Texas oil billionaire T. Boone Pickens proposes to use wind power to replace natural gas for electric generation and then use the natural gas to replace oil in cars.
A 2005 Stanford University study found that there is enough wind power worldwide to satisfy global demand 7 times over — even if only 20% of wind power could be captured.
Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion. It would take another $200 billion to build the capacity to transmit that energy to cities and towns.
That's a lot of money, but it's a one-time cost. And compared to the $700 billion we spend on foreign oil every year, it's a bargain.
Natural gas vehicles are less convenient (shorter range and less trunk space) than regular cars. But the fuel costs are substantially lower. You could implement part of Boone's plan by getting a natural gas powered car.
Boone is already putting his money ($2 billion through Mesa Power with a potential total cost of $12 billion by 2014) where his mouth is with a gigantic wind farm project in Texas. However, the US government is also contributing through a tax credit per kwh produced.
When a large wind power facility was built outside of town, Sweetwater experienced a revival. New economic opportunity brought the town back to life and the population has grown back up to 12,000.
In the Texas panhandle, just north of Sweetwater, is the town of Pampa, where T. Boone Pickens' Mesa Power is currently building the largest wind farm in the world.
At 4,000 megawatts — the equivalent combined output of four large coal-fire plants — the production of the completed Pampa facility will double the wind energy output of the United States.
If all of the natural gas used in electric generation was shifted to powering cars US oil imports would drop by more than a third. This would reduce the huge US trade deficit and partially shield the US economy from rising oil costs.
We currently use natural gas to produce 22% of our electricity. Harnessing the power of wind to generate electricity will give us the flexibility to shift natural gas away from electricity generation and put it to use as a transportation fuel — reducing our dependence on foreign oil by more than one-third.
How much sense this makes depends on where you think oil prices and oil supplies are going. I think we are within a few years of world Peak Oil. So I see a lot of merit to Boone's proposal.
On the Wall Street Journal's Environmental Capital blog Keith Johnson points to a claim that the lack of sufficient quantities of long distance electric power transmission lines serve as the biggest obstacle to much larger growth of wind power farms.
The Senate Committee on Energy and Natural Resources tackled the transmission problem—that is, how to get electricity from the remote places it’s usually generated to the built-up places it’s used. The U.S. Department of Energy last month said lack of transmission is the biggest obstacle to making wind power a major source of electricity in the U.S.
The transmission lines are needed for two reasons. First off, each area has uneven amounts of wind. Distant areas tend not to have slow wind periods at the same time. So long distance transmission lines with sufficiently fancy switching mechanisms could keep the power flowing from wherever it is blowing hardest to the areas where the wind is weak. Plus, the US southeast as generally weak winds - except offshore where deep water wind tower costs mean much higher wind electric costs. So the US southeast would need lots of transmission lines flowing in from the plains states which have the most wind in the lower 48 states.
In the comments of Johnson's post Michael Goggin of the American Wind Energy Association says that the current regulatory structure serves as a disincentive against the construction of sufficient transmission lines.
Rather, the problem is getting the correct policies in place so that these benefits are properly internalized by the firm making the transmission investment decision. The benefits of transmission investment tend to accrue to consumers spread over large multi-state regions, but currently these out-of-state benefits are largely ignored because most transmission planning and cost allocation decisions are made at the state level. Once the federal and state governments are able to work together to implement regional transmission planning and cost allocation policies that fully account for the societal benefits of new transmission, investors will happily step up to pay for the new lines.
I suspect that Boone's biggest motivation in setting up an organization to promote his proposal is to work for policy changes in the US Congress that will change the regulatory environment to one where the capital markets will supply the large sums of money needed to build up electric transmission infrastructure that will enable huge growth of wind power.
A couple of weeks ago I was digging up information about natural gas vehicles for a high mileage friend. Looking at a map of Compressed Natural Gas refueling station prices in the United States (scroll around in it) I was amazed that the price in Utah is about a third to a quarter of the cost in California. Oklahoma also has very low natural gas prices. If you live in Utah or Oklahoma and have long commutes then take a hard look at natural gas vehicles. Honda sells the Civic CNG. But I've come across claims of several month long waiting lists. Another alternative: CNG Conversion is available for the 2008 Ford Focus and several other models.
Boone's plan isn't going to work unless a lot of people decide on their own that a natural gas vehicle makes economic sense. When I look at the CNG price map and see how cheap CNG is in Utah and Oklahoma I think that CNG vehicles ought to take off in these states in order for CNG to have a chance at the national level. Maybe we've just needed the really high cost of gasoline to make CNG viable. Time will tell.
Update: I question the extent to which wind power can displace natural gas electric power. First off, natural gas gets used a lot for peaking power. Natural gas turbines can get spun up pretty quickly to respond to spikes in electric demand. Well, wind power certainly can't do that. Second, all those existing natural gas power plant operators are going to argue that Congress (i.e. taxpayers) should not subsidize construction of a big electric transmission line system or the installation of natural gas refilling stations. Still, if the Pickens Plan just shines more light on CNG vehicles it will probably give a big boost to CNG vehicle sales - especially in parts of the United States (and southern Canada) where natural gas is cheap.
Update II: I think the move toward CNG cars should come before a big build-up of electric transmission lines. Natural gas is already substantially cheaper than gasoline for powering cars. If this is going to work it ought to be possible to ramp up CNG cars now given some incentives for the shift.
