Resource Library Category: Economics (133 items)
Documents presented here are not the product of nor are they necessarily endorsed by National Wind Watch. This resource library is provided to assist anyone wishing to research the issue of industrial wind power and the impacts of its development. The information should be evaluated by each reader to come to their own conclusions about the many areas of debate.
Wind and gas: Back-up or back-out – “That is the question”
Source: Méray, Nora
The focus of this study is to explore the effect that the deployment of a large share of wind energy has on the Northwest European power generation mix in the current market circumstances. The starting point of the study is that wind power is added to the power generation system with the aim to reduce CO2 emissions. Several other studies, papers and reports have been published on this subject which underline the complexity of the issue. Facts, projections and speculations from these studies have been assembled and analysed to give an as objective as possible overview on the foreseen effects of an increasing share of wind energy. As such, the study aims to give general insight in what would happen to the power mix if more wind energy were to be introduced, what the contribution to CO2 emissions reduction would be, and the potential role of natural gas and other fuels in handling long periods (> 4 hours) of low wind supply. The goal has not been to deliver an all-encompassing literature study, nor to calculate every scenario we could envisage, but rather to unravel some of the complexities related to back- up capacity required in an electricity system with a large share of variable power. …
Conclusion
Wind power has a low capacity credit (in NW Europe). This means that wind power does not significantly replace other generating capacity; alternative power sources need to be in place, together with new installed wind capacity for at least 80% of installed wind capacity, to ensure that there is sufficient back-up to meet market demand at times of reduced wind power supply. Most of this will have to come from conventional power plants. If hydro capacity from Norway is available, this back-up capacity could be reduced to approximately 70%.
Wind capacity will thus essentially be “surplus” to the necessary dispatchable system capacity, and thus costs of wind capacity will essentially come on top of the costs of the base conventionalcapacity. The extra costs of wind capacity can be reduced or compensated by the abated fuel and carbon costs from conventional generation.
The effectiveness of wind power to reduce CO2 emissions is directly related to the level of CO2 prices. In today’s energy market with low CO2 prices, new installed wind power tends primarily to replace gas-fired power, resulting in limited CO2 reduction, and thus becomes an expensive and less effective way of reducing CO2 emissions. …
Clingendael International Energy Programme
December 2011
Download original document: ‘Wind and gas: Back-up or back-out – “That is the question”’
Measuring the Performance of Wind Energy Projects
Source: Virginia Wind
Assuring the Success of the Commonwealth Energy Policy
The General Assembly has found that energy is essential to the health, safety, welfare and economy of the Commonwealth and that state government should facilitate the availability and delivery of reliable and adequate supplies of energy to industrial, commercial, and residential users at reasonable costs. The General Assembly has also enumerated energy objectives (§ 67-101), set forth a Commonwealth Energy Policy (§ 67-102), and directed development of a non-regulatory Virginia Energy Plan (§ 67-201). Among the objectives addressed by the Code is promotion of alternative energy sources, which, compared to traditional energy resources, may be less polluting of the Commonwealth’s air and waters. Alternative energy includes electricity generated through the use of wind turbines.
Although the Commonwealth has no experience with commercial-scale wind energy projects, the General Assembly has sought to promote the development of such projects through expedited environmental permitting by establishment of a Permit By Rule administered by the Department of Environmental Quality (§ 10.1-1197.6). In addition, the General Assembly has directed the State Corporation Commission to approve increased consumer electricity rates for utilities that demonstrate attainment of the Commonwealth’s
Renewable Portfolio Standard (§ 56-585.2). Fortunately, the General Assembly has also recognized the need to establish a procedure for measuring the implementation of the Commonwealth Energy Policy (§ 67-100). It makes sense to assure that the desired benefits of energy production are obtained, that harm to the public interests are minimized, and that future revisions of the Virginia Energy Plan are informed by experience and data.
The General Assembly may have been well-intentioned in promoting wind energy development in the mix of alternatives, but new information about the efficacy of commercial-scale wind energy generation indicates that objective prediction and verification of performance is warranted.
