14,000 Idle Wind Turbines a Testament to Failed Energy Policies

[FrankRep]

http://www.thenewamerican.com/media/k2/items/cache/0458115da87b57533360fe42c82e77a6_XL.jpg (http://www.thenewamerican.com/tech/energy/item/15069-14-000-idle-wind-turbines-a-testament-to-failed-energy-policies)


14,000 Idle Wind Turbines a Testament to Failed Energy Policies (http://www.thenewamerican.com/tech/energy/item/15069-14-000-idle-wind-turbines-a-testament-to-failed-energy-policies)


The New American (http://www.thenewamerican.com/)
11 April 2013


When Element Power announced on April 10 (http://www.elpower.com/element-power-closes-sale-of-45mw-of-irish-wind-farms-to-blackrock) the closing of a deal to build wind turbines for Blackrock (http://en.wikipedia.org/wiki/BlackRock) in Ireland, nothing was said about the more than 14,000 other wind turbines lying idle around the world. Instead, Jim Barry, managing director for BlackRock, the world’s largest asset manager, expressed great pleasure at its new venture with Element:



We are pleased to have invested in the Irish wind energy sector and in particular the Garranereagh and Monaincha wind projects which represent an exciting investment opportunity for BlackRock’s clients. We look forward to developing our relationship with Element Power, an experienced international developer in the renewables sector.


Nothing was said about Element’s recent termination of another deal (http://www.kcet.org/news/rewire/wind/pioneertown-wind-turbine-project-abandoned.html) to build 40 wind turbines over 4,000 acres on top of Black Lava Butte and Flat Top Mesa in California, citing in its “request to relinquish” that there were “insufficient wind resources” to make that project viable. But there’s enough bank and government financing to keep the Irish project afloat for a while at least:



This welcomed recovery of the Irish economy is further evidenced by the fact that this long term non-recourse project finance was secured [by loans] from the Bank of Ireland … [and from two other British banks under] an Export Guarantee Scheme of the Federal Republic of Germany.


Those 14,000 wind turbines lying idle (http://www.naturalnews.com/034234_wind_turbines_abandoned.html) in California’s Altamont Pass, Tehachapin, and San Gorgonio areas and elsewhere around the world are testimony to the continuing and accelerating failure of hope over experience, funded with taxpayer monies. And these areas were selected as being “in the best wind spots on earth,” which are now, according to Natural News writer Jonathan Benson, just “spinning, post-industrial junk which generates nothing but bird kills.”

Once those taxpayer funds are withdrawn, the real economics of maintaining these expensive monstrosities are so overpoweringly negative that they are left to rot — skeletons proving the fraud and deceit of the whole global warming meme. As James Delingpole, the author of Watermelon: The Green Movement’s True Colors (http://www.amazon.com/gp/product/0983347409/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0983347409&linkCode=as2&tag=libert0f-20), noted during an interview (http://lewrockwell.com/orig10/delingpole44.1.html) with Lew Rockwell last November:



Wind farms do not generate electricity on any commercially competitive level. The only reason that wind farms can survive is through government subsidy, which is ... stolen from the taxpayer and funneled into the pockets of rent-seeking businessmen.


It’s a Ponzi scheme, concluded Delingpole, promoted as a way to siphon funds from those taxpayers into the pockets of investment managers like BlackRock and manufacturers like Element Power, despite evidence that such “investments” have no chance whatever of returning a profit with them. Delingpole explained:



The evidence for man-made global warming is vanishingly small, to the point of non-existence. The only people predicting disastrous man-made climate-change catastrophe are computer modelers and economists who are part of this green Ponzi scheme....

No earth scientist, no real scientist, is predicting this stuff because the evidence speaks otherwise.


Reality surfaced briefly in Great Britain last fall when Energy Minister John Hayes placed a moratorium on the building of more wind turbines in the U.K., which Christopher Booker, the author of The Real Global Warming Disaster (http://en.wikipedia.org/wiki/The_Real_Global_Warming_Disaster), saw as very good news. Enthusing over the apparent victory of reason over ideology, Booker waxed eloquent in his rejoicing (http://www.thegwpf.org/christopher-booker-its-good-riddance-wind-farms-dangerous-delusions-age/) at the Daily Mail:



The significance of yesterday’s shock announcement by our Energy Minister John Hayes that the Government plans to put a firm limit on the building of any more onshore wind farms is hard to exaggerate. On the face of it, this promises to be the beginning of an end to one of the greatest and most dangerous political delusions of our time....

