Showing posts with label carbon credit. Show all posts
Showing posts with label carbon credit. Show all posts

Monday, March 7, 2011

Climate Change

Climate Change - The Facts

The vast majority of the scientific community is in consensus that climate change is happening and human activity is almost certainly the cause. In the last 100 years the Earth has warmed by 0.74°C (and by 0.4°C since the 1970s), meaning that global sea levels have gone up, glaciers and sea ice has melted, floods and droughts are on the increase, and heatwaves are worse.
The term 'greenhouse effect' was coined to describe the way some gases in the atmosphere (such as carbon dioxide, nitrous oxide, and methane) trap some of the light energy from the sun after it is reflected from the Earth's surface, and  before it can escape out into space, so warming our atmosphere. This is a natural process that has been happening for billions of years, and without it the Earth would be about 33°C colder – too cold for us to live on. Now, however, human influence has upset the natural balance of carbon dioxide and other greenhouse gases and too much of the sun's energy is being trapped, causing average temperatures to rise. Human greenhouse gas emissions have gone from practically nothing to tens of billions of tons per year since the start of the industrial revolution. At present, over 30 billion tonnes of carbon dioxide (CO2) is emitted globally each year by burning fossil fuels, and another seven billion tonnes by changes of land use, mainly deforestation.
Around the world, climate change would cause greater risks from rising sea levels, flooding, droughts, food shortages, diseases, water shortages and loss of tropical forests.
Southern Europe and the Mediterranean Basin are the most vulnerable regions in Europe, and mountain areas (in particular the Alps), islands, coastal regions and densely populated floodplains are facing serious consequences.
According to the Fourth Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC) in 2007, we could expect to see continued melting of ice caps, glaciers and sea ice, significant changes in rainfall patterns and possibly more intense tropical cyclones such as hurricanes.
Flooding will contaminate drinking water, expose people to toxic pollutants and make the delivery of health and social services more difficult. Droughts will increase the risk of water shortages. Food and water shortages could lead to conflict and migration.

360investgroup carbon credits

Airlines to get 212.9m EUAs in 2012: EC

Airlines to get 212.9m EUAs in 2012: EC

Airlines will be given 212.9 million allowances for the first year the sector enters the EU emissions trading scheme in 2012, according to data from the European commission.
The number of allowances is 97 per cent of the sector’s average annual emissions from 2004 to 2006.

The cap will fall to 95 per cent of historical emissions from 2013 through 2020, equivalent to 208.5 million.

Source - Point Carbon

carbon trading
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Monday, February 14, 2011

World Bank Invests €68m in Post-Kyoto Credits

World Bank Invests €68m in Post-Kyoto Credits 

Fund will buy offsets from projects in developing nations after first phase of Kyoto expires in 2012, so carbon-cutting projects can continue to sell UN-backed offsets.
The projects, which have been approved under the UN's Clean Development Mechanism (CDM) offsetting scheme, range from landfill and composting projects to urban transport, energy efficiency and renewable energy initiatives.
"During a period of regulatory uncertainty, the UCFT2 is helping to maintain demand for post-2012 carbon credits," said Joƫlle Chassard, manager of the World Bank's Carbon Finance Unit. "It means we have another tool to help bridge the gap in the carbon markets."
The first tranche of the UCF (UCFT1), capitalised to €775m and launched in 2006, purchased 129.3 million tons of CERs generated by two Chinese incinerators of greenhouse gas HFC-23.

360investgroup

Friday, January 21, 2011

Carbon scheme a win-win for farmers

Carbon scheme a win-win for farmers, business and the environment

| Sourced From Carbonneutral |

International interest in a carbon credit scheme provides a win-win for farmers and the environment
19 January, 2011 – The Federal Government’s Carbon Farming Initiative, due to be introduced mid 2011, is already attracting interest from large corporations in Australia and overseas.  The scheme encourages establishing forests for biodiversity and other environmental co-benefits rather than monoculture plantations. Buyers are already making enquiries to invest in Australian reforestation projects that will produce carbon credits that are low risk, resilient, and improve marginal farm land

Thursday, January 20, 2011

Carbon Credits

Carbon credits may be cash crop

| Sourced From Thestarphoenix |
Saskatchewan farmers could one day be selling carbon credits along with their wheat and canola, a presenter at Crop Production Week said Thursday.
Brian McConkey, a senior adviser of physical science based in Swift Current with Agriculture and Agri-Food Canada, said in an interview local farmers are getting a handle on reducing greenhouse gas emissions and industry may be interested in buying the reductions.

360investgroup

Tuesday, November 30, 2010

Carbon emissions could reach record levels in 2010

A new study published in Nature Geoscience and conducted by researchers in the UK suggests that despite efforts to cut greenhouse gases,carbon emissions will increase by three percent this year, which is similar to the growth rates seen between the years 2000 and 2008.

360investgroup

carbon trading

Tuesday, October 26, 2010

EU Says Aviation Organization Recognizes European Carbon Market

EU Says Aviation Organization Recognizes European Carbon Market

| Sourced From Bloomberg |

The European Union claimed a diplomatic victory at an international aviation meeting, saying the participants accepted the EU’s plan to cap emissions by domestic and foreign airlines serving Europe as of 2012.
The European Commission, the 27-nation EU’s executive arm, also said the International Civil Aviation Organization reached a “breakthrough” agreement at its meeting that ended yesterday to curb global aircraft discharges of greenhouse gases beginning in 2020.
Such pollution is blamed for global climate change, which the EU is handling in part by adding airlines to its emissions trading system in less than 15 months.
“Critically, the deal is a good basis for proceeding swiftly with the inclusion of aviation in the EU’s Emissions Trading Scheme,” EU Climate Commissioner Connie Hedegaard said in a statement published in Brussels today. “The goal is not as ambitious as Europe thinks it should be, but at the same time ICAO has recognised that some states may take more ambitious actions prior to 2020.”
The agreement, reached in Montreal after almost a decade of deadlock at ICAO, will cover more than 90 percent of worldwide air traffic, the EU said in the statement. Emissions from international aviation account now for 2 percent to 3 percent of global greenhouse gas discharges and their share is expected to rise in the coming decades as the industry grows, according to the EU.
EU Carbon Market
Participants of the meeting “refrained from language which would make the application of the EU’s ETS to their airlines dependent on the mutual agreement of other states,” the EU said in the statement. “It was this requirement that led to a stalemate at the last ICAO assembly in 2007.”
The EU carbon market, started in 2005, is the world’s largest. It covers about 12,000 installations that produce energy or goods ranging from paper to cement. Emitters must have an allowance for each ton of carbon dioxide they let off. Those producing more than their allowance have to buy more; those that emit less can sell their surplus.
The bloc is on track to reduce greenhouse gas emissions by 20 percent this decade from 1990s levels and said it’s ready to deepen the target to 30 percent if other countries follow suit.
The next round of international talks on climate are due to start toward the end of November in Cancun, Mexico.


carbon trading

360investgroup Ethical Policy

Ethical and Environmental Policy

Formed for investors by investors; with over 11 years’ investment experience, ethical approach and unparalleled service both before during and after, we are now the fastest growing alternative investment house in the world. 360 Invest group are driven by our Investors, who wish to align their own principles of profit by investing in ethically-minded products. Ecological Impact We will not finance any business whose core activity contributes to: • global climate change, via the extraction or production of fossil fuels (oil, coal and gas), with an extension to the distribution of those fuels that have a higher global warming impact (eg tar sands and certain biofuels) • the manufacture of chemicals that are persistent in the environment, bioaccumulative in nature or linked to long term health concerns • the unsustainable harvest of natural resources, including timber and fish • the development of genetically modified organisms where there is evidence of uncontrolled release into the environment, negative impacts on developing countries, or patenting (eg of indigenous knowledge) • the development of nanotechnology in circumstances that risk damaging the environment or compromising human health.

