The US stimulus and "green jobs" for wind energy

Recently, there have been worried or angry or outraged articles in the blogosphere about the stimulus money going to help create jobs in Canada, China, or going into the pockets of foreign multinational companies.

I'd like to make a few comments on this.

This is part of my series on wind power.

  1. One of the reasons US projects need to import foreign-manufactured turbines is that the US-based production capacity is currently equal to less than 2/3 of the overall US market for new installations. Just under 8,000MW will be installed this year, with a current manufacturing capacity of 5,500MW. Many manufacturers are investing to build new factories, but this will take time;

  2. The main reason there is not enough manufacturing capacity is because the US has an appalling track record in supporting the industry: 3 times over the past decade, Congress allowed the main regulatory instrument, the PTC, to elapse, causing a catastrophic drop in installations:

    This had global consequences - the disappearance of one quarter of the world market is not an easy event to deal with - and almost caused the bankruptcy of several turbines manufacturers (some were bought out). Ever since, manufacturers have probably undersized their investments, in order to be able to deal with such a potential drop in demand, and they mostly avoided the US as a production base as a result, even though there are serious logistical advantages in this (heavy) industry to be located near your market.

    There is no secret: the only way to have manufacturing investment in an industry which needs no subsidies, but a specific regulatory framework is to have stable policies and, dare I say it, an industrial policy to promote both the wind industry (a good thing in itself) and the wind turbine manufacturing industry.

    This is still missing, right now. States are doing this at the local level, but it would make a lot of sense to do it at the federal level.

  3. One of the reasons why the early federal grants have gone to European companies is that they are amongst the main investors in the sector in the US (and globally) - because they are familiar with the sector, because they know how it works, because they have better access to the (artificially scarce) turbines, and are willing to invest in the US whenever it makes sense to do so. The sector is now a strategic activity for most big utilities in Europe, initially because they were forced by public authorities to invest, and now because they like the returns they get, and they have massive investment programmes at home and elsewhere. And the European suppliers are following them. Protectionism might choke that source of investment.

  4. Additionally, a large part of the money being invested in the US wind sector actually comes from European banks. The industry has largely been financed by project finance (which is my job), and that is a lending activity and not a capital markets activity - thus it did not interest US investment banks. So European bank balance sheet money has poured into the US wind sector to the tune of many billion dollars per year over the last several years. The financial crisis disrupted this for a while, but the European banks are now back at it. Again, protectionism might be a double-edged sword.

  5. Furthermore, a lot of the US-based solar manufacturing industry has come to life thanks to the generous tariffs provided in Germany and Spain for solar power: this help built the local industry, but significant amounts also went to manufacturers from around the world, including some large US players.

  6. While the worriers note that 50% of the jobs in wind come from manufacturing, it is also true that the other 50% are local (installation and long term maintenance and by nature not offshoreable - these will stay for the long run (that's more jobs than when you buy oil or coal-fired electricity, in any case); separately, building wind power generation is a good thing per se, avoiding carbon emissions, reducing dependency on fossil fuels (while natural gas is plentiful this year, there are still plenty of long term worries) and offering a stable-priced long term generation capacity.

As Natasha Chart noted in her sensible article on the topic, there are a few things that can be done:

  • local content requirements (say, 30-50% of the investment) are legal, and legitimate, and can help build up the local infrastructure and industry;
  • but they will work only in the framework of stable policies that are long enough, and credibly so, and not subject to the whims of politicians too scared of "socialism" or "subsidies" to keep at it;

The reality is - you get what you want. You cannot have the creation of large scale manufacturing employment without, again, an industrial policy. If you can't own up to a concept that too many seem to see as "socialist," all you'll get will be haphazard results, benefitting those that do have consistent policies and the infrastructure that goes with it, who will be able to take advantage of semi-random bursts of public support dictated by urgency or short term political grandstanding rather than properly designed.

In other words, if you want large-scale renewable energy investment, you have to accept the reality of the market today (ie it is dominated by European companies, with the Chinese pushing in), and put in place the policies that will make it attractive to invest in the US for the long term.

Why don't European manufacturer's build plants in the US?

Because their governments are using public funds to build green jobs in their own countries.

The US is very 'unprotective' compared to the rest of the world.
The result?
The US has become almost totally deindustrialized.

(And who started the renewable industry? Initially, the US(California).)

So here you advise the US to adopt a European style 'green industrialization'/subsidization but without protectionism?

Huh?
It's a contradiction in terms.

Majorian,

Why don't European manufacturer's build plants in the US?

Vestas, a Danish wind energy company (The one with the biggest market share in the world) is building manufacturing plants in the US and closing them down in the UK and Denmark. They are also building research centers (Houston), Blade and Tower Factories (Colorado). (see for ex. link1, link2, link3)

And who started the renewable industry? Initially, the US(California)

Could you give any link or figures about that? Germany and Denmark had a big renewable industry decades ago. I'm not saying you're not right. I'm just curious as I don't know the answer. Was California's renewable industry output higher in the 70s/80s than that of Europe?

It's not my intention to say that Europe and Japan didn't have early renewable energy programs but rather to counter the argument that americans are not capable of developing their own renewable industry (with our own money)and must import it from outside.

This is part and parcel of the 'comparative advantage'-globalistic-evilbastard-libertarian economists who justify the gutting of the US on economic principles, i.e. wind turbines can be built cheaper in China or India so it's foolish to build them in the US.

http://en.wikipedia.org/wiki/Comparative_advantage

I don't have exact numbers but if you're in California drive thru San Gorgonio or Tehachapi.

http://en.wikipedia.org/wiki/San_Gorgonio_Pass_Wind_Farm
http://en.wikipedia.org/wiki/History_of_wind_power

Hi Majorian,

I certainly agree that US-americans are fully capable of developing their own industry. And as Jerome is saying, manufacturing plants from abroad (Nordex, Vestas) and from the USA (GE) are creating local jobs (from the unskilled to the very skilled). IMO, for the time being, A balance of local and foreign investment has to be struck. In a transport constrained world, maybe things will move in another direction.

About History. The example of San Gorgonio and Tehachapi might be a bit unfortunate as around half the turbines that were installed there during the 70s and 80s in the California Wind Rush were Danish.
(see for ex. Wind energy in America: a history By Robert W. Righter). Which is not to say that the technology is not in the USA, as GE's success is proving.

My only comment was about the accuracy of the statement that the US started renewables in the 70s. It sure played a leading role with the subsidies in California, but many of the advanced aeronautical developments (from NASA, etc) never succeeded commercially. Also many innovations came from all around the world (solar thermal in France and Spain, Solar Tower in Spain for example).

About comparative advantage, as has been discussed in this blog often, there are hidden costs behind globalization. A price tag on robustness, unnecessary complexity, expensive fuel, unemployment, etc ... would make outsourcing look different ... but that's not the model today.

In any case, for turbines that weigh around 450 tons, shipping is not so cheap ... so locally produced is prefered (also because of logistics: Moving 50m long things half way accross the world is not practical, so it's avoided when possible).

Massagran

The US did start the wind industry in the 70s, but it dies down after the regulatory framework became erratic and then inexistent in the 80s. Quite a few engineers move on to Europe, where programems were started a bit later and sustained in Denmark and then Germany.

A regular on European Tribune is one of the US pioneers that moved to Europe to follow the industry. His comments are a gold mine of information on the technical side of the industry.

majorian:

Why don't European manufacturer's build plants in the US?

Actually, they do, more than a few, as noted in the comments above. But they would do more if the demand was more predictable.

So here you advise the US to adopt a European style 'green industrialization'/subsidization but without protectionism?

I noted that some protectionism (local content rules) would make a lot of sense as part of the package.

The US is very 'unprotective' compared to the rest of the world.

Again you've been suckered by your PTB's. Ask Canada how "open" or "free for trade3" the US market is. It's only open for fair trade with Canada until ANY local industry complains to their state senators about imports causing hardship for their constituencies, then it's out with the trade barriers. See Canada suing US at WTO over illegal softwood lumber tarrifs, winning $5 billion still unpaid after several years. See present situation ref. beef (only difference between Cdn and US practice is that Canada actually tests any animal suspicious for BSA. All deer / elk across northern US are suffering BSA but US does nothing, says nothing. See "anti-dumping" laws which killed lower-cost Canadian steel mills. etc. etc. etc.)

I agree that our labour should not be required to compete head-to-head with Asian or eg. Mexican labour when no workplace standards or other labour standards exist there (child labour, ridiculous work weeks, etc. etc.), but it seems instead that the US is ONLY interested in penalizing imports from countries like Canada where labour standards are higher. US workers need to stop listening to TV, esp. eg. FOX.

I have news for you, according to the wingnuts, the oil price is a TARP-funded scam. Read it and weep.

If we are post peak and production is declining we would expect to see high oil prices and massive overcapacity in the upstream oil industry from shipping to refining and pipelines.

Given this is exactly whats happening I don't see how this can be construed as weak demand for oil.

To many refineries and not enough oil does not equal weak demand.

I suggest you think that one through again as it make no sense. This might help:

a) Overcapacity is caused only by weak demand. Declining production caused that weak demand.

b) Generally it had been thought there were not enough refineries since none have been built since 1976. That a refinery should close citing "lack of demand" is quite shocking and a telling sign of the sheer extent of the current slump and oversupply.

c) As for "Peak Oil". Hubbert was actually referring to cheap oil - say 30$ a barrel in todays terms, not expensive oil - say $100, of which there is still an incredibly huge amount left in heavy oils in Venezuela and North American shale oil. It was always there and was also mentioned by Hubbert, but was not worth extracting at cheap oil prices. Only the higher oil price is what makes it profitable to extract. Notice the phrase is always "the era of cheap oil is over" with the emphasis on "cheap". Only the uninformed think that there is any shortage of expensive oil.

d) Lastly, if you had played any commodities markets you'd know about the huge manipulations by unaccountable hedge funds run by the big banks - it's common knowledge and it happens with all the commodities. It stopped only when they run out of other peoples money. It restarted when the taxpayer started refunding them.

