The major federal tax and grant subsidies for windpower and other qualifying renewables are scheduled to expire at year-end. And claims of robust economics, competitiveness, and growth have given way to fear of a freer, less preferential market in 2013 and beyond. Wind’s artificial boom/upcoming bust is the risky business of political capitalism.
Last Friday’s edition of Environment & Energy Daily ran this story (sub. req.):
The American Wind Energy Association estimates that 10,000 jobs will be lost by September — primarily among manufacturers of wind turbines and components facing a dearth of orders for next year. By the end of the first quarter of 2013, the industry will have shed about 37,000 jobs without quick action on a PTC renewal, according to a widely cited study AWEA commissioned from Navigant Consulting. The industry estimates it employed about 78,000 people at the beginning of this year.
So in the next six-to-nine months, nearly one-half of the industry’s jobs will be gone just because a special tax break has lapsed? How lousy is this industry? What have we gotten for decades and tens of billions of dollars expended to date?
And what is the plan for the inevitable task of dismantling the industrial wind turbines that no longer spin but look like some industrial death scene from Planet of the Apes?
Competitive–or Almost So?
What about the repeated claims that windpower is almost competitive? Back in 1986, a representative of the American Wind Energy Association told Congress:
The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive. It has come to the point that the California Energy Commission has predicted windpower will be that State’s lowest cost source of energy in the 1990s, beating out even large-scale hydro. [1]
He added: “We are not quite there. We have hopes.”
Just last week (26 years later!) a new report from the United Nations Environment Program (UNEP) and the Renewable Energy Policy Network for the 21st Century stated that wind will be “fully competitive” with gas-fired power generation by 2016.
As reported by North American Windpower:
Based on current trends, it is predicted that the average onshore wind project worldwide will be fully competitive with combined-cycle gas turbine generation by 2016 – even in the U.S., where gas prices are expected to rebound to a point where they cover the cost of extraction, UNEP says. At present, this is true only of a minority of wind projects – those that use the most efficient turbines in locations with superior wind resources.
Such is just the latest in a long list of false hopes, exaggeration, and falsified promises from the industrial wind lobby. They present half-truths, white lies, and falsehoods to get taxpayer/ratepayer subsidies, and then warn against losing jobs to try to keep the government largesse going.
The same will be true in the future, as it has been in the past. Such is the inherent fate of dilute energy that is higher cost and intermittent, requiring blending with dense, reliable energy.
Doom-and-Gloom
Back to the E&E News piece, here is more angst from the proponents of extending the PTC:
Wind farm developers generally say they have placed few, if any, turbine orders for next year because of uncertainty over the PTC’s fate, and several companies have already announced plans to cancel or suspend projects that already have been in development.
Just this week, developer Gamesa canceled a 30-turbine project in Pennsylvania, the third project cancellation in that state in less than a month, following Iberdrola Renewables’ decision in May to abandon two planned wind farms, according to press reports. Also last month, Invenergy delayed until at least 2015 plans for a 15- to 18-turbine wind farm in Roanoke, Va., citing uncertainty around the production tax credit.
NRG Systems, which manufactures turbine components, announced last month it would lay off 18 employees to reduce its work force to 100, with the company’s CEO saying at the time that the decision was required in the face of a “deeply unstable” industry.
“The constant threat of expiration of the PTC is an example of how government can negatively impact the private sector. … And the slowdown in the wind sector because of the games that Congress is playing with the PTC should serve as a canary in the coal mine for the broader economy,” said Joshua Freed, who directs the clean energy program at the centrist think tank Third Way.
Time is of the essence because of the 12- to 18-month lead time wind farms require before they can become operational and begin generating the tax benefits, industry sources say. Even if the credit is extended in November or December, industry representatives predict a significant downturn in 2013 compared to what is expected to be a banner year for turbine deployment this year.
