Maryland’s “Wind Powered Welfare”

Guest Post by David Middleton

Going Green

Offshore Wind Passes in Senate, Gov. O’Malley’s Signature Next


The construction of a wind power farm off the coast of Ocean City could begin as early at 2017

By Jessica Wilde, Capital News Service

Gov. Martin O’Malley’s offshore wind energy bill is on its way to his desk for a signature, having passed in the House in February and in the Senate on Friday.

Five friendly Senate amendments are expected to be approved easily by the House.

The new legislation will funnel $1.7 billion of ratepayer subsidies over a 20-year period toward the construction of a wind power farm 10 to 30 miles off the coast of Ocean City as early as 2017.

“It’s about a better Maryland for tomorrow,” said Sen. James Mathias Jr., D-Worcester, the former mayor of Ocean City, who changed his vote to support the bill.

O’Malley’s previous two attempts to push the legislation—the first more ambitious —never made it to the Senate floor largely because of concerns about the cost to Marylanders.

His first initiative also failed because utility companies would have had to make nearly 20-year commitments to buy offshore wind energy.

[…]

GreenbeltPatch

Offshore wind is, by far, the most expensive source of electricity. An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime. 34¢/kWh is almost three times the average retail residential electricity rate in the U.S.

The much ballyhooed Cape Wind project, off Cape Cod, is projected to have a 454 MW installed capacity. It will cost approximately $2.5 billion to build. This works out to $5,506,608 per MW. A natural gas plant generally costs less than $900,000 per MW.

Cape Wind currently has a long-term contract to sell half its output for 18.7¢/kWh. The average U.S. residential rate is in the neighborhood of 12¢/kWh.

Maryland has come up with a novel solution to make offshore wind more affordable to consumers…

Opinion: Local Editorial
Martin O’Malley’s wind-power welfare

If offshore wind energy were the way of the future, government would not have to subsidize it at all, let alone to the tune of $1.7 billion.

Maryland Gov. Martin O’Malley, D, justifies the subsidy he will soon provide to offshore wind based on the industry’s enormous upfront costs. He routinely fails to mention that investors routinely swallow large upfront costs to get a piece of industries that promise future profits. In the case of offshore wind, because the industry is not so promising, investors would never back it without O’Malley’s massive pre-emptive government bailout.

O’Malley is campaigning already for the Democratic presidential nomination in 2016. This is the real reason behind the wind power subsidies he will soon sign into law. It is a sad reflection on the integrity of Democrats in the state legislature that they have rubber-stamped O’Malley’s latest corporate welfare plan. Although Marylanders will pay only a small additional amount on average — about $1.50 per month for residential customers, and a 1.5 percent surcharge on Maryland businesses — every penny is being directed to businesses that have O’Malley’s ear. By diffusing the costs of highly concentrated benefits, O’Malley has found a way to squeeze ordinary residents of his state even further than they are currently squeezed, enrich a few wealthy developers, and come off looking like some kind of environmentalist hero.

[…]

The Examiner

$1.7 billion in taxpayer-funded subsidies divided by 200 MW works out to $8.5 million worth of SUBSIDIES per MW of installed capacity!!!

They could build a 200 MW solar PV plant for less than the cost of the subsidies!

They could build 2,000 MW of natural gas-powered generating capacity for the cost of just the subsidies…

200MW Of Offshore Wind Blowing This Way

The exact percentage of state electricity sales that must be met by offshore wind under the state RPS will be determined annually by state regulators, and will be based on the creation of “offshore wind renewable energy credits” (ORECs).

Roughly 200 megawatts (MW) of offshore wind capacity will likely be built as a direct result of the bill, and Governor O’Malley has previously said 40 turbines will be built about 10 miles off the coastline, creating 850 green jobs.

[…]

Read more at http://cleantechnica.com/2013/03/08/…z0tBdmufETJ.99

The $1.7 billion subsidy will be paid out over 20 years… $85 million per year… $100,000 per year per green job created ($2 million per green job)…

And this is just the cost of the SUBSIDY!!!

At 12¢/kWh and a 38% capacity factor, the Maryland offshore wind farm would generate about $80 million per year in gross revenue. The levelized generation cost (LCOE) would run about $226 million per year.

So, you will have an investment that could never pay itself off or even cover half its LCOE at market prices.

For this monstrosity to break even, with the subsidy, Maryland electricity consumers will have to pay 17¢/kWh.

Maryland taxpayers will have to cover 17¢/kWh, so that Maryland’s electricity consumers will only have to pay 17¢/kWh (assuming that the power company is a non-profit). I guess this will only be a burden on the Marylanders who both consume electricity and pay taxes.

Our Department of Energy recently agreed to spend $169 million more of the taxpayers’ money to subsidize similar boondoggles.

About these ads

96 thoughts on “Maryland’s “Wind Powered Welfare”

  1. “. . . offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime.”

    I wonder whether this 30-year lifetime fully factors in all the maintenance costs, including the challenges and expense of repair in offshore waters. It is also questionable whether offshore wind projects can even get to 30 years without significant upkeep/maintenance — likely more than had been projected by those pushing the projects.

    It is true that the numbers listed above factor in a huge amount for ownership and maintenance costs, but how much data do we really have about 30-year project lifespans for modern offshore wind turbines? Unless the $0.34 number cited includes a decent buffer for unknown/unexpected contingencies and costs for offshore siting challenges, the real price may actually be somewhat higher.

