Glenn Schleede examines the financial incentives available to owners of industrial wind energy and how taxpayers and utility customers are picking up the tab.

Impatience to solve current problems has resulted in aggressive RPSs with strict deadlines. Although we agree that renewable technologies will help attain social goals, mandating rapid, massive deployment of these technologies will result in high cost, disputes over land use, and unreliable electricity, leading to a public backlash against these policies. The United States needs to focus on the goals, provide substantial incentives to meet them, and avoid polices that exclude economical ways to meet them.

Wind energy is growing rapidly because environmentalists think it has environmental benefits and the government has given it large tax incentives. But electricity consumers who want reliable delivery and who are truly concerned about the environment should question this preferential treatment. Wind energy is environmentally harmful and costly to taxpayers. Furthermore, its expansion could adversely affect the nation's electricity transmission system.

Key Energy Issues to 2025

The Energy Information Administration (EIA), in preparing model forecasts for its Annual Energy Outlook 2005 (AEO2005), evaluated a wide range of current trends and issues that could have major implications for U.S. energy markets over the 20-year forecast period, from 2005 to 2025. Trends in energy supply and demand are linked with such unpredictable factors as the performance of the U.S. economy overall, advances in technologies related to energy production and consumption, annual changes in weather patterns, and future public policy decisions [see endnote 1 on page 8]. Among the most important issues identified as having the potential to affect the complex behavior of the domestic energy economy, oil prices and natural gas supply were considered to be of particular significance in increasing the uncertainty associated with the AEO2005 reference case projections.

The Annual Energy Outlook presents long-term projections of energy supply, demand, and prices through 2030 prepared by the Energy Information Administration. The projections are based on results from EIA's National Energy Modeling System.

DOE released its first Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends: 2006 on May 31st, providing an overview of developments and trends in the U.S. wind power market. The report analyzes trends in the marketplace, including wind power prices compared to wholesale electricity prices, project costs, turbine sizes, and developer consolidation. It also describes the increasing performance of wind projects, current ownership and financing structures, and trends among major wind power purchasers.
The report notes that U.S. wind power capacity increased by 27 percent in 2006 and that the United States had the fastest-growing wind power capacity in the world in 2005 and 2006. For the second straight year, the United States led the world by installing 2,454 megawatts of wind power capacity in 2006—16 percent of the capacity installed worldwide that year—followed by Germany, India, Spain, and China. Leading the way in annual growth capacity in the United States are Texas, Washington, and California.

This is the pdf version with charts of Sen. Inhofe's speech. The full text version of the speech is available via the link below.

It's commonly believed that new wind power generation will displace coal and natural gas-fueled power plants and thereby avoid all their associated greenhouse gas (GHG) emissions such as carbon dioxide (CO2), nitrous oxide (NOX) and sulfur dioxide (SO2). The benefits of these avoided emissions have become a major factor in wind developers gaining public support for their plans to site wind farms. These purported benefits also are the reason for the large subsidies governments have provided to offset wind's higher power production costs. Unfortunately, some of these environmental claims are built upon incorrect assumptions about how U.S. environmental regulations actually work and the type of generation a new wind project will displace. On any given power project, the benefits of avoided air emissions can be calculated as the simple difference between whether a designated project is built versus if the project is not built. This simple calculation has been incorrectly done by several renewable project developers and their consultants. Their mistakes have led them to incorrectly claim large air emission benefits from building new wind facilities.

Mr. Linderman's presentation to the Annual Conference of the National Energy Modeling System (NEMS)