I don't think of myself as a "wingnut", but it is hard to see where else all that money is going. Some of it goes to executive bonuses -- but otherwise, the targets seem to be hiding "toxic" assets (keeping housing prices up) and supporting oil prices in the face of declining demand.

I guess that if the (unintended, perhaps) result of all this is to allow for a rationalized collapse of demand with declining oil supply, then creation of an uberrich banker class may be the price we pay for avoiding social catastrophe. And maybe that won't work, either, but it seems to be the choice of our world leaders.

I should just point out this news article, with the Institution of Mechanical Engineers saying that the extreme government targets (80% CO2 reduction by 2050) are not achievable because "there is not enough time or capacity to build the wind turbines and extra nuclear power stations required."

http://news.bbc.co.uk/1/hi/sci/tech/8358077.stm

Unsurprisingly for the anti-science UK government, the official response is "The Institution of Mechanical Engineers' can't do, won't do attitude is sending out a defeatist message ahead of the crucial climate change talks in Copenhagen."

Save me from too many arts graduates thinking science/technology/engineering can be 'magicked' into existence because they put it in a policy document, then do nothing else.

We need some real scientists and engineers in control, with long term strategic plans that address the big issues and get down to cold hard metal rather than abstracts. I don't see it happening for CO2 or peak oil otherwise.

The IME doesn't seem to take into consideration manufacturing additions or workforce training, just focusing on what we have now. This IS, however, a wakeup call that measures need to be taken sooner rather than later, and that a critical path analysis be performed to understand where the bottlenecks are.

Tiered pricing of electricity and natural gas for homes and offices can reward those who take steps to insulate and replace inefficient HVAC. The zero-energy by 2016 drive will make sure new buildings use over 80% less energy. City center tolls (such as London's) can help reduce wasteful single occupant car commuting. Smart grid technology can also help reduce consumption. And of course, that's just the tip of the iceberg, so a 50% reduction would be a low target instead of an ambitious one.

The recession is keeping the lights on at the moment. There are a couple of unusual things happening in the UK electricity market at the moment.

The low price of natural gas and large number of CCGT's seem to to be undercutting the price of coal generated electricity, also there are net electricity exports to France as they seem to have a lot of nukes out of service for various reasons.

http://www.reuters.com/article/utilitiesSector/idUSLU26856720091030

http://www.bmreports.com/bsp/bsp_home.htm

The UK has wasted its North Sea reserves making cheap electricity with no long term investment in alternatives or storage. LNG import capacity has been built fairly quickly and it I don't see the 'gas glut' lasting for very long. I think the UK needs to get its act sorted on several key areas.

Build more natural gas storage facilities.

Improve thermal efficiency in buildings: insulation and move towards heat pumps starting with those on electric and oil fired heating. External insulation and solar water heating should also be considered.

Adopt the Danish model of multifuel CHP systems burning coal, rubbish, biomass and gas whilst providing district heating. Distributed generation running of gassified waste / coal / natural gas / biogas should provide good security and flexibility. Dump the CO2 and waste heat into greenhouses.

Accelerate construction of replacement nuclear reactors and grid upgrages to add more interconnectors with Europe and accomodate more wind power.

Expand and electrify existing railway services.

Look at potential for coal bed methane / gasification of the coal reserves under the North Sea, from a CO2 perspective this may not seem a good idea by this time there should be plenty of empty oil / gas fields to pump the CO2 into.

Build the Severn Barrage, and uprate and expand if possible existing pumped storage sites.

Roll out electric vehicles as they become available.

Or maybe DTI/DBEER/ whatever its called these days will just change its name again!

I'm alaways a bit non-plussed at such claims. It's not because we don't have the capacity today that we can't build it. It will take a number of years, but it can happen.

Without going into wartime efforts, one can note how quickly France ramped up its nuclear construction capacity in the 70s, to replace its whole thermal power production and more (at the time).

So how can one explain this massive production during world war II ?
http://en.wikipedia.org/wiki/Military_production_during_World_War_II

Apparently if you needed these wind turbines to kill enemies instead of saving the world, you would have your manufacturing capacity within years or even months.

By the way, with the $180 billion spent on AIG to save Wall Streets bonuses, one could have financed 600 thinfilm photovoltaic factories, which produce 96 GW of PV modules per year:
http://www.oerlikon.com/ecomaXL/index.php?site=SOLAR_EN_press_releases_d...

It's clearly a simple question of priorities and not possibilities.

But I do understand now why British products do not sell well in the world given the ignorance of their Mechanical Engineers.

The report calls for a warlike mentality to combat climate change, arguing that it needs much tougher tactics and a new enhanced government department to meet the challenge.

Probably worthwhile reading the news story first, let alone the paper.

The report says that the scale and speed are not possible with the current approach, or anything like, because the priority would not be there to deliver an almost total removal of all CO2 from electricity generation by 2050. The scale and speed are such that you need a strategic programme, rather than a piecemeal wishlist.

The main call however is for geoengineering to be researched, since CO2 mitigation approaches are unlikely to be sufficient to avoid the 2C temperature rise, because of the lack of directed political will.

In general I'd say they are correct if you take BAU growth as a baseline to keep too. Wartime type priorities are not BAU.

Ok, in that case saving Wall Streets bonuses is considered a wartime priority and reducing fossil fuel imports and reducing the unemployment rate is not.

I do believe thier mechanical engineers are taking into account not only technical but also political reality-that the efforts being made are simply grossly inadequate and certain to remain so.

The dollar is declining by the day. We see this in the price of gold, exceeding $1100 per ounce today and the rise of the Euro. Criminal elite have hijacked the American government. We see this at the revolving door between Wall Street and Big Government—bailouts for high rollers, supposedly too big to fail. We see this in American tacit support for the genocide of Palestinians—bad, bad karma, the tragedies of the wars and occupations of Iraq and Afghanistan and in the inanity of the main streams—radio, television, you tube, print, whatever. America’s economy is going the way of the Weimar republic. Framing any discussion of the future of American energy in terms of the old United States appears to me like playing baseball with a hockey puck, or going to a professional wrestling spectacle to hear Handel’s Messiah. Any energy or industrial policy coming out of Washington is a table scrap thrown by the Criminal Complex. Soooo . . . is there a Ghandi in the house?

On a (sort of) related note:

http://blogs.wsj.com/environmentalcapital/2009/11/10/paging-don-quixote-...

"In the wee hours of Sunday morning, Spain set quite a record: The country got more than half its electricity from wind farms, a first for a country long invested in renewable energy.

The wind in Spain just doesn’t have the same ring to it.Between 4:30 and 6 a.m., Spanish wind turbines took advantage of a particluarly windy day to generate 53% of the electricity coursing through the grid. Spain had never gotten more than 43% of its juice from wind power before. It suddenly had so much wind power, it had to export some electricity.
(...)"

Waveman: Of course. The owners of the USA have zero interest in either an industrial or energy policy for the nation. What is surprising is that this reality is avoided by so many.

One of the things that strikes me about wind is that it is really the unsubsidized total cost of wind that is important, not the subsidized, in terms of its effects on society. This includes the cost of all of the upgrades to the grid. We can see how "overspent" the US government is now. Even feed-in tariffs have a cost to homeowners and businesses. Maybe huge amounts of wind subsidies really don't make sense.

Another thought is Jerome's frequent comment (but not in this post)--"Just think how inexpensive wind will look in a few years when fossil fuels are more expensive"--may not ever be true. We know that the economy sinks when oil is over $80 - $85 barrel. We are seeing how hard it is to maintain high natural gas prices, even in Europe. Perhaps Jerome's statement is equivalent to "Wind will be competitive on its own when oil hits $200 barrel."

Another thought is the real question on the long-term nature of wind is the amount of time it adds to the grid as a whole for producing electricity. In other words, we can run the grid for N years, using only fossil fuels, before it fails for one reason or another (lack of fuel, or lack of paved roads, or breakdown in the international monetary system, for example). If we add some specified amount of wind, we can run the grid for, let's say, N + K years. The question is "What is K?". It seems to me that K has to be considerably less than 40. It seems like K could even be 0 or negative, if spending on wind displaces spending on nitty-gritty things like replacement of worn out transformers, or if by trying to build the grid out bigger, we make it less resilient.

Maybe we would be better off working to get N up. One part would seem to be taking better care of the maintenance or our existing grid. Another thing might be taking steps to undo "deregulation", if this is at all possible. The last thing we need is the failure of the grid because of financial failure of some of the companies involved in electricity production or transmission.

We do have a historical example to refer to in thinking about wind power: The Netherlands. The Dutch deployed wind power extensively in the late middle ages on up into the early 19th century.

Why such an extensive deployment of wind power there? One answer is sufficient: lack of better alternatives.

We will deploy wind power massively when better alternatives are no longer available. Until then, it is problematic - unless you subsidize it.

Nope, wind is actually cheaper, on a long term average, than other sources; it's just that it's not profitable under current deregulated power market frameworks - not quite the same thing.

This is the tragedy of capital-intensive infrastructure in a world where the dominant ideology of the day is short term profit.

Gail,

I've repeatedly given you links and studies that show that the cost of upgrading the grid, even in the US where it is a bigger task than in Europe, adds a few percent to the cost of wind power.

All studies point out that the unsubsidized cost of wind is in the same ballpark as the cost of coal, nuke or gas-fired electricity, as a long term average.

