Skip to comments.The Withering of Wind Power; or Obama's Not a Smart Investor
Posted on 03/16/2014 10:24:12 AM PDT by Kaslin
Originally established in 1992, the wind energy production tax credit has had a lot to do with fueling the growth of the nation's wind energy generating capacity since its inception. The National Renewable Energy Laboratory reports just how much the installed capacity for wind has grown in the years from 2000 through 2012, much of which has been enabled by the wind energy production tax credit subsidy:
So with that kind of "success", why does the wind energy industry need a permanent tax credit? After all, the purpose of the tax credit was to greatly accelerate the growth of the nation's installed capacity for wind energy - not to permanently sustain it.
That's why the U.S. Congress is willing to do away with the wind energy industry's tax credit:
This sweetheart deal looks to be on its way out, in part because it succeeded in what it set out to do. Over the past five years, wind has accounted for 36 percent of all new electricity generation installed in the U.S., second only to new natural gas installations. Wind now supplies more than 4 percent of the countrys electricity. At about 60,000 megawatts, theres enough wind energy capacity to power 15.2 million U.S. homes, a more than twentyfold increase since 2000. Its still tiny compared to fossil fuel: Combined, coal and natural gas supply roughly two-thirds of U.S. electricity. But wind produces about six times more electricity than solar. Thats led Congress to take steps to do away with tax incentives first established in 1992 to help the fledgling industry take root. In December lawmakers allowed the credit to expire.
The problem though is that for all its apparent success, wind energy is far from being as reliable as the fans of renewable energy would make it seem:
In Texas, the wind tends to blow the hardest in the middle of the night. Thats also when most people are asleep and electricity prices drop, which would be a big problem for the companies that own the states 7,690 wind turbines if not for a 20-year-old federal subsidy that effectively pays them a flat rate for making clean energy no matter what time it is. Wind farms, whether privately owned or part of a public utility, receive a $23 tax credit for every megawatt-hour of electricity they generate. (A megawatt-hour is enough juice to power about 1,000 homes for one hour.) This credit, which was worth about $2 billion for all U.S. wind projects in 2013, has helped lower the price of electricity in parts of the country where wind power is prevalent, since wind producers can charge less and still turn a profit. In Texas, the biggest wind-producing state in the U.S., wind farms have occasionally sold electricity for less than zerothat is, theyve paid to provide power to the grid to undercut the states nuclear or coal energy providers.
To find out how reliable wind energy is for utility consumers, we've taken the NREL's data and calculated the average production for the nation's installed wind capacity, which we've presented in the table below:
|U.S. Total Installed Wind Electricity Capacity and Generation|
|Year||Installed Capacity [MW]||Electricity Generation [MWH]||Average Electricity Produced [MW]||Percentage of Installed Capacity|
For our calculation of Average Wind Energy Produced, we divided the total electricity generated by wind by 8,760, which is the number of hours in a year. The result gives us a good indication of how much of the claimed "Installed Capacity" for wind energy was actually realized, for which we've also calculated the percentage.
That math assumes that the wind power generating equipment that has been installed would be running 24 hours a day, which is far from the case, as the strength of the wind varies throughout the course of a day, and also for more mundane reasons, such as the need to perform periodic maintenance, during which the wind turbines are shut down from operating. As such, it does not give an indication of the efficiency at which electricity is generated while the wind turbines are running.
What it does do however is give us a good sense of how reliable wind energy is in generating electricity for utility consumers. From 2000 through 2012, what we find is that wind energy delivered anywhere from 18% to 29% of its installed capacity, demonstrating a considerable degree of unreliability for utility consumers compared to other methods of generating power. Going by the wind energy industry's own claims, instead of powering the equivalent of 15 million American homes, it's actually only powering enough power for somewhere between 2.7 and 4.35 million of them.
Put another way, for utility consumers, wind energy is only capable of delivering somewhere between one-fifth to less than one-third of its promise. And even then, it doesn't deliver what it produces when it's really needed.
That's why the wind energy industry badly needs its production tax credit to be made permanent:
That the green energy lobby is now working to make the wind energy tax credit a permanent burden upon U.S. taxpayers, even as the industry supporters claim the industry's "success", really means that the entire industry's business model is fatally flawed. In calling to make the tax credit permanent at their behest, President Obama is really communicating on their behalf that the wind energy industry will never be able to sustain itself without it.
