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Category — Windpower: History and Issues

Where Wind Studies Go Wrong: Cullen in AEJ (Part II)

“The level of emissions savings provided by wind plants has never been conclusively determined, taking into account all the factors.”

Part I yesterday questioned the analysis and robustness of Joseph Cullen’s study, “Measuring the Environmental Benefits of Wind-Generated Electricity”. [1] Part II completes the commentary on this paper, covering:

  • Questionable data, which seriously inhibits any analysis of wind performance
  • Interstate trade in electricity, an often overlooked, but important, consideration in understanding impacts on emissions
  • A summary of the acknowledged shortcomings of this paper
  • Questionable opinions/claims made

Questionable Data

The level of emissions savings provided by wind plants has never been conclusively determined, taking into account all the factors. Further, there is no published accurate, minute-by-minute, actual fuel consumption or emissions by individual plant, especially for systems with notable levels of wind present. Note the limitations in the Katzenstein and Apt paper looked to by Cullen for corroboration as discussed in Part I.

In general, government reported emissions are estimates based on calculations using assumptions and relatively simple algorithms. In some cases, actual measurements are taken but are no better than those calculated as reported by the International Energy Agency (see page 35).

“Commercial instrumentation is available for monitoring CO2 concentration and flue gas volume flows. Given the limitations of such instrumentation, the accuracy of directly measured CO2 release is probably no better than that derived by indirect calculation.” (emphasis added)

A report by The Sustainable Energy Authority in Ireland, “Renewable Energy in Ireland”, in Appendix 1 also refreshingly recognizes the limitations to existing reporting methods.

“The assumption underpinning this approach is that the renewable plant is displacing the last plants to be dispatched to meet electricity demand, i.e. the marginal oil and gas plants. There are clear limitations in this analysis but it does provide useful indicative results.” (emphasis added for “indicative”, which is taken to mean “suggestive”)

“The limitations and caveats associated with this methodology include that it ignores any plant used to meet the associated reserve requirements of renewables. These open cycle plants will typically have lower efficiency and generate increased CO2 and NOx emissions compared with CCGT and these emissions should be incorporated into the analysis. The purpose of presenting a simplified analysis here is to provide initial insights into the amount of fossil fuels that are displaced by renewables and the amount of emissions thereby avoided.” (emphasis added)

The issue raised in the last quote speaks to the comments made in the Robustness section in Part I. [Read more →]

February 14, 2014   7 Comments

Where Wind Studies Go Wrong: Cullen in AEJ (Part I)

“The nature of the short-term operation of an electricity system is more like that of a machine than a market.”

A paper published by Joseph Cullen in the American Economic Journal: Economic Policy (November 2013), “Measuring the Environmental Benefits of Wind-Generated Electricity” [1] is important in two regards. First, using Texas data, it shows that even with notable emissions savings attributed to wind, the highly subsidized cost of wind is exceeded only by high estimates of the social costs of pollution.

Secondly and perhaps more importantly, his paper provides an opportunity to illustrate where wind-performance analyses fall short. This is the subject of this two-part post today and tomorrow, and is independent of the issue of carbon dioxide social benefits versus social costs.

Professor Cullen first determines how much electricity production of other generator types is offset by the presence of wind plants in the grid using a reduced form econometric model based on “…observed behavior and current market conditions.” The time frames for production are 15 minute intervals and two hour ahead forecasting by market participants. The market-oriented approach is exemplified by the following quote:

“When low marginal cost wind-generated electricity enters the grid, higher marginal cost fossil fuel generators will reduce their output.” (emphasis added) [Read more →]

February 13, 2014   6 Comments

Energy Tax Reform: Scrap the Baucus Proposal (Part IV: Negative Wealth Effects)

[Editor note: This is the final excerpt of a January 15 letter by Mr. Schleede to the Senate Finance Committee concerning the Baucus tax-reform proposal (December 18, 2013). Part I reprinted the executive summary and conclusions; Part II the high cost/low value of windpower. Part III the negative environmental effects of continued subsidization of windpower, including the “cleanliness” standard of the Baucus proposal.]

“Tax breaks and subsidies for wind transfer wealth from ordinary taxpayers and electric customers to “wind farm” owners, electric customers in some states, and the voluntary purchasers of high cost electricity from wind.”

During the past 20 years, a variety of tax breaks and special subsidies for the wind industry have had massive wealth transfer impacts. The proposed production tax credit (PTC) and investment tax credit (ITC) would extend such impact for years into the future. The Committee apparently has ignored the negative impacts of these transfers.

