Wind Power: Bad news blows in from Denmark

Many years ago I gave a short course on energy economics at Griffith University (Brisbane, Australia), and to the disgust of my students I insisted that only amateurs believed that wind-power would be able to deliver the goods.

As it happened, I was not completely correct, because although I did not know it, shortly before I gave that course, a manager at one of the largest and most prestigious scientific establishments in the United States, NASA (National Aeronautics and Space Administration), said that: "If the Danes could get 200,000 kilowatts from the wind back in 1908, we should be able to satisfy our present needs."

My memory is not as good as it once was where trivia is concerned, but apparently the excellent scientists and managers of NASA were thinking in terms of wind supplying about one-half of the electricity requirements of the United States. The problem here of course was that cost did not receive the attention that it deserved. My students in Brisbane suffered from a similar imperfection, because my suggestion that cost should always play some sort of role in dealing with the provision of electricity by alternative technologies, was greeted by the first gutter language that I heard in a university classroom.

In any event, the Danes are apparently talented where wind is concerned, because throughout the civilized world (and elsewhere) their achievements are constantly referred to. I regard this adulation as foolish, but unfortunately my personality deficiencies have prevented my messages on that topic from reaching the broad masses. For instance, despite my pedagogical talents, I have never been able to get those ladies and gentlemen to understand that the very high cost of electricity in Denmark would be even higher - and maybe intolerable - if the Danes were not able to hook into the grids of Sweden and Norway. In these two countries, before the curse of electric deregulation, the cost of producing electricity was perhaps the lowest in the world.

And not just the broad masses, because some of the smartest and highest paid ‘masters of the universe' seem to have fallen out of love with nuclear. I first noticed this in an issue of Business Week (10 July, 2006), where it was stated that "smart money is placing multi-billion dollar bets on ethanol, wind power, and solar. It's not throwing buckets of cash at nukes." I have heard this sort of thing many times in recent years, although ceteris paribus, these young ‘masters' should be perfectly equipped to comprehend the advantages of nuclear and the deficiencies of e.g. wind power. As I have gotten into the habit of claiming, without adequate nuclear, the ethanol, wind and solar in their ideal energy portfolios will underperform! I failed to emphasize this in my textbooks, but it is a basic premise in my present work (2010). I am also curious as to why this very simple hypothesis does not receive a great deal of attention from teachers and students of energy economics. As Thoreau remarked, "any truth is better than make believe."

Jeffry Michel, an MIT engineering graduate living in Germany, once informed me that the average capacity factor in Germany is about 21%. In other words, if 1000 kilowatt hours of (electric) electricity from a windmill are theoretically available during a year, the average (or better the expected) amount accessed during the same time period would only be 210 kilowatt hours. A year or so ago one of the leading energy/environmental bureaucrats in Sweden calculated that with a capacity factor of 25%, four (4) windmills with a capacity of e.g. 1000 kilowatts could replace a nuclear installation of 1000 kilowatts with a capacity factor of 100%, and as a result, with existing (construction and variable) costs, the windmills were a better economic prospect. Bizarre calculations of this nature were probably responsible for making (and keeping) Sweden one of the poorest countries in Europe until the Second World War.

Returning to Denmark, according to a short article by Torbjörn Isacson (2010), one of the largest windmill producers in the world, Vestas (of Denmark), has run into serious difficulties, and will be reducing its production. What I would like to believe is that the economics of windpower are on the way to being understood by highly educated persons in Denmark and the rest of Scandinavia, but this is only partially the case. They are understood in Finland, where despite the large cost overrun with its new Generation 3 reactor, it has been decided to construct two more reactors. But not in Sweden, where the dream of a complete massacre of the remaining nuclear reactors seems to be stronger than ever, given the growth in popularity of the environmental party. Unlike the situation in Finland, half-baked myths having to do with wind are more attractive in Denmark and Sweden than raising the percentage of energy independence.

REFERENCES

Banks, Ferdinand E. (2010). ‘The World of Energy: A Long Lecture'. Petromin-Asia. (Forthcoming).

Isacson, Torbjörn (2010). ‘Danska Vestas I rejält blåsväder'. Svenska Dagbladet. (19 August).

Professor Ferdinand E. Banks (BA,MSc,PhD) is the leading academic energy economist in the world.