Update III: Pickens wants some government incentives for the move to CNG cars. He argues the needed incentives are small compared to some of the incentives going into other forms of energy.
Washington, Pickens adds, can encourage the move to natural-gas-powered vehicles by providing modest economic incentives for fuel retailers to invest in CNG pumps at their stations, for automakers to build CNG-powered cars and for individuals to convert their existing vehicles to CNG use. And it should continue to provide tax incentives for another 10 years to encourage wind energy's rapid development as part of an overall plan to wean the nation from foreign oil, he says.
"It certainly would be cheaper than what they're doing already for nuclear," Pickens adds. But he's also in favor of developing more nuclear energy, and every form of alternative energy to reduce oil imports. "Try everything. Do everything. Nuclear. Biomass. Coal. Solar. You name it. I support them all," he says. "But there's only one energy source that can dramatically reduce the amount of oil we have to import each year, and that's (natural) gas."
A large electric transmission system combined with dynamic pricing would allow wind to provide a much larger portion of all electric power. This would come at the expense of both natural gas and coal electric. But then more natural gas and coal would be available for transportation. Plus, more coal would be available for export to help pay for the import of oil.
The notion of floating wind turbines far offshore may have come a nautical mile closer to reality late last month, with the announcement of a collaboration between Norwegian oil and gas producer StatoilHydro and Germany's Siemens, a major wind-turbine producer. The new partners plan to install what could be the world's first commercial-scale wind turbine located offshore in deep water. StatoilHydro has allocated 400 million NOK ($78 million) to floating a Siemens turbine in more than 200 meters of water--10 times the depth that conventional offshore wind-turbine foundations can handle--atop a conventional oil and gas platform.
They will use a standard Siemens 2.3-megawatt wind turbine and a spar buoy very similar to what floating oil drilling platforms use. Initially they expect the electric power to be as expensive as solar power (i.e. very expensive). But they think they can get the costs way down.
What I wonder: How much of the higher cost is due to the cable that brings the electricity to shore? That part of the cost doesn't seem very amenable to cost reduction in the short to medium term.
If you are waiting for alternative energy sources to become much cheaper, well, keep on waiting. Wind turbine costs are up for both offshore and onshore sites.
Shell's decision to sell its stake in London Array shows how difficult it will be to meet those goals. After the announcement on May 1, Skaerbaek, Denmark-based Dong Energy and Dusseldorf- based E.ON, Germany's biggest utility, said they may reduce the size of the project.
``Rising costs of materials,'' including steel and turbines ``are the reasons for reassessment of our position,'' said Shell spokeswoman Eurwen Thomas.
The price of offshore turbines rose 48 percent to 2.23 million euros ($3.45 million) per megawatt in the past three years, according to BTM Consult APS, a Danish wind power consultant. By comparison, land-based rotors cost 1.38 million euros per megawatt after rising 74 percent in the same period.
Some of that price rise might be due to strong demand for wind power. But materials cost increases played a role too. Higher commodities prices have pushed up prices for steel, aluminum, copper, and other materials used in wind tower construction.
So far the only energy source which looks like it might be getting ready for big price drops is solar. But it is also one of the more expensive ways to generate electricity. So it has plenty of room for improvement. The future costs of energy look pretty inflationary to me.
Some sources put the cost of offshore wind power at twice the cost of onshore installations. Yet the British government has announced plans to do big offshore wind farm builds. Companies in the Netherlands, Norway, and other countries might slash the cost of offshore wind by using floating platforms.
Offshore wind-farm developers would love to build in deep water more than 32 kilometers from shore, where stronger and steadier winds prevail and complaints about marred scenery are less likely. But building foundations to support wind turbines in water deeper than 20 meters is prohibitively expensive. Now, technology developers are stepping up work in floating turbines to make such farms feasible.
Noise and high spinning speeds have 2 blade turbines undesirable on land. 3 blade turbines get used on land instead. But offshore the trade-offs change and the advantages of 2 blades include lower costs due to a lighter structure.
Faster rotation also means less torque, meaning that the entire structure can be built lighter. (See "Wind Power for Pennies.") The rotor, gearbox, and generator of Blue H's 2.5-megawatt turbine will weigh 97 tons--53 tons lighter than the lightest machine of the same power output on the market. "This is a big advantage," says Jakubowski. "For us, weight on top is something we have to push up." The turbine and platform are correspondingly cheaper to build, he says. The net result, says Jakubowski, should be a highly competitive energy source. He estimates that Blue H's wind farms will deliver wind energy for seven to eight cents per kilowatt-hour, roughly matching the current cost of natural gas-fired generation and conventional onshore wind energy.
Natural gas prices will go up as natural gas fields get depleted. So wind could become preferred with natural gas relegated to back-up when the wind doesn't blow.
Taxpayer subsidies have made onshore wind farms highly profitable in Britain.
LAVISH subsidies and high electricity prices have turned Britain’s onshore wind farms into an extraordinary moneyspinner, with a single turbine capable of generating £500,000 of pure profit per year.
According to new industry figures, a typical 2 megawatt (2MW) turbine can now generate power worth £200,000 on the wholesale markets - plus another £300,000 of subsidy from taxpayers.
Since such turbines cost around £2m to build and last for 20 or more years, it means they can pay for themselves in just 4-5 years and then produce nothing but profit.
