Wind Power Generators

Wind Power Generators

Environmentalists are really big on wind power (as long as it isn't affecting their view from Cape Cod), but there are some significant issues that need to be worked out. One of those issues is that wind power is highly variable. This means that it really only makes sense if you have some practical way to store that energy. Another problem is that many of the places that have plenty of wind don't have enough customers to take advantage of that electricity--because the transmission lines don't exist to transfer power from places like West Texas to places like Los Angeles.

Now, I ran into a fascinating claim:

A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands.

Because of intense competition, the way wind tax credits work, the location of the wind farms and the fact that the wind often blows at night, wind farms in Texas are generating power they can’t sell. To get rid of it, they are paying the state’s main grid operator to accept it. $40 a megawatt hour is roughly the going rate.

I first saw this at Classical Values, and followed the links. But the last link to the original story is now dead. The story apparently first appeared on Greentech Media, which appears to be a blog for promoting alternative energy. While other articles on the Greentech Media site still reference this broken link, and indicate that it did indeed show this absurd situation, the original story has disappeared.

There's nothing terribly surprising about this irrational situation where alternative energy producers are having to pay someone to take their product. As Simon at Classical Values points out:

What they really need to do is to find customers who are willing to be paid to use electricity. In other words we have set up a system where conservation is a bad idea.

Once you start screwing with the market ever more laws are required to make up for the distortions created by the previous set of laws. It never ends and only gets worse.

As much as I like the idea of alternative power, and finding a way to impoverish societies where they have their turbans wound too tight, the fact is that much of the alternative energy industry isn't really a business; it's a religion, a belief that anything that doesn't involve fossil fuels is fundamentally wise. It is a religion because it involves not evidence, but faith.

The government can encourage alternative power, but they need to be encouraging basic research. If you throw a few billion dollars at solving hard problems, such as how to create inexpensive photovolatics, or more efficient wind turbines, that doesn't distort the market badly, like subsidies and tax credits to producers and consumers do.

I don't know if the disappearance of the original article off the Greentech Media article was a mistake, or an attempt to hide an embarassing reminder that some of this Green obsession is actually a bad idea. But the core problem remains: societies that refuse to face reality when it comes to economics end up going broke.