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Page added on November 30, 2013
A More Realistic Cost of Wind Energy
Various promoters maintain the cost of wind energy is competitive with other sources of energy. As shown below, this is not the case.
The EIA calculates the levelized cost of NEW onshore wind turbine plants place in service in 2018, capacity factor 0.34, 30-yr life, at $86.6/MWh, including transmission of $3.2/MWh.
NOTE: CFs of 0.34, and greater, are obtainable only in windy areas, such as west of Chicago, and offshore.
http://www.eia.gov/forecasts/aeo/pdf/electricity_generation.pdf
Assuming a realistic 20-year life of a wind turbine increases the levelized cost to $93/MWh.
After backing out the effect of accelerated depreciation for wind turbine plants, the levelized cost increases to $101/MWh.
Adding the cost of keeping gas or coal plants available in standby mode (in case of too little wind to turn the rotors, i.e., about 7.5 mph), AND in inefficient, part-load-ramping mode (extra Btu/kWh, extra CO2/kWh) to balance the variable wind energy, is $17/MWh for natural gas, $55/MWh for coal.
Extra balancing NG adds $6.00/MWh, extra balancing coal adds $9.00/MWh
Transmission system investments to get wind energy to the grid adds $27/MWh.
Thus, the total levelized cost of wind energy averages $151/MWh with NG back-up/balancing and $192/MWh with coal back-up/balancing.
NOTE: Levelized costs are the net present value of the total cost of new construction (including finance charges during and after construction), maintenance, and operation of a generating plant over its lifetime, expressed in dollars per unit of output, i.e. dollars/MWh. They are used to compare various generating sources to see which sources are the most cost-effective when constructing new plants.
The source of the above data is the American Tradition Institute, The Hidden Costs of Wind Electricity, December 2012,
http://www.atinstitute.org/wp-content/uploads/2012/12/Hidden-Cost.pdf
The Production Tax Credit
Note that the effect of the PTC is not included in the above calculations.
The PTC has been extended for one year by Congress and the President, but that one year extension means 10 years of PTC subsidies going to wind turbine plant owners who have begun construction of their turbines in calendar year 2013.
The PTC provides owners with 2.3 c/kWh that the wind turbines generate over the next ten years, which is worth about 3.4 c/kWh in pre-tax income, as the PTC is applied after taxes. The Joint Committee on Taxation estimates that just the one year extension will cost American taxpayers over $12 billion over 10 years, for wind turbines with a construction start (not a service start) during 2013.
Integrating Wind Energy to the Grid
Various wind energy promoters, such as the AWEA/NREL combo, et al, maintain integrating variable wind energy to the grid is similar to the minute-by-minute demand variations grid operators have had to deal with for decades. It is clear from the below report, this is not the case.
The report, dd November 2013, was jointly prepared by the North American Electric Reliability Corporation and the California Independent System Operator Corporation.
http://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC-CAISO_VG_Assessment_Final.pdf
Comparison to Other Technology Costs
According to the EIA, the levelized cost of energy from an:
– advanced NG combined cycle plant is $65.6/MWh
– advanced coal plant is $123/MWh
– nuclear plant is $108.4/MWh
http://www.eia.gov/forecasts/aeo/electricity_generation.cfm
The assertion made by the AWEA wind energy is becoming cost competitive with energy from other sources is not the case, based on these more-inclusive levelized cost estimates.
Wind Turbine Plant Energy Densities; W/m2
Wind turbine plant energy densities are less than 2 W/m2, as measured at the wind turbine, less energy losses to transmit the energy to the user. Here is an offshore example.
Offshore Example: The Anholt offshore wind power plant has 111 Siemens wind turbines, 3.6 MW each, for a total of about 400 MW, on 88 km2, 14 meter deep water, capital cost $1.65 billion; inaugurated on September 3, 2013; energy density = 400 MW x CF 0.40/88 km2 = about 1.82 W/m2; the CF of 0.40 as measured at the wind turbine is assumed, less energy losses to transmit energy to the user.
http://www.pennenergy.com/articles/pennenergy/2013/09/denmarks-largest-offshore-wind-power-farm-is-inaugurated.html
Onshore Example West of Chicago: Onshore wind plants west of Chicago have an average CF of about 0.38, as measured at the wind turbine i.e., about 0.38/0.40 x 1.82 = 1.73 W/m2, or 1.55 W/m2 at a CF of 0.34.