What I want to know: How many kilowatt-hours (kwh) are they saying comes from that 2MW turbine (which is probably running at 30% capacity or less on average) to net £200,000 (double that in dollars) on the wholesale market? The period of time sounds like a year. What are they selling the electric for on average at wholesale costs?
To put that in context, on average in the United States in 2007 the residential retail price of electricity was about 10.65 cents ($0.65USD) per kwh. That 2MW turbine running at a US site at 30% capacity for a year will produce .3 * 2000 kwh * 24 hours * 365 days = 5.265 million kwh per year. At retail that's a half million dollars or a quarter million pounds. But at wholesale it is probably half that amount or about £125,000. So are wholesale electric prices higher in Britain? Probably.
The revenue from the subsidy is bigger than the revenue from selling the electricity. That seems out of whack. But it is certainly a reason to be bullish on wind tower sales.
With the US dollar in the neighborhood of about 2 dollars per British Pound British wind subsidies are currently about the same amount of money as US wind subsidies.
According to Ofgem, the Labour government's wind subsidies currently stand at £485 million a year.
But the US has a lot more wind capacity. The US has more prime wind locations and so the same amount of subsidy money buys more wind power in the US than in Britain.
The British government now wants to allow the construction of unsubsidized nuclear power plants while simultaneously spending big money to subsidize a build-up of offshore (and therefore about 2 cents/kwh more expensive if some sources are to be believed) wind. Christopher Booker claims nuclear power would deliver just as much power at a quarter the cost.
At £2 million per megawatt of "capacity" (according to the Carbon Trust), the bill for the Government's 33 gigawatts (Gw) would be £66 billion (and even that, as was admitted in a recent parliamentary answer, doesn't include an extra £10 billion needed to connect the turbines to the grid). But the actual output of these turbines, because of the wind's unreliability, would be barely a third of their capacity. The resulting 11Gw could be produced by just seven new "carbon-free" nuclear power stations, at a quarter of the cost.
The EU's plans for "renewables" do not include nuclear energy. Worse, they take no account of the back-up needed for when the wind is not blowing - which would require Britain to have 33Gw of capacity constantly available from conventional power stations.
The same drawbacks apply to the huge increase in onshore turbines, covering thousands of square miles of countryside. They are only made viable by the vast hidden subsidies that wind energy receives, through our electricity bills. These make power from turbines (including the cost of back-up) between two and three times more expensive than that from conventional sources.
Europe is geographically not well suited to produce cheap wind or cheap solar in amounts large enough to let these sources produce most of Europe's energy. So the European solution appears to be to raise prices.
Meanwhile in the US a fight over wind power subsidies continues. Wind supporters want a continuation of the wind Production Tax Credit of 2 cents per kwh.
The 2005 energy bill provided exactly the kind of multiyear support the wind industry says it needs. The impact has been dramatic. Nearly one-third of all US power capacity added last year – about 5,244 megawatts – was in wind. Overall wind-generating capacity soared 45 percent last year, adding the clean-energy equivalent of 10 large coal-fired power plants, the American Wind Energy Association (AWEA) reported last week.
...
The production tax credit, or PTC, now pays utilities about 2 cents for every kilowatt of wind power they produce over the first 10 years of a project's operation. Congress's Joint Committee on Taxation estimated the cost to taxpayers at less than $1 billion a year, AWEA officials say.
Think of it this way: Those 5.244 GW of wind towers build in 2007 will probably run at about 30% of capacity. So we are really talking about the equivalent of a 1.57 GW nuclear power plant. The production tax credit of 2 cents per kwh, if applied to nuclear power, would clearly make nukes cheaper than coal. As things stand now a new nuke will probably cost a little more than coal electric.
Jerome a Paris, who lines up financing for wind projects in Europe, says the US wind production tax credit is so popular in Congress that it gets used to get other proposals enacted.
Oddly enough, the problem with PTC is not that it's unpopular in Congress, but the opposite: that it's hugely popular. That means that any law that includes it is likely to be supported by a strong majority, and then gets larded with more disputable - and disputed - items, which are then opposed. The PTC gets taken hostage, effectively... Crazy, but true.
The American Wind Energy Association wants a 5 year extension of the US Production Tax Credit. Curiously, in their argument for the extension they claim at least in New York State wind energy displaces mostly natural gas (PDF).
A recent New York study found that if wind energy supplied 10% (3,300 MW) of the state’s peak electricity demand, 65% of the energy it displaced would come from natural gas, 15% from coal, 10% from oil, and 10% from electricity imports
That is disappointing. I'd rather it displaced relatively dirtier coal. Probably in states that use larger percentages of coal for electricity wind displaces more coal than natural gas. But I'd be curious to hear from anyone who knows for sure.
Does the United States really have a coal electric tax credit?
The PTC provides a tax credit of 1.5¢/kWh (in 1993 dollars and indexed for inflation) for wind, closed-loop biomass and geothermal. Currently, the PTC for these technologies is 2.0¢/kWh. Electricity from open-loop biomass, small irrigation hydroelectric, landfill gas, municipal solid waste resources, and hydropower receive half that rate -- currently 1.0¢/kWh.
