Buffet’s Wind Purchase Further Proof of Wind Power Competitiveness in the Heartland

December 21, 2013

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Bloomberg:

The decision by Warren Buffett’s utility company to order about $1 billion of wind turbines for projects in Iowa shows how a drop in equipment costs is making renewable energy more competitive with power from fossil fuels.

Turbine prices have fallen 26 percent worldwide since the first half of 2009, bringing wind power within 5.5 percent of the cost of electricity from coal, according to data compiled by Bloomberg. MidAmerican Energy Holdings Co., a unit of Buffett’s Berkshire Hathaway Inc. (BRK/A), yesterday announced an order for 1,050 megawatts of Siemens AG (SIE) wind turbines in the industry’s largest order to date for land-based gear.

Wind is the cheapest source of power in Iowa, and the deal indicates that turbines are becoming profitable without subsidies, according to Tom Kiernan, chief executive officer of the American Wind Energy Association trade group. That’s a boost for suppliers including Siemens, General Electric Co. (GE) and Vestas Wind Systems A/S (VWS), and a threat to coal miners such as Peabody Energy Corp.

“If Congress were to remove all the subsidies from every energy source, the wind industry can compete on its own,” Kiernan said at a press conference at a Siemens factory in Fort Madison, Iowa, yesterday, when the order was announced.
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Power from wind is now cheaper than power from newly built natural gas plants, said Amy Grace, a wind analyst for Bloomberg New Energy Finance.

“Most people expect gas to become more expensive,”she said in an interview. “I think in most windy areas in the U.S it will be competitive by 2020.”

Crain’s Detroit Business:

DTE Energy Co. has announced lower electric rates for business customers in 2014 by 5.5 percent to 7.4 percent, depending on their service level. DTE also is cutting residential electric rates by 6.5 percent, company officials said today.

The rate cuts, said DTE, are due to lower fuel supply costs, which include lower renewable energy costs from wind, and ongoing efforts to reduce the company’s cost structure.

This is the first rate decrease for Detroit-based DTE in more than five years, spokesman Scott Simons said. Michigan approved the renewable energy package in 2008.
From 2007 and 2012, for example, DTE held operating cost increases to zero compared with average cost increase of 33 percent at its peer electric companies over the same period.

The plan was approved by the Michigan Public Service Commission.

The MPSC also cut its renewable energy surcharge by 85 percent, which reduces the fee to 43 cents per month from $3. Customer bills will be reduced by about $90 million.

“Our use of renewable energy is saving customers money while improving the health of Michiganders around the state,” said Rory Neuner of MI Air MI Health, in a statement.

Detroit News:

Detroit — Gov. Rick Snyder laid out four goals for Michigan’s energy policy Thursday, but offered few details on how he intends to accomplish them through a legislative proposal in 2014.

Snyder told reporters in Detroit his goals include reducing the amount of energy the state gets from coal and boosting the amount it generates from renewables, particularly on-shore wind.

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77 Responses to “Buffet’s Wind Purchase Further Proof of Wind Power Competitiveness in the Heartland”


  1. Don’t you think DTE is taking advantage? It announced lower electric rates for business customers in 2014 by 5.5 percent to 7.4 percent! Is it really low for business?


  2. Replying to two comments by Morin Moss starting here, part 1:

    Have you (conveniently) forgotten how long it took nuclear to reach the vaunted reliability you tout?

    Just over 11 years from the first controlled atomic chain reaction to the launch of the first atomic submarine, which was 60 years ago this month.  If it was reliable enough for people to stake their lives on beneath hundreds of feet of water, it was reliable enough.

    Not just capacity factor, because it seems that the industry has gotten very good at running the plants above nameplate, but AVAILABILITY factor as well.

    Michele Kearny quoted a bit from the NRC related to that.  All those repetitions of 100%, including Ft. Calhoun, make me wonder what you’re making a fuss about.  Only 7 less than 100%:  2 at 99%, 2 at 97%, 1 at 90%, one at 20%, one down.  When cold weather pushes power demands up, nuclear steps up.