Comparison of Areas Required; Nuclear Plants vs. Wind Turbine Plants
According to Forbes, a power company in South Carolina is investing about $11 billion to construct two 1,100 megawatt nuclear reactors on about 1,000 acres. Production = 2 x 1,100 MW x 8,760 hr/yr x CF 0.9 = 17,344,800 MWh/yr.
Wind turbine capacity, MW, required to produce the same quantity of energy: 17,344,800 MWh/yr/(8,760 hr/yr x CF 0.34) = 5,824 MW, say 6,000 MW to account for units being out of service for scheduled and unscheduled outages.
About 2,000 wind turbines, 3 MW each, 459-ft tall, 373-ft diameter rotors, CF 0.34, properly spaced to minimize airflow interference, would be required to produce the same quantity of energy, but it would be VARIABLE energy requiring OTHER generators to be more hours in inefficient part-load-ramping mode for back-up/balancing the wind energy, using more fuel/kWh and emitting more CO2/kWh, thereby partially offsetting what wind energy was meant to reduce.
Land area required = 6,000,000,000 W/(1.55 W/m2) x 1 acre/4047 m2 = 956,503 acres, or 1,495 square miles. The land can be used for agriculture, but any people living within 1.25 miles, or 2 km, from such wind turbines will find their quality of life, health, and property values adversely impacted. Animals, especially birds and bats, will also be adversely impacted.
Conclusions
According to the American Tradition Institute, there are numerous hidden costs to wind power, including the cost of back-up power, the cost of extra transmission, and the cost of favorable tax benefits. And, the assumption of a 30-year life used in government calculations for wind power is optimistic, based on reports from European countries regarding the useful service lives of their wind turbines.
Including these hidden costs in calculating the cost of wind energy increases its cost by a factor of 1.5 or 2, depending on the power system that is used as back-up. The Institute calculates that ratepayers are paying an extra $8.5 to $10 billion a year for wind energy compared to natural gas-fired generation, and this will only increase as more capacity is added. Add to this the more than $12 billion that the American taxpayer is paying for the ‘one-year’ extension for the PTC, and one can see that the wind industry is a boondoggle at the expense of taxpayers and ratepayers, that is making the US economy less competitive.
19 Comments on "A More Realistic Cost of Wind Energy"
BillT on Sat, 30th Nov 2013 1:48 am
A nice collection of reasons why no ‘renewable’ will ever be the answer to the decline in hydrocarbon energy. It is and will be a small percentage of energy supplied for the lifetime of the existing units, but the needed quantity of new ones will never be built. Especially after government subsidies end.
surf on Sat, 30th Nov 2013 1:55 am
“Thus, the total levelized cost of wind energy averages $151/MWh with NG back-up/balancing and $192/MWh with coal back-up/balancing.”
A NG turbine will do balancing as well as backup power. It appears he dded the cost twice just to make wind look bad. Then he ads a backup pallancing cost to make it look worse.
Utilities today maintaining enough conventional generation to produce 1010% of the power needed for the expected demand. Most of the time the demand doesn’t reach 90 % of the generating capacity. Wind power today doesn’t need backup power because it is mainly used to reduce fuel cost and to reduce emissions. So in most cases today pack-up power is simply note needed.
“Assuming a realistic 20-year life of a wind turbine increases the levelized cost to $93/MWh.”
The oldest wind turbines in the US (in California) were build with a 20 year life and they are now 25 years old and still producing power. The realistic life time for a modern wind turbine is 50 years not 20 years.
“Transmission system investments to get wind energy to the grid adds $27/MWh”
This cost depends on how far away the wind farm is from a grid connection poinnt. Most of the time the site sellected is located in a windy cost near a power line to reduce or eliminate power line costs. “$27/MWh” is worst case. In most cases this cost is very low.