The duration of the credit is 10 years. However, open-loop biomass, geothermal, small irrigation hydro, landfill gas, and municipal solid waste combustion facilities placed into service after October 22, 2004, and before enactment of EPAct 2005, on August 8, 2005, are eligible for the credit for a five-year period. Refined-coal facilities will receive $4.375 per ton (indexed for inflation) for a 10-year term. Indian coal production facilities will receive an increase in tax credit during the seven-year period beginning January 1, 2006, in the amount of $1.50/ton through 2009, and $2.00/ton after 2009.
My take on these subsidies: If governments are determined to offer them then the subsidies ought to take the form of guaranteed minimum prices rather than fixed amounts per kwh. Then if the cost of electric power from other sources goes up (e.g. when natural gas production starts declining and prices skyrocket) the governments won't have to spend as much on the subsidies. Also, minimum price guarantees would encourage governments to more realistically estimate what wind power will end up costing and wind farm builders would have more incentive to get their costs down below the minimum prices.
If Europe achieves its goal of getting 20% of its energy from renewables it will probably get most of that energy in the form of electricity. In that case Europe's renewable electricity might even surpass nuclear power as an electric power source. I say might? Yes, might. You might be surprised to learn that as a result of France getting 80% of its electric power from nuclear power Europe gets a higher percentage of its electricity from nuclear power (a third) than the United States (a fifth).
Currently nuclear power produces around a third of Europe's electricity, with 15 of the 27 member states producing it.
France is still building nuclear power plants.
In this case the exception is the French nuclear energy company Areva, which provides about 80 percent of the country's electricity from 58 nuclear power plants, is building a new generation of reactor that will come on line at Flamanville in 2012, and is exporting its expertise to countries from China to the United Arab Emirates.
If we want to move beyond fossil fuels the two biggest practical ways to do it today are wind and nuclear power. Eventually solar photovoltaics and perhaps algae biodiesel will hit price points where they can be seriously considered as well. But so far only nukes and wind can scale to any appreciable extent for affordable prices.
The Labour government of Gordon Brown has decided to strengthen their green bona fides in a big way.
Britain is to embark on a wind power revolution that will produce enough electricity to power every home in the country, ministers will reveal tomorrow.
The Independent on Sunday has learnt that, in an astonishing U-turn, the Secretary of State for Business, John Hutton, will announce that he is opening up the seas around Britain to wind farms in the biggest ever renewable energy initiative. Only weeks ago he was resisting a major expansion of renewable sources, on the grounds that it would interfere with plans to build new nuclear power stations.
But what will it cost?
Combined with almost 1 GW of existing capacity the proposed and planned wind farms will add up to 35 GW of capacity.
Mr Hutton's announcement, which will be made at a conference in Berlin tomorrow, will identify sites in British waters for enough wind farms to produce 25 gigawatts (GW) of electricity by 2020, in addition to the 8GW already planned – enough to meet the needs of all the country's homes.
But since this uses wind that does not always blow are they talking about max output? If so, then assuming 32% average operating capacity (guessing based on reports about existing wind farms) a more reasonable output estimate would be maybe 11 GW. They could accomplish the same goal of avoiding carbon dioxide emissions by building 8 GE ESBWR nuclear reactors (assuming 90% uptime). I wonder whether 7000 wind turbines, deep ocean towers, and cables to bring the power to shore will cost more or less than 8 nukes. Also, the wind towers will require a lot of gas or coal fired back-up electric power plants for when the wind does not blow. That's an added cost the nukes wouldn't have.
You might expect me to think this proposal is dumb because politicians didn't realistically weigh costs and nuclear power might be cheaper. But I'm looking at a bigger picture: Even the second cheapest substitute for fossil fuels for generating electricity is still an improvement over using fossil fuels to generate electricity. Now some of the more skeptical among you about global warming are thinking I've gone soft and sentimental. Not to worry. I'm still really worried about Peak Oil and I'm thinking more and more that we need to reserve natural gas and coal for transportation, fertilizer, and plastics. That'll still leave some libertarians among you unsatisfied. But sorry, I think a world of sovereign national oil companies in control of most of the remaining oil and hiding their real reserves is not a very efficient market. Plus, I think the market is making a massive mistake on energy.
To put that 34 GW number in perspective currently the United States has 13 GW of installed wind capacity. The US had only half that capacity 4 years ago. So a tripling of capacity before 2020 seems quite possible and perhaps even likely. Not sure if Britain will ever become the biggest producer of wind power. Right now Texas alone exceeds Britain in wind energy production.
The Scots don't want wind turbines they can see.
Up to 7,000 turbines could be installed off the UK's coastline in a bid to boost the production of wind energy 30-fold by 2020. The plans are likely to see a huge increase in wind farms off the coast of Scotland, although plans to situate new farms within 12 miles of the Scottish shore have been shelved.
Instead, the new farms will most likely be in deep-water locations up to 200 nautical miles offshore.
There's a growing movement in Britain against land-based and near shoreline ocean-based wind towers. The opponents share my esthetic reaction. Wind towers might be neat to go look at in a few places. But I want most countryside to remain more natural looking.
The British government might also pursue tidal power.
Mr Brown and his environment secretary, Hilary Benn, are expected to announce a range of measures including a tighter renewables obligation on electricity companies, a commitment to the Severn tidal barrage and an offshore Thames estuary wind farm capable of supplying a quarter of London's electricity with 341 wind turbines.
The UK's outstanding tidal resources could provide at least 10% of the country's electricity, the government's sustainable development commission has insisted.
