Cautionary Tale for Wind Power Enthusiasts: “Europe’s Renewable Romance Fades”

Note: On Vinalhaven, the bumper stickers “Spin, baby, spin” with an image of wind turbines sends a tired message. The bumper sticker is as empty of meaning as the FIEC production numbers that appear on  ratepayer bills; a monthly reminder to the neighbors of the Fox Islands wind turbines that “spin” is pretty much all that emerges from the closed-loop feedback that  suppressed community discussion — unlike places like Falmouth, MA — about the true costs and questions of wind power.

The “spinning” of wind turbines can be measured by kilowatt hours produced but it is meaningless without an analysis of the impact on the electricity grid. A new Wall Street Journal OPED gets to the heart of the matter.

Is wind power helpful to reduction of carbon emissions — as claimed by its advocates — or does it hurt? Because if it hurts, then paying twice as much for electricity — as Vinalhaven ratepayers do — than they would if the turbines had never been built, really hurts. Wind turbine enthusiasts are convinced they have the answer to this question: paying more for electricity through “sustainable” wind shows they are planting the American flag on energy independence. Really? Utility economists know the answer is much more complicated than “spin”.

Through one set of lenses, the neighbors of the Vinalhaven wind turbines are guinea pigs for the experiment of turbine placement where no state authority prevails over local, patriarchal practices of governance. It has turned out to be an extraordinarily costly experiment for neighbors, who are self-funding litigation against the state of Maine; litigation that is vehemently supported by Fox Island Wind and the local electric cooperative.

Through another set of lenses, the wind turbine neighbors are also paying — because they are subject to the miscalculations by the local enthusiasts on placement of the turbines too close to residences — for very important questions related to the stability of the New England electricity grid.

That the answers to those questions are gradually coming into focus — concerning the stop-start nature of wind and absence of technologies to store electricity on a municipal scale — is bitter news to neighbors whose property values, through no fault of their own, is impacted by wind turbines.

Wall Street Journal  OPINION
July 29, 2013, 6:52 p.m. ET
Europe’s Renewable Romance Fades

High energy bills and threats of blackouts ended the honeymoon. America, take note.


Europe has bet big on wind and solar energy, and many environmental advocates would like America to follow. Wind and solar have a role in the U.S. energy economy, but we would be wise to see the cautionary tale in the European experience and adjust our plans accordingly.
Wind and solar generate 3.5% of America’s electricity today, but Denmark gets 30% of its electricity from wind and hopes to produce 50% by 2020. Germany, Europe’s largest national economy, produces roughly 12% of its electricity from wind and solar today, and it wants renewable energy to account for 35% of electricity generation by 2020.

Clean energy powered by renewable resources is understandably attractive. But the honeymoon with renewables is ending for some Europeans as the practical challenges of the relationship become clear.

The first challenge is cost. Germany has reportedly invested more than $250 billion in renewable energy deployment, and its households pay the highest power costs in Europe—except for the Danish. On average, Germans and Danes pay roughly 300% more for residential electricity than Americans do.

Another challenge of Europe’s growing dependence on renewable energy is far more serious: the potential loss of reliable electrical supply. It’s one thing to ask consumers to pay more for cleaner energy; it’s another to force them to endure blackouts.

Since large amounts of electricity cannot be easily or inexpensively stored, it must be generated and delivered (“dispatched”) to meet the constantly changing demand for power. As millions of consumers turn electric lights and appliances on and off, power generators and grid operators must match supply to demand to ensure that current is moving across wires at the proper frequency to avoid power failures, brownouts and other problems.

Normally, this is fairly straightforward. Grid operators generally rely on coal and nuclear plants to meet baseload demand while modifying gas and hydroelectric power output to meet shifting demand. But electricity from wind and solar is variable and intermittent. Nature determines when and how much power will be generated from available capacity, so it is not necessarily “dispatchable” when needed.

When intermittent renewables are small players in the grid, they can be easily absorbed. But as they reach European levels of penetration, the strain begins to show. There are increasing reports of management challenges resulting from wind and solar across the European grid, including frequency fluctuations, voltage support issues, and inadvertent power flows. Anxious operators are concerned about potential blackouts.

In an April 17, 2012, letter to EU Commissioner for Energy Gunter Oettinger, for example, Daniel Dobbeni, the European Network of Transmission System Operators president, said grid operators are “deeply concerned about the difference in speed between the connection of very large capacities of renewable energy resources and the realization in due time of the grid investments needed to support the massive increase of power flows these new resources bring.” He also expressed great concern “about the potential destabilizing effect of outdated connection conditions for distributed generation that are not being retrofitted anywhere fast enough.”

There are solutions for these problems—upgrades to electricity transmission and distribution and expansions of “dispatchable” generation capabilities, coupled with “demand-response” and other efficiency measures. But the additional cost will be significant. The International Energy Agency has warned that Germany will need to invest between €47.5 billion ($62.9 billion) and €72.5 billion ($96 billion) in transmission and distribution over the next 10 years.

For now, the American picture is different. Unlike Europe, the U.S. has excess generating capacity and generally adequate transmission and distribution systems, so variability in the small amount of electricity produced by wind and solar in most markets is not a significant problem. But renewables are growing quickly. As older nuclear plants are decommissioned and new Environmental Protection Agency regulations shut down coal-fired plants, states such as California that are increasing renewable requirements will start to look more like Europe, with its cost structure and grid-management challenges.

There is also an important lesson in the European experience with energy subsidies: Focus incentives so they reward the right behavior. Lavish subsidies for wind and solar have changed Europe’s generation mix, but the costs have been high because the subsidy structure prioritized mass deployment rather than efficiency, reliability and innovation. Even in the U.S., the wind-production tax credit has occasionally produced “negative pricing”—that is, turbine operators pay grid operators to take their power even though it isn’t needed, just so the wind generators can collect tax credits.

If Congress insists on subsidizing renewable energy (and to be fair, Washington subsidizes all forms of energy), it should reform subsidies to incentivize innovations that would improve the efficiency and reliability of wind and solar, as well as the development of improved energy-storage technologies.

It is not surprising that many Americans share the European passion for wind and solar. But, as with any relationship, once the initial infatuation fades and difficult issues start to emerge, thoughtful action is needed before the relationship sours. Careful reform of our policies, informed by lessons learned from Europe, could avoid an ugly divorce down the road and help renewables find their place in America’s energy economy.

Mr. Garman, an assistant secretary and under secretary at the U.S. Department of Energy (2001-07), is on the board of directors of the Energy Innovation Reform Project. Mr. Thernstrom is executive director of EIRP.


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