Taking the wind out of wind power
November 17, 2009
By Dr. Stephen Murgatroyd
Columnist
Troy Media
Dr. Stephen Murgatroyd
EDMONTON, AB, Nov. 17, 2009/ Troy Media/ — Oresto Vigorito, head of the IVPC Energy Company and president of Italy’s National Association of Wind Energy, along with three others, was recently arrested and charged with fraud. Eleven others were charged but not arrested.
In the charge, it is alleged that government subsidies – wind power is highly subsidized – were used to build wind farms that were not able to operate. In other words, it is alleged the owners pocketed large amounts of government funds while not returning any services to the public.
In their zeal to appear to be responding to the perceived threat of climate change, politicians around the world are committed to increasing the number of wind farms, despite the lack of data on the impact wind farms will actually have on the environment or the amount of subsidies it will take to make them viable.
For example, in the UK in 2007 and 2008, electricity customers were forced to pay a total of over $1 billion in subsidies to the owners of wind turbines. That figure is due to rise to over $6 billion a year by 2020 because of the UK government’s unprecedented plan to harness some 25 gigawatts of wind capacity in its bid to shift away from fossil fuel use.
Unfortunately, capacity is not the same as use. According to its own statistics, the UK government estimates that the average load factor – the actual amount of kilowatt-hours delivered on a system in a designated period of time – for wind turbines across the U.K. was 27.4 per cent. This means that a typical two-megawatt turbine actually produced only 0.54 megawatts of power on an average day. The worst-performing U.K. turbine, again according to the government’s own statistics, had a load factor of just seven per cent. It is only the subsidies, and a legal requirement that energy providers use renewable energy, that allow turbine operators and their supporters to claim they can make a profit
Roger Helmer, Member of the European Parliament for East Midlands, is skeptical about wind-farms: He recently noted that all wind farms require back-up systems to provide energy when wind is low or power from the wind farms is intermittent. The British Wind Energy Association (BWEA) itself suggests that some 75 per cent of capacity needs to be backed up by coal or gas fired power systems. Generating wind industry players like E-ON –based in Germany – put the figure at over 90 per cent, while a recent UK House of Lords Report suggests that some 100 per cent back-up will be required, effectively cloning the capacity. The back-up generation capacity will run intermittently, variably and sub-optimally to compensate for wind variation — and therefore run inefficiently, with higher costs and emissions than necessary.
Wind power subsidy levels vary by jurisdiction. In the US, the Production Tax Credit (PTC), which was recently extended for another year, is a 1.8-cent tax credit per kilowatt hour for the first 10 years of the wind turbine’s life. Average electricity rates fall between seven and 11 cents per kilowatt hour, so the credit amounts to a subsidy of between 16 to 25 per cent. But US subsidies don’t end there. Several US states offer tax breaks on operating revenue, and allow write-offs for capital investment. State laws that require a certain percentage of electricity to be produced by renewables guarantee that there will be a market, no matter what the cost. In the UK, total subsidies stand at as much as £60 per MWh, with the entire burden falling on electricity consumers, whether they want renewables or not.
The motives governments use to justify the subsidies are two-fold: CO2 reduction and job creation. Unfortunately, on the CO2 front, things do not look good. For example, Denmark, with the highest intensity of wind generation in Europe, has amongst the highest per capita emissions in Europe. And the German experience is no different: Der Spiegel reports that “Germany’s CO2 emissions haven’t been reduced by even a single gram.”
It is no better when we look at job creation. In Spain, a report from Juan Carlos University in Madrid found the nation’s push for a huge expansion of alternate energy sources had no positive impact on job creation and instead appeared to have caused job losses – for every green job created, 3.9 jobs were lost in other sectors – by diverting resources in ways that hurt the overall economy. The alternate energy jobs that were created, the report maintains, required enormous subsidies – ranging from $752,000 to $1.4 million per position created – and often were only temporary. In Oregon, an investigation published in The Oregonian newspaper showed that a tax-credit program meant to spur the construction of solar and wind power plants in the state cost 40 times more than the administration told legislators it would. Lax oversight meant many dubious projects were given millions of dollars, with few job created.
It is a shame that no one is looking critically at what this rent-seeking and grant-farming industry is really all about. Perhaps the Italian courts will help us see the reality behind this industry.
Channels: The Calgary Beacon, May 5, 2010
