Subsidized wind energy buffets nuclear power industry in the United States
CHICAGO — A glut of government-subsidized wind power may help reach a goal some environmentalists have sought for decades: kill off U.S. nuclear power while reducing reliance on electricity from burning coal.
That’s the assessment of experts after the U.S. windenergy industry went on a $25-billion-US growth binge in 2012, racing to qualify for a federal tax credit that was set to expire at year’s end.
The surge added a record 13,124 megawatts of wind turbines to the U.S. power grid, up 28 per cent from 2011, increasing financial pressure on traditional generators such as Dominion Resources Inc. and Exelon Corp. in their operating regions. That’s because wind energy undercut power prices already driven to 10-year lows by an abundance of natural gas.
“Right now, natural gas and wind power are more economic than nuclear power in the Midwestern electricity market,” said Howard Learner, executive director of the Environmental Law and Policy Center in Chicago.
Wind-generated electricity supplied about 3.4 per cent of U.S. demand in 2012 — a share projected to jump to 4.2 per cent in 2014, according to the U.S. Energy Information Administration.
The wind power boom has benefited consumers in regions like the Midwest, where wind development is fastest, contributing to a 40-per-cent wholesale power-price plunge since 2008. The surplus is creating havoc for nuclear and coal generators that sell their output into short-term markets.
In the capacity-glutted Midwest, Richmond, Va.based Dominion is closing a money-losing reactor and selling coal plants, Exelon warns of shrinking nuclear margins and an Edison International coal-plant unit is into bankruptcy.