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The Cost of Wind Energy, Part I

Charles Barton's picture
Nuclear Green

I am a retired counselor. My father was a nuclear scientist and I have had a life long interest in and fascination with his work.

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I have said on numerous occasions that the inspiration for “Nuclear Green” came from David Roberts on Grist. Roberts maintained that the cost of nuclear energy was significantly higher than the cost of renewable energy. I decided to test Roberts’ claim by investigating the cost of wind energy. I wanted to find a means of estimating the cost of a one million mega watt (Mgw) wind generator and compare that to the cost of one million Mgw of nuclear generation capacity. In fact, units of one billion watts are probably easier to calculate and determine than the one million unit, but the one million watt unit can be determined by dividing the one billion watt unit by one thousand.

I found it difficult to locate sources that would give me any idea of the future cost of wind generating facilities, but I did find press releases that dealt with newly announced projects; thus I could base my cost estimates on wind projects that were launched in 2008. I found press releases about new wind projects included information on the nameplate electrical output of the project and the cost of constructing the wind generators and the auxiliary facility equipment. These costs ran from $2,250.00 to $2,500.00 per one million Mgw nameplate capacity. Nameplate capacity refers to the maximum possible electrical output that could come from a single wind generator.

As I was discover, nameplate capacity was a somewhat deceptive measure of a wind units electrical output.  No wind generator produced one hundred percent of its’ nameplate rated capacity over a one year period of time. A nuclear power plant produces about ninety percent of its’ nameplate rated capacity over a year’s period of time. Wind generators more typically produce thirty percent or less of their nameplate capacity.

Wind generation output varies according to the time of the day and the seasons of the year. Thus, for example, wind generation during August in Tennessee will typically produce less than ten percent of rated capacity. Coastal breezes may be stronger during the day time, thus wind will generate more electricity during the day in coastal areas. Inland breezes may be stronger at night and thus more wind generated electricity is produced at night.  Summer breezes generate less electricity while at the same time summer demand for electricity increases. This makes inland wind a poor match to summer electrical demands. Winds may drop during cold snaps when heating related demands for electricity increase. Thus installing wind generators that include the same nameplate generating capacity as nuclear power plants does not mean that the equivalent amount of electricity will be available from the wind generators when customers want it.

Wind generated electricity is in many instances poorly matched to consumer demands for electricity and these consumer demands may be inflexible. For example, the summer demand for air conditioning in Texas and in many other parts of the United States is inflexible. The demand for air conditioning is not simply a luxury, but a matter of public health. The same is true of winter heating. Thus, the electrical industry must deliver electrical energy to consumers when they need it. To fail to do so, would in many cases lead to problems in public health.

My studies of the cost of new wind power led me to conclude that the cost would be subject to considerable inflation. I noted that the cost of new wind generating capacity in 2008 was over twice its cost a decade ago. In 2009 there were further rises in the estimated cost of new wind construction. The most significant source of this dramatic inflation appeared to have been wind subsidies. The cost of new wind generating facilities was the lowest when there were no wind subsidies from the government. When subsidies kicked in, inflation of the cost for new wind generation facilities also kicked in. This appeared to contradict the argument for subsidies which stated the price of new wind generation facilities will drop as more facilities are built. Subsidies encourage the building of more new facilities. Advocates argue that increasing the number of facilities decreases the cost of further new facilities. Thus the subsidies of new facilities are justified as a means of decreasing the cost of new wind generation facilities. Powerful arguments emerged during the last decade that subsidies did not lead to lower wind facility cost. Quite the contrary, subsidies lead to increased costs.

When I reviewed plans for post carbon renewable energy without nuclear resources, I found that the estimated price of wind generation facilities ten and twenty years into the future were not much higher or even lower than current wind generation costs. At the very least the evidence for inflation was such that planners needed to take it into account in offering possible future scenarios. Yet future renewable energy plans consistently ignored the possibility of inflation in the price of new wind generators. Furthermore, this problem seems to have escaped the entire pro-renewable community. David Roberts, for example, expressed concern for inflation in the cost of nuclear power plants without recognizing that inflation could also take place in the cost of wind generators, but the evidence was not hard to come by. We have to wonder if people like Roberts simply don’t think the questions through or whether they are aware of the problems, but for unknown reasons, avoid mentioning them.

Were this the whole story and wind generators produced equivalent amounts of energy to those produced by nuclear power plants, wind would still hold a significant advantage. This is not the case, however. In my next post, I will consider the crippling disadvantages of wind and how wind can never successfully compete with nuclear power.

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I K's picture
I K on May 13, 2013

What I am about to type I don’t do to cause offence so don’t take it that way but hope it will be of use.

