European utilities: How to lose half a trillion euros | The Economist

A fascinating story about the combined effects of government policy and renewable electricity technology in Europe. Good intentions and massive subsidies have produced very high electricity consumer prices and decimated the finances of the electric utilities. The future seems even more uncertain as the consequences of these policies are destroying wealth with no demonstrable environmental benefit.

Are the same consequences in store for America?

European utilities: How to lose half a trillion euros | The Economist: "Those goals are now harder to achieve. Renewable energy has grabbed a growing share of the market, pushed wholesale prices down and succeeded in its goal of driving down the price of new technologies. But the subsidy cost also has been large, the environmental gains non-existent so far and the damage done to today’s utilities much greater than expected. Europe in general and Germany in particular see themselves as pioneers of low-carbon energy. If they are genuinely to be so, they will need to design a much better electricity system that rewards low-carbon energy without reducing reliability and imposing undue and unnecessary costs."

'via Blog this'

Google, Itochu, Sumitomo buy into massive Oregon wind farm - SmartPlanet

Here's a serious industrial scale wind farm that makes sense compared to GMP's Lowell Mountain 'piddle power' (65 megawatts) project. This Oregon installation has a capacity [source Google: Shepherds Flat is currently under construction near windy Arlington, Ore., and when completed in 2012 will produce 845 MW of energy. That’s a lot of wind—enough to power more than 235,000 homes] greater than the Vermont Yankee nuclear plant, when the wind blows, of course.

"The Shepherds Flat construction will occur in three phases. So far, turbine foundations are complete and electrical and road work is almost finished on the first phase, which provides 265 megawatts. The second phase, which covers 290 megawatts, is halfway finished on turbine foundation construction and road work. Construction is also underway on the third 290 megawatt phase. The project, which employs 400, includes erecting 338 turbines, developing 95 miles of roads and 167 miles of transmission lines."

Coakley backs Cape Wind-National Grid contract - The Boston Globe

Coakley backs Cape Wind-National Grid contract - The Boston Globe:

The Massachusetts Attorney General recommends the wholesale pricing to National Grid for new electricity from the 130 turbine Cape Wind installation which is expected to be built and operating by 2013. This is a significant wind energy project that has been bitterly opposed by several parties including Ted Kennedy when we was a Senator as well as Associated Industries of Massachusetts and various Indian tribes.

The scale of the project makes sense, but the pricing Coakley recommends at 18.7 cents per kilowatt-hour in 2013 increasing 3.5% annually will produce a wholesale price in 10 years (2023) of 26.38 cents per kilowatt-hour, a hefty 41% net increase.

By any accounting, that's costly electricity considering that I pay 13.84 cents per kilowatt-hour retail with Green Mountain Power.

Offshore industrial scale wind energy is very expensive, assuming this project represents a realistic price for the project to be profitable including the government subsidies. This project will demonstrate the operating feasibility and costs of off-shore wind power for the first time in the United States.

The Globe story portrays this deal as producing only a modest price increase for National Grid retail customers, but fails to include the 10 year price reality. Will the costs of electricity from all industrial scale sources rise by this amount? It seems that's only likely with implementation of a carbon tax in some form which would provide a substantial restraint on national economic growth.

In any event, a couple of decades of experience in northern Europe/Scandanavia has shown that electricity from wind accounts for only 9% of total electric production and that result is only possible by large investments in the grid and inter-country load balancing. Overall electricity costs are three times higher in Denmark, for example, than in France which opted for a nuclear generating capacity which produces the lowest cost electricity in Europe.


Americans should be skeptical of green energy advocates' claims that wind (and solar) is all a wonderful deal for the country given the experience of other countries.

"Late last month, Coakley got National Grid and Cape Wind to reduce the base price by 2 cents a kilowatt-hour, to 18.7 cents, with it rising 3.5 percent annually over the life of the contract. The altered deal, which Coakley described as “in the public interest,’’ still needs to be approved by the Department of Public Utilities.

Under the revised contract, National Grid electricity customers who use an average of 600 kilowatt hours of power a month would pay just under $1.50 more on their electric bills in 2013, when the contract begins, according to estimates provided by the utility. That’s about 40 cents less than what the original contract would have cost."

Wind Power Graphic

More than you probably ever wanter to know...facts about wind power, but in one graphic.