I have been following this extraordinary story for ten years ever since, in 2002, I first began looking carefully at what really lay behind this deceptive obsession with the charms of wind power. It didn't take me long, talking to experts and reading up on the technical facts, to see that the fashionable enthusiasm for wind energy was based on a colossal illusion … the greatest mistake in our history….

[Wind power] is … a catastrophic failure of judgment. [It is] stupendously inefficient and ludicrously expensive.... So unreliable are wind turbines — thanks to the wind’s constant vagaries — that they are one of the most inefficient means of producing electricity ever devised.


Delingpole went on to point out that all of England’s entire wind industry, consisting of more than 3,500 wind turbines, generates less energy than does one single gas-fired power plant at a small fraction of the cost. But pressure on members of Parliament by citizens who have had enough of the fraud and deceit forced the decision by Hayes, for the time being at least, to stop the insanity:



At long last, the penny began to drop with a growing number of MPs being besieged by constituents who wanted to know why our green and pleasant land should be disfigured for no obvious purpose other than to enrich the developers, and landowners such as [Prime Minister] David Cameron’s father-in-law Sir Reginald Sheffield, who has cheerfully admitted that the turbines on his Lincolnshire estate earn him £1,000 [$1,530] a day.


Of course, Sir Sheffield would not have found turbines so profitable if government had not distorted the market with subsidies.

Regardless, Delingpole’s victory dance ended on March 28 when John Hayes was unceremoniously booted (http://www.standard.co.uk/news/politics/pm-replaces-energy-minister-john-hayes-who-spoke-out-against-wind-farms-8552941.html) from his position as energy minister by Cameron, and replaced by pro-wind anti-reason Liberal Democrat Ed Davey (http://en.wikipedia.org/wiki/Ed_Davey).

It’s clear then that the evidence against wind farming will just continue to pile up at taxpayers’ expense until finally the sham is sufficiently exposed, or governments sufficiently chastened, or taxpayers sufficiently angered, to end the subsidies.

But what will happen to those idle wind turbines that now reflect nothing more than a standing graveyard of reminders to a failed ideology? That remains an open question. If there’s not enough money to maintain them, where will the money come from to tear them down?


SOURCE:
http://www.thenewamerican.com/tech/energy/item/15069-14-000-idle-wind-turbines-a-testament-to-failed-energy-policies

[pcosmar]

Wind is a viable and abundant source of power.
There are only 2 possible reasons FOR THEM BEING UNPROFITABLE.

Greed/(Fraud) and poor design.

Wind driven ships traveled and settled the world for thousands of years. Industry and production ran on wind power driving mills and and machine tools.

They would be excellent for private power needs,, but for regulatory interference.

The only problem with wind power is politics.

[FrankRep]

Wind is a viable and abundant source of power.

James Delingpole to Lew Rockwell: (http://lewrockwell.com/orig10/delingpole44.1.html)


Wind farms do not generate electricity on any commercially competitive level. The only reason that wind farms can survive is through government subsidy, which is ... stolen from the taxpayer and funneled into the pockets of rent-seeking businessmen.

[brushfire]

A church purchased one by my house. It sat for nearly 2 years while only operating during severe thunderstorms. They ended up moving it and now, it definitely operates more frequently, but I've seen many days where the flag was flogging and the turbine sit idle.

I have no issues with alternative energy, but I do have problems with subsidies. They're going to ruin a good thing with this sham they got going.

[pcosmar]

James Delingpole to Lew Rockwell: (http://lewrockwell.com/orig10/delingpole44.1.html)


Wind farms do not generate electricity on any commercially competitive level. The only reason that wind farms can survive is through government subsidy, which is ... stolen from the taxpayer and funneled into the pockets of rent-seeking businessmen.

I can provide more power than I could possibly use with a wind generator on my own property. If I was allowed to have one.

The only thing that stands in the way is government regulation.

I also signed a contract with a energy provider that wants to build a wind Farm in the area. Red Tape and Regulation is holding up that project presently.

[pcosmar]

Built in 1757

http://upload.wikimedia.org/wikipedia/commons/thumb/b/b3/MolenSneeuwAmsterdam.jpg/583px-MolenSneeuwAmsterdam.jpg

Still functional.
They were in existence since the 12th century (at least) and could only be improved by modern technology..


http://www.prevailingwindpower.com/Aermotor.jpg

http://www.aermotorwindmill.com/

Since 1888. Made in the USA

(I want one)

[FrankRep]

Built in 1757

Still functional.
They were in existence since the 12th century (at least) and could only be improved by modern technology..


