How will America meet the growing demand for clean energy to supply households and businesses and do it at a price people can afford?
Not with offshore wind power, a source that isn’t even remotely economically viable. Although the level of offshore wind power is less volatile than land-based systems, its output is very volatile. This volatility is a result of the inconstancy of the wind speed. As a result, offshore wind needs to be cheaper than power from natural gas plants and nuclear-generated electricity to be economically viable. Instead, it is almost certain to be more expensive and less reliable. If not for the $23 per megawatt-hour federal Production Tax Credit for wind power and state mandates requiring the use of renewable energy, plans for offshore wind turbines would come to a halt.
Offshore wind power sounds great until one gets into the economic and reliability details. There is a mistaken belief held by some politicians that unlimited supplies of clean energy will be produced from offshore wind turbines in the Atlantic, Great Lakes and the Pacific Northwest, so that serious planning for secure supplies of energy, like molten salt reactors, need not be undertaken. Yet the ability to generate large amounts of power from offshore wind is more promise than reality, and any presumed savings – on the scale promised by wind power’s more zealous advocates – are more ideology than reality.
According to a Department of Energy study of the potential for offshore wind energy, there is more than 320,000 square miles of water off U.S. coasts that could support approximately 2,000 gigawatts of capacity. That’s considerably more than the 1,100 gigawatts of electricity-generating capacity currently available in the U.S. However, the average capacity factor for off-shore wind is approximately 40 percent. This will impact the reliability of this potential source and limit its potential.
Offshore wind is potentially an enormous supply of energy, except for the fact that no one has come up with a practical and affordable way to capture it. At present, there is zero electricity being produced from offshore wind in the United States. In December, this country’s first offshore-wind power is expected to flow into the electric grid from five wind turbines off the coast of Block Island near Rhode Island. The turbines are slated to begin operating by the end of this year, but that’s the extent of offshore wind power in the U.S. Each of the giant turbines – at a height of 589 feet, they tower over even large vessels and can be seen from shore – is estimated to produce 125,000 megawatt-hours of electricity annually, which is enough to power 17,000 homes.
Deepwater Wind, developer of the Block Island turbines, estimates that the cost to build them was $300 million. Massachusetts, New York and other Northeastern states are watching to see how it all turns out. New York recently adopted a mandate requiring the state to get 50% of its electricity from renewables by 2030. Carbon mitigation was the driving force behind the mandate. But obtaining renewable energy from subsidized wind power is at best a counterproductive policy that’s led to the premature closing of several nuclear plants in California, Vermont, Massachusetts and Wisconsin – and has raised carbon emissions in the process. And it’s going to keep happening unless there are energy policy changes.
Clearly, only the fossil-fuel industry benefits if we shut down one reliable zero-carbon source of power and try to replace it with an unreliable emission-free source. The result is increased reliance on auxiliary power from natural gas and coal plants because renewables can’t meet all or even most of our electricity needs. Currently solar and wind combined supply only 7% of the nation’s electricity and it is less in Maryland. In July, approximately 3.3 percent of Maryland’s electricity came from solar and wind power while 38.9 percent came from nuclear. Nuclear power is the largest source of carbon-free electricity supplying about 60% of the carbon-free electricity in the U.S.
Yet state renewable portfolio standards require utilities to bring renewable capacity into their grids no matter how much it depresses markets. In fact, during times of overproduction, nuclear plants have to pay to send power to the grid.
Mind you, there wouldn’t be a problem if utilities could retire fossil-fuel plants, but those plants are needed to provide back-up power on days when the wind isn’t blowing and the sun isn’t shining. Which is why state mandates for renewable power are nonsensical.
Something else: natural gas plants have a lifetime of 30 to 40 years. With license renewal, nuclear plants like Calvert Cliffs operate for 60 years, and some reactors might be able to supply power for 80 years or more. By contrast, wind turbines have a lifetime of 15 to 20 years.
If offshore wind turbines are built up and down the Atlantic seaboard from Rhode Island to South Carolina, in about 20 years from now they’ll need to be replaced. But one large new nuclear plant could supply all of that emission-free energy from a single site. And it won’t need a subsidy or government mandates.
Dan Ervin Ph.D. is Professor of Finance at Salisbury University’s Perdue School of Business.
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