Die Already: When Will the Wind and Solar ‘Industries’ Finally Collapse?

The wind and solar ‘industries’ are a pair that can’t survive without massive and endless subsidies, which means their days are numbered.

Their ultimate demise is a matter of when, not if.

The wind back in subsidies across Europe has all but destroyed the wind industry: in Germany this year a trifling 60 onshore wind turbines have been erected, so far.

Twelve countries in the European Union (EU) failed to install “a single wind turbine” last year.

And, as a result, the manufacturers of turbines and solar panels are dropping like flies, as subsidies are rolled back across Europe.

The only thing ‘inevitable’ about the ‘transition’ to all wind and sun powered future is bankruptcy for wind and solar outfits, the moment the subsidies get cut.

Norman Rogers counts the days in the piece below.

What It Will Take for the Wind and Solar Industries to Collapse
American Thinker
Norman Rogers
9 July 2019

The solar electricity industry is dependent on federal government subsidies for building new capacity. The subsidy consists of a 30% tax credit and the use of a tax scheme called tax equity finance. These subsidies are delivered during the first five years.

For wind, there is subsidy during the first five to ten years resulting from tax equity finance. There is also a production subsidy that lasts for the first ten years.

The other subsidy for wind and solar, not often characterized as a subsidy, is state renewable portfolio laws, or quotas, that require that an increasing portion of a state’s electricity come from renewable sources. Those state mandates result in wind and solar electricity being sold via profitable 25-year power purchase contracts. The buyer is generally a utility with good credit. The utilities are forced to offer these terms in order to cause sufficient supply to emerge to satisfy the renewable energy quotas.

The rate of return from a wind or solar investment can be low and credit terms favorable because the investors see the 25-year contract by a creditworthy utility as a guarantee of a low risk of default. If the risk were to be perceived as higher, then a higher rate of return and a higher interest rate on loans would be demanded. That in turn would increase the price of the electricity generated.

The bankruptcy of PG&E, the largest California utility, has created some cracks in the façade. A bankruptcy judge has ruled that cancelation of up to $40 billion in long-term energy contracts is a possibility. These contracts are not essential or needed to preserve the supply of electricity because they are mostly for wind or solar electricity supply that varies with the weather and can’t be counted on. As a consequence, there has to exist and does exist the necessary infrastructure to supply the electricity needs without the wind or solar energy.

Probably the judge will be overruled for political reasons, or the state will step in with a bailout. Utilities have to keep operating, no matter what. Ditching wind and solar contracts would make California politicians look foolish because they have long touted wind and solar as the future of energy.

PG&E is in bankruptcy because California applies strict liability for damages from forest fires started by electric lines, no matter who is really at fault. Almost certainly the government is at fault for not anticipating the danger of massive fires and for not enforcing strict fire prevention and protection. Massive fire damage should be protected by insurance, not by the utility, even if the fire was started by a power line. The fire in question could just as well have been started by lightning or a homeless person. PG&E previously filed bankruptcy in 2001, also a consequence of abuse of the utility by the state government.

By far the most important subsidy is the renewable portfolio laws. Even if the federal subsidies are reduced, the quota for renewable energy will force price increases to keep the renewable energy industry in business, because it has to stay in business to supply energy to meet the quota. Other plausible methods of meeting the quota have been outlawed by the industry’s friends in the state governments. Nuclear and hydro, neither of which generates CO2 emissions, are not allowed. Hydro is not strictly prohibited — only hydro that involves dams and diversions. That is very close to all hydro. Another reason hydro is banned is that environmental groups don’t like dams.

For technical reasons, an electrical grid cannot run on wind or solar much more than 50% of the time. The fleet of backup plants must be online to provide adjustable output to compensate for erratic variations in wind or solar. Output has to be ramped up to meet early-evening peaks. Wind suffers from a cube power law, meaning that if the wind drops by 10%, the electricity drops by 30%. Solar suffers from too much generation in the middle of the day and not enough generation to meet early evening peaks in consumption.

When a “too much generation” situation happens, the wind or solar has to be curtailed. That means that the operators are told to stop delivering electricity. In many cases, they are not paid for the electricity they could have delivered. Some contracts require that they be paid according to a model that figures out how much they could have generated according to the recorded weather conditions. The more wind and solar, the more curtailments as the amount of erratic electricity approaches the allowable limits. Curtailment is an increasing threat, as quotas increase, to the financial health of wind and solar.

