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Tl;dr: He's seeing the effect of immature operators and mature technology. Onshore installations in Denmark, where operators are mature, show a performance decline with age which, though statistically significant, is perfectly acceptable.

Long version:
His statistical methods are perfectly standard for panel data analysis. The specification search is kind of sloppy, but his robustness checks seem thorough and come out fine, so I don't think that's a problem. Overall, I like his statistical methods and would probably use similar analysis myself.

The problems start to show up in the interpretation. The correct interpretation of his data is that:

  1. Onshore wind is a mature technology, with perfectly satisfying performance when operated by mature operators (performance degrades by only four percentage points, or 18 % (2.0 % annualized) over a ten-year period - this is not alarming).

  2. British onshore operators are not mature, as evidenced by their considerably steeper degradation of performance.

  3. Either offshore wind technology or the Danish offshore operators are immature. Since this study demonstrates a strong effect of operator experience it is not possible to discriminate between the two, as Denmark ceded leadership of offshore installation to Germany early in the present century.

  4. One worrying effect is that in the British data, capacity-weighted estimates display worse performance curves than unweighted estimates. This is a reverse of the expected effect (and indeed a reverse of the effect observed for both Danish on- and off-shore), and may indicate a major problem with British operators' management of large projects.

  5. The policy analysis is utter garbage on at least two levels: It displays either nearly complete ignorance or mendacious mischaracterization of the existing policy regime, and further bases policy recommendations on the assumption that both the technology and British operators are mature, and that there are therefore no further infant industry economies to harvest.

  6. The executive summary of the paper may be gainfully replaced by Figures 1, 10 and 14, which contain all the conclusions that are both interesting and accurate.

(Incidentally, nuke fans should take heed: Complicated technology depends on mature operators as well as mature technologies, and developing a mature operator and supply infrastructure takes decades.)

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 24th, 2012 at 12:29:24 AM EST
[ Parent ]
Thanks for that analysis. Some additional fine tuning:
  • on item 3 - experience moved to the UK in the late 2000s, Germany will join as of next year when the first industrial scale projects are built there;

  • on item 3 again: sample for offshore is really small. Apart from what are really R&D facilities, there are 2 projects in the sample for any significant period of time: Horns Rev (160 MW, 2002) and Nysted (165 MW, 2003). Other large projects come online in 2009/2010 (Horns Rev 2, Rødsand). The 2 early projects had to go through major teething problems, but 50% of Nysted was sold last year to PensionDenmark so they obviously think of the project as a long term ongoing concern (and DONG, the operator, must have given them the relevant underlying data)

  • on item 4: I think large projects in the UK are mostly quite recent, so there may be a learning curve there as well, but the point is to be noted indeed.


Wind power
by Jerome a Paris (etg@eurotrib.com) on Mon Dec 24th, 2012 at 05:14:40 AM EST
[ Parent ]
I checked the British onshore numbers, and as with the Danish offshore, the decline indicated is not borne out by the numbers :

The normalised load factor for UK onshore wind farms declines from a peak of about 24% at age 1 to 15% at age 10 and 11% at age 15.

If he is saying that, on average a park that starts at 24% will decline after 10 years to 15%, and after 15 years to 11% (which is what his rhetoric would lead us to believe), then that is clearly false.

If, on the other hand, he is saying that the average load factor for all farms at 1 year is 24%, and that the average for farms of 10 and 15 years are 15 and 11%, then that is something entirely different, which I don't believe is supported by the data either (having already caught him out on Danish offshore).

There is so much month to month variability in the onshore data that you would have to do statistics, what me not know how. But just squinting at the data is enough for me. He's a liar, and if you can explain how he comes up with this particular lie, I would be very interested.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Dec 24th, 2012 at 11:12:33 AM EST
[ Parent ]
I'm not clear on precisely what he's doing wrong, but I think he might be using a static model where he should be using a dynamic one. When I do a quick and dirty run on what I think he did, I get autocorrelated residuals, which usually means that you've forgotten a lagged dependent variable in your specification.

I'm not totally clear in how that would give him the sort of results he's getting, but models with autocorrelated residuals take great delight in producing interesting and innovative forms of gibberish.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 24th, 2012 at 08:04:45 PM EST
[ Parent ]
tl;dr

Did the author provide any justification for using Statistics to Model and analyze dynamic, non-linear, phenomena subject to sensitivity to initial conditions (aka "wind")?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Wed Dec 26th, 2012 at 01:45:31 PM EST
[ Parent ]
Yes: The aggregates are not.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 26th, 2012 at 06:10:46 PM EST
[ Parent ]
By "aggregates" you mean "previously measured" ?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Dec 27th, 2012 at 12:54:22 PM EST
[ Parent ]

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