The large wind farms just to our north on the Kenedy Ranch are under construction and the owners expect to have 250 wind turbines generating enough electricity to power some 90,000 homes by the end of this year. Wind energy is touted as a clean, renewable power source whose time has come as a viable alternative to help reduce dependency on fossil fuels. However, a look at the economics of wind power points to a different conclusion.
While the privately owned Kenedy Ranch is the site of wind farms under development by private corporations, the government continues to prop up the industry through subsidies in the form of tax credits. In other words, wind farm development likely would be a less attractive business venture without help from the government.
What’s known as the Production Tax Credit provides a 1.5-cent per kilowatt-hour tax break for the first 10 years of a renewable energy facility’s operation.
The history of the PTC gives insight into the influence it has over the development of wind energy in the United States, as its on-again, off-again status has lead to boom and bust cycles of wind farm development, according to an analysis by the Union of Concerned Scientists, an independent nonprofit that studies environmental issues.
The last lapse in the PTC, at the end of 2003, came on the heels of a year where the wind power industry increased production capacity by 36 percent. With no PTC in place for most of 2004, wind development decreased to a five-year low. Then, when Congress reinstated the PTC, 2005 marked the best year ever, with a 43 percent increase over the previous record year established in 2001.
The PTC was extended again at the end of 2007 for one year. The Renewable Energy and Energy Conservation Tax Act of 2008 includes a provision to extend the PTC through 2010. This bill passed the House of Representatives in February by a vote of 236-182, and now is pending review by the Senate Finance Committee.
While we recognize the need for alternative energy sources and a sensible national energy policy, we believe the free market is the preferred arena to sort out these issues, not the halls of Congress.
Valley Morning Star Editorial
9 July 2008
|Wind Watch relies entirely
on User Funding