Is Wind Worth It?

No one can deny the seriousness of interest in alternative energy. This dedication is leading to advances in technologies to make alternative energy economically efficient.

Most recently, Gizmag.com reported on a new wind turbine for the home. Weighing in at just 95 lbs (43 kg), it can be mounted on a pole, or a roof. The Honeywell Windgate wind turbine from EarthTronics is six feet across (1.8 m) and is able to generate power in wind speeds as low as 2 mph (3.2 kph).

These statistics are significant as most of the continental U.S. is in low wind areas making traditional wind turbines futile. The unit will go on sale with an MSRP of $4500, which is said to be a third of traditional wind turbines. Additional costs include the need for an automotive battery and a licensed electrician to hook the turbine into the house distribution panel. Mountain House Freeze-Dried Food

Do the numbers work? Will I put one up? Not yet. The turbine is said produce "...to up to 2000 kilowatt hours (kW) of power per year, which is about 15 percent of an average household’s energy needs." These numbers assume an average annual consumption of 13,333.33 kW hours. The average price per residential kW in the U.S. is $0.1138, thus making the annual average electric bill $1517.33. The wind turbine could reduce that amount by as much as $227.60 annually. Assuming only the cost of the turbine, it would take at least 19.77 years to get your money back. Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

The only thing that is making this turbine interesting is the prospect of a federal tax subsidy. The subsidy itself varies between 0-100% for the cost of the turbine alone, depending upon location. CNN reports the subsidy is 30%. Let's run the numbers again. With the 30% subsidy, the turbine now costs $3150 and would take 13.84 years to recoup the cost of the turbine alone. TGC Get 4 books for $1 each

In my personal opinion, this would not be on my list of capital expenditures. It would be close, as my new HVAC system is going to take 12 years for total payback. If you have $4500 and money for an electrician, you may want to do this. Of course, the elephant in the room is whether President Teleprompter and his Congressional sycophants are going to impose a "cap and trade" energy mega-tax. If that tax brings up the price of electricity, which it surely will, this wind turbine may be just the ticket.

For now, I am sticking with coal, natural gas and nuclear, as they provide the most consistent and least expensive power. If the economics of wind improves, I will certainly think about it.

A Global Nuclear Renaissance

An article in the 24 October 2008 print edition of the Wall Street Journal (B2) reports that France's Areva SA and Northrop Grumman are forming a joint venture to build heavy equipment for the nuclear power industry, as well as an engineering center in Newport News, VA.

According to a joint press release on 23 October:

The 300,000 square-foot facility represents a significant investment of more than $360 million in the U.S. commercial nuclear and manufacturing industries and will bring more than 500 skilled hourly and salaried jobs to the Commonwealth of Virginia. AREVA Newport News will be the first full-scale manufacturing facility dedicated to supply heavy components, such as reactor vessels, steam generators and pressurizers to the U.S. nuclear energy industry.



What the casual reader should know is the that the Newport News facility is one of the world's largest shipyards, and only one capable of building a Nimitz-class nuclear aircraft carrier. In short, it is a gigantic heavy industry site with highly-skilled labor.

This story is relevant to this blog not only because it follows the path of several previous articles:
"A Nuclear Renaissance in Germany?", "Nuclear, French Style", "Nuclear, India Style", "Nuclear, America Style", and "Build Wind, Drop Nuclear - Germany Loses its Mind" but also because nuclear power is one of the "greenest" and most reliable source of energy on the planet. This joint venture is also a shot in the arm of US heavy manufacturing, as the predicted market for its products is $100 billion.

Nuclear power is good for the US and those nations who are responsible. Let's hear it for Areva and Northrop Grumman for expanding the opportunity for clean and reliable power to the rest of the world.

A Nuclear Renaissance, in Germany?

In two previous posts, "Build Wind, Drop Nuclear? Germany Loses its Mind!" and the follow up post "Germany Loses its Mind- Follow Up" I wrote about how the German government was looking to decommission nuclear plants in favor of building 17 wind farms. As you can tell from the above titles and posts, I think it was a pretty bad decision.



However, there has been a ray of hope! I found this article on Platts titled "Germany's RWE to build new nuclear plants at home, abroad." The CEO, Juergen Grossman stated the following to the German newspaper, Sueddeutsche Zeitung, (as reported by Platts):

"RWE will engage in projects in Germany as well as abroad. An exact number will depend on the financing options available and possible partners, but we reckon about three to five new builds."

Well, it seems like Herr Grossman has the inside track. Maybe Germany has figured out that there is a real need for clean, reliable, nuclear power and that it doesn't have to be a zero-sum game with wind power.



Interestingly, he also makes this statement, that on first blush, is counter intuitive, considering the enormous capital costs surrounding the construction of nuclear facilities:

"Grossman believes the credit crunch provides an opportunity for RWE to grow as people look to greater security in their energy supplies. The crisis may require affected governments to reduce the amount of imported natural gas and re-focus on national resources, such as nuclear or clean coal technology, he said."

Let's hope that Germany can get back on the nuclear track while it lives out its wind fantasy.

