Wind Blows

by Dave Schuler on May 8, 2014

While we’re on the subject of what’s green and what isn’t, Tennessee Sen. Lamar Alexandar has an op-ed in the Wall Street Journal opposing the re-introduction of the wind power tax credit:

This giveaway expired in December. Yet on April 3 the Senate Finance Committee gave it new life by approving a $13 billion, two-year renewal within a package of 55 “tax extenders.” Once again, Washington is proving Ronald Reagan’s observation that “the nearest thing to eternal life that we’ll ever see on this Earth is a government program.”

The wind-production tax credit was first enacted in 1992. At the time, wind-power was considered a kind of “infant industry,” needing help to bring its technology up to speed and lead to lower costs. The tax credit has since been reborn eight times, even though President Obama’s Energy Secretary Stephen Chu in 2011 said that wind power is a “mature technology.” A mature technology should stand on its own in the marketplace.

I suspect that this explains the large windmill farms in midstate Illinois:

The 2.3-cent tax credit for each kilowatt-hour of wind-power electricity produced is sometimes worth more than the energy it subsidizes. Sometimes in some markets, for example in Texas and Illinois, the subsidy is so large that wind producers have paid utilities to take their electricity and still make a profit.

He offers three reasons not to support the subsidy

  1. It wastes money.
  2. It gives windmill operators a competitive advantage over other power generators which in turn makes it more likely that they’ll reduce capacity.
  3. At best wind power can only supplement other power sources rather than replace them.

Certainly #2 is the intention of the subsidy. If wind power doesn’t reduce power generation from coal, oil, or gas and does it at higher cost, what good is it?

I think that #3 is the really damning issue with wind power.

Here in Chicago the preponderance of electricity is generated using nuclear power and that has been the case for well over a generation. I honestly don’t see how any serious environmentalist can not support nuclear power and recently there appears to have been some movement in that direction. Luddites, yes.

I can also see how people who live in tectonically unstable parts of the country, e.g. California (or even Memphis) could be wary of nuclear power. One size does does not fit all and a solution that works in the upper Midwest might not be as prudent in the Southwest or Southeast.

{ 1 comment… read it below or add one }

PD Shaw May 8, 2014 at 10:09 am

There also seems to be a transmission issue, since where there is wind there is not often people. Investment in the electric distribution system makes more sense.

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