One important fact to keep in mind: The NAMEPLATE rating is not the output that can be expected from a wind turbine. The NAMEPLATE rating must be multiplied by a capacity factor (typically 20% - 35% for wind turbines/farms) to account for the time that the wind is too weak or too strong to generate electricity or when the turbine is out of service for maintenance. So, the output over time of a wind turbine with a NAMEPLATE capacity of 4 megawatts is likely to be 0.8 to 1.4 megawatts.

We would be better served if the popular media were clear about this when they report the true capacity of a wind farm. Instead, they resort to statements such as 'the wind farm will generate enough electricity to power 5,000 homes.' We are left wondering if they used NAMEPLATE rating or the far more realistic NAMEPLATE x capacity factor in their reporting. The difference is huge.

Nantucket Sound Wind Farm Delayed by Sunshine Claim

If wind farms are the cat's meow advocated by renewable, green energy zealots, Cape Wind now must take on the Wampanoag Tribe in Mashpee and Martha's Vineyard. This is hilarious if it weren't so foolish. I wish we knew the millions upon millions spent on the unending road to obtain a permit by the developers who began this project in 2001.

The opposition, BTW, includes the Kennedys and others with tons of money whose ocean view would be interrupted. Such a desecration! Green energy, the salvation of the planet, confronts the sacred 'viewsheds ' of the rich and powerful! A book has already been written about the struggle.

The Boston Globe opines.

"The ploy seems intended to drag out the approval process long enough for some other tactic to emerge. But the opponents will have to work hard to find a mechanism for delay as laugh-out-loud bogus as this one."

Hollywood should make a movie. Perhaps the liberal darling documentary filmmaker, Michael Moore, could do it pitting the green energy capitalist rascals against a besieged Kennedy clan and the Wampanoag tribe who valiantly fight against a project destined to reduce global warming by 0.000000000186 degree Celsius by 2050.

The long, long process to obtain permits to build this 130 turbine installation using 400 foot towers and a complex system of underwater cables has suffered every conceivable ploy by opponents to the project. Without huge subsidies for wind power, the developers would have long ago abandoned their plans.

Perhaps another nuclear plant in Plymouth or at a new site in Provincetown would be a far better solution than enduring this Wampanoag and Kennedy nonsense. Yet the power of the sun may yet overcome that of the wind...such a primal struggle, so exciting!!

"From a blustery perch over a Cape Cod beach, Chuckie Green gestures toward a stretch of horizon where he says construction of the nation's first offshore wind farm would destroy his Indian tribe's religion.

The Wampanoag — the tribe that welcomed the Pilgrims in the 17th century and known as "The People of the First Light" — practice sacred rituals requiring an unblocked view of the sunrise. That view won't exist once 130 turbines, each over 400 feet tall, are built several miles from shore in Nantucket Sound, visible to Wampanoag in Mashpee and on Martha's Vineyard.

Tribal rituals, including dancing and chanting, take place at secret sacred sites around the sound at various times, such as the summer and winter solstices and when an elder passes..."

The Problem of Scale

Because the story may not be viewable after a while due to the WSJ policy of limited time for reading without a subscription.

Mr. Bryce, the author, is the managing editor of Energy Tribune. His latest book is "Gusher of Lies: The Dangerous Delusions of 'Energy Independence'"(Public Affairs, 2008).

He clearly points out the difficulty with the whole notion of 'energy independence' showing the tiny contribution of wind and solar to the energy requirements of our country. To grow that proportion will take an enormous amount of time and funding.

In the story, unfortunately, Bryce bounces between total energy and electricity with his data. This may create some confusion, but his facts seem correct in each domain.

"...the key problem facing Mr. Obama, and anyone else advocating a rapid transition away from the hydrocarbons that have dominated the world's energy mix since the dawn of the Industrial Age, is the same issue that dogs every alternative energy idea: scale.

Let's start by deciphering exactly what Mr. Obama includes in his definition of "renewable" energy. If he's including hydropower, which now provides about 2.4% of America's total primary energy needs, then the president clearly has no concept of what he is promising. Hydro now provides more than 16 times as much energy as wind and solar power combined. Yet more dams are being dismantled than built. Since 1999, more than 200 dams in the U.S. have been removed.

If Mr. Obama is only counting wind power and solar power as renewables, then his promise is clearly doable. But the unfortunate truth is that even if he matches Mr. Bush's effort by doubling wind and solar output by 2012, the contribution of those two sources to America's overall energy needs will still be almost inconsequential.