  2. CAGW taxpayer funding to the military is no doubt way higher, anthony! LOL.

    9 March: Boston Globe: Bryan Bender: Chief of US Pacific forces calls climate biggest worry
    CAMBRIDGE — America’s top military officer in charge of monitoring hostile actions by North Korea, escalating tensions between China and Japan, and a spike in computer attacks traced to China provides an unexpected answer when asked what is the biggest long-term security threat in the Pacific region: climate change.
    Navy Admiral Samuel J. Locklear III, in an interview at a Cambridge hotel Friday after he met with scholars at Harvard and Tufts universities, said significant upheaval related to the warming planet “is probably the most likely thing that is going to happen . . . that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’’
    “People are surprised sometimes,” he added, describing the reaction to his assessment. “You have the real potential here in the not-too-distant future of nations displaced by rising sea level. Certainly weather patterns are more severe than they have been in the past. We are on super typhoon 27 or 28 this year in the Western Pacific. The average is about 17.”
    Locklear said his Hawaii-based headquarters — which is assigned more than 400,00 military and civilian personnel and is responsible for operations from California to India, is working with Asian nations to stockpile supplies in strategic locations and planning a major exercise for May with nearly two dozen countries to practice the “what-ifs.”…

    “The ice is melting and sea is getting higher,” Locklear said, noting that 80 percent of the world’s population lives within 200 miles of the coast. “I’m into the consequence management side of it. I’m not a scientist, but the island of Tarawa in Kiribati, they’re contemplating moving their entire population to another country because [it] is not going to exist anymore.”
    The US military, he said, is beginning to reach out to other armed forces in the region about the issue…

    http://www.bostonglobe.com/news/nation/2013/03/09/admiral-samuel-locklear-commander-pacific-forces-warns-that-climate-change-top-threat/BHdPVCLrWEMxRe9IXJZcHL/story.html

  3. You are directionally correct. See my book Gaia’s Limits. Offshore wind is more expensive than on shore, which is still dubious depending on HV interconnections and grid peaking capacity.

    Wind does not always blow. So for grid stability there must be offsets. The more wind in the grid mix, the more the mandatory ( since brownouts or grid failures are not acceptible options) offsets. Today, that means peak load natural gas turbine/gensets roughly equivalent to wind capacity.
    Do the math, and those stand alone would be cheaper than wind (hint, since with wind they are still needed anyway).
    So the whole Wind Shebang makes no fundamental sense now, and may never.
    Different issues when peak oil/ gas arises. But those are complex issues doubted by many here.
    Not worth posting except for those who have read my book on it, and who might have countr facts to bring to bear. But OT here.

  4. A 30 year lifetime! Who are they kidding? Onshore wind turbines are lucky to last 15 years. Offshore wind turbines will last about 10 years unless they break like matchsticks. The good news is that the sooner they fail, the shorter time that electricity consumers will have to pay the ridiculously high prices for the meagre amount of electricity they might produce.

  5. Maryland’s “Wind Powered Welfare”
    Posted on March 12, 2013 by David Middleton

    “The average U.S. residential rate is in the neighborhood of 12¢/kWh.”

    “An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime.”

    “Offshore wind is, by far, the most expensive source of electricity. An offshore wind farm would have to receive 34¢/kWh, wholesale, just to break even over a typical 30-yr plant lifetime. 34¢/kWh is almost three times the average retail residential electricity rate in the U.S.”

    There are possibly some rather profound ironies in all of this, of the anthropogenic variety.
    However, the choice remains what it really is to be green.

    You might indeed choose to convert, at two to three etc. times the cost, your belief structure into subsidies/taxes et al. Because, you know, what divorce is inexpensive? Just sayin’………

    A CO2 sequester at the end of yet another post-MPT extreme end interglacial. A good idea?

    It might just be at that.

    It occurs to me that if you are really in it for gaia you just cannot take the chance that CO2 might not be the tipping point, i.e. precede paleo-warmings instead of lag them (etc., et al CE etc. yet again). Why? Because if our darling half-precession cycle + old interglacial is destined to go the way of at least five of the last six interglacials (perhaps even one in eight) then the next climate chapter will be about the end-Holocene.

    The thing to ponder here is whether or not getting rid of the CO2 climate security blanket is actually the proper thing to do. Now.

    Whether you are in it for gaia or not, we have from a 1 in 6 to a 1 in 8 chance of repeating the first post-MPT extended interglacial, the Holsteinian, or MIS-11. If Marcott et al (2013) are actually correct, in that the Holocene reached its climate optimum at the end of a typical half-precessional aged extreme interglacial, then the choices might just be to extend the Holocene over to the next insolation peak, like MIS-11 may have done, with, I don’t know, maybe CO2 (?), or ban all GHG climate obstruction such that the next glacial inception may begin on schedule, like the vast majority of them have.

    Would you like fries with that??

  6. I am convinced that wind farms are net energy absorbers but it is hard to get enough data to do a proper analysis. If I just consider costs they obviously have to be subsidised to even exist but even then many of the subsidies are hidden. For example the capital cost of construction is high but how much higher would it be if fossil fuels were not available for mining and fabricating steel?
    I have a theory that the cost of something in a free market is a pretty good measure of the energy that has gone into making it and by this measure wind farms are a failure. Some people like them because they can generate money for some by sticking the bill for expenses to someone else. At the moment they can convince themselves that there is something noble about sacrificing money to ‘save the planet’. They do not seem to ask why some energy is so expensive or wonder where the money goes. (I suspect the extra money goes into burning more fossil fuels somewhere else to maintain the illusion.)
    If it could be shown that they were net energy absorbers even the thickest politician might have to take note.
    Any thoughts?
    Also I think that a 30 year life span is pretty optimistic.

  7. Maryland reads (readacrossmaryland.org) but we don’t do math. How long until Maryland goes to Congress to get subsidies for the poor and elderly because of self-inflicted price increases? Are we opening pool? Seriously, this will be big money.

