The True Cost of Wind Energy

Wind energy is one of our MOST EXPENSIVE options!

{Note: This analysis has been updated, so please go to the latest version.}

Periodically I get asked: what is the TRUE cost of industrial wind energy?

It seems like that should be a relatively straightforward answer, but it is anything but.

To appreciate what is going on, we need to understand the Big Picture regarding wind energy. (FYI, the same applies to solar.) The system is setup to grease the skids for wind energy developers — not ratepayers. When it comes to wind energy, we are dealing with 21st century snake oil salespeople. They have a sophisticated multi-part strategy to profit at the public’s expense…

Their FIRST major strategy is to sell politicians on the bogus concept that our electrical Grid should be inclusive — i.e., include ALL electrical energy sources (whether they are good or bad. An all of the above policy makes no technical or economic or environmental sense. (For a discussion of this, see here.) My alternative motto is that our electrical grid should include all of the sensible.

Their SECOND major strategy is to sell politicians on the false belief that we need enormous amounts of industrial wind energy to “save the planet from pending climate catastrophe.” Ignoring the accuracy of the Climate Change fear-mongering aspect, the reality is that there has never been a genuine scientific study that has concluded that wind energy saves a consequential amount of CO2! In fact, there have been multiple scientific studies that have concluded that wind energy can make Climate Change WORSE! (See here for some examples.)

Their THIRD major strategy is to sell politicians and the public on the illusion that industrial wind energy is inexpensive — so we should do it anyway (irrespective of points #1 and #2 above). So what is the true cost of industrial wind energy?

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Why this is not a simple question to answer is because wind promoters are VERY well aware that industrial wind energy is MUCH more expensive than our other conventional sources of electricity (fossil fuels, nuclear and hydro). So to get politicians and the public onboard, they have gone to EXTREME lengths to obfuscate wind energy’s REAL cost.

Here are ten sample examples of wind energy costs that are NOT acknowledged by wind promoters, so are NOT factored into any of their “cost of wind energy” claims:

1- Production Tax Credit (PTC) —

How much is this? This objective report says: “While the original justification for the PTC was to boost a nascent industry, the PTC continues to subsidize a mature industry to the expected tune of nearly $24 billion from 2016-2020 according to the Joint Committee on Taxation. And that estimate will almost certainly be too low…”

2- Other Federal Handouts —

A good example is the $100 million for wind energy in the 2022 “Infrastructure” bill. As it spells out in a separate legislative document, this taxpayer money is for such nonsense as “To support the integration of wind energy technologies with the electric grid and other energy technologies and systems” and “To support the domestic wind industry, workforce, and supply chain.” Billions of federal dollars are hidden in wind related costs (e.g., see here).

3- Transmission Cost —

A Nuclear power facility (for example), will have: a) one transmission line, and b) the distance will be relatively short, as it will almost always be located fairly near a population center. On the other hand, a very rough equivalent of wind energy will have: a) many transmission lines, and b) will be located a considerable distance from population centers. The transmission cost difference is substantial — but none of it is attributed to the root cause: industrial wind energy.

4- Auxiliary Power Cost —

The Electric Grid needs to have Supply and Demand balanced in a fraction of a second. Since wind energy is 100% unpredictable — and frequently goes to zero — 100% auxiliary power is necessary. For a variety of technical and economic reasons, the most appropriate auxiliary source is almost always gas. However, as with the preceding items, the cost and operation of whatever auxiliary source is used, is almost never attributed to the reason for it: wind energy.

5- Dutch Auction Cost —

This is a bit complicated, but once you understand it you will almost certainly say: this makes no sense whatsoever! That’s because it doesn’t.

A quickie summary is: let’s say that a Grid estimates that it needs 900 MWH next Tuesday. Five sources each bid to supply 200 MWH of it: Wind @ 1¢/KWH; Coal @ 2¢/KWH; Hydro @ 3¢/KWH; Nuclear @ 4¢/KWH; and Gas @ 6¢/KWH. The Grid takes the price of the highest accepted source (Gas), and then PAYS ALL THE SUPPLIERS THAT PRICE! Here is a good pictorial example of what happens.

What that means is that (in this case) wind gets 6¢/KWH (along with everyone else). But the wind people advertise that they are low cost (1¢/KWH) even though they got paid 6¢/KWH — and even though they knew that 1¢/KWH would never be the price they were paid (based on how the auction works). Dishonest.

6- No Penalty for Noncompliance —

Let’s say that Nuclear is unable to supply all their 200 MWH of electricity next Tuesday, as they had committed to (in #5). In this case the Grid manager heavily fines Nuclear, because the Grid manager now has to buy electricity on the spot market, which is quite expensive — so the fine is fair to ratepayers.

Let’s say that Wind is unable to supply all their 200 MWH of electricity next Tuesday, as they had committed to (also in #5). In this case the Grid manager does NOT fine wind, even though the Grid manager now has to buy electricity on the spot market, which is quite expensive. This is an ENORMOUS concession to wind developers, which is NOT fair to ratepayers. Further (like everything above), this extra Grid expense is NOT attributed to Wind — even though they caused it!

7- Payments for Non-Usage —

As if these Grid breaks aren’t enough, when the wind developers see the handouts that they are readily given, this green lights them to ask for more! Contrary to our traditional electricity sources, wind energy is not predictable — which is the excuse used for paying for underperformance of a bid. But, stunningly, in most cases wind energy also gets paid for over-performance as well! In other words, if they produce 100MWH that is not needed, in many cases they get paid to dump that! Of course, those payments are not attributable to wind energy’s cost.

8- Direct Host Community Costs —

There are numerous environmental costs to wind host communities — e.g., health costs to nearby residents (e.g., from infrasound), reduction of the values of nearby homes, etc., etc. There are multiple other costs that are spelled out here. No surprise, but none of these substantial costs are attributed to wind energy.

9- Indirect Host Community Costs —

There are several of these costs, like farmers reducing or stopping their crop production (after they sign a lease to host turbines). This means that they: lay off help, do not buy seed, fertilizer and equipment, do not provide food to the community, etc… Adverse military consequences (e.g., interfering with radar, etc.)… Trees are taken down (which are CO2 absorbers). Etc. None of these are factored into wind energy’s cost.

10- The High Cost of the Wind Supply Chain —

Some major turbine components are extraordinarily problematic from several perspectives. Rare Earth materials are a fine example. (Note: some 2 to 4 thousand pounds of Rare Earths are in every turbine!) The environmental and health cost of Rare Earths is staggering — but much of that is happening in China. Even though wind promoters say that climate impacts anywhere in the world are important to address, none of them are publicly objecting to this wind energy cost.

The Bottom Line

This is a somewhat complicated, technical subject, so the above is a layperson’s summary. The takeaway is that — despite what the lobbyists are pitching to the non-critically thinking public — the real cost of wind energy is 2-3 times the cost of nuclear and other conventional sources of electricity. Solar is higher than that!

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