Guest post by Steve Goreham
The U.S. wind industry is in despair. The Production Tax Credit (PTC), a subsidy of 2.2 cents per kilowatt hour to producers of electricity from wind turbines, is set to expire at the end of this year. The American Wind Energy Association cites a study by Navigant Consulting, claiming that, “…37,000 Americans stand to lose their jobs by the end of the first quarter of 2013 if Congress does not extend the PTC.”
The Natural Resources Defense Council, the Sierra Club, and other environmental groups have rushed to the defense of the PTC. The Sierra Club states, “At a time when we need clean energy more than ever, we simply cannot afford to let the PTC expire.” The PTC is the cornerstone of President Obama’s green energy program and a key measure supported by environmental efforts to fight global warming.
The Production Tax Credit was established by the Energy Policy Act of 1992 to support the nascent wind industry. But twenty years later, is this subsidy still needed? By the end of 2011, 39,000 wind turbine towers were operating in the United States and about 185,000 turbines were in operation worldwide, according to the International Energy Agency. This is no longer an infant industry. Despite the large number of wind towers, wind provides less than one percent of U.S. energy and less than one percent of global energy. A one-year extension of the PTC would cost American taxpayers over $12 billion.
In September, 19 companies sent a letter to the leaders of the U.S. House of Representatives, urging extension of the PTC. Why would Johnson & Johnson, Sprint, Starbucks, and other signers of the letter support subsidies for another industry? They voiced concern that “Failure to extend the PTC for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy…”
Never has corporate America been so misguided. Foolish policies like the PTC and proactive company programs to buy “green” renewable energy are based on Climatism, the belief that man-made greenhouse gases are destroying Earth’s climate. An increasing body of science shows that climate change is natural and that human emissions are insignificant. Nevertheless, Johnson & Johnson’s web site claims a reduction of 23 percent in carbon dioxide emissions from 1990‒2010. That emissions reduction and two bucks might get you a cup of Starbuck’s coffee.
While many people would like to power the world with zephyrs, the intermittency of the wind means that wind turbines cannot replace conventional nuclear, natural gas, or coal power plants. The 39,000 U.S. wind turbines generated only 29% of their rated output during 2011. When the wind doesn’t blow, conventional power plants must provide backup power if continuity of electrical supply is to be maintained.
In fact, electricity sourced from wind turbines does not cut CO2 emissions from a power system. Because of the rapid variation in the wind, backup coal or natural gas power plants must frequently and inefficiently cycle on and off to support demand. Studies from electrical power systems in Netherlands, Colorado, and Texas show that combined wind-conventional systems emit more CO2 and use more fuel than conventional systems alone.
Wind is also more costly than conventional systems. Analysis from the U.S. Department of Energy (DOE) shows that electricity from both coal and natural gas is much less expensive than from wind power, without requiring subsidies for operation. The DOE estimates the world has 200 years of technically recoverable reserves of natural gas, thanks to the hydraulic fracturing revolution. If the theory of man-made global warming is wrong, why subsidize another wind turbine?
The government can always provide subsidies to create jobs or to sustain jobs, but this may not be the best public policy. Thomas Jefferson was correct when he said, “It is error alone which requires the support of government. Truth can stand by itself.” Suppose we let the wind industry compete on its own merit?
Steve Goreham is Executive Director of the Climate Science Coalition of America and author of the new book The Mad, Mad, Mad World of Climatism: Mankind and Climate Change Mania
So they are saying that we can solve unemployment by using tax money to pay people to work. It It will result in more tax revenue from the incomes which we can use to pay for it. So that works out well. Doncha just love the Socialist free lunch?
In one respect, I find myself in agreement with the Governors’ Wind Energy Coalition letter in support of the PTC, which says, “The nation’s wind industry is again facing the boom-bust cycle in large measure due to an inconsistent tax policy.” I agree that we should reduce the uncertainty by adopting a consistent policy. Specifically, a policy of government non-interference in the industry — zero subsidy. Let the generating companies decide which is more cost-effective. Where wind power is less expensive than conventional power sources, it will be used; where it is less efficient, it won’t be.
The Representatives’ letter opposing extension of the PTC says, “Our nation can simply no longer afford to pick winners and losers in the energy marketplace.” The problem is that government has an inherent tendency to favor losers; winning approaches tend to be self-starting and don’t need to lobby for government support.