“According to the American Tradition Institute”
I did a quick search and found that this organization is an anti wind no profit oginization funded by various energy interests.
We don’t need a study of wind costs when real world data already exists. According to this link about the above report:
http://aweablog.org/blog/post/fact-check-american-tradition-institutes-taylor-and-tanton-blowing-smoke-on-wind-incentive
“Real-world data confirm that wind energy’s costs are far lower than those claimed in the report, even before the report more than doubles the cost of wind energy for unjustified reasons. Reports from third-party sources confirm that wind energy is increasingly affordable:”
Shaved Monkey on Sat, 30th Nov 2013 3:09 am
This message was was bought to you by the Koch Bros.
American Tradition Institute
[quote]ATI “is part of a broader network of groups with close ties to energy interests that have long fought greenhouse gas regulation.” The group has “connections with the Koch brothers, Art Pope and other conservative donors seeking to expand their political influence,” reported the Institute for Southern Studies in October 2011[/quote]
http://www.sourcewatch.org/index.php?title=American_Tradition_Institute
Others on Sat, 30th Nov 2013 4:27 am
If this is the case, the Chinese would not have installed 70,000 MW of wind energy capacity.
Its capacity factor is somewhere around 43% availability and not 34% as mentioned. Probably its flipped.
Also the life of wind turbine is 25 years and not 20 years. Another false news from Big Oil.
Still natgas will be more cheaper, but this will not last longer.
DC on Sat, 30th Nov 2013 6:01 am
Just another amerikan fossil-fuel astroturf organization. Total membership? Likely not even 6. One person to write the pre-canned trip, maybe another to send out emails, to answer a phone in an otherwise empty fake office, you know…standard astroturf protocol.
Arthur on Sat, 30th Nov 2013 9:26 am
Nobody claims that renewables are going to replace fossil in a plug & play manner. It will be belt tightening wherever you look. Kiss the car goodbye. But Denmark, Germany and Spain are living proof that wind can make a real difference and not a ‘few %’ as Bill claims.
According to the American Tradition Institute, there are numerous hidden costs to wind power, including the cost of back-up power, the cost of extra transmission, and the cost of favorable tax benefits.
Forget about ‘backup power’. In northern Siberia life comes to a complete standstill during the winter and all people then do is hibernate. That is not going to happen in the West, but yes, it can very well happen that (industrial) life comes to a stand still during long periods of absence of wind. Forget about extra transmissions, build a wind turbine next to every village for local consumption only.
The article is of little use, it does not matter how much wind (and solar) cost if renewables is all we have got.
Here are five examples of small European towns that have achieved 100% energy autarky based on wind, solar and biofuel:
http://deepresource.wordpress.com/category/positive-examples/
It can be done.
Davy on Sat, 30th Nov 2013 12:54 pm
There is no silver bullet for our energy decent. What is necessary is a buffet of multiple diverse efforts. Wind has an important place at the buffet where it is an optimum resource. Those areas that are marginal for wind farm construction then we are just pissing away resources (including fossil fuels) in their construction. In any case we must augment fossil fuels by any means for the energy decent. The coming financial crisis will end most inefficient efforts in all energy related investments
Kenz300 on Sat, 30th Nov 2013 1:27 pm
Energy collective —- promoters of fossil fuels trying to bash any competition from alternatives……
The fossil fuel industry trying to protect its PROFITS from any competition.
rockman on Sat, 30th Nov 2013 2:20 pm
Based on this article Texas must be losing its ass when it comes to wind power since we have more capacity than the #2 and #3 states combined. And on the verge of building out massive offshore wind farms. Must really be a dumb plan for the greatest hydrocarbon producing state in the country to have undertaken. Must be why the Texas economy is shrinking so fast with many companies and individuals leaving. NOT! LOL.
And Texas isn’t replacing fossil fuel fired plants with wind…it’s an add on. We’ll keep fueling our nuke plants and burning coal/NG. No choice: it’s estimated Texas electrical demand will increase about 50% in the next few decades.
