Coyote Blog

Frequent readers of this blog know that I am very skeptical wind will make very much sense as a major power source outside of a few niche applications.  Solar may not be economic today, but I think it will someday, and maybe even some day soon.  But I am not sure wind will ever be ready for prime time.

I thought this was pretty funny: (emphasis added)

In the space of one hour last month, electricity generated at wind farms in the eastern end of the Columbia River Gorge shot up by 1,000 megawatts – enough to power some 680,000 homes.

Less than an hour later, it plummeted almost as much.

Sitting in front of 10 computer screens in a fifth-floor room of the federal Bonneville Power Administration headquarters in Portland, Kim Randolph had to react quickly.

Working from a keyboard, she diverted millions of gallons of water away from massive turbines spinning in Columbia River dams and sent it around the dams.

The 17-year veteran power operations specialist remembers how fast she needed to work as a wind storm caused generation to peak and fall three times over eight hours.

The article is about the difficulty for grid operators in integrating and managing wind in the grid.  But here is the part that slides by — despite the electricity it is putting in the grid, wind is contributing…nothing.  Note that when wind production is surging, the utility is sending water around the turbines of the dam.  That lost potential energy is gone forever.  All the wind power did in this case is substitute for clean hydro power.  It has not value in this particular case (beyond the ability of the utility to put wind on its annual report and seek subsidies from the Obama administration).

Apparently the costs of trying to integrate wind into the grid is so high the utility tried to charge wind producers a higher integration charge than they do for other sources.   This attempt to set pricing equal to actual costs was apparently killed by pressure from the Obama administration, making sure that wind will continue to get preferential treatment and I presume substitute for dirty hydro power in the future.

Postscript: I just don’t see how wind is ever going to work on the grid.  In this case, wind is backed up by hydro, but in others it has to be backed up by spinning, fuel-burning fossil fuel plants.  Wind makes more sense to me linked to some type of flexible local process.  Using wind to make hydrogen from water may make sense.  Wind could store its energy by pumping water backwards back up a dam to be recovered as electricity through hydro power later.  Or it could run a local process, such as water desalinization  (a good potential candidate as sea breezes tend to be more constant).

After business school, I spent years in corporate marketing and planning roles.  A big part of those jobs were prioritizing investment projects against limited available funds.  Perhaps it is due to this experience, but to me it seems dead obvious that shifting capital and other resources to projects businesses would not have done on their own is clearly going to result in losses to the overall economy.  It can be argued that such investments pay off in other ways, and certainly I so argued when we were discussing cleaner water and air, but the whole notion that green spending and requirements will create jobs is just a myth.

I covered this before, but here is a Spanish study on the Spanish wind programs Obama said he wished to emulate (via Carpe Diem):

1. As President Obama correctly remarked, Spain provides a reference for the establishment of government aid to renewable energy. No other country has given such broad support to the construction and production of electricity through renewable sources. The arguments for Spain’s and Europe’s “green jobs” schemes are the same arguments now made in the U.S., principally that massive public support would produce large numbers of green jobs. The question that this paper answers is “at what price?”

2. We find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

3. The study calculates that since 2000 Spain spent €571,138 ($800,000) to create each “green job”, including subsidies of more than €1 million ($1.4 million) per wind industry job. The study calculates that the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy, or 2.2 jobs destroyed for every “green job” created.

From a NY Times review of  “The Goode Family” via Tom Nelson:

But the show feels aggressively off-zeitgeist, as if it had been incubated in the early to mid-’90s when it was still possible to find global-warming skeptics among even the reasonable and informed. But who really thinks of wind power — an allusion to which is a running visual gag in the show — as mindless, left-wing nonsense anymore?

