Monday, November 10, 2008

Wind Power in Ohio

The Journal Gazette’s article on wind farms stated “Like ethanol plants, wind farms require multimillion-dollar investments but create relatively few jobs.” Do we need to energy sources to add jobs to make the economy good? If so we could easily build the most expensive power plants such as Coal and Nuclear and create hundreds of jobs operating them. However, these types of jobs only increase the cost of energy which is passed on to the rest of us. High energy costs reduce the standard of living of workers. The four things that affect the ability of US companies to compete abroad our: taxes, material costs, energy costs and labor costs. This means the cheaper the electricity up front, the more likely a company can compete abroad and higher US citizens here at home. Productivity improvement means that we produce the same amount with fewer people or more with the same number of people. This frees up labor to provide other goods and services.

In addition, the farmer can earn $2,000 to $4,000 per year for leasing a tiny amount of land. Sure the lease drives up the cost of electricity, but it is still cheaper than paying for fuel and labor over the life of a power plant.

So how cost competitive is Wind Power? The article states it will provide enough electricity to power 120,000 to 195,000 homes. This is a pretty wide range. It identifies the power rating as 400 to 650 megawatts. The estimated cost is $800 million to $1 billion. This cost must then include site preparation as well.

Fossil fuel plant construction costs, as of 2004, were about $1,300 per kilowatt, or $650 million for a 500 MWe unit. This is similar to wind farm costs, but they (fossil) have the added cost of fuel which is volatile, labor and pollution.

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