Wind tidbits

By Dave Anderson:

Just a couple of things that have been sitting in my "interesting things, I should find a way to work them into a post" folder. 

As we saw last week, the Cape Wind project has received federal approval.  This approval is a significant step as it signals what the federal policy on near-shore wind energy production will be for the next several years.  It is not a final step as multiple stakeholders are heading to court, but it is a step forward towards creating green construction jobs. 

The drive toward offshore wind, however, may be driven more by
politics than economic and energy policy. Offshore wind farms cost up to
twice as much as land-based wind installations, but they offer
political leaders in densely populated U.S. coastal states a source of
local energy other than offshore oil and gas. "They want their energy to
be local. They want to harvest it inside their own state. And for the
first time they can conceive of that possibility," says Walt Musial, who
leads offshore wind energy research activities for the U.S. Department
of Energy's National
Renewable Energy Laboratory in Golden, CO.

Musial's analyses show that the 28 U.S. coastal states consume 78
percent of the nation's electricity, but only six could meet even
one-fifth of their power demand with land-based wind energy--the fastest
growing source of energy. Add in offshore wind potential in shallow
waters, however, and that number jumps to 26 states; for many it could
serve 100 percent of power demand. But achieving favorable economics
will be hard.

The Reality Based Community passes along an interesting tidbit about the size of the nation's renewable wind energy reserves.   

The estimate of potential US wind power has for a long time been
based on 20-year-old research whose cautious assumptions about future
technical progress have been outstripped by events. A 1991 study I cited
in a  2007
post set the economic wind power potential of the 48 contiguous
states at 3.7 terawatts, or 1.1 terawatts continuous equivalent
based on a 30% load factor. A conservative new
study from the National Renewable Energy Laboratory, based on
raising the height of towers from 50 to the current standard 80 meters,
increases the estimate to 10.5 terawatts installed or 3 terawatts continuous
equivalent. It does not assume any breakthroughs such as kite ladders. [Update:
there's even more energy at 100m or 150m, which can be captured by
bigger conventional rotors, but it becomes impracticable to move the
blades by road; at sea, you float them out, so offshore turbines can be
bigger. The 80m band is sensible onshore.]

And now from The Oil Drum on the marginal cost of wind, which is the critical cost:

Bloomberg has a somewhat confusing
article about the newest complaint about wind power, but the gist
of it is that wind power is an issue for the industry because it brings
their revenues down:

After years of getting government incentives to install
windmills, operators in Europe may have become their own worst enemy,
reducing the total price paid for electricity in Germany, Europe�s
biggest power market, by as much as 5 billion euros some years,
according to a study this week by Poeyry, a Helsinki-based industry
consultant.

Implicit in the article, and the headline (which focuses on lower
revenues for RWE) is the worry that wind power will bring down the stock
market value of the big utilities - which is what the readers of
Bloomberg et al. care about.

But despite the generally negative tone of the article, it's actually
a useful one, because it brings out in the open a key bit of
information: wind power actually brings electricity prices down!

Everyone agrees that wind-power has high capital costs.  That is what makes it an expensive source of boutique electrical power in most areas of the world.  The capital must be paid off.  However, wind has the advantage of having very low maintenance costs, and consuming a fuel source which is currently priced at zero.  The yearly operating costs for a turbine are depreciation, upkeep, and whatever the land lease payment dictates.  A turbine or steam generation plant has to pay for its fuel, upkeep and a much larger workforce so the marginal cost of production is higher despite its lower initial capital outlay. 

However when capital is cheap (like now), it would be a great idea to invest in wind to save money over the long run as well as reduce some of the negative externalities that wind would displace.