Running the numbers - true cost of commercial wind power

An interesting set of numbers from Ronald Bailey at Reason Magazine:

Costing Cape Wind: Was Teddy Right for the Wrong Reasons?
Yesterday, Interior Secretary Ken Salazar gave the green light for the Cape Wind wind farm project off Cape Cod. In a May 16, 2006 article in the Boston Herald, then-Sen. Ted Kennedy, whose family famously owns a "compound" overlooking the site of the future wind farm, denounced the project as a "special interest giveaway."

At his press conference yesterday Salazar said, "I don�t know the cost of the project, but I know it will be subsidized, but not sure by how much." In fact, Cape Wind Associates, the developer of the project is treating the cost estimates as a trade secret. The 130 wind turbines each have a maximum capacity of 3.6 megawatts, which sums to a total maximum capacity of 468 megawatt for the project. However, the wind doesn't always blow, so a generous estimate of a 40 percent capacity factor suggests that Cape Wind's generating capacity would average of about 184 megawatts.

Cost estimates for the Cape Wind project run from $1 to $2 billion. Let's assume the lower capital cost estimate and compare it to the capital costs for other types of electric power generation. Using cost estimates from the Electric Power Research Institute, I roughly calculated last year that building a 1,000 megawatt combined-cycle gas turbine power plant would cost about $1 billion, and a modern 1,000 megawatt coal-fired plant would cost about $2.8 billion. Now let's assume that they run at 90 percent capacity.

Crunching through the numbers, it appears that Cape Wind's capital costs are roughly 5 times greater than those of a comparable natural gas plant, and nearly double that of a modern coal-fired facility. Speaking of "giveaways," the sting of Cape Wind's high capital costs will be offset by federal subsidies amounting to $300 to $600 million.

And remember, that $300 to $600 million is dollars that we gave to the US Government on tax day. And remember that because this wind is a variable source, the power companies still need to have backup power generating capacity available online to fill in on a moment's notice should the wind die down during a time of increased need. Projects like this do not take coal or gas power plants offline, they just make things a lot more complicated and expensive while generating nothing but a feel-good thrill up the leg of the environmentalists. If people wanted to be effective, the government should take this $300 to $600 million and use it to super-insulate the houses of the people who will be served by this fiasco. Amory Lovins coined the term: 'nega-watts' and it fits the bill perfectly. Reduce our need, don't cripple our source. A major hat tip to The Daily Bayonet who also found this link to the actual cost of the electricity from the New York Times:

Selling Cape Wind�s Future Wares
Cape Wind, the huge offshore wind farm that recently won federal permission to build near Cape Cod, Mass., announced on Friday that it had signed a deal to sell half the project�s output to National Grid, a New England utility, for a price beginning at 20.7 cents a kilowatt-hour.

The next hurdle, which may be tough, is to persuade Massachusetts regulators to approve the deal. Retail rates for electricity in Massachusetts are now around 9 cents. And the 20.7 cents is just a beginning: The price is supposed to rise by 3.5 percent a year for the 15-year life of the contract.

So, we spend all this money, dink the taxpayers a couple hundred million dollars and more than double the electrical rates. And, considering this is #1) Massachusetts and #2) Federally Subsidized, I guarantee there will be cost overruns and that the $300 to $600 million in federal subsidies will just be a convenient starting point...