The reality of wind power – Extremely high cost and unreliably

More on the very high cots, high subsidy ant the unreliability of wind power. In this case from Spain where the government have subsidized wind power with OVER 90 % over the market price!

And solar power has been subsidized with OVER 575 % over the market price!

Isn’t it fantastic! Subsides of over 90% and 575% over market price!

I mean with subsides of over 90% and 575% I can turn any lousy money losing business into profit for my self but at a HUGE cost to society and the taxpayers.

And Shell is getting out of wind and solar power business for the same reasons.

Spain has increased its emissions by 40% since signing the Kyoto protocol. And yet, in contrast to the government estimate in 2004 that emissions permits would cost Spanish companies no more than 85 million euros annually, the real cost is now estimated at between 3 billion (government statement) and 15 billion euros (Price Waterhouse Coopers).”

”For the first 15 years, a subsidy of 90% over the market price has been payable, reducing to 80% thereafter. And for solar, in which Spain is also seen as a leader, subsidies have amounted to 575% of the market price for 25 years, then declining to ”only” 460%. With returns of 12 to 20%, the take up has been understandably high (indeed, there have been waiting lists). ”

”And they come at a cost: a renewables subsidy of 2.6bn euros in 2007, with about one third of the total going to the solar sector, which represents only 0.7% of installed capacity and about half the total number of jobs.”

The costs are such that the government has now had to reduce the subsidy for solar power by 30% and cap the amount of new capacity to be installed. This softening of support resulted in 10,000 job losses. Further reductions of subsidies put 40,000 more green jobs at risk. Energy prices are rising to cover losses in the distribution industry, and generators have announced the cancellation of 4.5bn euros of annual investment because they also pay an effective subsidy for renewable energy through the controlled price to the consumer.”

Se also my post among many others:

 Wind Turbines in Europe Do Nothing for Emissions-Reduction Goals

However costly, however uneconomic, however outright irrational you might have imagined windpower to be – the reality is even worse

The Real Cost of Wind and Solar Power!

Who knew a ”free” source of energy – Wind Power could be so expensive?

Overblown: The Real Cost of Wind Power!Carbon Credits Fund Broken Turbine

Article here:

http://www.cambridgenetwork.co.uk/news/article/default.aspx?objid=57640

Date: 20/03/09

Scientific Alliance newsletter 20th March 2009

The reality of wind power and green-collar jobs in Spain

Sometimes, two stories come along which starkly contradict each other. A perfect example is the reporting of Spain’s green credentials. The country is often held up as an example to laggards across the EU of how to invest in renewable energy. Take, for example, a piece in the Times last week, headlined ”Spanish windmills tilt country towards cleaner, greener energy”.

According to this, 30% of Spain’s energy in January and February came from wind and hydro power, thanks to wet and windy weather, and the figure for the year as a whole is expected to be nearer 30% than 20%. For comparison, ”carbon” energy (presumably coal- and gas-fired stations) accounted for 14.3% and nuclear 20.9%. Where the other 35% of energy came from is anyone’s guess: no figures are given. Crucially, the actual contributions of hydro and wind power are not given, but the likelihood is that the bulk of the 30% was hydro power.

Although great strides may well have been made in the last few years, it is difficult to reconcile these figures with those for Spain in 2005 taken from the EU energy portal (www.energy.eu). This gives a figure of 8.7% as the contribution of renewables: pretty much the EU average, and with a target of 20% by 2020. And as for carbon dioxide emissions, Spain is projected in 2010 still to be nearly 24% above its 2012 Kyoto target.

Another view of this situation was given by Dr Gabriel Calzada, Associate Professor of Economics at King Juan Carlos University during the Heartland Institute’s climate change conference in New York last week. In contrast to the Times article, the title was ”Spain’s new energy economy: Boom and bust of the Spanish renewable miracle”.

According to his figures, Spain has increased its emissions by 40% since signing the Kyoto protocol. And yet, in contrast to the government estimate in 2004 that emissions permits would cost Spanish companies no more than 85 million euros annually, the real cost is now estimated at between 3 billion (government statement) and 15 billion euros (Price Waterhouse Coopers).

