Articles like this one are terrible because they give "objective" credence to arguments made exclusively by lobbyists. I imagine the coal industry did not imagine that their lies would be repeated so uncritically:
Curbing carbon dioxide emissions — a central part of tackling climate change — will almost certainly raise electricity prices, experts say. And increasing the nation’s reliance on renewable energy will in itself raise costs.
These are, quite simply, lies, and the sole purpose of publishing such articles is to undermine the Obama administration drive to develop renewable energy.
Part of the Windpower series
The graphs below, from the EWEA (the European Wind Energy Association)(pdf!) can certainly not be seen as pro-coal, and yet they acknowledge that coal does seem to be cheaper:
The top one has coal and gas prices based on oil at 59$/bbl and coal at €1.6/GJ; the second one at oil doubling in price (118$/bbl) and coal going up by 50%. They do suggest that coal-fired electricity is cheaper, unless saddled with carbon costs. Or that you'd need $120 oil for wind to be competitive, something that has only happened for a few months at the top of the economic bubble last year.
But think about it for a second: the price of wind power is not going to change for the next 20 years, whereas the price of gas- or coal-fired electricity is going to vary with that of gas and coal (both of which are more or less directly linked to the price of oil). Are you willing to bet that oil prices will be below $120 for the next 20 years? Again: wind prices will NOT vary for the next 20 years: once a wind farm is built, it costs almost nothing to run, and it will produce electricity reliably for at least 20 years. Fossil fuel plants need to purchase the fossil fuels on an ongoing basis. Studies that show the price of electricity from coal-fired plants as something static somehow never acknowledge this.
And in fact, utilities that offered wind power pricing to consumers have already offered a taste of what's to come:
Cost Dropping Below Conventional Sources Marks Key Milestone in U.S. Shift to Renewable Energy [in 2006]
When Austin Energy, the publicly owned utility in Austin, Texas, launched its GreenChoice program in 2000, customers opting for green electricity paid a premium. During the fall of 2005, climbing natural gas prices pulled conventional electricity costs above those of wind-generated electricity, the source of most green power. This crossing of the cost lines in Austin and several other communities is a milestone in the U.S. shift to a renewable energy economy.
Austin Energy buys wind-generated electricity under 10-year, fixed-price contracts and passes this stable price on to its GreenChoice subscribers. This fixed-price energy product is quite attractive to Austin’s 388 corporate GreenChoice customers, including Advanced Micro Devices, Dell, IBM, Samsung, and 3M. Advanced Micro Devices expects to save $4 million over the next decade through this arrangement. School districts are also signing up. Round Rock School District, for example, projects 10-year savings to local taxpayers at $2 million.
Facing a Texas-style stampede of consumers wanting to sign up for the current remaining supply of green electricity, Austin Energy has resorted to a GreenChoice raffle that will be held on March 23. All its customers—both residential and business—were invited to participate in the drawing.
A similar situation has unfolded in Colorado with Xcel Energy, which is the state’s largest electricity supplier. Xcel’s 33,000 Windsource customers, who until late 2005 were paying $6 more each month for their electricity, are now paying slightly less than those using conventional electricity, which comes mostly from natural gas and coal.
Sure, as commodity prices have crashed with the current crisis, fossil fuel generation is again cheaper today: but we're talking about 20-30 year investments: do you believe that oil&coal will remain cheap for the next 20 years?
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The second thing that wind critics seem to ignore is the effect of wind on overall prices. As seems to be ignored by mostcasual writer on the topic, wholesale electricity prices are set at every moment by the marginal cost producer, ie the most expensive source required to provide the demand of the moment. Demand is mostly not sensitive to price (people switch on the lights or the AC when they need it, they don't worry about what it costs to produce the electricity powering them) - so supply and demand are balanced by supply ajusting. This is where the "supply dispatch curve" comes into play: it shows all the power producers, ranked by marginal cost of production, ie what it costs them to add one kWh of electricity at a given moment. For a gas- or coal-fired plant, it mostly means the cost of the extra fuel needed to be burnt to generate the extra power. Wind is a low marginal cost producer, meaning it costs almost nothing to produce more electricity (all is needed is more wind).
Below (on the left), you see what a traditional dispatch curve looks like. The graph is for the Nordgrid, ie Denmark, and Sweden: the low cost base load comes mostly from nuclear, but a US graph would look very similar, with low cost base load provided by coal. On the right, you see the same dispatch curve moved by the injection of wind power into the system: the curve moves to the right, as low cost wind is made available. With the almost vertical demand line, this has a stark effect on prices at peak times: they go down a lot (the effect in times of low demand is much less significant).
What this means is that whenever you have wind into the system, prices of electricity for consumers (for ALL of them, not just those that buy wind power) go down - and they go down most starkly at peak times.
Studies in Denmark show that the aggregate effect of such price reductions is quite significant. From a certain wind penetration, prices are brought down to baseload prices almost all the time:
In Germany, Spain and Denmark, where wind penetration is in the 10-25% range (in MWh terms), the overall electricity price reduction brought about by wind driving down prices when it's blowing is larger than the subsidy paid by the same consumers in the form of guaranteed tariffs. In other words, the subsidy is actually not costing consumers a cent, overall. And that's just from the periods when wind is actually blowing.
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Which brings us, as always to the intermittency argument, made once again in the NYT article:
A modern coal plant of conventional design, without technology to capture carbon dioxide before it reaches the air, produces at about 7.8 cents a kilowatt-hour; a high-efficiency natural gas plant, 10.6 cents; and a new nuclear reactor, 10.8 cents. A wind plant in a favorable location would cost 9.9 cents per kilowatt hour. But if a utility relied on a great many wind machines, it would need to back them up with conventional generators in places where demand tends to peak on hot summer days with no breeze. That pushes the price up to just over 12 cents, making it more than 50 percent more expensive than a kilowatt-hour for coal.
The argument in this paragraph mixes very different things. It argues that wind farms should cover the cost of other electricity sources when wind is not blowing, ie cover the cost of externalities. It's like asking coal-fired plants to cover the cost of treating asthma in the population living near coal-fired plants, or gas-fired plants to cover the cost of US Navy ships protecting Qatar, which sends LNG to the US. The industry which is fighting hard to exclude these externalities from the cost of fossil fuel generation is somehow keen to have thme included in the cost of wind. Funny, that. And, worse, it gets its numbers worse. Studies from Northern Europe, where wind penetration is significantly higher than anywhere in the US, provide actual data on what it costs to integrate wind into the system:
It doesn't cost 2+ cents/kWh, as claimed above, but around 0.2c/kWh (1 EUR/MWh = 0.1c/kWh) - not in theory, but in real networks with massive wind penetration.
In addition, it should be noted that when you build a wind farm, you don't need to build a backup fossil fuel plant in parallel: these already exist, they'll just be used less when wind blows. The argument that you spew more carbon because of wind is one of the stupidest: you spew more carbon than if you closed down the fossi fuel burning plants completely, but nobody argues that: getting them to burn less fuel is already a good thing, there's no need to actually close them: we'll just use them when wind is not available, instead of all the time.
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In summary, wind power prices are comparable to those of fossil fuel ppower plants, but (i) that price is guaranteed not to change over the next 20 years, (ii) when wind is blowing, it brings down prices for all consumers and (iii) the cost of intermittency and grid integration is much lower in practice than announced by "experts."
These facts obviously did not get in the way of the NYT journalist, who seems to have been fed fossil fuel industry talking points and to have copied then without any critical thought.
What a shame. Is it incompetence, or malice?