Your comments as to vital infrastructure like the grid falling apart in a few years' time are pure doomer and suggest that there is little point in discussing energy policy - we won't have access to ANY kind of energy pretty soon, according to you. What amazes me is that you don't consider that if this subject becomes strained the first thing that will happen is that government will take over the vital infrastructure and aportion the resources needed to maintain that as a priority, and I'm pretty sure that this includes the electrical utilities.

I would note that the US needs to replace almost all of its decrepit grid as it is, so I don't see that cost being added to that associated with installing wind turbines in order to determine an overall wind price.

Jerome,

While I agree with Gail on many things , I am with you on the long term costs of wind.

As I see it the argument that the grid will fail catastrophically is invalid.First off when and if it does actually fail (and there may well be a few wakeup blackouts) no matter how bad things are,fixing it will move up the priorities list to nunber ono fast.The public is as dumb as a herd of cows in some respects but no politician can stand in the path of keeeping the lights on.

UNLESS-things are so far gone that our handbasket has already arrived in hell-by the time we can't keep the lights on we will be living in refugee camps in large numbers and relief aid will comsist of water purifying and truck loads of dried beans and cabbage.In this case any money mistakenly invested in wind won't matter-hundreds of times more, thousands of times more , will have been mistakenly invested in other schemes with even poorer prospects for public good ranging from bankers bonuses to Govt Motors.

There has always been an extremely financially conservative element in certain parts of our society-people who have been willing to give up a lot in the short term for long term security.Such people saved and bought houses when renting was cheaper-knowing that rent is forever but mortgages are for twenty or thirty years.

A wind farm once constructed will last essentially forever-I have no figures but my guess is that a worn out turbine can be remanufactured for much less than half the cost of a new one and the transmission system never really wears out-it just gets reconditioned on e stretch at a time.

But the purchase of coal and natural gas IS forever.Ordinary hillbilly common sense indicates that ff will become on the average more expensive in real terms every year.

I have looked far and wide for a good analysis of the effects of the use of wind power on the actuall selling prices on coal and natural gas w/o finding one and conclude that wind is not yet a large enough part of the mix to matter much.

But the example of nuclear power is relevant in this respect.As far as I can see , the fact that we have a substantial nuclear capacity reduces coal consumption in this country by roughly fifteen percent,assuming coal would be the replacement fuel if our nukes are shut down.

If we could build up our wind industry to twenty percent of actual consumption there would emerge a very powerful effect of depressing coal and natural gas prices.

This would have the effect of extending the country's ff reserves for decades at least and might also enable us to cut our oil imports substantially by making the recharging of electric vehicles a more tractable problem.

It would strengthen our trade balance and contribute to our security.

Cheap tools are a bargain only in a society based on finance and short term considerations.In the long haul my Snapon brand tools , which cost several times as much as lesser brands , are not expensive-they are priceless.I can take a Sears socket that breaks back to the store for a free replacement it is true-but the Snapon simply doesn't break.The lost time, skinned knuckles, and frustration avoided are worth more than the short term savings.

One major crisis partly avoided by having an extensive wind system in place would pay fit.

A wind industry is not subject to lack of fuel shutdowns.A railroad strike or a coal miners strike will have but little effect on it, at least for the first few months.Strikes are not a problem in our current political environment, but who knows who might control our govt in a decade?

oldfarmermac -

Very well said!

The attractiveness of wind power largely depends on how far one chooses to look ahead. If one has a short-term, totally financially oriented perspective, then wind power can be unattractive; but if one has a longer more encompassing view, then wind power is a wise investment.

Two hundred years from now, wind turbines can still keep on turning, in one form or another, but the same cannot be said for steam or gas turbines (fully recognizing that all require some minimal infrastructure to survive).

Wind power has the potential for being sustainable, but fossil-fuel generated power clearly does not. THAT is the big difference that some of us here seem to refuse to recognize.

What we have here is the classic conflict between a system with high capital investment/low operating cost and one with low capital investment/ high operating cost. In our capital-oriented economic system the bias is definitely toward keeping capital investment as low as possible and then swallowing the high operating costs. This is the result of a value judgement that was made decades ago and which has become embedded in the thinking of those calling the shots.

I wondered if a public works pyramid building type project is in order, instead of pyramids build and erect wind turbines.

In our capital-oriented economic system the bias is definitely toward keeping capital investment as low as possible and then swallowing the high operating costs. This is the result of a value judgement that was made decades ago and which has become embedded in the thinking of those calling the shots.

We have a measure of this, I think it is called the discount rate. In any case the "present value" of something that provides a predictable source of future revenue is simply the sum of the future revenues, discounted by EXP( time*discount_rate). This essentially implies that we are competing against a bond that pays the same interest rate as discount rate. Presumably a major component of the discount rate, is the long term growth rate of the economy. So in an economy that is growing at a high rate, it is only natural that the discount rate would be high. The effective time horizon is inversely proportional to the discount rate. So what we need is a lower discount rate, then the effective cost of the capital can be amortized across more years of production (or fuel savings). I think as we move towards a steady-state style economy, that discount rates should drop dramatically.

Enemy,

Agreed.Lets look at this again from another pov.

If you can invest your money -say ten thousand dollars by loaning it out and earning say one thousand dollars per year then you would be better off investing it in renewable energy only if the same ten thousand in renewables if it earns (or saves ) more than one thousand annually.

The same ten thousand might earn more than one thousand annually after a few years in the stock market if you make a good investment especially in a growing economy.

So maybe after ten years your original ten grand is earning two thousand a year.

Can your investment in renewables keep up?Can it ever catch up?

That would depend probably more than anything else on the delivered price of fossil fuel produced electricity.

If the price of ff increases at a rapid rate due to depletion, war, taxes, or any combination of these it is altogether possible that after a decade the renewables are raking in a truly hefty profit if the user values the electricity at the avoided cost of purchasing coal or ng fired juice.

My guess is that both coal and ng will become substantially more expensive over the years due to both depletion and consumption taxes, not to mention carbon taxes as such-all of which must be passed on to the customer of course.

I've read that wind power is already competitive with gas-fired electricity in parts of the western US (without subsidies. As FF prices increase ( with cap and trade and/or carbon tax) wind power will be more and more competitive. If oil stays above $100 you could see an an exponential increase in turbine construction.

The other excellent fact is that wind power is really good for farmers as they get $2,000 or more per year per turbine for the space. A nice influx of capital to take a bit of the curse off of farming. And they can still farm almost all the land.

Another benefit is the distributed nature of wind, if one chooses. I've seen several articles about midwestern counties and towns putting up wind turbines and getting partly or mostly off fossil fuels. One local ski area here put up one turbine and now gets 50% of their power from wind.

To paraphrase old Senator Dirksen (God rest his soul): "A gigawatt here, and a gigawatt there and pretty soon you're starting to talk about real energy" And for those concerned about storage, check out the 20 megawatt flywheel storage plant the Beacon Power just broke ground on. And then there's all that hydo power that can be turned on and off relatively quickly.

All that's necessary is for there to be a suitable price floor under fossil fueled power and renewables will take off. And now that there are at least a few saner folks in Washington we might see an energy bill that gets part way there.

Jerome,

I wish I had as much confidence as you in the US government. They haven't done much so far on the US grid--except push for deregulation, so it is in no one's financial interests to maintain the grid.

With problems on many fronts (oil, Detroit autos, airlines, electricity, home loans) simultaneously, I am not sure the government is going to be smart enough to figure that they absolutely have to do what it takes to keep electricity going. Meanwhile, they keep running up debt.

If we had our house in order for electricity, and could add wind on without too much problem, then it might be a reasonable solution. But we have a "third world" grid that no one is going to shoulder the responsibility for fixing. Adding another element of complexity, without fixing our current problems, seems like it is asking for troubles.

The US government has not been on a war footing for quite a while - in fact, it has not been on a governing footing for a generation. Its priority right now is to protect the profits of the big corporations. If things move to survival mode, I have no doubt whatsoever that the US government will suddenly remember that it has a right of life and death over every single corporation, and can tell them what to do, and not the other way round.

Jerome a Paris -

I have always looked forward to your informative and well-written articles about wind power issues.

However, your above comment appears to display an inaccurate understanding of how the current US government and political system works.

First: If the US government 'has not been on a war footing for quite a while', then how do you explain the one trillion+ dollars the US has 'invested' in the Iraq/Afghanistan (and perhaps soon-to-be Iran and Pakistan) military adventures? On the contrary, the US is steadily evolving into a state of perpetual low-level war. It may not have the dramatic large battles and high casualty rates of WW I or WW II, but it is a war footing none the less. We are hemorrhaging billions a month on exercises in total futility, and with no end it sight. I call that a war footing.

Second: It is far less likely that in time of crisis the US government will tell corporations what to do, and far more likely that the major corporations (especially the financial establishment) will tell the US government what to do. Just look at the recent debacle regarding the bailout of Wall Street. Who told whom what to do?

Getting back to wind power. As you know far better than I, it's an uphill battle in the US, particularly offshore wind. As far as I can tell, most utilities in the US loath wind power, largely for two reason: i) above a certain fraction of power generating capacity, wind power can play havoc with grid management due to its intermittent nature, and ii) being that no fuel is involved, the utilities can't play their cute little games with fuel cost escalators, fuel surcharges, and the like.

perpetual low-level war is not quite the same as a war footing. What we currently have is close to full capture of the government by big corporates and the MIC. But just like for WW2, the balance can easily change, as soon as it becomes politically palatable - or expedient - to do so. It is possible; just because it does not seem conceivable in today's environment does not mean it can't happen. Actual threats to the basic physical well-being of Americans (and in particular to well-off Americans) like grid failure would almost certainly lead to very direct intervention.