Used for Grinding Grains, not Generating Electricity.

[Acala]

Built in 1757

http://upload.wikimedia.org/wikipedia/commons/thumb/b/b3/MolenSneeuwAmsterdam.jpg/583px-MolenSneeuwAmsterdam.jpg

Still functional.
They were in existence since the 12th century (at least) and could only be improved by modern technology..


http://www.prevailingwindpower.com/Aermotor.jpg

http://www.aermotorwindmill.com/

Since 1888. Made in the USA

(I want one)

The cost of building and maintaining these winds devices would exceed the cost of an equivalent amount of electricity off the grid. That's what it means to be non-economical. Now IF the government had never subsidized rural electrification and IF it did not now subsidize certain kinds of fuel used in power plants and them to externalize some of their waste costs, wind power MIGHT be economical in some windy rural areas, but mainly because grid power would be so much more expensive.

[torchbearer]

Used for Grinding Grains, not Generating Electricity. you could hook up an alternater, just as easy as a grain wheel. power is generated and transferred. it is a power generator that uses the power directly, without transferring it to electricity. you could state that the grain wind mill is more efficient than a grain mill power by electricity harvest by a wind turbine.

[Isaac Bickerstaff]

The flour mill and the water windmill transfer mechanical energy to complete a task without converting it. A DC wind energy conversion system ("turbine" for those of us that don't appreciate lobbyist bullshit) may work a little better than AC because DC can still function under variable conditions (like, say, the f**king wind!) and it can be stored, whereas AC needs to have constant voltage/amperage or the devices it powers will have an incredibly short useful life.

In order to make AC wind energy anything like usable on the grid, grid operators must place conventional "peaking plants" on spinning reserve, ready to begin generating electricity on literally a minute's notice as wind dies down. During the brief time periods that wind turbines are generating electricity, the variable output must be converted to be compatible with the grid. This is done by manipulating the amperage so the voltage remains constant. This effect is known as "dirty electricity" and can cause bizarre consequences to everything electrical (including humans) for up to 30 miles from wind facilities.

Wind turbines USE electricity. Yes they do. A lot. In the winter months especially, the heaters used to keep the equipment from freezing up can use as much as a megawatt per hour. Even when the turbine is standing there motionless.

The environmental impact is far from neutral. A very common sight in wind projects is lubricating oil misting out of the nacelles and oozing down the towers. The transmission in the nacelle needs to gear up 13 rpm to 60 revolutions per second. The forces involved with such an endeavor exceed the capacity of all known lubricants and gear boxes.
Manufacturing a 280 ft tall metal structure with moving 130 foot long fiberglass/resin sails at the top costs a whole lot of energy. With the addition of the 300+ yards of concrete and tons of rebar to build every anchor, and the thousands of miles of unneeded new transmission lines, the carbon footprint is much larger than it could ever offset. (Who gives a crap about CO2, though; it is all the other hitch hikers in industrial pollution that I am worried about)

Goldman Sachs, Morgan Stanley, GE, T. Boone Pickens are the driving forces behind this boondoggle here. Most of the other players have already bankrupted their home economies in Europe and are looking for corrupt politicians to give them handouts. Ask any wind developer if they would be around if it wasn't for all of the massive and ridiculous incentives, and every single one of them will answer with an unambiguous "No".

If you really want to use the wind to generate electricity, the only viable option is to use the wind to pump water to an elevated tank and then use micro-hydro to harness the energy. That very simple configuration in its crudest form will be be twice as efficient at converting mechanical energy to electricity than the most efficient wind turbine and it will be dispatchable.

If you got "regulation" out of the way, these damn things would be a laughingstock and not another one would ever be built.

PCOSMAR, watch your ass; these people are going to f**k you over big time.

[Zippyjuan]

Gee- a talking wind turbine! And it can apparently replicate itself!

A wind turbine says it will build more turbines in Ireland, but doesn’t mention the 14,000 turbines idle worldwide, lacking profitability or viability

[jmdrake]

James Delingpole to Lew Rockwell: (http://lewrockwell.com/orig10/delingpole44.1.html)


Wind farms do not generate electricity on any commercially competitive level. The only reason that wind farms can survive is through government subsidy, which is ... stolen from the taxpayer and funneled into the pockets of rent-seeking businessmen.

