News Reports Throw Caution to the Wind

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Many news reports about a new Department of Energy report echo the Boston Globe.

Wind power will be cheaper than electricity generated by natural gas within a decade, even without a federal tax incentive, according to a US Energy Department analysis.

Increasing wind energy to 35 percent of US electricity supplies by 2050 will cause national power prices to decline 2.2 percent and result in $400 billion in benefits related to reduced emissions of greenhouse gases. Wind energy provided 4.5 percent of US power supplies in 2013.

The report itself says,

The Study Scenario is a plausible outcome, representing what could come about through a variety of pathways, including aggressive wind cost reductions, high fossil fuel costs, federal or state policy support, high demand growth, or different combinations of these factors.

(emphasis in the original). If I am understanding this correctly, the authors took this 35 percent goal and conjured a scenario in which it might occur. Maybe we will have the “aggressive wind cost reductions, high fossil fuel costs” and so on, or maybe we will not.

I would add that I really object to a study that says that wind power will soon be cheap and ubiquitous. . .and that is why we need to make a long-term commitment to subsidize it. If wind power really does amount to 35 percent of total electricity generation, those subsidies will amount to real money. Moreover, if you really are confident that wind power is economical, then you would not be arguing for subsidies out into the indefinite future.

15 thoughts on “News Reports Throw Caution to the Wind”

  2. I’m a bit confused about where you’re getting “…and that’s why we need to make a long-term commitment to subsidize it” from. Looking through the report, increasing or maintaining subsidies wasn’t a major action item. The Boston Globe article even says:
    “Cost reductions and technology improvements will reduce the price of wind power to below that of fossil-fuel generation, even after a $23 per megawatt-hour subsidy provided now to wind farm owners ends, according to a report released Thursday.”

    All I can guess is that you got it from the “policy support” mentioned in the report, as one of four possible drivers of lower costs. There are plenty of policy support options other than direct subsidies, such as more favorable zoning or regulation.

  3. Reminds me of the theme:

    ObamaCare will bring low-cost and high-quality healthcare to everyone, if aggressive cost-cutting and health care expansion are achieved. Some of the details remain to be identified in detail, in the future.

    • Btw, isn’t it true that if new tech will cause wind power to cheapen then the subsidies for old tech should have ended a long time ago or never been? Why did we subsidize a short lived lock-in of a sub par….windmill? A windmill!

  5. Here, in haec verba, from the “study” is the major determinant:

    “Wind’s growth over the decade leading to 2014 has been driven largely by wind technology cost reductions and federal and state policy support.

    **Without actions to support wind’s competitive position in the market going forward,**

    the nation risks losing its existing wind manufacturing infrastructure and much of the public benefit illustrated by the Wind Vision analysis.” [breaks supplied for emphasis]

    Of course, it is NOT an “analysis.” It is a “scenario” full of sounds and fuzzy, signifying pretentions.

  6. What the report is saying is that if the costs of developing better wind power technology and of building the wind power infrastructure are paid by someone else, then it is feasible that at such a time in the future wind power will produce electricity at a lower cost than fossil fuels.

    (1) Who is footing the bill for the development? Someone has to do this. Who?

    (2) We could use this same argument to justify about any expense. Hey, if the cost of building a house is ignored then the cost of living in a house is cheap! Ergo, everyone should live in a house, paid for by someone else.

    One can dream up some amazing things when one only has to imagine someone else paying for those dreams.

  7. Yes, the report is total BS, and as Andrew has pointed out, is a political operation by some crony capitalists.

  9. Question: can alternative sources ever replace enough fossil fuel consumption to find the tipping point that would make them more economical in the larger sense? What I mean is, we can put solar panels on homes and commercial buildings, and cover the land with wind turbines that send energy to power plants for redistribution to homes and e-hookups for cars. But we use petroleum products for more than heating our homes and driving our cars.
    For example, with transportation you have to think beyond passenger vehicles. There are multitudes of over-the-road diesel trucks on the roads, as well as ocean shipping, aircraft, trains, and whatever else uses fossil fuels to run. No alternative discovered so far duplicates the energy output of fossil fuel for commercial shipping and transportation. Biofuel, I think, comes the closest.
    (Again, by way of example: the U.S. Navy has the “Green Fleet,” ships and aircraft powered with biofuel, but it’s at least 4x as expensive as the normal fuel. Which impacts the defense budget. …which has other ramifications.)
    While gasoline, diesel fuel, etc., make up ~3/4 of the petroleum-derived products line, petroleum products also include asphalt and road oil, and the feedstocks used to make chemicals, plastics, and synthetic materials found in nearly everything we use today.
    Wind turbines just ain’t gonna do it for us. And a carbon tax will raise the cost of just about everything we use in our daily lives.

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