Wind's Economic Value - September 11, 2006

Responses from publication:  http://www.energycentral.com/centers/energybiz/ebi_detail.cfm?id=205

Two issues need to be addressed for wind to reach the DOE goal. One is the number of square acres of land needed for a 20% penetration. And, the second is load following. If the prime power is coal you must have large spinning reserves to accommodate a lull in the wind. Spinning reserves still take fuel.

 

Marvin Yoder

 

I was extremely disappointed about the total lack of perspective on your wind promotional piece. I expected a far more researched and balanced piece. Wind like any other generation option has its pluses and minuses. You quote wind proponents extensively but have made no attempt to address the much larger issues that have limited wind's contribution to just 0.36% of the total 2005 US generation (EIA-Electric Power Monthly-March 2006).

 

  • Wind is highly unpredictable and generally provides very little power output during peaking demand periods. As a result, wind developers receive only a small capacity credit towards powerpool reserve margin requirements. Ratepayers are left paying for building conventional generation capacity anyway.
  • The national wind capacity factor was only a 29% (in 2005). If one uses average capacity performance factors in the COE calculations (vs. developer or AWEA claims), the calculated costs of production would be far higher. Seems like you are falling for Enron-type accounting to me.
  • Proponents claim that other options get far more subsidies than wind on a $ basis. Given that wind is only 0.36% of the nations total, I would hope that the nation spends more R&D $ on the options that account for the bulk of our current and future energy supply. If you compare all the subsidies on a $/MWh basis, wind and solar are by far the most heavily subsidized generation option s.
  • Wind is the fastest growing option because it is so small (The power of the denominator).
  • Wind projects can be controversial because of its large footprint (cleared area/MW) versus its small output (in large part due to its poor CF).
  • Wind project environmental claims are often overblown. For pollutants subject to cap & trade programs, any displaced emission source can sell/transfer their allowance to another source that would allow it to emit more. Bottom line is that for NOx and SO2, wind may displace fossil fuel emissions but will not avoid them.

Most wind projects are being developed to meet renewable portfolio standards. This is a special protected market that does not need to compete on a cost competitive basis with conventional generation options. The question you should ask is if the wind generation costs are so competitive, then why do states need RPS? How about we eliminate RPS and allow the market to choose the lowest cost pow er supplies. I strongly support green power purchase programs that allow customers to buy power from the sources they want. However, I have a problem that when not enough people who are willing to pay the $20-40/MWh green price premiums that developers then sell state legislators that they must pass an RPS to support renewables.

 

Tom Hewson
Principal
Energy Ventures Analysis Inc

 

Very positive and factual article regarding wind. It is timely that the article was published on 9/11, because that anniversary is indicative of perhaps the most important reason we should pursue wind energy. Wind's primary competition is natural gas (for electricity generation). Meeting increasing U.S. energy needs via natural gas will require large volumes of LNG (liquefied natural gas) imports. The countries with the required natural gas resources include Iran, Russia, Iraq, Saudi Arabia, Venezuela, Qatar, and the United Arab Emirates. Relying on these countries for our energy needs has highly predictable outcomes: war, terrorism, and price unpredictability. Avoiding increased LNG imports from these countries should be reason enough to pursue cost-competitive wind energy!

 

Thomas Conroy
President
Wind Tower Systems

 

There are many reasons for promoting wind energy. They include:

 

1. Wind energy is renewable. It will never run out like all fossil fuels will.

 

2. Wind energy reduces all greenhouse gases to zero. It is completely non-polluting.

 

3. It reduces our dependence on foreign sources of fuel like gasoline and LNG.

 

4. The cost of Wind Energy will become lower and lower as technology improves and economies of scale kick in.

 

5. The price of electricity from Wind Energy will not fluctuate the way oil and gas prices do. It will be stable.

 

We need to do this now, while we have time. The Federal Government should be doing everything in its power to support, promote and subsidize both Wind Generation Plants and the means to get the electricity to the current power grid. We will pay dearly if we don't do this now and it looks like the current administration is going to sit on its hands for another two years.

 

Jim Colleran
Salem, VA

 

In your recent article, Wind's Economic Value you stated, "Wind's predictability is a selling point." How can you use predictability and wind in the same sentence? In the recent heat storm in California's recent heat storm the wind farms performed at a dismal 4% capacity factor. You said that Germany is on its way to20% wind supply and yet from 1993-2003 they increased their capacity by ten fold and got a 4 fold increase in output. What's the problem? The wind didn't blow!!
 

 

As was pointed out to me by Thomas O. Gray, Deputy Executive Director/Director of Communications, American Wind Energy Association, wind is an "energy source rather than a capacity source" and is not expected to be relied upon for capacity. Yet it is clear in your article that it is being toted as something to be counted on 24/7. Something we all know is not true.
 

 

Is there any data showing the true capacity factor of the different wind farms that is available to the public? All I can find is predicted output, which your figures are based on, and anything that is actual is "proprietary" and not open to the public. I think it is time we opened the books and saw what we are really getting for all our installed wind capacity rather then the pie in the sky the wind energy industry is promising.

 

Philip Flowers

 

During a trip through the Netherlands a couple of years ago, I counted about 200 hundred windmills stretching out into the countryside and visible from our rental vehicle's windows. Half were not working.

 

After crossing into and driving through nearly the entire length and width of Denmark, which is located on a windy peninsula, I only counted a couple dozen windmills.

 

When asked, the Danes, acknowledged world leaders in windmill technology, said they were happy to sell Danish-made windmills to the rest of the world, but wouldn't invest in windmills for their own, energy resource-poor country.

 

The reason, as we were told: "They (windmills) are unreliable".

 

M. Oliver

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