1: pick the most appropriate unit and stick to it don’t jump units
2: keep it as short as possible while getting your message across.

In this article you should have probably picked 10,000TWh annually rather than 1TW and certainly not potentially confused readers jumping to KWs or MWs.  Also looking back and doing your calculations is probably a bad idea. You need to project forward. This will give you a range of possible figures so when anyone suggests the price of x will be y they are full of it. Any reasonable projection has a range. The price of x will be y plus or minus z.

I K's picture
I K on May 13, 2013

Regarding nuclear VS wind what we know for certain is that a generation ago a country built in a single decade 0.8 reactors per million population and it did not go bankrupt or fall into abject poverty but it is the fifth richest in the world. That nation was France.

Likewise a generation ago another nation built 0.45 reactors per million population and did not go bankrupt and is currently the richest nation on earth. That nation is the USA.  So what we know for certain is that if nations want to build lots of nuclear it is possible and it is affordable.

If china matched what France was able to do a generation ago china would have 1080 reactors which would exceed your aim of producing 10,000TWh annually. So one nation alone could achieve that aim. 

Other factors to consider. Nuclear can generate upwards of 80% of a national grids needs while the best achieved by wind to date is 28% in Denmark.

Offshore wind offers better potential with lower storage problems due to higher capacity factors but the industry is far too young to determine the costs or pros and cons.

As it stands if you want to generate a large portion of your needs nuclear is an option wind is not. That may change if a global grid (or many nation grids) are built but that is unlikely

Bill Woods's picture
Bill Woods on May 14, 2013

“… the best achieved by wind to date is 28% in Denmark.”

And I wouldn’t make too much of such national figures. Denmark isn’t an island.  Last year, Denmark generated 10.3 TW-h from wind. It also imported 15.9 TW-h (mostly from Sweden) and exported 10.7 TW-h (mostly to Germany). So Danish wind was really a smaller fraction of the larger, regional electricity supply for northern Europe.

Neil Fairhead's picture
Neil Fairhead on May 15, 2013

I am curious in that you say “My studies of the cost of new wind power led me to conclude that the cost would be subject to considerable inflation.” and yet the US Deprtment of Energy states “The
cost of energy from wind power, in areas with good wind resources, has decreased from over $0.55/kWh in 1980 (current dollars) to under $0.06/kWh today.”

See www1.eere.energy.gov/wind/pdfs/wind_accomplishments.pdf‎ published September 2012.

On what data do you base your conclusion which certainly seems counterintuitive as the fuel is free and there is no uncovered cost as there is with the long term management of high level nuclear waste?

Ssain Qurai's picture
Ssain Qurai on May 15, 2013

Looking forward to part 2!

Nathan Wilson's picture
Nathan Wilson on May 15, 2013

Berkeley Labs is a good source of info on wind power costs, LBL Renewable Energy

such as this report: Wind Power in an Era of Low Natural Gas Prices

Gary Tulie's picture
Gary Tulie on May 17, 2013

This is a lazy piece of writing and quite inaccurate in some of its facts. 

For a start, the author takes costs from 2008 and discusses them as though these costs are current – referring to the risk of further inflation in wind generator prices. 

In fact, the exact opposite has happened, with levelised cost of electricity having dropped around 20% between 2009 and 2012 with further drops in 2013. This drop arises from a combination of reduced capital costs and increased capacity factors due to increases in efficiency and swept area per MW. It is inexcusable to base a 2013 article on wind power costs on 2008 data!

As for changes in capital costs, a lot of this change is down to commodity prices – oil, steel, concrete, fibreglass and resin with a more recent contribution to cost reductions from the rise of China as a major wind turbine builder. 

Charles Barton's picture
Charles Barton on May 18, 2013

Neil, First, my data is based on the evolution of the cost of wind facilities over the last fifteen years. There has been an inflation of the cost of new wind facilities over that period of time. Your claimed cost for wind generated electricity does not correspond to the cost of generating base load or peak load electricity with wind. Wind lacks the reliability to produce base load electricity and wind cannot produce electricity on demand. Producing electricity on demand will be far more expensive than your estimate allows. The data over the last thirty-five years suggests that the construction of new wind facilities is largely dependent on government subsidies. Without government subsidies, few wind generators would be built.

Charles Barton's picture
Charles Barton on May 18, 2013

I K, Thank you for your editing points. My purpose in writing this post was to increase the accessibility to the general public of the discussion of the problems of wind. I have written more technical discussions in the past, but can no longer do so due to diminished eyesight capacity. My wife types from my dictation. 

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