A MORE REALISTIC COST OF WIND ENERGY



The below data are based on extracts from a report titled “The Hidden Costs of Wind Electricity”, December 2012, authored by Dr. Taylor and Tom Tanton.



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Assuming a realistic 20-year life of a wind turbine increases the levelized cost to $93/MWh; the EIA uses 30 years, the NREL uses 20 years. No wind turbine manufacturer claims 30 years. Some claim 25 years, others 20 years, but European experience indicates 20 years or less.



After backing out the effect of accelerated depreciation for wind turbine plants, the levelized cost increases to $101/MWh. Accelerated depreciation rules, just for wind turbines, allow the entire investment to be written off in 5 years, to make tax-shelter spreadsheets look good. The 5-yr write-off period is unheard of in the rest of the utility industry.



Adding the costs of:



- increased frequency of start/stop operation

- keeping gas and coal plants available in cold standby mode

- keeping some gas plants in synchronous (3,600 rpm) standby mode

- operating more hours in part-load-ramping mode (extra Btu/kWh, extra CO2/kWh)



to balance the variable wind energy, adds $17/MWh for natural gas, and $55/MWh for coal, and reduces the CO2 emission reduction effectiveness of wind energy, as more and more wind energy is added to the grid.




NOTE: In synchronous (3,600 rpm) standby mode (high-speed idling, 24/7/365, no or minimal energy sent to the grid), the fuel consumption is 6 to 8 percent of rated fuel consumption.



Extra balancing NG fuel adds $6.00/MWh, extra balancing coal fuel adds $9.00/MWh



Transmission system investments to gather energy from the wind turbines and transmit it from less populated areas, via HVDC and HVAC lines, to population centers 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.



Absent economically-viable, utility-scale, energy storage, variable/intermittent, non-dispatchable wind energy cannot exist on the grid, unless balanced by dispatchable coal, gas and hydro plants. For that reason, any levelized costs should be stated as a combination of:



- wind energy balanced by coal energy

- wind energy balanced by gas energy

- wind energy balanced by hydro energy



System costs can be determined by the weighted average cost of the combinations, as proposed in the Taylor/Tanton report.



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.



GROSSLY EXCESSIVE WIND ENERGY SUBSIDIES



The Taylor/Tanton report may or may not overstate, but it certainly performs a useful purpose to attract attention to the heavily-subsidized, wind energy boondoggle, and the inane crowing about wind energy being at grid parity, and the inane crowing about it lowering grid electric rates (BTW, not the rates of rate payers), whereas, in fact, that is merely so, because of the various subsidies, such as:



- accelerated depreciation to write off the entire project in 5 years, 50% in the first year, just for wind turbines, plus

- the 2.3 c/kWh production tax credit, PTC, for 10 years, or

- in lieu of the PTC, receive a 30% investment tax credit, ITC, or

- in lieu of the ITC, receive a 30% CASH GRANT at commissioning of the project, in case the wind turbine owner claims he has no taxes due against which to apply the ITC; “1603c clause of ARRA”, plus other

- government grants, low-cost loans, and loan guarantees, plus

- the socializing, via rate schedules, of various other costs that are mostly hidden/not-easily-identified, as explained in detail in the ATI report by George Taylor, Ph.D. and Thomas Tanton, each with decades of experience analyzing the economics of energy systems.

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With enough money, even pigs can be made to fly, and even wind energy can be made to appear at grid parity, with much of the costs foisted off onto the public via the rate schedules, the tax code and government hand-outs..