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Quotes from:
Renewable Energy -- Why Renewable Energy Is
Not Cheap and Not Green
by Robert L. Bradley, Jr.
Excerpted with permission of the author
by the Natural Gas Supply Association
Executive Summary:
A multibillion-dollar government crusade to promote renewable energy for electricity generation,
now in its third decade, has resulted in major economic costs and unintended environmental
consequences. . . .
Improved new-generation renewable capacity is, on average, twice as expensive as new capacity
from the most economical fossil-fuel alternative and triple the cost of surplus electricity. Solar
power for bulk generation is substantially more costly than this average; biomass, hydroelectric
power, and geothermal projects are not as uneconomic. The cost of wind power comes close to
the average, although certain prime projects with high economies of scale are cheaper. Only ideal
virgin geothermal sites and selected upgrades at existing renewable sites are economic for new
capacity under current technology and market prices.
Environmental Problems
. . . every major renewable energy source has drawn criticism from leading mainstream
environmental groups: hydroelectric for destroying river habitat, wind for killing birds, solar for
desert overdevelopment, biomass for air emissions, and geothermal for depletion and toxic
discharges. Meanwhile, natural gas, which has a substantial cost advantage over renewables, even
after imputing a "social cost"for alleged air-emission "externalities," has emerged as the most
economical "green" fuel heading into the new millennium.
Problems of Wind Power
Wind Costs
. . . . The aggregate ratepayer and taxpayer commitment makes the embedded cost of wind
power, conservatively estimated at 10 cents per kWh, some of the most expensive energy of the
present era, ranking with high-cost nuclear generation (above 10 cents per kWh compared to
average generation costs of around 4 cents per kWh), synthetic oil (around $57 per barrel versus
spot crude oil close to $20 per barrel), Strategic Petroleum Reserve oil (around $60 per barrel
versus spot of $20 per barrel), and synthetic natural gas ($3-$7 per MMBtu versus spot gas of
around $2 per MMBtu). . . .
. . . . wind power's high up-front capital costs and erratic opportunity to convert wind to
electricity (referred to in the trade as a "low capacity factor") more than cancels out the fact that
there is no energy cost from naturally blowing wind.
Low capacity factors, and still lower dependable "on peak" capacity (DOPC) factors, are a source
of wind power's cost problem. In California, for instance, where some 40 percent of the world's
capacity and over 90 percent of U.S. wind capacity is located, wind power operated at only 23
percent realized average capacity in 1994. This compares to nuclear plants with around a 75
percent average capacity factor, coal plants with a 75-85 percent design capacity factor, and
gas-fired combined-cycle plants that have a 95 percent average design capacity factor. All these
plants produce power around the clock. Wind does not blow around the clock to generate
electricity, much less at peak speeds.
. . . . By the mid-1990s, wind advocates reported that a new generation of wind turbines has
brought the cost down below 5 cents per kWh and even toward 4 cents in constant dollars. A
DOE estimate was 4.5 cents per kWh at ideal sites. However, even at the low end of the estimate,
the total cost of wind power was really around 6-7 cents per kWh when the production tax credit
and other more subtle cost items are factored in, as discussed below. This all-inclusive price in the
mid-1990s was approximately double the cost of new gas-fired electricity generation -- and triple
the cost of existing underutilized generation.
. . . . wind receives a 1.5 cent per kWh federal tax credit, escalating with inflation, which is
approximately one-third of its (as-delivered) selling price. Accelerated depreciation, allowing a
five-year write-off compared to the standard 20 years or more, is also given to wind, significantly
lowering its tax rate. Gas-fired electric generation does not have a tax credit or an option of
accelerated depreciation, and natural-gas extraction has a total deduction (primarily a scaled-back
percentage depletion allowance) of under 2 percent of its wellhead price. State severance taxes,
which totaled $45 billion for oil and gas extraction between 1985 and 1994, swamp this wellhead
deduction. Thus wind's entire tax credit can be added back in for an apples-to-apples comparison
with gas-fired alternatives.
Local tax incentives for wind, such as exist in California, as well as industrial revenue bonds, a
common inducement for renewable projects, would increase this add-back. All told, preferential
taxation can reduce renewable bids between 2 and 3 cents per kWh compared to the fossil fuels or
hydroelectric projects, not to mntion nuclear. At today's prices for new generation, this can be
over 50 percent of the final selling price, a very sizable preference.
