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
The problems of system frequency have become apparent as more wind is added onto the grid. Even moreso with solar PV.
The talk of a “smart grid” that can manage rapid decline and rise of output from scattered generators ( wind and solar ) is still just talk. The issues of managing a myriad of small, variable, inputs coupled by a robust grid designed to handle a one directional flow to very large and stable power sources are beyond any technology at the moment.
I watch the British grid via http://www.gridwatch.templar.co.uk/ and it is very instructive. The installed capacity for wind is about 8500 Mw and right now it is running at 2200Mw with national demand at 4568 Mw. It looks like gas is used as the “throttle/brake” on the system.
As the German says at E.On , wind is not the answer to anything other than subsidies for the operator, higher costs for all consumers and a warm fuzzy green feeling for the cognoscenti.
Alex, that’s the most sensible advice I’ve heard in a long time. Unfortunately, this country is run by economic illiterates who were put in power by economically illiterate voters. Equally unfortunately, economic common sense is heterodox to current mainstream economic thought.
A couple of weeks ago a representative of the UK wind industry told a very obvious lie on the BBC Today program, but naturally the presenters didn’t pick him up on this. He stated that renewables were generating ‘just under ten percent’ of power generation. Of course, the installed base probably is ‘just under ten percent’. But there is a vast gulf between the installed base and the actual amount of generated electricity. Utilisation is probably around 20%, which means the amount of power actually being generated by wind farms is around 2%. Clearly the representative would have been fully aware of this, so this was, by definition, a lie. The terrifying thing is that our politicians may actually believe that lie.
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I wonder if the US wind industry tell the same basic lie?
Chris
The argument against the PTC is actually even much simpler than this post implies.
Utilities only buy wind power because state level Renewable Production Standards (RPSs) mandate that they do so. They will buy exactly the same amount of wind energy with or without the PTC, because wind projects are never economically justifiable.
The PTC impacts neither supply nor demand of wind energy. The PTCs only function is to spread the cost of wind energy across the whole country instead of making only states with RPSs pay for it.
The job losses thing is a lark. Projects get the PTC subsidy for several years if they are in service before the subsidy expires. Finish a project today, get the subsidy on all production for a decade. Finish it in five weeks and you’re SOL. But, everybody thinks the PTC will be renewed. So, they’re putting projects on hold until it is renewed (thus the job losses today). If it isn’t renewed, the projects (and jobs) will come back in a few months because the industry exists for the sole purpose of fulfilling state level mandates that are insensitive to economics.
Lose the mandates, and the industry would rapidly disappear. Lose the PTC, and they’ll moan about it for a bit then get back to the business of supplying a product that no utility wants to deal with.
george e. smith says:
November 27, 2012 at 4:08 am
… Well Obama doesn’t want any productive people, which is why he is going to fine them till they quit woorking productively.
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You got it. I quit the rat race a decade or more ago. My little business earns just enough to put food on the table and pay the bills but not enough to have to pay taxes except for property tax. I shop direct from other farmers & second hand so sales tax is hit and miss (More miss than hit)
People are “Going Galt” though they do not call it that.
There are 28,952,489 small businesses, 21,351,320 have no employees and 7,601,169 have employees. Of these 4,608,036 or over half earn less than a million a year (gross) These are the firms that employ half the private sector jobs and account for more than half the new job growth.
There are only 18,469 of the ‘Big boys’ that is firms with 500 employees or more.
90,386 Firms have 100 to 499 employees
and 526,307 Firms with 20 to 99 employees
These last two catagories are the firms that have to make hard decisions about Obamacare and the increases in Unemployment tax. The federal unemployment tax has not gone up but The state UC tax rate paid by employers is based on the state’s current unemployment rate. As their unemployment rates go up, the states are required by federal law to raise the UC tax rate paid by employers.
So what do these firms earn (gross)?
1,305,233 firms that hire employees earn less than $100,000., and as I stated above 4,608,036 or over half of the small firms earn less than a million a year. That is a pittance for a firm employing others and paying for all the overhead needed for running a business.
SOURCE
If you want to stimulate the economy it is simple, get rid of the [selfsnip] red tape! Red Tape is the hidden tax that saps the lifeblood out of small business and petty
DICTATORSbureaucrats do not give a rodents behind on whether they kill the economy. They rather justify their job. Politicians want to please the ‘big boys’ who pay for their re-election while giving lip service to ‘Helping small business’Killing unnessary ret tape is the simple solution for creating new jobs and Congress and state and local governments will never ever consider it because most of them are lawyers or connected to big business, both of who find massive red tape to their advantage.