BillT on Sat, 30th Nov 2013 2:22 pm
Perhaps you techies should read this article if you haven’t already:
http://www.windpowerengineering.com/uncategorized/rare-earths-minerals-used-in-windpower-technology-could-fall-into-short-supply/
Kenz300 on Sat, 30th Nov 2013 2:43 pm
The fossil fuel propaganda machine attacking any competition…….. nothing new here.
It would be more honest if the fossil fuel industry did not hide behind these front groups and we could all see where their money and support is coming from.
A new form of attack ads…… by surrogates
Arthur on Sat, 30th Nov 2013 4:58 pm
Bill, for the long term there are other potential suppliers for rare earths than China, like Brasil:
http://deepresource.wordpress.com/2012/02/03/brasil-has-rare-earths-in-abundance/
But you are right, it could be a problem in the short term.
Arthur on Sat, 30th Nov 2013 5:09 pm
And here a pointer that shows not all wind turbines need rare earths:
http://yes2renewables.org/2012/03/06/rare-earth-magnets-not-all-new-turbines-are-using-them/
In recent weeks, media reports about the use of neodymium in wind energy converters gave rise to public discussions. The element belongs to the rare earth metals and is mined primarily in China − sometimes at the expense of health hazards and considerable damage to the environment. Neodymium is needed to make the permanent magnets that are used in the generators of other wind turbine manufacturers. The reports made blanket statements about an alleged dirty side to the clean wind energy that presents itself as an environmentally friendly alternative to nuclear energy. Contrary to what the media reports suggested, ENERCON wind energy converters generate environmentally-friendly power totally without neodymium. The gearless design on which all wind turbine types – from the E-33/330 kW to the E-126/7.5 MW – are based employs an annular generator with separate excitation. The magnetic fields required by the generator to produce electricity are created electrically. Due to this design, ENERCON turbines are built completely without permanent magnets.
rollin on Sat, 30th Nov 2013 6:17 pm
More tripe from the energy collective. I could show the errors in logic of this article but it would be a waste of time since other factors are much more significant.
Just add the cost of external destruction caused by fossil fuel plants to the final cost and wind and solar will be about an order of magnitude less costly. Too bad that cost studies never really take into account all the costs of using a power system.
Also add in the cost of using a limited resource to power society thus pushing it toward collaps and that would put the eventual cost of using fossil fuels two orders of magnitude or more beyond solar and wind.
Others on Sat, 30th Nov 2013 6:53 pm
Read the impact of shale gas. Its good, but we cannot keep relying on this forever.
http://catskillcitizens.org/
surf on Sat, 30th Nov 2013 7:59 pm
neodymium and other rare earths are actually not rare. They are common throughout the earths crust and minable deposites can be found in most countries.
The reason china dominates the rare earth market is because the chines government set up a monopoly that drove all other mining companies out of the market. When china recently announced that they would stop exporting rare earths a shortage quickly developed. However within 2 years old abandoned mines in the US and elsewhere were opened and started selling rare earths.
You can make generators with or without rare earths. A conventional generator such as the ones uses by Enercon turbines may be 90% efficient. A rare earth generator would be slightly more efficient about 92% and would be lighter and somewhat smaller. However a rare earth generator will cost more due to the difficulty and safety hazzards associated with the assembly of rare earth magnets.
BillT on Sun, 1st Dec 2013 1:34 am
Rare earths are not rare, however, they ARE difficult to refine in large quantities. Cost will limit their use just like oil.
Terry McNamie on Sun, 1st Dec 2013 8:33 am
I heard there are plans to build wind turbines on the moon, imagine all that energy that we can transmit to earth. Maybe Solar on mercury isn’t too far off.
Humans can extract as many resources as they want as long as there is capital. When they get too expensive to extract then we can recycle to infinity. All our energy problems are already fixed.
Bob Owens on Sun, 1st Dec 2013 3:30 pm
The energy companies are planning on drilling 1/2 Billion dollar test wells (each well) in the Arctic. Not production wells, but test wells. And they think wind power is too expensive! For that type of money they could build a hell of a wind farm and have income for 50 years (with proper maintenance). Soon we will only have renewable energy to fall back on. That is the reality we face.