As for renewable energy, the rapid growth of wind power is not surprising. For the first 15 years, a subsidy of 90% over the market price has been payable, reducing to 80% thereafter. And for solar, in which Spain is also seen as a leader, subsidies have amounted to 575% of the market price for 25 years, then declining to ”only” 460%. With returns of 12 to 20%, the take up has been understandably high (indeed, there have been waiting lists).

The result is that installed wind capacity is just over 10% of the total for the country, although it is unclear whether this is theoretical or makes allowance for a realistic efficiency factor. The buoyant market has created around 50,000 jobs, but these are nearly all for installing new capacity and so do not provide long term employment. And they come at a cost: a renewables subsidy of 2.6bn euros in 2007, with about one third of the total going to the solar sector, which represents only 0.7% of installed capacity and about half the total number of jobs.

The costs are such that the government has now had to reduce the subsidy for solar power by 30% and cap the amount of new capacity to be installed. This softening of support resulted in 10,000 job losses. Further reductions of subsidies put 40,000 more green jobs at risk. Energy prices are rising to cover losses in the distribution industry, and generators have announced the cancellation of 4.5bn euros of annual investment because they also pay an effective subsidy for renewable energy through the controlled price to the consumer.

So, with Kyoto emissions targets almost certain to be significantly overshot and the bubble of green-collar jobs now burst, the Spanish government must be wondering how it managed to waste so much money for so little reward. It is difficult to see an economic recovery in Europe (or the USA) being led by a boom in long-term green-collar jobs.

Shell gets back to basics

The reality of renewable power generation has also dawned on Shell. Several newspapers have carried the story that the company is stopping its investments in wind and solar power because they are simply uneconomic. Last year, it pulled out of a partnership with E.ON to build the 1,000 MW (when the wind blows at the right strength) Thames Array off-shore project.

Environmentalists will argue that such decisions are wrong, because they believe that the future lies with such clean technologies. To compound the offence, Shell is investing more in biofuels, which have been criticised because of the relatively low carbon saving they make and their distorting effect on food prices.

However, doing projects which are not commercially viable is not generally good business. Businesses have to look after their profitability and their shareholders first. In so doing, they are often highly innovative and take significant risks with technologies which give no payback for many years, moving away from renewables does not just mean the company is playing safe. Shell is changing tack for a reason, and that reason is that it sees no prospects of wind power becoming commercially viable for the foreseeable future.

Over the last decade or so, wind turbines have become more efficient, and wind is the renewable power source which needs the lowest subsidy to compete. But Shell does not see a continuation of the trend to the point where wind power will be economically viable without a subsidy. The situation for solar power (as the figures from Spain show well) is much further away from being economically competitive.

Even if wind (and eventually, solar) power become serious options, their intermittency remains a major problem until cheap, high capacity storage is available. In these circumstances, an energy company such as Shell is understandably getting back to basics and pursuing routes where it sees more potential. Biofuels is one of these.

True, this sector also has problems at present and requires subsidies to keep it viable. But the scope for major developments over the next few years is much greater. The first company which can convert waste biomass into a range of energy-dense fuels in a way which is potentially cost-effective has an important first mover advantage in what could be a large sector of the future transport fuels market.

It may turn out that Shell has backed the wrong horse in this particular case. Other companies may make a breakthrough in low-cost photovoltaics, or in some other area. But the point is that there will be a range of options being pursued by companies which all think they can be winners. Some of them will succeed, some will fail; the market will decide. This is a much better way of harnessing creative potential than single-mindedly focussing on just wind and solar power. Objective, hard-headed decision making will give the best results in the long term.