A smart investor would recognize these things and cut their losses so they could move on to greener opportunities. Allowing the wind energy industry's tax credit to permanently expire rather than be made a permanent burden for American taxpayers would make that possible.
Alas, President Obama is not a smart investor. Especially where green energy is involved.
zer0’s job as a marxist and a disciple of Saul Alinsky and Vladimir Lenin is to destroy as much of the country’s wealth as possible. he is a very smart investor.
“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”
Not to mention the allowance this industry gets for killing protected wildlife like eagles and condors. And not a peep from the Sierra Club and other “green” organizations.
It never was about investments, It was about American bankruptment and offshore bank accouts from kickbacks.
I was going to comment about how incredibly misleading the first graph is; because the scales used make it appear that production almost perfectly matches capacity — yet, production is only about 20% of capacity. However, the article covers that point quite thoroughly, so I won’t be making any comment.*
* Well, except for the comment I just made above.**
** And the comment I just made above about commenting.
Wind Lobby must have ran out of money.
It’s “The Grid”, stupid.
Energy sources can be basically split into two functions.
“Something” has to just sit there and reliably hum along
day in and day out to cover the base load.
“Something Else” has to be reliably available at a moment’s notice
to handle the any surges and variations in the power demand.
There is no place to fit either Solar power or Wind Power into the mix.
The graph and the first few words of the article tell the story best.
Even though the production tax credit began in 1992, windpower didn't take off until 2001. So something is in play besides the tax credit. What is it?
The price of natural gas. Look at the graph.
The first natural gas shortages in 2000-2001 and the spike in nat gas prices at that time set off the first segment rise of the graph. Until 2005.
In 2005 the graph line(capacity) gets steeper which reflects the shortages and price rise of gas caused by Katrina. Until 2007.
In 2007 the graph line increases gets steeper again to reflect that the price of natural gas had started following the price of oil(going up).
The author is not well informed when he speaks about nighttime wind power in Texas. Because Texas generates more power from nat gas than from coal, wind is substituted for nat gas at night.
But in places like TX and CA where substantial amounts of the base load is provided by nat gas, then wind can be substituted in for nat gas as either base load or peak load.
“President Obama is not a smart investor.”
If B0 Soebarkah were our money fund manager we would all be broke. Oh, wait...
I disagree. Obama is an artifact of the Chicago mob. The goal is to redirect the wealth to the elites, not destroy it. All this "green" stuff is just crony capitalism.
Neither wind nor solar can replace any of our traditional sources.
Neither one can be provide either a reliable/dependable base load or a reliable/dependable peak load.
Some other source must constantly sit on low idle (typically this is a NG turbine) so it can be available at a split-moments notice.
My point was that a glance at the graph makes it seem that there’s a close match between capacity and production of wind power. A more honest graph would have shown that, while there’s a very strong corelation between capacity and production, in fact actual production is only 1/5 th of the potential production implied in the capacity figures.
You make good points about there being other factors involved — there always are. Grid management measures, such as the substitution of wind for natural gas that you mention, would certainly make things less bad, in practice. However, the fact remains: production is only 1/5 of potential production. The graph does not show that discrepency graphically (you can figure it out, but the graphics do not reflect reality). It’s not an honest graph.
In Texas no power plants are on standby, not since 2001. But they are talking about it as of late.
Lenin really said that? It's sooooooo Obama...
There is a difference in capacity and production for coal and nat gas also. And sometimes the nat gas and coal plants go off line unexpectedly
By making the capacity scale match the production scale; the graph does show that capacity and production are rising at about the same rate. That would be important, if you were interested in changes in efficiency. However, it also masks the fact that production is only 1/5 of total capacity.
Do you have a graph comparing the utilization factor for wind power, relative to coal and natural gas plants?
Ideally, no energy source would be subsidized. Arguments could be made about subsidies for R&D -- but, not for full industrial-scale commercial implementation.
“... no power plants are on standby ...”
Have to be; there is no other way to provide instantaneous demand.
You and I might not be using the terms “stand by” and “idle” the same way.
Don’t know about Texas, but here in Georgia we have a good mix
of hydro, nuclear, coal fired boilers, petroleum fired boilers, and natural gas turbines.
Many of our coal-fired boilers have been taken off-line (idled).
One of the most interesting is a big hydro dam
that uses water to generate electricity during the day
and then consumes some of the excess electricity at night
to pump the river water back up stream to use again the next day.