What I'd like to know: So then is Brown's government going to abandon their flirtation with a revival of nuclear power? Or are they going to do nuclear and wind? If they do both they could save future dwindling supplies of natural gas for other uses.
A couple of New York Times pieces on wind power illustrate some of the obstacles in the way of growth in wind power.
In the United States, one of the areas most suited for wind turbines is the central part of the country, stretching from Texas through the northern Great Plains — far from the coastal population centers that need the most electricity.
In Denmark, which pioneered wind energy in Europe, construction of wind farms has stagnated in recent years. The Danes export much of their wind-generated electricity to Norway and Sweden because it comes in unpredictable surges that often outstrip demand.
In 2003, Ireland put a moratorium on connecting wind farms to its electricity grid because of the strains that power surges were putting on the network; it has since begun connecting them again.
Denmark was able to scale up wind power because it can buy electricity from neighbors when the wind doesn't blow. But if the neighbors do it as well then Denmark will eventually need to build more fossil fuel backup power plants to run when the wind doesn't blow.
The article says that Sweden is better suited for an increase in wind energy because they can use wind electric to pump water up into reservoirs to flow downhill later to generate electricity when the wind doesn't blow. But what's the cost of doing that?
Germany is also hitting limits on wind power.
In Germany, where 20,000 wind turbines generate 5 percent of the electricity, advocates say wind will be critical to meeting the government’s goal of generating at least 20 percent of all power from renewable methods by 2020. But the industry’s growth is slowing for a variety of reasons.
Germany is running out of places to put the turbines because of restrictions on the location and height of the devices. And rising raw material prices are making wind farms more expensive to build.
Germany is responsible for over half the world's photovoltaic demand even though it is so far north and therefore receives lower amounts of sunlight. The Germans are trying very hard to get green with energy. But their country is so densely populated and so far north that they are not well suited for wind and solar as compared to, say, the US great plains for wind or Arizona for sun. The Germans are better candidates for nuclear power than the United States but greenie opposition to nukes there currently has nuclear power on a path to a phase-out there. German Chancellor Angela Merkel might succeed in turning around that phase-out though.
Rising raw materials prices are also making coal plants, nuclear plants, and other electric power plants more expensive to build as well. So it is not clear that wind's relative competitive position is declining due to cost reasons. I suspect in wind's case part of the problem is that manufacturing capacity needs to catch up with the surge in demand.
What I'd like to know: Are more advanced wind turbine designs going to lower wind's cost more rapidly than that of other electric power sources?
The Europeans are putting in wind farms in order to reduce greenhouse gas emissions. Since we are running out of fossil fuels this is the wrong motivation. But fortunately these wind farms will provide very energy when Russian oil deliveries start declining and later when natural gas deliveries start declining as well.
So on the road from Grand Gorge to Stamford you see the yard signs popping up in front of barns and houses — “Yes to Clean Energy” on some, “No Industrial Wind Turbines” or “Save Our Mountains” on others.
It’s a long way from the hellish fires in Southern California or the scary drought in the Southeast to the Catskills. But for those contemplating the issues of climate change and the roadway to greener energy, it’s not so far away at all. Whatever role climate change may be playing right now, it’s clear that even something so elemental as the wind is as subject to the vagaries of politics, self-interest and community dynamics as anything else.
“I will say this just once: not in my backyard,” Mr. Many said, when asked to characterize the discord. “People in Delaware County think it ought to be in the Adirondacks. People in the Adirondacks think it should be in the ocean off Massachusetts. Teddy Kennedy thinks it should be somewhere else. Everyone wants alternative energy, but no one wants it where they have to look at it.”
I love NIMBYism. In this era of so much faux concern for others it is refreshing to hear such clear selfish declarations. But can't we be more practical in our NIMBYism? Both nuclear and solar have much less esthetic impact. If I was going to get my view of mountains and valleys ruined by a wind far that covers a wide area I'd argue for a nuclear plant that covers a much smaller area and produces far more power. I'd also argue for an acceleration of research on photovoltaic materials such as thin films and nanotubes.
Of the big four sources of net generation (coal, nuclear, natural gas, and conventional hydroelectric), only hydroelectric generation showed a decrease from August 2006 to August 2007, as it was down by 7.9 percent. According to NOAA, “severe to extreme drought” affected about 29 percent of the contiguous United States and approximately 44 percent of the contiguous United States fell in the “moderate to extreme drought” category. Coal generation in August 2007 was up 0.6 percent from August 2006 and net generation attributable to nuclear sources was up 1.0 percent over the same period. Natural gas-fired generation was up 13.6 percent from its August 2006 level as more peaking generation was needed in the warmer month. Petroleum liquid-fired generation was down 10.9 compared to a year ago, and its overall share of net generation was still quite small compared to coal, nuclear, and natural gas-fired sources. Wind-powered generation was 47.8 percent higher in August 2007 than it was in August 2006.
But a look at wind's contribution in absolute terms yields a different picture. The absolute increase in nuclear generation, at 6.2 million MWh more, was much greater than the absolute increase in wind generation, at 3.6 million MWh more. To put dollar signs on this keep in mind that average retail electricity sells for about 10 cents per kilowatt-hour. So that represents an increase in nuclear power sales of about $620 million and for wind power about $360 million. Maybe cut those numbers in half to get an idea of how much money was paid to the actual generating companies. Anyone have a more accurate way to estate that?
The biggest absolute increase came from natural gas and the second biggest came from coal. Even the increase from petroleum liquids was greater than that from wind.