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view our latest carbon credit reduction project

Thursday, October 21, 2010

Whaling worsens carbon release, scientists warn

Whaling worsens carbon release, scientists warn


By Victoria Gill Science reporter, BBC News, Portland
Blue Whale - Science Photo Library
Whales store carbon by the tonne
A century of whaling may have released more than 100 million tonnes - or a large forest's worth - of carbon into the atmosphere, scientists say.
Whales store carbon within their huge bodies and when they are killed, much of this carbon can be released.
US scientists revealed their estimate of carbon released by whaling at a major ocean sciences meeting in the US.
Dr Andrew Pershing from the University of Maine described whales as the "forests of the ocean".
Dr Pershing and his colleagues from the Gulf of Maine Research Institute calculated the annual carbon-storing capacity of whales as they grew.
"Whales, like any animal or plant on the planet, are made out of a lot of carbon," he said.
"And when you kill and remove a whale from the ocean, that's removing carbon from this storage system and possibly sending it into the atmosphere."
He pointed out that, particularly in the early days of whaling, the animals were a source of lamp oil, which was burned, releasing the carbon directly into the air.
"And this marine system is unique because when whales die [naturally], their bodies sink, so they take that carbon down to the bottom of the ocean.
"If they die where it's deep enough, it will be [stored] out of the atmosphere perhaps for hundreds of years."

Ocean trees
In their initial calculations, the team worked out that 100 years of whaling had released an amount of carbon equivalent to burning 130,000 sq km of temperate forests, or to driving 128,000 Humvees continuously for 100 years.
Humpback whale (AP)
The idea would be to do a full accounting of how much carbon you could store in a fully populated stock of fish or whales
Dr Andrew Pershing, University of Maine
Dr Pershing stressed that this was still a relatively tiny amount when compared to the billions of tonnes produced by human activity every year.
But he said that whales played an important role in storing and transporting carbon in the marine ecosystem.
Simply leaving large groups of whales to grow, he said, could "sequester" the greenhouse gas, in amounts that were comparable to some of the reforestation schemes that earn and sell carbon credits.
He suggested that a similar system of carbon credits could be applied to whales in order to protect and rebuild their stocks.
"The idea would be to do a full accounting of how much carbon you could store in a fully populated stock of fish or whales, and allow countries to sell their fish quota as carbon credits," he explained.
"You could use those credits as an incentive to reduce the fishing pressure or to promote the conservation of some of these species."

Is bigger better?
Other scientists said that he had raised an exciting and interesting problem.
Professor Daniel Costa, a marine animal researcher from the University of California, Santa Cruz, told BBC News: "So many more groups are looking at the importance of these large animals in the carbon cycle.
"And it's one of those things that, when you look at it, you think: ' This is so obvious, why didn't we think of this before?'."
Dr Pershing pointed out that whales, with their huge size, were more efficient than smaller animals at storing carbon.
He used the analogy of a small dog compared to a large dog.
"My wife's 6lb (2.7kg) toy poodle eats one cup of food per day and my dog - a 60lb standard poodle - eats five cups of food per day," he said.
"That's only five times as much food but my dog weighs ten times as much."
He said that the marine carbon credit idea could be applied to other very large marine animals, including endangered bluefin tuna and white sharks.
Dr Pershing said: "These are huge and they are top predators, so unless they're fished they would be likely to take their biomass to the bottom of the ocean [when they die]."
The American Geophysical Union's Ocean Sciences meeting has been taking place this week in Portland, Oregon


Original article can be viewed: http://news.bbc.co.uk/2/hi/science/nature/8538033.stm

360investgroup

India and Brazil head move to 'green' economic future

Oil pipelines at a refinery in Benicia, California Some governments give "huge subsidies" to oil and gas production, said Mr Sukhdev

India and Brazil head move to 'green' economic future

A forest A number of countries have systems in place to reward forest conservation
Governments are increasingly taking the economic value of nature into account in policy-making, with growing interest in results from a UN-backed analysis.
The Brazilian and Indian governments are among those keen to use findings from The Economics of Ecosystems and Biodiversity (Teeb) project.

“Start Quote

You cannot manage what you do not measure”
End Quote Pavan Sukhdev Deutsche Bank
Final results from the three-year study were unveiled here at the UN Convention on Biological Diversity meeting.

Nature's services must be counted if they are to be valued, its leader said.
Pavan Sukhdev, a Deutsche Bank capital markets expert who leads Teeb on secondment to the UN Environment Programme (Unep), said that if society did not properly account for services that nature provides, they would be lost.
In an earlier analysis, Teeb calculated that the economic value of services being lost - including water purification, pollination of crops and climate regulation - amounts to $2-5 trillion dollars per year, with the poor hardest hit.

Related stories

Here, Mr Sukhdev and his team concentrated on ideas for implementation - how to turn the findings of the study into real politics.
And the first thing for governments to do, he said, was to carry out national equivalents of the global Teeb study - to analyse the real value of ecosystem services to their economies.
"Conventional methods of accounting such as GDP accounting will not capture them - so we need... to rapidly upgrade the system of national accounts," he said.
"You cannot manage what you do not measure."
Global uptake Mr Sukhdev said that so far, 27 governments from Africa and Latin America, and one from Asia, had approached the Unep team for help in "greening" their economies.
Many of these are looking to translate the global Teeb findings findings into their national context, with Brazil and India in the vanguard.
India's Minister for Environment and Forests, Jairam Ramesh, said his country was planning a national economic assessment along Teeb lines.
"We are committed to developing a framework for green national accounts that we can implement by 2015, and we are confident that the 'Teeb for India' study will be the key facilitator," he said.
And Braulio Dias, secretary for biodiversity and forests in Brazil's Environment Ministry, said his country was also looking to Teeb for a change of direction - in fact, without the pending election, it might be happening already.
"The tradition of many countries including Brazil has been one of utilising regulation - command and control instruments - and we need to work more on incentive measures and get the different sectors on board," he told BBC News.
"The Teeb approach is very useful to make them understand the implications of loss of biodiversity, and also the return on investment in terms of biodiversity conservation.
"We have several bills before the national congress to establish a national mechanism for payment for ecosystem services - if they're approved, I think we will have a better possibility of implement some of those economic measures."

