The True Cost of Wind Energy — Updated
Wind energy is one of our MOST EXPENSIVE energy options!
When I wrote the original version of this last year, some attentive readers said that although my list of ten costs were spot-on, I should have added more. My original list was intended to be a summary, not all inclusive. That said I believe that several of their suggested additions are not trivial, so I am reposting this commentary which now has fifteen typically ignored costs of industrial wind energy…
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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 fifteen 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). This expert concludes that: “New Treasury Department numbers show that soaring federal handouts for wind & solar dwarf all other energy-related provisions in the tax code and will cost taxpayers $421 billion by 2034.“
3- Time Value of Money for Federal Largess —
It’s bad enough that the federal government awards tens of billions to inferior but politically favored energy sources. However, the federal government does not have this money sitting in a bank account. Instead these tens of billions of dollars are mostly borrowed, so we also pay substantial interest costs on this foolishness. Yet another part of this absurdity is that communist China has loaned us almost a Trillion dollars of this — so they are directly profiting from this insanity. Now see this major red flag!
4- 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.
5- 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. As one energy expert wonderfully phrased it: The hopeless intermittent delivery of power by Ruinables forces intermittency on some normally dispatchable energy source...at great cost.
6- 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.
7- 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!
8- 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 (e.g., see here)! Of course, those payments are not attributable to wind energy’s cost.
9- 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, killing of bats which results in reduced agricultural yields, 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.
10- 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.
11- 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.
12- De-Industrialization —
Nowhere on earth can it be demonstrated that wind and solar grid imposters reduce electricity costs. Any country that pursues these fantasies is pursuing impoverishment because industry (and the economic benefits they create), will likely eventually leave for countries with cheaper, more reliable energy sources.
13- Utility Conflict Exposed —
The bribes (aka subsidies) doled out to wind and solar exposes a significant conflict of interest for power providers: are they acting in the best interest of shareholders or customers? For example, since utilities are often guaranteed a return on their "capital base" they are perversely incentivized to install a huge capital base of unreliables to increase their profits — even though that increases costs and reduces reliability to their customers. So what is their primary allegiance?
14- Loss of Serenity —
Serenity's legal definition is that environmental quality which provides the greatest sense of wellbeing. Industrial wind turbines are anathema to the serenity of pastoral communities. Just as with other key values in life (like happiness, contentment, peacefulness, etc.) there is no way to put a sufficient dollar value on this huge loss.
15- Loss of Community —
This frequently results when the wind industry uses citizen money to bribe local officials and select landowners in order to create an us vs. them conflict. Other nearby property owners then sign a so-called Good Neighbor Agreement by which they agree not to complain about the numerous liabilities of the industrial wind project. For an annual pittance of a bribe, these "good neighbors" cooperate in the torture of nearby non-participating residents afflicted with adverse health effects, property devaluation, etc.
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 3± times the cost of nuclear and other conventional sources of electricity. Solar is higher than that!
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Your item No. 3 is far more of a consideration than most Americans understand. Every single dollar of debt has a negative value that is ridiculous if we analyze it properly. It is precisely the opposite of compound interest but the same formula is at work, only in reverse.
If we look at this logically, the main question must be, “ When will this debt be eliminated?” And, based on reality, the answer is, “Never!” So, the calculation of the long term damage of each debt dollar gets confused since the key calculation involves time.
But, to simplify and be super conservative, let’s assume the debt will be with us for 60 years and the FED can borrow money at 4.8% like the 30-year treasury is today. This says the long term negative present worth of each dollar is $16.67! In other words, the unfunded liability of our national debt is $607 Trillion if we never take on another dollar of debt.
The key point I am making is every dollar of debt our Congress agrees to take on needs to be multiplied by 16.67 to give us an accurate real cost to us tax payers.
My friends, this is a realty that somehow is missed daily by about 300 million Americans. Somehow we allow our politicians to sell us the idea that kicking the debt can down the road is a workable solution. This is a part of our education system that is missing and requires some critical analysis.
When they vote to allocate $20 Billion to green energy, is it worth $333.4 Billion in reality? That is the real question. How is that $333.4 Billion going to be paid back to us “investors”? They say green energy is an investment in our future. I say, “Bullshit.”
My biggest concern with wind is its natural mismatch with electrical demand. On the hottest days of the year, by definition, the wind does not blow (if the wind were blowing, the temperatures would be moderated by the natural air movement—hottest days tend to have calm air). In these conditions the utility has to shop for the most expensive back-up sources with little, or no help from wind.
A few years ago, I looked at the wind performance of the Bonneville Power Administration (BPA), an enormous provider in the Pacific Northwest. Of their 11,000 MW system, they had installed 3,000 MW of wind. On the peak day (I think it was 2011) guess how much wind was actually operating during peak demand? None!