AWEA Report Finds That Wind Turbines Save Money
Originally published on Into The Wind.
By Michael Goggin.
A new white paper report finds that wind energy is keeping electric bills low for American homes and businesses, thanks to plummeting wind energy costs driven by technological improvements. The report was compiled by staff at the American Wind Energy Association and uses publicly available data and more than a dozen studies from government, utility, and other independent sources to explore how wind energy affects consumers’ energy bills.
A major highlight of the report pulls from just-released Department of Energy data showing consumers in the states that use the most wind energy have fared much better than consumers in states that use less wind energy.
American consumers in the top wind energy-producing states have seen their electricity prices actually decrease by 0.37 percent over the last 5 years, while all other states have seen their electricity prices increase by 7.79 percent over that time period. The following chart summarizes how consumers have fared in states that produce more than 7 percent of their electricity from wind (Texas, Wyoming, Oregon, Oklahoma, Idaho, Colorado, Kansas, Minnesota, North Dakota, South Dakota, and Iowa) relative to other states.
Electricity Price Changes, 2008 – 2013
“During last month’s cold snaps, we saw very high wind energy output play a critical role in protecting consumers across the country from skyrocketing energy prices. This study confirms that wind energy is providing that benefit every day,” said Michael Goggin, Senior Electric Industry Analyst at the American Wind Energy Association.
Some of the highlights of the report include:
- The ways wind energy protects consumers by displacing the use of more expensive and polluting sources of energy.
- How wind energy costs have fallen by 43 percent over the last four years, as documented by DOE data.
- A section that links to 15 studies by independent grid operators, state governments, academic experts, and others confirming that wind energy reduces energy costs for consumers.
- Dozens of U.S. utilities that are locking in record low wind prices that will protect their consumers from fuel price fluctuations for decades.
As Mr. Goggin explains, “With the drastic cost declines over the last few years, wind energy offers consumers a great deal today. That deal will only get better with time because that low price is locked in for the life of the wind project, as the fuel will always be free. No other major source of energy can offer that kind of price stability. Diversifying our energy mix with zero fuel cost, zero emission wind energy is a win-win for consumers and the environment.”
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Wind energy saves money for the consumer means only one thing: it siphons profits away from coal, natural gas, nuclear, and oil.
About a third or all electricity is auctioned to meet fluctuating demant every five minutes. In every 5 minute period all sources of electricity that are needed to meet demand for those 5 minutes are paid the same based on fuel cost. Even a few percent infiltration of wind with zero fuel cost will cause havoc in the price structure. It will eliminating the need for more expensive fuels such as oil deflating profits for ALL fuels coal, nuclear, and natural gas for certain hours per year. For every five minutes that oil is removed from the supply of electricity all other sources will receive as much as 50% less payment per KWh resulting in monumental losses across the board. But this severe price reduction system wide across the entire grid will save billions to consumers. These billions will be gouged from someone’s behind namely from the bottom line of dirty and dangerous fossil fuels and nuclear electricity generation.
While the pain that dirty and dangerous sources of electricity generation feel today is measurable, it can get a lot worse quickly as people realize the huge benefits of wind power. Bankrupt coal mines littering the landscape, investment for natural gas drying up everywhere, and nuclear plants shutting down with no replacements in the horizon can become commonplace. This will cause a huge economic earthquake as the energy production splinters into extreme decentralization and with it spreading the wealth more broadly in society. Of course there will be winners and losers as the huge energy sector gets reorganized in smaller much more stable and predictable units of production. At the same time mountain top removal and oil drilling will go belly up but the scars on our planet’s atmosphere, land, and oceans will remain for centuries after all coal, oil, natural gas, and nuclear have long been discontinued.
The economic benefits to the consumer reported here do not include the health savings from pollution reduction. Dirty air from making electricity causes bronchitis, asthma and premature deaths. The cost of electricity is not just what we pay to the utilities but also what we pay to doctors, hospitals, and pharmacies the costs of lost work due to illness and premature deaths. Conservative estimates including only what is easy to measure by the US Army Corps of Engineers set the annual health savings to $53 million from the 130 wind Cape Wind Turbines that will produce 1,500,000 MWh per hear. If you do the math this comes to more than 3.5 cents / KWh making wind electricity an even greater bargain of what appears by the reducing what we pay utilities. Health savings however are not just a net economic benefit but a huge reduction of human suffering. How can you measure the economic loss of a kid growing up with asthma or a grandpa who died ten years before he had to?
So wind energy is a gigantic threat to the economics of fossil fuels and nuclear and is the reason there are such organized campaigns of misinformation against wind energy.
But the cat is now out of the bag and cannot get back in. As wind energy is becoming less and less expensive and the recognition of the true costs of dirty and dangerous electricity is becoming more and more clear and more widely understood, the collapse of the fossil fuel economy will become inevitable and will arrive faster than anyone can even dream today.
Well said.
And include solar. With the price of solar now dropping to 5 cents in the SW and heading lower traditional generation is in major trouble.