My apparently not reasonable and informed climate site is here.  Wind strikes me as the very embodiment of the typical leftish program — it is very expensive, it makes people feel really good about themselves for supporting it, and it does almost nothing to achieve its stated goals.   To the latter point, wind can produce a lot of power, but it typically does little to reduce fossil fuel emissions as its unpredictability and variablity require a hot bockup that is still likely producing CO2.  As a result, the experience in the two largest wind users in the world – Germany and Denmark – is that huge investments in wind yield little or no reduction in emissions.

If you move solar panels out of the Arizona desert, they are going to produce less electricity.  You almost don’t have to tell me where they are going — if they are currently close to the optimal spot for maximum solar energy production, then moving them is bound to reduce their output.

Seems obvious, huh?  So why is it so difficult to understand that when the government moves capital and other resources away from the industries where the forces of market optimization have put it, output is going to go down.

Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide.

For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.

U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.

The premiums paid for solar, biomass, wave and wind power – - which are charged to consumers in their bills — translated into a $774,000 cost for each Spanish “green job” created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.

“The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices,” he said in an interview.

We all know from reading the media that the Obama administration is 1) full of brilliant people way smarter than the rest of us and 2) driven by science.  So this insightful exchange between a reporter and White House spokesman Robert GIbbs vis a vis this Spanish study should come as no surprise:

Q: Back on the President’s speech today, a Spanish professor, Gabriel [Calzada] Álvarez, says after conducting a study, that in his country, creating green jobs has actually cost more jobs than it has led to: 2.2 jobs lost, he says, for every job created. And he has issued a report that specifically warns the President not to try and follow Spain’s example.

MR. GIBBS: It seems weird that we’re importing wind turbine parts from Spain in order to build — to meet renewable energy demand here if that were even remotely the case.

Q Is that a suggestion that his study is simply flat wrong?

MR. GIBBS: I haven’t read the study, but I think, yes.

Q Well, then. (Laughter.)

In two sentences, Mr. Gibbs demonstrates that 1) He is an idiot and 2) He has no respect for science.  The correct, intelligent response would be “I can’t comment, I have not read the study yet.”  Mr. Gibbs does deserve credit for being an apparent master of the non-sequitur.  I have been trying to think of an eqivilent formulation.  The best I can come up with is to suppose someone said that “publicly funded sports stadiums generate no new economic activity and are just a taxpayer subsidy of sports owners, players, and ticket holders” and getting the response that  “how can this be when people still go to the games?”

I was afraid that all this braininess in the White House was going to eliminate the humor from Administration pronouncements but I see that won’t be the case.

Here is the reality of the green jobs myth Obama is pushing (via a reader):

The Arizona Corporation Commission raised the monthly charge that Arizona Public Service Co. residential customers will pay in 2009 to support renewable energy to $3.17 a month from $1.32 a month.

That’s a 140 percent increase for the maximum tariff on people living in homes and apartments. Businesses would see their monthly charge increase to a maximum of to $117.93 from $48.84.

Large industrial customers could see tariffs of $353.78, compared with the current cap of $146.53.

The tariffs will be worth an estimated $78.4 million to the utility, which uses the money to acquire renewable energy and pay incentives to people who use rooftop solar and other renewables.

Nothing says “jobs creation” like increasing electricity prices.  Note that these prices are “per meter.”  Since many businesses have many meters (we have nearly 100 in Arizona), the price increase is much higher.  For example, we expect to see a $2-$5 thousand dollar increase next year from this program.

Oh, but you say that this money is invested and creates jobs?  Yeah, right. )  via Michael Giberson

A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands.

Because of intense competition, the way wind tax credits work, the location of the wind farms and the fact that the wind often blows at night, wind farms in Texas are generating power they can’t sell. To get rid of it, they are paying the state’s main grid operator to accept it. $40 a megawatt hour is roughly the going rate.

This is really incredible.    The power companies are constructing wind turbines and, at certain times, not only providing the power for free but actually paying the grid to take it.  All to capture subsidies and tax credits paid for by these special rate surcharges.    The only jobs being created are analysts trying to find the best way to rent-seek under these new laws.  I would rather pay people to dig holes and fill them back in.