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Debating the true cost of wind power electricity

Onshore wind generation is the cheapest renewable, but with back up, it costs two and a half times as much as gas or nuclear.

In a report published on 10March, the UK-based Royal Academy of Engineering (RAE) reveals that electricity from offshore wind farms, currently the most viable renewable source, will cost at least twice as much as that from conventional sources.

The independent study, commissioned from international energy consultants PBPower, puts all energy sources on a level playing field by comparing the costs of generating electricity from new plants using a range of different technologies and energy sources.
The cheapest electricity will come from gas turbines and nuclear stations, costing just 2.3p/kWh, compared with 3.7p/kWh for onshore wind and 5.5p/kWh for offshore wind farms.

"This may sound surprising," said RAE vice president Philip Ruffles, who chaired the study group, "especially as we have included the cost of decommissioning in our assessment of the nuclear generation costs. The weakness of the UK government's energy white paper was that it saw nuclear power as very expensive. But modern nuclear stations are far simpler and more streamlined than the old generation - the latest are only about half the size of SizewellB -... more [truncated due to possible copyright]  

In a report published on 10March, the UK-based Royal Academy of Engineering (RAE) reveals that electricity from offshore wind farms, currently the most viable renewable source, will cost at least twice as much as that from conventional sources.

The independent study, commissioned from international energy consultants PBPower, puts all energy sources on a level playing field by comparing the costs of generating electricity from new plants using a range of different technologies and energy sources.
The cheapest electricity will come from gas turbines and nuclear stations, costing just 2.3p/kWh, compared with 3.7p/kWh for onshore wind and 5.5p/kWh for offshore wind farms.

"This may sound surprising," said RAE vice president Philip Ruffles, who chaired the study group, "especially as we have included the cost of decommissioning in our assessment of the nuclear generation costs. The weakness of the UK government's energy white paper was that it saw nuclear power as very expensive. But modern nuclear stations are far simpler and more streamlined than the old generation - the latest are only about half the size of SizewellB - and far cheaper to build and run."

In the case of wind energy it is also necessary to provide back up capacity for when the wind does not blow. In this report, the RAE says it has been rather generous with the wind generation figures - assuming a need for about 65percent back-up power from conventional sources. The RAE has previously called for even higher back-up, more like 75to80percent. Even so, the cost of back up capacity adds 1.7p/kWh to the costs.

Onshore wind generation is the cheapest renewable, but with back up, it costs two and a half times as much as gas or nuclear.

Wind, nuclear and biomass generation all have the benefit of not emitting carbon dioxide, and the study also looked at the impact on costs of capturing carbon dioxide for all fossil fuels. This could add at least 2 p/kWh for coal-fired generators and 1-2p/kWh for gas generators. "Coal looks uneconomic in the future," said Ruffles, "by the time you capture the carbon dioxide it's going to cost as much as onshore wind."

Transmission costs

This study did not consider transmission costs to individual technologies or storage costs for gas to ensure security of supply - the market currently absorbs these through system operating costs or the cost of gas.

However, providing energy a long way from the eventual customer will add to its cost. "The renewables sector already benefits from subsidies worth around £485million a year through the Renewables Objective," added Ruffles. "The UK government is also planning to offer further subsidies in the form of reductions in transmission charges - this may run counter to the spirit of the new European Electricity Directive aimed at promoting competitive energy markets."

Ruffles concluded that people need to appreciate the real costs of generating electricity, including wind power.

In response the study, the British Wind Energy Association (BWEA) issued a statement which said that onshore wind in the UK already generates electricity at prices competitive with new conventional generation technologies, including nuclear, while offshore wind, initially more expensive, is starting to fall, with the general consensus that prices will reduce dramatically by 2020.

The BWEA also pointed to new research which showed current prices for onshore wind of 3.1pence per unit (p/kWh), dropping to 2.7p/kWh by 2010. The same research also found that current costs for offshore wind are 5.5p/kWh, predicted to fall to 4.4p/kWh by 2010 and further falling to 3.7p/kWh by 2020.

In addition, the BWEA was extremely surprised by the high figures quoted by the RAE for the cost of back up for wind energy.

These, it says, fly in the face of research conducted for the energy white paper, published in the UK government's Performance and Innovation Unit report of February 2002, which quoted a figure of 0.2p/kWh for a 20percent contribution from intermittent generation, more than eight-fold lower than the assumptions made by the RAE.

This low price for back-up, it says, will be further confirmed in a report due to be published shortly which concludes that intermittency is not a problem for wind energy at levels up to 10percent.

In relation to nuclear power, BWEA notes that the recent energy white paper concluded 'the current economics of nuclear power make it an unattractive option for new generating capacity'. BWEA further notes that the RAE report itself states 'further scrutiny of the commercial claims for nuclear power would be useful because of the lack of data from existing new build projects'.

BWEA assumes that the figures quoted for nuclear are based upon reactors that are yet to be built and is not aware of any market experience that proves the costs claimed by the RAE. This, it says, is in contrast with onshore and offshore wind where real cost data of real existing projects are used to make economic forecasts.

150000MW of wind energy by 2012

A new study by the German Wind Energy Institute (DEWI) predicts significant growth for the wind energy market over the coming years. The study predicts that by 2012 there will be 110000MW of installed wind power, worth about E130billion.

The five most important future markets indicated by respondents for the industry are France, UK, Austria, Italy and the USA. Compared with a similar survey in 2002 there is a major change here - there were high hopes for Poland and Turkey but they have not lived up to expectations.

On the other hand, countries such as Austria and the UK are increasingly going for wind energy, and France is developing more interest in wind.

Corin Millais, ceo of the European Wind Energy Association (EWEA), said, "The future of the wind industry lies in creating markets beyond the traditional big three, and this survey shows just how large that market could be - it has taken 25 years to built 40000MW, and will take less than 10 to add another 110000MW.

This, says Millais, is further confirmation that Europe remains the engine of growth of the global wind power market in the coming decade".


Source: http://www.engineerlive.com...

AUG 4 2006
https://www.windaction.org/posts/3811-debating-the-true-cost-of-wind-power-electricity
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