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Brooks Wilson's Economics Blog: Wind Farms: Production Costs and Externalities

Tuesday, February 15, 2011

Wind Farms: Production Costs and Externalities

The pollution that results from the consumption of carbon based fuels is well known.  Less well known is the pollution produced by alternative sources of energy.  This post highlights pollution generated by wind farms.  The document I am quoting, “Why Wind Won't Work? - it's Weaker than Water.,” was produced by the Carbon Sense Coalition.  As the name implies, the group is doubtful of the value of alternative sources of energy.  They describe themselves as
…a voluntary group of people concerned about the extent to which carbon is wrongly vilified in Western societies, particularly in government, the media, and in business circles. We aim to restore balance and reason to the carbon debate, and to explain and defend the key role of carbon in production of most of our energy for heat, light, and transportation, and all of our food.
The scientific method involves methodical study and measurement and prudent researcher should examine sources and our own biases.  The article is not a scientific article but I believe that it makes valid points about problems associated with wind farms.  In part, the executive summary reads
Wind power is very dilute, and thus a large area of land is required to gather significant energy. Wind energy needs a wide network of roads, transmission lines and turbines which degrades any area containing wind farms. It has a huge land footprint.

The operating characteristics of turbine and generator mean that only a small part of wind energy can be captured.

Wind power is also intermittent, unreliable and hard to predict. Therefore large backup or storage systems are required. This adds to the capital and operating costs and increases the instability of the network.

Wind farms are uniformly hated by neighbours and will not be willingly accepted without heavy compensation payments. Their noise, flicker, fire risk and disturbing effect on domestic and wild animals are well documented.

The wind is free but wind power is far from it. Its cost is far above all conventional methods of generating electricity. Either taxpayers or consumers will pay this bill.

The third paragraph begins, “Wind power is also intermittent, unreliable and hard to predict.”  The article provides evidence from Texas and reported in the Daily Kos.
Wind turbines are prominent in Texas, but a cold snap in early 2008 caused power demand to soar and winds to drop. This sudden loss of wind power (from 1,700 MW to 300 MW) just as demand reached the evening peak caused the grid operator to declare a power emergency and start shedding load and  cutting power to customers. The operator cut supply by 1,100 MW within ten minutes.

The authors also comment on carbon emissions associated with wind.  Note that they do not say if wind generates more or les carbon emissions than a coal fired plant, but that wind produces a lot of carbon.
Superficial commentators think that because wind itself does not rely directly on carbon fuel, its introduction thus reduces carbon dioxide emissions. This is not necessarily so, and promoters should be required to prove their case. 

Firstly wind requires backup to maintain steady power generation when  wind power fails. The best backups are probably hydro power or gas power, both of which can be turned on and off as quickly as the wind changes. Coal and nuclear can provide backup, but it is very expensive to do it that way. Nuclear is forbidden in Australia and coal of course emits the dreaded carbon dioxide.

Secondly, wind farms are usually in remote locations and the turbines themselves are necessarily spread over a large area. Each turbine has 1,500 tonnes of concrete, 2 tonnes of rare earth metals, and lots of steel and copper and requires much heavy transport and earth moving equipment to construct the towers, the access roads and the transmission lines. They  also need maintenance over this large area. Every one of  these activities emits carbon dioxide.
Finally, the authors compare the cost per kilowatt hour of various energy sources.
Energy Source USA Cents/Kwh
Natural Gas 8
Coal 9
Nuclear 11
Hydro-electric 12
Wind 14
Wind offshore 23
Solar thermal 26
Solar voltaic 40
Eventually, we will run out of oil and coal and these energy sources produce pollution even if you believe that these fuels contribute little to global warming or that the cost associated with global warming are relatively small.  My point is that other energy sources, particularly renewables, are expensive and dirty.  Rather than subsidize alternative sources of energy, the government should tax each according to the level of pollution they generate.  Setting the tax would be contentious but I would prefer this problem to rewarding government funding based in part of the political pull of recipients.


  1. Principle One - People face trade offs. Yes Wind Energy isn't perfect and 100% "green" but where is the full compare contrast list? While Wind energy is more expensive per kwh, people should be given the choice - a completely educated choice with the pros and cons of all energy sources on the same topics. They will be able to choose based on what is most important to them. Wind is still not prevailent enough to even have this as an option to every individual. I don't think the solution to every problem is taxing (ironically - the German Fat Tax and this seem to be the ones I pick to view). We seem to forget that people still have a voice - everyone is so focused on making decisions for the entire population and making policies accordingly that people should just be allowed to choose what energy source they want to go with based on what is most important to them. Then the people in that specific market would in turn set the equilibrium price, buyers and sellers. I, personally, would pay more for an energy source that would long term be better in pollution emmissions than worrying about a downturn in wind 3 years ago and the "unsightly" view it would cause.

  2. Alicia Castro (macroeconomics student)

    I agree with Colleen Scott, on the "principles of Macroeconomics" it clearly states that people do face trade-offs. This is just a matter of opportunity cost and what we as humans are willing to give up in order to have a "greener" earth.