According to the Global Wind Energy Council, the world now has 197 gigawatts of installed wind capacity with the largest amount in China (45 gigawatts), followed by the United States (40 gigawatts). Europe, led by Germany (27 gigawatts), has the largest regional share of the total, 44 percent, followed by Asia with 31 percent. But the issue of much of this capacity is useable and benefiting the electricity grid and jobs is another question entirely. European countries have found that subsidies, set asides, and special treatment for renewables cost the country job losses in other sectors. Denmark, a country that generates 20 percent of its electricity demand from wind, can only use half that amount and must export the remainder to Norway and Sweden whose hydroelectric power can serve as a storage device. In the United Kingdom, wind farms were paid 900,000 pounds to disconnect their units for one night because the electricity was not needed. In China, the wind expansion was so great that many wind units were sitting idle because they were not connected to the grid. Add to that, noise pollution, property devaluation, frozen turbine blades, bird kills, and the cost of revamping the electric grid starts to make one wonder whether wind power was the correct course of action and what its future entails.
The European Experience
Germany. Germany began its onshore wind expansion in 1997, instituting a feed in tariff to cover the higher cost of wind power that was 300 percent higher than traditional electricity costs. The highly subsidized wind market generated numerous investors who were guaranteed a market for 20 or more years and a high enough price to earn a profit. But, in 2008, German consumers were paying about 7.5 percent higher rates (1.5 cents more on a 20 cent per kilowatt hour household rate) and the abatement costs for carbon from wind generation were $80 a metric ton, four times the cost of carbon traded in the European trading system. Worse still, wind generally only produced about a fifth of its capacity. When its output rose to over 20 gigawatts on a windy weekend, grid connections to neighboring countries had to be shut down because they could not handle the additional power. Now that Germany has temporarily shut down some of its older nuclear units due to the nuclear accident in Japan, Germany has had to import power, principally nuclear power, from France and the Czech Republic. Certainly an ironic situation–with domestic nuclear being unpopular, imported nuclear had to be used to keep the lights on.
Germany is now moving its wind expansion to the offshore in an attempt to replace nuclear power. On May 2, 2011, Germany Chancellor Angela Merkel toured Germany’s first commercial offshore wind farm. The 50-megawatt wind farm is located 10 miles north of the Darss Peninsula in the Baltic Sea. Because of rough conditions in the Baltic and North Sea and because of the difficulty of getting loans for a large wind farm due to its cost, offshore wind has not progressed as quickly in Germany as in other European countries. Germany would like to have 10,000 megawatts of offshore wind by 2020 and is planning to finance $7.4 billion in loans for the first 10 offshore wind farms despite its problems from subsidizing onshore wind. According to German think tank Dena, in order to integrate its renewable energy sources, Germany will need to spend at least $13 billion on new transmission lines, covering about 2,240 miles.
Spain. In Spain, a study by Gabriel Calzada Alverez of the Universidad Rey Juan Carlos released in March 2009 found that:
- Since 2000, the Spanish government spent $791,597 to create each green energy job, with subsidies of more than $1.38 million per each wind industry job.
- For each green job created, 2.2 jobs were destroyed in other industries.
- Each megawatt of wind energy installed destroyed 4.27 jobs elsewhere in the economy.
Dr. Alverez’s findings were substantiated by a Spanish government document that was leaked indicating that the country’s foray into green energy was not a net producer of jobs. Spain can ill afford to lose jobs, particularly when it has spent so much in an attempt to gain jobs. Spain’s unemployment rate is now at 21.29 percent, almost a point higher than last quarter, with 4.9 million jobless in the first quarter of 2011. The country’s prime minister announced that he would not seek a third term.
Italy. Italy is experiencing a similar situation. A study by Italy’s Bruno Leoni Institute found:
- The amount of capital that generates one job in the renewable sector would generate either 6.9 or 4.8 jobs in the industrial sector or elsewhere in the economy, respectively. The study looked at just subsidies and not the energy value of the project which would have increased the numbers even more in favor of non-renewable jobs.
- The jobs in the renewable sector by 2020 are estimated to be between 50,000 to 112,000, but 60 percent would be temporary, disappearing after the wind tower or photovoltaic cell is installed.
Denmark. In 2009, a Danish think tank, CEPOS, published a study on that country’s wind industry, investigating reports of its 20 percent wind generation. The study found that while 19 percent of the country’s electricity generation was supplied by wind, wind only supplied an average of 9.7 percent of its electricity demand over a five year period. And, in fact, in 2006, wind generation only supplied 5 percent of demand. The country cannot use all the wind energy it generates since most of it is produced at night. Over an eight year period, West Denmark exported 57 percent of its wind generation and East Denmark exported 45 percent to neighboring Norway and Sweden, whose hydroelectric power can be easily switched on and off and can act as storage for the excess wind generation.
As a result of the subsidization for wind power, Denmark’s electricity customers have the highest electricity rates in Europe. Further, little carbon dioxide abatement results because displacing hydroelectric power does not displace carbon dioxide emissions. While some fossil displacement takes place in Denmark, it is at a cost of $124 per metric ton, nearly 6 times the trading value of carbon on the European Exchange. The CEPOS study also found that employment was reduced when it shifted from more productive sectors to the wind sector. An anti-wind association in Denmark, Neighbors of Large Wind Turbines, now has over 40 civic groups as members, protesting the noise and property devaluation caused by wind turbines
United Kingdom. The United Kingdom joined the renewable power band wagon and Verso Economics assessed the impact. They found that for every renewable job created in the UK, 3.7 jobs were lost elsewhere in the economy. In 2009/2010, the cost to electricity consumers in the UK was $1.75 billion and in Scotland, it was $159 million. The Verso study was different than its predecessors in that it used an input-output model to generate its results. Environmental groups had criticized earlier studies for using methodologies other than input-output models.
