Your Tax Dollars At Work: Hawaii receives a $117M Loan Guarantee for a 30 Mega"watt" Wind Farm.

[NNadir]

http://www.renewableenergyfocus.com/view/7869/hawaii-wind-farm-receives-us117m/">Hawaii wind farm receives US$117m

The US Department of Energy (DoE) has offered a conditional commitment on a US$117 million loan guarantee to finance construction of a 30 MW wind energy project in Kahuku, Hawaii.
Kahuku Wind Power LLC will install 12, 2.5 MW wind turbines with a battery storage system for load stability. The loan guarantee is supported by funds from the American Recovery & Reinvestment Act.

“This investment will create jobs and cut our dependence on oil, while promoting America’s leadership in the global race for the clean energy industries of tomorrow,” says Energy Secretary Steven Chu.

Construction of the Hawaiian wind project will create 200 jobs and, after completion, 6-10 full-time jobs, estimates the project sponsor, First Wind Holdings. The wind power output will be sold to Hawaiian Electric Company.

Let's play "Do math!!!!"

One hundred and seventeen million dollars to fund a 30 Mega"watt" wind plant, where the quotation marks refer to the fact that the "watts" are actually peak watts.

A typical capacity utilization for wind farms - except in fantasy land - is 25%.

This means that the actual installation will produce 7.5 Megawatts of average power.

(Note there are some very expensive batteries in this system, but they still do not change the amount of energy generated for $117M.

A typical power plant size is 1000MW. Thus to scale this system to produce as much energy as a typical 1000 MW plant, about $15.5 billion dollars would be required.

Experience, given the rotting turbines at South Point on the Big Island, is about 20 years, meaning that in order to produce this trivial amount of energy, Hawaii might be required to spend 5.8 million bucks a year, subsidized by the Government, which is broke and is the world's largest, by far, debtor.

Personally, I am in favor of spending these kinds of sums on infrastructure that is robust, reliable and will represent an investment for many future generations, sort of like the Oyster Creek Nuclear plant, completed in 1969 and still powering my state, producing more energy than all the wind turbines in Denmark.

There are two kinds of investments, wise and foolish, and this, in my view, is a foolish investment.

Hawaii, I note, has the highest electricity rates in the entire United States, 29.2 cents per kwh.

http://www.eia.doe.gov/cneaf/electricity/st_profiles/hawaii.html">Summary Statistics, Hawaii.

It gets, currently, about 8.8% of its energy from so called "renewable" sources, primarily wind energy. (In theory they also have considerable geothermal resources on the Big Island, which would be infinitely cleaner than strewing abandoned metal across their landscape.)

[kristopher]

1. Does that loan have a better than 50% chance of default like the nuclear loans?

[Statistical]

2. Nuclear power doesn't have a 50% default rate.

Director of CBO has made that clear however you need your strawmen.

Will you still be chanting 50% default rate when say next 4 reactors go online?
What about 10? What about 20? At what point will you give up on the 50% default rate meme.

So $5 to $7 billion for a nuclear reactor with average output of 1GW is to expensive to be competitive
HOWEVER (using power of magic of "green")
$15 billion + for wind producing same amount of energy is competitive.

Then you factor in fact that nuclear reactors last for 60 years (GenIII+ rated at 60 + 60 = 120 years) compared to wind of what 20 maybe.

So $15 billion for a plant that might last 20 years is economical but $7 billion for a plant that will last 60-120 years is not?

[kristopher]

3. DO we have to go through disproving your spin yet again?

The economics underlying the CBO report have only gotten worse for nuclear since the report was written. EVERY credit rating agency out there predicts the same or WORSE performance (55-70% default) from new nuclear plants for the same reason - their power is going to be too expensive to sell because of increased penetration by renewables.

Perhaps part of your problem is your routine reliance on a circle jerk of bloggers for your information. For example, the number you just floated of $15B for the wind side of the equation was just fabricated by nnads, who has the worst record for presenting factual information of anyone I've ever seen; although you are running a close second.

Of course, you really don't give a fig about the facts, you just want to promote nuclear at any price.

Haven't you ever wondered why NONE of the pronuclear cost studies include data from credit rating analysis? It is because of two reasons, 1) they don't buy the hype related to the overly optimistic assumptions that the nuclear corporations use trying to sell their products, and 2) the conclusions of these agencies cannot be smear by simply claiming they are "anti-nuke".

[Statistical]

4. Moody's rated bonds issued for Constructing Vogtle 3 & 4 reactors highly

As did S&P and Fitch.

Also CBO clearly indicates the 50% number does NOT apply to current loan program.