Year-to-date, net generation was 1.6 percent higher (43.1 million MWh more) than the same period in 2006, as the economy continued to grow, according to the Department of Commerce’s Bureau of Economic Analysis. Net generation attributable to coal-fired plants was up by 1.4 percent (19.0 million MWh more) compared to the same period in 2006, and nuclear net generation was up by 1.2 percent (6.2 million MWh more). Generation from petroleum liquids was 19.8 percent higher (6.3 million MWh higher) while generation from natural gas was 6.9 percent higher (39.0 million MWh higher). Year-to-date, net generation attributable to conventional hydroelectric sources was 13.4 percent lower (down 28.5 million MWh) than it was in 2006 due to the aforementioned drought conditions. Wind-powered generation year-to-date was 21.0 percent higher than in 2006 and contributed over 3.6 million MWh, or 8.4 percent of the increase in net generation year to date. Even with these significant increases, the contribution of wind-powered net generation to the National total year-to-date was only 0.7 percent through August 2007.
At 0.7% wind power is still a very minor electric power contributor. Electricity, in turn, is only one of the ways we use energy. Given all the non-electric use of natural gas, oil, and other fossil fuels wind power's contribution to the total power usage is even smaller.
I find the increase electric generation from petroleum liquids puzzling. Oil is about 3 times more expensive than natural gas per million BTUs. So why the big increase in petroleum liquids for electricity? Anyone know?
We need to shift more uses of energy from oil to electricity. Oil production is near a peak and we are going to need to move away from it by using more electrically powered devices. Cheaper wind (though not in my backyard or on any mountain range I like to look at) is part of the solution. But we really need photovoltaics cost breakthroughs, more nuclear power, and more research into ways to make nuclear power cheaper. I think solar and nuclear power should be our biggest sources of energy in the future with wind in third place.
Update: Another New York Times article discusses the growing anti-wind movement in many countries due mostly to esthetic considerations.
Supporters see modern wind turbines not as Don Quixote’s ferocious giants but as elegant symbols of a clean-energy future. But as the industry expands amid global pressure to cut carbon emissions and fight climate change, an increasingly mobilized anti-wind farm lobby in Europe, North America and elsewhere is decrying the turbines as ugly, noisy and destructive, especially for picturesque locales that rely on tourism. “These are not just one or two turbines spinning majestically in the blue sky and billowing clouds,” said Lisa Linowes, executive director of Industrial Wind Action Group, an international advocacy group based in New Hampshire that opposes wind farms.
Greeks are fighting against wind because 16% of their economy is based on tourism. Englishmen don't want their views of castles and Hadrian's Wall ruined by 100 meter high wind towers with huge blades.
“The eyes are constantly drawn to them,” said John Ferguson, a member of S.O.U.L. (or Save Our Unspoilt Landscape), a group opposing the nine-turbine Barmoor Wind Farm in the lush northeastern English county of Northumberland. Several wind farm developers are considering Northumberland, whose castles and national parks are a big tourist draw.
There's a solution to this problem. It is called nuclear power. SOUL has used Photoshop or a similar program to show what huge wind towers will look like in different locations in English countryside. I've been unenthused about wind power for a long time on aesthetic grounds. I'm happy to hear opposition has become more organized. If you are wondering whether wind towers might get built near you check out maps of wind speed at 80 meters high above the ground.
A plan to build 40 wind towers a few miles offshore of Long Island New York has been cancelled due to spiralling cost estimates.
According to LIPA, the study by Pace Global Energy Services, a consulting firm, found that the premium for wind-generated power from the Jones Beach project, over a 20-year period, would translate to about $2.50 per month to the typical residential consumer bill, or a total $66 million per year for all of LIPA. PACE arrived at the figure by comparing the cost of electricity produced in a combined-cycle natural gas power plant on Long Island, which is about $137 per megawatt hour, and a megawatt hour of power produced by the wind farm, which it said "could be $291."
Some locals opposed the project on esthetic grounds. But Long Island Power Authority Chairman Kevin Law says his decision was purely based on costs.
Costs for new electric generation plants of all types have been escalating sharply due to rising raw materials costs. Also, increased demand for wind power has been engineered by tax and regulatory changes and the resulting increase in demand has outstripped capacity of the wind tower makers to respond. Hence they've raised prices. Wind should become cheaper in a few years once makers have time to expand capacity.
Since nuclear, wind, and coal plants are all getting hit by higher costs due to higher steel prices I'd really like to know how long steel prices will remain high. Does anyone know how much the steel industry is increasing capacity and how soon we can expect to see a drop in steel prices?
I also wonder at the $137 per megawatt hour for the natural gas plant. That's a rather expensive 13.7 cents per kwh. What price of natural gas is that based on? What will happen to the price of natural gas once oil production peaks? My guess is the natural gas electric will end up costing more than they expect.
The cost of this project has almost quadrupled.
The original estimate for the windmills was about $200 million. The price increased to $356 million when FPL Energy of Florida won the bid for the project in 2003. Then last year, rising costs nearly doubled the estimate to $700 million.
Deep ocean offshore wind has been touted by some as a potential source of more reliable wind power. But even this Long Island project which was only a few miles offshore turned out to be too expensive. So I'm skeptical about the economic feasibility of deep offshore wind projects. Though ,aterials advances could some day make deep water wind towers more economically feasible.
