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.