[Update: Germany Stops Fighting Arithmetic and Ramps Up Construction of Economically Sensible Power Generation]
Two years ago we looked at the claim that wind generation can save money for power pool customers. We found that the supposed savings could be realized only if the elephant in the room – the above-market feed-in tariffs – were ignored.
In other words, the total amount spent on electricity purchases from a power pool was augmented by the additional amounts consumers pay to fund the feed-in-tariff (FIT). As long as wind generators can bid a low price but receive the higher FIT, then they have an incentive to underbid, thereby reducing pool prices, but not overall costs.
In addition, we looked at what an economically least cost system might look like in Germany over the next ten years. …
Thousands of bureaucrats are at another cushy climate confab–this time in Cancun–while Senators Bingaman, Brownback and Reid are contemplating how to ram a federal renewable energy quota through a lame-duck session. Their prospects are not good, which should give them more time to consider the experiences of Europe and windpower. The results of this experiment in energy coercion are humbling.
Germany, specifically, is in the throes of a windpower boondoggle that should be heard the world over. The general lesson is that energy forcing brings with it technological risk that must be factored into the public policy equation.
A North Sea Boondoggle
Barely two months after the inauguration ceremony for Germany’s first pilot offshore wind farm, “Alpha Ventus” in the North Sea, all six of the newly installed wind turbines were completely idle, due to gearbox damage.…