Kennedy Drops Opposition to Nantucket Wind Farm

The price of wind energy is comprised of the construction cost and maintenance costs of the infrastructure. Of course coal facilities also require comparable infrastructure AND require coal. The wind farms get wind for "free". Unfortunately, the wind doesn't show up when people want it, i.e. during peak demand for electricity.

I don't think anyone is claiming wind farms to be built as peakers, but offshore wind is the optimal density and blows much more often than in most other places, allowing for a Net Capacity Factor for Cape Wind of I'd guess 50%+.

Certainly people use electricity on Cape Cod as everywhere else in the world. But in New England, peak generation season is during the summertime when people run their ACs. Few people in New England use electricity to heat their homes in the winter, when the wind farms would produce their peak electricity. In other words, the marginal electricity is generated when it is not needed.

I don't know what the wind regime is on Cape Cod, but I'd guess there is substantial wind in the summer months as well.

Costs for electricity generation are generally quoted per kilowatt-hour. Unfortunately, the costs that are quoted for wind farms are generally B.S.

If a wind farm signs a Power Purchase Agreement with a utility for $.06/kWh, that is all they are paid for the kWh generated, no B.S. about it.

They overstate the benefits of wind by quoting cost of generation as maximum possible peak generation as opposed to when the electricity is actually needed.

No, most wind farms quote their generation on an annual basis.

Most wind farms can't and don't ever generate their peak, because the electricity is more expensive than that available from coal plants and is not needed. Thus the surplus wind generated electricity is not needed and is never used.

Many wind farms generate their peak in the months when the regional wind is strongest. Electrons put into the grid by a wind farm are used just as much/little as thos put into the grid by a coal plant. Electrons is electrons when they're in the grid.

If it were not for federal subsidies this proposed wind farm would not be built. The subsidy is equal to 1.5 cents per kilowatt hour as a production tax credit.

The PTC is an offset against the owner's federal imcome tax, and only earned IF electricity is generated. Own a home? Write off your mortgage interest? Same thing.

Wind power probably costs 2 to 3 cents more per kilowatt hour than coal on average. The numbers are very very hard to determine.

Coal used to be cheaper, but not anymore as there are fewer trains to ship it and the cost of diesel to fuel the trains has gone up. The numbers are very easy to determine - run a spreadsheet of either power plant and compare them. The capital costs are roughly the same, but coal has a fuel cost and higher O&M costs. Wind farms just don't generate on demand, which is why they tend to get built in windy areas to maximize production.

The American Wind Energy Association, which is a very PRO wind group thinks that New England wind is about 6 to 7 cents per kilowatt hour. I think they are a penny shy. So call it 7.5 cents per killowatt hour.

6 to 7 seems right as the construction costs for offshore wind are higher. I'll ask the Cape Wind guys next week.

Coal is about half that, maybe a little more. So figure wind power in New England is TWICE as expensive as coal.

Actually wind power on Cape Cod looks to be about HALF that much!

If you like wind power....then more power to you. But I hate to see my tax dollars wasted on your pet projects, just as I'm sure you would hate to see your tax dollars wasted on mine.

I like a diversified energy portfolio, which includes some wind. It's not tax dollars wasted, it's tax credits earned by the owner IF electricity is generated. I thought Conservatives were all for paying less taxes??

DTogo

I don't know what the wind regime is on Cape Cod, but I'd guess there is substantial wind in the summer months as well.

I don't know either. Ask the Cape Wind guys.

Costs for electricity generation are generally quoted per kilowatt-hour. Unfortunately, the costs that are quoted for wind farms are generally B.S.

If a wind farm signs a Power Purchase Agreement with a utility for $.06/kWh, that is all they are paid for the kWh generated, no B.S. about it.

Yeah, no kidding. But that's the cost to the buyer, not the cost of generation. The question I was answering is what is the cost of generating wind power, not what is the cost of a fixed contract per kWh to a customer post tax credit subsidy. And the former question is more relevant, since in a capitalist economy, we try to allocate resources towards commercial activites that generate profits. If an unsubsidised wind farm isn't profitable, it should not be built. Of course I favor ending all other commercial subsidies in the energy and other industries.

