July 2, 2012

Wind Power: a Model of Successful Public Policy?

An article published today at the World Energy Forum by Antoine Dechezleprêtre, Grantham Research Institute on Climate Change and the Environment, London School of Economics, and Matthieu Glachant, CERNA, Mines ParisTech, has some interesting statements undercutting wind industry claims of success:
The massive deployment of wind turbines across the world has been driven mainly by public policy support. European countries like Spain, Portugal, Germany or Ireland have mostly relied on feed-in tariffs. In the USA, Renewable Portfolio Standards and systems of tradable certificates [and tax breaks] have been implemented. The Clean Development Mechanism has played a prominent role in emerging countries. For instance, almost all Chinese wind farms are either registered as CDM projects or are in the pipeline.

The spread of wind policies and the rapid growth of wind energy have gone hand in hand. So can we consider these policies a success? Installation of wind capacity is not an end in itself, and in the short term these policies have actually increased the cost of energy. The cost of wind power generation is still high relative to conventional electricity. According to the International Energy Agency, the cost of onshore wind ranges from 70-130 US$/MWh compared to 20-50 US$/MWh for coal-fired power plants and 40-55 US$/MWh for CCGT [combined-cycle natural gas–fired turbines]. Offshore wind is even more expensive (110-130 US$/MWh).

Even counting the benefits of avoided carbon emissions, it is not clear whether the social cost of wind energy is lower. The social cost of carbon according to the World Bank is around $20/ton, which in the best conditions puts wind energy and coal at parity. However, the net impact of wind energy on carbon emissions remains a controversial issue as the intermittency of wind power production requires a carbon-emitting backup such as combined cycle gas turbines. Moreover, in developing countries, the so-called additionality of some CDM wind projects has been challenged, casting serious doubt about their net carbon impacts.
The result of the need for backup is actually worse than suggested there, because wind power production is highly variable, requiring open-cycle gas turbines (OCGT) which are able to ramp their output fast enough to balance that from wind. But the carbon emissions from OCGT are about twice those from CCGT, so that a system of wind + OCGT may actually see more carbon emissions than a system of CCGT alone.

And if wind does not actually do much to reduce carbon emissions, then CDM compounds that debacle not only by driving the construction of sprawling, almost useless, wind energy facilities in developing countries, but by providing the means for developed countries to continue emitting as much carbon as ever.

wind power, wind energy, environment, environmentalism