Posted on 12/11/2013 6:00:20 AM PST by thackney
Once again, the Production Tax Credit (PTC) - so crucial to the US wind industry - expires at the end of this year, but this time we're hardly hearing anything about it. It will likely quietly slip away during the night on New Year's Eve.
Although the credit serves the entire industry, wind manufacturers are particularly exposedrelated production facilities (in 44 states) will be left "blowing in the wind."
Thanks to the wind PTC, the US is one of the largest and fastest growing markets for wind energy. Some 70% of components for US wind farms are Made in the USA. 80,000 Americans are employed in the industry supply chain.
For the past two years, it cost an average of 4 cents per kilowatt hour to buy wind power under a long-term power purchase agreement - making wind energy competitive with fossil fuels.
After its strongest year ever in 2012, the wind industry struggled through 2013, as it ramped back up after the last minute (literally) extension of the PTC. Now that it is returning to healthy levels, it's Ground Hog day.
Here we go again. It's an all-too-familiar feeling. The PTC was allowed to expire in 2012, 2008, 2005, and 2003, before Congress passed an extension.
In the background, some are pushing for another extension of the credit, but that's being met by an equal if not stronger pushback from those who don't want to see it renewed.
This summer, Rep. Mike Fitzpatrick (R-PA) introduced a bill to extend the PTC for another six years and then phase it out permanently, "The PTC Certainty and Phase-Out Act of 2013" (H.R.2987).
But in late September, 23 groups including well known names like Koch Brother's-backed Americans for Prosperity, FreedomWorks and Club for Growth sent a letter to Congress pressuring them to let the PTC expire.
They call wind a mature industry that doesn't need "welfare," even as fossil fuel industries continue to fight to keep their century-long tax credits. The fact is that because the US does not have an energy policy, the tax code has been used to spur grow in all kinds of energy, but most estravagantly, oil, coal, gas and nuclear ... not wind and other renewables.
All of the Usual Suspects
Among the usual suspects agitating against the PTC is the American Energy Alliance (AEA), a conservative advocacy group, and the Institute for Energy Research, its affiliated think tank.
Founded in 2008 by Thomas Pyle - who had previously lobbied on behalf of such key fossil fuel advocates as the National Petrochemical and Refiners Association and the Koch Brothers-backed Americans for Prosperity - AEA released a study and an advertising campaign early this month that claims taxpayers in many U.S. regions are footing the bill for wind generation. Taxpayers, they say, have laid out over $12 billion on the PTC over the past 20 years.
An IER study, "Estimating the State-Level Impact of Federal Wind Energy Subsidies," calculates how much wind developers in each state received from the PTC in 2012. Their conclusion? 30 states paid more than they recouped from in-state wind energy, led by California, New York, Florida, New Jersey and Ohio.
"Studies like this are essential for the American public to understand what happens when government takes their money to fund expensive programs that benefit boutique industries. The present administration has picked wind as its favorite energy source and as a result, every American taxpayer loses," states Pyle, who currently serves as president of both AEA and IER.
Analysis is Flawed
"It doesn't take a Ph.D. in economics to see why this type of analysis is flawed," says Kevin Haley, strategic communications manager for the American Council on Renewable Energy (ACORE).
"By IER's logic," he says, "the long-embedded domestic manufacturing tax deduction for oil and gas, for example, would be unfairly slanted in favor of oil and gas-producing states - with the likes of Maryland, Nevada and Missouri "subsidizing" states like Texas, Louisiana and Oklahoma. The fact is, energy tax credits, the PTC included, are intended to support the energy industries - not the actual states themselves."
In fact, he argues, the PTC confers substantial economic benefits for states. "Take Michigan, one of IER's top ‘loser' states. Michigan is about to join the elite 'Gigawatt Club.... The PTC helped build a regional wind industry in Michigan that now comprises over 40 local businesses and 3,000-plus in-state jobs."