“Start Quote

Collectively, $650bn of subsidies for oil and gas?”
End Quote Pavan Sukhdev Deutsche Bank
But he echoed the concerns of many other developing countries by emphasising that some kind of international payment system, transferring money from the West to the rest for conserving resources, might be needed in the long run.
The European Union also supports the Teeb principles, with many countries and the EU itself set to examine the potential for greening their economies along Teeb lines.
"Teeb can have the same impact for biodiversity as the Stern Review had for climate change, and will be a useful tool to help reduce the loss of species and habitats," said UK Environment Secretary Caroline Spelman.
"The UK Government has been a major supporter of Teeb since it started and we will be funding the roll out of the report across the world to communicate the central message that, economically, we have to take action to reduce the loss of our natural environment before the cost becomes too high."
Politics of conservation While a number of countries including Brazil and India do have systems in place to reward forest conservation, implementing the full Teeb vision would amount to a root and branch overhaul of economic incentives and taxes.
But some moves could and should be quickly made, said Pavan Sukhdev.
The first thing was to "flatten the footbal field", which currently sees huge subsidies given to oil and gas production - largely in richer countries.
"Collectively, $650bn of subsidies for oil and gas?
"Surely, this is not a Mother Theresa business - it is not a charity - it doesn't need subsidy," he told BBC News.
"I would like governments to look at and start disclosing their subsidies, and gradually work to reduce them and indeed eliminate them; because if want businesses to arise which have a better footprint and a lower cost to society, the first thing you have to do is to stop favouring those that don't."
The draft agreement from this CBD meeting would see countries agreeing to incorporate biodiversity values into their national accounting by 2020, and eliminating by the same date subsidies that are detrimental to biodiversity.
But many nations are holding to the point, in negotiations, that "nothing is agreed until everything is agreed"; and although many developing countries support the Teeb concept, factional politics could yet prevent the endorsement of such a vision here.

original news source:http://www.bbc.co.uk/news/science-environment-11588020

Wednesday, October 13, 2010

Carbon Credits Jump Most in a Year as Utilities Buy, EU Squeezes Supply

Carbon Credits Jump Most in a Year as Utilities Buy, EU Squeezes Supply




Power lines and pylons stand in the darkening sky




A file photo shows power lines and pylons standing in the darkening sky near Cologne. Photographer: Wolfgang von Brauchitsch/Bloomberg
A file photo shows smokestacks and cooling towers emiting smoke and water vapor at the E.ON-owned Scholven coal-powered electricity plant near Gelsenkirchen, Germany. Photographer: Wolfgang von Brauchitsch/Bloomberg
The price of polluting jumped 15 percent in Europe this month, the biggest gain in a year, as utilities including E.ON AG amass carbon credits and regulators restrict future supplies.
E.ON, the largest power producer in Germany, needs European Union carbon futures now for generation in 2013 and beyond. It’s purchasing United Nations credits, a less-expensive alternative for complying with EU caps, to “minimize its exposure,” said Eliano Russo, E.ON’s head of carbon supply.
Smokestacks and cooling towers
Europe designed the world’s biggest cap-and-trade program to limit greenhouse gases by doling out fewer allowances each year through 2020. While an unforeseen recession derailed plans set before 2008 to create a shortage of permits, an economic rebound and EU squeeze on allocations for phase three, starting in 2013, has utilities scrambling for longer-dated futures.
“The market is long today but will definitely be short in the future,” Russo said in an interview. “Whatever happens at the global level, the EU emissions trading system will be in place until at least 2020.”
Carbon futures for delivery this December traded today on London’s European Climate Exchange at 14.66 euros ($19.64) a ton, near their highest since December 2009. The contract so far this month is up four times as much as oil’s 3.5 percent gain.
E.ON, which hedges about 40 percent of its electricity three years before it’s delivered, said in a regulatory submission last year that emitters will probably spend about 24 billion euros annually on carbon auctions starting in 2012.
Near-Term Glut
The Dusseldorf-based utility, with 150 million euros budgeted to curb greenhouse gases in developing countries, is applying its European technology to cut emissions from rubbish dumps in Vietnam and China and power stations in Indonesia.
E.ON is among investors shifting their focus from a near- term glut of permits to a likely shortage after 2012. Carbon contracts outstanding for 2012 delivery jumped 10 percent in the past month to a record 165,532 contracts, 2.7 percent more than open interest for the 2010 benchmark, according to ECX data.
The concentration of longer-dated carbon contracts stands in contrast to the oil market, where traders have four times as many bets on 2010 contracts as they do for December 2012, according to New York Mercantile Exchange figures. What’s more, open interest in CO2 exceeds that of oil for the December 2012 contract.
Immediate Auctions
The EU regulator is resisting a call from utilities to schedule immediate auctions for CO2 permits valid from 2013 and beyond, said Mark Lewis, a Paris-based analyst for Deutsche Bank AG. Without those futures, utilities are forced to buy current allowances, he said. Generators generally sell power forward only when they can also buy fuel and carbon allowances to lock in the profit.
EU carbon prices may rise to 30 euros a ton in 2012 if the regulator sells significantly less than about 600 million tons in “early” auctions, Trevor Sikorski, a London-based analyst at Barclays Capital, forecast yesterday in an e-mailed note.
About 11,000 factories and power stations are in the EU program. Emitters with spare permits can sell them, while those that exceed their allocations can buy them on the open market or at auction. The knowledge that supplies will shrink as the EU distributes fewer allowances going forward is spurring demand for carbon now, said Laurent Segalen, the London-based head of commodities and environment at Nomura Holdings Inc.’s international unit.
“Emitters with surplus allowances seem unwilling to sell them at current price, while utilities are buying,” Segalen said. “All this is a correct configuration for a bullish market, which can go toward 20 euros.”
Insufficient
Utilities are concerned “there may not be a sufficient number of EU allowances to cover utilities’ needs to hedge for the years after 2012,” E.ON Energy Trading AG spokesman Jamee Majid said by e-mail on April 19.
The carbon price rebound from as low as 12.41 euros in January comes even as cap-and-trade stagnates outside Europe. Bloomberg New Energy Finance estimates the global carbon market will be valued at $1 trillion by 2020, 28 percent less than previously forecast, as the U.S. Senate jettisons a House proposal to cap and trade emissions from oil refineries and most factories.
“Cap-and-trade by definition is dead,” NRG Energy Inc. Chief Executive Officer David Crane said in a March 4 interview. The comments from the Texas power producer echoed similar words from Lindsey Graham, a South Carolina Republican working with Massachusetts Democrat John Kerry and Connecticut independent Joseph Lieberman on the Senate energy bill.
‘Work in Progress’
While the bill is “a work in progress,” it likely will include a cap-and-trade system only for utilities, Graham told reporters in Washington on March 26. The senators are scheduled to unveil the bill on April 26.
In Europe, carbon markets had to overcome recession, regulatory missteps and the failure of global climate talks. In one of the most recent setbacks, the EU had to revise its rules after Hungary sold “recycled” permits that had already been counted once before in Europe, halting spot trading on the BlueNext SA carbon exchange in Paris for three days last month.
Carbon markets also sagged after last year’s climate summit in Copenhagen. UN envoys there failed to extend the 1997 Kyoto Protocol, whose current targets expire in 2012.
“We were on the cardiac table,” Brett Genus, a London- based carbon broker for Evolution Markets Inc. said April 15 by phone. “Now we’ve got a heart beat again.”

Source of publication - By Mathew Carr and Catherine Airlie - Apr 21, 2010 7:17 PM GMT+0200
link back - http://www.bloomberg.com/news/2010-04-20/carbon-credits-jump-most-in-a-year-as-utilities-buy-eu-squeezes-supply.html

Tuesday, October 12, 2010

private sector organisations have registered for the government’s Carbon Reduction


Almost 2,800 public and private sector organisations have registered for the government’s Carbon Reduction Commitment emissions trading scheme, and a further 400 are going through the process, it was announced today.


