Italian Energy Giant Invades America: The Cheapest Way to Make Expensive Electricity

Enel: An Italian Energy Giant Invades America (full series)
Eating Up the Environment | Trespassing Against the Osage Nation
Virtue Signaling | The Cheapest Way to Make Expensive Electricity

The Cheapest Way to Make Expensive Electricity

Even if those wind turbines were spinning right outside metro Atlanta with powerlines running right into the city, they never could have literally electrified all of Atlanta in real time. Thunder Ranch gobbles up 93 square miles to produce an annual average of roughly 1 TWh of electricity—only enough to electrify about 70,000 homes for a year. Even this assumes the absurd hypothetical that the wind blows exactly as much as needed, when it is needed.

Enel couldn’t come remotely close to electrifying any big city with the daily power produced at Thunder Ranch. Atlanta sits on 135 square miles. It is home to 499,000 residents and more than 14,000 businesses. Thunder Ranch likely needed to operate for roughly two months to generate the electricity that Enel claimed was “used to power Atlanta” during the Super Bowl week.

Most major cities are far more densely populated. Detroit sits on 139 square miles and is home to more than 620,000 people. San Francisco has more than 800,000 residents on just 47 square miles.

There are no magic batteries that can store up a week of energy for Atlanta and no trucks that can drive it there from Oklahoma to be used during the Super Bowl. The electricity for major cities must be produced on-demand.

This is why Enel has to sneak that “V” word into “virtual power purchase agreement.” It’s virtual, not real.

Here as well, there isn’t anything unusual about the behavior of Enel or AB InBev. Their Thunder Ranch arrangement is typical of what occurs when weather-dependent power advocates claim they have “replaced” coal or natural gas generation.

In truth, all they have done is add needless redundancy to an otherwise reliable system that works fine without them.

Coal, natural gas, and nuclear power plants remain necessary as backups for the frequent occasions when the wind and sun—like a flaky employee—won’t work. The more unreliability that is added to the system, the more backup is needed. It’s inescapable math.

Worse still, constantly starting up and stopping reliable power plants is the most expensive way to generate electricity from them.  It’s as logical as using an 18-wheel long-haul freight truck to deliver mail door to door in a densely populated subdivision. Getting to each mailbox is going to be absurdly expensive.

Although these added costs are inflicted on energy grids by weather-dependent power advocates, the extra expense get credited against the good old reliable energy systems. Those who understand this waggishly describe wind and solar as the cheapest method of generating overpriced electricity.

But the weather-dependent wonder twins have become the only source of virtue signaling in the energy market, which is why they chew up most of the subsidies. Despite being America’s leading source of zero-carbon power since anyone bothered to worry over carbon emissions, nuclear energy receives little credit and very little federal financial support by comparison.

Virtue signaling is valuable because it allows people to pretend the laws of physics can be ignored and to move those hefty subsidies for weather-dependent power into the pockets of industry advocates.

Always lucrative, subsidies for wind production are getting jumbo-sized by the so-called Inflation Reduction Act. A July 2023 blog posted on the Enel website provides guidance for the firm’s potential American-based partners who may wish to get in on the loot:

The domestic content bonus tax credit was created by the Inflation Reduction Act, which directs nearly $400 billion in federal incentives to the development of new clean energy and energy technology projects such as solar photovoltaic (PV), wind, geothermal and battery storage. . . . At Enel North America, our experts are prepared to help you unlock the maximum value of the domestic content bonus tax credit and other incentives offered by the Inflation Reduction Act. Contact us now to explore the opportunities available.

Whether Enel has been benefitting directly from weather-dependent power subsidies or indirectly through customers and clients, the American taxpayers have been very generous to those trying to capture tiny dribbles of energy from huge plots of America’s environment.

The headline from an August 2007 Reuters report announced Enel’s arrival on the American stage: “Enel to build wind farms in U.S. and Canada.” Fifteen years later Enel reported that 55.2 percent of total electricity it generates worldwide was still generated for Europe, with just 10.3 percent generated for North America.

Tellingly, the figures are reversed for Enel’s wind energy output. While just 21.3 percent of Enel’s wind energy was generated by spinning turbines in Europe, a disproportionate 45.9 percent of its wind output was generated by wind machines in North America.

A perfect explanation for this disparity was provided in 2014 by Warren Buffett:

I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.

Warren Buffett became one of the richest men in the history of Earth, but it wasn’t because he will be remembered as one of the planet’s most prolific providers of electricity. Enel is profiting from his example.