  8. Master Resource did a detailed analysis of the full costs of wind power, concluding: wind plant implementations cannot be sustained because they divert a large portion of national wealth into unproductive debt-laden investments.
    I commented: Exactly. Look at Europe, on the verge bankruptcy after spending bundles of money on heavily-subsidized green energy. So, when the Democrats passed their cap & trade bill in the House in 2009 that mandated insane 83% CO2 cuts by 2050, if the bill had made it to Obama, we wouldn’t have seen wind and other fanciful green energies making up more than an iota of this lost energy. Our country, already in a fiscal mess, could not maintain such reckless spending.
    Moreover, as far as the full cost to society of wind power, consider also the documented health problems and loss in property values in the vicinity of windmills.
    Further, I later added: I often hear that “someday” green energy and wind will be economically viable, so we should subsidize it now. No, when someday comes, then go ahead and produce windmills. Actually, don’t. It is a hazard to the birds. No joke. It’s killing birds by the thousands, including the Bald Eagle. Stop it.

  9. Well I see the windmills from here. But American has even more dangerous enemies it seems – aorry if this is a littlemopff topic, buy you are talking about the American Don Quixote charging windmills, correct? (Boston Globe) — America’s top military officer in charge of monitoring hostile actions by North Korea, escalating tensions between China and Japan, and a spike in computer attacks traced to China provides an unexpected answer when asked what is the biggest long-term security threat in the Pacific region: climate change.

    Navy Admiral Samuel J. Locklear III, in an interview at a Cambridge hotel Friday after he met with scholars at Harvard and Tufts universities, said significant upheaval related to the warming planet “is probably the most likely thing that is going to happen . . . that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’’

    “People are surprised sometimes,” he added, describing the reaction to his assessment. “You have the real potential here in the not-too-distant future of nations displaced by rising sea level. Certainly weather patterns are more severe than they have been in the past. We are on super typhoon 27 or 28 this year in the Western Pacific. The average is about 17.”

    Locklear said his Hawaii-based headquarters — which is assigned more than 400,00 military and civilian personnel and is responsible for operations from California to India, is working with Asian nations to stockpile supplies in strategic locations and planning a major exercise for May with nearly two dozen countries to practice the “what-ifs.”

    http://weaselzippers.us/2013/03/10/commander-of-u-s-pacific-forces-says-global-warming-is-our-top-threat/

  10. Update: The latest LCOE for offshore wind has the midpoint at $0.22/kWh, with the maximum at 0.34/kWh. I haven’t seen a projected LCOE for this particular installation yet. The $0.17/kWh subsidy leads me to think that the LCOE is likely to be well above $0.22/kWh. The wild card with offshore anything is maintenance and operating costs.

  11. This is excellent news.

    Here in the UK the government is committed to hitting EU targets that will mean that by 2050 most of our weatlh generation capacity has been exported to the “3rd world” and we will be left with power shortages, higher costs, increased winter deaths, and a spoiled countryside littered with useless wind turbines.

    It’s good to know that we won’t be alone, and the USA intends to continue to lead the western world into the inevitable cold and dark future.

  12. I really don’t understand what all the surprise is about all this talk of megawatts misses the point. These are Subsidy Farms that is their entire purpose, they are a way of laundering taxpayer funds to friends, families and supporters of politicians. You can tell subsidy farms they are normally marked by large windmills. As soon as there is no subsidy left the windmills are abandoned to corrode as the subsidy farmers move on to another location that has politicians with subsidies to farm.

  13. There is a saying: “Politicians are like dinosaurs … even if you kick them hard between the legs, it will still take 5 years for their tiny brains to realise”.

    When will they realise that even the greens have gone off bird-mincer windmills? When will they realise the science doesn’t support the non-science scare?

    Perhaps another analogy is a chicken. Hold a chicken on its back on the ground and initially it struggles. Then it goes all limp, Then carefully release your hand and the chicken will sit there for almost a minute on its back … looking around wondering what is going on until eventually it finally does something and gets up

    Likewise, the so called “science” has long since disappeared, but these political chickens sit looking stupid, carrying on doing what they are doing because …. because they are chickens.

  14. This is indicative of the new economic theme in our country. Private risk migrating to the public. And with that, accountability goes out the door…

  15. Phillip Bratby says:
    March 12, 2013 at 11:43 pm
    ///////////////////////////////////////////////////////////////////

    In the UK, onshore wind turbines were expected to have a life expectancy of 25 yeaars. Evidence, based upon actual on site performance, and higher than expected maintenance costs, suggests that, in the real world, they may have a life expectancy of 15 or even as little as 12.5 years.

    As Philip notes, the life expectancy of off-shore wind will be significantly less. It may well be half that of on shore wind.

    The real achilles heal for off-shore wind is maintenance and associated costs. Anyone who has experience of shiiping and the toll that the sea takes on ship machinery and hence required maintenance will readily appreciate that off-shore wind turbines will require maintenance far more frequently than their counter-parts on land. However, maintenance off-shore will be difficult and dangerous. These will be tall wet structures exposed to the elements. It may be the case that maintenance can only safely be carried out in calm weather, There may well be few such windows of opportunity. Further, these periods cannot be pre-programmed in advance since they are at the mercy of a chaotic weather system the advanced prediction of which is not possible. The upshot is that maintenance vessels, supply vessels and the like will have to be chartered in and these vessels may be standing idle for lengthy periods whilst waiting for a suitable weather window in which to carry out maintenance. The costs of chartering in these vessles may be expensive. Obviously, these costs are market driven , but in the oil inductry, the daily hire rates for supply vessels (and the like) is expensive. I expect that the costs of maintenance has been very much under-estimated.

