Wind power: a wise investment for Wichita and Kansas?

Writing in The Wall Street Journal, Robert Bryce explains the terrible economics now facing the wind power energy, with emphasis on T. Boone Pickens, who has made a big splash with his plans to invest in wind power. A few takeaways:

  • Pickens’ $2 billion investment in buying wind turbines has left him with “a slew of turbines he can’t use.”
  • U.S. government subsidies amount to $6.44 per million BTUs generated by wind, but natural gas costs just $4 now. These low prices may be around for years, with gas market futures contracts below $6 through 2017.
  • Even with the subsidy, gas can’t compete with wind. Wind power installations are down 72 percent in 2010 as compared to 2009. That trend is expected to continue.
  • “Texas Comptroller Susan Combs reported that property tax breaks for wind projects in the Lone Star State cost nearly $1.6 million per job.”
  • Because Canada has renewable energy mandates, Pickens hopes to sell his turbines there.

With the economics of wind power looking so grim and with $2 billion of turbines sitting around looking for a buyer, we have to question the wisdom of Wichita Mayor Carl Brewer recruiting wind power companies to come to Wichita.

Incoming Kansas governor Sam Brownback is a supporter of renewable energy standards. These standards require utility companies to produce a certain level of power from renewable sources, which in Kansas is primarily wind. When Kansas electric generator Westar announced plans to increase its wind energy portfolio, Brownback said “Kansas wind is an important resource for our state that will provide clean energy for our residents and businesses and contribute to our economic growth. I applaud Westar Energy’s leadership in wind energy.”

A Wind Power Boonedoggle

T. Boone Pickens badly misjudged the supply and price of natural gas.
By Robert Bryce

After 30 months, countless TV appearances, and $80 million spent on an extravagant PR campaign, T. Boone Pickens has finally admitted the obvious: The wind energy business isn’t a very good one.

The Dallas-based entrepreneur, who has relentlessly promoted his “Pickens Plan” since July 4, 2008, announced earlier this month that he’s abandoning the wind business to focus on natural gas.

Continue reading at The Wall Street Journal (subscription required) or at Bryce’s site (free)


5 thoughts on “Wind power: a wise investment for Wichita and Kansas?”

  1. Bob—I have a very close relative that works for a power plant that also has some windpower…this person is in the economics of the power co. and told me that no matter which way you figure it,, windpower costs 4x as much to produce as coal does when you hit the bottom line after having figured life of generator,Life of structure, repairs, replacement costs, etc,etc.
    A few people “in charge” are just trying to kid themselves and the sheeple about the wonderful wonders of windpower.

  2. If it can pay for itself , do it. If not do your home work on them. Never seen a wind farm pay the bills off. G.E. 1.5 MW wind mill. Used $750,000 , new $ 1.5 million. $400,000 to transport and put up. $85,000 per year for maintenance, that is if it is used or not. Replacement of generator head to 40,000 hours (bearings) Times this by how ever many that you would put up. //// 10 megawatts of natural gas would cost far less, run for years 40 or more and be off set by 14 acres of young trees, making natural gas just as green but more reliable by far. Above I put the price as used at $750,000 each. Used also means repo, due to unpaid bills.

  3. As long as the government subsidizes wind and solar, the wind and solar companies will continue to take. They will not be affordable, ever. That is not part of the plan. The plan is to come up with an idea that the government will give you money for. Not anything that will actually be affordable to consumers. It makes me laugh when the government talks about small business! They think of small business as places that hire from 50 to 150 people. Take a walk down Main Street, you LOONS! Those businesses hire 3 to 10 people and NEVER ship jobs overseas. NEVER ask for subsidies or tax breaks. (And never get any either!) And you don’t have to bribe them to stay in town! You’ll never be asked to paint their buildings or pay their bills. Thank GOD for mom and pop businesses, and dadgumit, we are sick and tired of being sneered at!

  4. Hi, Wind power isn’t really cost effective on a large scale. It would be a good investment for a farmer to augment his commercial power. It also isn’t something you can store for a calm day. We’d probably be as well off fermenting Pig crap to get the Methane.

    Later

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