And as to wind, another big reason utilities don't like it is that it brings prices for their other generators down, by pushing the dispatch curve towards cheaper plants: wind being a zero marginal cost producer dislodges expensive marginal plants, especially at peak times (if it is available, of course).

Jerome a Paris -

I would argue that perpetual low-level war IS being on a war footing, the difference primarily being that there are no parades, no drafts, or no massive casualties. It is more akin to death by a thousand cuts. If this isn't a war footing, then I suppose neither was the Vietnam era. Didn't the French experience much the same thing re Algeria?

Yes, sudden catastrophic events, like a massive grid failure, could lead to very direct government intervention. But that doesn't change the cast of characters who are really pulling the strings in the US.

IMO the only reason we are still in a "low level perpetual war" is because we don't have a draft.

I am not sure the government is going to be smart enough to figure that they absolutely have to do what it takes to keep electricity going.

I don't think it is a matter of the smartness of government, but the fact that the decision making apparatus is so seriously compromised by a multitude of special interests. If we able to eliminate this influence things might change pretty quickly. Of course it would probably require some sort of severe shock to allow such drastic action to take place.

Gail,

The gov't is finally addressing the grid. Recently awarded "Smart Grid" grants totaled in the billions and will result in the installation of nearly 20 million "smart" meters in individual homes as well as digital controls on power centers and large transformers. It's certainly not all that's needed but is a good first step.

I also believe there is as much as 5 billion or more in stimulus funds for overall grid transmission upgrades that have yet to be awarded. Again, not a total solution but it shows that the new folks in the energy department are starting to think and plan. There were some recent articles about a proposal to build a superconducting interconnection(high voltage DC?) in New Mexico to allow power sharing between the three major US sub-grids.

Also, while major upgrades are necessary, if you really think ours is a "third world" grid, either you haven't spent much time in the 3rd world or they've been spending trillions of dollars when I wasn't looking. Most articles I've read are about how much of the 3rd world doesn't have ANY grid, let alone a decrepit one such as ours.

One charity I give to is the Solar Electric Light Fund (SELF) that constructs PV systems in rural villages so they can turn off their kerosene lanterns and have a small refrigerator in the clinic to store medicine and vaccine. A few billion more spent on those types of projects and they will be getting ahead of us but they still need all the help us better off folks can lend. That's what I give intstead of Xmass presents. I would urge all readers of this to consider similar efforts.

Why would windpower be the driving force behind so called massive costs in upgrading the grid? Wouldn't nuclear face the same problem? My bet is that the decentralized character of wind (or at least 'possbile decentralized character') could lower the demand for upgrading the grid in contrast to some hotspots in electricity consumption caused by fewer but much larger nuclear plants.

I wonder if there are any studies that could give some figures to this discussion, as the same arguments pro/con pop-up everytime.

Why would windpower be the driving force behind so called massive costs in upgrading the grid? Wouldn't nuclear face the same problem?

"The wind is always blowing somewhere", but if you want to rely on that, you need a a grid that can power the nation from all the various 'somewheres'. E.g. to provide power to Chicago, you'd need enough transmission capacity to bring the power from wind farms in the Dakotas, OR from Kansas, OR from Texas, OR from solar plants in the southwest, OR whatever.

Alternately, you can build nukes within a hundred miles of the city, which would use shorter transmission lines much more efficiently.

And when the nuke suddenly goes down because of a transformer failure (as demonstrated in Germany twice this year), or scheduled because it needs maintenace then 100% of the replacement power also needs to come from far. So the transport lines still have to be there even if there is no wind powered production and therefore blaming wind for transmission construction needs is not fair.

Why would windpower be the driving force behind so called massive costs in upgrading the grid? Wouldn't nuclear face the same problem?

There is regional wind, and then there is wind as a national resource. The big wind resource in the USA is the greta plains, running from North Dakota to Oklahoma. This area has relatively low population density (primarily because water is scarce), so this wind power would need to be shipped several hundred of a couple of thousand miles.

I see a figure of a hundred billion bandied about to build the lines needed for a wind enhanced grid, which in terms of the amounts we throw away on truly frivolous things is not even beer money-only roughly around three hundred per capita.

About a thousand per capita from the best off third of us.

For this we get cleaner air, and an economic stimulus that is real.We get a far better balance of trade-we could sell Mexico juice for the last of thier exportable oil if it lasts long enough.We move back into the technological lead in energy.

We get it all back in gasoline savings alone in a few years when electric cars-even the ones that will go only twenty miles on battery power or so-become common.

styno

Check out the Rocky Mountain Institute (RMI.org) they are major proponents of distributed generation. They have put out a number of articles and a couple of books on energy and the environment.

Their founder is Amory Lovins who has had some recent articles on why nuclear makes no sense.
Some people seem to be hating on him for that.

I'll check that site out. With the stakes at hand with both wind and nuclear (they both need most of the money up front) it will continue to be a heated debate, literaly when you account for the 3/4 of energy wasted within a nuclear plant ;-)

As Hermann Scheer puts it: "Are we going to tell our future children: Yes, we could have solved the problem, but we argued that 3 or 4 cents (read: ct/kWh) was too expensive".

http://www.youtube.com/watch?v=_z7cdDYP_zg

In other words, we can run the grid for N years, using only fossil fuels, before it fails for one reason or another (lack of fuel, or lack of paved roads, or breakdown in the international monetary system, for example).

People keep pointing out that we don't need paved roads to build or maintain wind farms.  Rails will do just as well if not better, and can be pulled up and re-used once the installation is complete.  Once you've graded the rail-bed and laid the ballast, you're done for a century or so.

Un-doing "deregulation" is a sine qua non.  It is impossible to maintain a grid if nobody is responsible for it and allocating the costs properly, which is the situation we have now.

Maybe that's the situation now in most places, but it's really not a big deal to remotely tell a modern windturbine (or park) to produce only a certain amount of power if network overloading is about to happen. Also every inverter has to live up to rigorous rules regarding its frequency, phase and voltage output. Controlling these parameters can also be used to help regulate the network. These requirements are already in place in Denmark, so it's no future hi-tech. Computers can model the state of the network and use a SCADA system to control numerous production sites remotely.

But unless it's absolutely necessary you always try to put as much renewable power in the grid as possible.

The people who wrote the US constitution were afraid of government, so they structured it in such a way as to render the US government as inefficient and powerless as possible. They succeeded beyond their wildest dreams.

When people look at what is being done in other countries (e.g., energy policy, health care financing, rail transport, etc.) and wonder why we can't do the same thing in the US, they need look no further - this is the explanation. The US is constitutionally incapable of governing itself efficiently and effectively.

A lot of people in the US feel that this is important, so important that it is worth a lot of sacrifices to keep it. Maybe so, but they need to understand that our ability to sustain a world-leading economy and a world-leading standard of living is one of the main things that are going to have to be sacrificed. If you want your nation to be inefficient, you may, but there is a price to be paid for it.

The more examples one examines of US federal Governance the more disquiet one feels.

Where are the aims? The guidelines? The planning? The allowed dissident opinion? And then, what are the tactics? What are the possible snarls, failures, and how are they dealt with? How to figure the potential waste or harm? What corrective measures, downscaling, change of direction, might be necessary? How to implement these at various stages? On page 30, not more, these should be addressed, leading to on page 40, variants, and on page 45, Plan B and Plan C. That’s it. For energy, for infrastructure, for water, for education, etc. Naturally enough, colleagues from other departments must be consulted. Expert committees ...and so on.

Are our American cousins so wary of 5, 10 and 20 year plans because they smell of Soviet Russia? I’m aware that the USSR was not too keen on variants, but it was a simpler world, and they accomplished a tremendous amount in a short time, obviously with a somewhat narrow view point, partly foisted on them by post-WW2 geo-politics. China makes these kinds of plans today, having melded communist dirigisme with free market ideology, leading to State Capitalism, somewhat reminiscent of, say, Mussolini’s fascism. Switzerland makes plans (it has completely fallen down on energy imho), possibly for reasons very different - a hands on democracy, a federation rather than a nation, with lofty libertarian ideals - with the citizens de facto holding veto power - no plan can come to fruition without it being laid out. France has a long tradition of this kind of planning, handled by the ‘elites’ (political power, technocrats, industrialists) from de Gaulle onwards, (see for ex. nuclear power in F) although Sarkozy is now running an ad hoc, lurching, reactive, populist type Gvmt.

Obama, as a Democrat, has, it seems to me, evidences some symptoms of leftish dirigisme - see his hesitation about ‘his’ war (Democrats and Republicans swap good wars and bad wars), Afghanistan, his pseudo-investment in ‘greenery’ (Bush did it too btw), and his health care plan, or rather attempts at pushing through some vague, more inclusive, seemingly noble, state of affairs in this area. (I am no fan. repeat.) Yet, these symptoms are just that, vestiges of another time, irrelevant political ticks, decried by all except his ‘core’ supporters in the public, adherents to ‘the group‘ who is now in power, etc. (Vested interests have corrupted Government; is that an excuse?)

Where is the US going?

Question: Where is the US going?
Short Answer: The US is going down.

Long Answer: When the United States sooner or later defaults on its colossal debt to the world economy, mostly to China and Japan, the US government will slowly decay to an arrangement of two things. First, there will be cadre of government loyalists dependent on a federal paycheck for subsistence, funding and grants, and fealty to foreign concerns—scientists, agents, factory farm managers, approved entrepreneurs, public school teachers, prison wardens, media mouth pieces, conformist academics, administrators, persons with narrow-scope, somewhat short-sighted views. Second, there will be the national law enforcement agencies tasked with preventing open, violent rebellion and revolution. The white train cars, FEMA camps and plastic coffins are already in place, in case things get really ugly. The American Empire will collapse under its own weight. Suburbia is doomed. Reasoned debate among those in charge is limited to bedrock concerns about their next two-, four- or six-year term or retirement. A national energy policy is nice but it’s not going anywhere before the next generation of unmanned aerial bomber, spy satellite and Big Pharm vaccine gets off the ground.