Just because something may be impractical when done large scale based on gubmint funding doesn't mean it's not practical for the individual.

http://www.mdpub.com/Wind_Turbine/

[jmdrake]

I can provide more power than I could possibly use with a wind generator on my own property. If I was allowed to have one.

The only thing that stands in the way is government regulation.

I also signed a contract with a energy provider that wants to build a wind Farm in the area. Red Tape and Regulation is holding up that project presently.

I thought you lived out in the boonies? What kind of regulation is keeping you from building your own small turbine?

[Zippyjuan]

The article notes "14,000 idled wind turbines" at sites like Tehachapi Pass and Altamont and San Gorgonio. It should be noted that the reason they are currently idled is that they are being "repowered" and replaced with newer, bigger turbines.

Altamont:
http://en.wikipedia.org/wiki/Altamont_Pass_Wind_Farm

Considered largely obsolete, these numerous small turbines are being gradually replaced with much larger and more cost-effective units. The larger units turn more slowly and, being elevated higher, are claimed to be less hazardous to the local wildlife. This claim is supported by a report done for the Bonneville Power Administration.[5]

Tehachapi Pass: http://en.wikipedia.org/wiki/Tehachapi_Pass_Wind_Farm


Wind development in the Tehachapi Pass began in the early 1980s. The area hosts a multitude of wind farms, comprising one of California's largest wind resource areas. The pass is undergoing much repowering activity. The area has multiple generations of wind turbine technology installed, including both single and double blade turbines, as well as the more modern three blade horizontal axis design. The older generation turbines generate kilowatts, and the modern turbines installed generate up to 3 megawatts, depending on the specific turbine and manufacturer. The Tehachapi wind resource area is a net exporter of generation to other parts of the state of California.

Does upgrading represent a "failed technology?" If their being idle is proof that the idea is a failure, then the proof is a failure.

[FrankRep]

The article notes "14,000 idled wind turbines" at sites like Tehachapi Pass and Altamont and San Gorgonio. It should be noted that the reason they are currently idled is that they are being "repowered" and replaced with newer, bigger turbines.

Altamont:
http://en.wikipedia.org/wiki/Altamont_Pass_Wind_Farm

It should also be noted that the government is giving special tax credits to NextEra Energy and other Wind companies, which gives them an unfair market advantage.



More Wind on Extending the Production Tax Credit (http://www.canadafreepress.com/index.php/article/50102)


Canada Free Press
October 8, 2012


We have already written a history and critique (http://www.instituteforenergyresearch.org/2012/04/24/assessing-the-production-tax-credit/) of the wind energy Production Tax Credit (PTC) which is set to expire at the end of the year. We also recently debunked (http://www.instituteforenergyresearch.org/2012/09/19/nrdc-ptc-flaws/) two pro-PTC studies put out by the NRDC. Yet we have just come across a different analysis [pdf] (http://www.nexteraenergyresources.com/pdf_redesign/wind_ptc.pdf), conducted by wind developer NextEra Energy, that makes a novel argument for the PTC:

This particular study claims it would help the government’s finances to renew the tax credit for unsustainable wind energy. In this post we’ll outline the flaws with this unusual claim.
...



DRIESSEN: Big Wind tax credit exterminates endangered species (http://www.washingtontimes.com/news/2012/dec/22/big-wind-tax-credit-exterminates-endangered-specie/)
Thousands of birds killed by wind turbines


Washington Times
December 22, 2012



The American Wind Energy Association wants its production tax credit (PTC) for wind electricity extended yet again. Congress should say no — and terminate the PTC now.

Wind energy is expensive and unreliable. It does nothing to reduce carbon dioxide emissions. It is land- and raw-materials-intensive, parasitic and redundant. Whenever the wind is low or inconsistent, every megawatt of wind power must be supported by electricity generated by fossil-fuel plants. Even more damning, wind turbines disrupt wildlife habitats and butcher birds and bats that are vital to ecological diversity and agriculture.

[ClydeCoulter]

So, Zippy, did they pay for themselves, the initial cost + maintenance?

Oh, and evolution says that the birds that survive will produce offspring that will go on to live in harmony with the turbines.

[pcosmar]

I thought you lived out in the boonies? What kind of regulation is keeping you from building your own small turbine?

I do. And I can get away with most anything I want to do here.. ( there are still building codes)
But that is one that is restricted. (Folks have tried)

And it can be done,, at about 4X the cost of the hardware and approx 5 years in court fights.