Wind's Site Limitations
Second, low-cost wind depends on select sites with strong, regular wind currents (Class 4 and
above wind speeds) versus other power generation that can be built in larger increments in far
more places, or converted or repowered in existing locations. Remote wind sites often result in
construction of additional transmission lines, estimated to cost as much as $300,000-$1million per
mile. The economics of transmission are poor because while the line must be sized at peak
output, wind's low capacity factor ensures significant underutilization. This adds a half-cent per
kWh, more in California and sometimes less elsewhere, to the levelized cost of wind.
Unpredictable Supply
. . . . since wind is an intermittent (unpredictable) generation source, it has less economic value
than fuel sources that can deliver a steady, predictable source of electricity. Utilities obligated to
provide firm service must either "firm up" the intermittent power at a premium (estimated to be
between one-half and 1 cent per kWh) or penalize the provider of interruptible supply.
Wind's Future
. . . . It is an error to conclude that even if wind is not competitive now, it soon will be. Wind is
competing against improving technologies and the increasing abundance of natural resources. The
cost of gas-fired combined-cycle plants -- the most economical electric generation capacity for
central station power at present -- has fallen in the last decade due to improving technology and a
50 percent drop in delivered gas prices adjusted for inflation. Gas turbines have increased their
energy efficiency factors from just above 40 percent in the early 1980s to nearly 60 percent today.
Forecasts by the Department of Energy and other sources expect continued efficiency
improvements in the years 2000 and 2015 for gas-fired generation. By one forecast, new gas-fired
generation of virtually any capacity will cost from $200 to$450 per kilowatt, generating power at
2 cents per kWh. . . .
Residential Wind Noise
Regarding residential wind systems, the American Wind Energy Association states, "As a general
rule of thumb, a turbine owner should have at least a 10 mph average wind speed and be paying at
least 10 cents per kWh for electricity." Properties need to be one acre or more to support a
80-to-120 foot tower, and noise levels "about half as much as . . . a lawn mower" can be
expected.
Jobs from Wind
. . . . A jobs-creation rationale for wind power is marshaled by supporters, almost as a last line of
defense. The American Wind Energy Association trumpets the fact that about $3.5 billion is
invested in the United States [wind power] industry, where watt-for-watt, dollar-for-dollar, that
investment creates more jobs than any other utility-scale energy source. In 1994, wind turbine and
component manufacturers contributed directly to the economies of 44 states, creating thousands
of jobs for American communities.
The high-cost propensity of wind power is a negative, not a positive, aspect of the industry.
Subsidies
. . . . The Department of Energy has spent $900 million (constant 1996 dollars) on wind energy
subsidies through FY 1995. Yearly DOE wind expenditures ranged from $10 million in FY 1990
to a high of $129 million in FY 1979. The California Energy Commission's Wind Program
(founded in 1977) and Energy Technologies Advancement Program (founded in 1984) have
provided tens of millions more dollars in wind subsidies. Foreign governments have spent the
equivalent of hundreds of millions of dollars more on research and commercialization.
A conservative estimate of the total U.S. taxpayer subsidy to wind power is more than $1,200 per
installed kilowatt, even greater than the direct capital cost of wind under advanced technology of
around $860 per kilowatt and certainly more than the installed capacity cost of gas-fired
combined cycle of approximately $580 per kilowatt. . . .
The need for more subsidy for wind commercialization apparently continues. The 1995 report of
the DOE-appointed Task Force on Strategic Energy Research and Development (Yergin Task
Force), concluded that $350 million in future research and development funding was still needed
for "wind characterization, aerodynamics, structures and fatigue, and advanced concepts and
components."
Failure of Wind R & D
What the Yergin task force failed to consider is that the federal government's crash course in
wind-related research and development has been a bust to date, and further commitment may be
doomed as well. Paul Gipe, one of the nation's leading advocates of wind energy, has pronounced
the U.S. effort through the early 1990s "a chimera. . . nothing more than 'welfare for the
educated.'" He explains:
The United States lavished nearly half a billion dollars on the aerospace industry from 1974 to
1992 [for wind power R&D]. . .. . [Yet] with the exception of United States Windpower's model
56-100, none of the United States-designed machines in California can be called a success. . . . By
the mid-1990s there were no major United States manufacturers selling commercially proven wind
turbines to independent developers in the United States and there were practically no United
States wind turbines operating in Europe.
