Can Wind and Solar be Useful?

There are certain areas around the world where wind and solar can be economically useful.

While so-called clean energy is a ruse in the United States and Europe to cut CO2 emissions, there are places where wind and solar can make a real contribution.

Primarily they fall into three categories.

  • Islands lacking oil, natural gas or coal
  • Isolated locations, remote from the grid
  • Countries where natural resources can be better used for generating income

Many islands around the world have had to rely on diesel generators for power generation.

This has generally required the importation of expensive diesel fuel.

Some larger islands, such as Malta and Aruba, have used steam-driven power plants, but this has required the importation of expensive oil. In a few instances, natural gas has been imported for use with gas turbines.

Valletta, Malta, Photo by D. Dears
Valletta, Malta, Photo by D. Dears

Consumers on these islands have paid 50 cents or more per kWh for electricity, or five times what the average American pays. On Pacific Islands, the cost has been as high as $1.00 per kWh.

This affords wind and solar an opportunity to lower the cost of electricity on islands, large and small, which can benefit all who live there.

Even if wind and solar generated electricity cost 11 cents per kWh, or 30 cents per kWh respectively, they can lower the cost of electricity on these islands.

Hawaii may be able to make good use of both wind and solar, which is far different from the remaining states where the motivation isn’t economic, but rather to cut CO2 emissions.

Included in the second category are situations where solar can provide power for remotely located instrumentation, data collection, signs, etc.

In the third instance there are countries where installing concentrating solar power plants can be economically viable.

Saudi Arabia, together with some Gulf countries, is considering the installation of concentrating solar power plants (CSP). They are projecting that CSP will reduce their use of oil for generating electricity, thereby freeing the oil for export at a large profit.

These countries are considering, and in fact, have started building nuclear power plants for similar reasons.

Some countries with mining operations, such as Chili, are considering the use of CSP to augment power generation which is often done locally due to the mines being located far from the grid.

Common sense, good judgment and sound economics should be the basis for deciding when and where, wind and solar should be used.

Even on islands where solar and wind may make some sense, they can only augment, not replace, fossil fuels.

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12 thoughts on “Can Wind and Solar be Useful?

  1. It is ironic that you mention Hawaii as a location that could benefit from wind-generated power. Hawaii has six abandoned wind farms. The most familiar of which is the Kamaoa Wind Farm at Ka Lae (South Point), which finally had its last abandoned windmill removed after years of litigation by the state to force its former owner to remove it. The state had to finally foot the bill to have it hauled away. Why the wreckage? The (government-funded) subsidies ran out.

  2. Donn,
    Interesting article as always.
    I would like to add to your criteria that all forms of energy should be selected on a free market basis, no subsidies, no tax breaks, no free land, same environmental restriction for killing birds, same reliability, and no mandates for a certain % of renewable sources.
    We read about renewable numerous installations that are profitable, but fail to mention that mandates from various states require purchasing a certain % of such power often at very expensive price. For NJ go to http://www.njcleanenergy.com/srecpricing

    Soon NJ will require circa 20% renewable. Note that renewable sold for a high of $590 per MWH in January 2015 with an average of $183 per MWH in January 2015.
    Of course this will drive up the delivered price to the homeowner.
    I don’t see this price anywhere near competitive with reliable coal fired energy.
    Did the solar panels work well with snow on them?

    • All the tax breaks and rebates and subsidies should be eliminated. Especially the feed-in tariffs that require the utility that the homeowner is connected to accept his output at vastly inflated prices relative to the market price. The homeowner thus gets a huge windfall in terms of price and also not paying for the infrastructure associated with connection and distribution of his energy. If he wants to use it in his home locally that’s fine, just don’t connect to the grid and make the rest of us pay more.

