[MUSIC] So Texas and the high plains. And basically, the economics of
a wind farm depends two things, how often the wind blows,
very obviously, and how fast it blows? And a wind farm produces a maximum
capacity when the wind is blowing around about 18 miles an hour. And the Texas panhandles some of
the high plains, the wind blows at 15 to 20 miles an hour quite a lot of the time,
so you can get favorable economics there. In those acute locations you
can produce electricity for around about 3.5 cents a kilowatt an hour,
which is highly competitive, its much less than gas its much,
much less than coal. On the wind farm here on shore in
New York produce is much less efficient. The wind is less strong, it flows
less of the time on the cost here, it could be 8 or
9 cents per kilowatt an hour. The offshore wind farms have higher winds,
and more stable winds, so they’re more attractive for those reasons
but they also have higher capital cost. In an onshore wind farm you can build for roughly $1,500 a kilowatt
of capacity today. Offshore wind farms, I don’t quite know,
I haven’t have seen the quotations for the ones being built that you mentioned. But in Europe they’re going for
5,000 euros, 4 to 5,000 euros a kilowatt capacity,
something like that, so a lot more. So it’s a race, and does the extra
power output from the higher winds and more stable winds compensate for
the higher capital costs? And the power output actually goes
up with a cube of the wind speed. So you double the wind speed, you increase
the power output by a factor of eight, at least within limits. At a certain point it maxes out. So the economics of the off shore wind
farms is questionable at this point. I mean,
there are very few operating in the US. Another thing in their favor is location. I mean, most of the good wind sites in
the US are a long way from demand sites. So Texas Panhandle or the high plains,
Wyoming, places like that. So you have to have a 1,000, 1,500 mile
cable to bring the power to a market. If you put it ten miles offshore off Long
Island, you’re into the New York market, very short.>>East Hampton.>>Yeah,
it’s actually much lower connection costs. So in Europe, until very recently,
offshore wind was very expensive. It was more expensive than
onshore wind by a big factor. That’s just changed in the last year or
so. So last year, DONG Energy, Danish Oil and Natural Gas, they put up some
wind farms off the Danish coast which are supposedly producing power
at around 6 euro cents a kilowatt hour. That’s the lowest I’ve seen for
any offshore wind farms anywhere. If the wind farms here can
produce that kind of cost, they’d be very competitive because of
the good location near the demand centers. [MUSIC]