A great deal of federal initiatives have come about in recent years encouraging renewable energy sources. Wind energy and other sources of power that don’t rely on fossil fuels are gaining steam and the good news is that it might pay off for the end user.
Veritable Nor’easter of wind energy
According to CNN, the Obama administration is touting the renewal of subsidies for renewable energy sources, as a law creating a number of subsidies for wind energy generation, among other sources, is set to expire at the end of the year. The reason the administration wants to renew the subsidy is that without it, the cost of wind energy could rise 30 percent, which wind energy producers and equipment manufacturers typically receive in federal subsidies.
Currently, about 3.3 percent of the nation’s electricity was generated via wind turbines at the end of 2011, about the equivalent of generating power for 18 million homes. Wind turbines are one of the fastest-growing types of power generation, as 32 percent of new power generation capacity is from wind turbines. Should all subsidies cease, the cost of wind power could be double that of natural gas.
No fuel needed
The economic case for renewable energy is that it uses things that don’t run out, such as sunlight, wind or water, to create electricity. They produce no waste, don’t pollute and require less maintenance than plants fueled by non-renewable sources. Lower cost of operation means lower cost of product over the long term. Unfortunately, the hitch is that the buy-in costs of wind energy and other renewable power sources is high.
Currently, wind energy is starting to get competitive with conventional coal plants and some natural gas plants. According to CleanTechnica, the Department of Energy reported in 2009 that the cost per kilowatt-hour of wind energy was between 4 and 9 cents. In 2010, according to the National Resources Defense Council, top-performing wind energy sites were averaging about 7 cents/kWh. The American Wind Energy Association also reported in 2011 that new wind farms were selling contracts at about 6 cents/kWh, roughly the same as a combined-cycle natural gas power plant, which according to the Department of Energy, is the cheapest type of natural gas plant to run.
Natural gas is currently the rock star of the energy trade, as it’s cheaper than any other source. The DOE estimates that for new plants entering service in 2017, the cost for a combined-cycle gas plant will be $66.10 per kilowatt-hour, compared to $96.00 per kWh for wind. Conventional coal is estimated at $97.70 per kWh, advanced coal with a carbon-capture system is estimated at $138.80 per kWh.
However, the DOE’s estimates don’t include tax credits and subsidies, which can knock up to 30 percent off the top.
The NRDC reports that the cost of wind energy has come down by 85 percent in the past 20 years, which should continue as the technology progresses. Subsidies are not exactly in vogue politically at the moment and there are a healthy number of skeptics about renewable energy sources’ potential. Investment in them, by private interest or by government, is pursuit of two noble goal. The first, of course, being cleaner energy. The second is cheaper power, which anyone can appreciate.