Today Reuters posted a story called “Pickens backs off wind farm project”
Texas oil billionaire T. Boone Pickens has called off plans to build the world’s biggest wind farm in the Texas Panhandle, the Wall Street Journal said.
Pickens said the wind farm project was scuttled partly because of the lack of adequate transmission lines to carry the electricity from remote locations to cities, according to the paper.
The oil tycoon had hoped to build new transmission lines but could not secure financing, the paper said.
This paper neatly summarizes the impossible economics for most of these large scale alternative energy projects, focusing on areas that aren’t usually covered well by the media or academics.
One of the favorite alternative energy projects involve wind energy, basically giant windmills / turbines that generate electricity when the wind blows. Wind energy viability is determined by a lot of factors, including:
1. how much the wind blows, or more accurately, how “steadily” the wind blows at a relatively high rate of speed
2. cost of the turbines / windmills
3. reliability of the turbines / windmills (one of the major manufacturers out of India has been recalling and having issues with the blades)
4. ability to find permits to site the blades (famously the Kennedy’s are blocking them for damaging the “view” off their compound on the East coast)
5. amount of subsidy that the state power commission / Federal government is providing for the energy (else they generally aren’t financially viable)
6. access to transmission lines to bring the electricity back to the urban areas that are most likely to utilize this electricity
7. access to funding (debt and equity) that allows the developer to build and secure the land, materials and equipment to complete the job
Of all these items, people tend to focus on items 1-4 above, with some understanding that without 5 (subsidies or requirements to “source” a certain percentage of generation alternatively), it isn’t going to just happen.
However, #6 and #7 are actually the biggest bottlenecks right now, and tied to long term items that the state, local and Federal authorities are doing the least about.