Saturday, December 9, 2006

Wind Power: Good News, Bad News

The good news: with current petroleum prices, wind power is currently competitive with other methods of electric generation even without tax subsidies.

The bad news: Congress will almost certainly renew those subsidies next year- despite the fact that wind power companies no longer need them to be competitive.

Here's the Houston Chronicle's article on the subject.

Note the following numbers in the article:

COAL FIRED ELECTRICITY: 4.2 cents per kilowatt-hour
WIND POWER (subsidized): 4.6 cents per kilowatt-hour
WIND POWER (without subsidy): 6.0 cents per kilowatt-hour
NATURAL GAS FIRED ELECTRICITY: 6.8 cents per kilowatt-hour

The article also goes on to note infrastructure costs are fairly high for wind power. Viable wind generation sites are limited to remote areas- deserts, plains, or offshore sites- all of which require long-distance transmission wires to be installed. Furthermore, the high cost of wind turbine construction has caused a bottleneck for expansion of wind generation projects, making them more expensive. These, plus the call to make electric generation affordable for all, are the justifications cited for the tax credit.


If an industry is so successful that it has maxed out its ability to expand... why does that industry need tax dollars to survive?

As for transmission line costs... the same argument should apply to rural electrification projects, including the one I live on. Yes, I indirectly receive a government subsidy- because electric service to my area would never have been profitable without a massive initial government outlay. Even now my electricity comes not from a commercial provider, but from the regional co-op that owns the electric lines. In many, if not most, places the electric wires are run on publicly acquired rights of way, but the wires themselves are privately owned. This has led to monopolies in the past and mind-boggling regulations today.

There's a very simple solution to this. We have government owned roads to rural areas so that people who live and work there can get goods to and from the market- enriching all. We have government operated sea ports and airports for the same reasons. Let's extend this public service to transmission infrastructure- in short, publicly owned electric wires. Charge the electric companies a tax per kilowatt hour for maintenance- say, a nickel per- and let anyone with generation capacity into the market. This simplifies the current absurd regulations that try (and fail in many cases) to make the current private infrastructure open to competition- while opening that competition wider than ever.

The anarchists in the Libertarian Party, of course, would never go for this. In fact, there are some who with a straight face call for all public roadways to be auctioned off to the highest bidder- immediately. I don't know about you, but I'd rather not pay a $5 toll just to leave my driveway... and I don't like the "toll" electric companies charge for the use of their wires. This is a case where monopolies will exist UNLESS government acts... and I'd like to abolish all natural monopolies in such a manner.

But in the meantime, let's stop giving taxpayer money to companies owned by Goldman Sachs, hm? Subsidies are only justifiable as a temporary assistance to growing industries which, without them, could not get started. Wind power has its feet under it now- in fact, it's growing by leaps and bounds. It's time to get Goldman Sachs and other investors in wind power off the Welfare rolls... for a start.

1 comment:

KMacK said...

You're right. Wind Power is a viable source and really doesn't need much help anymore. That money would be better spent next on some sort of effective storage system: that's the key to the whole thing.
We are currently getting into the basement with the Li-mH (Lithium-metal hydride) storage systems now available: we need more investment in storage technology before things like Solar-Direct (Photovoltaics) will be useful enough to bother with.
Contrary to the hype; Fusion Power isn't the Holy Grail of energy systems, It's tremendously inefficient for what you get out of it, unless you're using it to drive a Spacecraft.
Let the Big Fusion Generator (the Sun) give us power: we need to be able to store the stuff in reasonable amounts for commercial and residential customers to use before non-polluting Solar (like wind) power will be an effective replacement for Coal/Gas. Once we can store energy efficiently in large amounts, we can clean up our act, big time.