“The Unbearable Lightness of Wind”
April 21st, 2009
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Ross McCracken has a wonderful article in the current issue of Insight, the energy journal published by Platts, called “The Unbearable Lightness of Wind.”McCracken tackles the question that nobody has posed yet - what is going to be the economic consequences of putting up all these windmills with government subsidies, mandates and “feed-in tariffs” that tell the utilities, “Buy it whatever it costs.”

“Wind power has its critics and they feel that their reservation have been overridden by policy makers whose imagination have been captured by a green agenda that downplays wind’s limitations,” says McCracken. “The conundrum that wind poses is not just technical, [however]. It lies in the fact that wind does not directly displace fossil fuel generating capacity, but will make this capacity less profitable to maintain.”

What’s likely to happen, McCracken argues, is that windmills - which generate electricity only 30 percent of the time - will replace some peaking power and some base-load power:

As wind provides neither baseload nor peaking plant it has no impact on reserve capacity. . . [I]t increases redundancy in peaking plant and reduces the profits of baseload generation; potentially good for consumers but bad for investment in non-intermittent sources of power, and presenting the risk of a decline in reserve capacity. . . . [P]eaking plants would be used much less and baseload plant would see sustained period of potential below cost prices - a particular nightmare for the nuclear industry.

So without contributing any reliable capacity, wind will nonetheless make coal and nuclear less profitable. Existing plants will be caught in a trap but new construction will be discouraged entirely. Already the British Nuclear Group is complaining that it can’t build any new reactors if they have to compete against subsidized wind farms. Environmentalists are turning handsprings, claiming joyously that wind is finally replacing nuclear. But that’s not what’s happening. Instead, nothing will be replacing coal and nuclear as demand increases. Nor will any carbon emissions be reduced, since coal plants will have to stay on line to provide backup.

The one type of generating capacity that will be expanding is natural gas. GE, Siemens and Toshiba are already marketing their gas turbines as the “natural companion to wind,” because they can stop and start instantaneously to match the wind’s vagaries. Rather than heading into an era of renewable energy, we are probably headed into an era of natural gas, the most expensive way to produce electricity. California, which has been at this for almost 30 years, gets 40 percent of its electricity from natural gas - twice the national average - and pays 50 percent more for electricity than surrounding states.

Our growing investment in wind, therefore, promises two things - more expensive electricity and declining reserve capacity, especially if electrical demand continues to grow. By coincidence, that’s exactly the path trodden by California on the way to the Great Electrical Shortage of 2000. Or maybe it isn’t a coincidence at all. Maybe we’re just traveling down the same road, this time on a national scale.

Tags: baseload power, energy economics, wind power