Nuclear, French Style

Ah, the French. While I love to poke fun at them and their, um, French ways, I have to give them credit for their successful nuclear power program. There, I said it. The French do something right that isn't silly.

The New York Times ran a piece titled, "France Reaffirms Its Faith in Future of Nuclear Power" on August 17, 2008. In it, the explain how France got its act together, starting in the late 1950s, to be as close to energy independent as possible. The article states, "Nuclear power provides 77 percent of France’s electricity, according to the government, and relatively few public doubts are expressed in a country with little coal, oil or natural gas." Certainly, this has helped smooth out many economic bumps experienced by those countries without such an aggressive nuclear policy. Additionally, think of how clean the air is without all of those coal plants?

Did I mention that nuclear power is clean, reliable, and cost effective? Here is where France really makes nuclear the best option: "He (senior aide to Jean-Louis Borloo, the minister of ecology, sustainable development and planning) said that France’s choice for a “closed fuel cycle” — reprocessing used nuclear fuel to recover plutonium made in the reactors so it can be reused — was safer." Too bad Jimmy Carter banned fuel reprocessing in the US. Spent fuel from first use has about 95% of its active ingredient left. Hey, recycling, what an idea!

Finally, the French discovered that having a successful power program is great for their economy. In some towns, the 60-year life cycle of a nuclear power plant, "...we have economic activity for two generations.”

Nuclear, India Style

India is not only one of the world's largest countries by population, it is also on of the largest consumers of electricity. However, India suffers insufficient power generation and distribution networks, making stable and continuous power a very hard target.

In the July 24 issue of Business Week, titled "All Eyes on India's Nuclear Prize," the article, while focused on who is getting business to build 30+ reactors, also spells out India' commitment to clean, nuclear energy.

When it comes to spending about $100 billion of government money, one can bet on controversy. Additionally, when that money is to spent on building safe, reliable, clean, nuclear plants, one can count on the leftists to scream the loudest.

So, should one be suprised when the article states, "Communist members of Singh's coalition opposed it and walked away from the government, forcing a confidence vote on July 22." If one followed the news, they would see that Singh survived the confidence vote.

Lest anyone question the need India has for power, consider this quotation:

"And as the economy expands, New Delhi hopes to quintuple nuclear energy production. "Demand for electricity is so large," says R.B. Grover, India's chief negotiator for the nuclear deal, "that we can accommodate all countries" willing to help build capacity.

All the best to India and its nuclear power expansion. If they are successful, perhaps the can reduce the number of coal and oil plants and really reap the fruits of clean, safe, and reliable, nuclear power.

Germany Loses its Mind-Follow Up

First, thank you to all my readers. I hope you are finding the posts worthwhile and occasionally humorous. I pride myself on the research that I do for each post, as well as my professional experience and Masters-level education. And yes, nuclear energy is safe, very safe.

I would like to post a comment to one of my posts on Germany's decision to decommission nuclear plants in favor of wind farms. Again, thank you for your comments.

Anonymous said...

I hope nobody reads your ramblings, mate. You clearly ignore the horrors and suffering that Chernobyl caused and still continues to cause to Eastern Europe. Nuclear energy is not safe, period. Anyone who says so is ignoring the number of accidents around the world that get reported 2-years after they happened -- or never if they can conceal it (Russia?).

We -- Germans -- simply do not trust the people working in nuclear power plants. The technology may be alright, but the human beings inside are no computers, we all make mistakes. Chernobyl was no technical issue, but a series of very unlikely human errors. As long as we are in control, nuclear power is not safe. OTOH I wouldn't even think about giving a computer total control over such a thing.

And please, stop bragging about your superior common sense, when it sounds more like some down-home-hokum. You clearly have little facts at your hands as you continue to accuse every other person on this planet to have none.

Look at some pictures of the people dying in Chernobyl and read about their stories and then remember that it was a human error that can and will happen again. Maybe this could teach you some compassion.

And while we're at it, just buy a bike and use it instead of a car and choose home appliances by their energy usage -- the German build ones are pretty good at this, maybe then you can understand that our environment is pretty dear to us.

So, if you research nuclear power generation globally, you will find that the Russians failed to build a secondary containment unit of reinforced concrete, which is standard for ALL Western nuclear plants. If they had done that, the deaths and devastation wouldn't have occurred.

The French and the US have managed to run nuclear plants without fatalities for over 30 years. Guess what, that's a lot safer than flying in a plane or riding a bicycle!! Human error is real. However, with proper planning and risk management, nuclear power generation remains the cleanest and safest, without exception.

We pray for the souls of the dead and injured from Chernobyl, but also place the responsibility where it belongs, squarely on the shoulders of the haphazard Russian builders.

Nuclear, American Style

I have written about nuclear power on two occasions, "Build Wind, Drop Nuclear? Germany Loses its Mind!" and "Nuclear, Silver Bullet or Money Pit." While I generally have a positive outlook on nuclear power, I must agree with William Tucker, author of "Terrestrial Energy: How Nuclear Power Can Lead the Green Revolution and End America's Long Energy Odyssey," which is due out in September, as to how the US can do it better.