By David Williams


Separate figures for the public sector are expected on Monday. However, John Maddocks, CIPFA’s policy manager for sustainability, told Public Finance that early indications showed a strong take-up by local authorities. He said more than 90% of those expected to join had signed up a few days before last night’s deadline.
‘It’s pretty good going,’ he said. ‘It might well be better than the private sector has done – but many public sector organisations are already used to managing their energy usage.’
Maddocks said the CRC was forcing many councils to get to grips with their energy usage for the first time, assessing their full property portfolios and finding easy efficiencies.
But, he added, ‘registration is relatively easy – there are concerns around the trading side, the buying and selling of carbon allowances’, as few public bodies will have prior expertise in emissions trading.
Andy Johnston, head of the centre for local sustainability at the Local Government Information Unit, said some public bodies ‘probably will have missed the boat’.
But, he noted that the Environment Agency, which runs the scheme, had already pledged to work with those who have failed to register on time, rather than name and shame straight away.
The CRC is intended to reduce emissions among the UK’s biggest polluters that are not already covered by the larger European Union Emissions Trading Scheme.
The registration criteria are complex, but qualifying organisations will be those currently spending around £500,000 a year on electricity.
Participation is mandatory for all departments of the UK, Welsh and Scottish governments. Hundreds of other public bodies including councils are expected to qualify.
The final number of registrants – 2,779 plus the 400 still being processed – is significantly less than the 5,000–6,000 expected when the CRC was launched.
Public Finance understands that many ‘parent’ organisations have registered in place of their constituent bodies, which could have been large enough to qualify on their own.
Around 8,000 organisations – not including all CRC registrants – have contacted the EA to declare that their energy usage is below the CRC threshold

source - http://www.publicfinance.co.uk

Wednesday, October 6, 2010

Wind Power

Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, wind mills for mechanical power, wind pumps for pumping water or drainage, or sails to propel ships.
At the end of 2009, worldwide nameplate capacity of wind-powered generators was 159.2 gigawatts (GW).[1] Energy production was 340 TWh, which is about 2% of worldwide electricity usage;[1][2] and has doubled in the past three years. Several countries have achieved relatively high levels of wind power penetration (with large governmental subsidies), such as 20% of stationary electricity production in Denmark, 14% in Ireland[3] and Portugal, 11% in Spain, and 8% in Germany in 2009.[4] As of May 2009, 80 countries around the world are using wind power on a commercial basis.[2]
Large-scale wind farms are connected to the electric power transmission network; smaller facilities are used to provide electricity to isolated locations. Utility companies increasingly buy back surplus electricity produced by small domestic turbines. Wind energy, as an alternative to fossil fuels, is plentiful, renewable, widely distributed, clean, and produces no greenhouse gas emissions during operation. However, the construction of wind farms is not universally welcomed because of their visual impact and other effects on the environment.
Wind power is non-dispatchable, meaning that for economic operation, all of the available output must be taken when it is available. Other resources, such as hydropower, and load management techniques must be used to match supply with demand. The intermittency of wind seldom creates problems when using wind power to supply a low proportion of total demand, but as the proportion rises, problems are created such as increased costs, the need to upgrade the grid, and a lowered ability to supplant conventional production.[5][6][7] Power management techniques such as exporting excess power to neighboring areas or reducing demand when wind production is low, can mitigate these problems.

Renewable energy
Biofuel
Biomass

History


Medieval depiction of a windmill
Windmills are typically installed in favourable windy locations. In the image, wind power generators in Spain near an Osborne bull
Humans have been using wind power for at least 5,500 years to propel sailboats and sailing ships. Windmills have been used for irrigation pumping and for milling grain since the 7th century AD in what is now Afghanistan, Iran and Pakistan.
In the United States, the development of the "water-pumping windmill" was the major factor in allowing the farming and ranching of vast areas otherwise devoid of readily accessible water. Windpumps contributed to the expansion of rail transport systems throughout the world, by pumping water from water wells for the steam locomotives.[8] The multi-bladed wind turbine atop a lattice tower made of wood or steel was, for many years, a fixture of the landscape throughout rural America. When fitted with generators and battery banks, small wind machines provided electricity to isolated farms.
In July 1887, a Scottish academic, Professor James Blyth, undertook wind power experiments that culminated in a UK patent in 1891.[9] In the United States, Charles F. Brush produced electricity using a wind powered machine, starting in the winter of 1887-1888, which powered his home and laboratory until about 1900. In the 1890s, the Danish scientist and inventor Poul la Cour constructed wind turbines to generate electricity, which was then used to produce hydrogen.[9] These were the first of what was to become the modern form of wind turbine.
Small wind turbines for lighting of isolated rural buildings were widespread in the first part of the 20th century. Larger units intended for connection to a distribution network were tried at several locations including Balaklava USSR in 1931 and in a 1.25 megawatt (MW) experimental unit in Vermont in 1941.
The modern wind power industry began in 1979 with the serial production of wind turbines by Danish manufacturers Kuriant, Vestas, Nordtank, and Bonus. These early turbines were small by today's standards, with capacities of 20–30 kW each. Since then, they have increased greatly in size, with the Enercon E-126 capable of delivering up to 7 MW, while wind turbine production has expanded to many countries.

Wind energy


Distribution of wind speed (red) and energy (blue) for all of 2002 at the Lee Ranch facility in Colorado. The histogram shows measured data, while the curve is the Rayleigh model distribution for the same average wind speed. Energy is the Betz limit through a 100 m (328 ft) diameter circle facing directly into the wind. Total energy for the year through that circle was 15.4 gigawatt-hours (GW·h).
The Earth is unevenly heated by the sun, such that the poles receive less energy from the sun than the equator; along with this, dry land heats up (and cools down) more quickly than the seas do. The differential heating drives a global atmospheric convection system reaching from the Earth's surface to the stratosphere which acts as a virtual ceiling. Most of the energy stored in these wind movements can be found at high altitudes where continuous wind speeds of over 160 km/h (99 mph) occur. Eventually, the wind energy is converted through friction into diffuse heat throughout the Earth's surface and the atmosphere.
The total amount of economically extractable power available from the wind is considerably more than present human power use from all sources.[10] An estimated 72 terawatt (TW) of wind power on the Earth potentially can be commercially viable,[11] compared to about 15 TW average global power consumption from all sources in 2005. Not all the energy of the wind flowing past a given point can be recovered (see Betz' law).

Distribution of wind speed

The strength of wind varies, and an average value for a given location does not alone indicate the amount of energy a wind turbine could produce there. To assess the frequency of wind speeds at a particular location, a probability distribution function is often fit to the observed data. Different locations will have different wind speed distributions. The Weibull model closely mirrors the actual distribution of hourly wind speeds at many locations. The Weibull factor is often close to 2 and therefore a Rayleigh distribution can be used as a less accurate, but simpler model.
Because so much power is generated by higher wind speed, much of the energy comes in short bursts. The 2002 Lee Ranch sample is telling;[12] half of the energy available arrived in just 15% of the operating time. The consequence is that wind energy from a particular turbine or wind farm does not have as consistent an output as fuel-fired power plants; utilities that use wind power provide power from starting existing generation for times when the wind is weak thus wind power is primarily a fuel saver rather than a capacity saver. Making wind power more consistent requires that various existing technologies and methods be extended, in particular the use of stronger inter-regional transmission lines to link widely distributed wind farms. Problems of variability are addressed by grid energy storage, batteries, pumped-storage hydroelectricity and energy demand management.[13]