Example. I earn $100. My tax rate is 10%. I get a $10 tax deduction. My taxes are $9. If I get a tax credit for $10, my taxes are $0.

If it were not for federal subsidies this proposed wind farm would not be built. The subsidy is equal to 1.5 cents per kilowatt hour as a production tax credit.

The PTC is an offset against the owner's federal imcome tax, and only earned IF electricity is generated. Own a home? Write off your mortgage interest? Same thing.

No, the PTC is a tax credit, not a tax deduction. The two are quite different. The former is a direct reduction in taxes paid. The latter is a reduction in revenue against which the corporate tax rate is applied to generate taxes due. Tax credits are MUCH better than tax deductions for a taxpayer.

Please also note that the tax credits are not applicable *ONLY* to the profit created by the wind power projects. Most wind projects are owned by large utilities like PG&E which use can use the tax credits to offset profits created from non-wind energy production.

Coal used to be cheaper, but not anymore as there are fewer trains to ship it and the cost of diesel to fuel the trains has gone up. The numbers are very easy to determine - run a spreadsheet of either power plant and compare them. The capital costs are roughly the same, but coal has a fuel cost and higher O&M costs. Wind farms just don't generate on demand, which is why they tend to get built in windy areas to maximize production.

This is your paragraph with which I disagree most. While it was true that there were some rail delivery problems out of the Powder River Basin, those are largely gone today. Addtionally on the East Coast the advent of scrubbers means that high sulfur coal is now both available and usable. So utilities don't need shipments from across the country. High sulfur coal is also much less expensive that low sulfur coal. Therefore coal has continued to retain its advantage over wind, even with today's relatively high coal prices.

And the notion that it is easy to compute the costs of coal and wind is not correct. One would need to spreadsheet EVERY coal plant and EVERY wind plant. It is a BIG job. Simply picking one location was not the question I was asked nor was answering, although determining the cost of a new coal facility in New England versus the Cape Wind project would certainly be a valuable exercise.

I opened the link from Cape Power, but I don't understand your point. The prices on that page are prices that users pay, not the generation costs, correct? I think I missed your point.

I like a diversified energy portfolio, which includes some wind. It's not tax dollars wasted, it's tax credits earned by the owner IF electricity is generated. I thought Conservatives were all for paying less taxes??

I like a diversified energy portfolio too. I have no problem with anybody putting up wind farms. However providing tax credits to do so is a subsidy of one form of energy over another. I am opposed to that.

Conservatives, and libertarians (and I'm more accurately described as a latter though I lead a very conservative life personally) are opposed to taxes. But they are also opposed to an unfair application of the tax code to pick winners and losers. Wind tax credits could hardly be a worse example of socialist industrial planning and is no different than giving subsidies to corn farmers.

Yes, I know burning coal generates the bulk of electricity in the U.S., but how does that coal get to the power plants? And how many people generally work at a coal-fired power plant? How do they get to/from work everyday?

Do you think these people will cease to exist if we build Windmills? If someone works at a coal plant and we shut it down, are we going to deport them? And I don't think we will be shutting down any coal plants. New power plants meet the growing demand, very few plants are being shut down.

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This has gotten a little technical.

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The Coast Guard decides such things? Call me cynical, but it seems more likely that he has secured assurances rom others that they will block the wind farm for him.

I think the Coast Guard's involvement is to determine if the proposed wind farm would be a hazard to navigation in the area. Unfortunately, I agree with you that this probably means the fix is in.

Yes, I know burning coal generates the bulk of electricity in the U.S., but how does that coal get to the power plants?

Generally by railroad.

That's lame.

Here's some more lame: I just heard Patrick Kennedy is learning to fly airplanes. I know you don't want to buy a ticket on that flight. The whole Kennedy Sobriety Checkpoint exercise is to respond to the Kennedy's on their turf and help solve the energy problem by exposing the "impaired driving" problem. Thank you.