Läs även andra bloggares åsikter om <a href=”http://bloggar.se/om/milj%F6“ rel=”tag”>miljö</a>

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15 svar to “The reality of wind power – Extremely high cost and unreliably”

  1. Topics about Climate » Archive » The reality of wind power – Extremely high cost and unreliably Says:

    […] UD/RK Samhälls Debatt created an interesting post today on The reality of wind power â […]

  2. Topics about Jobs » Archive » The reality of wind power – Extremely high cost and unreliably Says:

    […] Gust Gossip created an interesting post today on The reality of wind power â […]

  3. Diego Méndez Says:

    We Spaniards are subsidizing wind energy as it gets 7% more efficient every year, which means it will be twice as cost-effective ten years from now, which means cheaper than any other source of energy.

    Once it becomes the cheapest way to get electricity, and the US buys wind turbines for some 10% US GDP, you will see all those jobs coming to Spain. (By the way, the same goes for high-speed rail, underground systems, electric cars, etc.).

    By the way, your article is full with errors. The target is not 20% renewables by 2020, but 30% renewables by next year. We will surely reach this target, as windmills are already generating over 40% of electricity in windy days.

    http://en.wikipedia.org/wiki/Wind_power_in_Spain

    • sophiaalbertina Says:

      Diego Méndez,

      “30% renewables by next year” – Good luck, you are really going to need it. Most wind power would not survive 1 second without all the tax benefits, subsidies etc.

      On top of that you have the huge unreliability of wind power, especially during the winter when it’s most needed. Very low average power levels and the output goes like a continuing rollercoaster drastically up and down all the time.

      Not to mention high maintenance costs, and that you have to build backup systems (coal, gas etc) that have to kick in since most of the time the wind power stations are not producing very high output.

      The vast amounts of land required to site the turbines, the stringing of wires from thousands of small-scale power generators to the power distribution grid

      And so on and so on….

      So you are going to have VERY expensive electric bills for the common people. And high costs for your industry. And you have to raise the taxes to keep up with all these subsidies.

      Sounds like a great recipe for economic ruin for your people and country

  4. Diego Méndez Says:

    sophiaalbertina,

    let’s say we pay electricity some 25% more expensive due to renewables. That just makes industry and homes more energy-efficient. I mean, car fuel in Europe costs twice as much as in the US; did we lose our car industry because of that? No. In fact, it is the US car manufacturers that are on the brink of bankruptcy.

    Today, General Motors. In 10 years’ time, General Electric.

    (As an aside, I will answer to some of your technical concerns: wind power is not unreliable, it can be rightly forecast and there is no correlation between, say, wind in north-western Spain and wind on German Bavaria on a given day; so once all Europe gets electrically connected, wind power will be just as stable as coal; moreover, wind power is inversely correlated to solar power; maintenance, etc. are more than paid for with feed-in tariffs (some 80% more expensive than ordinary tariffs); subsidies don’t come from taxes, but in the form of feed-in tariffs; and, most importantly, as wind power gets 7% more efficient every year due to scaling and research on new materials, it is expected to be CHEAPER THAN ANY OTHER ENERGY SOURCE in just 10 years’ time. Then we will have the technology; General Electric just won’t. And the same goes for high-speed rail, etc. etc.)

  5. Wind power – what at costly and unreliable joke! « UD/RK Samhälls Debatt Says:

    […] to my previous post Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt – 12 and The reality of wind power – Extremely high cost and unreliably, and as an excellent illustration point to my comment to Diego […]

  6. Glenn Says:

    Does anyone know exactly how much maintenance costs are for electricity produced? I have a wind farm near me that was in a tax fight with the township and they said in a news article that they produced $7 million dollars in electricity per year but their maintenance costs were $6.5 that seems a lot doesn’t it for 24 turbines up for only a few years.

  7. Vindkraften som en mycket, mycket dyr bergochdalbana med liten effekt - 13 « UD/RK Samhälls Debatt Says:

    […] The reality of wind power – Extremely high cost and unreliably […]

  8. Brittanie Bawden Says:

    Whenever I think about doing something like this on my own, all I my instincts tell me to crawl under a rock. LOL.

  9. Record cold and snow in November – Wind Power at 12% output « UD/RK Samhälls Debatt Says:

    […] The reality of wind power – Extremely high cost and unreliably […]

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