There’s too little power in wind

Federal and state government officials, “wind farm” developers, and renewable energy advocacy groups have for years touted windmills as an environmentally benign and economically acceptable way to produce electricity.

The advocates of wind energy have largely persuaded the public, the media, regulators, and elected officials that windmills can make a significant contribution to electricity supply and to emission avoidance. They have also been able to secure tax shelters and other measures highly favorable to wind farm developers . . . and quite unfavorable to consumers, taxpayers, and those who must live near those developments.

The analysis underlying this report focuses on one state–Wisconsin–where four wind farms have already been built and two more have been proposed. To help provide a better understanding of the potential for wind energy, this report:

• presents recent data on the output from Wisconsin’s existing wind farms, estimates the potential output from two proposed wind farms, and compares that output to Wisconsin’s total electricity production;

• shows that the very large machines produce very little electricity;

• demonstrates that claims of emissions avoided by wind energy are inaccurate and, even if they were accurate, are so small as to be virtually meaningless;

• explains how a large share of the true costs of electricity from windmills is being shifted away from the large companies that are building wind farms, and instead buried in bills paid by taxpayers and electric customers;

• identifies other misleading claims made by wind energy advocates;

• points out that federal and state officials have abandoned their responsibility to taxpayers and electricity consumers.

Too little power

Combined, Wisconsin’s existing and proposed wind farms would provide roughly one-quarter of 1 percent of the state’s total electricity production. Table 1 below provides electricity output data from the four existing wind farms, including their total electricity output during the 12-month period from July 1999 through June 2000. The table also estimates the potential annual electricity output from two new wind farms proposed for Wisconsin, and compares these outputs to the total amount of electricity produced in Wisconsin in 1999.

Data in the table demonstrate clearly that the 83 existing and proposed windmills in Wisconsin generate very little electricity and cannot make a significant contribution in supplying Wisconsin’s electricity or improving its reliability:

• The total output from the 35 windmills on four existing wind farms represented just 0.082 percent of the state’s 1999 electricity production.

• The estimated output from the 28 windmills that would make up FPL Energy’s proposed Addison wind farm would equal 0.091 percent of Wisconsin’s 1999 electricity production.

• The estimated output from the 20 windmills that would make up Enron’s proposed Eden (Iowa County) “wind farm” would equal 0.113 percent of Wisconsin’s 1999 electricity production.

The above analysis overestimates the potential contribution of wind farms. In 1999, Wisconsin used more electricity than was produced within the state.

The state’s electricity demands are increasing rapidly. The amount of electricity demanded by and delivered to electric customers in Wisconsin in 1999 was 3 percent above 1998 amounts.

The significant amounts of additional electricity required for Wisconsin’s increasing demands can be satisfied effectively and at reasonable cost only by adding significant natural gas or coal-fired generating capacity. Those demands cannot be satisfied by building large windmills that produce electricity only intermittently and then in truly insignificant amounts.

Rated capacity is small

Windmills contribute so little to electricity supply and reliability because, despite their large size, the electricity output from windmills is small. Moreover, windmills produce electricity only when the wind speed is within a certain range. In the case of Wisconsin’s existing wind farms, the full, “rated” output occurs only at wind speeds of 30 to 34 miles per hour.

When evaluating the potential contribution of windmills, it is critically important to consider their “capacity factor,” shown in column 6 of Table 1. The capacity factor of any electric generating unit is calculated by dividing its net electricity output (in kilowatt-hours, or kWh) by the rated capacity (also in kW) times the hours in a year.

Because windmills are dependent on the availability and speed of the wind, they have very low (typically 15 to 30 percent) capacity factors. That means windmills will produce only a small part of their “advertised” nameplate capacity.

The fossil fuel and nuclear power plants on which Wisconsin depends for most of its electricity operate at much higher capacity factors–in effect, whenever they are needed–since they aren’t dependent on wind conditions.

Tens of thousands of windmills would be needed to supply a significant fraction of Wisconsin’s electricity demand, or to replace electricity from existing power plants. Table 2 compares the potential output from windmills with the output of several existing generating plants in Wisconsin. Specifically, Table 2 shows how many windmills operating at a 25 percent capacity factor would be needed to produce the amount of electricity (i.e., kWh) that:

• was produced in 1999 by several existing nuclear and coal-fired generating plants in Wisconsin; and

• will be produced by a recently approved natural gas-fired generating plant if it operates at only a 70 percent capacity factor.

The data in Table 2 help underscore the point that wind energy will never be able to make a significant contribution in supplying Wisconsin’s electricity demands:

• 3,587 windmills of the size proposed for the Addison wind farm, operating at a 25 percent capacity factor, would be required to equal the 1999 electricity output of Point Beach nuclear plant;

• 4,407 windmills of that size and capacity factor would be required to equal the 1999 electricity output of the Pleasant Prairie coal-fired generating plant; and

• 3,267 windmills of that size and capacity factor would be required to equal the output of the planned new gas-fired generating plant at Kenosha, if the Kenosha plant operates at only a 70 percent capacity factor.