    I envisage that it will quickly become apparent that the costs of maintenance will be so high that routine maintenance will go out of the window. At first, there will be attempts to carry out emergency/breakdown maintenance, but it will soon become apparent that even that is not cost effective. The upshot is that it is likely that once the turbine fails, it will be seen as not worthwhile repairing, and one will soon reach a position when the off-shore windfarm operates at 90% capacity, then 80% capacity, then 70% capacity such that after about 7 to 10 years there may well be only about 30 to 40% of the wind turbines actually working and providing any energy.

    PS. when referring to capacity I mean the number of turbines installed. As one knows, on shore wind typically produces only about 22 to 30% of installed capacity. Off shore wind, initially may achieve a little higher (since there is more wind over oceans than land) but off shore wind will soon fall behind onshore wind in delivering actual energy since there will be far more frequent turbine breakdowns, and reapirs will be carried out less frequently, if at all. It would not surprise me at all if after 7 to 10 years one sees typically the windfarm producing only around 10% of installed/boiler plate GW capacity.

  16. Lew Skannen says:
    March 12, 2013 at 11:47 pm
    “They do not seem to ask why some energy is so expensive or wonder where the money goes. (I suspect the extra money goes into burning more fossil fuels somewhere else to maintain the illusion.)”

    It is in fact so that the suppliers of oil and gas have a strong interest in the West erecting as many wind turbines and solar panels as possible. They know that any useless economic activity will drive up the demand for their product. The more wind energy and solar power a nation installs, the higher the energy cost to the consumer gets. So oil and gas can also get more expensive – increasing the profits of the suppliers.

  17. A 30 year lifetime? I seem to remember a recent report into the actual measured – not modelled! – UK and Danish (?) windfarms that showed the effective lifetime was around 12-15 years not the 20-25 typically projected by those over here pushing for development and accepting the subsidies. IIRC this was because the output deteriorated quite a bit as the turbines aged. Even allowing for improvements in the design and construction of future wind turbines, 30 years seems to be a ridiculously optimistic estimate.

  18. … creating 850 green jobs….

    Our experience in Europe is that this sort of thing:

    1 – creates a few hundred jobs in China
    2 – maintains several jobs in an importing and assembling facility in Europe
    3 – puts a lot of money in a few international entrepreneurs’ pockets

    The entrepreneurs tend to be based in Switzerland or the Caymans – but they will have New York, Paris and London flats, so you can claim that some of the money is coming back into the country…

  19. MA folks are all masochists.
    A real shame MA and CA can’t be moved adjacent to one another.

  20. I wonder how many windmills would have been left if they had been built before Sandy came along, not to mention the earlier much stronger storms.
    Also I can’t remember off hand what the sea bed is like off Sandy Hook, but if the name means anything I’ll be interested to see how far down the piling for the bases goes. Our local ones are already having tidal scouring problems round the bases and they’ve only been up a couple of years.
    We’ve found them useful at the sailing club as visual navigational aids when we lay the racing marks at the beginning of the season, though.

  21. The cupidity of our politicians is directly proportional to the ignorance and stupidity of our voters.

  22. Somewhat off-topic, but energy related, see

    http://www.telegraph.co.uk/finance/newsbysector/energy/9924836/Japan-cracks-seabed-ice-gas-in-dramatic-leap-for-global-energy.html

    If this can be extracted safely, then burning methane produces less CO2 than either coal or natural gas, and hence for those that are concerned about the possible effect of CO2 emissions on global climate, extracting this source of energy should be high at the top of the list of cleaner energy solutions.

  23. Here’s a broadcast documentary on wind power from February I just noticed yesterday. The best stuff starts at about twenty one minutes. They talk about the only fully peer reviewed study on health effects of wind turbine noise, and do a demonstration of low frequency modulation on sound.

    Wind Rush

  24. ….and if you factor in the diminishing energy return on older turbines after several years at sea, it will be even more eye-wateringly expensive. Welcome to Europe, Maryland, and all its bonkers energy policies.

  25. I would bet the house that building these monstrosities to withstand hurricanes and tropical storms is going to be a challenge – and even more expensive than envisaged

  26. The windmills are a ideological power symbol for leftist faubians/cultural revolution elite as churches are a symbol of religious power for religions?

  27. Such a shame.
    My family and I really enjoyed our vacations in Ocean City.
    We will need to find somewhere further down the coast from now on.

    Thats a further several thousand dollars a year they can add to the cost of this nonsense.

  28. Call it an experiment in measuring the wind off the Northeast for climate change modeling and the money shall flow…

  29. It would be enlightening to make a documentary that shows how much green and insider money/influence is spent to shove green subsidies down the tax payer’s and rate payer’s collective throat. “Follow the money” would be fascinating. And, unlike “Gasland” and “GLB” it could be factual.

  30. A kludgey legerdemain, foisted on us by a quorum of , illusionary , self righteous, sanctimonious prestidigitator’s

  31. With the number of major storms that run up the coast they will be lucky to even get these things built, much less keep them running.

  32. As a resident of the UK, with all our money wasting wind turbines, I sympathize with those who will be unable to afford this ludicrous method of electricity generation. Go buy a home generator it will be cheaper to run and you get power when you want not when the wind blows.

  33. ‘…A typical 30-year plant lifetime…’ 10-30 miles offshore..??
    Not a cat-in-hell’s chance.
    Denmark (with some of the best offshore history information – and much more ‘benign’ sea conditions) is recording ACTUAL turbine life of 7-12 years. After that all you get is a load of shipping hazards…
    Clearly Maryland politicians suffer from the same delusions as ours this side of the pond…

  34. Poor Maryland. Shows that responsiblity is gone with the wind. Its not too hard to understand that run-away electricity costs will cost jobs. Lucky US is having cheap natural gas – having the potential to end this stupidity … in years from now. So much money borrowed from future generations wasted. Maryland may ask for Federal support then. Great plan, and lots of possibilities to capture some money on its way down.
    Over here in Germany we start to feel the enormous cost burden this brings to cosumer and companies.
    Its not that there are not enough problems on the European table here, but the same green lobby pushing their issues aggressively and the bureaucracy is growing. Welcome to the club, fellow American friends.

