Environmental Engineering Reference
In-Depth Information
11.2.1 Economics Is Still King
Although the prospects of wind power difusion in a given nation depend on
how the STEP variables outlined in Chapter 10 conlate and evolve, there is
one variable that stands out as exerting the dominant inluence on the for-
tunes of wind power—comparative cost. Simply put, wind power systems
cannot compete with coal-ired technologies or nuclear power when the
negative externalities associated with these two latter technologies are not
comprehensively internalized into the cost of electricity generation. Even in
recent times, where the cost of coal has risen dramatically and wind power
costs have continued to diminish, the cost gap between wind power and
coal-ired power has not yet been bridged.
here is no nation that adequately internalizes these external costs.
However, policymakers in nations that have been most successful in cata-
lyzing wind power difusion have made attempts to internalize some of the
costs and beneits—through carbon taxes, feed-in tarifs, or other govern-
ment subsidies—and to rectify historical inancial support imbalances by
ramping up renewable energy R&D support.
Nevertheless, all wind power support policies sufer from two shortcom-
ings. First, any subsidies that are provided to wind power developers do not
come even remotely close to the cost savings associated with mitigating the
economic impact of elevated levels of climate change. 3 If the subsidies fully
relected the costs that will be averted, wind power would be the preferred
economic option. 4 Second, wind power subsidies give energy consumers the
wrong impression. By subsidizing wind power, the message sent to energy
consumers is that wind power is commercially unviable and needs gov-
ernment support. he truth is that the current economics underpinning
coal-ired power and nuclear power are distorted and inaccurate. hese tech-
nologies are actually far more expensive than the wholesale price indicates,
but the external costs (health costs, waste storage costs, climate change costs,
etc.) are currently shouldered by other stakeholders. It may very well be that
a better approach to fostering public support for wind power development
would be to force power plants that employ conventional energy technology
to fully internalize external costs so that the public understands that wind
power technology should not be viewed as a charity case, but rather as a pre-
ferred economic solution.
he inluence of economics on wind power difusion should not be
misconstrued as intimating that economics is the only factor inluencing
difusion. As Chapter  10 summarized, there are other sociocultural, tech-
nological, and political forces that play enabling roles. In short, favorable
economic conditions are necessary but not suicient conditions for wind
power difusion.
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