Category — American Wind Energy Association (AWEA)

Ending industrial wind subsidies is a quadruple win: it fosters real jobs, promotes economic growth, protects endangered species, and elevates environmental values over image-making.

The public is coming to this view, not only energy realists. In the face of repeated efforts to extend (seemingly perpetual) wind energy subsidies by industry lobbyists, taxpayers and grass root environmentalists have said: ENOUGH.

Informed and inspired by a loose but growing national coalition of groups opposed to more giveaways with no scientifically proven net benefits, thousands of citizens called their senators and representatives – and rounded up enough Nay votes to run four different bills aground. For once, democracy worked.

A shocked American Wind Energy Association and its allies began even more aggressive recruiting of well-connected Democrat and Republican political operatives and cosponsors – and introducing more proposals like HR 3307 to extend the Production Tax Credit (PTC).

Parallel efforts were launched in state legislatures, to maintain mandates, subsidies, feed-in tariffs, renewable energy credits, and other “temporary” ratepayer and taxpayer obligations. [Read more →]

“The stakes here could not be clearer. Economic studies have shown that Congressional inaction on the PTC will kill 37,000 American jobs, shutter plants and cancel billions of dollars in private investment. Congress needs to understand that, with PTC uncertainty, layoffs have already begun and further job losses and even plant closings will accelerate each month as we near expiration in December.”

- Denise Bode, quoted in American Wind Energy Association, “As Wind Manufacturing Job Losses Loom, Bipartisan Wind Extension Drive Continues (February 16, 2012).

Three cheers for market-driven resource reallocation for personal and economic betterment.

Some of us can speak from personal experience. I was part of the 4,000-person layoff from Enron Corporation on Monday December 3, 2001. The economy became a little more efficient that day, as many started getting jobs at other energy companies and elsewhere where consumer demand was stronger.

Such is the ‘creative destruction’ of the market economy where the good replaces the bad, and where the even-better replaces the good.

The windpower industry is entering what could well be the beginning of a death cycle. Industrial wind is increasingly losing its special ratepayer and taxpayer support with democracies in deficit and consumers in search of cost and reliability advantages.

Judging from the ‘help wanted’ signs, the oil and gas industry stands ready to absorb the precious resources that have gone into the ‘Enron’ of energy sources. Some workers will need to be retrained, while others will find a closer integration of skills.

Perhaps even the employees of AWEA can become true environmentalists or libertarian to argue against ethanol and on-grid solar and light bulb mandates to close deficits and increase personal liberty. The pro-consumer, pro-taxpayer movement can always use a few more good women and men! [Read more →]

If you haven’t heard from the American Wind Energy Association (AWEA), you probably will.

Ominous, scary ads are running nationwide warning of the crushing blow to American jobs if Congress fails to extend the Production Tax Credit (‘PTC’), the 20-year ‘temporary’ subsidy most credited for market growth in the wind sector. The PTC is due to expire at the end of this year.

Most of the ads target particular House members who, so far, have resisted the industry’s demands for their PTC earmark. The pressure is particularly heated right now as Congress negotiates the payroll tax holiday bill, which is viewed by many as the last best chance to attach an extension of the PTC before November’s presidential election.

AWEA is also leaning on its friends to do its bidding. Politicos from wind-friendly states like Iowa, and Kansas have written letters to members of the Congressional conference committee that’s now hashing out the tax bill. The letters repeat the same tired talking points about jobs.

Jobs Fallacy

It’s embarrassing to see these politicians blindly repeat what they’ve been told with no apparent understanding of the costs and impacts of pro-wind policies. Government (taxpayers) do not create jobs on net. Resources taken from the private sector reduced demand and thus (unseen) jobs to create the seen (wind) jobs.

But higher energy costs and misallocated resources in the process make us all poorer. Henry Hazlitt refuted ‘green jobs’ decades before the term was invented in Economics in One Lesson via his explanation of seen-versus-unseen jobs.

A Ballooned Subsidy

Do you think Senator Harkin or Governor Brownback realize that since the PTC was adopted in 1992, its annual cost has ballooned from $5 million a year in 1998 to over $1 billion annually today. Or that this open-ended subsidy of 2.2¢/kWh in after-tax income represents a pre-tax value of approximately 3.7¢/kWh? In many regions of the country the PTC equals, or exceeds the wholesale price of power! [Read more →]

Until the end of 2010, the American Wind Energy Association’s annual reports were in the public domain. The details of their business now go to members only.

What has changed? What information has the lobby organization decided to share only with insiders? And why?

A look at some of AWEA’s slanted and aggressive one liners, such as August 4th’s Continued Growth Depends on Consistent Tax Policy, is revealing. Make no mistake–the fate of the industry is not in the hands of consumers as it is with virtually all other goods and services in our economy. It is wholly government dependent. And in terms of the paramount budget debate, wind power is not viable without exemption from its American duty to help reduce our national debt.

AWEA’s predicament has lead them to simultaneously threaten and beg Congress. “Project activity and orders for 2013 and beyond are scant because of the lack of a predictable business environment, causing layoffs and even bankruptcies in American manufacturing plants and the supply chain,” said AWEA. “These struggles for U.S. wind manufacturers will only worsen if Congress were to allow the tax credit to expire.”

Recently, I told my 10-year old daughter that she had to clean up her room before having friends over to play.  Her response reminds me of AWEA’s threat/plea to Congress: “Daddy, if you don’t let me have a friend over this weekend, I’LL NEVER CLEAN MY ROOM AGAIN!”  What’s a father – or a Congress – to do?

And more from last week’s press release: “Clearly Congress cannot take for granted all the wind energy manufacturing and construction jobs that have been a bright spot through the recession.”

The nineteenth century classical liberal political economist Frédéric  Bastiat would not be impressed, and neither should be Congress. [Read more →]

The newly released Annual Market Report, 2010 from the American Wind Energy Association (AWEA) can be summed up in one word — Spin!

I’ve tracked the wind industry’s progress closely in the last six years, and mapping our observations to their declarations is always a challenge; AWEA’s reports are packed with assertions but rarely include the data and assumptions on which claims are based.

This year’s report was no different. To illustrate the point, it is useful to critically examine some of their claims. After all, we as taxpayers directly or indirectly enable the projects that make this trade association possible.

High Cost, Low Value

With natural gas selling at record lows, and supplies expected to be abundant through this decade, if not far longer, wind developers are under pressure from investors to secure power purchase agreements (PPAs) with utilities.

Most PPAs for onshore wind we’ve reviewed lock-in purchases for 15+ years at roughly twice the wholesale price of fossil and nuclear resources within their respective regions. In some cases, the prices are fixed regardless the time of day the energy is delivered or number of years into the contract; others apply adjustments for on- and off-peak energy and may include annual escalators.

In states where renewable portfolio standards have been adopted, utilities likely have no choice but to accept above-market rates which are passed through to customers in the rate base.

AWEA claims that average power purchase agreements for wind generation in 2010 were priced around 6 cents per kilowatt-hour (kWh), which it asserts approximates the same wholesale price for combined cycle natural gas plants–and is about 2 cents cheaper than coal-fired electricity. It might be true that wind PPAs are around 6 cents per kWh, but comparisons to natural gas and coal are not appropriate. [Read more →]