Wind Power Economics Discussed at UMaine
Thursday, November 03, 2011 10:05 AM
The economic costs and benefits associated with wind energy as compared with other energy sources were analyzed at a University of Maine forum on Wednesday, October 26, by economists, an energy analyst, and an electricity transmission expert from Central Maine Power.
Charlie Colgan: Economic Issues
Charles Colgan, the former state economist and a University of Southern Maine professor in public policy at the Muskie School, said his analysis of three operating commercial wind farms in Maine indicates that wind power has very different short- and long-term costs and benefits.
In 2010, Colgan did impact analysis on the First Wind farm at Mars Hill, the TransCanada farm at Kibby, and First Wind Stetson I and II.
"The job impact is mostly in the construction phase, with about 300 jobs created in the state," said Colgan. Goods and services related to construction totaled $223 million in Maine, he said.
He estimated that 45 total jobs are required during the operating period of the farms, with occasionally more during maintenance. Offshore wind will need more workers due to the marine support jobs associated with ocean-based turbines.
Colgan said that increasing use of electricity to fuel the information age and hybrid vehicles, which are likely to become more prominent as new emission-control standards are implemented in the near future, will rely on a mix of energy-supply types to meet demand.
"Wind power will be around for decades and the future will determine how effective it is," said Colgan. "Wind, along with wood, is one of the only ways Maine has to become an energy supplier."
There are no other types of big projects, including hydro and tidal, on the horizon, said Colgan.
Other questions about wind power, including the impact on tourism, health concerns from sound and pressure waves and possible mitigation or litigation costs associated with siting wind turbines, were not analyzed from an economic perspective.
Gary Hunt & Colin High: Air Quality, Subsidies and Hidden Costs
Gary Hunt, a professor of economics at the University of Maine, said that wind energy is competitive when all hidden costs associated with extraction and burning of fossil fuels is factored into economic models.
Wind power developers receive federal subsidies through grants and tax breaks that fund research and development of wind power. On the face of it, that makes wind power a much higher cost form of energy than gas, coal, oil and hydro.
But costs go down over time, once the research and development phase turns into more routine operations, said Hunt.
He also argued that when the environmental costs associated with pollution control and the impacts on health are factored in to the cost of petroleum and coal, the price of wind power generated per kilowatt hour is less expensive than oil and coal and competitive with natural gas.
Wind power creates negligible pollution in the manufacturing, delivery and construction of wind turbines, said Hunt.
The cost per kilowatt hour for traditional fuel sources, then, is artificially low because the environmental costs are not borne by the manufacturers, but by consumers in the form of health care bills and taxes for environmental clean-up.
"We need a real comparison of costs," he said. The best way to assess cost per kilowatt hour, said Hunt, is to put emission charges on oil, coal and gas. Then, when wind power subsidies are removed, wind power is economically competitive.
Wind could provide 20 to 25 percent of the electric power supply for New England by displacing coal and oil in the electricity supply mix, said Hunt.
"Wind directly reduces emissions by displacing fossil fuel generation," said Colin High, an energy and environmental consultant from Vermont. "Wind must be pushed into the system immediately so it will displace the most expensive source at the particular hour when the wind is blowing."
Currently, energy generated by wind cannot be stored.
High said that scientific modeling shows that a 40-megawatt wind farm, such as the one at Mars Hill, displaces 107,216 megawatt hours from a combination of coal, oil and gas. That keeps the equivalent of 60 tons of carbon dioxide and other pollutants from being spewed into the air each year.
"No one is in any doubt about this," said High.
CMP's Brian Conroy: Transmission
Brian Conroy, the director of electrical engineering systems at Central Maine Power, briefly described how the New England electricity grid works.
The grid, which takes in all of New England, not just Maine, is the infrastructure that transmits electric power to customers. It doesn't generate electricity. It moves it around.
Predictions are made about how much energy will be used at a specific time of day on any given day in the year. Then, the grid goes into a sort of cruise control for that time frame to deliver the needed electricity, explained Conroy.
The issues with wind, he said, are two-fold from a transmission point of view. First, wind farms tend to be located some distance from collection points on the grid. Since the developer pays for the connector lines that take the wind-generated power to the grid, it can be a large capital expense for the developer and trickle down to increase the price of the electricity.
The second issue is the uncertainty of when the wind will blow, making it difficult to make the predictions Conroy said are necessary to keep the grid supplied with power.
High disputed this, saying that wind, like weather, can generally be predicted two, three or four days out and planned for in the energy mix.