An industrial wind facility in Kewaunee County, Wisconsin has been decommissioned after just 20 years of service because the turbines are no longer cost effective to maintain and operate. The decommissioning of the 14 turbines took many people by surprise, even local government officials and the farmer who had five of the turbines on his property.
Why Are We So Surprised?
What’s really surprising about these wind turbines being commissioned after 20 years is the is the fact that people were surprised by it. You’d be astonished at how many people I talk to that have no idea that wind turbines only last for 20 years, maybe 25. In fact, the National Renewable Energy Laboratory says the useful life of a wind turbine is only 20 years.
The short usable lifespan of a wind turbine is one of the most important, but least-talked about subjects in energy policy.
In contrast to wind, coal, natural gas, and nuclear plants can run for a very long time. Coal and natural gas plants can easily run for 50 years, and nuclear plants can be updated and retrofitted to run for 60 years. This has profound implications for the cost of electricity on a per megawatt hour basis that seemingly no one is talking about.
When the federal government puts out their cost projections for energy, the numbers they produce are called the Levelized Cost of Energy, or LCOE. These numbers are supposed to act as a measuring stick that allows policymakers to determine which energy sources will be serve their needs, but these numbers are wrong because they assume all power plants, whether they are wind, coal, natural gas, or nuclear will have a 30-year payback period.
This does two things, it artificially reduces the cost of wind power by allowing them to spread their costs over 30 years, when 20 would be much more appropriate, and it artificially inflates the cost of coal, natural gas, and nuclear by not calculating the cost over the entirety of their reasonable lifetimes.
Good for the Locals?
So we know wind turbines are only competitive with others sources of generation on paper after significant number fudging, but what about the contributions wind makes to the local economy?
Kewaunee farmers who were probably counting on lease payments for 10 more years will no longer receive them, and the local town government had benefited from an $8,000 annual impact fee that bolstered tax revenues for the Town that they will no longer see. Furthermore the Town of Lincoln and Kewaunee County will lose a utility aid payment of $39,920.
No businesses last forever, and the taxes paid by the industry were helpful for the time they were made, but communities in Minnesota should be wary of viewing the wind industry as a panacea of local tax revenue. Based on what happened in Wisconsin, these payments can go away with very little notice.
Isaac Orr is a policy fellow at Center of the American Experiment, where he writes about energy and environmental issues, including mining and electricity policy.