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Wind Farms DO NOT Provide Large Economic and Job Benefits (quite the opposite)

One would think that by now Obama Administration officials would admit that “wind farms” do not provide large economic and job benefits. However, recent Administration statements suggest the delusion continues and, perhaps, that officials do not understand why their expectations are unrealistic.

False expectations may be due to the infamous “JEDI” model (Jobs and Economic Development Impact model) developed for DOE’s National Renewable Energy Laboratory (NREL) by a wind industry consultant-lobbyist. Unfortunately, this “model”( paid for with our tax dollars) has been widely promoted by NREL and DOE and outputs from the model are used by “wind farm” developers to mislead the public, media, and government officials.

Economic models often produce false or misleading outputs because (a) the model itself is faulty, and/or (b) unrealistic assumptions are “fed into” to model, with the result that the models overstate national, state, and/or local job and other economic benefits.

In the case of wind energy models, basic flaws and faulty assumptions often include one or more of the following:

1. Ignoring the fact that much of the capital cost of “wind farms” is for equipment purchased elsewhere, often imported from other countries.  Some wind energy advocates claim that wind turbines are “manufactured” in the US when, in fact, they are merely assembled in the US using imported parts and components. About 75% of the capital cost of “wind farms” is for turbines, turbine parts and components, towers and blades – so a large share of the “wind farm” cost is for imports. These add to the outflow of wealth from the US and provide no economic or job benefits in the US.

2. Assuming that employment during project construction results in new jobs for local workers — when most “wind farm” construction jobs are short term (6 months or less) and the overwhelming share of them are filled by specialized workers who are brought in temporarily.

3. Assuming that the very few permanent “wind farm” jobs are new jobs filled by local workers – when, in fact, these few permanent jobs are often filled by people brought in for short periods. Some “wind farm” owners contracts with suppliers of wind turbines and other equipment for maintenance work with the result that no “new” jobs for local workers are added.

4. Assuming that temporary workers who are brought in for short periods live and spend their pay checks — and pay taxes — locally when, in fact, these workers spend most of their wages where they and their families have permanent residences — where the workers spend most of their weekends and where they pay nearly all of their taxes.

5. Assuming that the full purchase price of the goods and services purchased locally (often minimal in any case) has a local economic benefit.  In fact, only the local value added may have a local economic benefit.  This truth is illustrated by the purchase of a gallon of gasoline — let’s say for $3.00.  Only the wages of the service station employees, the dealer’s margin, and the taxes paid locally or to the state mayl have a local or state economic benefit.  Economic benefits associated with the share of the $3.00 that pays for the crude oil (much of it imported), refining, wholesaling, and transportation generally flows elsewhere.

6. Assuming that land rental payments to land owners for allowing wind turbines all have local economic benefit.  In fact, these payments will have little or no local economic benefit when the payments are to absentee landowners OR if the money is spent or invested elsewhere or is used to pay income taxes that flow to Washington DC or state capitals.

7. Using “input-output” models that spit out “indirect” job and other economic benefits that, in effect, magnify (a) all of the overestimates identified above, and (b) use unproven formula and data to calculate alleged “multiplier” effects.

8. Ignoring the environmental and economic COSTS imposed by “wind farm” development, which include (a) environmental, ecological, and economic costs associated with the production of the equipment, and  constructing and operating the “wind farm” (e.g., site and road clearing, (b) wildlife habitat destruction, noise, bird and bat kills and interference with migration and refuges, (c) scenic impairment, (d) neighboring property value impairment, and (e) infrastructure costs.

9. Ignoring the fact that electricity produced from wind turbines, has less real value than electricity from reliable generating units — because that output is intermittent, volatile and unreliable. Also, the electricity is most likely to be produced at night in colder months, not on hot weekday late afternoons in July and August when demand is high and the economic value of electricity is high.

10. Ignoring the “backup power” costs; i.e., the added cost resulting from having to keep reliable generating units immediately available (often running at less than peak efficiency) to keep electric grids in balance when those grids have to accept intermittent, volatile and unreliable output from “wind farms.”

11. Ignoring the fact that electricity from “wind farms” in remote areas generally results in high unit costs of transmission due to (a) the need to add transmission capacity, (b) the environmental, scenic and property value costs associated with transmission lines, (c) the electric transmission “line losses” (i.e., electricity produced by generating units but lost during transmission and never reaches customers or serves a useful purpose), and (d) inefficient use of transmission capacity because “wind farms” output is intermittent and unpredictable and seldom at the capacity of the transmission line that must be built to serve the “wind farm.”

