Windfall$ for Wind Energy

August 20, 2013 by  
Filed under Green Energy News

CERDAFIED - The good news is … Britain’s Wind farms have become so successful at producing electricity that they exceed demand. The bad news is …The extra power generated by the giant turbines can not be sold. So they turn them off!  

Consistently, you can count on government intervention to make matters worse. When the wind farms are shut down, they are then compensated to the tune of nearly £30million a year. The customers are forced to pick up the tab. 

This “balancing” of expected profits leaves the consumer enslaved to guaranteed profit margins.  Some wind farms are receiving more compensation from shutting down than from powering up. 

More wind farms are on the way, though they are not needed under the current market system. This drives up the cost of the power. Scotland and Britain has flooded the supply market. Without government intervention and compensation, good business practices would naturally be put in place. The company would create earned profits. 

Under the current circumstances, they have no motivation to relieve their customer base of the burden of their profits. Why would they abandon the golden goose? Especially since such greed will be rewarded by politicians consistently. 

The coal producing energy and nuclear energy should be reduced and eventually phased out as wind production increases if the goal is clean energy. If the goal is cheap energy, the question is cheap to whom? Cheap production of energy that only benefits the power companies is a partial failure to the customer base who wants relief from the cost as well as the environmental impacts. 

As much as 40% of Britain’s wind energy has been discarded due to maintenance work or poor weather conditions. With another 1,000 turbines planned and 5,000 existing, reaching Britain’s 2020 renewable energy goal of 15% may seem counter intuitive. 

The wind farm operators also receive payments known as ‘forward trades’. These advance payments are made when weather conditions shut down the turbines. Approximately £18.6 million was paid out in 2011. 

Guaranteeing profits is a recipe for disaster. Onshore wind farms are guaranteed at least £100 per megawatt hour and offshore wind farms receive £150 per megawatt hour. The current wholesale rate is £50. Wind farms have charged £200 per megawatt hour to shut down. This price gouging is beyond unacceptable. 

Competition is the only true motivator when it comes to lowering the price of energy for the consumer. Power companies are not competing for your hard earned dollars. Other than taking yourself off the grid and going solar, new innovations will never relieve you of the cost it will only relieve them. 

Some analysts are quick to point out the failure of Britain’s National Grid’s infrastructure. They are ignoring the burdensome policies for excess energy production. Clean energy is being hijacked by bad shut down policies abroad. 

The United States wind farms generated only 3.78% of our electrical energy. California generates 5,549 MW, second to Texas. The largest wind farm in the United States is in California with a capacity of 1020 MW of power at the Alta Wind Energy Center. The U.S. Department of Energy would like to have 20% wind energy by 2030. 

Are we set to make the same mistakes as Britain? Will we create higher costs by our regulation policies? So far Congress has avoided some of the pit fails. The federal production tax credit (PTC) which is around $20 per MW·h helped to boost the development of the U.S. wind industry.  They receive this funding over the first ten years of selling wind energy. Each year the tax credit has expired and then renewed. 

Our policies should be long term in order to create growth in the market place and prevent Investors from getting skittish around renewal times. But we must avoid mimicking Britain’s Wind Energy policies. 

Dare we say that a policy that closes riskier nuclear energy facilities in favor of wind energy would be commendable? Saving more water, is just one of the benefits. Wind turbines don’t consume water unlike nuclear energy and it will be saving 4 Trillion gallons of water if the 20 percent wind scenario is achieved by 2030. 

As Fukushima continues unabated in spilling its radioactive water into our ocean waters, we can no longer afford the luxury of trusting world governments or the nuclear energy future. Mark Cooper, a senior fellow at the Vermont Law School published a report that looks at the nuclear industry and its inability to compete with low carbon alternatives.  

Cooper evaluated the early retirement of several nuclear facilities and the factors leading up to it. Poor performance, aging fleets, lower cost competition and lower risk are some of the many reasons nearly three dozen reactors are at the end of their line. 

Cooper sums up the problem by stating, “Nuclear reactors are simply not competitive. They are not competitive at the beginning of their life cycle, when the build/cancel decision is made, and they are not competitive at the end of their life cycles, when the repair/retire decision is made.” 

Cooper projects that the impact of Fukushima could have the potential costs of a quarter of a trillion dollars. The public continues to seek compensation from Tokyo Electric Power Company (TEPCO), and the costs continue to rise as this disaster continues to play out. The disruption of the economy, the psychological despair, and the public health impacts are ongoing and increasing in intensity. 

Natural gas, the once safe alternative, is now creating the same type of the psychological despair and public health impacts due to the new fracking technology. 

Cooper rationalizes that, “Wind power plays a role by shifting the supply-curve in such a way that it lowers the market clearing price. As wind is added to meet long-term needs, it has this short-term effect. The effect is likely to continue. Onshore wind is becoming more competitive as a long-term resource.” 

“The lesson for policy makers in the economics of old reactors are clear and it reinforces the lesson of the past decade in the economics of building new reactors. Nuclear reactors are simply not competitive.” Cooper concluded. 

Can we learn from Britain’s wind energy mistakes?

 

 

(Lisa Cerda is a contributor to CityWatch, a community activist, Chair of Tarzana Residents Against Poorly Planned Development, VP of Community Rights Foundation of LA, Tarzana Property Owners Association board member, and former Tarzana Neighborhood Council board member.)

-cw

 

 

CityWatch

Vol 11 Issue 67

Pub: Aug 20, 2013

 

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