There is a movement to include batteries with solar installations to move excessive middle-of-the-day generation to the early evening. This is a palliative to extend the time before solar runs into the curtailment wall. The batteries are extremely expensive and wear out every five years.

Neither wind nor solar is competitive without subsidies. If the subsidies and quotas were taken away, no wind or solar operation outside very special situations would be built. Further, the existing installations would continue only as long as their contracts are honored and they are cash flow–positive. In order to be competitive, without subsidies, wind or solar would have to supply electricity for less than $20 per megawatt-hour, the marginal cost of generating the electricity with gas or coal. Only the marginal cost counts, because the fossil fuel plants have to be there whether or not there is wind or solar. Without the subsidies, quotas, and 25-year contracts, wind or solar would have to get about $100 per megawatt-hour for its electricity. That gap, between $100 and $20, is a wide chasm only bridged by subsidies and mandates.

The cost of using wind and solar for reducing CO2 emissions is very high. The most authoritative and sincere promoters of global warming loudly advocate using nuclear, a source that is not erratic, does not emit CO2 or pollution, and uses the cheapest fuel. One can buy carbon offsets for 10 or 20 times less than the cost of reducing CO2 emissions with wind or solar. A carbon offset is a scheme where the buyer pays the seller to reduce world emissions of CO2. This is done in a variety of ways by the sellers.

The special situations where wind and solar can be competitive are remote locations using imported oil to generate electricity. In those situations, the marginal cost of the electricity may be $200 per megawatt-hour or more. Newfoundland comes to mind — for wind, not solar.

Maintenance costs for solar are low. For wind, maintenance costs are high, and major components, such as propeller blades and gearboxes, may fail, especially as the turbines age. These heavy and awkward objects are located hundreds of feet above ground. There exists a danger that wind farms will fail once the inflation-protected subsidy of $24 per megawatt-hour runs out after ten years. At that point, turbines that need expensive repairs may be abandoned. Wind turbine graveyards from the first wind fad in the 1970s can be seen near Palm Springs, California. Wind farms can’t receive the production subsidy unless they can sell the electricity. That has resulted paying customers to “buy” the electricity.

A significant financial risk is that the global warming narrative may collapse. If belief in the reality of the global warming threat collapses, then the major intellectual support for renewable energy will collapse. It is ironic that the promoters of global warming are campaigning to require companies to take into account the threat of global warming in their financial projections. If the companies do this in an honest manner, they also have to take into account the possibility that the threat will evaporate. My own best guess, after considerable technical study, is that it is near a sure thing that the threat of global warming is imaginary and largely invented by the people who benefit. Adding CO2 to the atmosphere has well understood positive effects for the growth of crops and the greening of deserts.

The conservative investors who make long-term investments in wind or solar may be underestimating the risks involved. For example, an article in Chief Investment Officer magazine stated that CalPERS, the giant California public employees retirement fund, is planning to expand investments in renewable energy, characterized as “stable cash flowing assets.” That article was written before the bankruptcy of PG&E. The article also stated that competition among institutional investors for top yielding investments in the alternative energy space is fierce.

Wind and solar are not competitive and never will be. They have been pumped up into supposedly solid investments by means of ill advised subsidies and mandates. At some point, the governments will wake up to the waste and foolishness involved. At that point, the value of these investments will collapse. It won’t be the first time that investment experts made bad investments because they don’t really understand what is going on.
American Thinker

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Reblogged this on ajmarciniak.

  2. We are a long, long way before the collapse of wind and solar, perhaps a generation. Before the collapse, we will have to suffer through a substantial increase in power failures and a tripling of electric rates before a majority of folks are convinced the wind and solar promises are just hot air.

    In the meantime, we need to do all we can to avoid anymore installation of wind farms closer than a mile and a quarter, or more, from any neighborhood. For that reason, I do not oppose offshore wind installations. At two to three times the cost of land based systems, the collapse will be sooner than later..

