Big Green for Little Wind? Alec Baldwin Eyes $0.40/kWh Power
“I want to build something that is environmentally forward-thinking. I’m not building a satellite dish so I can watch the Knicks game.”
- Alec Baldwin, quoted in “Actor Tilts at Windmill,” Wall Street Journal, July 16, 2012.
“‘We’re behind big wind,’ [Mike] Bergey [of Bergey Windpower] said, with small-turbine technology having advanced just a couple of iterations from its early days, while the more mature big-wind technology has pushed forward eight or nine times. A little more help on the R&D front — some of that government solar money, say — would be appreciated, he said.”
- Peter Danko, “Alec Baldwin Turbine Puts Small Wind In Spotlight,” Ecotech Institute, July 20, 2012.
Alec Baldwin, the Hollywood movie star, has worked to preserve the charm and character of the Town of East Hampton on Long Island (Suffolk County, New York). But his plan to build a 120-foot-tall wind turbine on his Amagansett property is misguided and temps other people to make the same mistake.
If TV antennas on house roofs look bad, these small wind turbines will look much worse–and make noise.
Mr. Baldwin said he is trying to “escape” high electric rates and draw attention to renewable energy with his Bergey Windpower Excel 10kW turbine.
However, as most other, well-meaning “visionaries,” he is doing the Long Island economy a disservice by touting small wind turbines, which is an inefficient choice within an inefficient technology to begin with. It is unfortunate also because of other well-meaning people with much less money to waste could follow his flawed example.
Payback and KWh Cost
Mr. Baldwin’s 15-year revenue = 10,000 kWh/yr x $0.25/kWh x 15 yr = $37,500; the $0.25/kWh is assumed to be the 15-year average rate. (Note: The 15-year average cost of electricity was obtained by escalating a starting rate of $0.187/kWh at 4%/yr. )
Capital cost $97,050
- LIPA rebate $38,185
- Federal PTC $17,360
Net capital cost = $41,505
If the net capital cost is borrowed from a bank at 4%/yr and paid off as a mortgage, the annual payments would be $3,699 for 15 years, for a total of $55,983.
With the total mortgage costs of $55,983, maintenance at 0.5%/yr of the capital cost, escalating at 3.5%/yr, would come to $4,004 over 15 years.
With a total cost of $59, 987 (55,983 + 4,004), Mr. Baldwin could have bought the 150,000 kWh from the “expensive”
utility for $37,500, or $0.40/kWh.
On a simple payback basis, it would take 16.6 years for Mr. Baldwin to recover his $41,505 on the wind turbine. (Periodic maintenance, at several hundred dollars per event, would lengthen the payback period.) Without subsidies, the simple payback would be 39 years.
These calculations are conservative. It is quite possible, if not probable, that this small wind turbine will not have a useful service life beyond 10 years. It is high-risk to have your capital asset naked in the elements.
“The bottom line is, this technology is going to come,” Baldwin stated in the face of the controversy. “There are going to be wind turbines everywhere in this country.”
Probably not. Residential wind power systems are very expensive and have negative externalities for neighbors. Grassroot opposition will grow and speak with truth to power. Meanwhile, governments and other entities enacting subsidies for such projects need to perform more due diligence before earmarking other people’s money to such projects.