You don't understand-Obama is different-he is the one-LOL. I assume you have viewed Fall of the Republic.

Where is the US going?

to an irrelevant oblivion. And the world will be very fortunate if it doesn't take everything down with it.

Of course, the U.S. learned all this from Europe. The U.S. would be South Africa without the "opportunities" presented by WWI-WWII

“Where is the US going?"

I look at the big picture as a big game of last one standing.

All Countries are doing whatever possible to not be the first. This explains what is happening better than anything I can see.

At the same time the World is afraid that if the US falls first and fast it will get real messy and they are right.

The biggest wild card IMO is Israel. If they get a hint that their big brother might not be there on the playground to protect them, they will strike first. Go all Columbine.

It most likely is best for all if US is last one standing, so get comfortable with our lot in life and start act Imperial.

“Start wearing purple” LOL

Well, when life serves up lemons, maybe its best to just make lemonade.

The fact of the matter is that the era of large-scale, centralized, statist approaches has already peaked along with oil, and is fading into the past. The future is going to be small-scale and localized.

The US missed out to some extent on the centralized statism that was characteristic in most other large and developed countries. Trying to belatedly bring that in just when it has largely run its course elsewhere might not be the wisest approach. The fact that the US has been constitutionally designed to be federalist and decentralized might fortuitously serve to position the US well for a decentralized and localized future.

Thus, instead of thinking that what we need are large, centralized, national-scale solutions to all of our problems, fretting about the blockage that the national government represents, and thinking about how to change that, maybe what we really need to be thinking about is working with the system rather than against it, bypassing Washington entirely, and focusing on decentralized, small-scale solutions that can be implemented at the state and local level without depending upon Washington's help or approval.

Thus, getting back to the topic of this thread, with specific reference to wind power, what needs to happen is that wind generators need to be installed in the places that make the most sense. These are going to be places that: a) have good steady winds; b) need electricity nearby; and c) lack better options. The problem with schemes that envision large scale wind farms being set up in one part of the nation, and the electricity then being transported long distances to other parts of the nation, is that such a scheme inevitably cross several states and thus requires the involvement of the FedGov. Smaller scale installations close to the end consumers require less involvement with the Feds.

Where is the US going? Going, going gone...

Actually the country that I knew as the US when I was much younger seems to have been dismantled a long long time ago.

Our cities have turned into jungles
And corruption is stranglin' the land
The police force is watching the people
And the people just can't understand
We don't know how to mind our own business
'Cause the whole worlds got to be just like us
Now we are fighting a war over there
No matter who's the winner
We can't pay the cost
'Cause there's a monster on the loose
It's got our heads into a noose
And it just sits there watching

(America)
America where are you now?
Don't you care about your sons and daughters?
Don't you know we need you now
We can't fight alone against the monster

Steppenwolf Monster/Suicide/America

Pretty interesting comment, I think it adds in some more insight. But far more than our institutional framework we have swallowed the Chicago School totally unfettered market stuff hook line and sinker. And we make that part of our national identification "but, that is what distinquishes us from the rest of the world". Since the last thing we seem to be capable of is examing scacred ideology against real world data, our tendency is to just dig deeper faster.

The Fascist father of the neo-conservatives, Leo Strauss, and his students seem to be holding our Congress and the administration enthralled. Is that the Chicago school you mean?

Not exactly-it has advanced to the next level, in which great financial power is increasingly determined through political power. Theoretically, Goldman Sachs would have been sunk under that school of thought (and a more well run competitor would have advanced)-in reality they just take 70 billion from the taxpayers using the power of the government.

I'm sorry. Maybe no one told you guys - solar and wind make little economic sense. No rational investor is writing checks right now except for utilities who are trying to appease regulators. This is the time to invest in education (more PhDs) and R&D, not copy the mistakes of Europe. How many billions were spent on technology that everyone knew would be outdated in a few years? The Germans and Spanish are stuck subsidizing inefficient plants for the next 20 years. What ever you say about Bush, it will be proved that waiting was and is the best policy.

How many billions were spent on technology that everyone knew would be outdated in a few years?

How can technology become "outdated" if no one spends on it?

It seems to be true that pioneers never get rich -- they make their successors rich, however. It is fortunate that someone has developed wind and solar energy, for they will be useful some day.

In the short run, if money is the object, "Drill, baby, drill."

"No rational investor is writing checks right now except for utilities who are trying to appease regulators."

Unfortunately this is true for all the "solutions" for the "new paradigm".

What makes absolute sense for the future "new paradigm" makes no economic sense in the "current paradigm".

Myself and many others (Alan Drake?) are coming up against this reality hard.

All potential investors say "we will give you a little money to put together a small, limited, proof of concept and when people start pounding a pathway to your doors we will give you all the money you need".

This is doomed to failure from the beginning.

IMO all that can be done is to prepare and structure the concepts to be ready to spring into action, build out as fast as practicle, when the paradigms shift.

Soon the future "new paradigm" will be undeniable by a large enough % of the population that things can start happening and it will be highly critical that the WRONG things are not allowed to dominate.

Taking a page from Shock Doctrine, we must have the best solutions in place ready to be implemented at the inflection point.

For my own small contribution, Hyper-efficient Community Scale Food Processing, it takes an enormous amount of time, energy, and money and even though it makes zero economic sense, the interest and support has been phenomenal.

The other possible way forward is to trick'em. Create a money trap and once you got it all tied up just do what you want.LOL

Cheers!

Economic or thermodynamic sense? To my knowledge there is no factory, powered by wind or solar, that can bake silicon into chips or forge high grade metals for turbine blades. We need just one such factory, to allow us to demonstrate the doable. Maybe we cannot physically succeed in such an endeavor, but the learning curve in attempting to do so, would be quite an asset in meeting future needs, which cannot be met, at least I can't see it, within the present way of doing things, lollygagging into oblivion, business-as-usual. Nevertheless, the technological challenge appears more possible to solve than in organizing a deaf, dumb and blind Congress into doing more than just feathering their own dirty nests and being persuaded into funding something more promising than weapons of mass destruction or more needful than their mighty mouse proxy bordering the Dead Sea.

To my knowledge there is no factory, powered by wind or solar, that can bake silicon into chips or forge high grade metals for turbine blades. We need just one such factory, to allow us to demonstrate the doable.

That is just silly. Energy is fungible. It makes no difference if say a solar panel factory gets most of its energy from fossil fuels. So long as its energy consumption is much lower than what will be produced by its products. And since any modern industry is distributed all over the place: materials and parts coming from all over the world, global measures are the only ones that make sense. Now it could be that some material inputs depend upon chemicals from fossil fuels, that is a different problem from EROEI. And it will have to be worked out. Currently Iron and steel, depend upon metalurgic coal, for instance. I'd bet that we could find a way to smelt iron without coal inputs, but it would be more expensive, and not needed until we can no longer use coal for it.

Right on about fungibility. All electons look pretty much the same now matter how they're pushed into the circuit.

I'm not a big basic steel expert but I did work one summer in the blast furnace(s)at the J&L steel plant in Pgh, PA - long since closed, abandoned and beamed up. I think it's a pitiful excuse for an office park now. The ooal is made into "coke" before being used in the blast furnace so any source of carbon to make some nice, dense, charcoal looking bits would work. Probably cost a lot more.

As (if) coal is driven up by cap and trade, there will be more recycling. Then, you may see landfills being mined for the metals and stuff we so blantantly have been tossing out. Many of them now capture the methane and make power with it. In 50 or 80 years the biodegradeables will be digested and it won't be too nasty to dig in.

If you define "economic sense" as "private investors making a profit" then you are undoubtedly correct - investors require a specific regulatory framework.

But studies show that the price impact of feed-in tariffs that put more wind into the system (as a zero-marginal cost producer, it brings prices down whenever there is wind), in aggregate, is larger than the gross cost of the subsidy to wind producers (and a lot larger than the NET subsidy provided by such tariffs), so for society, giving a guaranteed price to investors actually LOWERS power prices...

"Zero cost marginal producer" just doesn't exist. As en electricity trader, i can assure you that 1 - there are still costs to maintaining those turbines 2- they do have a finite life so we will have to wait and see what the ultimate recovery of energy is 3 - there are enormous costs in regulating a system around wind and spinning reserves can actually INCREASE overall price . I am not sure which studies you are referring to, but almost all that i have seen show that wind is a bad investment when considering the total energy invested. Good idea, will work one day, but Spain/Germany did are doing the world a favor by spending a lot so we can gain from there mistakes. As for giving a "guaranteed" price, I am not sure what you mean, but I am pretty sure the only "guarantee" is that wasting a lot of money on unproven technology makes people feel good.

Ooh, the spinning reserve argument. How did your skeptisism respond on hearing that two nukes went suddenly, unexpected, offline in Germany this year... and that no blackout occurred during either event? Does that mean that there is also spinning reserve available for the biggest of all plants in the network, typically a nuke? I guess so. Why is spinning reserve for wind such an especially bad thing then?

Styno, take a look at the ERCOT report on the emergency declared 2/26/08

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/27706_11...

At 1600 the grid was running smoothly at 31.5 GW. Between 1630 and 1830 load increased to 33.5 GW. Wind dropped from 2GW to 0.4 GW. ERCOT was forced to cut power to some customers when backup plants were not able to make up the difference of 3.6 GW.