With wind causing thermal plants to sell at a loss at nights and solar dropping the price ceiling during the days the old economic model is shot. The utility industry is heading toward major disruption.
Thanks for bringing solar in the picture.
I was writing from a North East perspective where we have half the sun hours per year as they have in Southern California. This means that the same solar cell is better off installed where it will make twice as much electricity. In a same way wind turbines need to be first installed where there are the most productive winds. It makes sense to pick the lowest lying fruit first.
Eventually after the best sites are taken and the cost drops further solar and wind can be installed much more widely. In Germany for example they have installed both wind and solar more widely than we do in the US.
However if we are in a race to replace with wind, solar, hydro, geothermal and other sources down the road the enormously centralized fossil fuel and nuclear energy sector then we need to use the most cost effective technologies according to local conditions. This is not always the case today.
The NE:SW difference is not 1:2. The NE has a lot of nice long sunny days in the summer.
Solar does produce more in the SW but the NE has some pretty high retail electricity prices which makes solar more attractive for the end user.
All areas need to be installing some of everything. That creates an experience local installation industry and sets up the supply stream. Then as technology improves and prices drop it will be easy to ramp up.
Clearly the best mix is going to differ from region to region but ‘some of each’ is likely the best way to minimize the need for storage and dispatchable generation.
Well yes and no.
The cost of electricity is not based on a particular season but on the yearly output. With this basis I compared the amount of electricity of two projects installed at the same time. The solar project received $5 per Watt subsidy for 60 Watt installation while a near by 660 Watt single wind turbine with good but not the best wind received $.68 per Watt subsidy. The wind turbine has a 23% capacity (I said not the best possible wind) and the solar cell in the northeast location is 15% capacity. If you do the math the same dollar of subsidy generated more than 10 time more electricity or 1000% more electricity generated with wind compared to the amount generated with solar. This means a dollar of subsidy for the wind project displaced 1000% more dirty air than the solar PV did. Even at half the subsidy at $2.5 per Watt it is still nuts to install PV when the same money can remove a lot more dirty air than PV could per dollar in that location.
I have heard many times before that idea that there is more sun in the summer and more wind in the winter. However it does not translate into real numbers. The least expensive and most productive clean and safe energy source in the northeast during the hottest hours of the year is by far the steady offshore winds in the early afternoon hours.
For storage by far the most efficient way is to store energy by not using existing hydro and save it only for times that there is no wind. There have been studies in New Brunswick demonstraing there enough wind and hydro to ballance out and to go 100% hydro & wind. Of course this will require re-writing all the rules of how electricity is priced and distributed with insentives not to use hydro until it is needed.
In certain parts of the country some solar companies tried to share 50%-50% the available subsidies with wind regardless of the environmental benefits in that location. In Florida solar companies even supported offshore drilling for oil because oil promised to give a small % of the offshore oil profits for solar subsidies. This is unacceptable behavior bad for the environment.
If a breakthrough in geothermal or harnesing ocean wave energy happened tomorrow that made it more productive than wind I would say that 100% of the money invested in wind should immediately shift into the new clean energy.
I agree a mix is needed but based on real numbers and outcomes. It is the health of our children we our talking about. Wind and solar are not equal partners in the northeast.
How do hours of production and demand match up for wind and solar in the NE?
Wind is so much more productive than solar in the NE, that even at the time of max solar output wind simply makes much more electricity per dollar compared with solar. Do the math.
Furthermore offshore wind has very high output in the hot afternoon hours due to the ocean winds rushing towards the hot land. Sailors now that.
You question the 1:2 ration I stated above but I understated when I compared solar in the NE with solar in the SW as 1:2. According to the map I found at a PV company site:
http://aurora-energy.com/wp-content/uploads/2013/05/2-map.png
the correct ratio is more like 1:3.
Bottom line solar has an important role to play in replacing dirty and dangerous sources of energy . But not everywhere.
Overstating the importance of solar can be counterproductive as admitted by emails written by Green party members in Germany as reported by Spiegel.
You clearly have a map for a winter month. I live in Canada, north of your northeast, and I get 4.2 kWh per day.
Average annual values are around 4.5 for the NE, and a little over 6 for the SW.
Definitely not 2:1.
Here’s the solar map I’ve been using. NE gets an annual average of 3.5 hours. The Death Valley area of CA/NV gets 6. The majority of the SW gets 5 to 5.5 hours.
http://www.wholesalesolar.com/Information-SolarFolder/SunHoursUSMap.html
The NE is zone 5 on your map, and 4.2 hours Bob
You got me.
Guilty of posting while sleepy.
6/4.2 = 1.4
5/4.2 = 1.2
That looks more like it! Definitely a long way from double!
With the cost of storage where it is today, I think that a mix of solar/wind works best in most of the US. I know offshore in the NE maybe be the best of anywhere in the US. And that might change the balance more than else where. But distributed also has a benefit that it removes the need up transmission. So the math is not as simple as #Kw produced.