12. Ignoring the fact that the higher true cost of the electricity from wind is passed along to ordinary electric customers and taxpayers via electric bills and tax bills which means that people who bear the costs have less money to spend on other needs (food, clothing, shelter, education, medical care — or hundreds of other things normally purchased in local stores), thus reducing the jobs associated with that spending and undermining local economies that would benefit from supplying these needs.

13. Perhaps most important, ignoring the fact that the investment dollars going to “renewable” energy sources would otherwise be available for investment for other purposes that would produce greater economic benefits. “Wind farms” have very high capital costs and relatively low operating costs compared to generating units using traditional energy sources. They also create far fewer jobs, particularly long-term jobs, and far fewer local economic benefits. “Wind farms” are simply a poor choice if the goals are to create jobs, add local economic benefits, or hold down electric bills.

Is it too much to ask for the new Congress to realistically view windpower and dispense with false hopes and promises?

36 comments

1 RexAlan { 01.05.11 at 4:59 am }

Is it too much to ask for the new Congress to realistically view windpower and dispense with false hopes and promises?

Don’t hold your breath waiting for it to happen!

2 Mike Giberson { 01.05.11 at 9:54 am }

All politician-talk about jobs is bunk, whether we are talking about building stadiums for sports teams or subsidizing favored industries. It isn’t the case that public spending has no effect, but that politicians just point to (usually exaggerated) seen effects and ignoring the unseen.

But I don’t think it is so much that politicians don’t understand how things work, as it is that they don’t really care. Announcing public projects and jobs programs, etc., allows the politicians to claim credit whether or not any credit is due. That’s good enough for the politician; truth is irrelevant because voters don’t understand the bigger picture.

A good rule of thumb: when a politician says the words “create jobs,” you should laugh at them.

But there is little wrong with paying to import useful goods, services, and raw materials, whether we are talking about crude oil or wind turbines. Most parts of the country couldn’t sustain their incomes without their paying for oil produced in other places and having it imported to their locale.

3 Tom Stacy { 01.05.11 at 12:11 pm }

I generally agree with Mr. Giberson’s assumption about lawmakers, but I am not certain apathy is the problem so much as that they may be trying to think through energy policy from a longer term, and fear factored perspective.

The potential for crude oil demand to outstrip supply over the coming decade or two – for whatever reason – deserves at least some consideration in light of the build cycles for various electric generation technologies. Yes, I know proven reserves have historically risen beyond the wildest dreams of fortune tellers from a decade before. And I realize why. But innovation will someday run up against against a truly depleted resource base. Maybe not for a century or two. And maybe in 20 years.

What we know now is that wind and solar production profiles fit better with electrified transportation than with traditional electricity roles – mostly because electrified transportation necessarily entails energy storage. Admittedly this represents another huge expense with inefficiencies, stranded costs, resource shortages and all the other trimmings and environmental anguish of scaling up. The question, though, is how high might oil prices get, and might they get high enough to make electrified ground transportation scalable and competitive – and when?

If you get that far as a lawmaker, it opens up another series of questions about how quickly various generation and transmission technologies could come on line. Wind happens quickly in small amounts, but gradually and steadily for large amounts. That might fit well with a transition to electrified transportation. Nuclear happens in bigger chunks – but ten to fifteen years after a plant is permitted to build.

So I think lawmakers see wind as fitting in with gradually rising electricity demand better than nuclear, and with more manageable bites of upfront costs. They should not think this way at the exclusion of thinking about wind’s generation profile, though.

I believe nuclear energy is a much better way to go in the long term, and that we should commit to a policy that encourages a scale large enough to drive plant capital costs down. Energy density, feasibility to build proximate to loads, system reliability, resource sustainability, environmental concerns and economics all point to nuclear over so-called renewables.

But turning to nuclear – leaves a potential short term capacity shortage (not that wind alone even offers guaranteed capacity at an affordable price). So focusing on guaranteed capacity in the short term, we could opt for wind + natural gas – considerable amounts of which would require combustion turbines for fast response, or for gas alone as a capacity resource – using only high efficiency combined cycle plants running at a relatively steady and high output. This is a choice worth evaluating, as complex as is it, and would be a “bridge fuel” (as Pickens would say) to a nuclear powered future. This is my current thinking as to how to broach the topic with lawmakers and have them show more than closed mouth disinterest.

Hopefully readers will interpret this comment as an attempt to foster a dialog about what makes law makers tick and the best ways to reach them.

