Three important questions are tied to the future of industrial wind power to continue to expand in the nation’s electricity mix.
1. Can the wind industry survive without the PTC?
The industry can no-longer claim to be nascent. There are more megawatts of wind operating in the US than nuclear power with tens of thousands of megawatts in development.
Moreover, for nearly a decade the wind industry has touted that it was ready (or nearly ready) to move off the PTC and grow on its own dime. The phase-down was intended to provide a glide path to traditional sources of construction financing.
But in 2020, tax equity still represents between 50-65% of project costs.
The industry used the phase-down as a six-year extension of the tax credit. In the period from 2016 to 2020, developers made no apparent effort to reduce reliance on the subsidy. Instead, they focused solely on beginning construction of as many wind megawatts as possible, especially in the years 2016 and 2017 when the subsidy had the greatest value.
It is unlikely the industry will ever be able to make up for the loss of the PTC using traditional construction financing–the reason wind interests no longer discuss weaning themselves off the subsidy.
2. Regardless of cost, isn’t it important to support wind/solar to reduce carbon emissions?
Any climate change policy must first assess the impacts of specific actions against the perceived benefits. Wind energy is an intermittent energy source that can only be produced when the wind is blowing. Even with over 100,000 megawatts operating in the U.S. very little of the capacity is relied on to meet critical peak periods. This is particularly true during hot summer afternoons when demand is highest. Despite the rhetoric that the United States can be powered 100% by wind energy, the reality is much different. There are other, more efficient ways of producing clean energy that can reliably meet demand that do not require billions in public subsidies.
It is also important to recognize the environmental impacts of renewable energy. Wind and solar have low power densities and thus require substantially more land than traditional sources of generation. Placement of the turbines requires tens of thousands of acres in order that the operation of one turbine does not interfere with others within the same project. The land moving and excavation necessary to accommodate turbine foundations and many miles of new access roads alters the landscape permanently despite allowing portions of the area to revegetate. This is especially true in virgin areas of the desert and on ridgelines. When considering the noise emitted from the turbines, the habitat is further disrupted.
Utility-scale solar projects concentrate sunlight that kills birds flying over, burning them to a crisp. Migrating waterfowl looking at large expanses of solar panels dive into them, thinking they are lakes, and are not able to regain flight. Large solar facilities often include perimeter fencing which prohibits free movement of migrating land animals. Square miles of land covered with solar panels lock out wildlife and destroy plant life.
These damaging impacts are multiplied by the sheer number of wind and solar projects being built now, and those proposed. Congress and many environmental groups are acting as though the impacts of wind and solar development are already well understood and mitigated for. This is not true. In fact, the science has not kept current with the rapid development.
3. What can we expect from Congress regarding the PTC?
Looking at language in the Moving Forward Act (H.R 2) passed by the House in July 2020, we can get a sense of the policies many Democratic members of Congress are pushing for renewables under the Green New Deal.
For example, H.R 2 calls for another five-year extension of the production tax credit at 60% of the current value. The bill also brings back the direct pay option which eliminates the need for tax investors. Armed with five more years of the PTC and cash grants, wind developers and their Corporate and Wall Street partners will have sufficient funding to get nearly any project permitted and built. Since Congress has repeatedly demonstrated its willingness to assist the industry, other extensions are likely to be enacted.
H.R.2 also establishes the goal of permitting no less than 25,000 megawatts of new wind, solar, and geothermal on public lands by 2025. In order for this to be accomplished, H.R. 2 calls for wind priority areas to be designated on public land where the environmental reviews of proposed projects will be expedited under a programmatic environmental impact statement. It is not clear from the language to what extent detailed, project-specific analyses will be allowed.
If serious wildlife issues arise after construction, it is impossible to enforce operational mitigation measures. A developer is only bound by the conditions in the EIS. If the permit assumes no adverse impact, there will be no mitigation measures for that impact, nor will there be monitoring to determine whether that assumption was correct.
Further, who decides the parameters for what is, and what is not suitable land for wind farm development matters. We’re only now beginning to understand how much of the wildlife resident or migrating through project areas have been killed or displace by the development.
The history of public policy towards industrial wind turbines reconfirms the insight from Milton and Rose Friedman: “The so-called infants never grow up.” But wind is less infant than it is inferior for new generation compared to, in particular, natural-gas-fired combined-cycle generation.
Wind is thought of as a free, endless source for electricity. But in business, economic, and ecological terms, it is just the opposite. The infrastructure required to turn free wind currents into usable energy–land, cement, steel, and long-distance transmission wires — are hardly inexpensive and limitless. Suitable sites that do not compromise health and property are quite finite, bringing the descriptor renewable into question.
This means that even with artificial (government-enabled) profitability, the resource faces what environmentalists a generation ago called the limits to growth.