Skip to comments.Renewables Fail the Cost Test, Again
Posted on 01/27/2013 7:34:14 AM PST by Kaslin
The Federal Energy Regulatory Commission (FERC) has just released their Energy Infrastructure Update report, which shows how much new electric generating capacity was installed for 2012. According to the report, renewable energy sources (biomass, geothermal, solar, hydro, and wind) accounted for 49.10% of all new domestic electrical generating capacity installed in 2012 for a total of 12,956 MW. More than a quarter of that new capacity (25.29%, or 3,276 MW) reportedly came on-line in the month of December 2012 alone and wind led the way in 2012 with 164 new units totaling 10,689 MW.
Advocates of renewable energy are likely cheering these new numberseven though, according to the FERC report, renewables still only account for 15.40% of total installed U.S. operating generating capacity, with wind coming in at 4.97%. (Note: wind megawatts are not comparable to other megawatts, as theyre not always available.)
Without directly saying so, the FERC report highlights renewable energys dependence on government subsidies. Why in a twelve-month year, did more than a quarter of the new capacity come online in just one monththe month of December?
Despite intensive lobbying efforts on behalf of the American Wind Energy Association, the Production Tax Credit (PTC) for wind energythat was set to expire at the end of 2012wasnt extended until the Fiscal Cliff Deal became law on January 2, 2013. Those seeking to benefit from the government largesse had the financial motivation to get as many wind projects as possible up and running. As long as the project was completed in 2012, it would receive the PTC for the next ten years. The Fiscal Cliff Deal gave wind energy developers one more year to take advantage of the PTCbut the PTC extension wasnt a sure thing until after it had already expired. (Note: the new PTC deal changed the requirements from being completed by the end of the one year extension to qualify, to merely starting construction by December 31, 2013.)
Wind energy advocates claim that the PTC is needed to help make wind energy cost competitive with traditional energy sources, such as coal and natural gas. However a new report from the American Traditions Institute that looks at the Hidden Costs of Wind Electricity reveals that the true costs for wind-generated electricity are actually one-and-a-half to two times more than what the Energy Information Agency (EIA) forecasts.
According to the EIA, the levelized cost of electricity generated from an advanced natural gas-fueled, combined-cycle power plant is 6.3 cents per kilowatt hour and 11.1 cents from advanced coal or nuclear. The EIA models forecast wind-generated electricity at 9.6 cents per kilowatt hourwhich sounds very promisingbut fails to take into account the hidden costs.
The hidden costs of wind-generated electricity include:
· Because, with rare exceptions, wind can only operate as an appendage to traditional generation, not as a replacement, the cost of primary fossil-fueled plants must be included. The traditional plants are kept available to balance winds large variations in output. Adding wind to the system reduces the amount of generation for which the plants are paid and therefore increases their operating costs.
· The reduced fuel efficiency wind imposes on those plants.
· Due to the remote siting of most wind facilities, real costs include long-distance transmission and the losses that come with it.
According to the report, these hidden costs are not included in the EIA figures because the regulatory authorities have not required wind operators to pay for them, rather the costs have, once again, been borne by consumers. The authors state: In an honest, transparent, and accountable political system, that should not be an excuse for policy makers to ignore their impact on consumers, jobs, and the economy.
With the hidden costs factored in, the report concludes that winds true cost is about 15.1 cents per kilowatt hour for natural-gas fired back-up and 19.2 cents for coal-fired back upor one-and-a-half to two times the cost of new-construction coal- or gas-fueled electricity. (The higher costs do not include the 12 billion in taxpayer dollars going to the wind industry due to the PTC extension.)
The authors believe these costs will go up, not down. First, wind energy is a mature industryworldwide market is more than $50 billion per year. Therefore, costs are unlikely to be reduced by either technological advances or further economies of scale. Additionally, most current wind facilities have been built in locations that could piggyback on existing transmission infrastructureas these easier opportunities are used up, new installations will have higher transmissions costs.
But the dollar figures are only part of the hidden costs.
Renewable energy proponents tout clean and green as one of its key selling points. Many utility companies offer customers an option to feel good about saving the planet by using the more expensive renewable energy.
But recent news from Germanywhich is reputed to have more renewable energy than most of the developed world, and Greecewhere the economy is known to be one of the worst in the developed world, show that, in practice, expensive energy is neither clean nor green, and carries negative unintended consequences.
Both countries are reporting that trees are disappearing from forests and parks as impoverished residents, too broke to pay for electricity or fuel, turn to fireplaces and wood stoves for heat.
In Germany, Der Spiegel blames high energy costs for a rise in tree thefts and wood-burning stove purchases: Germans bought 400,000 such stoves in 2011, the German magazine FOCUS reported this week. It marks the continuation of a trend: The number of Germans buying heating devices that burn wood and coal has grown steadily since 2005.
Similarly, the Wall Street Journal reports that in Greece: As winter temperatures bite, that trend is dealing a serious blow to the environment, as hillsides are denuded of timber and smog from fires clouds the air in Athens and other cities, posing risks to public health. In addition to the environmental devastation, the illegal logging has caused and the visible pollution from burning wood, the high cost of electricity has caused schools in Greece to close because they cant afford heat and lives have been lost as the wood-burning fires have broken out of wood stoves, burned down houses, and killed residentsincluding children trapped in their burning home.
As most of America is in the midst of a deep freeze, and the Obama Administration is moving forward with its renewable energy programs, the hidden costs of expensive electricity to human life and the environment need to be counted as well as the economic impacts. As the stories from Europe clearly point out, expensive electricity hits the poor the hardest.
BTW, cheap energy means a high standard of living for the masses. Production and distribution of items that make our lives easier are directly affected by energy costs. When energy costs go up, our lives become more difficult.
The only cost effective renewable is hydroelectric so we’re tearing out dams and building windmills that need to be replaced every 10 to 20 years.
Nuclear is the best option for the near term.
In addition to the environmental devastation, the illegal logging has caused and the visible pollution from burning wood, the high cost of electricity has caused schools in Greece to close because they cant afford heat and lives have been lost as the wood-burning fires have broken out of wood stoves, burned down houses, and killed residentsincluding children trapped in their burning home.
All the do gooder environmental wack jobs who tout alternative energy never consider what the economic impact of their pipe dreams will be. If they say they do they use pipe dream estimates of what the cost of their projects will be and wildly over estimate the output that can be expected from their projects.
Well above is just part of the unintended consequences of their political actions and their save the environment at all cost attitude.
When politics gets involved in forcing preordained economic choices on business and individuals these are always the consequences. People suffer and die prematurely.
During the heady days of the USSR when people with the best of intensions ran the entire economy of a huge country the results were similar but much worse. The life expectancy of the people of the USSR was at least 10 years lower than the capitalist countries. The environment of the USSR was devastated. The standard of living of its people was only slightly better than that of a third world country.
Politician must not be permitted to execise control over the economy and because energy is the life blood of the economy we must get the governments hands out of making energy decisions in the US.