Keith AB, the national demand is probably 4568 Gw, not Mw. Great page, btw. Very informative.
Does anyone have figures for:
Total # and capacity of wind turbines installed in US since the 1992 subsidy
Total # and capacity of wind turbines installed in US since 1992 still producing power
Total # and capacity of wind turbines actually removed in US since 1992
Total # and capacity of wind turbines no longer functioning but still in place (can be calculated from above).
Clearly prime turbine locations are at a premium. So if the technology is commercially viable dead turbines in prime locations will be removed and replaced with newer ones, just as older buildings in prime locations will be replaced with ones representing “highest and best use”. If instead new turbines are installed mainly in new locations and dead turbines are left in place (especially in better locations), then what is viable is the building of turbines, not the operation of them.
There is no point subsidising a type of power generation if the people collecting the subsidies clearly aren’t in it to generate power. We can argue about the value of renewable power, but I can’t imagine any argument to create more non power producing, public nuisance eyesores.
The Natural Resources Defense Council, the Sierra Club, and other environmental groups have rushed to the defense of the gravy train and crony capitalism.
Corrupt eco-activists. They should all be in jail.
@Brad Blake says:
>…yes, the subsidy for ethanol got dropped, but the trade off for the industry was a planned mandate to increase the % from 10 to 15%, creating a larger volume market.
It seems to get forgotten that the mandate to have xx many miles per gallon in undermined by the addition of ethanol to the fuel. Ethanol has an energy content of about 32.9 MJ/kg and gasoline about 48. Adding 15% ethanol of fuel reduces the MPG rating by about 5%.
If the entire enterprise relies on 2.2 cents/killowatt hour, the entire enterprise has no economic validity.
When businesses strain to make a profit, the management know it. This is the situation when those who can take the maximum salaries and bonuses they can, and sell stock at each good opportunity (leaving stock “on the table” is used as evidence that you still believe in the company, but it is actually just the red herring to distract from the profit you are actually taking). I’ll bet all but the line-workers are coming off the wind (and solar) excitement with mansions near Al Gore’s.
@Crispin in Waterloo,
“Ethanol has an energy content of about 32.9 MJ/kg and gasoline about 48. Adding 15% ethanol of fuel reduces the MPG rating by about 5%”
While your statement is reasonably accurate as applied to blended fules, you do need to consider more than just the raw energy content. The octane rating of the fule and the octane level the engine was designed for must both be considered as well.
The octane rating is a measure of a liquid fule’s resistance to spontaneous ignition under preasure. The higher the octane rating the more torque the engine can apply to the pistons. Increased torque makes an ICE engine more mechanically efficient.
Runing a high octane fule in a engine designed for a lower octane fule will result in reduced efficency. Runing a low octane fule in an engine designed for high octane fule will dammage the engine.
Gas has an octane rating in the range of 80-95 depending on the precise blend.
Pure ethanol has an octane rating of around 150. An IC engine properly designed for pure ethanol from the ground up would be both mechanically and thermally more efficent than an IC engine designed for gasoline. From what I have read the efficency gain is more than enough to compenaste for the reduction in raw energy per unit volume.
No problem here, if the Sierra Club and friends want the raptor dicing machinery to keep spinning, they can put up the money themselves. I intend to see these people pay for their scams/stupidity. If you are still pushing CAGW in whatever guise today, you are either lying or incompetent. Retribution (Justice) will require compensation from the malicious liars and ridicule for the gullible. Projection being a bitch and as ,our intellectual betters from, the team see us a violent ignorant rabble, unfit to question their wisdom, what the hell I can play along with that. Where are the alarmists going to hide? Once the western countries are bankrupted and enslaved? China? China will sell the useful idiots to the highest vengeful bidder, equal weight trade for iron ore? After all there appears to be no shortage of fools and China won’t need them once they own us.
Worst energy source imaginable. And those Chinese jobs that will be lost? Horrible.
george e. smith says:
November 27, 2012 at 3:47 am
It never ceases to amaze me how many people are in favor of raising someone else’s taxes.