Electricity generation

Typical components of a wind turbine (gearbox, rotor shaft and brake assembly) being lifted into position
In a wind farm, individual turbines are interconnected with a medium voltage (often 34.5 kV), power collection system and communications network. At a substation, this medium-voltage electric current is increased in voltage with a transformer for connection to the high voltage electric power transmission system.
The surplus power produced by domestic microgenerators can, in some jurisdictions, be fed into the network and sold to the utility company, producing a retail credit for the microgenerators' owners to offset their energy costs.[14][15]Grid management
Induction generators, often used for wind power, require reactive power for excitation so substations used in wind-power collection systems include substantial capacitor banks for power factor correction. Different types of wind turbine generators behave differently during transmission grid disturbances, so extensive modelling of the dynamic electromechanical characteristics of a new wind farm is required by transmission system operators to ensure predictable stable behaviour during system faults (see: Low voltage ride through). In particular, induction generators cannot support the system voltage during faults, unlike steam or hydro turbine-driven synchronous generators. Doubly-fed machines generally have more desirable properties for grid interconnection[citation needed]. Transmission systems operators will supply a wind farm developer with a grid code to specify the requirements for interconnection to the transmission grid. This will include power factor, constancy of frequency and dynamic behaviour of the wind farm turbines during a system fault.[16][17]

Capacity factor

Worldwide installed capacity 1997–2020 [MW], developments and prognosis. Data source: WWEA
Since wind speed is not constant, a wind farm's annual energy production is never as much as the sum of the generator nameplate ratings multiplied by the total hours in a year. The ratio of actual productivity in a year to this theoretical maximum is called the capacity factor. Typical capacity factors are 20–40%, with values at the upper end of the range in particularly favourable sites.[18] For example, a 1 MW turbine with a capacity factor of 35% will not produce 8,760 MW·h in a year (1 × 24 × 365), but only 1 × 0.35 × 24 × 365 = 3,066 MW·h, averaging to 0.35 MW. Online data is available for some locations and the capacity factor can be calculated from the yearly output.[19][20]
Unlike fueled generating plants, the capacity factor is limited by the inherent properties of wind. Capacity factors of other types of power plant are based mostly on fuel cost, with a small amount of downtime for maintenance. Nuclear plants have low incremental fuel cost, and so are run at full output and achieve a 90% capacity factor. Plants with higher fuel cost are throttled back to follow load. Gas turbine plants using natural gas as fuel may be very expensive to operate and may be run only to meet peak power demand. A gas turbine plant may have an annual capacity factor of 5–25% due to relatively high energy production cost.
In a 2008 study released by the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, the capacity factor achieved by the wind turbine fleet is shown to be increasing as the technology improves. The capacity factor achieved by new wind turbines in 2004 and 2005 reached 36%.[21]

Penetration

Kitegen
Wind energy "penetration" refers to the fraction of energy produced by wind compared with the total available generation capacity. There is no generally accepted "maximum" level of wind penetration. The limit for a particular grid will depend on the existing generating plants, pricing mechanisms, capacity for storage or demand management, and other factors. An interconnected electricity grid will already include reserve generating and transmission capacity to allow for equipment failures; this reserve capacity can also serve to regulate for the varying power generation by wind plants. Studies have indicated that 20% of the total electrical energy consumption may be incorporated with minimal difficulty.[22] These studies have been for locations with geographically dispersed wind farms, some degree of dispatchable energy, or hydropower with storage capacity, demand management, and interconnection to a large grid area export of electricity when needed. Beyond this level, there are few technical limits, but the economic implications become more significant. Electrical utilities continue to study the effects of large (20% or more) scale penetration of wind generation on system stability and economics.[23][24][25]
[26]
At present, a few grid systems have penetration of wind energy above 5%: Denmark (values over 19%), Spain and Portugal (values over 11%), Germany and the Republic of Ireland (values over 6%). But even with a modest level of penetration, there can be times where wind power provides a substantial percentage of the power on a grid. For example, in the morning hours of 8 November 2009, wind energy produced covered more than half the electricity demand in Spain, setting a new record.[27] This was an instance where demand was very low but wind power generation was very high.
Wildorado Wind Ranch in Oldham County in the Texas Panhandle, as photographed from U.S. Route 385
The Danish grid is heavily interconnected to the European electrical grid, and it has solved grid management problems by exporting almost half of its wind power to Norway. The correlation between electricity export and wind power production is very strong.[28]

Intermittency and penetration limits

Main article: Intermittent Power Sources. See also: Wind Power Forecasting.
Electricity generated from wind power can be highly variable at several different timescales: from hour to hour, daily, and seasonally. Annual variation also exists, but is not as significant. Related to variability is the short-term (hourly or daily) predictability of wind plant output. Like other electricity sources, wind energy must be "scheduled". Wind power forecasting methods are used, but predictability of wind plant output remains low for short-term operation.
Because instantaneous electrical generation and consumption must remain in balance to maintain grid stability, this variability can present substantial challenges to incorporating large amounts of wind power into a grid system. Intermittency and the non-dispatchable nature of wind energy production can raise costs for regulation, incremental operating reserve, and (at high penetration levels) could require an increase in the already existing energy demand management, load shedding, or storage solutions or system interconnection with HVDC cables. At low levels of wind penetration, fluctuations in load and allowance for failure of large generating units requires reserve capacity that can also regulate for variability of wind generation. Wind power can be replaced by other power stations during low wind periods. Transmission networks must already cope with outages of generation plant and daily changes in electrical demand. Systems with large wind capacity components may need more spinning reserve (plants operating at less than full load).[29][30]
Pumped-storage hydroelectricity or other forms of grid energy storage can store energy developed by high-wind periods and release it when needed.[31] Stored energy increases the economic value of wind energy since it can be shifted to displace higher cost generation during peak demand periods. The potential revenue from this arbitrage can offset the cost and losses of storage; the cost of storage may add 25% to the cost of any wind energy stored, but it is not envisaged that this would apply to a large proportion of wind energy generated. The 2 GW Dinorwig pumped storage plant in Wales evens out electrical demand peaks, and allows base-load suppliers to run their plant more efficiently. Although pumped storage power systems are only about 75% efficient, and have high installation costs, their low running costs and ability to reduce the required electrical base-load can save both fuel and total electrical generation costs.[32][33]
In particular geographic regions, peak wind speeds may not coincide with peak demand for electrical power. In the US states of California and Texas, for example, hot days in summer may have low wind speed and high electrical demand due to air conditioning. Some utilities subsidize the purchase of geothermal heat pumps by their customers, to reduce electricity demand during the summer months by making air conditioning up to 70% more efficient;[34] widespread adoption of this technology would better match electricity demand to wind availability in areas with hot summers and low summer winds. Another option is to interconnect widely dispersed geographic areas with an HVDC "Super grid". In the USA it is estimated that to upgrade the transmission system to take in planned or potential renewables would cost at least $60 billion.[35]
In the UK, demand for electricity is higher in winter than in summer, and so are wind speeds.[36][37] Solar power tends to be complementary to wind.[38][39] On daily to weekly timescales, high pressure areas tend to bring clear skies and low surface winds, whereas low pressure areas tend to be windier and cloudier. On seasonal timescales, solar energy typically peaks in summer, whereas in many areas wind energy is lower in summer and higher in winter.[40] Thus the intermittencies of wind and solar power tend to cancel each other somewhat. A demonstration project at the Massachusetts Maritime Academy shows the effect.[41] The Institute for Solar Energy Supply Technology of the University of Kassel pilot-tested a combined power plant linking solar, wind, biogas and hydrostorage to provide load-following power around the clock, entirely from renewable sources.[42]
A report on Denmark's wind power noted that their wind power network provided less than 1% of average demand 54 days during the year 2002.[43] Wind power advocates argue that these periods of low wind can be dealt with by simply restarting existing power stations that have been held in readiness or interlinking with HVDC.[44] Electrical grids with slow-responding thermal power plants and without ties to networks with hydroelectric generation may have to limit the use of wind power.[43]
Three reports on the wind variability in the UK issued in 2009, generally agree that variability of wind needs to be taken into account, but it does not make the grid unmanageable; and the additional costs, which are modest, can be quantified.[45]
A 2006 International Energy Agency forum presented costs for managing intermittency as a function of wind-energy's share of total capacity for several countries, as shown:


