POWER December 2010 - 6

SPEAKING OF POWER
Three Questions About
Renewable Energy
R
enewable energy advocates hailed
recent poll results as unquestionably
demonstrating the public's support of
renewable energy resources. However, answers
to follow-up questions showed that
the public's willingness to pay for increased
renewable energy is lukewarm at best.
The Financial Times/Harris poll, conducted
online by Harris Interactive, surveyed
household members who pay the
energy bill each month in France, Germany,
Great Britain, Spain, Italy, and the
U.S. between September 15 and 21, 2010.
They were asked three questions about
their support of renewable energy.
Question 1
The first question was, " How much do you
favour or oppose a large increase in the
number of wind farms in [your country]? "
The expected strong support was evident
with 87% of U.S. respondents marking either
" favor more than oppose " or " strongly
favor " ; Europeans responded with similarly
high percentages. Without context, some
advocates concluded that the poll results
were a public mandate for wind farms.
Peter Kelley, a spokesman for the American
Wind Energy Association (AWEA),
quickly jumped to just that conclusion.
" There are few things in this world that get
87 percent of support from the American
public, " he said in an interview with The
Hill on October 28. Kelly then noted that
a national renewable electricity standard
(RES) would lower energy bills by driving
down the cost of natural gas. " When asked
whether they want to pay more, well, they
don't have to pay more, " he said.
New wind project start-ups in 2010 are
a fraction of those in 2009. Even with extremely
favorable tax treatment, investors
are migrating to more lucrative opportunities
in other industries. The key reason
wind installations are becalmed is not for
lack of government mandates or subsidies
but because the price for natural gas is low.
After all, tax credits for investors aren't
particularly helpful unless your company is
profitable.
In fact, AWEA yearns for gas prices
at least in the $7 to $9/million Btu
6
range, the minimum at which wind farm
development, with existing tax credits,
become economically competitive. With
gas prices expected to remain low for a
number of years, AWEA's only remaining
option is to push a national RES that
uses regulatory forces rather than market
forces to spur growth.
Question 2
The second question- " How much of an
increase would you be willing to pay at
the most, for energy if it were from renewable
resources? " -adds context to the poll
results. Among U.S. respondents, 34% answered
" nothing more " and 17% said up to
5% more. It's not surprising that everyone
wants wind energy but few are willing to
pay the freight. Should the cost of energy
increase by 20%, the percentage of wind
energy supporters nosedived to 5%. The
percentages were even lower in Europe.
Implicit in these two questions is the
assumption that wind farms are " clean "
because they produce zero air emissions.
This is not always a good assumption. The
real emissions of any power generation
technology can only be determined within
the context of its effect within the larger
and much more complex electricity grid in
which it operates.
In west Texas, for example, it's common
now to have negative price periods during
which suppliers actually pay grid operator
ERCOT to take their power. This energy
market distortion is caused by Production
Tax Credit and Texas Renewable Energy
Credit revenue that is solely based on the
quantity of energy produced, not on when
the energy is needed by the grid. Market
data show instances when negative power
prices have reached up to $35/MWh before
wind farms were shut down, giving insight
into the level of subsidies owners receive
for that wind energy.
Proponents note that subsidies are
meant to distort the market in order to
achieve the greater good of clean energy
generation. Perhaps, but this question remains:
Are regions such as ERCOT's west
Texas actually operating at lower overall
emissions with wind farms? In the Sepwww.powermag.com
tember/October
issue of COAL POWER
(www.coalpowermag.com), a sister publication
of POWER, one author makes the
case that net emissions actually increase
with more wind farms. In the two-part report
" Overblown: Wind Power on the Firing
Line, " the author argues that because the
majority of wind energy is produced offpeak,
the net effect of wind farms running
at zero to negative power prices at night
is to cycle normally baseload coal-fired
plants, causing a net increase in system
emissions. Perhaps wind energy is not as
clean as you expected.
Question 3
The third and last question went to the
heart of this clean energy tug-of-war:
" The European Commission estimates
it would cost each household an extra
€150/£110/$220 on a monthly basis
on gas and electricity bills to cut green
house emissions and get more renewable
energy. Given the choice, how
likely would you be to pay this extra
€150/£110/$220 per month? " Predictably,
only 12% of U.S. respondants answered
that they were " completely " or
" very likely " to make that choice; percentages
were lower for European countries.
In the U.S., 68% of respondents
said they were " not at all likely " to pay
that much extra; in European countries,
the range was between 36% (Italy) and
77% (France). As for most of our U.S.
readers, this surcharge would more than
double my monthly electricity bill, so put
me in the " not at all likely " category.
The problem with this last poll question
is that it implies there is a choice
in selecting renewable energy, when none
exists. Rising energy costs will remain hidden
on your monthly bill in the form of
tax credits, building new gas-fired plants
dedicated to chasing wind, system operating
inefficiencies, and increased maintenance
on existing fossil plants with what
appears to be no discernable environmental
benefit. That doesn't sound like much
of a choice to me. ■
-Dr. Robert Peltier, PE, is POWER's
editor-in-chief.
POWER | December 2010
http://www.coalpowermag.com http://www.powermag.com
POWER December 2010

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