Editor & Publisher, Marcellus Drilling News (MDN)
Fractivists say wind energy is a bargain but a comparison of the capital costs, not to mention the subsidies, says natural gas beats wind energy hands down.
You hear a lot about wind these days, not so much about solar, as an alternative to nasty fossil fuels like natural gas. But, is wind really all that?
We spotted an Associated Press story bragging about “the nation’s first offshore wind farm” opening off the coast of Rhode Island. Deepwater Wind built five turbines producing 30 megawatts of electricity (enough electricity to power 17,000 homes) 3 miles off Block Island–at a cost of $300 million. That’s about $10 million per megawatt to construct the facility.
Now, let’s compare that to building a natural gas-fired electric plant. Natgas plants cost about $1 million per megawatt (10x less). This past year the very first built-from-scratch natural gas power plant built to use Marcellus Shale gas, called Panda Liberty, went live. Panda Liberty is an 829-megawatt Marcellus gas-fired electric generating plant in Asylum Township, Bradford County, PA. While Panda Power doesn’t release financial details, we believe we’re on solid ground in estimating the cost to build the plant at $829 million.
Here’s the kicker: Panda Liberty’s 829 megawatt plant supplies enough electricity to power one million homes! Let’s see, spend $300 million to supply 17,000 homes, or $829 million to supply one million homes. Hmmm, tough one.
We know, it’s not an exact apples to apples situation. The wind farm continuously gets its energy source (wind) for free, and the gas that powers Panda Liberty is not free. But honestly, there’s not enough ocean, or hilltops, to site those big, ugly turbines to take the place of clean-burning natural gas. In our book, there is no comparison. Natural gas beats wind energy hands down.
Here are some excerpts from the story we spotted, gushing about the new wind farm off the coast of Rhode Island:
The nation’s first offshore wind farm has opened off the coast of Rhode Island, ushering in a new era in the U.S. for the industry.
Deepwater Wind built five turbines 3 miles off Block Island to power about 17,000 homes, a project costing about $300 million. It announced Monday that the wind farm has begun producing energy for the grid…
Deepwater Wind installed the wind farm over two years, with the five turbines installed in August. National Grid is buying the output.
It had planned to open the wind farm in November, but it took more time to get final approvals from regulators. The company said this month that a turbine wasn’t turning because its generator was damaged by a drill bit left inside but that the issue wouldn’t delay the startup. Deepwater Wind was selected as the state’s offshore wind developer in 2008.
Many Block Island residents supported the wind farm as a way to drive down the island’s high energy costs, though some opposed it out of fear that the turbines would dramatically alter ocean views that both residents and visitors enjoy.
The wind farm is expected to supply about 30 megawatts of electricity annually. National Grid said that is more than enough to meet Block Island’s current demand and the excess will be redirected to mainland Rhode Island through a submarine cable.
The offshore wind industry is far more advanced in Europe.
Mr. Grybowski said the industry is focusing on markets where states have indicated a strong interest in developing an offshore resource, including New York and Massachusetts. Deepwater Wind is negotiating with a New York utility to build a 15-turbine wind farm off eastern Long Island.
Democratic Gov. Gina Raimondo has said she wants Rhode Island to be the most collaborative and aggressive state in creating a supply chain for wind energy, to bring electricity costs down and to address climate change…
BOEM has awarded 11 commercial offshore wind energy leases for sites in the Atlantic Ocean. Another lease sale is planned for Thursday for the rights to develop a huge offshore windfarm between New York and New Jersey. Groups representing the fishing industry in four states sought to delay the auction. But an agreement between the groups and BOEM will allow it to proceed.
Editor’s Note: Unlike Jim, I don’t find the windmills ugly unless we’re talking hundreds of them squeezed into one spot. As an “all of the above” guy, I’ve been involved in wind projects and when they’re spread out along a ridge or on the horizon I see them as quite elegant. Nonetheless, Jim’s basic point is well-taken for several additional reasons.
The first is the widely differing capacity factors associated with natural gas and wind. The Energy Information Administration says the average capacity factor wind in 2015 was only 32.2% while combined cycle natural gas plants achieved 55.9% and those numbers are growing with technological advances. The gas plants reached a new high of 71.3% this past August, for example; the same month wind energy dropped to 24.5%, which was the second lowest monthly number since January, 2014. That means natural gas is approaching three times the efficiency of wind energy in some months. That magnifies the value of natural gas power plant investments compared to wind.
Secondly, because of these low capacity factors, wind energy is unable to deliver continuous power as needed to supply electricity to those 17,000 homes. Some days or hours it will be able to power more and other days or hours far, far less even though energy needs are relevantly constant. A gas plant is producing constantly other than when it’s down for maintenance or is not needed.
Two natural gas plants, therefore, can ensure constant energy as needed, one picking up when the other is down. Two wind farms cannot do that. Their output is highly erratic and typically both will follow the same general pattern, meaning something else must pick up the slack. That something else is typically either natural gas or nuclear power. Consequently, it is simply not true that this Rhode Island facility will power 17,000 homes. It will do so from time to time but to do so continuously, it will need help from other energy sources. It’s no coincidence wind energy is doing so great in Texas; that’s where the gas is to balance out the wind energy supply.
Finally, there are the subsidies and the cost of delivering that energy. Wind-energy projects are almost always a significant distance from end users, whereas natural gas plants can be located nearer consumers and the grid. This means higher costs to deliver the electricity. Our buddy, Pat Leary, wrote about about wind energy here and included the following chart, illustrating how transmission costs play a factor:
Notice how transmission costs are higher for most of the renewables and, especially, off-shore wind energy. Notice, too, how combined cycle gas plants are the lowest cost source of electricity there is. Levelized cost analyses typically (although not consistently) incorporate consideration of the subsidies involved. That’s one of the reasons natural gas, just as Jim says, wins hands down overtime over wind energy. It doesn’t mean wind energy shouldn’t be part of our energy portfolio but any suggestions wind energy can replace natural gas are self-delusions.