MattS says:
November 27, 2012 at 8:51 am
How do you plan on converting the millions of cars already on the road so that they can burn ethanol efficiently?
There is a fetish aspect to green energy. David Suzuki wears a solar backpack when he walks to provide constant arousal. My neighbour gets wood when he talks about wind and solar. His activist friend promotes wind, solar and straw bales hoping to get laid with enviro-chicks. They pray to the planet before eating and debate “is green green enough”.
Logic and engineering are not relevant concepts
The Sierra club supporting a tax credit for giant bird killers. That is just wrong.
The costs of wind power and the subsidies associated with it are confusing, to say the least. Often, the cost is stated simply as a number and the units are not clear. I was able to find some more detailed discussions on several web sites, and I have tried to simplify the information.
The subsidy for wind power generated is $02.2 per KWH, the Production Tax Credit.
The total subsidy for the PTC is $12.18B over the period 2013 to 2022.
The yearly PTC is therefore about $1.2B per year.
The cost of the 37,000 jobs saved by the PTC is therefore about $32K per year per job.
There are other tax credits and grants associated with wind power. The WSJ reported that the total cost is around $4.9B per year for the wind power industry.
Power companies are required to buy the power, sometimes when they can’t use it, increasing the cost to the consumer. They must also maintain hot standby backup, with the net result that there is no reduction in fossil fuels burned .
Total jobs claimed directly and indirectly created by wind power is around 85,000. The cost to the taxpayer per job is therefore about $57,000 per year. On that basis, clearly it would be beneficial to let the industry die by eliminating all the grants, loans, subsidies, tax credits, etc.
http://www.nationalreview.com/articles/316854/cost-wind-energy-jobs-robert-bryce#
http://online.wsj.com/article/SB10001424053111903285704576559103573673300.html
http://www.masterresource.org/category/windpower/subsidiescost-of-windpower/
“””””…….richardscourtney says:
November 27, 2012 at 5:54 am
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…….””””””
Richard, I think you and I have been working on pretty much the same page for long enough now, that we don’t disagree much on anything important.
My follow on yours was entirely supportive; I always like to read all the factoids you manage to flush out from wherever you go hunting.
The synchronous shake to bits mode of horizontal wind turbines, is something I actually discovered (for me) while out fishing. My electric trolling motor, which hummed like a fine Swiss watch when the boat was up on the trailer, yet in the water, it rattled like it was about to blow a head gasket; how the hell could it get so far out of balance for no reason.
Turns out , you run those things quite shallw, so they don’t stick too far below the keel, so the propellor blade gets very close to the surface, where the water pressure is very small. Meanwhile the other blade is down deeper, with more water pressure, so it thrusts more efficiently, while the top blade is just splashing the surface water around (well not quite). So as the blade rotates, the thrust generated, increases to a max near the bottom, and drops to a min near the surface, so that generates a back and forth thrust cycle synchronized to the rotation speed.
Horizontal wind turbines do the same due to the height wind shear gradient. In addition of course to the axial thrust variation, the blade drive torque also cycles during the revolution, so theree is a torsional cyclic oscillation as well. No wonder they eventually kill themselves. And if you raise the tower heaight relative to blade diameter, you increase the structural problems of the tower itself.
And when you look at the huge land area required for the intake port, and the exhaust port of the “engine” (it’s really a sun driven gas turbine heat engine), the efficiency of extraction of solar energy from the atmosphere is abysmal.
George
Billy, I bet you’re from Canada’s left coast. What you’re describing sounds so Vancouver. Are these the same neighbours that agonize about old folks homes and Ronald McDonalds Houses in their backyards because they contain old people and the relatives of sick kids?
37,000 jobs lost. 74,000 new jobs created!
So, anyone got a read on whether our gutless wonders in the US Congress are going to renew this disfunctional subsidy?
Since John in L du B seems a reasonable sort who is not a NIMBY, maybe we can find out where he lives and put in a nuclear power plant next door.
Could someone report on whether this story is similarly mendacious:
If wind power is such a good idea, should not the manufacture and installation of the windmills be by wind-generated power only? I can only imagine the problems of producing the towers, wind vanes, electric generator machinery and concrete emplacements using only wind-generated electricity. It would certainly cut their numbers, and dramatically increase the cost of the windmills, thus showing to the world the fallacy of wind generation.