    Matt

  35. Anthropogenic Global Warming is easily surpassed by Anthropgenic Global Stupidity.

  36. Cape Wind also has automatic 3% annual cost increases for 20 years built into the contract – despite starting at 3X market wholesale rates. The rate payers are forced to pay. This corrupt contract was forced by politicians who wanted a ‘green’ feather in their cap. Also, Cape Wind receives federal and state tax subsidies and a no bid $0 lease of the site. Crazy.

  37. Let’s be clear about power “capacity.” That refers to the MAX amount of power that a generation
    facility can produce, not how much it can produce. If the winds are strong enough to provide
    38% capacity, then that wind farm would be the equivalent of a 76MW conventional plant.
    That farm will produce roughly 1.5 percent of Maryland’s power. It’s insignificant.
    And exactly how long are those 850 green jobs going to last?
    On a brighter, more intelligent note, two days ago in South Carolina the first concrete was poured for Summer Unit 2, a Westinghouse AP1000 nuclear plant with a capacity of 1180 MW, providing that power over 95% of the time. Two more plants have been approved and will be built,providing South Carolina with by far the most emission-free power in the US – over 85%, all nuclear. No wind, no solar. No BS and no high electric prices. Maryland produces over 50% of its
    power burning coal. At O’Mally’s rate of progress, the future of Maryland power is coal.

  38. “Cape Wind currently has a long-term contract to sell half its output for 18.7¢/kWh. The average U.S. residential rate is in the neighborhood of 12¢/kWh.”

    You are comparing capewind’s wholesale charge to the grid to the retail (including distribution). For a fair comparison, you need to compare wholesale to wholesale and then capewind looks even worse (about 3X).

  39. The optimism of the longevity of these things just boggles the mind. But, then, I have a friend who just installed (heavily subsidized) solar panels guaranteed to last 50 years, and expected to last 150 years. I’m not buying any of it. None of this stuff will last anywhere near that long in working condition.

  40. “The good news is that the sooner they fail, the shorter time that electricity consumers will have to pay the ridiculously high prices for the meagre amount of electricity they might produce.”

    Hummmmmm. You really have no idea how corrupt governments and their syncophants work.The taxpayer will pay for this for the full 30 years(and probably longer as costs go up). Once that $0.34 rate is in,it is in. No government in the world has ever truly reduced a tax.What they mark down with one hand,they raise something else with the other.
    BTW….anybody know if this will affect the Kennedy clan’s view??

  41. The ratepayers resident in the Sovereign Socialist People’s Republic of Maryland might as well write checks directly payable to Commissar O’Malley’s campaign contributors.

  42. @Ben, “Frankly, my dear, I don’t give a damn.” Rhett Butler to Scarlet O’Hara in Gone With The Wind from 1939, and still they will not learn. RESET, MOLON LABE

  43. I have seen the same all across Africa. Huge factories standing empty. Huge roads leading to nowhere. You can be ABSOLUTELY sure that certain people will gain personally from this madness. Large construction projects are nice juicy targets for graft and personally enriching the bureaucrats.

    Of course, it will not be obvious who is on the take or how the scheme works – but rest assured when it seems mad to everyone else there are some who “get it” and will retire immensely wealthy.

  44. As soon as O’Malley has his windmills, he will be able to turn off the Calvert Cliffs nuclear power station. Perhaps he can then sing a song about his success, by candle-light. (He has quite a successful band, by the way).

  45. Someone who is involved in the renewable industry in Maryland said the offshore wind farm in Maryland will never happen because the utility payback will never cover the utility company’s cost of installation and operation, i.e. the formula does not work and no one will take it. I hope he is right.

    Well, I am no sure of what will happen, but recently I was skiing in West Virginia and as I drove up Mount Storm, where the wind turbines cover the mountain top, perhaps 35% of all the wind blades were not turning. I assume this is because there was a failure, and this project is not all that old.

  46. And when they get their next Atlantic seaboard hurricane? How will their precious little windmills hold up?

  47. If a generator breaks, its cheaper to walk down the hall (at the power plant) to fix it, than to drive/fly to the coast, get in a boat, chug out to the windmill (assuming the waves/weather allow), etc. Not to mention the extra wear and tear of the outdoor environment on the hardware.

    The likelihood of immense cost ineffectiveness of off-shore windmills (vs on-shore power) should be self evident to any engineer. So, are the people pushing this “liars or fools”?

  48. From a structural dynamics view, the foundations for these units will be a challenge to install and maintain. I suspect that the Corps of Engineers and Coast Guard will have some review process and the State of Maryland / Developer application will be a contentious issue. . These foundations will be a attraction for marine life and fisherman and at the same time pose a hazard for the Atlantic flyway and maritime interests. Don’t hold your breath for 2016.

  49. Ian says:

    March 13, 2013 at 1:37 am

    “wind passes in senate”…yes I can believe that part of the first sentence!!! LOL!
    OMG Ian, you have nailed it. ROFL

  50. It looks like the chart has switched the colors for “Fixed O&M” and “Levelized Capital Cost”. Wind and solar have high capital costs but allegedly low O&M costs, aka ‘free energy’.

    Is it true that climategate FOIA has released the password? Tom Nelson just posted something.

