The Failure of Wind Power

December 11, 2012

Some politicians, like Massachusetts Governor Deval Patrick, are very ambitious about the role of alternative energy in electricity generation. His goal for the state is to produce 2,000 megawatts of power from alternative energy sources by 2020, says Kevin D. Williamson of the National Review.

Patrick expects wind power to be a major alternative source.  However, as the general manager of the local utility authority in Princeton, Mass., describes, many wind-energy projects are failures.

  • Princeton Municipal Light Department's wind-energy project has lost nearly $2 million.
  • Customers of this utility company pay more in their electricity bill than the average customer -- totaling nearly $744,000 in 2011.
  • Moreover, the general manager projects the project to lose $600,000 a year.

The projected yearly losses don't assume changes in wholesale electricity rates or repair costs, which can be extravagant.

  • Original warranties on turbines have expired and extended warranty options are not available.
  • This is problematic considering that the cost of replacing a gearbox, for instance, is estimated at $600,000.
  • About $40 billion worth of wind turbines will go out of warranty by the end of 2012.

Additionally, wind turbines are out of commission more than 20 percent of the time -- only 0.5 percent of that time accounts for regularly scheduled maintenance. This makes it difficult for companies to produce cheap energy to consumers.

On top of the costs of utility losses and the price of subsidies, companies forgo investments in more economically viable projects. Rather than have the government provide incentives for certain ventures, market forces can direct companies and public officials to make sound investments. For example, agricultural and industrial users have more to gain from wind-energy projects than municipal utilities.

In some cases, wind energy has proven an economical investment. Valero installed a massive wind farm at its refinery in Texas that generates enough electricity for the entire complex. Furthermore, equipment used to run Marcellus Shale gas runs off solar power. In both cases, the firms were willing to invest in the alternative energy because it was economical, not because the government provided incentives.

Source: Kevin D. Williamson, "Deval-used Wind Power," National Review Online, December 3, 2012.

 

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