The good news? Resources wasted in the wind sector can be redeployed in the resource-needy oil and gas sector! To wit: Dear Wind Industry: We Need Your Workers and Materials (and taxpayers need your cessation).
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[1] Michael L. S. Bergey, American Wind Energy Association in Renewable Energy Industries, Hearing before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, 99th Cong., 2nd sess. (Washington, D.C.: Government Printing Office, 1986), p. 129 (emphasis added).
…so if, finally, repeal of the PTC (well, non-extension in perpetuity) will result in the ‘loss’ of 37,000 jobs by Q1 of 2013, and if the conservative estimate of 2 1/2: 1 of Spain’s experience (rather than the 7:1 of Italy) that means we get a net GAIN ~100,000 jobs.
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A good analysis would first separate energy from electricity, then compare all subsidy dollars versus all production. A good common denominator for energy comparison is the BTU. A good common denominator for electricity comparison is the mWh. This gives a better perspective to truly measure Return on Investment (taxpayer and ratepayer investment).
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Perhaps these government subsidized projects should, like hazardous waste sites, have a post closure bond/insurance/guarantee, so the eyesores are dismantled when the government trough dries up.
So the fact that the oil and gas industry was subsidized for literally decades means nothing to you? Also if you right wingers want to claim the expiring Bush tax cuts are in fact “increases” then how is this not an increase in tax on a given industry. You just tweak the numbers to suit your agenda.
The wind industry has supported me now for almost 5 years. None of you “energy experts” understands the technology involved or the constraints. It’s just the same mantra of “drill baby drill” – who cares if you cant drink the water from hydrofracking and shale gas operations – as if those industries aren’t ponzi schemes. You believe the the technology involved in hydro-fracking and deepwater drilling is “safe” in spite of decades of spills and toxins released that make people sick and yet you complain about wind turbines being “eyesores”.
Also its incredibly lame that you are mocking your fellow american’s job losses. Really truly – what is your agenda here? Do you honestly think you are here to “help” or do you just come to rant and listen to yourself in an echo-chamber?
Colin #8:
Wind talent needs to go where it is really needed and is sustainable, as judged by consumer demand. Shame on government for creating the artificial boom, and employee beware of entering a political business funded by temporary political majorities.
No mocking here, Colin. Workers deserve better, that’s all. Good public policy helps, not hinders, the labor force.
Colin #7:
Oil and gas were decades old and consumer driven when tax breaks began–not so with wind power that is all about government mandates.
http://www.instituteforenergyresearch.org/2011/11/21/u-s-energy-subsidies-wind-and-solar-have-no-argument/
There has never been an oil or gas mandate that I know of to rival renewable mandates, but tell me if you know of some.
And the relative size of the subsidies–wind is out of sight! http://www.forbes.com/sites/realspin/2011/08/15/where-federal-energy-subsidies-really-go/.
You’re characteristically kind in your response to Colin, Rob. First, you might have asked him what evidence he has that wind machines, which can’t produce modern power, can be an alternative to natural gas. That is, how is it that he thinks that a nondispatchable, zero capacity generating unit like wind can replace any conventional unit, including hydrofracking natural gas?
Second, why is it that subsidies, such as they are for conventional generating systems, with their responsive capacity, are infinitely preferable to subsidies for non capacity, unresponsive generating units?
Third, why not ask him to provide transparent documentation substantiating the number of full time employees working at wind plants in any given state–say Texas or Iowa? The numbers per wind plant will typically be not more than a handful. Now divide those numbers into the capital costs of the wind plants that tax dollars had subvented. Would Colin agree that these small numbers of wind jobs, produced at a cost to the taxpayer at hundreds of thousands of dollars per job (a conservative figure) is something that seems reasonable, particularly for electricity production that can only enhance the need for those hydrofrackers he so despises?
Wind is a scam of enormous proportion. Subsidies for it are akin to giving a second story burglary ring a ladder and an alibi. Buying politicians in the name of creating wind jobs should be a criminal offense.
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