Applicability of Those Estimates to Specific Projects. CBO’s 2003 estimate was intended to represent the possible costs of loan guarantees to build the first units of the next generation of nuclear power plants. The estimate reflected the average financing costs, construction costs, and other project characteristics that were anticipated at that time. The assumptions and analyses supporting that estimate reflected information about the technical, economic, and regulatory environment as it existed in 2003, almost seven years ago. Such generalized estimates of credit risk may not apply to a guarantee for any particular power plant because of variations in the technical, economic, regulatory, and contractual characteristics of each project.

CBO’s recent estimates address a wide variety of possible projects involving both nuclear and non-nuclear energy sources. Whether the government will incur subsidy costs for the program as a whole, or for individual projects, will depend not only on the characteristics of the projects, but also—critically—on what fees the Department of Energy will charge to cover the government’s potential costs.

So CBO hasn't even determine if there will be a loss and if so how much the loss is. The DOE will be charging a subsidy fee (paid up front) for loan guarantees which will offset any potential losses. Since that fee hasn't been set yet and no funds have been release your 50% claim is premature.

I trust CBO ability to calculate risk & loss a lot more than your biased opinion.

7 years ago fossil fuel prices weren't as high as they are today ($25 per barrel of oil and half current price of coal per ton).
7 years ago Climate Change wasn't mainstream.
7 years ago there were no emission caps in Europe.
7 years ago China demand for energy (and thus risk of future price rises) wasn't even in same magnitude as today.
7 years ago the probability of a carbon tax at some point in the future was nill.
7 years ago no GenIII+ reactors have been finalized.
7 years ago other countries weren't already building GenIII+ reactors.

[kristopher]

5. ROFLMAO you are clutching at straws

The reports from the credit rating agencies are current and they are AS BAD OR WORSE than the CBO estimate.



The ONLY way they sell debt is for the TAXPAYERS to assume ALL risk. So if the subsidy fee is appropriate to the risk, the loan guarantee is going to be worthless because the cost is still going to be too high to build the plants. If the subsidy fee is set lower, then that becomes a typical nuclear industry hidden cost where both the ratepayers and the taxpayers are going to be paying for the same electricity - in either case the electricity is far more expensive than what renewables will cost.

In a financial transaction, risk isn't just an abstract concept. Interest rates based on risk are not abstract concepts. Those interest rates represent the losses that are expected plus a standard return on investment. If I invest $10,000 in 10 different 6% safe investments the return is going to be the same as if I invest $10,000 in 10 different high risk investments even though the high risk investments are going to promise 15% return. The difference is that many of the 15% projects will die and the money will be lost.

UNLESS that is, you can get some fool to take all the risk for you; which is the case for nuclear plants and subsidies.

You cited the blog but you apparently don't understand what it says.

[NNadir]

7. Well since every nuclear plant not destroyed by ignoramuses is now a cash cow,

the taxpayer risk is essentially zero.

The Oyster Creek Nuclear Reactor had both its main external costs, and its construction costs amortized decades ago.

By contrast, this Hawaiian wind turbine garbage will be heaps of useless metal in 20 years, and taxpayers will lose money.

I favor a TVA type nuclear construction program on a massive scale to deal with the climate change emergency. But then again, I take dangerous fossil fuels seriously and I'm not here trying to put lipstick on the dangerous fossil fuels pig, which is the entire reason that the wind industry exists.

The idea that there IS ONE anti-nuke who understands economics is ludicrous on it's face, given that it only takes 4 or 5 reactors to produce as much energy as the entire planet can produce from wind, and there over 430 reactors that have operated for decades, mostly in countries that have the world's lowest electricity prices.

The fact that our pet dogmatists here are getting so shrill is making them more and more and more amusing by the minute. They claimed back in 1980 that nuclear power was dead for economic reasons, just before nuclear generation was poised to become the the fastest growing source of climate change gas free energy to be observed in the next three decades.

Chant away!!!!!!

[NNadir]

6. Let's see if we have this straight. We have here a guy who can't tell the difference between

http://www.energy.eu/#domestic">the Danish electricity price of 26.71 Eurocents/kwh and http://www.energy.eu/#domestic">France's13.01 Eurocents/kwh electricity price giving a lecture on economics?

That is rich, like an anti-nuke brat living on a trust fund and doing no useful work in his pathetic consumerist life.

This reminds me of the time a President of the United States hired a guy from the Arabian Horse Show Business to run FEMA.

I can tell already that right here, in the E&E forum, we have a guy who is qualified to be the Secretary of the Treasury in a Republican administration.

[Nederland]

8. I wish that post of his wasn't deleted

I'm curious what ignorance was on display...

[malakai2]

9. I'm curious to know too

.

[joshcryer]

10. Which one?

I alert on all insulting and disruptive posts here.