In the 7-12-2008 edition of The Wall Street Journal, Mr. Tucker writes an editorial titled, "Let's Have Some Love for Nuclear Power." He outlines the strengths and weaknesses of the current energy situation in the US, and points out how coal, while abundant and efficient, creates significant amounts of CO2 and other pollutants. He also clearly spells out the costs and inefficiencies of solar and wind.

What makes Mr. Tucker's discussion unique is that he points out the need to allow investors to decide whether to invest in nuclear, and not just rely on subsidies. As I mentioned in my "Silver Bullet" post, some companies have decided not to pursue new nuclear plants. For nuclear to be successful, a stable, regulatory environment must be in place, as well as re-allowing the recycling of spent nuclear fuel.

Government, yes I said government, can help out in both instances. Regarding regulation, the US government has improved and streamlined the process for building new plants. Now all it needs to do is overturn that genius president, Jimmy Carter's ban in fuel recycling. Tucker gives an easy to understand example. France, which has produced 80% of its electricity needs from nuclear over the past 30 years, recycles its spent fuel. The waste product fits in one small underground room. Imagine if the existing spent fuel could be recycled for fuel, as well as industrial and medical purposes, not only would nuclear power be even less costly, but actual waste would be reduced.

Let's here it for more clean nuclear power, as well as nuclear recycling!

Build Wind, Drop Nuclear? Germany Loses its Mind!

**See the updated articles Germany Loses its Mind Follow Up and A Nuclear Renaissance in Germany?.
If it ain't broke, don't fix it! That is a piece of conventional wisdom I agree with. However, Germany is more focused on "green" love than common sense.

As reported in an article on Yahoo!, "Germany wants to build 30 wind farms," Germany is going to close 17 nuclear plants and build wind farms instead. Brilliant! Talk about disturbing the environment with 30 new wind farms, ask Teddy Kennedy and Walter Cronkite how they feel about wind farms in Nantucket (story here).

Unfortunately, Angela Merkel has been cowed by the Greens. From the article,

"The government has agreed to honour a decision to close the country's 17 nuclear power plants by 2020 but remains divided over the issue.

Merkel insists that a nuclear phase-out would hinder efforts to slash Germany's dependency on greenhouse gas-producing fossil fuels.

But Tiefensee, a member of Merkel's Social Democrat coalition partners, said that investing in windfarms was better than keeping the nuclear plants running.

"We believe in renewable energy and not in nuclear energy.""

Whether or not Tiefensee and the other socialists in Germany "believe" in renewable energy, one can't change the fact that nuclear is more efficient both in cost and energy output. Empirical data is always better than beliefs when it comes to money.

Nuclear, Silver Bullet or Money Pit

When discussing the "energy crisis," one of main issues is electricity, including its generation and distribution. In the US, electricity is mainly generated by burning fossil fuels, however, nuclear power generates about 20% of nations electricity, with hydroelectric, and to a much smaller degree wind and solar rounding out the list (numbers, source EPA).

When considering what is the most efficient as well as "best" for the environment, nuclear seems to be a pretty good option. Its day to day generation of electricity doesn't produce any green house gases or other pollutants to global warming adherents fear. Were that not enough, the French produce 80% of their electricity through nuclear power. So why not more here in the US? Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

In the July 7, 2008 print edition of "Business Week," there is an article titled, "Nuclear's Tangled Economics," (which is the source of all quotations in this post). It highlights presidential candidate John McCain's desire to have 100 new nuclear power plants. The article also highlights that current estimates put the cost at new plants at about $7 billion dollars. While that number is expected to grow as the cost of materials to build the plants grow, the question is whether it makes sense for power companies to build them.

One the first issues any such project is going to contend with is the cost of regulation. Fortunately, the US has standards for building new plants, as well as more efficient regulation. However, some power companies have decided to drop their projects. Most notably, MidAmerican Energy Holdings, "... a gas and electric utility owned by Warren Buffet's Berkshire Hathaway, shelved its own nuke plan earlier this year, saying it no longer made economic sense." Protect your Medical Identity with TrustedID. $1,000,000 Warranty & Great Customer Service

While Berkshire Hathaway shareholders should be grateful for the careful financial management of the company, they may also consider that NRG Energy, Dominion Resources, Duke Energy, and "...six other companies have already leaped to file applications to construct and operate new plants largely because of incentives Congress has put in place." The incentives are not just tax credits, but also $18.5 billion in loan guarantees. Considering the status of the credit markets, the loan guarantees can make all of the difference. eFax Annual Subscription

While nuclear energy is clearly one the best, proven, and clean technologies for electricity generation, it isn't without commercial risk. Each power company is going to have to review the risks, their capital positions, and the economic climate to determine is building a new, nuclear power plant is right for the share holders.

Dollars and Sense Topics for Discussion

The list of topics to be analyzed has grown! The new ones are in red:

1. Using Corn and Sugar Cane to Create Ethanol Fuel
2. Carbon Offsets
3. Gasoline Hybrids
4. Solar
5. Reformulated Gasoline
6. Nuclear Power

In each of the above cases, without a government subsidy, these very popular topics may be economically inefficient and not born out by the market.