all tunnels, pipes and generating kit below the surface [1].

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Oil Production Vital Statistics June 2015

This is the June 2015 edition of Oil Production Vital Statistics. The May 2015 Vital Statistics is here. EIA oil price and Baker Hughes rig count charts are updated to end May 2015, the remaining oil production charts are updated to April 2015 using the IEA OMR data.

  • World total liquids production up 460,000 bpd to 95.7 mbpd
  • OPEC production up 160,000 bpd to 31.21 mbpd (C+C)
  • N America production down 250,000 bpd to 19.55 mbpd
  • Russia and FSU down 10,000 bpd to 14.05 mbpd
  • Europe down 20,000 bpd to 3.45 mbpd (compared with April 2014)
  • Asia down 149,000 bpd to 7.86 mbpd
  1. The mismatch between regional production losses and gains compared with the global number is probably buried in the IEA revisions which are backdated up to 3 months. All that can be said is that over the last 3 months production has grown within each region and globally.
  2. The fall in US oil rig count is slowing but still falling. The US total rig count stood at 1 rig below the previous low point of 876 reached on June 12th 2009.
  3. The oil price rally has stalled with the formation of an interim top in progress. There is as yet little sign of a significant drop in US production.
  4. The current action appears to be demand driven, the low price raising demand more than it is suppressing supplies.

Figure 1 Daily Brent and WTI prices from the EIA, updated to 26 May 2015. The price rally has stalled for the time being with an interim top forming. This action is set alongside growing production and demand.

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Blowout week 74

For this week’s feature story we head north to the frozen wastes of Canada:

Money Morning:  Canada’s New Shale Oil Field Could Rival the Bakken

Canada’s energy industry may be most famous for its world-class oil sands resources. But a new shale oil field could surpass the oil sands as Canada’s largest untapped oil reserve. In fact, it could even rival the massive Bakken shale of North Dakota in terms of recoverable oil. This area lies north of British Columbia and east of the Yukon. Recent data from the National Energy Board (NEB) and the Northwest Territories Geological Survey shows that this area holds as much as 200 billion barrels of shale oil reserves. That compares to U.S. Geological Survey estimates that the Bakken shale formation will yield 4.3 billion barrels. Not all of this Canadian oil is necessarily recoverable. But the Canol and Bluefish shales contain a total approaching 7 billion barrels of economically viable resources.

Location of Canol and Bluefish shales (image credit MyYellowknifeNow)

The usual mix below the fold, including shale oil, the coal crisis in Germany, Austria now to sue the Czech Republic over nuclear, the doomed city of Hull, Exxon’s CEO speaks out on renewables, a solution to the energy storage problem, biofuels and water use, vanishing glaciers on Everest, an ice cream that increases climate change awareness and immediately following, are the EIA’s oil production numbers reliable?

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Estimating Storage Requirements At High Levels of Wind Penetration

In recent posts and comments there have been a number of back-of-the-envelope estimates – including some from yours truly – of how much pumped hydro storage would be needed to bridge some of the low-wind periods that have been registered in the UK. Here I take a closer look at the question of how much wind power storage would be needed at the high-penetration grid scale.

And I find that estimating how much storage is needed is not a trivial exercise. It is in fact a very complicated one, and we get quite different results depending on what it is we want to achieve and how we go about achieving it. Within limits (usually high ones) we can make the storage requirement pretty much what we want it to be. For any given scenario there is in fact no correct answer.

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