According to a recent study, wind installations in the UK produce wind power at only 21 percent of capacity. One factor for this poor performance is that wind turbines in the UK freeze in the winter, suspending their generation and requiring the turbines to be heated, creating a demand for additional energy. And besides freezing temperatures, very high winds have caused the turbines to be turned off to prevent damage. Recently, the British have found that three of its older coal-fired power plants will need to be retired sooner than originally expected needing to turn to wind for its replacement power. The irony is that any one of the coal plants provides almost twice as much electricity as all of Britain’s 3,000 wind turbines put together. The contribution of the country’s wind mills during weeks of freezing weather last winter was minuscule, and during hot weather recently, the country had to import nuclear power from France since there was no wind power. Recently, wind operators were asked to turn off their wind turbines and were paid 900,000 pounds to do so because there was insufficient demand. The payments were about 20 times the cost of the power they would have produced.
Europe has pushed so hard and so quickly into renewable technologies with its subsidies, loans, and other incentives that it forgot to see if the electricity grid could handle it. According to Oxford University economist Dieter Helm, “Basically, governments have allowed the buildup of wind without thinking through the grid consequences. There are two responses: Stop wasting so much on the rapid development of wind and its questionable economics, or plough on regardless, in which case enormous grid investments are urgently needed.” Estimates are as high as $138 billion to upgrade the grid for onshore networks over the next 10 years.
The costs and technical obstacles are much, much higher for offshore wind, getting power from the offshore to where it is needed, when it is needed, and at the time of production. And the question is: Who should pay for grid development? Should it be subsidized or should the market bear the brunt? Another issue with new transmission is where to place the lines. Overhead is an eyesore to many, underground has cooling problems, and there is also lost energy getting it from either the windy north or sunny south to central European demand centers.
The U.S. Experience
Like Germany, the United States has built its wind onshore and ranks second in the world in total wind capacity. Last year, wind generated 2.3 percent of the electricity demand in the United States. Like Germany, the United States would like to venture to its offshore for wind generation. It has approved the construction of wind turbines off of Cape Cod, Massachusetts. The problem is getting buyers for the power which is more expensive than onshore wind generation and more expensive than current electricity rates in Massachusetts. Only half of the currently planned capacity has a buyer.
Other issues have also surfaced. On the same day that Chancellor Merkel toured Germany’s first commercial offshore wind farm, May 2, the Bureau of Ocean Energy Management, Regulation, and Enforcement announced that they were more than halving the amount of offshore areas in Massachusetts that would be available for lease to offshore wind. That came as a result of a request from Massachusetts Governor Patrick Deval and other political officials from Massachusetts, who are reacting to concerns from the fishing industry. The original area to be leased was about 12 nautical miles south of Martha’s Vineyard and Nantucket and extending about 31 nautical miles offshore.
Noise pollution is also a problem. In Maine, for example, the current minimum setback is 1.5 times the height of the tower, or between 582 and 615 feet for most projects. The setback distance is based on safety guidelines from the turbine manufacturer. But, folks affected would prefer a mile setback to keep people from being disturbed by the noise, the low-frequency sound pressure and vibrations that turbines and their blades make under various wind conditions.
Like Europe, the United States is dealing with grid-related issues. One issue is the ramping up and down of fossil fuel and nuclear generators based on when the wind blows or does not blow. When wind capacity was small, natural gas turbines were able to deal with most of the ramping. But now, coal is being ramped up and down based on the output of the wind units. That ramping up and down of coal units that were designed to operate continuously, exposes valves, piping and other components to more extreme temperature shifts and causes potentially damaging changes in steam operation. It also causes carbon dioxide emissions to increase because more carbon dioxide is released due to the ramping than if the coal unit was run continuously because more fuel is burned.
Another grid-related problem results from the oversupply of electricity. Recently, the Bonneville Power Administration (BPA) indicated that they were going to draft a policy to shut down wind turbines during excess electricity because of high water levels that resulted from storms and spring runoff from melting snow. That caused concern from wind turbine operators, who receive a production tax credit based on their actual generation levels. As a result, renewable advocates and environmentalists indicated that BPA should spill water over the dams instead of shutting down wind turbines. BPA argued against spilling water and curtailing hydropower production because it conflicts with a mandate to protect endangered salmon and steelhead and meet water quality standards in rivers. Because the force of falling water creates air bubbles that dissolve as gas in waterways, the gas can harm fish and violate the Clean Water Act. According to BPA, a wind power shutdown would be a last resort, but it must balance its energy load.
The ad below from Idaho Power points out issues with variable generation sources.
Although wind is a renewable, European experience has shown that its development causes loss of jobs in the economy, grid stability problems, high subsidization, higher retail electricity rates, and usage issues. Europe increased their renewable generation so quickly that it did not evaluate how its electric grid would be affected and now needs to make substantial investments. The United States is also involved with grid-associated problems with renewable energy including generation over supply and ramping problems primarily when backing up wind generation with coal units.
Most disturbing, though, is the level of subsidization that Europe has amassed from developing its wind industry, the higher rates that its population pays for wind-generated electricity and the limited amount of wind generation actually available to the countries that paid for it. There is still time for the United States to learn lessons from the European wind experience, but will it?