4 William J. Kelleher { 01.05.11 at 12:43 pm }

Wind energy may be another example of Lysenkoism. Where are the good engineering reports that prove or disprove the assumptions that wind energy will help solve our dependance on fossil fuels and will provide jobs in the US? Politicians don’t want to hear that wind energy will be a failure. New York State spent over $20 million to promote Plug Power’s fuel cell in every home served by natural gas. It was a scam from the very beginning. Wall Street has confirmed the scam. The cost of a share of Plug Power has gone from $120 to less than 50 cents.

5 Gary Novak { 01.05.11 at 2:40 pm }

Windmills are only expected to last 20 years. But it will take longer than that for “renewables” to replace fossil fuels. In the meantime, building windmills will use more fossil fuels than they replace and speed up the depletion.

The global average productivity of windmills is 24% of their rated capacity. This means that the transmission lines to them will only be used at 24% of the same capacity, or if they are over-rated even less. If transmission lines are rated 1.3 megawatts for each 1 megawatt of wind energy (the sort of buffer electricians like), their average use will be 18.5% of capacity. Such under-use of transmission lines will be a huge increase in costs, when renewables replace fossil fuels.

6 Jane Eggebeen { 01.05.11 at 4:56 pm }

Is it even remotely possible for wind energy to “replace” fossil fuels? Why hasn’t Denmark done that after 20 years? And if we only have just over 1% electricity generated by wind now (after the billions of dollars invested), I can’t even imagine how expensive it would be to increase it to 20%.

Why don’t lawmakers realize now, in the short term, that this is drastically too expensive? It doesn’t make sense to spend that much money on something “for the short-term”.

Do lawmakers honestly believe that electric vehicles will “replace” the need for oil? Even the “Volt”, at it’s price of $41,000. barely replaces the need for gas. How many Americans can afford a $41,000 vehicle? I say lawmakers need a reality check. We are broke, and we need to maximize our cheap natural resources like coal and gas, and make them cleaner. Do lawmakers really believe that we will “run out” of these resources? Is that true? Is the pursuit of wind energy a distorted dream of lawmakers that the wind can “replace” our need for oil?

7 Jon Boone { 01.05.11 at 6:29 pm }

The idea that a wind/natural gas tandem an effective, economically defensible replacement for oil is likely an accurate depiction of what many policy makers actually think. It is not an idea that should have much traction for those who seek honest energy policy, where the bulk of our energy use–electricity, transportation, heating–becomes increasingly more reliable and secure at more affordable cost. The few lawmakers who have the smallest clue about the issue should shun a wind/gas tandem as a highly Rube Goldbergesque enterprise, since gas alone could achieve all the goals set for the tandem, thus avoiding the capital costs, environmental treachery, and massive incivility induced by all those hiccuping entangled wind projects.

Again, let’s be clear about wind’s utter dysfunctionality: it is continuously at work destabilizing the match between supply and demand from the supply side, making everything involved with it work much harder just to remain in place, including those natural gas generators. Attempting to ingratiate oneself into the affections of those politicians touting wind, even as a halfway measure to nuclear, reveals a creepy kind of pretentiousness. Making believe that wind technology “could fit well with a transition to electrified transportation” is an old wind chestnut roasting in the same imaginative fire that helped forge a belief in ethanol as a cure for the cankers of energy dependence and in hydrogen fuel cells as a means of greenhouse gas emissions. Those enamored of Honda’s FCX Clarity, for example, should be compelled to explain from where all that hydrogen would come. Those hopped up about Tessla’s electric super car might also explain how long it would take wind to charge its battery.

8 Ed Reid { 01.06.11 at 9:58 am }

Before natural gas could be used as a “bridge” fuel, a lot of new wells would have to be completed to actually produce the gas and a lot of pipeline capacity would have to be constructed to move that natural gas to market. The necessary transmission pipeline capacity is not sitting in the ground waiting to be filled.

Before the requisite pipeline capacity was built, it would have to be financed. That is highly unlikely if the “bridge” is not long enough to permit full investment recovery. Investor altruism is an extremely limited commodity.

Before launching such a plan, it would appear helpful to have a goal established and clearly articulated. If that goal was an energy independent, all-electric, zero carbon emission society by 2050, achieving it would require commissioning ~80 large nuclear power plants per year beginning in 2020. While theoretically achievable in a society without a plaintiff’s bar and environmental activist groups, that achievement seems hardly likely in our version of the real world.