  51. I’m all for letting these little enclaves of Lefty theology fall as far down the rabbit hole as they can go.

  52. This is one reason my wife and I are moving out of Maryland. I can’t wait to hear the O’Malley voter base (Maryland’s welfare recipients) crying about not being able to pay their electric bills. However, on the positive side, the wind turbines will provide good fishing and diving structures when the first really good hurricane knocks them over.

  53. You can’t neglect the fact that while the intial capacity factor of an offshore windfarm is initially higher that that of a typical onshore one, that factor goes down fast after a few years as shown in the study The Performance of Wind Farms in the United Kingdom and Denmark by Gordon Hughes. High winds and salt tends to wreak havoc on the internals of windmills and the maintenance costs are much higher than on land. Combined with the fact that towers are also subject to the “attacks” of strong waves and you have all the ingredients of a financial and environmental fiasco. Market forces and financial realities will eventually bring an end to all of this but at a high cost for us tax and rate payers.

  54. Isn’t it interesting that in the age where (almost) everything can be found out at the push of a button, such expensive, focused government grants that make neither economic nor technological sense can breeze their way through without some voter revolt?

    There is a pervasive sense that “government” money is extra money, perhaps left by a relative of the Tooth Fairy. Government money is money that hard-working citizens make that they have taken from them by force of law. Not money that is cheerfully donated.

    All government money should be viewed as money taxpayers WANT to give to get services they want. If this project were put to a referendum, would the citizens of Maryland approve it? I think not.

    We/you need some mechanism to rein these fellows in. Perhaps if they appeared in public the way they think of themselves, in powdered wigs, puffy shirts, tight pants with silver-buckled shoes, with a pinch of snuff about to go up their noses, we’d understand who was handling our money.

  55. David says:
    March 13, 2013 at 5:36 am

    ‘…A typical 30-year plant lifetime…’ 10-30 miles offshore..??
    Not a cat-in-hell’s chance.
    Denmark (with some of the best offshore history information – and much more ‘benign’ sea conditions) is recording ACTUAL turbine life of 7-12 years. After that all you get is a load of shipping hazards…
    Clearly Maryland politicians suffer from the same delusions as ours this side of the pond…

    I don’t think the politicians are deluded at all. They are as aware as everyone else that this is a boondoggle that they can use to pass taxpayer money to friends and associates (and in UK often other politicians – Gummer( Deben) Yeo, Cameron all with snouts in the trough).

    All the windfarms have to do is stay in place until the NIMTO limit that all politicians use. Not In My Term of Office – I will be out of office enjoying the benefits of whatever boondoggles I authorized and the failures of the policy will be ‘owned’ by my successors. Correctly contracted the successors may even have to continue to fund the failing boondoggles as the contracts will be written that way to profit their predecessor. Another example from UK: the Public Private Finance Initiatives in UK that have turned into wildly successful contracts for the private companies and continuing uncancellable nightmares for the government – that was not accidental. Maryland taxpayers will still be paying these subsidies when the windmills are corroding stumps in 30 years time because the contract will be written to be independent of the amount of electricity provided. But when they first start noticeably failing NIMTO will have passed so nobody will be accountable.

  56. .
    $8.5 million in subsidies per MW of installed capacity??

    Since windelecs (wind turbines) only generate for 25% of the time, the actual subsidy is $34 million per MW.

  57. C’mon, let’s not be so pessimistic. As Kevin Trenberth has so knowingly informed us, CAGW will result in more, and more severe hurricanes. So, by replacing fossil fuel electrical generation with wind powered electrical generation we won’t have to worry about CO2 induced CAGW hurricanes smashing those offshore wind farms to smithereens. That is, however, assuming that hurricanes, CAGW or not, don’t smash them to smithereens before…um…uh…ok, there is reason to be pessimistic after all.

    Come to think of it, I guess there’s even more reason to be pessimistic. I mean, couldn’t we at least try to emulate the ancient Egyptians and build temples that future generations, 2,000 years from now, might actually respect, rather than bend over laughing. Wind farms are, after all, nothing but temples to environmentalism. It’s not like they’re practical. Let’s consider what they’ll think when they excavate acres, and acres, and acres of these stupid things, on land and sea: “Our ancestors really did this?!”

  58. Think positive! I will be a massive pull for …

    Tourism.
    Come to Ocean City Maryland
    – See the least efficient electricity generating plant in the US, if not the world.
    – See the USA’s most costly $/MW generating plant.
    – See the USA’s worst eyesore in water.
    – See the USA’s biggest potential man-made storm hazard.
    – See the US biggest maintenance hazard of modern times but green job have been created
    – Engage with the local people that didn’t paid for all this.

  59. As a life-long Maryland resident, I can only face-palm my embarrassment – yet again. I’ve already written to my local representatives and let them know I will be keeping this in mind during the next election. Not that it will do any good. I’m convinced that we have the stupidest voters in the country. If not, then a really close second behind California.

  60. Sadly, offshore wind energy promoters and advocates have not learned that when you piss into the wind, you wet yourself. Sailors have know of this axiom for several millennia.

  61. RHS says:
    March 13, 2013 at 8:28 am

    As long as they can put it where Ted Kennedy HAS to see it!

    That would involve digging a very, very deep hole. Come to think of it, it sounds exactly like the kind of jobs program Teddy would have been so fond of.