Three examples illustrate the depth of the wealth-transfer problem.

1. Wealth transfer from ordinary taxpayers to “wind farm” owners

Wealth is transferred from the pockets of ordinary taxpayers (and/or their children and grandchildren who inherit the national debt) to the pockets of “wind farm” owners.

This occurs because the PTC or ITC permit “Wind farm” owners to escape tax burden, with the result that ordinary taxpayers who do not enjoy such tax shelters must pick up the burden. During times of deficit spending, tax liability escaped by “wind farm” owners adds to amounts that must be borrowed to cover the deficit and, therefore adds to the huge and growing national debt burden that will fall on our children and grandchildren. [Read more →]

January 22, 2014   2 Comments

Energy Tax Reform: Scrap the Baucus Proposal (Part III: Environmental Issues)

[Editor note: This is the third except of a January 15 letter to the Senate Finance Committee concerning the Baucus tax-reform proposal of December 18, 2013. Part I reprinted the executive summary and conclusions; Part II the high cost/low value of windpower; and Part IV will review the negative environmental effects of continued subsidization of windpower, including the “cleanliness” standard of the Baucus proposal.]

For more than a decade, the wind industry and its advocates have created a false impression among many in the public, media, and government that electricity from wind is “clean” and can be provided without adverse environmental and ecological impacts.

As demonstrated earlier, the production of electricity from wind actually results in emission of air pollutants because electric grid managers are forced by the availability of electricity from wind to keep other, generally fossil-fueled, generating units immediately available to compensate for the unreliability, intermittence, and volatility of the output from wind turbines.

Six Issues

But that is not the only adverse environmental, ecological, scenic, and property value impact resulting from “wind farms.” Others include: [Read more →]

January 21, 2014   No Comments

Energy Tax Reform: Scrap the Baucus Proposal (Part II: High cost/low value of windpower)

[Editor note: This is the second of a four-part series reprinting the January 15th letter of Mr. Schleede to the Senate Finance Committee concerning the Baucus tax-reform proposal dated December 18, 2013. Part I yesterday reprinted the executive summary and conclusions; Parts III and Part IV next week will cover the environmental wealth effect issues of current public policies favoring wind power.]

The Senate Finance Committee has ignored adverse economic impacts of the massive tax breaks and subsidies that have been provided to owners of wind turbines and “wind farms” and, in effect, has proposed continuation of large tax breaks for these owners – all at the expense of ordinary taxpayers and electric customers.

The economic impacts of the proposed tax breaks on electric customers is not even mentioned in the rationale for the Committee’s new tax break scheme – unfortunately, another indication of the wide gulf between thinking and actions of members of Congress and the interests of ordinary people outside Washington who are burdened by costly Congressional actions.

High electricity bills, one of the impacts of wind energy subsidies, are directly harmful to consumers with limited income, and they drain money and jobs from local economies. Apart from the direct adverse impact on consumers and local economies, the economics of wind energy are decidedly negative because electricity from wind is high in true cost and low in true value.

High True Cost of Electricity from Wind

On the cost side, wind energy advocates have emphasized the fact that the energy source or “fuel” for wind turbine is free. They have played down or ignored the facts about the full, true monetary cost of wind energy, which must take into account all of the following: [Read more →]

January 17, 2014   2 Comments

Energy Tax Reform: Scrap the Baucus Proposal (Part I: Summary & Conclusions)

“Clearly, the wind industry would be a huge beneficiary of [this] proposed tax break scheme…. Almost certainly, lobbyists for the wind industry were heavily involved in the drafting of the Committee’s proposal…. It’s time for the Congress to consider the national interest, including the interests of citizens, taxpayers, and electric customers, before again extending tax breaks for the wind industry.”

MEMORANDUM FOR: Chairman and Members the Senate Finance Committee

SUBJECT: Energy Tax Break Proposal announced on December 18, 2013,

Thank you for the opportunity to comment on the December 18, 2013, Staff Discussion Draft of the Senate Finance Committee’s Energy Tax Reform proposal.

Your proposal to repeal all existing renewable energy tax breaks is a good one and it should proceed. Your proposal to adopt a new renewable energy tax break scheme should be scrapped.

This memorandum provides comments on the portion of the proposal dealing with energy used to generate electricity covered on pages 3 and 4 of the above cited document.