I simply do not have the resources for that.

On the Canadian side of the ditch there are operating Wind Farms. Within sight.
So close,,and yet so far away.


http://www.youtube.com/watch?v=PEEAl9laoUg

http://www.sault-canada.com/en/ouruniqueadvantage/renewableenergy.asp

Wind Energy
Sault Ste. Marie is home to the Prince Wind Farm, one of the largest wind energy farms in Canada. The site's 126 turbines can produce 189 megawatts of renewable energy, enough to power about 60,000 homes or roughly two cities the size of Sault Ste. Marie.

[AGRP]

Wind is a viable and abundant source of power.
There are only 2 possible reasons FOR THEM BEING UNPROFITABLE.

Greed/(Fraud) and poor design.

Wind driven ships traveled and settled the world for thousands of years. Industry and production ran on wind power driving mills and and machine tools.

They would be excellent for private power needs,, but for regulatory interference.

The only problem with wind power is politics.

Good point. A simple add on creates a vortex:


Yuji Ohya, a professor of renewable energy dynamics and applied mechanics, and his team at Kyushu University have impressed a Japanese consortium enough to attract an investment of $1.5 billion in an offshore wind power plant that will employ a new technology known as a “Wind Lens.” As Japan abandons its nuclear power aspirations in favor of sustainable and clean energy, new technologies and innovative designs are making the future for Japan brighter.

http://www.industrytap.com/wp-content/uploads/2013/01/Wind_Lens_Offshore_Setup_featured.jpg



http://www.industrytap.com/wind-lens-fluid-dynamics-concentrated-wind-energy/523

[pcosmar]

It should also be noted that the government is giving special tax credits to NextEra Energy and other Wind companies, which gives them an unfair market advantage.


It should also be noted that Canada,, and England (where the author is located) are both socialist countries.
They don't even pretend to not be socialist unlike the US.

There is your fail.

When you subsidize on one hand and regulate on the other you can expect it to fail.

[libertariantexas]

The article notes "14,000 idled wind turbines" at sites like Tehachapi Pass and Altamont and San Gorgonio. It should be noted that the reason they are currently idled is that they are being "repowered" and replaced with newer, bigger turbines.

Altamont:
http://en.wikipedia.org/wiki/Altamont_Pass_Wind_Farm


Tehachapi Pass: http://en.wikipedia.org/wiki/Tehachapi_Pass_Wind_Farm



Does upgrading represent a "failed technology?" If their being idle is proof that the idea is a failure, then the proof is a failure.

The wind turbines in question are ANCIENT and produce at a mere fraction of what a modern turbine would do.

Given that these areas are supposed to be some of the best areas for wind in the world, it makes sense to take them off line and replace them with more modern and efficient turbines.

How many of you are using Pentium II computers with Windows '95? Probably not many. Yet those old machines probably still run.

Does that mean PC technology has failed?

I'll bet most of you have replaced your CRT Television with an LCD flat screen. Does that mean that TV technology has failed?

Both that ancient Pentium II and that old school CRT television are far newer than the wind turbines being replaced.

You get the point. I hope.

I don't agree with government subsidies, but the technology most certainly has not "failed."

[Koz]

Funny, I don't see many sail powered cargo ships these days. Wind is an old technology that is not as efficient or as cheap as natural gas, coal, nuke. I'm fine with wind, just not with wind subsidies.

[Isaac Bickerstaff]

Now that actual production data is finally being recorded and released (maybe), the older "obsolete" 0.7 Mw wind turbines are showing around a 30% capacity factor whereas the newer 1.5Mw and 2.0 Mw have never consistently produced better than 21%. the reason for all of the reconditioning is to get the federal tax CREDIT--not deduction, credit-- just for planting these damn things even if they never produce a single spark of electricity.

"Regulation" is the biggest racket that the government is a party to. Utilities, and by extension the "independent power providers" (a fancy name for the wind whore hedge fund managers) that take the utilities' money, are guaranteed a positive rate of return on money they spend--usually in the neighborhood of 10%. Regulation has nothing to do with getting in the way of these bozos; it has everything to do with telling the public to sit down and shut up. If "regulation" is getting in the way of any one of these companies, either the company is so incompetent that signing off on them would be embarrassing to the regulators, or the proposed location is so ridiculous that planting wind turbines there would ultimately be a PR disaster for the entire wind whore industry.

[pcosmar]

Funny, I don't see many sail powered cargo ships these days.
Not many ships,, but some.