One byproduct of DOE centralization and largesse has been the professional corruption of the
American Wind Energy Association, which, Gipe states, fell into the trap of measuring its success
by the size of taxpayer subsidies.
International Trade and Wind
Today's renewable export industry is a very small portion of total U.S. energy-related exports. A
$500 million annual renewable export industry accounts for under a tenth of 1 percent of the total
U.S. export market. Unwise and uneconomic subsidies abroad do not justify unwise and
uneconomic investments at home. Should foreign subsidies result in major technological
breakthroughs to make wind power economically and environmentally viable in niche markets, the
United States can "free ride" by importing the technology or equipment. U.S. ratepayers and
taxpayers would be spared the burden, and, in fact, American consumers would have been
advantageously subsidized by foreign taxpayers or ratepayers.
Wind Turbines Kill Birds
The universal rationale for this massive public commitment to wind power is that it is
environmentally benign. But wind power has at least one major environmental problem -- the
massive destruction of bird populations -- that has begun to draw serious concern from
mainstream environmentalists.
Wind blades have killed thousands of birds in the United States and abroad in the last decade,
including endangered species, which is a federal offense subject to criminal prosecution.
. . . .the Sierra Club labeled wind towers "the Cuisinarts of the air". . . .
"How many dead birds equal a dead fish equals an oil spill?" Ten thousand cumulative bird deaths
from 1,731 MW of installed U.S. capacity is the equivalent of 4.4 million bird deaths across the
entire capacity of the United States electric market (approximately 770 gigawatts). A 20 percent
share of U.S. capacity, a figure that the American Wind Energy Association put forward some
years ago in congressional hearings, would equate to 880,000 cumulative bird deaths. Calculated
on an average operating basis, the number would rise severalfold. . . .
A 1992 study commissioned by the California Energy Commission (CEC) "conservatively"
estimated that 39 golden eagles were being killed at Altamont Pass each year, a significant figure
given a total population of 500 breeding pairs.
. . . . American kestrels and red-tailed hawks were also considered to be at risk from Altamont
Pass, according to the CEC study. While these facts could be ignored by the prowind power
community, the National Audubon Society's call for a moratorium on wind power projects in
bird-sensitive areas (a position spearheaded by Audubon's San Francisco chapter) cannot. . . .
Pollution from Wind Turbine Materials
Since large wind farms require thousands of tons of materials, virtually all of the air emission
associated with the electricity used to make these materials (such as cement or steel) must be
counted against the air emissions "saved" once the farm comes on line and displaces fossil
fuel-generated output. For example, a recently announced Zond wind farm of 40 to 45 effective
megawatts is composed of 150 wind turbines weighing 35 tons each or just over 10 million
pounds. The entire electricity requirement for these materials (cement, steel, fiberglass, etc.)must
be estimated before assigning an air emission factor. . . .
Wind Energy's Visual Pollution
Wind power's land disturbance, noise and unsightly turbines present environmental drawbacks
also. . . . The irony of visual blight was not lost on environmental philosopher Roderick Nash
who, referring to the Santa Barbara environmentalists, asked, "If offshore rigs offend, can a much
greater number of windmills be any better?" . . . .
Environmentalists have raised concerns over . . . . flashing lights and red-and-white paint required
by the FAA on tall towers, . . . fencing requirements, oil leakage and abandoned turbines. . . .
Smoke
Another problem of wind farms appears to be fire and smoke. One article pointed that "Wind farm
operators are feeling the heat from the state Department of Forestry and Fire Protection over
blazes in Altamont Pass. Causes range from electrical shorts to exposed wires to flaming birds."
Wind's Land Use Issues
Wind farms also fail the land-use test compared to fossil fuel. A wind farm requires as much as 85
times more space than a conventional gas-fired power plant. Paul Gipe estimates the range to be
between 10 and 80 acres per megawatt -- from 30 to over 200 times more space than gas plants.
Wide spacing (a 50 megawatt farm can require anywhere between two and 25 square miles) is
necessary to avoid wake effects between towers. The world's 5,000-megawatt (nameplate) wind
power capacity as of 1995 consisted of 25,000 turbines -- little bang for the visual blight buck.
The argument that the actual space used by wind towers is much smaller than the total acreage of
wind farms ("as little as 1 percent of the land is actually occupied") is the "footprint" argument
that eco-energy planners refuse to consider for petroleum extraction in the Arctic National
Wildlife Refuge (ANWR) in Alaska.