In the good old days, the idea was to make large amounts of electricity with as few a number of employees as possible – it’s called productivity. In the new era of wind power, the idea seems to be to make a small amount of electricity with as many employees as possible – it’s called economic madness (or, to be politically correct – sustainability).
It is not only about subsidies. The full weight of environmental protection & regulation should be brought down on industrial scale wind farms. Externalities like infrasound emissions (down to 0.1 Hz & up to 120 dB), road networks built for heavy trucks in pastoral landscapes, endangered birds chopped and the like should be payed for by the industry itself, at full price. End-of-lifecycle decommissioning should be enforced, by compulsory reserves built for that specific purpose. Never let them escape to bankruptcy, making the general public pay for it from taxpayer’s money.
at least the MSM in Australia are calling out Tim Flannery for once:
27 Nov: Andrew Bolt: Flannery’s 100 per cent fantasy
Terry McCrann fact-checks Chief Climate Commissioner Tim Flannery’s latest prediction:
The latest effort from its so-called ‘chief climate commissioner’ really takes the cake with his absurd claim that Australia could be powered “almost entirely by renewable energy.” …
Yes, the body of his report does note that some 65 per cent of that 10 per cent comes from hydro. It’s arguably closer to 80 per cent in non-drought years.
That means barely 2 per cent of our total electricity comes from what the average person would think as ‘renewable’… Wind and solar…
That means even using his optimistic numbers for current wind and solar generation, we would have to increase our installations of wind and solar by at least forty times what they are today to get 100 per cent of our electricity from these two “plentiful” sources….
But that’s to produce today’s power. Flannery’s talking about some decades ahead, when our demands will probably have doubled. So make that a 160-fold increase in windmills…
Solar and wind could even be the cheapest sources of power for retail users by 2030, Flannery trumpeted. As carbon prices rise, he added.
Yes, the greatest half-truth of the climate propagandists. Make real power sources ridiculously, unnecessarily expensive and suddenly wind and solar become “cheap.”…
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/flannerys_100_per_cent_fantasy/
the day of reckoning is coming as more and more people find they can’t pay their bills on account of this CAGW lunacy…
Here is a ripper of a quote, sums it up in a few words…
Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
— Ronald Reagan (1986)
“The nine most terrifying words in the English language are, ‘I’m from the government, and I’m here to help.” – Former U.S. President, Ronald Reagan, 1986
Sorry I added another quote…
Rupert
I wonder if the Natural Resources Defense Council, the Sierra Club, and other environmental groups recognise this upwardly mobile figure:
$16,306,546,800,522.00
http://www.usdebtclocks.com/
Ah……probably not !!!!!!!!
“A one-year extension of the PTC would cost
American taxpayersChinese Lenders over $12 billion.”There, that’s more accurate… by the time we pay back the debt, it will be over $24 Billion… then again, maybe we’ll just “Pull an Argentina” and default on it…
Years ago I was sailing from Boston to the Bahamas on a sailboat, and the engine quit. So I know what it is like to have to rely on the wind.
We spent three days standing still with the water glassy in a dead calm. Each hour that passed, the Gulf Stream was drifting us back northwards around two miles. After three days we had drifted over a hundred miles the way we didn’t want to go.
People can get all romantic about the age of sail, and marvel over how beautiful clipper ships were, and scorn how dumpy tankers look. However when the wind is blowing you towards a reef, it sure is nice to have some sort of back up power. Many sailors died, during the “beautiful” age of sail, because they relied on wind alone.
Considering wind power is so dependant on back up power, to get us where we want to go, one wonders why we don’t skip the wind, and rely on back up power alone. This is especially true when you consider the fact wind turbines are neither as clean, cheap nor as environmentally friendly as people orginally promiced.
37,000 jobs to be lost if the US doesn’t subsidise wind-power? I wonder how many lives will be LOST if America doesn’t get its government finances in order? Witness the depression in Greece where ordinary people cannot get life-saving medicines because the government cannot be trusted to pay the pharmaceutical companies.
eo:
At November 26, 2012 at 9:38 pm you say
The wind industry is the most “mature” energy industry in the world.
