By Peter Glover and Michael J. EconomidesÂ
This is not what President-elect Barack Obama’s energy and climate strategists would want to hear. It would be anathema to Al Gore and other assorted luminaries touting renewable energy sources which in one giant swoop will save the world from the â€œtyrannyâ€ of fossil fuels and mitigate global warming. And as if these were not big enough issues, oilman T. Boone Pickensâ€™ grandiose plan for wind farms from Texas to Canada is supposed to bring about a replacement for the natural gas now used for power generation. That move will then lead to energy independence from foreign oil.
Too good to be true? Yes, and in fact it is a lot worse.
Wind has been the cornerstone of almost all environmentalist and social engineering proclamations for more than three decades and has accelerated to a crescendo the last few years in both the United States and the European Union.
But Europe, getting a head start, has had to cope with the reality borne by experience and it is a pretty ugly picture.
Independent reports have consistently revealed an industry plagued by high construction and maintenance costs, highly volatile reliability and a voracious appetite for taxpayer subsidies. Such is the economic strain on taxpayer funds being poured into wind power by Europe’s early pioneers — Denmark, Germany and Spain â€“ that all have recently been forced to scale back their investments.
As a result this summer, the U.K., under pressure to meet an ambitious E.U. climate target of 20 percent carbon dioxide cuts by 2020, assumed the mantle of world leader in wind power production. It did so as a direct consequence of the U.K. Government’s Renewables Obligations Certificate, a financial incentive scheme for power companies to build wind farms. Thus the U.K.’s wind operation provides the ideal case study — and one that provides the most complete conclusions.
The U.K. has all the natural advantages. It is the windiest country in Europe. It has one of the continent’s longest coastlines for the more productive (and less obtrusive) offshore farms. It has a long-established national power grid. In short, if wind power is less than successful in the U.K., its success is not guaranteed anywhere.
But wind infrastructure has come at a steep price. In fiscal year 2007-08 U.K. electricity customers were forced to pay a total of over $1 billion to the owners of wind turbines. That figure is due to rise to over $6 billion a year by 2020 given the government’s unprecedented plan to build a nationwide infrastructure with some 25 gigawatts of wind capacity, in a bid to shift away from fossil fuel use.
Ofgem, which regulates the U.K.’s electricity and gas markets, has already expressed its concern at the burgeoning tab being picked up by the British taxpayer which, they claim, is â€œgrossly distorting the marketâ€ while hiding the real cost of wind power. In the past year alone, prices for electricity and natural gas in the U.K. have risen twice as fast as the European Union average according to figures released in November by the Organization for Economic Cooperation and Development. While 15 percent energy price rises were experienced across the E.U., in the U.K. gas and electricity prices rose by a staggering 29.7 percent. Ofgem believes wind subsidy has been a prime factor and questions the logic when, for all the public investment, wind produces a mere 1.3 percent of the U.K.’s energy needs.
In May 2008, a report from Cambridge Energy Research Associates warned that an over-reliance on offshore wind farms to meet European renewable energy targets would further create supply problems and drive up investor costs. No taxpayer respite there. But worse news was to come.