- The 2010 Virginia Energy Plan estimates the costs of new electricity generation sources, including wind generation facilities. Based on data provided for new facilities entering service in 2016, the cost of electricity generated with onshore wind projects will be 49% greater than the cost of electricity generated with conventional coal-fired power plants and 25% greater than the cost of electricity generated with nuclear power plants. (Virginia Department of Mines, Minerals, and Energy 2010. The Virginia Energy Plan, www.dmme.virginia.gov/DE/VAEnergyPlan/VEP-2010.shtml)
- Although the National Research Council predicted in 2007 that onshore wind energy development may offset carbon emissions by a small amount, a 2010 report by Bentek Energy, LLC reached a different conclusion. Research presented in the report suggests that contrary to expectations and the objectives of Colorado’s Renewable Portfolio Standard, wind energy development has resulted in increased emissions of sulfur, nitrogen, and carbon. This undesirable result is attributed to the inefficient management of coal-fired power plants that is required to accommodate the variable and intermittent electricity generation achieved by wind turbine facilities. (Bentek Energy, LLC, 2010. How Less Became More: Wind, Power, and Unintended Consequences in the Colorado Energy Market, www.bentekenergy.com)
- A 2007 report by the National Research Council projected that U.S. onshore wind power development through 2020 will achieve no reduction in demand for electricity from other sources, will provide no reduction in sulfur and nitrogen emissions, and may offset carbon dioxide emissions by only 1.2 to 4.5% from the levels of emissions that would otherwise occur from electricity generation. The report further concluded that because the density of the onshore wind resource is less for the Mid-Atlantic region states than for the country as a whole, the benefits in terms of electricity supply and emissions reductions will be less than for the country as a whole. (NRC, 2007. Environmental Impacts of Wind Energy Projects, National Academy Press, www.nap.edu/catalog/11935.html)
Determination of both the projected and realized performance of wind energy generation projects is absolutely necessary in the proper administration of state incentives and licensing.
Wind energy generation projects must be subject to SCC licensing and the requirement to obtain a certificate of convenience and necessity.
SCC approval of wind energy generation facilities should further be conditioned upon provision of:
- analysis that objectively calculates the costs and benefits of proposed wind energy projects
- annual reports that document the performance of installed wind energy projects
These analyses and reports should be based on publically reviewable data and methods that quantify effects on the reliability of electricity service and costs to consumers, electricity generation on an annual and monthly basis and during peak demand periods, and reductions in air pollution obtained through displacement of electricity generation by traditional energy sources. Prior to issuance of any licensing action under Title 56, the SCC must verify that the data and calculations concerning these costs and benefits are credible and accurate and that proposed projects are necessary and in the public interest.
Finally, it is imperative that future periodic revisions of the Virginia Energy Plan incorporate knowledge and experience gained from existing wind energy projects and that plan revisions be subject to public review and comment.
Electricity costs: The folly of wind-power
Source: Lea, Ruth
Wind-power: inordinately expensive and ineffective at cutting CO2 emissions
The focus on wind-power, driven by the renewables targets, is preventing Britain from effectively reducing CO2 emissions, while crippling energy users with additional costs, according to a new Civitas report. The report finds that wind-power is unreliable and requires back-up power stations to be available in order to maintain a consistent electricity supply to households and businesses. This means that energy users pay twice: once for the window-dressing of renewables, and again for the fossil fuels that the energy sector continues to rely on. Contrary to the implied message of the Government’s approach, the analysis shows that wind-power is not a low-cost way of reducing emissions.
Electricity Costs: the folly of wind-power, by economist Ruth Lea, uses Government-commissioned estimates of the costs of electricity generation in the UK to calculate the most cost-effective technologies. When all costs are included, gas-fired power is the most cost-efficient method of generating electricity in the short-term, while nuclear power stations become the most cost-efficient in the medium-term.
All that wind takes a lot of gas
Wind-power is acknowledged to cost more than traditional fossil fuel power stations. But estimates from Government-commissioned reports suggest that, when the cost of CO2 emissions is included, onshore wind-power becomes one of the more cost-effective means of generating electricity. Offshore wind does not however. [See p. 12 - p. 23] Unfortunately, these estimates fail to factor in all the costs of wind-power. These costs are due to the fact that energy output from wind is unpredictable and rarely occurs in areas of most demand:
… wind-power is unreliable and requires conventional back-up generating capacity when wind speeds are, for example, very low or rapidly varying … [p. 14]
This means that wind farms need to be supported by conventional capacity including gas-fired power stations that can be switched on whenever the available wind fails to match demand for electricity. Lea cites research by Colin Gibson, former Power Network Director at the National Grid Group, who has produced some of the most comprehensive estimates for these ‘add-on costs’.
When these add-on costs are included, the resultant levelised generating costs (£ per megawatt hour) for the main electricity generating technologies are, for medium-term projects:
- Nuclear pressurised water reactors (PWR): £67.8 per MWh.
- Gas-fired combined-cycle gas turbines (CCGT): £96.5 per MWh.
- Gas CCGT with carbon capture and storage (CCS): £102.6 per MWh.
- Coal (ASC) with CCS: £111.9 per MWh.
