A tax reform plan drafted in part by incoming Trump administration Treasury Secretary Steven Mnuchin bodes poorly for wind industry lobbies hoping once again to extend current federal production tax credits (PTCs) which are set to expire by 2021.
Now set at 2.3 cents per kilowatt-hour, the original subsidy intent was to “level the energy market playing field” by stimulating technology development to achieve competitive costs, reduce fossil fuel “climate pollution,” and advance American energy independence.
None of these goals are really any closer to realization now than when these subsidies were first enacted in 1992.
Here are some key reasons:
Remote possibilities with fickle trickles
First, consider that even gargantuan wind installations covering thousands of acres generate only small amounts of unreliable power. The most ideal wind locations are remote from large urban and industrial regions where power demands are highest. This results in large transmission infrastructure costs and power loss inefficiencies.
The quality of that power isn’t any bargain, either. Unlike coal and natural gas-fired plants which provide reliable power when needed — including peak demand times — wind installation output varies substantially with local daily, monthly, and seasonal weather conditions independent of demands. This intermittence trend favors colder night-time periods rather than hot summer late afternoons when power is needed most.
Texas, one of the most promising wind energy states, averages only about 16.8% of the installed capacity.
Shadowy backup juggling and grid balancing acts
Those intermittent outputs require access to a “shadow capacity” which enables utilities to balance power grids when wind conditions aren’t optimum . . . which is most of the time.
Anti-fossil energy promoters aren’t eager to mention that those “spinning reserves” (which must equal the total wind capacity) are fueled by the same sort of coal or natural gas turbines that those friendly breezes were touted to replace.
Second-by-second grid management to insure uninterrupted power transfer becomes increasingly complex and inefficient as more and more intermittent sources are added to the power supply mix. Fossil-fueled turbines must be constantly throttled up and down to balance the grid, and wind energy overloads produced on blustery days must be dumped when regional power systems don’t have room for it. This introduces big inefficiencies… much like driving a car in stop-and-go traffic.
Short on longevity, long on maintenance
A major study of nearly 3,000 on-shore British wind farms found that the turbines have a very short –12- to 15-year– operating life, not the 20- to 25-year lifespans applied in politicized government and industry projections. The report also concluded that a typical turbine generated more than twice as much electricity during its first year than upon reaching 15 years of use. Performance deterioration for off-shore installations is even far worse.
The author, an Edinburgh University economist and former World Bank energy advisor, estimated that routine wear and tear will more than double the cost of electricity produced by Britain’s wind farms in the next decade in order for the government to meet present renewable energy targets.
Environmental and neighbor opposition
Along with high life-cycle investment and operations costs, let’s also add environmental costs to the mix. As with all other energy sources, many self-proclaimed environmentalists aren’t all keen on wind turbines either. A Sierra Club official described them as giant “Cuisinarts in the sky” for bird and bat slaughters. Nearby landowners are fighting them in the courts for un-neighborly human offenses.
“Not in My Backyard” (NIMBY) opposition typically arises from an aesthetic perspective where turbines and associated transmission lines dominate scenic vistas. Other local wind critics have legitimate health concerns about land-based installations. Common symptoms include headaches, nausea, sleeplessness, and ringing in ears resulting from prolonged exposure to inaudibly low “infrasound” frequencies that even penetrate walls.
Competitive free market fictions
big wind power investor has admitted, “[O]n 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.”
Production tax credits were first enacted to provide a “temporary boost” for fledgling wind and solar industries 25 years ago. That federal charity cost taxpayers $12 billion in 2014, amounting to around $23 per megawatt of power produced . . . about half the wholesale price of electricity.
This was about 50 times more subsidy support than received by coal and natural gas combined, yet wind and solar together produced less than 5% of total U.S. electricity. Wind farm hand-outs are even more generous when state and local tax credits are factored in.
No, wind is certainly not a “free,” reliable or economically competitive energy source. Nor is it a sustainable charity we can continue to afford blow money into.