Wind is an old technology that is not as efficient or as cheap as natural gas, coal, nuke. I'm fine with wind, just not with wind subsidies.


And cheap? Wind is free,, Rigging, or harnessing it is certainly cheaper than the cost of several wars,

I don't mean for it to be a sole source of power,, but as a supplemental source.
And no,, it should not be subsidized. Nor should Oil,, or any other source.

The only Fail here is Government involvement.

[Isaac Bickerstaff]

Wind is about $88/megawatt hour--plus subsidies of about $22/megawatt hour, plus the financial losses of trying to sell the surplus energy when it is produced at low demand times ($70 million just from Minnesota REA in 2011)
Coal is about $44/Mwh and subsidized around $0.44/Mwh and nuclear is subsidized around $1.59/Mwh.
There is nothing cheap about wind power.

Without government involvement, there would be no utility scale wind turbines. Period. Google "John Eckland". The modern era of wind was developed by the largest, most evil propaganda firm the world has ever seen.
Still believe in wind turbines? Blame MK ULTRA.

[fatjohn]

Wind is about $88/megawatt hour--plus subsidies of about $22/megawatt hour, plus the financial losses of trying to sell the surplus energy when it is produced at low demand times ($70 million just from Minnesota REA in 2011)
Coal is about $44/Mwh and subsidized around $0.44/Mwh and nuclear is subsidized around $1.59/Mwh.
There is nothing cheap about wind power.

Without government involvement, there would be no utility scale wind turbines. Period. Google "John Eckland". The modern era of wind was developed by the largest, most evil propaganda firm the world has ever seen.
Still believe in wind turbines? Blame MK ULTRA.

What lifetime for wind turbines do they use for these calculations? Normally 20-25 right? Well that is a significant underestimation my friend. Based on data of the danish wind turbines, the most mature market in the world, one could easily claim a lifetime of 40 years.

[jmdrake]

What's the nature of the regulations you're facing? Zoning laws? Power company monopoly power? I remember years ago NPR covering a story where a family wanted to put up a windmill and provide free electrictiy to their entire town, but the plan got zapped by power company any-compete rules. I don't know what would have happened if they built it for themselves.


I do. And I can get away with most anything I want to do here.. ( there are still building codes)
But that is one that is restricted. (Folks have tried)

And it can be done,, at about 4X the cost of the hardware and approx 5 years in court fights.

I simply do not have the resources for that.

On the Canadian side of the ditch there are operating Wind Farms. Within sight.
So close,,and yet so far away.


http://www.youtube.com/watch?v=PEEAl9laoUg

http://www.sault-canada.com/en/ouruniqueadvantage/renewableenergy.asp

[libertyjam]

Solar panels could destroy U.S. utilities, according to U.S. utilities
http://grist.org/article/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/
By David Roberts

Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground.

That is not wild-eyed hippie talk. It is the assessment of the utilities themselves.

Back in January, the Edison Electric Institute — the (typically stodgy and backward-looking) trade group of U.S. investor-owned utilities — released a report (http://www.eei.org/ourissues/finance/Documents/disruptivechallenges.pdf) [PDF] that, as far as I can tell, went almost entirely without notice in the press. That’s a shame. It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.

I’ve been thinking about how to convey to you, normal people with healthy social lives and no time to ponder the byzantine nature of the power industry, just what a big deal the coming changes are. They are nothing short of revolutionary … but rather difficult to explain without jargon.

So, just a bit of background. You probably know that electricity is provided by utilities. Some utilities both generate electricity at power plants and provide it to customers over power lines. They are “regulated monopolies,” which means they have sole responsibility for providing power in their service areas. Some utilities have gone through deregulation; in that case, power generation is split off into its own business, while the utility’s job is to purchase power on competitive markets and provide it to customers over the grid it manages.

This complexity makes it difficult to generalize about utilities … or to discuss them without putting people to sleep. But the main thing to know is that the utility business model relies on selling power. That’s how they make their money. Here’s how it works: A utility makes a case to a public utility commission (PUC), saying “we will need to satisfy this level of demand from consumers, which means we’ll need to generate (or purchase) this much power, which means we’ll need to charge these rates.” If the PUC finds the case persuasive, it approves the rates and guarantees the utility a reasonable return on its investments in power and grid upkeep.

Thrilling, I know. The thing to remember is that it is in a utility’s financial interest to generate (or buy) and deliver as much power as possible. The higher the demand, the higher the investments, the higher the utility shareholder profits. In short, all things being equal, utilities want to sell more power. (All things are occasionally not equal, but we’ll leave those complications aside for now.)

