Mittwoch, August 08, 2007

The Real Costs of Going Green...

There is a letter to the Editor in Today's FAZ - unfortunately behind their pay firewall - that covers the real costs of going Green in terms of what the Germans are doing with wind energy. It's from Thomas Heinzow, from the University of Hamburg, Research Department for Sustainable Ecological Development (Forschungsstelle Nachhaltige Umweltentwicklung).

I did find this, but it's only in German: I'll lay out the argument here, but won't do a translation.

Basically, energy policy in Germany, put into place by the Greens during their kingmaker role in their coalition with the SPD under Schröder, is a massive swindle that costs German consumers of electricity no less than around 90 billion Euros.

That's right, ninety billion Euros.

Germany is in the process of installing 45'000 MW of wind energy equipment, with 25'000 MW planned for the North Sea windfarms and 20'000 MW on land. The cost per KW - not MW - is €5'800 for land and €6'600 for sea; this is €58'000 and €66'000 per MW. Now, the real usage rate for land - empirical evidence, not guesswork - is that an average of 9'400 MW will be available at any given time from the North Sea, and around 3'000 MW from land installations, which is, what, an efficiency of 37,6% for sea and 15% for land.

Given the 20-year cycle of the machinery and necessary maintenance and repairs, the depreciation rate is between 6% and 9%.

All of this, calculated reflecting all appropriate parameters, you have a cost of avoiding carbon dioxide by using wind power of between €300 and €400/ton of carbon dioxide.

The same effect can be achieved by cleaning up coal and other fossil fuel energy users of around €40/ton.

Now, the windpark equipment has to be manufactured: given this, the construction needed, etc., and you get an additional carbon footprint of 30 mn tonnes over the life of the system - 20 years - and the need to subsidize the windpark operators with around €6mn/year.

All told, the installation of the windparks will cost around €90 bn. Who pays?

The German consumer of electricity pays, as the subsidies for wind energy are paid for by increasing the KWh price of electricity.

The only way that you get a break-even in comparison to coal, for instance, is if you make coal five times more expensive than it is today.

Now, this is not some back-of-the-envelope study: they got the data for windflows for the years 2000-2004 for the region where the windparks will be located in order to model the expected fluctuations in energy production; they were able to determine what sort of energy generation would be necessary to ensure that the base energy for the net would always be guaranteed (if you don't do this, you get blackouts when the wind power drops below what is needed for the net); they were able to calculate energy production from windparks to every 15 minutes (!) during each and every day of the year and so on. Serious study, in other words.

From their conclusion, my translation and summation:

The windparks can generate maximum of 26 GW, with extreme volatility of plus/minus 12GW/15 min and an average volatility of plus/minus 5GW/15 min. This volatility exceeds the technical limits for the existing electrical energy transportation system, and requires the acquisition of fast-reaction basis energy systems (must react within a 15 minute time period!), based either on gas turbines or pumped-reserviour water systems. This means that windpark energy generation, given the extreme costs and lack of real reduction of energy productions's carbon footprint, is not an appropriate energy policy, given that actual reduction via cleaning up current energy production mixes cost between €15 and €40/ton, instead of the price of between €300 and €420/ton for windparks. Energy from windparks can first become economically viable if other energy costs increase by 4 or 5 fold from current levels.

Investment in windparks would make sense only if current energy generation was running at maximum efficiency with optimum emission scrubbing equipment, as the ecological impact would then have greater effect. By failing to invest in this solution, the ecological impact of windfarms is severely reduced and makes little or no economic or ecological sense. The investment in windpower at the cost of increasing efficiencies means that the political goals of the project will not be adequately met and that the opportunity costs of the project are so great that any potential ecological benefits are largely lost.


That's why they call economics the dismal science. It pokes massive holes in pie-in-the-sky ideas.

The problem here is that the German consumers are paying for this ecological idiocy. I wonder how much money the windpark operators and machinery makers paid the Greens in Germany to get this on the table? The whole thing stinks to high heaven.

PS: this isn't a study done by an energy company, it's one that actually takes an objective look at how to realistically reduce the carbon footprint. They're right: putting up the windfarms is a massively bad idea. But hey, it's only taxpayer money, and we'll get the stupid consumers to pay in any case.


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