Now imagine that ERCOT had implemented a big wind and solar expansion over the last 20 years. At 1600 the grid was running smoothly at 31.5 GW with 10 GW of solar, 10 GW of fossil and 11.5 GW of wind. Between 1630 and 1830 load increased to 33.5 GW. Wind dropped from 11.5 GW to 2 GW. Solar drops to 0 GW. Backup plants, mostly low efficiency open cycle gas turbines, will have to come on line with 19.5 GW of fossil fuel power.

That is not going to do much to reduce emissions, and the cost of building, maintaining and running those backup plants will jack up electric bills tremendously.

The eastern and western U.S. grids are far larger than ERCOT, but even for little ERCOT the unexpected loss of a 1GW nuclear plant is much easier to cover than the loss of a huge wind and solar array. Unscheduled nuclear shutdowns are very rare, while huge swings in wind and solar power are daily occurrences.

Over 30GW load for 24 million people? Quite a bit.

Sorry, not Styno, and this is to argue about the grid part of the cost of renewables. Beyond that Nuclear Central breakdowns can be huge as the Japanese have found, even without minding the nasty kind of breakdowns.

The mentioned incident does not seem to have put any brakes on installations in Texas, according to http://www.awea.org/publications/reports/3Q09.pdf (page 3) .

As for the stretch of the imagination that would have been a big solar expansion plan indeed. If CSP is meant here, on-site storage techniques are available that should have been able to provide maxpower at 18:00. [1] Insolation may be a bit feeble in Texas for CSP, but there are already installations being set up in the Extremadura, which isn't any sunnier, so it might be doable once CSP will have climbed the learning curve. Close to a third of the load by PV at 16:00 on the dark side of the year (i.e. nothing at 18:00) is beyond the wildest dreams of any Terminator. PV is normally used to shave off the mid-day peak.

I understand an interconnector for the Texan grid is being built near Clovis, New Mexico. And that they are tweaking around a bit on their own grid.

For the rest, there are various possibilities beyond gas backup, which by the way isn't expensive to build, or wasn't til the recent resources crunch. Agreed that readiness may cost a bit.

If Texas had good hydro, relief could come from there. Then there would be pumped-storage hydro if you can find a hill-top or two near the Rio Grande. These two options normally come with a reasonable price. Also it would be interesting to know how fast Canadian hydro could possibly be called in.

Talking of renewables expansion, why not include some biomass or geothermal? Ideally you do that with a feed-in tariff system.

Wind turbines themselves can do cute things to the grid even without spinning. In Germany there are now laws on the topic. [2]

Texas isn't a small place. If you do some math to optimize wind farm distribution and use the Gulf too, an appreciable amount of backup capacity can be spared.

Sure there are others...

All in all, even without counting the not meager additional revenues, that does not sound like a huge bill to foot, assuming a reasonable amount of planning. (i.e. if you don't put Enron back in charge)

[1] "Should", because it would depend on the inertia associated with a particular storage implementation, molten salt for instance, things of which I have no clue right now.
[2] I would have to check details.

" The mentioned incident does not seem to have put any brakes on installations in Texas, "

No, as long as the subsidies are available windmills will be built.

http://nucleargreen.blogspot.com/search?q=wind+subsidy

" If CSP is meant here, on-site storage techniques are available that should have been able to provide maxpower at 18:00. [1] Insolation may be a bit feeble in Texas for CSP, "

I was not thinking CSP. That adds quite a bit to the price, and then the question is what happens after a cloudy day without wind, or several cloudy days without wind?

No matter how much storage you build, within reason, you need full fossil backup. CCGT is too expensive for intermittent use, leaving low efficiency open cycle gas.

Wind and solar kWh's alone may be cheap, but building and maintaining a reliable system is very expensive and fairly high in CO2 emissions.

I see from the link above that you write publications on grids and will therefore cowardly stop arguing, happy with my starter, only to mention that indeed building and maintaining a reliable system shouldn't be discarded.

Please have a glance at the following post:

http://www.theoildrum.com/node/4526/407702

Maybe you could comment?

Serge

What is the difference between a week without wind and a similar shutdown time of a nuclear plant (refueling, maintenance, transformer failure, whatever)? Don't these same arguements stand for nuclear (or any other large powerplant)? And what's the specific problem with wind then?

" What is the difference between a week without wind and a similar shutdown time of a nuclear plant (refueling, maintenance, transformer failure, whatever)? "

Maintenance and refueling outages are scheduled long in advance for spring and fall periods when demand is at its lowest. These things do not count against a plants reliability, only its capacity factor. Grid managers make sure there will be enough generation on hand, and if an unexpected outage occurs, they can delay or reschedule the planned outage.

Wind and solar power is not dispatchable or reliable. It cannot be scheduled or rescheduled days or weeks in advance.

This does not explain what happens what happens when during an unexpected failure of a big plant and how this is accommodated. If a central powerplant falls of the grid then you loose 1 to 2 GW at once in a few miliseconds, on the other hand if a windturbine falls of the grid because of failure then it's only a few megawatt maximum. Solar and wind are predictable enough that replacement power can be scheduled in time. Why would you need to know their output a few weeks in advance?
Demand changes continuously as well and operators have 100 year experience in meeting that demand. I don't think that a portion of wind and solar is nothing they can't handle.

Wind dropped from 2GW to 0.4 GW.

1.6 GW during a few hours? But what about if 7 nuclear power plants fail to produce power for an entire month:

http://ipsnews.net/news.asp?idnews=47909

Seven German nuclear plants have failed to generate any electricity this month due to technical breakdowns. They have about half the production capacity of Germany's 17 nuclear reactors, but Germany did not suffer any power shortages.

Does nuclear need even more subsidies to prevent this from happening in the future?

Nuclear power has dominated government spending on energy research and development, accounting for over US$159 billion between 1974 and 1998. Although its share has fallen, it still accounts for 51% of the OECD energy R&D budget

http://www.world-nuclear.org/sym/2001/fig-htm/frasf6-h.htm

And by the way Germany's wind power operators do not receive any tax-payer money and are still reducing electricity prices more than what they receive in feed-in tariffs and Germany's wind industry is still exporting over 83% of its wind turbines with a profit (as opposed to France with its nuclear power plants):
http://www.tagesspiegel.de/wirtschaft/art271,2147183
http://www.wind-energie.de/en/news/article/wind-energy-made-in-germany-i...

" Early this month, three plants shut down automatically due to failures in their transformers. The other four have been out of service for months, and are undergoing expensive repairs. "

So four plants are down for schedualed maintenance and three had transformer problems. Any source of energy can have transformer problems.

U.S. reactors operated at a capacity factor around 50% in the early days and are now up to 90%. If one utility has reliability problems it does not prove that reliable operation is impossible, but if one utility has good performance, it proves that good performance is possible.

" Does nuclear need even more subsidies to prevent this from happening in the future?
Nuclear power has dominated government spending on energy research and development, accounting for over US$159 billion between 1974 and 1998. "

1974-1998? You can do better than that. Nuclear fission and nuclear fusion are as different as solar thermal and geothermal. How much was spent on building new demonstration reactors?

Did you miss the recommendation in your reference?

“Until recently, governments investing in nuclear research and development were devoting relatively little to innovative new designs. As international co-operation has been common in nuclear energy this is clearly an area for further co-operation. The report therefore suggests governments: Consider shifting nuclear R&D to new designs.”

I agree with your reference.

How much of that 159 billion was spent on new designs? Take that amount and divide it by all the taxes paid on all the nuclear power generated in OCED countries over the same years. Government makes far more on nuclear power than it spends on nuclear power.

" And by the way Germany's wind power operators do not receive any tax-payer money "

Right. The renewable energy mandates take it right out of the customer. Here is a pro wind slide show that explains.

http://www.german-renewable-energy.com/Dateien/EEE/PDF-Fachvortraege-Mes...

Amendments 2009:

Any source of energy can have transformer problems.
Fortunately renewables are decentralized and do not have power ratings of over 1 GW. If a wind turbine has an unexpected shut down it has hardly an impact. If a 1.6 GW nuclear power plants has an unexpected shut down it does.

If one utility has reliability problems it does not prove that reliable operation is impossible
It also doesn't prove that unexpected shut downs are impossible.

How much of that 159 billion was spent on new designs?
It was spent on the development of nuclear energy. If you believe the tax-payer money wasn't spent on what it should have been, then complain to your apparently incompetent nuclear friends.

Government makes far more on nuclear power than it spends on nuclear power.
No, governments would have gotten a better deal, if they had spent it on other options.

Right. The renewable energy mandates take it right out of the customer. Here is a pro wind slide show that explains.
And yet the electricity consumers still pay less for the feed-in tariffs than what wind energy reduces electricity prices.
http://www.tagesspiegel.de/wirtschaft/art271,2147183
In addition wind turbine builders only receive something if they produce energy and nuclear power builders receive money in advance regardless whether their nuclear power plant will ever produce or not.
http://www.npr.org/templates/story/story.php?storyId=89169837

A good 10 years before the plant actually comes on line, we're going to start being billed for it," Newton says. "And that billing is just going to increase as the costs increase. As the public becomes aware that there's no requirement that they ever see anything for this money

The eastern and western U.S. grids are far larger than ERCOT

Now doesn't that cut both ways as the wind and sun's availability for power generation is not likely to go down over an entire large place simultaneously.

the cost of building, maintaining and running those backup plants will jack up electric bills tremendously

Not near as much as bailing out all the bogus 'investors' is going to jack up our taxes and we would actually have something to show for it with all of the plants, not to mention the money would be distributed to a much larger base quite a bit lower on the food chain, which actually generates more economic activity overall thus making it easier for the higher electric rates to be absorbed. You do sound like you work for someone rather high on the food chain with a huge investment in the status quo.