  62. Maybe Minnesotans for Global Warming could do a parody of the famous Woody Guthrie song:

    This wind is your wind; this wind is my wind.
    From the mountain passes, to New Jersey beaches …

  63. I’d sure like to see the assumptions underlying those “levelized” cost figures. A single figure for uncontrollable power such as wind and solar is simply not possible. For several reasons. In the case of wind, production cost is practically linear with respect to the amount of wind a given
    site provides. But guess what? There is not an extensive supply of equally good wind sites. The best sites will be (or have been) developed first. Future turbines are practically guaranteed to
    provide more costly power. Ditto for solar, although not as pronounced, especially when vast desert acreage is available. But both wind and solar cost more the more you produce, for the simple reason that a grid can handle without much alteration, small amounts of wind/solar (which is what we now have – small amounts). But as the volume grows, it starts seriously impacting the grid,
    reducing the percentage of capacity that conventional plants can attain. That means any power they now produce will have to be a lot more costly, since basically, their only cost component being reduced by displacement is fuel, and fuel, in some cases (nuclear), is a tiny cost component (less than 10%). Therefore, each unit of power from the conventional plants has to cost more,
    potentially a lot more, depending upon how much below capacity it is operating. In general, studies of power costs have in the past been the products of enthusiasts and backers of particular renewable technologies and those estimates are often preposterously optimistic. And so are any cost estimates of wind based on existing wind turbines, which practically by definition are the lowest cost producers that will ever exist in that area. Another probably not included cost
    factor is the side effect cost of storage, as for example, the very costly pumped storage facilities California is building to store wind/solar power for a few hours.

  64. I think the chart showing levelized cost of photovoltaic solar at 15-cents is off by a country mile. The European experience indicates unsubsidized solar cost is more on the order of 40-cents (U.S.) per Kwh.

  65. That thud you just heard was the bottom falling out of the property prices in Maryland. Who’d want to buy a home where you pay boutique prices for electricity?

  66. Ian W says:

    March 13, 2013 at 8:11 am
    ///////////////////////////////////////
    The thrust of your comment may be correct, but, in theory, there is nothing preventing the UK Parliament passing a law withdrawing all subsidies and providing that there will be no compensation whatsoever for any broken contracts. Parliament does not have to honour its contracts, but should it fail to do so, in the future, 3rd parties will be more wary of dealing with UK Plc.

  67. Can’t wait to see the reactions on the greenies’ faces when a few years of Atlantic hurricanes reduce most of those windmills to twisted steel and the power company goes hat-in-hand to ask for two or three times the original price to rebuild them….

  68. How long will it take for the turbines to become so unstable that nobody will go near them for fear of collapse? Within 20 years there will be a departure from this folly and then there will be a huge new problem in how to deal with all these massive structures that no longer work and are dangerous to maintain. By mid-century there could be a booming business in conducting tours of these abandoned farms known as relics of the “Illogical Era of Green Worship.”

  69. No Worries, they will just jack up electric rates. In California, my ‘tier’ for over baseline presently runs about 26 cents / kW-hr headed for 30 Real Soon Now. In the early vetting / planning stages is a $1/2 / kW-hr tariff.

    I’m sure everyone will be happy to pay 1/2 a buck per kW-hr just to know they are not using cheap reliable natural gas turbines at close to 1/10th that price…

    Even with some of the highest gasoline costs in the nation, it is now cheaper to “Camp at home” with a gasoline stove than to use an All Electric Kitchen.

    http://chiefio.wordpress.com/2012/05/29/camping-at-home-is-cheaper/

    I predict a large rise in sales of outdoor propane grill / stoves … and even conversion of AEK houses to gas ranges ( presently our natural gas price is significantly lower than gasoline prices per equivalent heat content).

    At the $1/2 level it will be cheaper to run my own generator at home on gasoline. It is already cheaper to do so on Natural Gas (ignoring my labor costs…)

    So we’re rapidly inducing people to adopt strategies used in other 3rd world locations. Gasoline or kerosene stoves. Open fire outdoor cooking. DIY electricity – though I got good at that already under Gov. Gray (out) Davis and our rolling blackouts.

    I got to looking at such things, and how folks lived elsewhere, and found that the Rocket Stove is one of the preferred methods of cooking. Relatively cheap and easy to make your own. Burns what we call “yard waste” and what they call “collected wood fuel”. Even came up with a simple DIY version using about $20 of bricks. (Primarily for my ‘after the quake’ preparations. It lets me build a working stove from the loose brick ‘rubble’… ;-)

    http://chiefio.wordpress.com/2013/02/24/g70-stove-pictures-and-use-report/

    But there are commercial ones too. Even a nifty one for camping that lets you charge your cell phone / iPod:

    http://chiefio.wordpress.com/2013/02/22/usb-wood-fired-stove-iphone/

    So watch for increased use of “yard waste” in locations that adopt the high tariff model. Make electric rates match 3rd world kind of pain, get 3rd world kind of responses. It’s just the way economics works.

    BTW, a first look at charcoal by the bag at Walmart looks like it may be cheaper to do your cooking over charcoal. It’s about the same cost / BTU as gasoline. So it all comes down to how efficient your BBQ is with fire. I’ve gotten my Dutch Oven out of the garage and roasted a chicken in it to test the whole process. Not too bad, but with a bit of a ‘surround’ I think I can get fuel use down even more into the “cheaper” range.

