Cato Institute
Policy Analysis
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birds emerged. The first-generation problems
Geothermal sites are often located in pro-
required a government-funded $100 million
tected, pristine areas and so create land-use
cleanup and repowering effort in California,
conflicts, and toxic emissions and deple-
the heart of the U.S. wind industry.9 8
tion can occur.1 0 1 Hydroelectric power is the
least environmentally favored member of
Oil companies did not diversify into the
the renewable energy family owing to its
wind industry as they had into solar power.
disruption of natural river ecosystems.1 0 2
Profitable sites and applications for wind
power were narrower even than those for
Nuclear power, although it is air emission
solar power, although wind power had one
free like renewable energy after plant con-
clear advantage over its renewable rival--it
struction, is less popular than hydroelec-
was substantially less uneconomic as a
tricity with mainstream environmentalists
source of electricity for the power grid.
and is rejected because of its risk profile
Nonetheless, the economics of wind power
and waste disposal requirements.1 0 3
remained relatively poor, particularly com-
The respective costs of wind and solar
pared with the economics of natural gas
have dropped by an estimated 70 percent
combined-cycle generation, which was
and 75 percent since the early 1980s.1 0 4
rapidly improving. The bankruptcy in 1996
Extensive  government  subsidies  for
Geothermal sites
of the world's largest wind developer,
research on and development and commer-
are often located
Kennetech, like the bankruptcy of solar
cialization of these technologies--much
industry leader Luz five years before,
greater than for other renewables and fossil
in protected,
marked the end of an era.
fuels on an energy production basis--have
pristine areas.
The heavy political promotion of wind
been a primary reason for this substantial
improvement.1 0 5 Mass production has result-
and solar power in the 1970s and 1980s
cannot be characterized as successful.
ed in fewer material requirements, more
Billions of taxpayer, ratepayer, and investor
product standardization, automated man-
dollars were lost, bearing little fruit except
ufacturing, and improved electronics.
for experience. But for proponents of alter-
Larger wind farms have also introduced
native energy, hope springs eternal. Two
economies of scale. Improvements in infor-
decades of "broken wind turbines, boon-
mation management, just-in-time invento-
doggle wind farm tax shelters, and leaky
ry techniques, and lower energy costs--fac-
solar hot-water heaters" are ancient history.
tors at work across the economy--have also
"The world today," the faithful believe, "is
been responsible for the reduced infrastruc-
already on the verge of a monumental ener-
ture cost of these two alternative energy
gy transformation . . . [to] a renewable ener-
sources. One recent study of wind tech-
gy economy."9 9
nologies concluded:
A survey of today's leading renewable
[Wind] costs have declined from
alternatives, however, demonstrates that this
around US$ 0.15­0.25 per kWh to the
predicted transformation is just as question-
US$ 0.04 to 0.08 per kWh today in
able now as it was two or more decades ago.
favorable locations. Technical devel-
Solar and Wind as Kyoto Energies
opments have been rapid and impres-
sive, most notably in the areas of
Wind and solar power are the two energy
increased unit size, more efficient
sources most favored by the environmental
blade designs, use of light-weight but
community to displace fossil fuels to help
stronger materials, variable speed
meet the goals of the Kyoto Protocol. Other
drives, and the elimination of reduc-
sources have met with greater environmen-
tion-gear mechanisms through the
tal ambivalence if not concern. Biopower is
introduction of electronic controls for
an air emission renewable energy source
frequency and voltage regulation.1 0 6
that can contribute to deforestation.1 0 0
18