“Wind resource” maps for Wisconsin suggest that the areas with suitable wind conditions for wind farms are quite limited. The potential areas are further limited by existing and planned land uses; recreational, scenic, and other environmental considerations; the fact that many property owners do not want windmills in their neighborhoods; and the fact that wind farms must be located near existing transmission lines.

Emission reductions would be tiny, too

The advocates of wind energy advocates often claim significant quantities of air pollutant emissions–sulfur dioxide (SO2), nitrogen oxides (NOX), and carbon dioxide (CO2)–can be avoided if wind energy is substituted for electricity generated by coal, natural gas, or oil.

Even if the emission reductions claimed by advocates were correct (they are not), those reductions are very small compared to either the emissions currently associated with electricity generation in Wisconsin, or with the reductions that could be achieved in other ways.

Table 3 below demonstrates that anyone seriously interested in reducing or avoiding emissions would not waste time and effort on building windmills to produce electricity. The table shows the insignificance of the claimed “avoided emissions.”

Table 3 shows the claimed “avoided emissions” from three operating and one planned wind farms (61 windmills) combined would add up to a small fraction of 1 percent of the emissions from Wisconsin’s existing generating plants.

Wisconsin’s electric generating companies could reduce emissions of SO2, NOX, and CO2 in several ways that would be much more effective than building windmills. The alternatives include:

• building modern, new gas-fired, combined cycle generating units (like the one now planned for Kenosha by PG&E’s Badger Company) to supply Wisconsin’s rapidly increasing demand for electricity and, possibly, replacing older generating units;

• repowering existing, older coal-fired generating units with modern gas-fired, combined cycle generating units;

• installing additional pollution control equipment on existing coal-fired generating plants (e.g., scrubbers to reduce sulfur dioxide and/or selective catalytic reduction and/or low- NOX burners to reduce nitrogen oxides).

Cost-shifting to taxpayers, consumers

Tax shelters and other subsidies for windmills shift costs from wind farm owners to taxpayers and electric customers, with those costs hidden in property tax and electric bills.

Apart from the minuscule contributions windmills could make to Wisconsin’s electricity requirements and emission reductions, it is important to recognize that even the advocates of wind energy agree it costs much more to produce electricity using windmills than it does using “traditional” energy sources (e.g., coal, natural gas, hydropower).

It is the widespread recognition of this fact that has led the wind energy industry and its lobbyists, “renewable” energy advocacy groups, electric generating companies, the U.S. Department of Energy, and DOE laboratories to lobby for a wide variety of tax breaks and other subsidies.

Those interest groups have been amazingly effective. Their efforts have resulted in a host of federal and state tax shelters and other subsidies are available to wind farm developers. When the effects of these tax shelters and subsidies are taken into account, wind farms are a highly profitable venture.

Seldom mentioned, however, is the cost-shifting effect of the tax shelters and other subsidies. The true costs of wind farm projects are shifted away from the owners and developers, and to electric customers and taxpayers. The shifted costs are hidden in tax bills and monthly electric bills. This cost-shifting is accomplished in four ways:

• Tax shelters (including accelerated depreciation, production tax credits, and property tax exemptions) reduce the amount of corporate income tax and property tax paid by energy companies that build wind farms. As a result, the tax burden is shifted to other income and property tax payers.

• Direct subsidy payments are made by the federal and/or state governments to wind energy companies (usually for research and development) and advocacy groups (for “studies” and lobbying). The funds for these subsidies come from tax revenues or so-called “public benefit charges” that are added to electric bills.

• Statutory or regulatory requirements, including so-called “Renewable Portfolio Standards,” increase the overall cost of electricity generation. In turn, the rates per kWh charged to all electric customers are increased.

• Premium prices (often called “green pricing” programs) have been established by some state governments, including Wisconsin, to allow electricity producers or suppliers to charge customers premium prices for electricity produced by windmills.

Concluding thoughts

Energy companies and the advocates of renewable energy have the right to pursue their interests. Ideally, they would not mislead the public, media, Congress, and state and local government officials by fostering unrealistic expectations about the potential contribution of wind energy.

However, it is the U.S. Department of Energy, DOE laboratories, Congress, and state officials (legislatures, utility commissions, and governors) who are directly responsible for shortchanging consumers, taxpayers, and the people who must live near wind farms.

These officials are charged with protecting the public interest, and this they fail to do when they accept at face value the misleading claims of wind energy advocates, pretend windmills can make a significant contribution, and adopt tax shelters and other subsidies that shift the high cost of producing wind electricity to consumers and taxpayers.

Glenn R. Schleede is a policy analyst with Energy Market & Policy Analysis, Inc. He can be reached by email at [email protected].