Writing for the New York Times Matthew Wald examines the economics of wind power.
He said that in one of the states the company serves, Colorado, planners calculate that if wind machines reach 20 percent of total generating capacity, the cost of standby generators will reach $8 a megawatt-hour of wind. That is on top of a generating cost of $50 or $60 a megawatt-hour, after including a federal tax credit of $18 a megawatt-hour.
Note that a tax credit on one party is a tax on another party. So that wind tax credit is not free and causes market distortions. Though other energy sources have their own external costs that cause market distortions.
By contrast, electricity from a new coal plant currently costs in the range of $33 to $41 a megawatt-hour, according to experts. That price, however, would rise if the carbon dioxide produced in burning coal were taxed, a distinct possibility over the life of a new coal plant. (A megawatt-hour is the amount of power that a large hospital or a Super Wal-Mart would use in an hour.)
A few things to note here. Take the $18 per megawatt hour US government tax credit away from wind and it costs from $68 to $78 per megawatt-hour plus another $8 per megawatt-hour for standby capacity coming from other electric power sources. That puts it at double or more the cost of coal electric.
But the economics above understate the problem with wind. Suppose we shift to dynamic pricing of electricity (which we should btw) so that the price of electricity varies as a function of demand and supply. Electricity would cost more at 2 PM on a hot summer day than at 2 AM on a cool fall day. Well, wind tends to blow when electric demand is lowest!
In many places, wind tends to blow best on winter nights, when demand is low. When it is available, power from wind always displaces the most expensive power plant in use at that moment. If wind blew in summer, it would displace expensive natural gas. But in periods of low demand, it is displacing cheap coal.
The wind power industry wants a far more sophisticated electric power distribution grid so that wind electric can get carried from wherever the wind is blowing to wherever it is not blowing. Some industry analysts are skeptical about the feasibility of such an undertaking and whether it would even work since we could have weak wind days over a very large area. I wonder what it would cost.
Curiously, wider usage of wind power would favor coal over nuclear. Why? Coal has a larger variable cost than nuclear because coal as fuel is a larger fraction of total coal electric cost than uranium or plutonium is as a cost for nuclear electricity. In a nutshell, nuclear plants have the highest capital cost but the lowest fuel cost. Next comes coal and then finally natural gas. Natural gas electric plants cost the least to build but have the highest fuel cost. So they are used for peak power. Wind is so unreliable that natural gas plants probably would cost too much as back-ups to wind and therefore coal would be the best back-up for wind.
Nuclear, by contrast, works best as baseload power. Nuclear plants cost so much to build and save so little in operational cost when idled that once a nuclear plant gets built it makes sense to run a nuclear plant continuously 24x7.
Photovoltaics (if only they didn't cost so much) have far more favorable supply characteristics as compared to wind. They produce the most electricity during summer days when demand is highest. Though they are far from perfect. First off, in the northern hemisphere (and a similar problem occurs in the southern hemisphere just 6 months out of phase) the hottest days are in July and August and yet the longest day of the year (when the most suns shines to generate the most electricity) is in late June. Also, electric power demand does not peak at high noon. As the day heats up people turn on more air conditioners into the afternoon as the sun is past its peak and into the evening when people go home and turn on air conditioners, TVs, computers, and assorted home appliances. Solar's output peak does not match the market's demand peak for electricity.
Wind (and solar and nuclear) economics would improve if a carbon tax was levied on coal and natural gas burned to generate electricity. But coal would still retain a large cost advantage even with a hefty carbon tax.
The economics of wind would change radically if the carbon dioxide emitted by coal were assigned a cash value, but in the United States it has none. Coal plants produce about a ton of carbon dioxide each megawatt hour, on average, so a price of $10 a ton would have a major impact on utility economics.
I've read estimates of the cost of full carbon dioxide sequestration of about 2 cents per kwh or $20 per megawatt-hour. That'd still leave coal cheaper than wind. Though full carbon sequestration would probably make nuclear cheaper than coal (see Phil Sargent's links in the comments).
When comparing between wind and coal the wind tax credit is economically similar to forcing coal burning utilities to do full carbon sequestration on coal in the sense that the wind tax credit narrows the gap between wind and coal by about the same amount as the cost of carbon sequestration. However, the wind tax credit does not cause a big shift in demand away from coal because wind costs too much. An elimination of the wind tax credit combined with a requirement for full carbon sequestration would cause a partial shift away from coal toward nuclear and would eliminate the economic argument in favor of wind.
The wind tax credit currently causes a small reduction in demand for nuclear power. How? To the extent that wind farms get installed the effect is to increase the demand for back-up power sources which are cheaper when not used all the time. The back-up power is needed for when the wind does not blow. Since coal plants cost less than nuclear plants they are cheaper as back-up power for wind.
Note that the relative cost of nuclear, coal, wind, natural gas, and other electric power sources varies within the United States and even more globally. For example, in the Middle East natural gas is far cheaper than in the United States and coal is far more expensive. Similarly, the amount and reliability of wind varies. In some regions (e.g. the southeastern part of the United States) winds are pretty weak. Whereas in other regions (e.g. the Aleutian Islands of Alaska) winds are very strong.
Note as well that the relative costs of electric power sources will change with technological advances. Photovoltaics strike me as having the greatest potential for big cost declines. But being the most expensive photovoltaics most need big cost declines. Nuclear, wind, and cleaner coal costs will decline as well. But how much and how soon?
