Wind, Solar and Economies of Scale

Rich Sweeney goes beyond my casual “go read it” reference to the Economist article on renewables in Germany and actually explains its implications:

Like a lot of things, economies of scale are more complex than the renewables lobby would have you believe (Joseph Romm makes the scale argument a lot, and recently Daniel Weiss made a similar claim). However, government can’t simply, and infinitely, induce cost reductions by just promoting scale (I think Stalin made a similar miscalculation). Especially when one of the production inputs is scarce, as silicon is (at least in the short run).

Diseconomies of scale are actually even more of an issue for wind, as I’ve been meaning to post for some time. The technology itself, ie wind turbines, have been around for awhile and could probably be best characterized as mature (at least for high-speed winds). So the potential for cost reduction is probably relatively limited on the capital side. The other main input, however, is finite – wind. Moreover, not all winds (?) are created equal, with some sites being much harder to get too and further away from the grid. So for wind energy, there’s a real possibility of decreasing returns to scale, depending where you are on the supply curve.


  1. Yes, but surely there’s an even more real possibility of a sweet spot somewhere between where we are (not many turbines deployed) and where we would be putting too many too far from the points of use …

    … there may be a lot of real problems with wind, but the implicit argument that there isn’t much more to be gained in terms of scaled deployment seems wrong.

  2. Scale.

    My regular morning bike ride takes me past a half-dozen turbines. They are not on a grid, merely supplying the house below the electricity generated from the almost constant wind.

    It’s a wedge, a slice, a part of the solution, not all of it. Sadly, a goodly chunk of the solution is adjusting our lifestyles.



  3. The New York Times blog Dot Earth has interesting stories. Two recent ones are a dynamic time series of CO2 emissions over the entire U.S. and a discussion of large coal plants in India.

  4. Sand is silicon (oxide). There is not a shortage of silicon, but maybe of silicon solar cells. Anyone who starts off with such a boner is right away batting zero in the why should I believe him league.

  5. I think Sweeney was talking about the shortage of solar-grade silicon, which has certainly been real … but for a good reason, i.e., big uptick in people making solar cells.

    I would expect continuing cost reductions even in wind turbines, just for the usual reasons, but of course not forever. I think there are still a lot of places, and I’m especially fond of the fact that turbine footprints actually work OK in the middle of farmers’ fields, unlike solar. Since farmers are going to need electric tractors, this is actually not bad.

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