The falsehood that wind needed “support” to “mature” is an example of Goebbles’ technique of propaganda; i.e. if a lie is to be believed then it has to be so outrageously untrue that few would doubt such a thing would be said unless it were true.
Wind power has been used for centuries. Wind energy powered most of the world’s shipping for thousands of years. Primitive wind turbines powered pumps (notably in the Netherlands and England) and mills throughout Europe for centuries.
There are a number of types of wind turbines. They are divided into Vertical-Axis and Horizontal-Axis types.
Vertical-axis windmills to mill corn were first developed by the Persians around 1500 BC, and they were still in use in the 1970’s in the Zahedan region. Sails were mounted on a boom attached to a shaft that turned vertically. The technology had spread to Northern Africa and Spain by 500 BC (3). Low-speed, vertical-axis windmills are still popular in Finland because they operate without adjustment when the direction of the wind changes. These inefficient Finnish wind turbines are usually made from a 200 litre oil drum split in half and are used to pump water and to aerate land (3). Low speed vertical-axis windmills for water pumping and air compressing are commercially available (a selection of commercial suppliers is at http://energy.sourceguides.com/businesses/byP/water/wPumpMills/wPumpMills.shtml).
The horizontal-axis wind turbine was invented in Egypt and Greece around 300 BC. It had 8 to 10 wooden beams rigged with sails, and a rotor which turned perpendicular to the wind direction. This type of wind turbine later became popular in Portugal and Greece.
Around 1200 AD, the crusaders built and developed the post-mill for milling grain. The turbine was mounted on a vertical post and could be rotated on top the post to keep the turbine facing the wind.
This post-mill technology was first adopted for electricity generation in Denmark in the late 1800’s. The technology soon spread to the U.S. where it was used to pump water and to irrigate crops across the Great Plains. During World War I, some American farmers rigged wind turbines to each generate 1 kW of DC current. Such wind turbines were mounted on buildings and towers. On western farms and railroad stations, wind turbines for pumping water were between 6 and 16m high and had 2 to 3m diameter. With 15kmh wind speed, a 2m-diameter turbine operating a 60cm diameter pump cylinder could lift 200 litres of water per hour to a height of 12m. A 4m diameter turbine could lift 250 litres per hour to a height of 38m.
The above brief history demonstrates that wind turbines can have useful niches to the present day. For example, small wind turbines can be used to economically pump water or generate electricity in remote locations distant to – or disconnected from (e.g. on boats) – an electricity grid supply. But wind power lost favour when the greater energy concentration in fossil fuels became widely available by use of steam engines.
Wind power has recently found favour for large scale electricity generation in some places, but the use of windpower was abandoned for such purposes with invention of the steam engine because it is uneconomic and impractical. Windpower is intermittent, inefficient and controlled by the wind. Water power was also used for centuries but was not abandoned with invention of the steam engine because water power is continuous, efficient, and controlled by its operators.
The steam engine is a much more modern technology than windpower and is inherently more economic and practical than windpower. Clearly, according to the arguments of windpower advocates, steam engine technology should be subsidised so it can “mature”.
Richard
http://wattsupwiththat.com/2012/08/18/mcintyres-talk-in-london-plus-the-uks-tilting-at-windmills-may-actually-increase-co2-emissions-over-natural-gas/#comment-1062160
[adapted from a 2009 comment]
Here is an excellent report from Germany. E.On Netz is (probably still) the largest wind power generator in the world.
E.On Netz Wind Power Report 2005, Germany
http://www.wind-watch.org/documents/wp-content/uploads/eonwindreport2005.pdf
Capacity Factor was ~20% (” The average feed-in over the year was 1,295MW, around one fifth of the average installed wind power capacity over the year”).
Perhaps more important than Capacity Factor is Substitution Factor, ~8% in 2005 and dropping to 4% by 2020 (this is “an objective measure of the extent to which wind farms are able to replace traditional power stations”).
Because wind does not blow all the time, you need almost 100% conventional power station backup for installed wind power.
In conclusion:
Wind power does not require “75% backup” or “4 times backup” – when wind power forms a significant component of grid generating capacity, it requires almost 100% backup from conventional power sources.
That is why wind power requires huge life-of-project subsidies and why it is fundamentally uneconomic.
