Wind Power

Time to Wind Down Wind Subsidies

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Your tax dollars blowing in the wind.

On the campaign trail President Barack Obama pushes for renewing the billions in federal subsidies that support the wind power industry on the grounds that it creates thousands of jobs. Of course, dumping government money into any activity will create jobs—the question is are such jobs worthwhile? Over at the Wall Street Journal, Senator Lamar Alexander (R-Tenn.) and Congressman Mike Pompeo (R-Kan.) argue in their op/ed, "Puff, the Magic Drag on the Economy," [sub required] that it's past time for federal production tax credit propping up the wind power industry to fade away. As they note:

From 2009 to 2013, federal revenues lost to wind-power developers are estimated to be $14 billion—$6 billion from the production tax credit, plus $8 billion courtesy of an alternative-energy subsidy in the stimulus package—according to the Joint Committee on Taxation and the Treasury Department. If Congress were to extend the production tax credit, it would mean an additional $12 billion cost to taxpayers over the next 10 years.

The two Capitol Hill denizens point out that the tax credit is so lucrative that the wind power producers crank their wind turbines even when the grid doesn't need the power. This leads to "negative pricing." Basically, wind producers flood the grid with electricity forcing baseload coal and nuclear plants—which can't just power up and down to take into wind power's inherent erratic production—to sell their power at a loss.

The result, as the two Capitol Hill denizens go on to explain, is that: 

Temporarily lower energy prices driven by wind-power's negative pricing will cripple clean-coal and nuclear-power companies. But running coal and nuclear out of business is not good for the U.S. economy. There is no way a country like this one—which uses 20% to 25% of all the electricity in the world—can operate with generators that turn only when the wind blows.

One might reply that building nimble natural gas plants which can respond more quickly to the fickle fluctuations of wind power could address this problem. Since this is so, why not just let commercial power generators build gas plants and save the money spent subsidizing wind?

But what about all those subsidized jobs? Lamar and Pompeo reply:

But they are jobs that exist only because of the subsidy. Keeping a weak technology alive that can't make it on its own won't create nearly as many jobs as the private sector could create if it had the kind of low-cost, reliable, clean electricity that wind power simply can't generate.

The point is that the money spent on subsidized wind could have been invested privately in ways that would have created even more jobs in more productive areas of the economy.

As background on green jobs versus real jobs, see my column, "The Unseen Consequences of Green Jobs." I also describe my visit to a wind farm in Montana in my article, "Wind Turbines Are Beautiful."

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  1. Wind power is horrible from a power engineer’s perspective as well.

    It’s impossible to control the power factor being put out by the generator with any precision. The result is that to produce the power the gird actually is demanding, a controllable generator has to be running at low power producing highly varying amounts of current.

    This, of course leads to lots of wear on the generator and also leads to higher emissions-per-watt than would be produced if the controllable generator was allowed to operate at peak efficiency.

    Little exposes the religious nature of the modern green movement as starkly as their infatuation with wind power. They’re bad ecologically (chopping up the ickle birdies), bad from a pollutant perspective, create energy poverty which hurts the poor most, and make the electrical grid less robust. But they dominate the sky, and make the breast swell with pride at the sight of the harvesting of nature’s bounty.

    1. Not to mention they are noisy as fuck.

    2. Re: tarran,

      It’s impossible to control the power factor being put out by the generator with any precision.

      It’s certainly not like bullseyeing womp rats with your T16 back home.

    3. I was under the impression that the angle of the blades could be adjusted to cap the power output at any given time. The power system doesn’t need absolute precision, it just needs to operate within frequency and transmission constraints.

      Fossil units have always had to regulate, wind didn’t change that. Your only other option is hydro/pump storage (which is great, if you can get it), but that’s geographically limited. If wind is introducing uncertainty, I would think it’s in load following and medium term planning.

  2. It was good to see Congressman Pompeo in the news again. It reminded me of his epic smackdown during the Solyndra trials.

    Here’s a trip down memory lane for you-

    http://www.youtube.com/watch?v=grPTJMQh9sU

    Congress needs more Mike Pompeo’s.

  3. Are the tax credits for nuclear, oil, gas, and coal production also on the chopping block? 26 USC 43, 45I, 45J, 45K.

  4. I’m lobbying for a Breaking Wind subsidy

  5. BTW To view any article in WSJ that requires a subscription, just Google it. If you come to WSJ via Google then it is not paywalled

  6. But they are jobs that exist only because of the subsidy. Keeping a weak technology alive that can’t make it on its own won’t create nearly as many jobs as the private sector could create if it had the kind of low-cost, reliable, clean electricity that wind power simply can’t generate.

    A great article by James Delingpole that talks about the alleged health issues that these machines cause on nearby homesteaders gets even more interesting when it talks about the direct subsidies received by farm or landowners from government for allowing a generator to be installed in their land (in Great Britain and Australia.) The direct subsidy becomes, for all intents and purposes, a direct bribe from the government to individuals to turn them into willing protectors of wind energy, even to the point of (alleged) violence against those neighbors that fight the wind turbines. The implications are quite scary, to the point of turning wind energy into the next Scientology.

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