Please support your statement on emissions while you are at it, making sure to account for all fuel transport costs associated with all styles of power plant you are comparing.

" Now doesn't that cut both ways as the wind and sun's availability for power generation is not likely to go down over an entire large place simultaneously. "

Watch the weather maps. Systems can be several hundred miles wide.

" You do sound like you work for someone rather high on the food chain with a huge investment in the status quo. "

Have you read my recommendation?

http://www.theoildrum.com/node/4961#comment-459021

" Please support your statement on emissions while you are at it "

http://bravenewclimate.files.wordpress.com/2009/08/peter-lang-wind-power...

Watch the weather maps. Systems can be several hundred miles wide.

and...transmission lines can't be longer. I live in AK, watch a whole lot more map than the average duffer, several hundred miles barely gets me to the next town.

You somehow think the subsidies railroads (I hear they move a pound or two of coal yet) received for a century can just be wiped off the books and all will start level...I bet if grid owners and power generators could get the free land railroads did there would be no problem getting investors. That ain't gonna happen so another system must be put in place...Ayn Rand is dead, Greenspan shoveled the dirt on her coffin.

Locally our tiny little grid (about 1/2 million people} is 500 miles long, crosses good sized mountains, has hydro, gas, coal and oil power. The local utility (which earlier this decade installed what was then the world's biggest ni-cad battery to handle short outages) is about ready to install a wind farm only a few miles from where the experimental clean coal plant has been idle for over a decade after only about a year of operation (non performance issues started one heck of a legal pissing match that I think has finally been settled). The R&D money that went into that plant was a bust. That will happen but safeguards need to be in place to get experimental systems that don't perform cycled back into production in a more timely fashion.

We other have issues up here too. The utilities are working on combining somehow, but there is resistance--our utility co-op has spent substantial sums on upgrades in recent years while the bigger utilities to the south have pretty much been grinding their gear to dust as their gas field depleted.

Transitioning to a couple very large, well interconnected, long run efficiently and sustainably supplied grids will hardly be any easy task for the rest of country but sad to say a level playing field has never been part of the utility game and it would be impossible to take all the subsidies which have been built into the systems in operation out and level things out to see who will survive. Gov involvement in a big way will be unavoidable.

Open cycle gas? They are still building those things, ughh. Looks like a place for regulation/tax structure man, my hero :(

Fact is you are an ignorant liar.

Fact is the Wind industry in Germany not only exported over 83% of its wind turbines with a profit and generated over 90,000 jobs, wind power in Germany actually reduced electricity prices:
http://www.tagesspiegel.de/wirtschaft/art271,2147183
http://www.wind-energie.de/en/news/article/wind-energy-made-in-germany-i...

Whoops. A liar is one who purposefully mistates the truth, like politicians do. "Ignorant liar" is almost an oxymoron.

I agree that Germany makes a lot of money selling turbines to the world. Ferrari makes money selling cars too, but it doesn't mean it good for the planet.

As for prices, yes, marginal prices might drop at some times, but the subsidies, spin/reg requirements, AND economic impact on other facilities (not building more efficient new gas turbines/ultra-super crits), really make it a silly argument. Try finding evidence that is from an independent source.

Inefficient Ferraris paid by tax payer bailed out investment bankers don't reduce the dependence on fossil fuel imports. Wind turbines do.

And the study stating that wind energy does reduce electricity prices is from EON which operates coal power plants. This is even better than an independent source.

And besides that interconnected wind farms provide baseload and the US already has 622 GW of flexible capacity installed and only 336 GW of coal:
http://www.stanford.edu/group/efmh/winds/aj07_jamc.pdf
http://www.eia.doe.gov/cneaf/electricity/epa/epat2p2.html

When you already have 622 GW of flexible capacity installed it's absurd to build more.

And there's no reason not to benefit from the flexible hydro capacity already installed in Canada.

And there's no reason not to operate flexible heat pumps replacing fossil heaters and there's no reason not to replace fossil fueled hot water heaters by flexible heat pumps. (Heat pumps do not require power on demand.)

And there's no reason not to build HVDC lines such as Brazil and China do:
http://www.abb.ca/cawp/seitp202/7a28da84b8d0eb83852576040072f764.aspx

Another option is to interconnect widely dispersed geographic areas with an HVDC "Super grid". In the USA it is estimated that to upgrade the transmission system to take in planned or potential renewables would cost at least $60 billion[32]. Total annual US power consumption in 2006 was 4 thousand billion kWh.[33] Over an asset life of 40 years and low cost utility investment grade funding, the cost of $60 billion investment would be about 5% p.a. (i.e. $3 billion p.a.) Dividing by total power used gives an increased unit cost of around $3,000,000,000 × 100 / 4,000 × 1 exp9 = 0.075 cent/kWh.

http://en.wikipedia.org/wiki/Wind_power

And there's of course no reason not to reduce the unemployment rate by reducing the dependence on fuel imports.

Or is it better to pump order of magnitudes more tax-dollars in the non-producing financial market such that they can come up with more tax payer backed liars loans and tax payer backed derivatives and increase fuel prices with speculation?

Or is it better pump order of magnitudes more tax-dollars in the expensive defense sector to possibly secure foreign resources without knowing whether the military operation will succeed and what it will cost?

Jerome's graph up top illustrates that wind energy is not financially competitive in the United States without subsidies.

Again, "financially competitive" and "economic" or "societally smart" are rather different concepts...

Dear Gail,

Do you know of studies about other energies being "financially competitive"?

Say, if oil refiners/producers had to build their own harbours (instead of using the subsidised ones), if they had to pay to use the public roads, etc.

Or would the North Sea enterprise have been "financially competitive" if the oil companies had to pay taxes (like everybody else) during the initial years of exploration and production (they were exempt of the PRT (Petroleum Revenue Tax) for many many years).

Would offshore oil be competitive without the subsidies (or tax exemptions, for ex ref)

Are there any studies about the cost of Nuclear? (if they had to get private insurance without Gov. back up and take care of all the decommission and long term waste)

I am very curious about the hidden subsidies (not as apparent as feed in tarif) from the other energies. These are also subsidies with our taxes, no questions asked.

It's hard to find an ideal project for really big wind.

You may remember my suggestion to you(Gail) from many months ago that a giant wind farm could supply electricity for cooking oil out of shale in Wyoming/Colorado by Shell's Mahogany method which has an EROI of +3.
As far as water goes you can either pull the plug on Lake Powell or divert Snake River water from Jackson Lake.

A billion barrels of oil per year, 3 million barrels per day would require 1.6 TWh per day or 300 GW of wind. 300 GW would be supplied by
200,000 1.5 MW wind turbines covering perhaps 20000 square miles of flat scrub plateau all in the immediate vicinity of the Colorado/Green river oil shales.

Oil shale is a good insulator so intermittent electricity could be stored as heat. The Colorado/Green River oil shale resource is about 600 Gb.
Southern Wyoming has excellent wind resources blowing steadily thru its historic South Pass.

300 GW of wind at $1 per W = $300 billion dollars for 3 million barrels of oil per day. Petrobras is interested in investing $200 billion dollars in the Tupi field for a 700,000 bpd return for 4 years.

http://www.energyandcapital.com/articles/brazil-tupi-oil+field/868

The same stop and go politics for stimulating windenergy has been going on in the Netherlands as well. The result is somewhat the same as in the USA, a practically dead domestic industry that once thrived and produced innovative designs. I tend to blame our (previously) very large NG deposits for the lack in creating a stable investment climate.

All that the government concerns is developing strong bonds with NG rich countries, like Russia, Algeria and Abu Dhabi (iirc). All very stable countries with leaders that obey existing contracts and a history of goodwill to help us sub-sealevel living folks even if other countries like, ehm, Ukraine for instance are causing trouble. Well, no, but that doesn't hinder our leaders to continue on that road. There simply is no long term planning or vision, a shame really.

In the end, when governments fail, the people have to take measures themselves. So here we see for instance a rise in wind cooperation's exploiting large winturbines funded by citizens that provide renewable energy to their stakeholders, the consumers: http://www.windvogel.nl/ (sorry, Dutch language)

The same stop and go politics for stimulating windenergy has been going on in the Netherlands as well. The result is somewhat the same as in the USA, a practically dead domestic industry that once thrived and produced innovative designs. I tend to blame our (previously) very large NG deposits for the lack in creating a stable investment climate.

Over here (USA) it is primarily a function of the political pendulum. We have one party that supports wind (and other so-called renewables0, and another that considers them to be soft-hippie power. So depending upon which one is in power at the moment, the government either supports it or hinders it. And with every election cycle there is a strong chance of a reversal.

The energy strategy for the US should focus on reducing oil imports. Many things can be done to help accomplish this:

1. Open up federal lands and offshore for oil production that are now off limits.

2. Replace home heating oil systems with natural gas.

3. Move the ethanol blend wall to E15 or E20.

4. Cash rebate incentive programs for new hybrid and EV purchases.

These measures would help the US economy as well. Replacing coal and natural gas with renewables should be secondary.

You either are being deliberately obtuse or you really just don't get it!
Yeah, drill, baby, drill! Go out get a loan and buy a new Prius and everything will be just fine...

You really need to add: Education and R&D spending, and stiffer Building Codes/Standards, imports of biofuels (diversity helps!)
You really need to eliminate incentives for hybrids and E20. They have great marketing and dubious, if not sinister benefits.

China places more emphasis on electricity production-since 1989, Chinese electricity production is up about 500%, while the USA total is up about 40%. China right now is at the USA 1990 level in electricity production. The trend is for China to produce more than 3 X the electricity of the USA by 2029, which would appear to be extremely unlikely-should be interesting.