Two more wild cards: dynamic pricing and better electric energy storage technologies. Big declines in battery costs would greatly help wind and photovoltaics. Electronic switches could charge batteries when electricity is cheapest.
Depending on the wind speed average and the amount of energy consumed every month, Skystream typically lowers a household electricity bill by 20% to 90%. It is not uncommon for Skystream owners with total-electric homes to have monthly utility bills of only $8 to $15 for nine months of the year (2005 data). The amount of money a Skystream saves you in the long run will depend upon its installed cost, the amount of electricity you use, the average wind speed at your site, and other factors.
For a typical home in California, where the cost of energy is $0.14/KWh, the Skystream 3.7 will produce 400 KWh per month. This will save a household $672 per year on their utility bill. At this rate, they will pay for their Skystream system in approximately 12 years (after rebates, payback is as low as 7 years. This example assumes: $8,500 installed cost, power in an 8 MPH breeze with full output achieved at 20 mph.
Skystream lists conditions you need to meet for their product to work for you. They say you need at least a half acre of land that is unobstructed. Note that eliminates most suburban and city homes right there. Also, you need zoning permission to put up a tower 42 feet high (12.8 meters). Plus, you need a utility that'll let you sell back excess electricity. All these factors shrink the market. Though I can imagine large commercial buildings putting up a batch of these things on their roofs.
The Skystream 3.7 just won a Popular Science magazine award.
FLAGSTAFF - AZ, November 7, 2006/PRNewswire/ -- Today Southwest Windpower announced its newest product, the Skystream 3.7™, has been awarded a 2006 Best of What’s New Award from Popular Science in the Home category. Each year, Popular Science reviews thousands of new products and innovations and includes the top 100 winners in its annual Best of What’s New issue. To win, a product or technology must represent a significant step forward in its category.
“Best of What’s New is the ultimate Popular Science accolade, representing a year’s worth of work evaluating thousands of projects,” said Mark Jannot, editor of Popular Science. “These awards honor innovations that not only influence the way we live today, but that change the way we think about the future.”
Skystream is a next-generation residential power appliance that hooks up to the home to help reduce or eliminate monthly electricity costs. Skystream is the first compact, user-friendly, all-inclusive wind generator (with controls and inverter built in) designed to provide quiet, clean electricity in very low winds. With Skystream, homeowners and small business owners now have the power to choose their electricity source.
For the sake of argument let us grant them their assertion that in many homes in California the Skystream can pay itself back in 12 years or even 7 years with government rebates. So should people in the rest of the United States (or the world for that matter) rush to buy Skystreams for their homes? That depends on local conditions, and not just wind conditions.
First off, that payback time depends on the ability to sell back excess electricity to your local electric utility when the wind is blowing hard and you are not using much electricity. Now, if you always use lots of electricity that might not matter. But if you live in an area where you can't sell back excess electricity and your energy usage is highly uneven then that'll make the payback time much longer.
Second, electric costs vary considerably around the United States. Electricity costs more in California than in most states. In 2006 (and all these numbers are up sharply from 2005) California's electricity is about 14.52 cents per kilowatt-hour (kwh) and in New England it costs about 16.23 cents per kwh with 16.72 per kwh in New York (wow!) versus a US national average of 10.41. The mountain states pay only 9.01 and Wyoming only 7.68. Other really cheap states (generally heavy users of coal but with hydro power too) include Tennessee and Utah at 7.7, .Missouri at 7.62, Nebraska at 7,48, North Dakota at 7.11, and South Dakota at 7.87. Down at the bottom are coal states Kentucky at 7.08 and West Virginia at 6.25. Idaho appears to have the cheapest electricity in America at 6.23 cents per kwh. Outside of New England and Californa the two other high cost electric states are Alaska at 14.74 and Hawaii at an incredible 23.53.
If you live in one of higher cost states then you should find out if you can sell electricity back to your utility. If you live in Hawaii and get a fair amount of wind then the ability to sell electricity your utility probably doesn't matter. These Skystream gadgets could be just the ticket to lower electric power costs.
Unless you live in a pretty windy place it would be imprudent to install one of these things without first installing some sort of cumulative wind speed measuring device at the same altitude as you'd install this device. Or find some other way to find out what your typical wind speeds work out to.
If you live in a lower cost electricity state then you save less in two ways. First off, when you use less utility power you save less money. Second, if you can even sell electric power back to your utility you earn back less money off your electric bill.
Cheap home wind power will make battery powered cars more desirable. Imagine we get cheap high energy density batteries that'll power a car for a couple hundred miles. That'd make all undependable energy sources (e.g. wind, solar, even hydropower from streams that run only when it rains) more attractive. You come home at night, plug in the car to the wind mill, and it charges only part of the time.
With batteries to charge up you won't care whether the wind blows in the afternoon, evening, or early morning. You won't even care if it blows every day. If your car can go hundreds of miles you don't need for it to get recharged every day. You just need to average enough to keep your car ready to go.
The restrictions on wind tower installation in suburban and urban environments makes photovoltaics a better longer term bet for local generation using renewable energy sources. But photovoltaics still cost much more than wind and utility power. For people living in rural areas home wind power could become pretty popular. It will deliver power even in the short days of winter when photovoltaics will deliver less electricity. Also, it will complement solar even in the summer by delivering some power at night.