Pumped storage is not a solution, except perhaps in the few parts of the world where hydro power is significant, and where additional pumped storage is available that is not already dedicated to other uses.
When wind power is significant, it can dangerously destabilize the entire electrical grid – see the example below from Christmas 2004 in Germany.
****************************************
EXCERPTS from
E.On Netz Wind Power Report 2005, Germany
formerly at http://www.eon-netz.com/…/EON_Netz_Windreport2005
FIGURE 5 shows the annual curve of wind power feed-in in the E.ON control area for 2004, from which it is possible to derive the wind power feed-in during the past year:
1. The highest wind power feed-in in the E.ON grid was just above 6,000MW for a brief period, or put another way the feed-in was around 85% of the installed wind power capacity at the time.
2. The average feed-in over the year was 1,295MW, around one fifth of the average installed wind power capacity over the year.
3. Over half of the year, the wind power feed-in was less than 14% of the average installed wind power capacity over the year.
The feed-in capacity can change frequently within a few hours. This is shown in FIGURE 6, which reproduces the course of wind power feedin during the Christmas week from 20 to 26 December 2004.
Whilst wind power feed-in at 9.15am on Christmas Eve reached its maximum for the year at 6,024MW, it fell to below 2,000MW within only 10 hours, a difference of over 4,000MW. This corresponds to the capacity of 8 x 500MW coal fired power station blocks. On Boxing Day, wind power feed-in in the E.ON grid fell to below 40MW.
Handling such significant differences in feed-in levels poses a major challenge to grid operators.
__________
In order to also guarantee reliable electricity supplies when wind farms produce little or no power, e.g. during periods of calm or storm-related shutdowns, traditional power station capacities must be available as a reserve. This means that wind farms can only replace traditional power station capacities to a limited degree.
An objective measure of the extent to which wind farms are able to replace traditional power stations, is the contribution towards guaranteed capacity which they make within an existing power station portfolio. Approximately this capacity may be dispensed within a traditional power station portfolio, without thereby prejudicing the level of supply reliability.
In 2004 two major German studies investigated the size of contribution that wind farms make towards guaranteed capacity. Both studies separately came to virtually identical conclusions, that wind energy currently contributes to the secure production capacity of the system, by providing 8% of its installed capacity. As wind power capacity rises, the lower availability of the wind farms determines the reliability of the system as a whole to an ever increasing extent. Consequently the greater reliability of traditional power stations becomes increasingly eclipsed.
As a result, the relative contribution of wind power to the guaranteed capacity of our supply system up to the year 2020 will fall continuously to around 4% (FIGURE 7).
In concrete terms, this means that in 2020, with a forecast wind power capacity of over 48,000MW (Source: dena grid study), 2,000MW of traditional power production can be replaced by these wind farms.
*****************
http://wattsupwiththat.com/2012/07/06/from-the-ieee-a-skeptic-looks-at-alternative-energy/#comment-1026391
“The ultimate agenda of pro-Kyoto advocates is to eliminate fossil fuels, but this would result in a catastrophic shortfall in global energy supply – the wasteful, inefficient energy solutions proposed by Kyoto advocates simply cannot replace fossil fuels.”
Written by Sallie, Tim and me in 2002 – apparently, that was just too difficult to understand.
Full article at http://www.apegga.org/Members/Publications/peggs/WEB11_02/kyoto_pt.htm
Ten years and a trillion wasted dollars later, even some of the dimmest politicians are beginning to realize that wind and solar power and corn ethanol are “wasteful, inefficient energy solutions” that “simply cannot replace fossil fuels”.
Ten years and a trillion wasted dollars later, even some of the dimmest citizens are beginning to realize that we are governed by scoundrels and imbeciles. 🙂
Reality check says:
November 26, 2012 at 7:03 pm
Where was the bailout for the 18,000 Hostess workers about to be out of work? The people who won’t be hired due to Obamacare?…
_________________________________
However putting money in the pockets of your buddies is. Crony capitalism at its finest!
Well that is a mere pittance of lost jobs compared to those that are going to be lost come January, if the Congress RINOS cave to the President’s 51% “mandate” to raise the capital gains tax, and all those other taxes.
Oh I forgot, it is only on those making more than $250,000 per year (AGI). Guess who all is going to be making more than $250,000 per year AGI after the print and spend inflation finally kicks in, and the dollar really goes in the toilet.
