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.
[…]
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.
[…]
$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.
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“. . . 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.
Gone with the wind….
Man oh man, the stupid hurts.
If they don’t work well enough, they can be converted to be reliable generators. 😉
A bonus is that there will be no more arguments about the noise from the generators.
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
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.
Someone should stop this wind power madness….really.
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.
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??
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.
Gawd, the madness continues…
I thought these blinking [self-snip-self-snips] were waking up! Does this HAVE to end with the masses up in arms?!
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.
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.
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/
“wind passes in senate”…yes I can believe that part of the first sentence!!! LOL!
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.
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.
A 30 year lifetime for the wind turbines is vastly exaggerated.
A study from the UK, done by Gordon Hughes, has actually found that offshore wind turbines degrade faster than those onshore. And while lifetime for onshore may be 15 years, offshore it is more like 10 years. See Figure 1 in the publication found here:
http://www.ref.org.uk/publications/280-analysis-of-wind-farm-performance-in-uk-and-denmark
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.
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.
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…
Phillip Bratby says:
March 12, 2013 at 11:43 pm
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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.
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.
“Windmill” jokes are rapidly replacing “blonde” jokes….
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.