“WIN, WIN, WIN, WIN” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 152

whenever you want than for one that's available only for a random hour
every day or for one you can only use in the middle of the night.
According to Paul Joskow, then an MIT energy economist, “Levelized
cost comparisons overvalue intermit ent generating technologies [such
as wind] compared to dispatchable base load generating technologies
[such as coal or gas].” 35 To show how big a deal this is, he sketches
out an example. Imagine two big power plants, each of which will last
for thirty years. 36 One costs the equivalent of $4.5 billion to build and
maintain over its lifetime, and it would need another two cents for
every kilowat -hour of electricity generated. Being a base load plant—
let's say one that uses natural gas—it delivers power 90 percent of the
time. h e electricity provided costs about 5.8 cents per kilowat -hour.
h e second plant costs half as much to build and nothing to oper-
ate, because the fuel—the wind or the sun—is free. h e output is also
intermit ent; on average, it's able to produce power only 30 percent of
the time. Nonetheless, due to being so much cheaper to run, it delivers
electricity costing a smidge less than that from the other plant—only
5.7 cents for each kilowat -hour.
h e second power plant seems bet er, but there's a problem.
Electricity is worth more when in high demand and less when there's
reduced need for power. Joskow assumes that about a third of the time,
electricity is worth nine cents for each kilowat -hour, and the rest of
the time it's worth only four cents. h en he does the math to see how
each power plant will fare. h e owner of the expensive but steady power
plant makes a predictable but modest proi t of about $3.8 million each
year. But the fate of the less consistent plant depends strongly on when
it delivers. In the worst case, it produces power only when the price
is lowest, and the owner loses more than twenty-two million dollars a
year. At the other extreme, the second plant produces power precisely
when the price is highest; the owner nets a whopping forty-three mil-
lion dollars every year.
It turns out that wind turbines are a lot like the imaginary power
plants that crank out power mostly when people don't want it. Wind
power might seem superi cially to be within striking distance of other
sources, but when you unpack things some of the competitive edge
goes away.