    • Helen Parker says:

      Wise to Wind: Please turn your thoughts to the devastating impact of IWTs on the fragile marine environment: infrasound, siltation, blunt trauma, EMF resulting in cellular epigenetic change. Off the shores of New England, even the first part of the planned buildout would be American-sized: the largest offshore array in the world!! It’s generally simply referred to as ‘the first offshore commercial array in the US – quite a sleeper! …its scale held well under the public radar): an 800MW array (84 of Vestas’ newest, untested 9.5MW turbines covering ~250 square miles of ocean). A total of 1,400 square miles are already auctioned off to wind developers, destined to hold 700 turbines for a chock-a-block 7,000MW array. First phase, “Vineyard Wind,” was recently halted, however, by the Edgartown (Martha’s Vineyard) Conservation Commission’s July 7th substantially well-reasoned cable permit denial:

      https://www.edgartown-ma.us/images/071819concomvwdecision.pdf

      as well as by a delay in the BOEM’s issuing a final EIS, reportedly due to NMFS reservations:

      https://www.reuters.com/article/us-usa-wind-fishing-exclusive-idUSKCN1UO0EK.

      Please, Wise to Wind, this might turn right here, right now if we replace breezy acceptance of more harm to our precious planet with the intention to educate the world that these things belong NOT NIMBY but NOWHERE! Thanks.

    • J Smythe says:

      There is no determined safe distance to turbines.

      • It’s downright deeply disturbing what Dr. Mariana Alves-Pereira has to say about the harm to our cells, to our nervous system and to our vestibular system. She’s publicly stated that knowing what she knows about the harm, she would not live within 20 km from turbines and yet innocent men, women and children in rural Ontario are being forced to live with turbines within 1 km and with hundreds of them within 20 km. These people did not consent to being harmed. In fact, they were told by the wind industry that they would not be harmed.
        Forced relocation is absolutely unacceptable.
        Turbines in close proximity to residents need to be turned off.
        Let the floodgates open on the issue of harm from infrasound.

    • J Smythe says:
  3. Charles Wardrop says:

    The UK authorities are way behind in recognising the dashed hopes of all who initially imagined the tremendous potential benefits from windpowered renewables.That despite the late Prof Sir David MacKay’s advice not to install them pending vast enhancement of battery electric storage.

    Sir David was the main scientific adviser to the UK government.

  4. Reblogged this on Climate- Science.

  5. Son of a goat says:

    Could Charismatic Kane Thornton be the new “Dr Who”?
    Did Captain Cook sail the Tom Thumb to the moon?

    If one was an attendee at the first day of the Clean Energy Summit in Sydney, the answer to both these questions would be probably be in the affirmative.

    Charismatic Kane as CEO of the Clean Energy Council gave his key note address to Australia’s annual gathering of renewable luvies on the first day of the two day summit at the Sydney Hilton.
    His orchestration was titled “Moon landing anniversary hangs brightly over clean energy debate” and was covered on media website Renew Economy. https://reneweconomy.com.au/moon-landing-anniversary-hangs-brightly-over-clean-energy-debate-59208/

    Kane suggests the technological and political challenges faced by man 50 years ago in putting man on the moon are similar to those we now face in transitioning to an all renewable future.
    Unfortunately the scope of Kane’s ramble is done with a set of blinkers on where he can only see a wind and solar powered future.

    I think Kane needs to get back in the Tardis and firstly go back a couple of 200 years and pop up in a sailing ship becalmed in the Straits of Gibraltar.
    After twiddling his thumbs, he could then fast forward to 1969 and the Kennedy Space center and watch the Apollo 11 take off. I feel certain he would find the enormous thrust given to Apollo 11’s rockets were from fossil fuels not a couple of solar panels and a spinnaker up the front.

    Finally he could set the dials of the Tardis to the year 2100 and he might find the real advancement in power generation has been in nuclear and that the only thing left of the wind industry is rusting hulks abandoned all over the countryside.

    A plaque placed at the entrance to each wind park would read;
    “Here they stand broken hearted, spent a penny but only farted.”

    • Son of a goat says:

      Never to miss an opportunity, apparently Kane and the Luvies will be living it up at tonight’s Gala Dinner, eating their Atlantic salmon, washed down with Penfold wines with the background theme music of David Bowie’s, Space Oddity.

      • Here in New England, we have a Green Tie Gala every year too, always at the State House where Green investors and CEO’s can fete politicians with delicious dinners, smiles, handshakes and pats on the back, all the while congratulating them on what a terrific job they’re doing and hitting them up for more of taxpayers’ hard-earned money. They fall for that every time.

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