    Contrast this to wind power.  Last night, the weather report said winds near me were about 15 MPH.  This isn’t much above the cut-in speed of the 1.6 MW GE wind turbine that seems to be so popular here, and by my reading of the graph in the data brochure one would produce maybe 25% of nameplate rating in a 15 MPH wind.  If you intend to de-carbonize space heating using electricity, your main sources of generation can’t have 3/4 of their nameplate output unavailable when you need heat the most.

    Right now, the report says local winds at 3 knots.  Wind farms near me would be net consumers of power.  It’s dark out; solar is off-line.  Why would you promote “renewables” that cannot produce for me?

    After all this time, why hasn’t France, Sweden, or someone else gone 100% nuclear?

    Because they weren’t asked to?  When carbon became an issue it came along with such a heavy dose of anti-nuclear hysteria that the same people demanding an end to burning FFs also demanded an end to nuclear energy.  It’s hard to nuclearize your remaining combustion-powered systems when you’ve got hordes of voters convinced that the ones you’ve already got will cause everyone’s children to have 3 eyes and the eventual end of humanity.

    A number of the commenters here seem to believe something like that.  I’m here as pushback from the reality-based community.

    • MorinMoss Says:

      Just over 11 years from the first controlled atomic chain reaction to the launch of the first atomic submarine, which was 60 years ago this month. If it was reliable enough for people to stake their lives on beneath hundreds of feet of water, it was reliable enough.

      Well into the ’90s, many reactors couldn’t manage EAFs above 75%, some below 60%.

      See Table 2, page 586

      Michele Kearny quoted a bit from the NRC related to that. All those repetitions of 100%, including Ft. Calhoun, make me wonder what you’re making a fuss about. Only 7 less than 100%: 2 at 99%, 2 at 97%, 1 at 90%, one at 20%, one down. When cold weather pushes power demands up, nuclear steps up.

      First off, those stats are collected once a day, within a 4 hour window.
      Not very informative; would like to see more history.
      When I went to the main page to try to find more info, I found a link to more bad news about Fukushima.

      The word on the intertubes was that Shinzo Abe was set to announce a reversal of the current nuclear policy which would have made you very happy, I assume.

      But this latest news, plus the revelation that homeless Japanese have been press-ganged into cleanup will not help raise the profile of the industry.

      Another unfortunate bit of reality.


      • Well into the ’90s, many reactors couldn’t manage EAFs above 75%, some below 60%.

        I don’t think “couldn’t” is the correct word there.  “Didn’t”, certainly, but what were they being asked to do?  French plants were and still are used to load-follow, at least early in their fuel cycles.

        In the USA, ownership of many nuclear plants was recently concentrated in the hands of specialist corporations and the management philosophy changed quite a bit.  Under that management, capacity factor went up quite a bit using reactor hardware that had aged substantially in the interim.  Can you really blame the technology for what (you say) was poor performance 20 years ago?  Or could it be other factors, like corporate management massaging their expenses to hold their preferred position before Public Utilities Commissions?  Different incentives, different results.

        When I went to the main page to try to find more info, I found a link to more bad news about Fukushima.

        I was going to write you a refutation of the fear-mongering in that “news” item, and got diverted onto something else.  That’s a good thing, because the Hiroshima Syndrome addressed it better than I ever could have:

        The resurrection of old F. Daiichi news has spurred the Tokyo Electric Company to respond. The topic is the occasional mist emanating from the top of the unit #3 reactor building at F. Daiichi. This has been happening off-and-on since last summer. Tepco found that rainwater collecting around the Primary Containment head will evaporate on cool or (now that it is winter) cold days because the steel dome, which is inside a deep concrete pit, is warmed by the 100oF (40oC) heat being generated inside the containment. In the winter, the evaporation rate is so great that it looks like a steam leak from inside the reactor building. The progenitor of this not-so-new news is the Turner Radio Network, which is essentially a conspiracy theory site run by former convict Hal Turner. His website has nothing to do with Ted Turner or Turner Broadcasting Company.