Here's why. The latest data from the U.S. Energy Information Administration show that total solar and wind output for 2008 will likely be about 45,493,000 megawatt-hours. That sounds significant until you consider this number: 4,118,198,000 megawatt-hours. That's the total amount of electricity generated during the rolling 12-month period that ended last November. Solar and wind, in other words, produce about 1.1% of America's total electricity consumption..."

Energy tech innovation threatened by economy | Green Tech - CNET News

Energy tech innovation threatened by economy | Green Tech - CNET News

An interesting report. Two things stand out for me:

1./ What will be the price of electricity for consumers in year 5 and year 10 if the U.S. embraces cap and trade and the development of alternative/renewable sources under President Obama's proposals. This should be estimable. Does anyone have a source for this information? Is anyone in the media asking?

2./ What will be the price without cap and trade, i.e., letting development of alternative energy sources take its natural/normal course of growth, along with the unhindered price of coal and natural gas with whatever subsidies and spending the government decides to enable for alternatives.

The alternative energy establishment is powerful and growing, but is saying they are stymied because we are in a recession. If the price of fossil fuels and capital determine the pace at which alternatives become a larger part of the mix, then they are really saying that the only way for alternatives to grow is with a dramatic change in public policy and massive government funding and subsidies.

We should keep in mind the following realities as this debate unfolds:

Electricity Sources (U.S. Nov 2008)

Coal 48.4%
Petroleum 1.1%
Natural Gas 21.4%
Hydro 6.4%
Nuclear 19.4%
All other 3.3% (wind, solar, geothermal, biomass, etc.)

It's obvious that the real purpose of cap and trade has little to do with climate change and everything to do with pricing coal out of the market as a source of electricity because nuclear and hydro have essentially no carbon emissions. Natural gas is also relatively clean and petroleum is a de minimus source of electricity.

So, anyone with the answers to my two questions, please step forward. The price of energy will be high. Please tell us how high.

Utility AEP plans backyard energy storage | Green Tech - CNET News

Utility AEP plans backyard energy storage | Green Tech - CNET News

Both grid and neighborhood scale storage technology to cope with the vagaries of wind and solar produced electricity will need to come a long way to be cost effective. Nevertheless, it's encouraging to see companies and researchers devoting resources to new developments in this field.

We hear little about this in the popular media, which may lead people to believe incorrectly that solar and wind are direct replacements for baseload power from nuclear, hydro and coal. Without storage capacity, they will continue to be bit players on the electricity stage.

Let's remember these are real costs to added to the sources of renewable/alternative electricity when they grow beyond today's minuscule contribution they will make to our electricity supply.

Obama's Energy Promises

I receive a newsletter called the The Energy Advocate whose author has little tolerance for most of the claims made for alternative/renewable energy sources and all that Obama and his minions have promised, particularly on the campaign trail. The facts usually prove troubling to politicians.

This is an example of a claim and the facts behind it that I couldn't pass up, so I'll pass it on.

TEA quotes an Obama promise: "...double the amount of energy that comes from renewable sources during my first term."

TEA analysis:

"This may sound may sound like an intention to bring common sense to Washington. But what does it mean? Almost all of our renewable energy - a total of 7% of our energy - comes from biomass and hydropower. Wind and solar together produce only 6% of that 7%, less than 1/2% of what we use.

If Obama's plan is to double the wind and solar, we would still be getting less than 1% of our energy from them, and all at very high cost. If his plan is to double the 7%, how might he accomplish it? Go find some undiscovered big rivers? Send more people out with chainsaws? In any case, the dubious doubling will come by executive fiat, not by market forces."

TEA also quotes Obama and provides his assessment:

The plan "to require that 25% of electricity consumed in the U.S. is derived form clean, sustainable energy sources like solar, wind and geothermal by 2025" is both delusional and coercive. Presently, the U.S. uses 444 GigaWatts of electrical power (averaged around the clock all year). Twenty five percent of that is 111 GigaWatts. Since it takes about 300 square miles (770 sq. km) for wind to produce a year round average of 1 GigaWatt, Obama is talking about 33,000 square miles cluttered up with industrial wind turbines. (We exclude both solar and geothermal from this discussion.) That's about 6 times the land area of Connecticut, or one third the land area of Colorado. Again, inflicting the expense and the blight on the landscape will come by executive fiat.