Increase in system operation costs, Euros per MW·h, for 10% and 20% wind share[6]
10%20%
Germany2.53.2
Denmark0.40.8
Finland0.31.5
Norway0.10.3
Sweden0.30.7

Capacity credit and fuel saving

Many commentators concentrate on whether or not wind has any "capacity credit" without defining what they mean by this and its relevance. Wind does have a capacity credit, using a widely accepted and meaningful definition, equal to about 20% of its rated output (but this figure varies depending on actual circumstances). This means that reserve capacity on a system equal in MW to 20% of added wind could be retired when such wind is added without affecting system security or robustness. But the precise value is irrelevant since the main value of wind (in the UK, worth 5 times the capacity credit value[46]) is its fuel and CO2 savings.
According to a 2007 Stanford University study published in the Journal of Applied Meteorology and Climatology, interconnecting ten or more wind farms can allow an average of 33% of the total energy produced to be used as reliable, baseload electric power, as long as minimum criteria are met for wind speed and turbine height.[47][48]

Installation placement

Good selection of a wind turbine site is critical to economic development of wind power. Aside from the availability of wind itself, other factors include the availability of transmission lines, value of energy to be produced, cost of land acquisition, land use considerations, and environmental impact of construction and operations. Off-shore locations may offset their higher construction cost with higher annual load factors, thereby reducing cost of energy produced. Wind farm designers use specialized wind energy software applications to evaluate the impact of these issues on a given wind farm design.[citation needed]
Wind power density (WPD) is a calculation of the effective power of the wind at a particular location.[49] A map showing the distribution of wind power density is a first step in identifying possible locations for wind turbines. In the United States, the National Renewable Energy Laboratory classifies wind power density into ascending classes. The larger the WPD at a location, the higher it is rated by class. Wind power classes 3 (300–400 W/m2 at 50 m altitude) to 7 (800–2000 W/m2 at 50 m altitude) are generally considered suitable for wind power development.[citation needed] There are 625,000 km2 in the contiguous United States that have class 3 or higher wind resources and which are within 10 km of electric transmission lines. If this area is fully utilized for wind power, it would produce power at the average continuous equivalent rate of 734 GWe.[citation needed] For comparison, in 2007 the US consumed electricity at an average rate of 474 GW,[50] from a total generating capacity of 1,088 GW.[51]

Wind power usage

The World Wind Energy Association forecast that, by 2010, over 200 GW of capacity would have been installed worldwide,[55] up from 73.9 GW at the end of 2006, implying an anticipated net growth rate of more than 28% per year.
Wind accounts for nearly one-fifth of electricity generated in Denmark — the highest percentage of any country — and it is tenth in the world in total wind power generation. Denmark is prominent in the manufacturing and use of wind turbines, with a commitment made in the 1970s to eventually produce half of the country's power by wind.[citation needed]
In recent years, the US has added substantial amounts of wind power generation capacity, growing from just over 6 GW at the end of 2004 to over 35 GW at the end of 2009.[4] The U.S. is currently the world's leader in wind power generation capacity. The country as a whole generates just 2.4% of its electrical power from wind, but several states generate substantial amounts of wind power.[4] Texas is the state with the largest amount of generation capacity with 9,410 MW installed.[4] This would have ranked it sixth in the world if Texas was a separate country. Iowa is the state with the highest percentage of wind generation, at 14.2% in 2009.[56] California was one of the incubators of the modern wind power industry, and led the U.S. in installed capacity for many years. As of mid-2010, fourteen U..S. states had wind power generation capacities in excess of 1000 MW.[4] U.S. Department of Energy studies have concluded that wind from the Great Plains states of Texas, Kansas, and North Dakota could provide enough electricity to power the entire nation, and that offshore wind farms could do the same job.[57][58]
China had originally set a generating target of 30,000 MW by 2020 from renewable energy sources, but reached 22,500 MW by end of 2009 and could easily surpass 30,000 MW by end of 2010. Indigenous wind power could generate up to 253,000 MW.[59] A Chinese renewable energy law was adopted in November 2004, following the World Wind Energy Conference organized by the Chinese and the World Wind Energy Association. By 2008, wind power was growing faster in China than the government had planned, and indeed faster in percentage terms than in any other large country, having more than doubled each year since 2005. Policymakers doubled their wind power prediction for 2010, after the wind industry reached the original goal of 5 GW three years ahead of schedule.[60] Current trends suggest an actual installed capacity near 20 GW by 2010, with China shortly thereafter pursuing the United States for the world wind power lead.[60]
India ranks 5th in the world with a total wind power capacity of 10,925 MW in 2009,[1] or 3% of all electricity produced in India. The World Wind Energy Conference in New Delhi in November 2006 has given additional impetus to the Indian wind industry.[61] Muppandal village in Tamil Nadu state, India, has several wind turbine farms in its vicinity, and is one of the major wind energy harnessing centres in India led by majors like Suzlon, Vestas, Micon among others.[62][63]
Mexico recently opened La Venta II wind power project as a step toward reducing Mexico's consumption of fossil fuels. The 88 MW project is the first of its kind in Mexico, and will provide 13 percent of the electricity needs of the state of Oaxaca. By 2012 the project will have a capacity of 3,500 MW. In May 2010, Sempra Energy announced it would build a wind farm in Baja California, with a capacity of at least 1,000 MW, at a cost of $5.5 billion.[64]
Another growing market is Brazil, with a wind potential of 143 GW.[65]
South Africa has a proposed station situated on the West Coast north of the Olifants River mouth near the town of Koekenaap, east of Vredendal in the Western Cape province. The station is proposed to have a total output of 100 MW although there are negotiations to double this capacity. The plant could be operational by 2010.
France has announced a target of 12,500 MW installed by 2010, though their installation trends over the past few years suggest they'll fall well short of their goal.
Canada experienced rapid growth of wind capacity between 2000 and 2006, with total installed capacity increasing from 137 MW to 1,451 MW, and showing an annual growth rate of 38%.[66] Particularly rapid growth was seen in 2006, with total capacity doubling from the 684 MW at end-2005.[67] This growth was fed by measures including installation targets, economic incentives and political support. For example, the Ontario government announced that it will introduce a feed-in tariff for wind power, referred to as 'Standard Offer Contracts', which may boost the wind industry across the province.[68] In Quebec, the provincially owned electric utility plans to purchase an additional 2000 MW by 2013.[69] By 2025, Canada will reach its capacity of 55,000 MW of wind energy, or 20% of the country's energy needs.





