Sunday, 23 December 2012

New US study: Natural gas-fired energy generation three times cheaper than wind energy

On January 1, US consumers/taxpayers have a big reason to celebrate - the federal production tax credit on wind investment expires: 

For the past 20 years the credit has offset about 30% of the cost of building wind turbines. Add to that the “renewable portfolio standards” for green energy mandated by 29 states, and as a result we’ve seen wind farms spring up across the country. Since 2007 nearly 40% of all the new electricity capacity built in this country has been wind. Wind now generates roughly 3.5% of U.S. electricity.
Don’t expect wind’s share to climb beyond that level any time soon. The end of the tax credit could very well mean the end of the wind industry.

Read the entire article here

The greenies and the wind energy lobby are of course whining, but an end of an industry, which is totally dependent on government (taxpayer) subsidies would be more than welcome in a country, where there is an abundance of clean and cheap natural gas (mainly shale gas) for energy production - and increasingly also as fuel for trucks and cars. 

The real productions costs for wind energy are about three times higher than the costs for natural gas-fired energy, according to a new report by the American Tradition Institute:

new report by the American Tradition Institute (ATI) finds that the full cost of wind electricity is nearly twice what has typically been reported, once hidden costs and subsidies are taken into account. The report, “The Hidden Costs of Wind Electricity,” provides an analysis of three major costs that past estimates have ignored.
“The costs that have been left out of previous reports are the costs of paying for the fossil-fired plants that must balance wind’s variations, the inefficiencies that wind imposes on those plants, and the cost of longer-distance transmission,” said George Taylor, Senior Fellow in Energy Policy at ATI and lead author of the study.  “Once these hidden costs are included and subsidies are excluded, wind generation is not close to being competitive with conventional generation sources such as natural gas, coal or nuclear.”
Using conservative estimates for these real but hidden costs and adding them to the Energy Information Administration (EIA)’s and the Office of Energy Efficiency and Renewable Energy’s most recent generation-cost reports nearly doubles wind’s projected cost – from 8 cents per kilowatt-hour without them to 15 cents per kWh with them.
That 15 cents/kWh is triple the current cost of natural gas-fired generation and 40 to 50% higher than EIA’s estimates for the cost of new nuclear or coal-fired generation.
“Because wind is an intermittent source of electricity, it needs appropriate amounts of fossil-fueled capacity ready at all times to balance its large and rapid variations,” said Tom Tanton, Director of Science & Technology Assessment at ATI and a co-author of the report. “Those primary fossil plants then operate less efficiently than if they were running full-time without wind, meaning that any savings of gas and coal or any reductions in emissions are much less than simple calculations would indicate.”

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