The 25% plan also assumes that that quantity of stochastically varying [Editor's note: A stochastic process is one whose behavior is non-deterministic in that a system's subsequent state is determined both by the process's predictable actions and by a random element] electricity could actually be integrated into the power grid, even though 10% is enough to make the life of a dispatcher worse than that of an air traffic controller."

Blowhards - WSJ.com

Blowhards - WSJ.com

The Cape Wind Farm controversy reminds me of our situation in Vermont. Hypocrisy is alive and well on Cape Cod and in Vermont when it comes to industrial scale wind development. We just don't like to make trade-offs when it comes to building vital infrastructure.

Would that life would be so simple as to not require hard choices! Perhaps Vermont needs another non-profit; let's call it NIMBYS United Against Tough Choices where ideologues could gather to talk 'green' while doing nothing helpful for our economy. They could use Senator Shumlin' s example of leading the Legislature through a climate change sensitivity session in 2007 while doing nothing for Vermont's economy.

Alternative energy faces power line bottleneck in U.S. West | Reuters

Alternative energy faces power line bottleneck in U.S. West | Reuters

The promises are easy, the delivery is very hard. How about this dilemma ?

"Bureaucratic delays stem from mandates of U.S. land agencies, said Lew Milford of the Clean Energy States Alliance, which represents 20 states' renewable energy funds: "It's one of those tricky good-versus-good problems -- trying to move more renewable energy but in an environmentally friendly way."

Wind Farm Off Cape Cod Clears Hurdle - NYTimes.com

Wind Farm Off Cape Cod Clears Hurdle - NYTimes.com

Ah, yes, the magic and power of wind, that wonderful 'free' source of energy that requires years to obtain several permits, untold $millions in studies, consultants, lawyers, meetings, etc. Then, when/if permits are obtained, the developers can invest many more $millions to actually build the wind farm and sell electricity.

Yet, it's probably not as expensive as permitting a nuclear plant. But a nuke operates 7/24 producing baseload power, something a wind farm can never deliver. Why, oh why, do we insist in tying ourselves up in transaction costs that make energy more expensive than need be. It must be the American way to enrich consultants and lawyers.

Solar Meets Polar as Winter Curbs Clean Energy - NYTimes.com

Solar Meets Polar as Winter Curbs Clean Energy - NYTimes.com

All sources of electricity experience some problems caused by temperature and weather changes, but some less than others. Alternative sources of electricity would seem more prone to the vagaries of storms, winter and other difficult conditions.

What these stories should always include is a reference to the need for reliable baseload power sources always available for the grid. Continual omission by the media creates the false impression for the public that all sources of electricity are equal in terms of supply reliability to the national or regional electric grid. This is certainly not the case and we should be well advised of that.

This lack of reliability, particularly for solar and wind, is not a major issue at present, but will be if alternative sources on the grid reach about 20% from their present contribution of less than one percent.

The Energy Challenge - Energy Goals a Moving Target for States - Series - NYTimes.com

Here's a sensible piece from NY Times about the gap between what politicians and advocates say and do and the situation 'on the ground.'  The hard realities of building electric infrastructure should now be coming clear even to the die-hard wishful thinkers, but some are so imbedded in their ideologies that they are undeterred.

'Renewable' and 'alternative' electric energy are only a miniscule and expensive-to-build part of the mix . It's not that we shouldn't build more renewable sources into the mix, but our goals need to be tempered with a good dose of common sense. Texas and New Mexico seem to get it, but most states don't.

The Democrat candidate for governor of Vermont had proposed an unrealistic wind/alternative energy plan. I parodied it here because Vermont has this love/hate relationship with its environment and the production of needed energy. Moreover, many are beguiled by the idea sponsored by politicians currying votes that we can 'save the planet' by getting 'all' our energy needs differently and quickly.

Many Vermonters would close Entergy's Vermont Yankee nuclear plant tomorrow if they could, but they present no realistic new alternative energy sources to replace the inexpensive 35% of our baseload needs, nor the substantial financial contribution that Vermont Yankee makes to several funds to benefit Vermont's environment, economic development and low income folks to help them pay for energy use.

Al Gore is mostly clueless about energy realities and seems to have been captured as a pawn of the greenies. No matter, most realistic thinkers dismiss his rants.