Power analysis

Due to ever increasing sizes of turbines which hit maximum power at lower speeds[81] energy produced has been rising faster than nameplate power capacity. Energy more than doubled between 2006 and 2008 in the table above, yet nameplate capacity (table on left) grew by 63% in the same period.

Small-scale wind power


This wind turbine charges a 12 V battery to run 12 V appliances.
Small-scale wind power is the name given to wind generation systems with the capacity to produce up to 50 kW of electrical power.[82] Isolated communities, that may otherwise rely on diesel generators may use wind turbines to displace diesel fuel consumption. Individuals may purchase these systems to reduce or eliminate their dependence on grid electricity for economic or other reasons, or to reduce their carbon footprint. Wind turbines have been used for household electricity generation in conjunction with battery storage over many decades in remote areas.
Grid-connected wind turbines may use grid energy storage, displacing purchased energy with local production when available. Off-grid system users can either adapt to intermittent power or use batteries, photovoltaic or diesel systems to supplement the wind turbine. Equipment such as parking meters or wireless Internet gateways may be powered by a wind turbine that charges a small battery, replacing the need for a connection to the power grid.
In locations near or around a group of high-rise buildings, wind shear generates areas of intense turbulence, especially at street-level.[83] The risks associated with mechanical or catastrophic failure have thus plagued urban wind development in densely populated areas,[84] rendering the costs of insuring urban wind systems prohibitive.[85] Moreover, quantifying the amount of wind in urban areas has been difficult, as little is known about the actual wind resources of towns and cities.[86]
A new Carbon Trust study into the potential of small-scale wind energy has found that small wind turbines could provide up to 1.5 terawatt hours (TW·h) per year of electricity (0.4% of total UK electricity consumption), saving 0.6 million tonnes of carbon dioxide (Mt CO2) emission savings. This is based on the assumption that 10% of households would install turbines at costs competitive with grid electricity, around 12 pence (US 19 cents) a kW·h.[87]
Distributed generation from renewable resources is increasing as a consequence of the increased awareness of climate change. The electronic interfaces required to connect renewable generation units with the utility system can include additional functions, such as the active filtering to enhance the power quality.[88]

Economics and feasibility


Windmill with rotating sails

 Relative cost of electricity by generation source

Growth and cost trends

Wind power has negligible fuel costs, but a high capital cost. The estimated average cost per unit incorporates the cost of construction of the turbine and transmission facilities, borrowed funds, return to investors (including cost of risk), estimated annual production, and other components, averaged over the projected useful life of the equipment, which may be in excess of twenty years. Energy cost estimates are highly dependent on these assumptions so published cost figures can differ substantially. A British Wind Energy Association report gives an average generation cost of onshore wind power of around 3.2 pence (between US 5 and 6 cents) per kW·h (2005).[89] Cost per unit of energy produced was estimated in 2006 to be comparable to the cost of new generating capacity in the US for coal and natural gas: wind cost was estimated at $55.80 per MW·h, coal at $53.10/MW·h and natural gas at $52.50.[90] Other sources in various studies have estimated wind to be more expensive than other sources (see Economics of new nuclear power plants, Clean coal, and Carbon capture and storage). A 2009 study on wind power in Spain by the Universidad Rey Juan Carlos concluded that each installed MW of wind power destroyed 4.27 jobs, by raising energy costs and driving away electricity-intensive businesses.[91] However, the presence of wind energy, even when subsidised, can reduce costs for consumers (€5 billion/yr in Germany) by reducing the marginal price by minimising the use of expensive 'peaker plants'.[92]
In 2004, wind energy cost a fifth of what it did in the 1980s, and some expected that downward trend to continue as larger multi-megawatt turbines were mass-produced.[93] However, installed cost averaged €1,300 a kW in 2007,[94][not in citation given] compared to €1,100 a kW in 2005.[95][clarification needed] Not as many facilities can produce large modern turbines and their towers and foundations, so constraints develop in the supply of turbines resulting in higher costs.[96]
Global Wind Energy Council (GWEC) figures show that 2007 recorded an increase of installed capacity of 20 GW, taking the total installed wind energy capacity to 94 GW, up from 74 GW in 2006. Despite constraints facing supply chains for wind turbines, the annual market for wind continued to increase at an estimated rate of 37%, following 32% growth in 2006. In terms of economic value, the wind energy sector has become one of the important players in the energy markets, with the total value of new generating equipment installed in 2007 reaching €25 billion, or US$36 billion.[94]
Although the wind power industry will be impacted by the global financial crisis in 2009 and 2010, a BTM Consult five year forecast up to 2013 projects substantial growth. Over the past five years the average growth in new installations has been 27.6 percent each year. In the forecast to 2013 the expected average annual growth rate is 15.7 percent.[97][98] More than 200 GW of new wind power capacity could come on line before the end of 2013. Wind power market penetration is expected to reach 3.35 percent by 2013 and 8 percent by 2018.[97][98]
Existing generation capacity represents sunk costs, and the decision to continue production will depend on marginal costs going forward, not estimated average costs at project inception. For example, the estimated cost of new wind power capacity may be lower than that for "new coal" (estimated average costs for new generation capacity) but higher than for "old coal" (marginal cost of production for existing capacity). Therefore, the choice to increase wind capacity will depend on factors including the profile of existing generation capacity.

Theoretical potential - World

Map of available wind power for the United States. Color codes indicate wind power density class.
Wind power available in the atmosphere is much greater than current world energy consumption. The most comprehensive study As of 2005[99] found the potential of wind power on land and near-shore to be 72 TW, equivalent to 54,000 MToE (million tons of oil equivalent) per year, or over five times the world's current energy use in all forms. The potential takes into account only locations with mean annual wind speeds ≥ 6.9 m/s at 80 m. The study assumes six 1.5 megawatt, 77 m diameter turbines per square kilometer on roughly 13% of the total global land area (though that land would also be available for other compatible uses such as farming). The authors acknowledge that many practical barriers would need to be overcome to reach this theoretical capacity.
The practical limit to exploitation of wind power will be set by economic and environmental factors, since the resource available is far larger than any practical means to develop it.

Theoretical potential - UK

A recent estimate gives the total potential average output for UK for various depth and distance from the coast. The maximum case considered was beyond 200 km from shore and in depths of 100 – 700 m (necessitating floating wind turbines) and this gave an average resource of 2,000 GWe which is to be compared with the average UK demand of about 40 GWe.[100]

Direct costs

Many potential sites for wind farms are far from demand centres, requiring substantially more money to construct new transmission lines and substations. In some regions this is partly because frequent strong winds themselves have discouraged dense human settlement in especially windy areas. The wind which was historically a nuisance is now becoming a valuable resource, but it may be far from large populations which developed in areas more sheltered from wind.
Since the primary cost of producing wind energy is construction and there are no fuel costs, the average cost of wind energy per unit of production depends on a few key assumptions, such as the cost of capital and years of assumed service. The marginal cost of wind energy once a plant is constructed is usually less than 1 cent per kW·h.[101] Since the cost of capital plays a large part in projected cost, risk (as perceived by investors) will affect projected costs per unit of electricity.
The commercial viability of wind power also depends on the price paid to power producers. Electricity prices are highly regulated worldwide, and in many locations may not reflect the full cost of production, let alone indirect subsidies or negative externalities. Customers may enter into long-term pricing contracts for wind to reduce the risk of future pricing changes, thereby ensuring more stable returns for projects at the development stage. These may take the form of standard offer contracts, whereby the system operator undertakes to purchase power from wind at a fixed price for a certain period (perhaps up to a limit); these prices may be different than purchase prices from other sources, and even incorporate an implicit subsidy.
Where the price for electricity is based on market mechanisms, revenue for all producers per unit is higher when their production coincides with periods of higher prices. The profitability of wind farms will therefore be higher if their production schedule coincides with these periods. If wind represents a significant portion of supply, average revenue per unit of production may be lower as more expensive and less-efficient forms of generation, which typically set revenue levels, are displaced from economic dispatch.[citation needed] This may be of particular concern if the output of many wind plants in a market have strong temporal correlation. In economic terms, the marginal revenue of the wind sector as penetration increases may diminish.

