Stretching or Ignoring Facts and Making Unwarranted Assumptions when Attempting to Justify Wind Energy
Wind energy developers, lobbyists, and other advocates are continuing to push federal and state political leaders and regulators to provide even more tax breaks and subsidies for wind energy, and to force local and state officials to override the growing citizen opposition to the construction of controversial “wind farms.” Some politicians appear sympathetic to the wind industry objectives, despite citizen opposition.
The growing citizen opposition to the construction of huge wind turbines is based on a wide variety of economic, energy, environmental, and ecological issues – ranging from economic cost and wealth transfer to electric grid impact, noise, bird and bat kills, impact on scenic vistas and neighbors property values. This paper focuses primarily on the economic and energy system issues and the challenges facing political leaders and regulators as they consider wind energy.
Discussions of wind energy now underway in Kansas are used in this paper to illustrate the issues and challenges facing both government officials and citizens.
Like many state and local governments, officials in Kansas have been trying to square “popular wisdom” about the merits of wind energy with the actual facts about wind energy. In Kansas, the Governor’s Kansas Energy Council (KEC) recently issued for public comment proposed recommendations dealing with wind energy.1 The proposed recommendations are a part of the KEC’s efforts to develop a new Kansas Energy Plan.
The Kansas Corporation Commission (KCC) has released a cost-benefit analysis prepared for the KEC by the Economics Staff of the KCC. The KCC staff analysis is in response to a “challenge” by the Governor “to have 1,000 megawatts of renewable energy capacity installed in Kansas by 2015.”2 As a result of its analysis, the KCC staff concluded that “meeting the [Governor’s] Challenge is likely to result in utilities having comparatively higher revenue requirements and, consequently higher rates”3 (emphasis in original). This conclusion is important because the KCC staff reached it without considering the full, true costs of electricity from wind energy.
The story doesn’t stop there. Faced with the challenge from the Governor, the KCC has considered a KEC proposal to add an arbitrarily assigned “external” cost to electricity generated from other energy sources so as to make electricity from wind appear cost effective. Similar approaches have been tried elsewhere and found unjustifiable.
When all the environmental, economic and energy facts about wind energy are considered objectively, it becomes very clear that wind energy is very costly. Building so-called “wind farms” or smaller wind energy facilities inevitably produces high costs and “winners” and “losers.”
The big winners are wind farm owners. The landowners who lease land for wind turbines “win” in a small way because they receive some additional income.
The big “losers” are electric customers and taxpayers who, together, bear the full true costs of electricity from wind energy. Other “losers” are those, including the landowners’ neighbors and all who are adversely affected by the environmental, ecological, scenic, and property value impact of huge wind turbines.
• Lists key reasons why political leaders and regulators are facing problems when attempting to deal with wind energy.
• Provides more information on the effort in Kansas to evaluate wind energy.
• Identifies facts about wind energy that are often not taken into account by political leaders and regulators.
• Comments on the efforts in Kansas to promote greater use of wind energy.
• Outlines lessons for all government officials that can be learned from the efforts in Kansas.
Lessons for all government officials faced with wind energy issues.
Clearly, government officials in Kansas certainly are not the only ones who are being confronted by the controversial matter of wind energy, by aggressive wind industry lobbyists with substantial resources at their command, and with proposed “wind farms” that are opposed strongly by citizens for a wide variety of energy, economic and environmental reasons.
The facts uncovered by citizen groups during the past three years and the work being done on wind energy in Kansas that is discussed above does provide the basis for several “lessons” for other federal, state and local government officials. For example:
1. Points made by the Staff of the Kansas Corporation Commission (KCC) about the unfavorable economics and higher cost of electricity from wind are likely to be applicable in other states and jurisdictions.
2. Much of the information about wind energy that has been made widely available by the wind industry and other wind energy advocates is not objective but, instead, is highly biased in favor of wind. All too often, this includes information prepared, funded and/or distributed – at taxpayer expense – by the US Department of Energy’s Office of Energy Efficiency and Renewable Energy (DOE-EERE) and DOE’s National Renewable Energy “Laboratory”
3. “Studies” and “analyses” prepared by individuals and organizations with a long history of doing work for promoters of wind energy should be evaluated carefully. During the past 15 years tens of millions of dollars (often tax dollars) have been spent by the wind industry, DOE-EERE, and NREL and the wind industry for “studies” and “analyses” of wind energy. All to often, it appears that such work is assigned to individuals and organizations that can be counted on to produce results and conclusions that fit the preconceived notions of the officials controlling the money and awarding the contract or grant.
4. Predictions that costs of electricity from wind will decrease should not be believed. Promoters of wind energy have long claimed that the cost of electricity from wind has decreased dramatically and will continue to decrease. Graphs showing this are found in DOE-EERE, NREL and industry documents and have often been used unwittingly in the media. Unfortunately, these predictions:
• Are based on assumptions that cannot be justified.
• Do not take into account all the true costs of wind energy, and
• Have already been proven to underestimate the costs that are considered.
The capital cost of wind turbines and, therefore, the cost per kWh of electricity from wind, have increased substantially during the past two years.
5. Government officials who are truly interested in serving the public interest must find ways to resist pressure from wind industry lobbyists and avoid assuming that the information they provide is objective. This task is proving increasingly difficult because of the involvement in wind energy by several large financial and energy organizations that are now capitalizing on the huge tax breaks and subsidies for wind energy and that have substantial resources that can be devoted to lobbying government officials at all levels. It is very clear that government officials who have adopted recommendations of wind energy promoters have created existing policies, tax breaks and subsidies that are now:
a. Transferring millions of dollars annually from the pockets of ordinary taxpayers and electric customers principally to a relatively few “wind farm” owning corporations, and
b. Misdirecting billions of capital investment dollars to energy projects (“wind farms”) that produce very little electricity – which electricity is high in cost and low in value because it is intermittent, volatile, unreliable and most likely to be available when least needed.