Lets not forget, the U.S. will burn about 940 million tons of coal this year, China will burn 2.5 BILLION tons! They have ADDED 300,000mw of coal fired capacity in the last 6-7 years while we only have a total of 450,000mwh. Greenpeace and the Sierra club have been picking on the wrong targets.

Greenpeace and the Sierra club have been picking on the wrong targets.

Now Theskepticaltrader, what is that supposed to mean ? Do I smell a "Plank in Your Own Eye"-issue here ?

I am only pointing out how many resources have been allocated to stop or interfere with the construction of 20-30 plants here in the US versus the 300 plants coal plants built abroad in the last 4 years.

Don't worry-the idea that Obama and Gore are promoting is that funnelling your cash through Goldman will somehow turn all that Chinese coal smoke into Chanel Number 5-YES WE CAN.

SkepTrader,

I'd agree with you that there are too many subsidies if you were in favor of eliminating ALL subsidies. Like for instance the huge sudsidies for nuclear.

The entities proposing the current round of new nukular plants will only build them if they get loan guarantees. Also there's the Price Anderson Act without which not only would no new plants be built but many existing ones would be shut down. I'll support Price Anderson when I get the same subsidy for my house and car, boat, plane, etc.

On top of that you have the hidden health and environmental costs of fossil fuel plants.

The "huge subsidies" for nuclear via Price-Anderson have cost the taxpayer nothing.  On the other hand, the implicit subsidy of coal-fired plants spewing mercury and other toxins has cost the US taxpayer quite a bit in inedible food and contaminated water.  You have enjoyed the benefits of Price-Anderson in the form of cleaner water, reduced acid rain and (paradoxically) reduced radioactive contamination of your environment; the tramp uranium and thorium in fly ash emits more radiation than the legal emissions of a nuclear plant.

Nuclear plant operators want loan guarantees as political insurance.  The Democratic Congress leans anti-nuclear, and the industry does not want to put capital at risk when political machinations can trash their investment.  A loan guarantee puts the pols at risk too.

But surprises can happen. A different spin from the top can move attitudes accross the masses and make the pols respond differently especially if the polling questions are worded to exact more positive spin. The construction of polling questions is one of the big political manipulators of the day.

Exactly that was my assumption - and my "Plank suspicion"-issue turned true.
You see,I'll only applaud such arguments the very same day that the Chinese surpass US when it comes to fossil usage PER CAPITA - Not before.

So China is a fast growing economy coming from way down with the 3rd world while the USA is (or used to be) a fully developed country. Your growth numbers just can't be compared.

Also, the US has 250 million inhabitants and china has 1 billion, so comparing 940 with 2500 without those numbers is comparing apples with oranges. And another issue: the US offloads it's mass production to China, so part of the energy consumption there should be written on the balance of the US.

Last, just saying "well let the others sort their business first before I have to" is just a way of justifying your lack of responsibility.

And yet even though China produces consumer goods for practically the entire Western world, it still emits almost 5 times less CO2 per capita than the US does.


Note that emissions as a result of manufacturing exports and emissions avoided by importing products are not considered in the graph above. For instance, around 33% of China's emissions in 2005 were due to the production of exports rather than consumption.
http://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissio...

And even though China has a much lower GDP than the US it invests far more in renewable energy and efficiency than the US does:
http://www.ren21.net/pdf/RE_GSR_2009_Update.pdf

But since you are concerned about Chinese CO2-emissions why don't you simply stop buying consumer goods instead of blaming others for your own shortcomings?
After all nobody forces you to buy consumer goods manufactured in China.

tCO2 per person is not a realistic measure of carbon responsibility because you have to look at what you get for the CO2 produced.

Here are the tCO2 per GDP(ppp) by country

Russia .99
Iran .84
China .61
Australia .59
Canada .55
USA .5
Korea .46
Mexico .37
Germany .34
Japan .34
Israel .34
India .33
UK .29
Denmark .29
Cuba .27
France .21
Switzerland .16
Nepal .08

http://www.iea.org/co2highlights/co2Highlights.XLS#'GDP PPP'!A1

tCO2 per GDP(ppp) by country

has nothing to do with:

what you get for the CO2 produced.

The Western financial industry has a much higher GDP than entire China and yet produces absolutely nothing compared to China which produces the majority of the consumuer goods in the world.

Your world should ideally consist of 100% Goldman Sachs bankers because they generate a very high GDP without producing anything at all and thus get the lowest CO2 per GDP. Therefore, in your super-CO2/GDP world the human race would die out shortly, as people who do not produce any food, any goods, any energy, anything at all cannot survive. Well, at least in your humanless world, there are no artificial GHG emissions (apart from your rotting GS bankers) and nobody needs to worry about how to solve the energy problem. But I certainly hope we don't have to go there.

Fact is China being a gigantic export nation actually produces a lot for the CO2 it emits, compared to the US. And this is what is relevant and not what taxpayer bailed out derivative bankers do.

Yes-the UK is even worse-in the coming years the bamboozled public will gradually realize the goose has been cooked and the "leaders" they were told to "trust" sold their future very cheaply indeed.

The US financial sector(including real estate, all business assets, rents and financial companies is about 32% of GDP. Wall Street directly amounts to ~8% of US GDP.

http://www.bis.org/speeches/sp081119.htm

According to the IMF 2008, the US was $14T GDP-ppp, the EU was $15T GDP-ppp and China was $8T GDP-ppp.

I guess you don't know that China only has 12% of US trade (2008) after Canada(17.6%) and ahead of Mexico(10.8%)and Japan(6.1%) and 16% of US imports 2008.

So what does China export to the USA?
Computers and computer junk, clothes, furniture, shoes, toys, electrical parts, oil rigs and coal and steel.

What does the US send to China(beside US jobs)?
Soybeans, meat, cotton, copper, aluminum, plastics, semiconductors, aircraft, medical equipment, wood pulp, petroleum products.
The raw and semi-finished materials for China's industrial economy.

http://www.census.gov/foreign-trade/statistics/highlights/top/top0812yr....

http://www.census.gov/foreign-trade/statistics/product/enduse/imports/c5...

Fact is China being a gigantic export nation actually produces a lot for the CO2 it emits, compared to the US. And this is what is relevant and not what taxpayer bailed out derivative bankers do.

In 2008 China exported 1428.5 $G and imported $1133.1 $G.
Germany at $1498 $G is the biggest exporter.
OTH, the US exported 1300 $G and imported 2100 $G.

http://www.uschina.org/statistics/tradetable.html

Money makes the world go round and that will continue into the future.
What is the alternative?

Soybeans, meat, cotton, copper, aluminum, plastics, semiconductors, aircraft, medical equipment, wood pulp, petroleum products.

And yet the US still generates a gigantic trade deficit with China. :o)
http://www.census.gov/foreign-trade/balance/c5700.html#2008
And this even though the wages in the US are orders of magnitudes higher than in China. :o)

In 2008 China exported 1428.5 $G.

With American wages this is over 20,000 $G. :o)
http://www.chinalaborwatch.org/2006%20Editorials/07-24-2006%20Minimum%20...

In addition, the value of the USD would be much lower if commodities were not traded in USD and even lower if commodities were traded in RMB instead and the RMB was disconnected from the USD.

Money makes the world go round and that will continue into the future.

Obviously this has nothing to do with:

you have to look at what you get for the CO2 produced.

Which this discussion is all about.

A few quick and dirty notes on some earlier comments.

What to expect short of declaring WW3 or outpouring of sweet doomer adrenaline:

Wind Force 10 (page 36)

Maybe a bit on the conservative side, but appreciate versus those other institutional energy forcasts TOD readers will know I mean without them being named here.

They upped a bit later on.

Wind Force 12 (2002) (page 53)
Wind Force 12 (2004) (page 62)

European bank balance sheet money has poured into the US wind sector to the tune of many billion dollars per year over the last several years. The financial crisis disrupted this for a while, but the European banks are now back at it.

Good. Also I remember to have gleaned somewhere that by now there are over 100 industrial facilities spread out over the US, and that most industrial content for US installations has ended up happening there.

European companies [...] have better access to the (artificially scarce) turbines

Yep, but these rewards had been earned hard enough beforehand; and even over the last couple or so years margins have remained extremely civilized compared to other players in the energy sector.

They won't stay there for much longer though, I'm afraid. There has been impressive capacity buildup in China, with most of the expected 12 GW of installations for this year built there. Thats up from 0.1 GW in 2003 [1], and the sky being the limit they will soon stop doubling their installed capacity each year and start to export, so expect a sustained price dip for turbine cost in the not too distant future. See the PV industry for proof of concept. And barring unpleasant events, the heavier nature of turbines won't stop this from happening. It has been shown before that tossing wind turbines across oceans is perfectly feasible.

On the comment on energy return, last time I came across wind energy EROI figures they were between 20 and 50. The often quoted number is that it takes six month for a turbine to get at the energy input.

Another one on cost: Disinterested studies on the cost of generation techniques tend to be an endangered species, and finding out what wind costs versus coal or other bad guys will require some intelligence and energy input of its own by the inquiring mind. And a cup of honesty, there are quite a few variables that can be tossed around here. To my set of values wind power on land is cheap already, offshore not yet, but still not prohibitive. Odds that any country will go broke for having put up too many turbines are slim.

On intermittency: Yawn, but I'll take up the fight if somebody wants to. Plus futures like desal and ecars. Forget hydrogen :-)

[1] Probably comes close to what Jerome meant by "industry policy". And indeed its a pity turbines don't orbit around the planet and no Apollo programme remains in sight. Well, the US they did a bit of helpful legislation in the early Obama days. The Chinese by the way also have a grid that remains to be set up. Any takers they won't be able to do so?