Wind power & the ‘Greenfellas’ connection

The wind industry must stand on its own feet in the free marketplace or, in the parlance of a ‘Greenfellas’ movie, be blown away in the attempt

Dark days ahead for the wind power industry
Peter C. Glover
On 1 February 2013 11:31

We always knew that wind power came with a heavy ‘social levy’. That social levy was the accepted high price that would ‘underpin’ the true initial cost of wind power until the industry ‘matured’. We would suffer its unreliability, its intermittence, its aesthetic impact on the landscape, the “shockingly high” number of bird deaths, and the noise and strobe effects that torment the lives of residents.

“Trust us”, the wind industry intoned, “the enormous public investment is just seed-funding. It will be well worth it as costs fall in the cause of saving Mother Gaia”.

Energy insiders never bought it. The Victorians replaced windmills with steam driven machinery because they weren’t cost efficient enough. But it’s easy to understand why Joe Average and populist politicos bought it. After all, aren’t most of us suckers for fictional romantic notions of wafting windmills able to harness the wind and create ‘free energy’?

Except that’s not how it worked out in the real world.

First we were jolted back to reality by uncovering a burgeoning raft of hidden costs – costs specifically obfuscated by wind company claims. The cost, for instance, incurred by having to turn off turbines when the wind reaches over 30 mph; by the failure of turbines to operate above 30 percent capacity; the massive additional cost of having to upgrade power grids to cope with wind’s irregular load factor; not to mention the necessity of investing in gas-turbine back-ups to cover when wind turbines fail. The list goes on.

Decades on, not only does the initial social levy remain the lifeblood of the wind industry, but the latest evidence reveals that the true cost of wind power was vastly under-estimated from the start. More than that, the wind industry’s use of data to support its claims looks downright corrupt. Such is the attraction of enormous windfall profits available from the public purse it was only a question of time before organised crime took an interest.

In January, one of the most extensive feasibility studies into wind power in Germany and the United States was published. It revealed that the claims for energy generated from wind turbines – which have always been low compared to hydrocarbon generation – have been over-estimated. In short, we get even less energy from windfarms and from our investment in them that we had thought.

In July 2012, the author of the above report produced a second in-depth study showing that wind energy’s impact on CO2 emission reductions had also been grossly over-stated.

There are signs that government ‘greens’ too are getting cold feet over the true cost of wind power. When US tax credits on wind energy ended on January 1st, the US wind industry realized the jig was up. For 20 years the cost of building US wind projects has been offset by a 30 percent credit. No more.

Plans for new wind capacity have already stalled as a result. In recent weeks, turbine manufacturer Iberdrola confirmed it has ditched plans for 100 wind farms across the United States. Without guaranteed public funding wind farms just won’t happen. Fact.

According to the US Energy Information Administration the “levelized cost” of new wind power today runs out at 8.2 cents per kWh compared to 6.3 cents per kWh for advanced natural gas-burning plants. In the face of the US-led shale gas boom, that’s just no contest.

But even the EIA’s comparative costs are called into question by a new report “The Hidden Cost of Wind Electricity’ published by the American Tradition Institute. It shows how the EIA itself has understated the true cost of wind power by factoring in the investment cost necessary to upgrade infrastructure and transmission; a factor that actually doubles the cost of wind power.

Yet another timely report, The Performance of Wind Farms in the UK and Denmark, recently published by the Renewable Energy Foundation, is equally damning about what should by now be a “mature” industry, but which is still entirely reliant on subsidy. Not only does it find government’s investment regimes “extremely generous”, it also confirms the need for much greater capital investment. And that’s capital that could only be realized from more substantial public subsidies.

The UK Public Accounts Committee (PAC) agrees. In January the PAC slammed the government’s “generous” licence deals, identifying a single £17 billion deal with just two engineering companies. Yet another cost incurred as part of the National Grid upgrade to cope with wind-derived electricity loading. The PAC equally condemned the government’s policy of funding green energy companies whether or not they actually deliver energy to households.

It is no surprise that UK energy ministers have begun to balk at the true cost of wind energy and its impact on soaring energy prices. The UK Government has commissioned a study into the impact of turbines on the landscape and their effect on house prices. Meanwhile David Cameron’s call for a national debate on wind farms reflects, according to The Sunday Times, a government “at war over wind farms”.

The simple fact is, harnessing the power of the elements has always attracted the ‘romantic’ in us. Unfortunately, romantic notions and our fancies about harnessing ‘free’ wind and sun power have little to do with hard-nosed energy and economic realities. Just ask ‘Mr Green Energy’ Al Gore. Sure on the face of it, he’s a leader of the new green romantics – except of course when it comes to real world business deals. Gore made $100 million from the US government’s investment in green energy – just before dumping his green shares when the government gravy train showed signs of derailing.

Whether its ripping off the public purse with false claims or suspending one’s moral principles to pursue personal enrichment, corruption breeds corruption, including criminal corruption.

In Italy the guaranteed rake-off from Italy’s generous wind power and green energy regime has, since 2009, increasingly attracted Mafia involvement. After shaking down farmers to gain title to their lands, ‘legitimate’ Mafia operators then bid for EU wind subsidies buying off any political opposition.

Okay, so most wind entrepreneurs aren’t the Sopranos. But ‘incentivized’ corruption of the ‘social levy’ element of wind power has had its day. The wind industry must stand on its own feet in the free marketplace or, in the parlance of a ‘Greenfellas’ movie, be blown away in the attempt.

Peter C Glover is co-author of the bestselling Energy and Climate Wars and is a contributing editor at The Commentator. For more:

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