Wind Turbine Profits Blown Away in Portsmouth

First, let’s be clear about the economics of publicly backed wind turbines: The appearance of profit is only possible because the start-up costs are heavily subsidized and the expensive nature of the energy production is hidden by being spread out to all consumers, typically via mandated rates.

So, the $400,000 that the town of Portsmouth supposedly made on its giant fan was not a profit gained by offering a more efficient or desirable product, but by forcing other people to pay more.  (Sounds like a tax, doesn’t it?) The town government profited, but it would be wrong to extrapolate that benefit to the broader public… that is, the “we” that people seem to confuse with government bodies.

Now it appears that even that appearance of profit was illusory.  Alex Kuffner reports:

For three years, the $3-million windmill fulfilled that promise, making about $400,000 in profit for the town after accounting for maintenance and debt payments. But in February, the 1.5-megawatt turbine started to falter, shutting down for weeks at a time with technical problems. In June, it stopped spinning again, and it has not been started since.

Last week, the Town Council learned that the turbine’s gearbox had failed and would have to be replaced at a  cost of at least $460,000 — which would completely erase those three years of profit.

Keep in mind that the cost of repairs is not the whole story, because if the blades aren’t turning, the turbine isn’t earning any money for the town whatsoever, but the debt payments continue.

The piece that small-government, free-market folks have difficulty understanding is why anybody believes, in the first place, that people with no expertise in a particular industry — perhaps no expertise in business generally — will make better decisions if voters let them play with other people’s money.

I have no idea what the odds are that a half-million-dollar gear box will malfunction a few years into wind turbine operation, but even people with experience purchasing automobiles ought to have a sense that such things are possible. Whatever the case, it’s reasonable to suspect that if it were the town council’s own livelihood that had been hinging on highly technical parts (manufactured in foreign countries), rather than a little piece of everybody’s livelihood, either the project never would have happened or the safeguards would have been stronger.

If they hadn’t been, well, hey, the people suffering would actually have been the people who didn’t put those safeguards in place.  Now the people of Portsmouth are at the mercy of a German manufacturer’s supposedly generous offer to sell the town two gear boxes for the price of one, which ought to make town residents wonder three things:

  • What’s the profit margin on a $460,000 box of gears?
  • Will they get the same deal again in six to eight years if the experienced time proves to be the lifespan of this part?
  • What other expensive components are set to trigger new costs as soon as the “profitability” returns?

Moreover, anybody else across the state who has been wondering whether wind turbines are a good deal, when introduced through government agencies, should perhaps consider the question answered.

  • bill

    Point well taken, though somewhat obvious to anyone willing, and able, to think about it.

  • dave

    The Safeway Turbine (Bristol) worked for about a week. Someone should go talk to the owner about the benefits, or subsidies, of windmills. Quite frankly I do not think anyone cares as long as the benefit check shows up every month.

    Did you see the Solar scam article Sunday? The feature was a 70-year old school teacher who eliminated her $35 per month electricity bill by paying a $80 per month lease on the equipment.