Now, into this cozy business model enters cheap distributed solar PV, which eats away at it like acid.

First, the power generated by solar panels on residential or commercial roofs is not utility-owned or utility-purchased. From the utility’s point of view, every kilowatt-hour of rooftop solar looks like a kilowatt-hour of reduced demand for the utility’s product. Not something any business enjoys. (This is the same reason utilities are instinctively hostile to energy efficiency and demand response programs, and why they must be compelled by regulations or subsidies to create them. Utilities don’t like reduced demand!)

It’s worse than that, though. Solar power peaks at midday, which means it is strongest close to the point of highest electricity use — “peak load.” Problem is, providing power to meet peak load is where utilities make a huge chunk of their money. Peak power is the most expensive power. So when solar panels provide peak power, they aren’t just reducing demand, they’re reducing demand for the utilities’ most valuable product.

But wait. Renewables are limited by the fact they are intermittent, right? “The sun doesn’t always shine,” etc. Customers will still have to rely on grid power for the most part. Right?

This is a widely held article of faith, but EEI (of all places!) puts it to rest. (In this and all quotes that follow, “DER” means distributed energy resources, which for the most part means solar PV.)


Due to the variable nature of renewable DER, there is a perception that customers will always need to remain on the grid. While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent. To put this into perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically “cut the cord?” [Emphasis mine.]

Indeed! Just the other day, Duke Energy CEO Jim Rogers said, “If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.” What happens if a whole bunch of customers start generating their own power and using the grid merely as backup? The EEI report warns of “irreparable damages to revenues and growth prospects” of utilities.

Utility investors are accustomed to large, long-term, reliable investments with a 30-year cost recovery — fossil fuel plants, basically. The cost of those investments, along with investments in grid maintenance and reliability, are spread by utilities across all ratepayers in a service area. What happens if a bunch of those ratepayers start reducing their demand or opting out of the grid entirely? Well, the same investments must now be spread over a smaller group of ratepayers. In other words: higher rates for those who haven’t switched to solar.

That’s how it starts. These two paragraphs from the EEI report are a remarkable description of the path to obsolescence faced by the industry:


The financial implications of these threats are fairly evident. Start with the increased cost of supporting a network capable of managing and integrating distributed generation sources. Next, under most rate structures, add the decline in revenues attributed to revenues lost from sales foregone. These forces lead to increased revenues required from remaining customers … and sought through rate increases. The result of higher electricity prices and competitive threats will encourage a higher rate of DER additions, or will promote greater use of efficiency or demand-side solutions.

Increased uncertainty and risk will not be welcomed by investors, who will seek a higher return on investment and force defensive-minded investors to reduce exposure to the sector. These competitive and financial risks would likely erode credit quality. The decline in credit quality will lead to a higher cost of capital, putting further pressure on customer rates. Ultimately, capital availability will be reduced, and this will affect future investment plans. The cycle of decline has been previously witnessed in technology-disrupted sectors (such as telecommunications) and other deregulated industries (airlines).

Did you follow that? As ratepayers opt for solar panels (and other distributed energy resources like micro-turbines, batteries, smart appliances, etc.), it raises costs on other ratepayers and hurts the utility’s credit rating. As rates rise on other ratepayers, the attractiveness of solar increases, so more opt for it. Thus costs on remaining ratepayers are even further increased, the utility’s credit even further damaged. It’s a vicious, self-reinforcing cycle:

[pcosmar]

What's the nature of the regulations you're facing? Zoning laws? Power company monopoly power?

I am 'zoned" for anything. Commercial,Residential, Industrial, Agriculture.
Though every little functionary wants to exert power. Code Enforcement is the Sticking Point,, though for the life of me I can not understand why.
And the Power company is a Co-Op,, Though they seem to be talking out both sides of their face.

You would think,, With ALL the residents in favor, they would be supporting and investing. but no.

Something else is going on. It really makes no logical sense.

[jbauer]

Funny, I don't see many sail powered cargo ships these days. Wind is an old technology that is not as efficient or as cheap as natural gas, coal, nuke. I'm fine with wind, just not with wind subsidies.

actually they said they were going to put a "sail" on cargo ships. It looked more like a parachute but they were talking about 15% savings. This was published back in 07 when fuel prices had skyrocketed the last time.

