lesson #2, I don't think you understand wind energy

In yesterdays post I said wind energy was competitive, and some of the newest systems being installed are lower than other sources of energy.  Here are the numbers.

Cost * of energy generation in 2010 dollars per MWh:
Wind with the production tax credit = $68.25, without $90.25.
Nuclear $103.20.
Coal $104.35.
Natural Gas $177.20.

Of these only wind has a known cost for the years ahead.  From 2006 to 2011 utilities saw the average price of coal increase by 39%, this is, or will be, passed to consumers.  Natural gas prices have trended up over the years, although down the last 2 years, still generation equipment for burning natural gas is far more expensive than for coal (per MWh capacity) leaving the total cost the highest of all methods.

Drilling and fracking have created a glut of natural gas.  Yet, due to high equipment costs it does not appear it will ever lower our electric bills.  The glut is spawning pipes to port cities where it will be liquified and sold to foreign nations, which will soon lead to price rebounding.  The low prices may not endure as long as the damage to the environment will.

Without the tax credit new wind is still competitive, still offers a hedge against fluctuation of fossil fuels.  Yet, with credits developers are ensuring a quicker and stronger moderation, maybe a reversal, of always climbing electric rates.   Since 2001, residential rates increased nationally all but one year.  Additionally, the public and the GOP often suggest this tax credit prevents utilities from operating in a free market atmosphere, well this is funny, since utilities are wholly regulated by regional rate commissions and a number of government agencies, making the newest and lowest energy source singularly more expensive hardly seems like a free market move that would benefit the consumer.

* There is more than one way to calculate energy costs, numbers here are the "levelized" method, the most common.   If you really care what it is you can find on-line explanations.  The prices above are averaged over many plants across the nation.

Below you will find more information.