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Cape Wind

Cape Wind is the name of a proposed electric generating wind farm off the coast of Nantucket, Massachusetts.  If it ever gets built, it promises to be the nation’s best known and most controversial wind farm.  The Wiki article gives some of the particulars.  The nameplate peak generating capacity is being advertised as 420 megawatts, and the estimated construction cost is around $900 million.  Using a really hopeful capacity factor of 25 percent for the total wind farm, this means the reliable generation will be just under 110 megawatts.  If I were an investor, I would figure on getting 20 percent of the nameplate rating as reliable generation, and if it got any better than that, it’d just be gravy.  Europe has a lot of experience with windmills, and their long term capacity factors rarely reach 25 percent.  A smart investor would figure on 20 and give thanks to God if he got anything above that.

The article does not say whether the $900 million includes the cost of bringing offshore transmission lines to the wind farm, but I’m betting it doesn’t.  Underwater cables are more expensive than putting up towers and hanging wires because they are complex engineering devices containing pipes and pressurized dielectric fluids, pressure sensors to detect leaks, etc.  Because they’re under the sea, repairs are a serious technical challenge.

Factoring in an optimistic capacity factor of 25 percent, the published estimate of installed cost works out to about $8.6 million per megawatt for the wind farm.  That’s just a tad over the cost of new nuclear construction.  Note that if the capacity factor turns out to be closer 20 percent, which is highly likely, the installed cost rises to almost $11 million per reliable megawatt, which is clearly not competitive for any form of commercial power generation.  Moreover, the maintenance costs on this installation will be very high because of its location, and the unreliability of the generated power will require the utilities in Massachusetts to keep alternative generating sources available.  This adds a tremendous amount of cost to the overall project, which is why these things are still just not economically viable.

Think about it: If these things could actually make money in mano-a-mano competition with the power company, the power companies themselves would already be building them.  The power companies simply do not care where the electricity comes from as long as it is rock-solid dependable and can be generated for less than what the public utilities commission allows them to charge.  The reason public utilities commissions haven’t already mandated greater use of green-gadgets is because they are colossally expensive and unreliable, and the commissioners would never get re-elected if they were responsible for massive increases in power bills and frequent blackouts.

A couple of footnotes to this story are worth a few electrons.  First, Walter Cronkite, who originally opposed this wind project, is reported to be having second thoughts about it and now says it should be studied further.  Second is the mention in the Wiki article of Mirant Corporation and one of its many misadventures.   Mirant is a spin-off of the utility giant Southern Company.  Mirant was spun off as an independent power producer and quickly went bankrupt mostly as a result of its calamity in California back in the energy starved days of Gray Davis.  Massachusetts, understandably, would like to shut down Mirant’s oil-fired power plant to avoid another oil spill.  My advice for the state of Massachusetts is to retire Ed Markey and banish Mirant’s oil-fired anachronism by going with the real green technology: nuclear.

2 Comments

  1. factchecker

    Using European capacity factors to estimate U.S. cf’s is like saying the speed limit is 35 on highways since that’s what’s on your country road.

    U.S. Department of Energy estimates offshore wind capacity factors in the U.S. at 34-55%. Smart investors would take heed to not use your “20%” as Gospel. Also, you’re not including the Production Tax Credit when you calculate the price per megawatt.

    Additionally, there are already a dozen projects either in early development or about ready to put turbines in the water. The reason why power companies hadn’t been building offshore wind farms isn’t because they weren’t cost competitive – it’s because the feds hadn’t made a process so the farms could be built! Now they’ve made the regs, and dozens of farms are likely to go up in the next couple years.

    Posted on 01-Jun-09 at 9:09 am | Permalink
  2. admin

    Dear Factchecker,

    A capacity factor of 55 percent for a wind farm would make it more than competitive with conventional generation. You must remember, however, the capacity factor on wind turbines suffers at both ends of the wind spectrum. They obviously don’t turn when the wind is dead, but they have to be protectively shut down when the wind is too strong. One problem with a high intensity wind field is that both problems will crop up. Add to that the additional costs and maintenance challenges of a marine environment and submerged cables and they’ll have a very challenging time making it economically viable. I hope it works out well for them, but even the best wind farms have so far been unable to displace serious baseload capacity.

    The production tax credit is just taking the earnings of Americans and giving them away to people who make windmills. That doesn’t truly make them economically self-sustaining. It just makes them really high-tech welfare recipients. As a Christian, I’m against taking money from one citizen and handing it over to another so an unprofitable enterprise can be continued.

    Bro. Steve

    Posted on 01-Jun-09 at 15:16 pm | Permalink

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