- Advanced supercritical (ASC) coal-fired power plants: £133.2 per MWh.
- Onshore wind: £146.3 per MWh (including ‘add-on costs’ of £60 per MWh).
- Offshore wind: £179.4 per MWh (including ‘add-on costs’ of £67 per MWh).
(Note: one megawatt hour can run approximately 1000 desktop computers for 8 hours)
The most cost-effective technologies are nuclear and gas-fired. Onshore, and especially offshore, wind technologies are inordinately expensive.
Pumping out more CO2
Besides the prohibitive costs, the report shows that wind-power, backed by conventional gas-fired generation, can emit more CO2 than the most efficient gas turbines running alone:
In a comprehensive quantitative analysis of CO2 emissions and wind-power, Dutch physicist C. le Pair has recently shown that deploying wind turbines on “normal windy days” in the Netherlands actually increased fuel (gas) consumption, rather than saving it, when compared to electricity generation with modern high-efficiency gas turbines. Ironically and paradoxically the use of wind farms therefore actually increased CO2 emissions, compared with using efficient gas-fired combined cycle gas turbines (CCGTs) at full power. [p. 30]
This means that the cost of having wind is not just carried by consumers but by the environment as well.
Caught in a cross-wind
The report explains how two competing environmental policies have generated a perverse set of priorities. The renewables targets have forced the energy sector to focus on more expensive, less reliable power sources, rather than those most likely to reduce emissions while keeping costs to the rest of economy competitive:
- The Climate Change Act 2008 requires that Britain’s greenhouse gas (GHG) emissions be cut by 80 per cent by 2050 compared with the 1990 level and by 34% by around 2020.
- The EU’s Renewables Directive (2009) commits the UK to sourcing 15% of final energy consumption (FEC) from renewables by 2020. Renewable energy sources include wind, hydro and biomass, but not nuclear power. [pp. 4-5]
This means that UK legislation separately specifies an outcome (reduced CO2 emissions) and a process, more renewable energy.
The outcome itself is substantial and threatens many Britons’ standard of life and employment prospects if not achieved efficiently:
… consultants Redpoint Energy point out “… meeting these targets will mean a radical change in the way the UK produces and consumes energy over the coming decades.” [p. 4]
Unfortunately, the legislated process is ineffective at reaching its supposed outcome. The result of forcing unreliable renewables on the energy sector is higher costs to consumers as well as more CO2 emissions than are necessary for maintaining the electricity grid.
One outcome of this micro-managed approach is that commercial and public sector energy users are, paradoxically, charged under the Climate Change Levy for their use of electricity generated by nuclear power stations (nuclear plants emit no CO2 after construction). The CCL is designed to encourage greater use of renewable energy sources even though wind-power can result in higher CO2 emissions than efficient gas turbines. [pp. 6-7]
The report concludes:
[Wind-power] is expensive and yet it is not effective in cutting CO2 emissions. If it were not for the renewables targets set by the Renewables Directive, wind-power would not even be entertained as a cost-effective way of generating electricity or cutting emissions. The renewables targets should be renegotiated with the EU. [p. 30]
For more information contact:
Ruth Lea, Director of the Manufacturing Renewal Project, 0207 799 6677
Civitas on 0207 799 6677
Notes
i. Ruth Lea is Director of the Manufacturing Renewal Project at Civitas and an economic adviser to the Arbuthnot Banking Group.
ii. Electricity Costs: The folly of wind-power is available to download here.
iii. Civitas is an independent social policy think tank. It has no links to any political party and its research programme receives no state funding.
Download original document: “Electricity costs: The folly of wind-power”
Wind energy production: Legal issues and related liability concerns for landowners
Source: McEowen, Roger
the 1800’s, farmers in the United States installed several million windmills across the Midwest and Plains to pump water and (later) generate power for lights and radios. Those windmills fit nicely into the existing landscape and generally did not create problems for others. Today, however, the wind energy industry is using the wind in a different manner by virtue of large- scale aerogenerators that have a tremendous impact on the visual landscape and the rural culture. In some communities, wind energy development has raised issues between neighbors, between private landowners and wind energy development companies, and between local officials and development companies.
Some farmers and other rural landowners have entered into long-term agreements with wind energy companies for the placement and operations of aerogenerators on their property. Generally, those agreements are drafted in favor of the wind energy company and require negotiation and modification of numerous provisions to make them fair from the landowner’s perspective.
In this article we provide an historical background behind the current emphasis on wind-generated electricity, address taxpayer subsidies that support the wind energy industry and detail the legal issues surrounding wind energy production and landowner agreements.
Wind energy production: Legal issues and related liability concerns for landowners