[Isaac Bickerstaff]

What lifetime for wind turbines do they use for these calculations? Normally 20-25 right? Well that is a significant underestimation my friend. Based on data of the danish wind turbines, the most mature market in the world, one could easily claim a lifetime of 40 years.

The numbers I quoted are from a power purchase agreement that was accidentally posted on the MN PUC e-dockets without having the "trade secret" numbers blacked out.

There are not enough cranes in the world of the scale able to service wind turbines to keep up with the repair demands of the existing "fleet" of wind turbines.

The effective life of a utility scale wind turbine is estimated at 20-25 years simply to trick investors into handing over money. The real effective life is more like 15 years before needing a complete rebuild. That means that 50% of turbines built will make it to the 15 year mark. Around 25% never make it to 5 years without major repair. There again, it is hard to get accurate numbers because there is nobody checking up on them and lying is so common in the industry.

Also, study the Danish wind industry to learn about how 20% of retail electric sales from wind turbines causes increased pollution, destabilizes the grid, and bankrupts whole economies. The 40 year effective life figure of Danish turbines conveniently ignores the fact that after 40 years, the turbines turning are not the ones that were originally installed--or even the ones that replaced the ones that were originally installed.

[EBounding]

Funny, I don't see many sail powered cargo ships these days. Wind is an old technology that is not as efficient or as cheap as natural gas, coal, nuke. I'm fine with wind, just not with wind subsidies.

What's funny is they have to use giant coal powered boats to ship the wind turbine parts.

http://www.mlive.com/news/muskegon/index.ssf/2012/10/ss_badger_extends_sailing_seas.html



http://media.mlive.com/chronicle/news_impact/photo/11469866-large.jpg

LUDINGTON, MI – Thanks to a need to transport wind turbine parts between Michigan and Wisconsin, the S.S. Badger will extend its season to Nov. 2 and that will provide a discount for late-season passengers.

The Lake Michigan Carferry was to have ended its 2012 sailing season Oct. 14 but the one-trip-a-day schedule between Ludington and Manitowoc will continue through Nov. 2. An agreement with General Electric will have the Badger carrying an additional 60 wind turbine tower sections yet this year, ferry officials said.

“The extension of our sailing season is a great benefit for our customers, our employees and our port cities,” Lake Michigan Carferry Vice President of Shore Operations Pat McCarthy said.

The Badger already has transported more than 300 over-sized wind turbine part loads this year. Overall, the Badger has carried more than 1,000 commercial vehicles this season, reducing more than 80 million pounds of truck traffic on the highways through Chicago, company officials said.

Ferry owners make the case that this is just one more reason the U.S. Environmental Protection agency needs to provide a new discharge permit for the coal-powered ferry’s coal ash discharge. An all-critical permit application is before EPA officials in Chicago, who must provide the Badger with permission to continue discharging coal ash into Lake Michigan or the ferry likely will not operate in 2013.

The Badger provides a large economic development boost to both Ludington and Manitowoc and officials in both port communities have been fighting for a resolution of the coal ash dumping issue that will allow the Badger to continue to operate.

“The extension of the Badger’s sailing season shows the important role that the Badger plays as a short cut across Lake Michigan,” Ludington Mayor John Henderson said. “The movement of wind towers between Wisconsin and Michigan is a great example of how important the Badger is to our industrial economy as well as our tourism industry.”

Some of the wind turbine parts come from Tower Tech, a Wisconsin manufacturing company, according to Manitowoc Mayor Justin Nickels.

For passengers, information on the special 40 percent discount from Oct. 15-Nov. 2 and reservations can be made through the ferry company by calling (800) 841-4243. Through Nov. 2, the Badger departs Ludington at 9 a.m. and arrives in Wisconsin at noon local time, leaving Manitowoc at 2 p.m. Wisconsin time and arriving back in Ludington at 7 p.m.

Meanwhile, critics of the Badger’s historic coal ash dumping practice in Lake Michigan continue to put the pressure on the EPA to stop the practice after this sailing season. Lake Michigan Carferry owners have said they cannot find an alternative to the lake discharges for 2013 but are seeking options for the future.

The Milwaukee Journal-Sentinel in an editorial late last month called for an end of the coal ash discharges into Lake Michigan, arguing that the Ludington-based ferry company has “had enough time” to come up with a solution. The newspaper is concerned that the coal ash is adding toxic chemicals to the lake, while the ferry company’s discharge permit application argues that the coal ash discharges meet federal environmental standards.