Comments on: Long-distance transmission complements “local self reliance”

By: Bartman

Bartman — Mon, 23 Nov 2009 04:35:27 +0000

Nothing from the web, Jim, just numbers from folks at my employer, when deciding whether we get into the wind business or not.

A 2.5MW wind turbine costs about $5 million. Amortize it over 35 years, expect to earn 10%, and add in a reasonable operating and maintenance cost and maybe it makes sense at $30/MWh, if we assume the thing is running at 100% capacity. But it isn’t, it’s averaging 10 or 15 or maybe 25% capacity factor, so you need $120 or $150/MWh. And the wind tends to blow a lot at low-load (and hence, low priced) hours, and the more wind that is put in, the lower the price goes when the wind blows.

These days it isn’t uncommon to see power priced at $0 to minus $20 (or less) when the wind blows in places like West Texas and Iowa. You have to do a lot of wishful thinking and finger-crossing to make wind look good, and I couldn’t live with such optimistic assumptions. Neither could my bosses, who decided not to spend their owners’ money on wind development.

As to whether the I-bankers are wrong, well, I don’t know. I don’t know what assumptions they’re making that make wind look like a good investment, but as I said above, I couldn’t make them with a straight face.

By: GraniteViewpoint

GraniteViewpoint — Thu, 19 Nov 2009 16:54:37 +0000

bartman,

Based on your prior posts, you seem to know what you’re talking about. But that $100/MWH estimate for wind seems high. Do you have any web accessible references for the $100/MWH number?

I did some analysis of local medium-scale wind projects (25-150 MW) in NH and ME and many projects appear to be well under $100/MWH (especially in ME). Also, these are mostly mountaintop projects that are more costly than midwest wind.

Also, it seems like the capital markets are still very receptive to wind projects, even despite the credit crunch. Do you think they’re just wrong about the economics?

Thanks,

Jim

By: Fat Man

Fat Man — Thu, 19 Nov 2009 02:36:39 +0000

Some years back a wrecked ship was discovered off the coast of Anatolia, the wreck contained cargo that was unmistakably from places far away such as ingots of metals that cannot be found nearby. The wreck was estimated to be from about 3000 B.C.E.

Pre-columbian Indian graves have be excavated in Ohio that contained goods from Mexico and Lake Superior.

Trade over long distances is not a modern invention nor an artifice of Western Civilization.

The “environmentalist” fascination with abolishing trade is another proof, as if any more were needed, that their ideology is not even vaguely related to reality.

By: bartman

bartman — Wed, 18 Nov 2009 18:02:45 +0000

With the prospect of shale gas keeping gas prices below $6 for several years, if not decades, renewables are dead in the water. Solar and wind both need power well into the $100/MWh area to obtain a reasonable ROI, and with enough gas, we won’t see power above $60 anywhere or anytime. Carbon prices would have to be >$100/ton to make renewables borderline economic.

Also, it’s almost like these self-reliance folks have never heard of comparative advantage. Does this guy drink coffee or tea, or wear cotton clothes, or eat seafood? None of those things can be done with local products if you live in the northern half of this country more than 100 miles from either coat.

By: Charles Barton

Charles Barton — Wed, 18 Nov 2009 14:45:21 +0000

Michael, an alternative approach to energy localization would be to develop a small (100 to 400 MW) Liquid Fluoride Thorium Reactor that can be either air or water cooled. Clusters of LFTRs could be installed on existing coal and gas turbine power plant sites. Much of the existing plant infrastructure including the connection could be recycled. LFTRs could be mass produced in factories lowering nuclear manufacturing costs. They could be housed underground in many locations, eliminating the necessity for expensive above ground containment structures. LFTRs would be very safe. They would produce little or no nuclear waste, and stable fission, a LFTR output, would have positive market value, and thus would not be considered local waste. With this scheme, few additions to the grid would be required, and electrical production would be kept close to the electrical consumers. This system could be implemented at a fraction of the cost of conventional nuclear reactors, or renewable generating systems. It could be available in as little as 10 years with a Manhattan project type approach, and would be extremely scaleable with mas production in factories.