And of course the conservative groups don't mention that in the fiscal cliff deal that renewed the PTC, fossil fuel industries retained their tax advantages, amounting to $46 billion over the next 10 years. The wind PTC would cost $18 billion if it remained in place during that time.
As of early 2013, there are 60 gigawatts of wind capacity in the US, enough to supply 6% of electricity.
There is a big fight here in NH about bringing Hydro power down from Quebec. As you pointed out the St. Lawrence seaway flows 24/7 out of the Great Lakes. However, all the people in the northern tip of NH do not want the towers in their back yard. In the southern 2/3 of the state it will travel on existing right of ways. The big fight is that we do not need the power here in NH. We have plenty of capacity right now. What people do not take into account is the fact that the Seabrook Nuclear Plant will not produce power forever. It was built in the 1980’s. Hydro electricity is the cheapest electric power that you can generate. It also produces no greenhouse gases.
$0.04/kWh?
How much does it cost without all the subsidies?
Plus these bird-killing machines are a horrid blight on the landscape.
A friend works for a company that is associated with wind energy. That company has been buying up shuttered power plants. I find that interesting. Maybe they see the future is going back to the past?
You know, that decaying rusty turbine prospect has always concerned me. Unused rusty oil jacks are not pretty but wind turbines are so dang huge! People say that oh you just put in your contract that they have to be removed when no longer in use. I always thought that it sounds good but you can’t squeeze blood out of a turnip, if the company is bankrupt they won’t have money to remove those monstrosities.
Here in Michigan a lot of the dams used to produce power for small local power companies. With the growth and monopolization of power companies (we’re down to 2) they decommissions nearly all of the small dams in favor of centrally produced coal electricity.
However with modern tech the electricity can be fed into the grid from multiple sources. Also modern retrofits can produce much more power than they once did. Locally we did some digging and found that our little 180 acre lake with 10 foot of head could produce as much electricity as 6 to 10 average wind generators. With basic maintenance a small hydro plant can produce for 70 to 100 years before needing a serious overhaul.
Sedimentation is an issue but that’s happening without generators in place. Laminar flow aeration looks like one good solution. Basically its a grid of small air lines that pump tiny bubbles into the sediment near the dam to promote bacterial growth and promote decay.
The one (and only) good thing that has happened with the tax credits is really ironic:
In order to properly install a wind turbine generation station, provision must be made for backup generating capacity. (for all those who may not believe that the wind does not blow all the time, it does not).
That backup capacity is mostly natural gas powered.
Soooo.... what exists is a lot of natural gas generators that are seldom used.
At a moment’s notice, these can be turned on and boom, all the sudden you have a huge added delivery of the cheap, clean burning fuel which America has abundantly.
Ironic, eh?
We went through the same here in Western PA when 100 year old coal mines began caving in and leaking acid drainage into the creeks. The companies who were responsible for them were long-bankrupt.
There are no requirements to install backup capacity due to the installation of wind power turbines.
Rig it up with a conveyor to fire the boiler.
Maybe they want to use the electrical transmission line connection and associated substation while installing wind turbines.
And recently, this has become a significant issue in Texas because ERCOT has been saying that Texas needs to consider putting some power on stsndby. Apparently, market forces(high wholesale power prices during shortages) are not working, so says ERCOT.
“There are no requirements to install backup capacity due to the installation of wind power turbines. “
then it is not primary power generation, just supplementary.
Primary power generation requires backup.
Independent power producers sell to utilities.
Ain’t deregulation grand?
>>You know, that decaying rusty turbine prospect has always concerned me. Unused rusty oil jacks are not pretty but wind turbines are so dang huge! People say that oh you just put in your contract that they have to be removed when no longer in use. I always thought that it sounds good but you can’t squeeze blood out of a turnip, if the company is bankrupt they won’t have money to remove those monstrosities.<<
I’d imagine the scrap value is worth the cost of removing the windmills. Huh? Maybe? I’d hope so.
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