by Jerome a Paris
Fri Sep 9th, 2011 at 07:49:30 AM EST
Amongst all the macro-economic and geo-political gloom, here's a tidbit of good news, coming from Australia but confirming in a detailed what we've already known:
Why wind is cutting energy costs
The most common critique of wind energy, and renewables in general, in the mainstream media and anywhere the issue is discussed is that it is expensive.
The problem is, this is only half true. Or at least, it only tells half the story. While the levelised cost of energy from wind farms is higher than that of baseload coal and gas, the deployment of wind energy here and overseas is having a surprising impact on energy market prices: it is causing them to fall.
And itís not the only myth that a new analysis of the South Australian market has busted: wind is succeeding in displacing coal, it is also having a dramatic impact on the stateís energy emissions, and it doesnít need anywhere near as much back-up generation as some like to claim.
Additionally, the study notes that wind displaces coal rather than gas, and that as wind increased its penetration, the need for gas peakers actually declined (in the comments to the article, the author further notes that imports from the neighboring state also declined).
In other words, the "subsidy" given to wind producers is paid by coal producers in the form of lower production and lower prices for their production, and part of it goes directly to consumers. Which is exactly as it should be - reducing a noxious activity while having widespread benefits. But it's also no surprise that the incumbents, and in particular the coal players, hate wind.