Apple goes windy in Iowa

[billanole]

Looks like the winds of change are steadily blowing in the future of electricity....
https://www.iowaeconomicdevelopment.com/iowa-stories-detail?id=219&cat=

More than 36 percent of Iowa’s electricity comes from wind (the highest percentage of any state), Iowa’s electricity rates are significantly lower than the national average and Iowa has one of the most stable grids in the country.

 

[Urban Cryer]

Awesome! Flyover states are perfect for wind turbines

 

[Formerly Rockymtnole]

There are hundreds of those turbines along I-80 through Iowa. It's an amazing sight. Much better than oil wells but definitely alters the landscape.

 

[seminole97]

Iowa’s electricity rates are significantly lower than the national average and Iowa has one of the most stable grids in the country.

I wonder how subsidies factor into that determination.

"The demand for electricity in the U.S. has been nearly flat over past decade, due to slow economic growth and gains in energy efficiency. Despite the lack of new demand, new wind farms are popping up across the country because of the tremendous tax credits they generate for their owners.

Warren Buffett has admitted as much. In 2014 he explained: “I will do anything that is basically covered by the law to reduce Berkshire's tax rate [. . .] We get a tax credit if we build a lot of wind farms. That's the only reason to build them. They don't make sense without the tax credit.”"

 

[billanole]

Costs are coming down in a hurry for renewables. Subsidies are less and less the driver, as costs per megawatt continue to squeeze carbon based production.
https://www.ge.com/reports/size-matters-next-big-thing-wind-turbines/
I lost track of a better article showing just how competitive these larger turbines make wind. Due to their diameter and height, they grab more power for longer periods, thus evening out the ups and downs and requiring less need for peak plants to supplement during low production.
Battery progress is going to be key as well to leveling out the need for peak plants.
Another article I have lost talked about the TVA having to revisit their 20 year plan after only 3 years due to the dramatic drop in need for coal plants... they are less and less cost effective purely from a demand standpoint. This article did not get into the health and enviro costs associated with coal.

Edit.
Ahh, found it. https://www.vox.com/energy-and-environment/2018/3/8/17084158/wind-turbine-power-energy-blades

It will be impressive as an engineering feat, but the significance of growing turbine size goes well beyond that. Bigger turbines harvest more energy, more steadily; the bigger they get, the less variable and more reliable they get, and the easier they are to integrate into the grid. Wind is already outcompeting other sources on wholesale energy markets. After a few more generations of growth, it won’t even be a contest anymore.

Edit. Here is a different take on Buffett’s strategy and one reason big power is scrambling...

https://www.vox.com/energy-and-environment/2018/2/27/17052488/electricity-demand-utilities
.
The utility business model is headed for a reckoning
TVA, as a government-owned, fully regulated utility, has only the goals of “low cost, informed risk, environmental responsibility, reliability, diversity of power and flexibility to meet changing market conditions,” as its planning manager told the Times Free Press. (Yes, that’s already a lot of goals!)

But investor-owned utilities (IOUs), which administer electricity for well over half of Americans,face another imperative: to make money for investors. They can’t make money selling electricity; monopoly regulations forbid it. Instead, they make money by earning a rate of return on investments in electrical power plants and infrastructure.

The problem is, with demand stagnant, there’s not much need for new hardware. And a drop in investment means a drop in profit. Unable to continue the steady growth that their investors have always counted on, IOUs are treading water, watching as revenues dry up.

 

[goldmom]

I think the turbines are great, but they need to find a solution to eliminate the danger to the hundreds of thousands of birds killed every year, especially the larger birds of prey. Golden eagles, Hawks, various raptors and even bald eagles. Screen them like a giant fan?

 

[seminole97]

Here is a different take on Buffett’s strategy and one reason big power is scrambling...

Curiously they didn't comment on the tax advantages that Buffet claimed are the only reason that investment was made. Didn't mention them at all. Seems odd to leave out a factor so crucial to current investment.

The problem is, with demand stagnant, there’s not much need for new hardware.

In real markets investment is driven by efforts to reduce costs, in order to increase profits. Competition on price reinforces this. But I enjoy the Voxsplainin' on the inadequacy of central planning.

 

[billanole]

Curiously they didn't comment on the tax advantages that Buffet claimed are the only reason that investment was made. Didn't mention them at all. Seems odd to leave out a factor so crucial to current investment.



In real markets investment is driven by efforts to reduce costs, in order to increase profits. Competition on price reinforces this. But I enjoy the Voxsplainin' on the inadequacy of central planning.

That was my thought about tax advantages. The article talked about the need for big power to invest in projects that they earn return on, which sounds to me like what Buffet has done.

 

[seminole97]

That was my thought about tax advantages. The article talked about the need for big power to invest in projects that they earn return on, which sounds to me like what Buffet has done.

A product that returns a profit on the market is enriching society (net value gain, irrespective of how it is split), a product that returns a profit only due to tax advantages isn’t necessarily accomplishing the same thing. And there are opportunities that miss out funding accordingly.
Buffett’s willingness to milk the system isn’t new, but it strikes me as odd that he says it wouldn’t make sense to build these wind farms without the subsidies whilst an article touting their price advantages makes no mention of that investment requisite. If they’re genuinely cost advantageous to alternatives, why do we have to further enrich Berkshire? If that’s the case it really makes Buffett even scummier for taking this handout and then griping about his effective tax rate.

 

[DanC78]

@seminole97

So it may cost the same if not more to power their data centers via wind turbines, but with the tax break it’s cheaper than traditional power sources???

And do you think the early adopters are considering the fact that it’s “clean” energy, or is it simply about the total cost of ownership???

 

[Semiologist]

Ya'll in the Pensacola area can see the turbines being brought out of the GE building on the train tracks where I10 comes into town from the East, right before Exit 17.

 

[Nole Lou]

Question...so are the tax advantages as Buffet speaks of...are those for basically putting them up and getting them going? Or are the tax advantages the only thing that makes them profitable even once they're up and running?

Big difference to me there. If the investment is too large to be recouped in a timely manner, tax advantages to MAKE the investment worth getting these things set up, I don't have a problem with that if it's something that has a lot of public good associated with it like renewables. Better than the government building it themselves.

However, if once it's up and running, the tax advantages/subsidies are the only thing making the year over year operation a profitable business, then that's a problem.

I guess I'm thinking ethanol for example, which is presumably only worth producing based on the subsidies. If that's the case with wind farms, that's bad news...especially in the prospect that if the subsidies ended, you'd potentially have companies walk away leaving these monstrosities to rot idle?

Again, if the subsidies are in the initial investment, that's reasonable I think.

 

[fsu1jreed]

Ya'll in the Pensacola area can see the turbines being brought out of the GE building on the train tracks where I10 comes into town from the East, right before Exit 17.

I pass by 4 or 5 a week while on my way to/from week.

 

[Nolomite]

What does this have to do with Apple?

 

[fsu1jreed]

What does this have to do with Apple?

I don't get the reference.

 

[Nolomite]

I don't get the reference.

That is Apple Martin, the daughter of Coldplay front man Chris Martin (also pictured) and Gwyneth Paltrow.