      Where I live we’re going on our fourth consecutive day without a peek of sunshine. I’m guessing my solar-powered batteries would be long exhausted by now. So what relying on wind and solar for your primary energy sources does is make you even more a slave to the environment, something mankind has spent millions of years trying to be free of. Natural forces are not dispatchable energy sources. I’d guess 99% of the public has no idea of what that (dispatchable) means. But they experience it whenever there is a power outage, and if it lasts much more than a day it makes headlines, because people then realize what they’ve lost. If it happened much more frequently, perhaps on a daily basis like it does in many energy-poor countries, they’ll know it even more.

    • Thanks for the comment. Renewable portfolio standards are forcing many states to use wind and solar generated electricity which forces people to pay higher prices. It’s another travesty.

    • I agree with you, Bill, and I’m betting Donn does, too.

      Mandates and subsidies (direct and indirect) interfere with the free market’s ability to establish a product or process’s true value.

      There is some oversimplification in Donn’s analysis, however. CO2 is not the only pollutant we all want to avoid inhaling when even a “super-clean” coal or nat-gas plant operates.

      And no one wants nuclear waste in their back yard, etc.

      So I think some (SOME!) price-manipulation is worth exploring (via carbon taxation) as a low-administrative-cost way of crediting the positive environmental benefits of solar (my 10KW array produces electricity without using water, burning anything, or spewing any pollutants into the environment).

      It’s thus unfair to force Solar power to price-compete with coal when one craps into the fish tank in which we all have to swim while the other does not. Even Donn would agree that we all can place a dollar value on environmental benefits (Californians willingly vote for expensive environmental protections because that state’s environment is one of the primary draws for commerce and tourism). There’s nothing wrong with pricing your neighbor’s licence to crap on us (this has already been done with guzzler taxes, charging for discharge permits, etc.).

      My local utility values my Solar PV electricity at 8 cents/KWH, though it looks like it’s going to devalue it to 6 cents/KWH soon, and that’s on top of nickle and diming me with a grid-access fee. It would be unfair for it to “justify” what it pays me for my excess-meter power by blithely insisting that hey, coal sells at 4 cents/KWH. It would be absurd for it not also acknowledge that the coal plant pollutes the air we breath, not to mention the earth-raping costs of coal.

      Social/environmental benefits to fellow rate-payers ought to count for something, no? This factor is often missing from Donn’s otherwise excellent columns.

      • Sorry, I do not agree with pricing externalities for the many reasons I have stated before.
        My articles next week or so, will explain why PV roof top solar is bad for America. Remember, that utility scale solar and wind kills bats and birds: What’s their value?

  3. Right now the market fails in two ways to price in a value for things that are important and we take for granted. The first is availability and reliability. Here the market structure is upside down. The most unreliable, non-dispatchable sources are given vastly more price preference, beyond it’s worth, whereas the most reliable and readily dispatchable sources are left to fend for themselves. The other is avoidance of ecological damage. Very little credit is priced into the added value of the truly clean forms of generation, i.e., nuclear, while the most polluting are not penalized in any way in the current market structure.

    As far as externalities go, right now some forms of generation are required to pay them, others aren’t. Plant decommissioning, for example. Nuclear has to save money to do that. Coal companies must pay to “restore” strip mined sites (although the “restored” sites often don’t look too much better. But windmill owners can walk away from a wind farm when the subsidies dry up and others are stuck with the bill to demolish the rusting hulks. The playing field should be leveled in those cases.

    • Bill. Tremendous comments.
      I agree with most of what you have said.
      You have delved down into the details, which always exposes some of the misinformation that’s out there.
      There are problems with externalities, however, such as the value of birds killed by windmills or the negative cost of air pollution, where new regulations have reached the point of diminishing returns.
      It’s hard to put a value on most externalities, which is why, for the most part, I’m not in favor of adding them to an economic analysis. As you know, I believe economic analyses should be devoid of opinion wherever possible.
      Your point that reliability and availability are assigned no value, while the most unreliable and least available are given preference is a very important observation.
      Thank you.

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