Wind energy enthusiasts have been inclined to talk breezily about the high availability of wind farm facilities, and talk confidently of load factors of 25 to 40 %, depending on location. Folk who challenge these figures were dismissed as curmudgeons or special interest propagandists. By the time the machinery of the global warming lobby had achieved its astonishing success in making us all more afraid of carbon dioxide than of nuclear power plants, governments too had started to buy into these arguments, repeat them to the public, and base policies on them.
Those governments that have accepted this reasoning have heavily supported wind power deployment with huge subsidies from public funds, typically amounting to 60–70% of the generator’s revenue. In the USA this takes the form of tax credits, while in Europe saleable green certificates (UK, Sweden, Italy) a feed-in tariff (Germany, France) or premium payments (Spain, Denmark) have found favour. Indeed these methods have been so successful as a means of stimulating investment that the last few years have seen a frenzy of applications for new build and a large number of new starts, in the UK, Germany and Scandinavia in particular, on a scale usually only seen when massed investors scent an obscenely profitable opportunity.
In fact between 2000 and 2007, the EU’s installed wind capacity increased almost six-fold from 9.7 GW to 56.5 GW. In 2007, wind power installations made up 40% of total new power, making it the fastest growing generating technology in Europe. Over the last ten years, cumulative wind power capacity in the EU increased by an average of 28 % per year, while the market grew by an average 21 % pa.
And there is no sign of a slowdown in wind farm proposals despite sharp increases in plant and construction costs that have seen investment per MW reach staggering levels. Figures for current proposals (not including connection) are increasing as you read this, but show a remarkable indifference to siting, whether onshore or off-shore. In the USA the 1300 MW first phase of T Boone Pickens’ (Mesa Power) 4000 MW Pampa project in Texas will cost $4 billion, or $3m per MW. The proposed Rødsand II site, Denmark, total capacity 207 MW, looks a real bargain at r275 million, which is r1.3 m per MW. The $1 billion Deepwater Wind Rhode Island project is to generate 1.3 million MWh/year, suggesting a total capacity in the order of 500 MW. That’s $2 m per MW. Compare these with the UK government’s BERR department rather optimistic figure which suggests £1m/MW, for off- or on-shore installations, and Airtricity’s website which puts the cost at $2.2 million per MW. But the costliest of them all is SSE’s Greater Gabbard offshore facility, which is coming in at £1.8bn for 504 MW. At £3.6m per MW that looks a crazy figure even at a 100% load factor. At a load factor of 35%, and if it sells every kWh it could produce with no downtime, the farm would bring in a maximum annual income of around £0.385 m per MW. And this income must also support grid connection and pay all running costs – rents, maintenance, interest etc. Another cost factor, where there is a large proportion of wind energy on the grid, is the necessary spinning reserve. Of course, 35% is in any case an unattainable ideal. Wind does not always blow when you want the power (in fact the opposite is true – there is some correlation between extremes of cold and hot weather, and lack of wind) or you have it when you cannot sell it.
But load factor is absolutely critical. (There is some confusion about how the terms ‘load factor’ and ‘capacity factor’, originally designed for conventional plant, should be applied to wind energy. The term load factor is now generally used as a measure of the useful productivity of a wind facility. It is in this sense that I use it here.) A figure for the UK of 30% is given by the BWEA, and 25-40% more widely. 30% is the figure generally accepted as the level necessary to making a wind farm investment viable in the present day support regime, yet, every year, there is tangible evidence that these figures, critical to the future success of the wind industry in selling and installing enough equipment to make a difference, are simply not attainable in practice.
Germany’s two largest operators are E.On and RWE. In 2005 RWE found that the load factor on its wind farms was around 16 %. The picture at E.On Netz, one of Germany’s largest TSOs, is hardly any better. According to its 2006-7 Wind Report Germany had 20.423 GW installed in 2006, producing 30.2 TWh in the 2006-7 season, an overall load factor of 18.9 %. E.On’s share of that was 8.112 GW, producing 12.9 TWh/y, a load factor of 17.9%. In fact their Report every year since 2005 has shown that wind farm load factors are well below, sometimes scandalously below, the 30% figure needed to keep them financially viable.
One must ask oneself then why generators such as E.On, which has just signed a large offshore wind farm contract with Dong and Siemens (Rødsand II), continue enthusiastically to endorse wind generation when its own operating figures suggest that it is non-viable, or why governments continue to pour taxpayers’ money into it. Opponents say that public money would be better spent elsewhere, and judging by the real figures returned by real wind farms, they may be right. The figures certainly cast doubt on the cosy idea that once one has bravely borne the initial cost, then the 30-40 % load factor of wind, and it’s near 100% availability in the terms used by generators, mean that the rest is easy. Not at 20% load factor, it isn’t, and that is more like the reality. Even in Britain, Europe’s best endowed country for wind resource, the nine-year average is only 28%.
None of the above is an argument against the use of wind power. It is an argument against self-deception and the false hope it creates of a future free market for wind energy. There is almost no hope of any kind of free market model delivering the amount of wind power we would need unless we bribe the industry at a level that would create profits to outrage both good sense and the population at large. The problem is far, far too big to be left to the vagaries of the profit motive. Modern governments however are reluctant to completely abandon free market policies, or at least, to be seen to, and are still encouraging the idea that competitive economics, the necessity of stimulating a mature, confident high volume technology while administrations keep a decent distance, is the way to go. But that is not how they are acting. They are acting as if cost is irrelevant, that we must have a high proportion of renewables in our mix at any expense, and are pouring money into what by any rational standards are mad schemes. These governments have embarked on a course that it is now virtually impossible to abandon without abandoning climate change reversal too. A statement in December 2007 by the UK energy Secretary John Hutton, cements this idea. ‘Our trajectory on renewables is beyond question. They are as central to our future low carbon economy as chimneys were to the industrial revolution and road building following the invention of the mass produced car.’
All agencies and politicians have accentuated the need for a solution that satisfies three criteria – energy security, affordability and climate change effectiveness. The time has come to accept that we cannot have effective climate change policies that are affordable and logical, maybe not even energy efficient, and by discarding the pretence of justifying renewables on a commercial basis, release them from an impossibly heavy burden. What we should be deciding is not whether we can afford anti-global warming measures but whether we want them. Because actually the financial price is an irrelevance. Carbon dioxide build up is almost immune to market forces and it is simply foolish to imagine otherwise. So how much do we want electricity? At double, or even treble the price?
Of course, there will be ramifications. We can expect the indefinite continuation of subsidies, a clamping down on nimbyism, the strengthening of obligations to buy renewable sourced power, and the pouring of more cash into developing the necessary companions for renewables, such as hugely increased storage. And we will have to pay for it, one way or another. The trick will be to make sure the money does not all end up in the pockets of developers. Fortunately a mechanism already exists. In English speaking countries it is known as a windfall tax.
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