Well I’ll bet that our new soon to be President again never considered that, when he said he was only going to stick it to the rich. So who’s going to force the rich to work to support the rest of us; slavery was outlawed a long time ago.
I may just give my ownself a tax break, and simply quit working, and spending except for food. I already got more toys than I really need. Yes 2013 is going to be a nice year for me.
Sorry for all you unemployed PhD Physics graduates, who are stuck depending on your climatism grants to keep you in the lifestyle you’ve become accustomed to.
Sustainable = Profitable. Anything that cannot exist without subsidies cannot be called sustainable.
“””””…..richardscourtney says:
November 27, 2012 at 3:04 am
eo:
At November 26, 2012 at 9:38 pm you say
If congress is transparent enough and calls a spade a spade, the correct name for the PTC should have been an Act to repeal the law of supply of and demand for the Wind Power Industry……”””””
Richard, where I came from, we know a lot about wind power, been using it for eons. Use it to push boats along instead of paddle wheels; and we are pretty good at it too.
One thing about wind power that became quite obvious, since the Americas Cup campaigns, from 1995 onward, is that a lot of people discovered there ain’t much wind power at ground level, or sea level, so all those racing sloops started to look more like Chinese Junks, with their highly square top sails, to put the sail area up high where the wind energy is.
Funny thing is our Polynesian Mates knew that eons ago, so they put their triangular sails upside down. Did I say, we do know a thing or two about wind power, which is why most savvy people don’t build vetical wind turbines, if they want a lot of wind power.
Of course horizontal wind turbines eventually shake themselves to pieces, with the synchronous vibration built in, as a result of that same vertical wind shear gradient.
Well has it occurred to anyone that subsidizing wind power is just a different slant on the broken window fallacy. The money stolen from other people for the subsidy payments, could have been used by its original owners to pay for some real work to be done, by productive people. Well Obama doesn’t want any productive people, which is why he is going to fine them till they quit woorking productively.
Don’t forget the subsidy is more than the federal 2.2 cents/kWh, much more. It includes RPS money from the states and additional transmission costs. In one region the extra wind-required transmission costs are more than the all-in cost of generating from natural gas. Wind is being rejected for many reasons and the PTC is just a convenient excuse.
george e. smith says:
November 27, 2012 at 3:58 am
‘highly square top sails’
Nothing new under the sun I think with gaff topsails and bowsprits too, just like my little 1935 carvel pitch pine on oak 4 tonner. Thames barges and spritsails too of course.
Interesting – that the logo of the American Wind Energy Association shows wind blowing at a wind turbine – but nothing coming out…
Says it all, really…
“Failure to extend the PTC for wind would tax our companies …” That’s enough of a reason to put a stop to it right there. Addiction to subsidies is real and it’s ugly. In this case, it’s so ugly you can even find a bunch of Texas conservatives down at the ol’ crack barrell.
“But extending the PTC can bring America’s homegrown, affordable, clean and abundant wind energy industry across the finish line to establish economic viability and long-term stability.” Wow. That’s quite the sails (pun intended) pitch, for those with not much upstairs or who were born yesterday. So is the lame excuse of saving 37,000 jobs, at an estimated cost to taxpayers of $325,000 per job. Big Wind is one industry which deserves to die. What they are anxiously waiting for of course, is for the Environmental Protection Rackets’ greenhouse gas rules to go into effect, making coal less economical.
george e. smith:
Thankyou for your post at November 27, 2012 at 3:58 am which comments on my post at November 27, 2012 at 3:04 am.
My post explained that windpower is the world’s most “mature” energy industry and, therefore, does not merit a subsidy to bring it to maturity.
My post was mostly an extract from the introductory sections of an Annual Prestigious Lecture I had the hounour of providing in 2006. It is not clear to me whether your comment is – or is not – in agreement with my post. However, although the lecture is old, it is not dated and – whether or not you agree with my post – I think it may interest you. It can be read at
http://scienceandpublicpolicy.org/images/stories/papers/reprint/courtney_2006_lecture.pdf
The lecture provides much more information and detail than my earlier brief presentation to a public forum in 2003 which William links in his post at November 26, 2012 at 6:57 pm.
Richard
How many jobs does an extra $12B in taxes cost each year?