Ballooning cost is blowing in the wind

by: Bjorn Lomborg
From: The Australian March 22, 2012 12:00AM

EFFORTS to stem global warming have nurtured a strong urge worldwide to deploy renewable energy. As a result, the use of wind turbines has increased tenfold during the past decade, with wind power often touted as the most cost-effective green opportunity. According to Connie Hedegaard, the European Union’s Commissioner for Climate Action, “People should believe that (wind power) is very, very cheap.”

In fact, this is a highly problematic claim. While wind energy is cheaper than other, more ineffective renewables, such as solar, tidal, and ethanol, it is nowhere near competitive. If it were, we wouldn’t have to keep spending significant sums to subsidise it.

In Britain, for example, wind remains significantly costlier than other energy sources.

Using the UK Electricity Generation Costs 2010 update and measuring in cost per produced kilowatt-hour, wind is still 20-200 per cent more expensive than the cheapest fossil-fuel options. And even this is a significant underestimate.

As Britain and other developed countries have rushed to build more wind turbines, they have naturally started with the windiest places, leaving poorer sites for later.

At the same time, people increasingly protest against the wind farms in their back yards. Local opposition has tripled during the past three years, and local approval rates for new wind farms have sunk to an all-time low.

Most people believe that a few wind turbines can be attractive, but it is an entirely different matter when turbines are scattered across the countryside, or when massive, industrial wind farms extend for kilometres. Complaints have also increased about enormous new wind turbines’ low-frequency noise.

Given souring public sentiment, most of the future increase in wind turbines is expected to take place offshore, where there is less opposition, but where costs are much higher.

With its “20-20-20” policy, the EU has promised that, by 2020, it will cut its carbon emissions by 20 per cent from 1990 levels, and increase its reliance on renewables by 20 per cent.

For Britain, this requires a dramatic increase in wind power, especially offshore.

This will be surprisingly costly. Britain’s Carbon Trust estimates that the cost of expanding wind turbines to 40 gigawatts, to provide 31 per cent of electricity by 2020, could run as high as pound stg. 75 billion ($113bn). And the benefits, in terms of tackling global warming, would be measly: a reduction of just 86 megatons of CO2 a year for two decades. In terms of averted rise in temperature, this would be completely insignificant. Using a standard climate model, by 2100, Britain’s huge outlay will have postponed global warming by just over 10 days.

Moreover, this estimate is undoubtedly too optimistic. Wind frequently does not blow when we need it. For example, as the BBC reported, the cold weather on December 21, 2010, was typical of a prolonged cold front, with high-pressure areas and little wind. Whereas wind power, on average, supplies 5 per cent of Britain’s electricity, its share fell to just 0.04 per cent that day. With demand understandably peaking, other sources, such as coal and gas, had to fill the gap.

Making up for a 5 per cent shortfall in supply is manageable, but the situation will change dramatically as Britain increases its reliance on wind power to reach the 31 per cent target by 2020. Wind power becomes much more expensive when we factor in the large supplies of power that must be created for back-up whenever the wind dies down.

The cheapest back-up power by far is provided by open-cycle gas plants, which imply more CO2 emissions. Thus, wind power will ultimately be costlier and reduce emissions less than officially estimated.

(This is also why simple calculations based on costs per kWh are often grossly misleading, helping to make wind and other intermittent renewables appear to be cheaper than they are.)

This has been shown in recent reports by KPMG/Mercados and Civitas, an independent think tank. A new report by University of Edinburgh professor Gordon Hughes for the Global Warming Policy Foundation estimates that 36GW of new wind power would cost pound stg. 120bn for just 23 megatons of CO2 reduction a year. In other words, temperature rises would be postponed by a mere 66 hours by the end of the century.

Contrary to what many think, the cost of both onshore and offshore wind power has not been coming down. On the contrary, it has been going up during the past decade. The UN Intergovernmental Panel on Climate Change acknowledged this in its most recent renewable energy report. Likewise, the UK Energy Research Centre laments that wind-power costs have “risen significantly since the mid-2000s”.

Like the EU, Britain has become enamoured with the idea of reducing CO2 through wind technology. But most academic models show that the cheapest way to reduce CO2 by 20 per cent in 2020 would be to switch from coal to cleaner natural gas.

The average of the major energy models indicates that, downscaled for Britain, achieving the 20 per cent target would imply a total cost of roughly pound stg. 95bn during the coming decade, and pound stg. 18bn every year after that.

Of course, these figures include reductions in areas other than electricity, as well as higher energy prices’ total cost to the economy. Nonetheless, the lesson is clear: if the goal is not just to cut CO2 emissions, but to use renewables to do it, the models show that the cost balloons to pound stg. 188bn for this decade and pound stg. 36bn every year after 2020.

In effect, insisting on wind power means using energy that is far from competitive, does not help to avert climate change, and costs an extra pound stg. 92bn for Britain alone. For any country, this seems like a very poor choice.

Bjorn Lomborg is the author of The Skeptical Environmentalist and Cool It, head of the Copenhagen Consensus Centre, and adjunct professor at Copenhagen Business School.

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