9 Global Warming Hoax Weekly Round-Up, Jan 6th 2011 « The Daily Bayonet { 01.06.11 at 11:50 am }

[...] On the topic of multi-billion pound con tricks – the UK is waking up to the news that wind turbines don’t work well.  Giant bird shredders have been sold on the easily misunderstood but optimistic ‘capacity’ number rather than the actual generating performance.  How does 22% efficiency sound.  Anyone?  Wind farms also do not create jobs. [...]

10 Jon Boone { 01.06.11 at 12:22 pm }

Nice comments, Ed. It’s seems reasonable for government to establish goals, such as you’ve mentioned here, even if the timetable to achieve them seems problematic. Any subsidies for the means of achieving those goals, however, should only be made available to implement technologies with proven effective capacity.

11 Ed Reid { 01.06.11 at 12:55 pm }
12 tadchem { 01.06.11 at 3:06 pm }

In my experience, Cost/Benefit analyses, of which JEDI is but one, are plagued by investigator bias. They aare invariably initiated by someone with a project to sell, and because of the salesman’s optimism, invariable overstate benefits and understate costs. When was the last time a major project came in *under* budget, or delivered on all promised benefits and a few unexpected ones?

13 Ed Reid { 01.06.11 at 5:09 pm }

Tom Stacy,

The District of Comedy should become a large scale demonstration project for a 100% renewables-supplied grid, with no backup from surrounding conventional generation, with the full non-incentivized cost of the power paid by our elected representatives as consumers at their places of residence. I suspect the combination of reduced reliability and increased cost would send a clear message which would be difficult to overlook.

Alternatively, the GSA energy system could become the first “green utility”, with the investment funded from the congressional budget and the operating cost “savings” allowed to flow back to the congressional budget. Again, full non-incentivized investment and operating cost.

I realize neither would ever be allowed to happen, but I can enjoy the image. :-)

14 Some Recent Energy and Environmental News « PA Pundits – International { 01.07.11 at 6:20 am }

[...] Schleede “False claims that ‘wind farms’ provide large economic and job benefits” <<http://www.masterresource.org/2011/01/false-wind-claims/>&gt; Yet another study (this one in Texas) concludes that the Green Jobs claims are way [...]

15 Wind Energy is a Corporate Welfare Scam | PolyMontanaPolyMontana { 03.21.11 at 4:23 pm }

[...] “economics” of wind are just as grim (See: http://www.masterresource.org/2011/01/false-wind-claims/). Let’s take a look at just a few of the government programs that enable the boondoggle of wind [...]

16 BILL HADING { 04.16.11 at 10:55 pm }

Wind generation information that is advertised as a replacement future saviour for the production of power supplies is completly false. By the very nature of their operational mode they can only supply harmonic power above the fundamental countries frequency i.e. English/Europe @50 cycles per second OR Americans 60 cycle per second.
This is dirty power that is forcebly imposed onto connected Systems that cause distortions and many irregularities of the consumers equipment that create increased hidden costs. None more so through the metering distortions.

17 Wind Farms DO NOT Provide Large Economic and Job Benefits (quite the opposite) { 09.13.11 at 7:08 am }

[...] By Glenn Schleede, Master Resource Free-Market Energy Blog [...]

18 Wind farms useless! | { 11.19.11 at 6:53 pm }

[...] Wind farms do not provide large economic and job benefits ; Share this:TwitterFacebookPrintEmailLike this:LikeBe the first to like this post. This entry was posted in Local news and tagged Crookwell, turbines, wind power, windfarms. Bookmark the permalink. ← Taralga Bauxite [...]

19 Tom Kennedy { 02.26.12 at 2:08 pm }

Have you also included the cost of decommissioning out of date wind farms. I have seen estimates of 14,000 abandoned windmills in the US alone. Last summer I saw on the big island of Hawaii an abandoned wind farm ruining one of the most beautiful places on earth. per Delingpole it looked like ‘a bad war of th worlds movie set”.

I have pictures!

20 Tom Kennedy { 02.26.12 at 2:13 pm }

Here is more on windmills in Paradise:
Andrew Walden of American Thinker explored nearly 2 years ago the demise of the 37-turbine wind farm at Kamaoa Wind Farm in Hawaii: “Built in 1985, at the end of the boom, Kamaoa soon suffered from lack of maintenance. In 1994, the site lease was purchased by Redwood City, CA-based Apollo Energy. Cannibalizing parts from the original 37 turbines, Apollo personnel kept the declining facility going with outdated equipment. But even in a place where wind-shaped trees grow sideways, maintenance issues were overwhelming. By 2004 Kamaoa accounts began to show up on a Hawaii State Department of Finance list of unclaimed properties. In 2006, transmission was finally cut off by Hawaii Electric Company.California’s wind farms — then comprising about 80% of the world’s wind generation capacity — ceased to generate much more quickly than Kamaoa. In the best wind spots on earth, over 14,000 turbines were simply abandoned. Spinning, post-industrial junk which generates nothing but bird kills.”