    For now, at least, the gasoline stove is cheapest to cook with. (Well, propane is about the same cost, but they jockey back and forth…)

    I’m sure that folks lighting fires in the backyard is going to do wonders for the environment…

    Oh, and using a gasoline or kerosene heater (or lantern that gives ‘free light’ with your heat ;-) is much more economical than using an electric room heater. ( I had used an electric room heater in just the bedroom and let the whole house natural gas heater off, to save on wasting heat. With their price differentials, it is now cheaper to just let the whole house be heated. Eventually I need to put in baseboard hot water and an external fired heater that lets me just warm the one room. Using an unvented fire appliance is not a good idea. But I just know some poor folks will do it just to save the cost of $1/2 electricity…)

    Oh Well, as they say… buy stock in makers of charcoal and BBQ grills…

  70. richard verney says:
    March 13, 2013 at 4:27 am
    Somewhat off-topic, but energy related, see

    http://www.telegraph.co.uk/finance/newsbysector/energy/9924836/Japan-cracks-seabed-ice-gas-in-dramatic-leap-for-global-energy.html

    If this can be extracted safely, then burning methane produces less CO2 than either coal or natural gas, and hence for those that are concerned about the possible effect of CO2 emissions on global climate, extracting this source of energy should be high at the top of the list of cleaner energy solutions.
    ———-

    Natural gas IS mostly methane anyway, so the methane hydrates are roughly equivalent to natural gas. Still better than coal at any rate(no sulfur or ash to worry about)

  71. There are other problems with Maryland wind power. The power distribution system on the Delmarva Peninsula operates from west to east. If the wind power is installed, they will have to also construct an east to west distribution system and at great expense. Recently there was a plan to connect various power plants with a single grid from Virginia through Maryland and Delaware to New Jersey. The govt turned the plan down. There is no way to get this off shore wind power to market with exiting lines.

    Also, they had better plan to keep these towers so far offshore that they can not be seen from the beach at Ocean City. Can you imagine people spending their hard earned dollars for a family vacation at the beach, only to see a forest of wind towers in the distance as compared to the endless horizon!

  72. @E.M.Smith says:
    March 13, 2013 at 3:11 pm

    I don’t know what your construction is like, but if you’re thinking of baseboard, have you considered in-floor radiant heat? Using selector valves, you can heat as much or as little of the house as you like.

  73. I am wondering what the line is on this venture in Atlantic City; will bet on costly overruns, 50% more cost for maintenance, a hefty price for modifying the grid to distribute the inconsistent power generated, and then a costly removal process when it is deemed unsafe…
    It is exactly this level of incompetence that encourages me to suspect it is all planned (amongst MANY more issues) to fabricate plausible deniability and stall until the next bonus cheque clears.

    But hey cancel a dozen F 35s and build all the statues with moving parts that you want or tidal power or geothermal power or…the experiments are being done around the world, perfect for an American redesign (innovation the US is know for) or just wait and keep spying on China…

  74. E.M.Smith says:
    March 13, 2013 at 3:11 pm
    “…But I just know some poor folks will do it just to save the cost of $1/2 electricity”
    ===================================
    Some interesting points. My two cents…
    Heat pumps with underground reservoir; water radiators using the earth as a heat sink or source as required…(cost effective geothermal) This is a very hard boon to legislate away.
    Ferment yard litter and extract methanol food waste for ethanol or methane. Form “tribes” in your neighborhood to pool resources (homeless do the same and squat retreat then squat again…repeat^n, i.e nomadic squatters into every nook and cranny) Collect rainwater (test it for heavy metals) and rebuild cisterns of old.

    I have more ideas but i grow weary of this topic and they are more “hardcore” and will seem less crazy during the next “quantum fluctuation” lol

    The pattern has been well established, incompetent “rule” with little or no accountability and then business as usual: repeat. Each iteration transfers wealth/property/money/hard assets/resources to the modern Pharaohs and…

    oh and the poor folk will not do that until they cannot afford their electric bill anymore, or water bill, or property tax, or police tax or movement tax or poll tax or service tax or sales tax or, debt recovery taxes, transmission tax or data tax, or…you know that 47 percent that pay no taxes hehehehe
    errr, not to be confused with the 2% that pay no taxes.

  75. Something wrong with that chart which shows the fuel costs of a coal plant being lower than the original investment costs. That could only be true over a short period of time. Certainly not over a 40 year lifetime as most UK power stations are designed for.

  76. cedarhill says:
    March 13, 2013 at 4:11 am

    MA folks are all masochists.
    A real shame MA and CA can’t be moved adjacent to one another.

    FYI, MA is the state abbreviation for Massachusetts. The state abbreviation for Maryland is MD (which I always write as Md so it doesn’t look like Missouri, which is MO).

  77. Rart,

    You have really a lot to learn about basic econ. In your case it almost appears hopeless.

  78. To quote Anthony in another blog thread.. “The stupid, it burns…”
    Why are we subsidizing some thing that is 3-4 time more expensive than other sources? This throwing money at a problem and never solving it… and that money they are throwing away is MINE!

  79. Rud Istvan says:

    Wind does not always blow. So for grid stability there must be offsets. The more wind in the grid mix, the more the mandatory ( since brownouts or grid failures are not acceptible options) offsets. Today, that means peak load natural gas turbine/gensets roughly equivalent to wind capacity.
    Do the math, and those stand alone would be cheaper than wind (hint, since with wind they are still needed anyway).

    With wind (or solar) power the alternative generating capacity has to be able to rapidly vary output. This is likely to decrease efficiency and increase maintainance costs for the power plants concerned. Thus using “renewables” can easily push up the cost of electricity from all sources.

  80. Phillip Bratby says:

    The good news is that the sooner they fail, the shorter time that electricity consumers will have to pay the ridiculously high prices for the meagre amount of electricity they might produce.
    But the taxpayers might be stuck with paying for them. Even if they no longer even exist…

  81. Apples and oranges:

    34¢/kWh, wholesale, price of wind power
    34¢/kWh is almost three times the average retail residential electricity rate

    Residential rates not only inlude wholesale prices, but the costs for transmission ditribution, billing etc.

    In maryland, wholesle power is bought on sold on the PJM market (www.pjm.com)
    The price is called the locational marginal price It has averaged 4 cents a kwhr for the past few years.

    Thus 34 cents is EIGHT times the average wholesale rate.

Comments are closed.