AWEA: Fact check - Lomborg errs on cost of wind power

While Mr. Lomborg manages to works in a few gems like “The switch to fossil fuels has also had tremendous environmental benefits.” and “Coal saved Europe’s forests,” the reality is that, thanks to massive cost reductions, wind energy is already making important contributions to solving our environmental problems. Wind power has accounted for more than 35 percent of all newly installed electric capacity in the U.S. over the last five years, and renewables combined were 55 percent of all new capacity in 2012.

Wind now reliably provides more than 20 percent of the electricity in Iowa and South Dakota and more than 12 percent in nine states, according to the Department of Energy. The amount of wind power installed in the U.S. today reduces CO2 emissions by almost 100 million tons per year--equivalent to taking 17 million cars off the road.

This rapid deployment of wind energy has occurred because costs have already fallen precipitously. Importantly, deployment, not research and development, has been the leading driver of these cost reductions.

In fact, wind power costs have declined more than 50 percent in the last four years, according to the 2013 annual report from leading financial services firm Lazard. The Department of Energy similarly concluded that “With [wind’s] combination of lower prices and improved performance, wind is becoming a strong competitor."

A key driver of these cost reductions has been the creation of a domestic wind turbine manufacturing sector that now builds over 70 percent of a wind turbine’s value in the USA.

In a virtuous circle, policies that successfully encourage private sector deployment of wind energy have greatly driven down wind energy costs, enabling further deployment, which further brings down costs, etc. Calls for policymakers to switch from the meager policies that deploy wind energy to instead investing in research and development sound like a desperate effort to ensure that we take our foot off the gas pedal just as we are about to reach the clean energy future that we so urgently need.

In his piece, Mr. Lomborg repeatedly attempts to lump modern renewables like wind and solar in with prehistoric energy sources like burning firewood for heat. That allows him to point to underdeveloped regions and make ridiculous arguments like “The most renewables-intensive places in the world are also the poorest.”

(Incidentally, a few paragraphs later, Mr. Lomborg acknowledges that wind energy supplies 34 percent of Denmark's electricity, though he doesn’t offer an explanation as to how Denmark and other wealthy European countries that obtain more than 15 percent of their electricity from wind energy fit into his theory about the relationship between wealth and renewable use.)

Finally, Mr. Lomborg conveniently overlooks the far larger subsidies given to other energy sources, which are particularly large when one looks historically and globally. According to the Congressional Research Service, “For more than half a century, federal energy tax policy focused almost exclusively on increasing domestic oil and gas reserves and production. A report by DBL Investors also found that in “inflation-adjusted dollars, nuclear spending averaged $3.3 billion over the first 15 years of subsidy life, and O&G subsidies averaged $1.8 billion, while renewables averaged less than $0.4 billion.” Even by the Nuclear Energy Institute’s own count, fossil and nuclear subsidies are many times larger than the total amount given to all renewables over the last 60 years

Internationally, the International Energy Agency estimated that, in 2011 alone, global fossil fuel direct subsidies were worth $523 billion, compared to $88 billion for all renewables. Earlier this year, the International Monetary Fund reported that global subsidies to fossil fuels are a staggering $1.9 trillion a year, including about $500 billion in direct subsidies as well as more than $1 trillion more provided by a lack of policies to account for the costs of pollution.

Bottom line: like all energy industries, the wind industry needs stable policies to continue to grow and further bring down its costs, keeping us on the path to a low-cost, clean energy future.