[Other land use issues include] erosion from service roads cut into slopes (an important problem
for California where mud slides are a hazard), [and] "fugitive dust" from unpaved roads. . . .
Doubled Costs
Another environmental consideration with wind projects is created when they are combined with
gas turbine backup to lower the weighted average cost of power and to achieve reliability as a
firm source of electricity. Gas/wind hybrids (or gas/solar hybrids) blur the renewable-fossil fuel
distinction and avoids the questions: why not have a gas-only project, and is the project really
needed at all given existing overcapacity?
Solar: The Smaller the Better
Weighing in at 373 megawatts nationally, bulk, or central station, solar power (power generated
at a large-scale centralized location and then transmitted on the power grid to multiple users)
represents .03 percent -- three hundredths of 1 percent -- of total U.S. generation capacity. Solar
generation of 901 million kWh in 1995 was .03 percent -- three hundredths of 1 percent -- of
national electricity production, one-fourth the size of the tiny wind industry. As with the wind
power industry, solar's long promised commercial viability has not occurred, and potential market
share has been grossly overestimated. A variety of government subsidies, however, has allowed
solar's capacity and output to double since the late 1980s.
Cost
. . . . new solar power is triple the cost of new gas-generated electricity and quadruple the cost of
surplus power. . . .
Site Limitations
Solar power, like most other renewables, is geographically limited for the foreseeable future. In
the United States, central-station solar is limited to the desert Southwest and other selected
locales, which often involve transmission investments that custom-sited gas-fired plants can avoid.
. . .
Subsidies
The Department of Energy has spent approximately $5.1 billion (in 1996 dollars) on
solar energy since FY 1978, more than $12 million per megawatt. This investment per unit of
capacity is some 20 times greater than today's capital cost of modern gas-fired plants. Looking
ahead, post-FY 1994 DOE funding to attempt to commercialize photovoltaics and solar thermal is
estimated to be $1,050 billion, triple the estimate for wind power.
Solar Materials
Thermal solar systems receive sunlight, concentrated in a parabolic dish trough or in a tower,
which is then converted to electricity by a heat engine and electric generator. A 1978 study found
that the materials required for thermal solar projects were 1,000 times greater than for a similarly
sized fossil fuel facility, creating substantial incremental energy consumption and industrial
pollution.
Solar Emissions
. . . . an energy specialist at the California Energy Commission calculated that the production of
concrete per thousand megawatts of nameplate solar capacity (a proportionally high input) results
in carbon emissions equivalent to 10 billion cubic feet of combusted natural gas -- approximately a
year's worth of fuel for a similarly sized gas-fired plant. . . .
Bird Deaths
[At the Solar One facility] bird deaths ("the birds died primarily from collisions with the
picture-like surface of the heliostats") are as much as 10 times the kill at Altamont Pass per
megawatt, although endangered species and other high profile birds have not been at risk. . . .
Solar Land Use
. . . . central-station solar requires between five and 17 acres per megawatt . . . compared to
gas-fired plants that a decade ago required only one-third of an acre per megawatt and today can
be as little as one-twenty-fifth of an acre. . . .
[At the Solar Two facility]. . . . The 1,900 mirrored panels, each measuring over 100 square
yards, come out to 17 acres per megawatt of capacity. That is 50 times greater than a similarly
sized gas-fired facility on a nameplate basis but 150 times greater on a generation basis. And
unlike wind power, the land concentration of solar farms is very dense.
These concerns led a Worldwatch Institute study to conclude:
Solar Two looks good on paper, and it is expected to provide steady baseload electricity as well
as late afternoon peaking capacity, but the future of all the central solar generators is in doubt.
They are expensive to build, their very scale escalates financial risks -- as with nuclear power --
and their massive height (in excess of 200 meters) may attract opposition. . . .
Solar's Threats to Animals
The installation phase has distinct environmental consequences given the large land masses
required for solar farms -- some five to 10 acres per megawatt of installed capacity. Species such
as the desert tortoise and the Mojave ground squirrel are displaced. Radio-tagged desert tortoises,
classified as a "threatened species," were killed either at the Kramer Junction Luz thermal solar
site or soon after relocation away from the site -- a problem for photovoltaic farms as well.
Hundreds of stacked mirrors create visual blight, and shading from the solar cells creates micro
climatic impact. These environmental negatives may seem puny, but it is an "eco-dilemma" for its
proponents, who are trying to justify spending millions of involuntary ratepayer and taxpayer
dollars for an allegedly benign energy resource.
