The wind industry's lobbying of Congress to extend the Production Tax Credit (PTC) reached a fevered-pitch last week when the Federal government took no action on the PTC before recessing for August break. Ralph Cavanagh, director of the Natural Resources Defense Council's energy program called Congress' inaction a "criminally irresponsible failure", Sierra Club e-mailed marching orders to willing soldiers calling on them to demand their "do-nothing" representatives do something, and print media did its best to dutifully deliver the daily message: without the production tax credit, giant corporations now on the verge of unleashing an economic and environmental boom will go elsewhere, and our most desperate regions of the country will remain desperate.
WindAction Editorials filed under Taxes & Subsidies
This month, the U.S. Energy Information Administration (EIA) released an important analysis on Federal energy subsidies with a focus on electricity production. The total Federal energy-specific subsidies to all forms of energy was estimated at $16.6 billion for fiscal year 2007, more than double the estimated amounts in 1999 as calculated in 2007 dollars. Windaction.org was most interested in Table ES5 of the Executive Summary which itemizes subsidies paid per fuel-type as measured in megawatt hours (MWh) of generation. A subset of the table is listed below:
The Recorder newspaper published an interview with Judge Theodore Morrison, retiring member of Virginia's State Corporation Commission (SCC). Judge Morrison served on the Commission when it reviewed and conditionally permitted the controversial 39-megawatt Highland New Wind Development wind energy facility proposed for Allegheny Mountain in Virginia. Judge Morrison's comments are worth noting given the aggressive campaign now underway by the wind industry to pressure Congress into renewing the Federal Production Tax Credit (PTC) as part of the Economic Stimulus Package.
The wind industry has continuously lobbied Congress to enact a long-term extension of the federal production tax credit (PTC) since the incentive was first introduced in 1992. The PTC now represents up to one-third the return on a given wind farm. While it's true that fossil fuel generation also receives federal subsidies, when measured on a per kilowatt hour basis, wind is paid significantly more for a very minor percentage of overall generation (1% of U.S. consumption).
More than half the states in the U.S. have adopted a Renewable Portfolio Standard (RPS) requiring a percentage of electric generation come from renewable sources. A Lawrence Berkeley National Laboratory study found that 62% of the renewable generation needed to satisfy these RPSs will come from wind, with Texas and the Midwestern States seeing 94% compliance coming from wind energy.
Robert Bradley, in his seminal policy paper entitled Renewable Energy Not Cheap, Not "Green", discusses the Department of Energy's 1976 study which estimated wind power could supply nearly 20% of the U.S. electricity by 1995. By 1996, wind represented 1/10th of 1 percent share with clear signs the market was in decline. In 1997 Enron entered the picture with its purchase of Zond, one of the largest developers of wind generation. This, coupled with new state and federal restructuring initiatives that funneled billions into new subsidies for wind and other renewables, resuscitated the near-dead market.