        I live at about 45°N, with a view of water.  I have seen vapor (“steam”, if you don’t know any better) rising off surfaces that are not radioactive and are barely above freezing.  All it takes is open water and very cold air, preferably still enough that convective cells can form and make visible plumes.  At Fukushima, you’ve got water at roughly warm-bath temperature exposed to cold air.  You get the inevitable.  You can either panic over nothing, or use a little critical thinking and settle down.  Your choice.

        The word on the intertubes was that Shinzo Abe was set to announce a reversal of the current nuclear policy which would have made you very happy, I assume.

        Of course.  It would cut fuel oil and LNG (and even coal) imports to Japan.  It would cut prices of those goods, and perhaps put some marginal producers out of business.  It would cut carbon emissions.

        My question to you:  why wouldn’t that last point make YOU very happy?

        But this latest news, plus the revelation that homeless Japanese have been press-ganged into cleanup will not help raise the profile of the industry.

        They weren’t doing cleanup on the plant grounds proper, and I understand that yakuza corruption in labor contracting is a constant in Japan in any large project.  Again, there’s a lot less there than the headlines imply.  It really IS on the order of “DEEP FREEZE HITS MIDWEST! GLOBAL WARMING REFUTED!”

    • dumboldguy Says:

      “I’m here as pushback from the reality-based community”

      The legend of E-Pot continues to grow—-in his own mind. I am a dues-paying member of the “reality-based community” and I can’t seem to remember us having any election to name Eww-Potty as our savior and spokesman. But then, I’m just a dumb old guy and CRS. Can anyone refresh my memory?


  3. Part two of response to Morin Moss:

    it’s YOU who are irked some by the lack of a magic wand that would make the whole world fall in love with your perenially overbudget multibillion-dollar radioactive tea kettles.

    Hold that thought.

    a great many people in many countries have qualms, fears & concerns about nukes. Safety, waste, proliferation, cost, etc.

    And a great many people have fears about fluoridated water, the MMR vaccine, alien abductions, “chemtrails”, HAARP….

    What you don’t mention:  are such fears reasonable?  Do they have any relationship to actual dangers?  Or are they hyped up by disinformation campaigns?

    To the point:  who bears the burden of outing disinformation campaigners and refuting their false messages?  Climate Crocks exists as a site to refute disinformation spread by climate deniers.  But if Climate Crocks is to help get human society onto a course of declining atmospheric greenhouse gases, it cannot attack those who are helping the cause.  It must defend them.  That includes refuting the disinformation used to attack them.

    Are those who spread qualms, fears and concerns about nuclear energy legitimate and proportionate, or fear-mongering?

    I submit that they are fear-mongerers.  The worst nuclear accidents in history did not cause enough damage to humanity to merit the attacks on the industry.  The fears are not reasonable; worse, those who stoke the fears block the measures which would address them.  There is no relationship between the actual hazards and the demands made to address them.  Do you demand that the claimants of infrasonic damages prove their case?  Do the same for claimants of damages from potential (not actual) small, steady radiation exposures.  Be consistent.

    Seriously, that’s it.  Be consistent.  Figure out what the true hazard to the public is, and minimize it.  If fear-mongers try to hype something beyond its actual threat, they deserve to be suppressed, even jailed.  If they demand that more-damaging energy sources be used in preference to less-damaging ones, they are threats to the human race.  Free speech is not a license to lie without being held liable for damages.

    • MorinMoss Says:

      This is a very different stance from “taking the world as it is”.

      In a previous discussion, you accused me of “moving the goalposts”.
      Here you’ve relocated them to a different reality.


      • Did physical reality change between 1957 and 1988, or 1988 and today?  Human fads and perceptions, certainly… but if they were “reality” they could not be altered by social trends.

        Please tell me which goal posts I’m alleged to have moved, and what goals they designate.  I’m all ears.

        • dumboldguy Says:

          You’re not “all ears”, Ewwwwwww-Pot.

          You’re all eyes, the better to admire yourself in the mirror with.

          SBAN, E-Pot!


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