In 1993 congressional hearings, the Sierra Club and Wilderness Society testified in favor of
maximum acreage being made off limits to commercial development in California's Mojave desert,
one of the prime solar sites in the United States.
Solar's Toxic Chemicals
The major environmental cost of photovoltaic solar concerns toxic chemical pollution (arsenic,
gallium and cadmium) and energy consumption associated with the large scale manufacture of
photovoltaic panels.
Biomass: The Air Emission Renewable
Biomass is electricity created from a variety of energies such as wood, wood waste, peat wood,
wood sludge, liquors, railroad ties, pitch, municipal solid waste, straw, tires, landfill gases, fish
oils and other waste products. Of these inputs, wood accounts for more than 60 percent of
biomass. Biomass generated 60 billion kWh in 1995, 1.7 percent of national electric power output
and 16 percent of national renewable production.
Cost
. . . . Biomass is not economical today, and even the projected research and development goal of 4
cents to 5 cents per kWh is still well above new gas-fired capacity and roughly double the spot
price of surplus electricity. . . .
Emissions
Biomass is not environmentally benign from the energy environmentalist's own perspective, since
carbon dioxide is released upon combustion -- even more than from coal plants in some
applications. Nitrogen oxide and particulates are also emitted.
Land Use
Other environmental problems were cited by Christopher Flavin and Nicholas Lenssen of the
Worldwatch Institute:
Although biomass is a renewable resource, much of it is currently used in ways that are neither
renewable nor sustainable. In many parts of the world, firewood is in increasingly short supply as
growing populations convert forests to agricultural lands and the remaining trees are burned as
fuel. . . . As a result of poor agricultural practices, soils in the United States Corn Belt . . . are
being eroded 18 times faster than they are being formed. If the contribution of biomass to the
world energy economy is to grow, technological innovations will be needed, so that biomass can
be converted to usable energy in ways that are more efficient, less polluting, and at least as
economical as today's practices.
Subsidies
. . . . The Yergin Task Force estimates that $930 million in future DOE subsidies will be necessary
to approach commercialization.
Geothermal: The Nonrenewable Renewable
Geothermal -- steam energy that is generated from the earth's heated core -- is currently produced
from 19 sites in four western states (California, Nevada, Utah and Hawaii) and accounts for just
under one-half of 1 percent of national power production and national generation capacity.
Production has fallen far short of projections made in the 1980s and is currently in decline due to
erratic output from a number of California properties. Nationally, geothermal output in 1995 was
6 percent below 1994, a drop of 971million kWh.
Site Issues
. . . . A number of drawbacks are inhibiting geothermal growth. Geothermal is very site-specific
and may not match customer demand centers. These same sites are often located in protected
wilderness areas, areas that environmentalists do not want disturbed. Unique reservoir
characteristics and limited historical experience increase investor risk. . . .Promising sites can turn
into dry holes upon the completion of drilling. . . .
Renewable?
Is geothermal a renewable resource? One study states . . . that "geothermal resources are not
strictly renewable on a human time scale, but the source is so vast it seems limitless." Christopher
Flavin and a new coauthor tell us five years later, "Although geothermal reserves can be depleted
if managed incorrectly (and in some cases have been), worldwide resources are sufficiently large
for this energy resource to be treated as renewable." Yet the supply of coal in the United States
and natural gas in North America is arguably "so vast it seems limitless" as well. Geothermal
cannot be considered a renewable resource, at least in the United States. . . .
Depletion occurs where more steam is withdrawn than is naturally recharged or injected, and
"inexhaustible" reservoirs can become noncommercial. Alternative water uses or low availability
have reduced recharging capacity at The Geysers, for example. . . .
Geothermal Emissions & Waste
Geothermal is not only a scarce, depleting resource, it has negative environmental consequences
despite the absence of combustion. In different applications, there can be CO2 emissions, heavy
requirements for cooling water (as much as 100,000 gallons per megawatt per day), hydrogen
sulfide emissions, and waste disposal issues with dissolved solids and even toxic waste. . . .
. . . . [at The Geysers} corrosive acids have also destroyed equipment.
# # #
Note: A more extensive excerpt from this book is available through the
National Center for Policy Analysis (NCPA). The entire book is to be
published by the Cato Institute in 1997.
The Natural Gas Supply Association represents producers and marketers of domestic natural gas.
This page was last
updated August 31, 1997