Note: George Sterzinger, quoted below, was a former head of Vermont's Department of Public Service who has apparently been basking in the light of reality.

"...Yet the experience of states that have adopted similar goals suggests that passing that requirement could be a lot easier than achieving it. The record so far is decidedly mixed: some states appear to be on track to meet energy targets, but others have fallen behind on the aggressive goals they set several years ago.

The state goals have contributed to rapid growth of wind turbines and solar power stations in some areas, notably the West, but that growth has come on a minuscule base. Nationwide, the hard numbers provide a sobering counterpoint to the green-energy enthusiasm sweeping Washington.

Al Gore is running advertisements claiming the nation could switch entirely to renewable power within a decade. But most experts do not see how. Even with the fast growth of recent years, less than 3 percent of the nation’s electricity is coming from renewable sources, excepting dams.

“I think we are really overselling how quick, how easy and how complete the transition can be,” said George Sterzinger, executive director of the Renewable Energy Policy Project, a Washington advocacy group."

...In New England, the trend is to build more plants that run on natural gas and oil, not wind, said Gordon van Welie, chief executive of the entity that operates New England’s power grid.

...Experts said that without far more attention to the practical barriers, including the lack of lines to carry power, those new goals will be as difficult to meet as the old ones.

...A national standard, if the government decided to impose one, would put an even greater premium on new power lines, because more electricity would need to be moved from parts of the country with abundant wind and sunshine to the great cities where power is consumed.

The Energy Challenge - Energy Goals a Moving Target for States - Series - NYTimes.com

Op-Ed Columnist - Bailout (and Buildup) - NYTimes.com

Op-Ed Columnist - Bailout (and Buildup) - NYTimes.com

Thomas is wringing his hands because gasoline prices are falling. Please tell us, Thomas, what you think the 'correct' price should be for the 'green' future you advocate.

I agree that we need to move much, much more of our energy to renewable sources under our control, but that mix MUST include nuclear. You include it in your ideas, but unless you are willing to advocate strongly for that, all the rest, to use a term from an energy newsletter I receive, are merely 'piddle power.'

If an energy source does not pay its own way over the long term, it won't work. Governments cannot be expected to subsidize the energy industry forever. People should pay for energy like any other purchase, not through a tax.

Alternative Energy Suddenly Faces Headwinds - NYTimes.com

Alternative Energy Suddenly Faces Headwinds - NYTimes.com:

Now that the hysteria for renewables has been dampened by the financial crisis, government will face the choice to back off the high-sounding campaign rhetoric by McCain and Obama or attempt to 'mandate' renewable energy development. And if he (the winner) holds to his plan, where will the capital come from? As I posted yesterday, Presidents are not in control of the economy no matter what they or people may think.

A higher % of renewables, now at 7% in the U.S., may be warranted if economic realities justify expansion, but some renewable projects, like corn to ethanol for gasoline, deserve to die.

Here in Vermont, Democrat candidate for Governor Symington proposes 20% of Vermont's electricity from wind within 10 years, presumably from in-state wind turbine farms. For that dream to become reality, I suggest she must take the next step and support Vermont exercising a right of eminent domain to take the land and build the roads that will be needed for such a massive projectin Vermont (200-250 400' turbines). That little piece of reality seems to be missing from her energy proposal. Ah well, her dreams are now confronting reality as capital dries up for massive wind projects, at least temporarily.

While I haven't been watching TV closely, have Mr. T. Boone Pickens' ads for BIG WIND to replace natural gas for electricity also dried up? Perhpas reality affects billionaires, too.

"Wall Street analysts say most utilities and other builders can profitably choose big wind projects over gas-fired plants only when gas prices are $8 per thousand cubic feet or higher. Natural gas settled Monday at about $6.79 per thousand cubic feet, down from about $13.58 on July 3.

“Natural gas at $6 makes wind look like a questionable idea and solar power unfathomably expensive,” said Kevin Book, a senior vice president at FBR Capital Markets.

Government mandates already on the books, including state rules requiring renewable power generation and federal requirements for production of ethanol, ensure that to some degree, alternative energy markets will continue to exist no matter how low oil and gas prices go. But the credit crisis means some companies that would like to build facilities to meet that demand are going to have problems. “If you can’t borrow money, you can’t develop renewables,” Mr. Book said."