NCPA - National Center for Policy Analysis

The High Cost of Wind Energy

November 3, 2011

For years, politicians, environmental groups and the renewable energy lobby have been claiming that widespread use of wind energy would result in substantial reductions in carbon-dioxide emissions.  These calls have been supplemented by changes to public policy -- specifically, in 2008, the National Renewable Energy Laboratory, an arm of the U.S. Department of Energy, issued a report that said the United States could produce 20 percent of its electricity from wind by 2030. This "20 by '30" goal, however, is not cost effective and will have a negligible impact on aggregate emissions, says Robert Bryce, a senior fellow at the Manhattan Institute.

  • Last year, electricity generation in the United States totaled 4.1 trillion kilowatt hours, with wind energy constituting 94.6 billion kilowatt hours, or about 2.3 percent of total generation.
  • For wind to expand to supply 20 percent of U.S. electricity consumption, it would require a nine-fold increase in the size of the installed wind generation base, from 40,000 megawatts of capacity to 360,000 megawatts.
  • Total installed electric-generation capacity in the United States (from all sources) is about 1 million megawatts.

Following these figures as they are today, it becomes clear that in order to meet this lofty objective, substantial changes would be required.  This is especially true given the high costs of installment, land allotment required and increases in residential electricity rates.

  • Installing an additional 320,000 megawatts of wind power at $2.43 million per megawatt will cost the United States about $777.6 billion or about $44.7 billion every year for the next 19 years, amounting to a carbon tax of $54 per ton.
  • Following the estimate of 0.2 square miles per installed megawatt of wind capacity, 360,000 megawatts of capacity would require about 72,000 square miles of land to be occupied with wind turbines -- a land area just larger than North Dakota at 69,000 square miles.
  • A carbon levy of $54-per-ton could increase electricity rates in coal-reliant regions by about $0.058 per kilowatt-hour, which represents a 48 percent increase over current levels.

While these costs are substantial, perhaps the most compelling figure in the production of wind energy is that, even if the "20 by '30" goal is achieved, it would represent only a 2 percent decrease in global emissions.  This should give lawmakers cause for pause as they weigh the enormous costs against these miniscule benefits.

Source: Robert Bryce, "The High Cost of Wind Energy as a Carbon-Dioxide Reduction Method," Manhattan Institute, October 2011.

For text:

http://www.manhattan-institute.org/html/ib_11.htm

 

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