The Boston Globe recently reported that National Grid will pay 20.7 cents per kilowatt-hour for Cape Wind electricity production starting in 2013, with increases of about 3.5% a year for 15 years. This radically uneconomic cost figure challenges the pro-wind studies of the project–and confirms the analyses of authors at MasterResoource.
A Charles River Associates (CRA) report previously indicated that the Cape Wind projects would save electricity customers billions of dollars. This expectation was immediately challenged in a MasterResource post by Glenn Schleede, who documented the study’s out-of-date data, doubtful assumptions, and missing costs. His conclusion was that the electric customers in New England – as well as the taxpayers – deserve a far more complete and objective analysis of the potential cost impacts on them of the proposed Cape Wind project than was provided by CRA and released by Cape Wind.…
Part I of this two-part post reviewed most of the considerations that must be understood in evaluating analyses of wind power.
Part II completes this analysis by focusing on one of the most important considerations in the wind utility debate, wind’s capacity value. To this end, I review a paper by Gross et al, which is relied on by Komanoff, and conveniently provides an opportunity for the review of a second paper.
Wind’s Capacity Value
Komanoff uses a flawed analogy by claiming that a backup quarterback contributes value to a team even if he never plays. First, the concept of “never playing” is arguably a reasonable notion with respect to industrial wind power. Second, the analogy applies more correctly to operating reserves, which are needed to fill in for the other generation means if, and when, needed.…
Is the introduction of industrial- or utility-scale wind power into our electricity systems good public policy?
This political economy question (wind power is government dependent, or it would only be a market question) hinges to a large degree on operations research, or engineering. And it is here that a hotly contested debate is going on, for it is an open question about how much wind power really displaces fossil fuels–the raison d’etre of wind subsidies in the first place.
This two-part series evaluates some of the latest approaches and considerations in this debate. One important paper published in 2009 by Charles Komanoff sees wind-for-fossil-fuel displacement as robust and is currently being cited by wind proponents in Maine. Another paper in my review is a study by Gross et al, which is relied on by Komanoff.…