External costs



Most forms of energy production create some form of negative externality: costs that are not paid by the producer or consumer of the good. For electric production, the most significant externality is pollution, which imposes social costs in increased health expenses, reduced agricultural productivity, and other problems. In addition, carbon dioxide, a greenhouse gas produced when fossil fuels are burned, may impose even greater costs in the form of global warming. Few mechanisms currently exist to internalise these costs, and the total cost is highly uncertain. Other significant externalities can include military expenditures to ensure access to fossil fuels, remediation of polluted sites, destruction of wild habitat, loss of scenery/tourism, etc.
If the external costs are taken into account, wind energy can be competitive in more cases, as costs have generally decreased because of technology development and scale enlargement. Supporters argue that, once external costs and subsidies to other forms of electrical production are accounted for, wind energy is amongst the least costly forms of electrical production. Critics argue that the level of required subsidies, the small amount of energy needs met, the expense of transmission lines to connect the wind farms to population centers, and the uncertain financial returns to wind projects make it inferior to other energy sources. Intermittency and other characteristics of wind energy also have costs that may rise with higher levels of penetration, and may change the cost-benefit ratio.

Incentives

Some of the over 6,000 wind turbines at Altamont Pass, in California, United States. Developed during a period of tax incentives in the 1980s, this wind farm has more turbines than any other in the United States.[102]
Wind energy in many jurisdictions receives some financial or other support to encourage its development. Wind energy benefits from subsidies in many jurisdictions, either to increase its attractiveness, or to compensate for subsidies received by other forms of production which have significant negative externalities.
In the United States, wind power receives a tax credit for each kW·h produced; at 1.9 cents per kW·h in 2006, the credit has a yearly inflationary adjustment. Another tax benefit is accelerated depreciation. Many American states also provide incentives, such as exemption from property tax, mandated purchases, and additional markets for "green credits". Countries such as Canada and Germany also provide incentives for wind turbine construction, such as tax credits or minimum purchase prices for wind generation, with assured grid access (sometimes referred to as feed-in tariffs). These feed-in tariffs are typically set well above average electricity prices. The Energy Improvement and Extension Act of 2008 contains extensions of credits for wind, including microturbines.
Secondary market forces also provide incentives for businesses to use wind-generated power, even if there is a premium price for the electricity. For example, socially responsible manufacturers pay utility companies a premium that goes to subsidize and build new wind power infrastructure. Companies use wind-generated power, and in return they can claim that they are making a powerful "green" effort. In the USA the organization Green-e monitors business compliance with these renewable energy credits.[103]

Full costs and lobbying

Commenting on the EU's 2020 renewable energy target, Helm (2009) is critical of how the costs of wind power are citied by lobbyists:[104]
For those with an economic interest in capturing as much of the climate-change pork barrel as possible, there are two ways of presenting the costs [of wind power] in a favourable light: first, define the cost base as narrowly as possible; and, second, assume that the costs will fall over time with R&D and large-scale deployment. And, for good measure, when considering the alternatives, go for a wider cost base (for example, focusing on the full fuel-cycle costs of nuclear and coal-mining for coal generation) and assume that these technologies are mature, and even that costs might rise (for example, invoking the peak oil hypothesis).
A House of Lords Select Committee report (2008) on renewable energy in the UK says:[105]
We have a particular concern over the prospective role of wind generated and other intermittent sources of electricity in the UK, in the absence of a break-through in electricity storage technology or the integration of the UK grid with that of continental Europe. Wind generation offers the most readily available short-term enhancement in renewable electricity and its base cost is relatively cheap. Yet the evidence presented to us implies that the full costs of wind generation (allowing for intermittency, back-up conventional plant and grid connection), although declining over time, remain significantly higher than those of conventional or nuclear generation (even before allowing for support costs and the environmental impacts of wind farms). Furthermore, the evidence suggests that the capacity credit of wind power (its probable power output at the time of need) is very low; so it cannot be relied upon to meet peak demand. Thus wind generation needs to be viewed largely as additional capacity to that which will need to be provided, in any event, by more reliable means
Helm (2009) says that wind's problem of intermittent supply will probably lead to another dash-for-gas or dash-for-coal in Europe, possibly with a negative impact on energy security.[104]
In the United States, the wind power industry has recently increased its lobbying efforts considerably, spending about $5 million in 2009 after years of relative obscurity in Washington.[106]

Environmental effects


Livestock ignore wind turbines,[107] and continue to graze as they did before wind turbines were installed.
Compared to the environmental effects of traditional energy sources, the environmental effects of wind power are relatively minor. Wind power consumes no fuel, and emits no air pollution, unlike fossil fuel power sources. The energy consumed to manufacture and transport the materials used to build a wind power plant is equal to the new energy produced by the plant within a few months of operation.[108][109] Garrett Gross, a scientist from UMKC in Kansas City, Missouri states, "The impact made on the environment is very little when compared to what is gained." The initial carbon dioxide emission from energy used in the installation is "paid back" within about 2.5 years of operation for offshore turbines.[110]
Danger to birds and bats has been a concern in some locations. American Bird Conservancy cites studies that indicate that about 10,000 - 40,000 birds die each year from collisions with wind turbines in the U.S. and say that number may rise substantially as wind capacity increases in the absence of mandatory guidelines.[111] However, studies show that the number of birds killed by wind turbines is very low compared to the number of those that die as a result of certain other ways of generating electricity and especially of the environmental impacts of using non-clean power sources. Fossil fuel generation kills around twenty times as many birds per unit of energy produced than wind-farms.[112] Bat species appear to be at risk during key movement periods. Almost nothing is known about current populations of these species and the impact on bat numbers as a result of mortality at windpower locations. Offshore wind sites 10 km or more from shore do not interact with bat populations. While a wind farm may cover a large area of land, many land uses such as agriculture are compatible, with only small areas of turbine foundations and infrastructure made unavailable for use.
Aesthetics have also been an issue. In the USA, the Massachusetts Cape Wind project was delayed for years mainly because of aesthetic concerns. In the UK, repeated opinion surveys have shown that more than 70% of people either like, or do not mind, the visual impact. According to a town councillor in Ardrossan, Scotland, the overwhelming majority of locals believe that the Ardrossan Wind Farm has enhanced the area, saying that the turbines are impressive looking and bring a calming effect to the town.[113]
Noise has also been an issue. In the United States, law suits and complaints have been filed in several states, citing noise, vibrations and resulting lost property values in homes and businesses located close to industrial wind turbines.[114] With careful implanting of the wind turbines, along with use of noise reducing-modifications for the wind turbines however, these issues can be addressed.

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