Executive Summary

The Committee’s proposal that would base the availability and size of the proposed tax break for energy used in producing electricity on “cleanliness” (specifically, “greenhouse gas emissions”) measured at a “generating facility” is faulty in three important respects; specifically: [Read more →]

January 16, 2014   2 Comments

“Clean Energy Economy in Three Charts” U.S. DOE Misleads Again

“Cost, even if it were accurately calculated, is much different than true ’value’, especially in the case of the intermittent, unreliable electricity from wind. This elementary fact cannot be unknown to energy specialists at the U.S. Department of Energy, or their political leaders. The fact that DOE issued such misleading material is sad. The fact that it is done at taxpayer expense is despicable.”

The U.S. Department of Energy (DOE) has, once again, issued a misleading document attempting to justify the massive tax dollars, subsidizes, and tax breaks that are being spend on renewable energy. The December 6, 2013, release is titled “The Clean Energy Economy in Three Charts.”

Unfortunately, this release will mislead gullible reporters and news outlets (it was reposted at Breaking Energy). Expect it to appear elsewhere. I hope others will take the time to challenge this blatant taxpayer-funded propaganda when they come across it.

Wind Energy Section

There is too much false and misleading information in the DOE release to correct with a single comment so I will deal only with the section on “wind energy.” In their attempt to defend wind energy, the authors picked two highly misleading statistical measures that have long been so recognized by serious observers of energy markets: [Read more →]

January 9, 2014   6 Comments

Speaking Truth to Wind Power (Recent IER Panel on the Hill)

“Here’s to a post-PTC world. One where, in Lisa Linowes words, ‘the industry shifts their business plans away from those based on tax avoidance to plans based on energy production’.”

Last month, the Institute for Energy Research (IER) held a policy luncheon on Capitol Hill to discuss the problems of wind power in light of the debate about whether to extend the long-standing (1992–) production tax credit (PTC). The event highlighted a new IER study calculating the “taker” and “payer” states from the PTC, Estimating the State-Level Impact of Federal Wind Energy.

I moderated the panel. Panelists included Travis Fisher (IER) and three leading grassroots activists: Lisa Linowes of New Hampshire, Tom Stacey from Ohio, and Kevon Martis of Michigan. Lisa, Tom, and Kevon are wind-power experts whose volunteer work is inspired by the economic waste and wholly unnecessary degradation of rural life.

I began by describing wind power as the perfect imperfect energy due to its economic and environmental drawbacks. Converting wind energy to electricity, indeed, has been a perennial folly since the 19th century for reasons explained in books of the day.

I identified industrial wind as a “crony industry,” given its tip-to-toe government dependence. Such is different from consumer-friendly industries that might be populated by some crony companies (firms desiring special government favor at the expense of competitors, ratepayers, or taxpayers).

Travis Fisher

Travis Fisher, coauthor of the new IER study, explained his methodology of comparing PTC tax receipts per state to tax payments from that state. The straightforward analysis found takers and payers in unusual places. Texas wind producers were the biggest takers, and California taxpayers the biggest payers, given where the wind turbines spin. [Read more →]

January 7, 2014   4 Comments

Fighting AWEA in OH, MI, and DC: Thank You Volunteers for a Great 2013!

Thinking back over the past 12 months, it is amazing the things the Interstate Informed Citizens Coalition have accomplished together.

We attended nearly every Energy Forum in the state and brought informed speakers and testimony  before the MPSC and MEO.

I was able to present as a formal speaker in Traverse City. We picketed several Energy Forum events and handed out literature across the state and made our “Death Turbine” infamous!

We strengthened our ties with our Ohio brethren, excluding college football:

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We picketed the AWEA in Columbus and East Lansing and got great press coverage for our efforts. [Read more →]

December 23, 2013   5 Comments

Let the PTC Expire: Letter and Signatories (100+ groups and counting)

“It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference.”

- Ludwig von Mises, Human Action (1940), p. 334 [4th Edition, 1966, p. 337].

Government goes to those who show up. The wind industry got there first (concentrated benefits, diffused costs). But the pro-consumer, pro-taxpayer, pro-freedom movement has staged an impressive counter attack against government-dependent cronyism. Energy politics dates from the mid-nineteenth century in the United States–but never has more than one hundred pro-liberty groups spoken with one voice before.

Will the wind Production Tax Credit expire as scheduled at the end of this year? The American Wind Energy Association (AWEA) hopes not. Why? Because continued expansion depends on the timing of this huge subsidy (see this graph by the editors of Real Clear Energy).

Letter and Signatories

Here is the November 4, 2013, letter to Congress from more than 100 signatories, big and small, city and grassroots, energy related and not. More signatories may add to this list.

Dear Senators and Representatives: [Read more →]

December 18, 2013   2 Comments