21 Oxymoronic Windpower (Part I: Howlers) « Quixotes Last Stand { 03.06.12 at 7:53 am }

[...] doublespeak. Despite the promise of many jobs in the USA, for example, wind provides almost no permanent employment, with most wind manufacturing migrating to [...]

22 Energy 101 and Economics 101 | Venango County Tea Party Patriots { 05.10.12 at 11:43 am }

[...] – for families, factories, hospitals, schools, offices and shops. They squeeze budgets and cost jobs. Indeed, studies have found that two to four traditional jobs are lost for every wind or other [...]

23 Time to terminate Big Wind subsidies « Eco-Imperialism – Paul Driessen { 05.14.12 at 1:17 pm }

[...] – for families, factories, hospitals, schools, offices and shops. They squeeze budgets and cost jobs. Indeed, studies have found that two to four traditional jobs are lost for every wind or other [...]

24 Karl Rove Tilts at Windmills, Government Subsidized Windmills: This is a Problem, an Expensive, Disastrous Problem | A Time For Choosing { 06.12.12 at 12:21 pm }

[...] squeeze budgets and cost jobs. Indeed, studies have found that two to four traditional jobs are lost for every wind or other [...]

25 Save the birdies, please « Conservative in CA's Blog { 07.28.12 at 1:43 pm }

[...] electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job loser [...]

26 Save the birdies. Please « Conservative in CA's Blog { 07.28.12 at 1:46 pm }

[...] electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job loser [...]

27 Voting for wildlife extermination - Eco-Imperialism { 08.01.12 at 10:53 pm }

[...] rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is [...]

28 NetRight Daily » Voting for wildlife extermination { 08.02.12 at 8:22 am }

[...] electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job [...]

29 HACER Weekly News Report USA | US: Voting for wildlife extermination – by Paul Driessen { 08.03.12 at 1:30 pm }

[...] rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is [...]

30 Voting for wildlife extermination … Paul Driessen « Omega Dispatch { 08.04.12 at 10:04 am }

[...] electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job [...]

31 Voting for Wildlife Extermination « PA Pundits – International { 08.05.12 at 5:01 am }

[...] electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job [...]

32 Wind energy’s bird and bat butchery { 10.17.12 at 10:14 am }

[...] of the economy, to generate expensive, unreliable electricity, it kills two to four jobs for every “green” job created. Turbines harm people’s health and well-being and lower property values of nearby [...]

33 Time to terminate Big Wind subsidies { 11.01.12 at 1:05 pm }

[...] – for families, factories, hospitals, schools, offices and shops. They squeeze budgets and cost jobs. Indeed, studies have found that two to four traditional jobs are lost for every wind or other [...]

34 JR { 11.08.12 at 4:21 am }

Regardless of any of this, we still need to develop renewable energy. The only reason we can support such a large population is due to fossil fuels, when they run out, the human population will be reduced to about half a billion people globally unless we have developed something else by then. That means that of 16 people YOU know, only 1 is going to be allowed to live. This is not our choice and the only thing we can do about it is to ensure we find a new source of energy, any other developments are completely meaningless. Keep in mind also that every decade that passes we tend to be using as much fossil fuels as mankind has used in total, our use is growing exponentially – it’s irrelevant how many new reserves we find now. So basically, although wind energy will never replace fossil fuels, it may be able to play a part. No renewable energy is going to replace fossil fuels alone, it will have to be a mix of different technologies such as wave, wind, solar, and anything else we can find. The people who are going to suffer won’t be the generation of people reading this now, it will be your kids, grandkids, and great grandkids who are going to be eating each other if we don’t do something about it.

35 Stop subsidizing the slaughter! - Capitol Hill Outsider { 12.19.12 at 12:17 am }

[...] hospitals, school districts and other businesses, industrial wind power kills two to four jobs for every wind job created through government mandates, subsidies and tax credits – which themselves extract [...]

36 Jay { 12.29.12 at 7:47 pm }

It was wrong to use taxpayer money to subsidize wind or solar energy to begin with. But we did the wrong thing for 30 years. We should stop now and let the Hery Fords and Thomas Edison’s of today and the market forces take care of it.
In the meantime, we should go back to alternative energy that has proven to work., Nuclear. We already wasted decades in Nuclear Energy. Let’s go back and right a wrong policy.

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