Governor Deval Patrick’s new deal to blow costly subsidies on a breezy wind farm off Nantucket Sound has leading green energy proponents purple with rage. And these aren’t just your usual run of the windmill anti-carbon crusaders and environmental activist organizations.
Acting upon the legislature’s Green Communities Act of 2000 requiring that 20% of the state’s power come from renewable sources by 2025, the 130-turbine Cape Wind project threatens to obstruct the pristine ocean view of that elite one percent of greedy rich coastal residents the other 99 percent are presumed to loathe.
What true “environmentalists” could possibly object to non-polluting wind power that will help save our planet from the dreaded climate-ravaging fossil-emitted CO2 scourge? Some of their names should be quite familiar to you. One, for example, is Robert F. Kennedy Jr., nephew of a popular president and prominent lawyer for the powerful Natural Resources Defense Council (NRDC). His uncle, the late Senator Ted Kennedy (D-MA), along with Senate colleague and fellow Nantucket resident John Kerry, didn’t want Cape Wind disturbing their vistas either.
Senator Kerry explained his reasons this way: “I’ve always said that I think Senator Kennedy has raised very legitimate issues with respect to the siting process and with respect to location. I’ve also suggested that it’s my opinion there may be even better locations for it. I’ve sat with Jim Gordon [president of Cape Wind], I’ve sat with other folks, I’ve met with Coast Guard people. I’ve tried to do due diligence on it, and I’m not sure there aren’t both windier and, you know, more accessible areas.”
In other words, it’s not that the Senator doesn’t like wind power. He just doesn’t want it located off his beach.
Governor Patrick helped blow life into Cape Wind by approving a merger of two local utilities, NStar and Northeast Utilities of Connecticut, creating a new company that must purchase 27.5% of their output from the project. The $17.5 billion agreement also requires that Cape Wind freeze its rates for the next five years and distribute a one-time rebate of $21 million ($13 per capita) to the customers. But since Cape Wind construction hasn’t yet begun, the freeze on electricity prices will lapse by the time NStar starts purchasing the power.
The Boston Globe reports that the deal won’t come cheap, either for NStar, or for its customers. Based upon a 15-year contract filed with state regulators last Friday, the starting price for power Cape Wind produces will be more than double the cost of conventional Massachusetts electricity. While utilities generally pay about 8 cents per kilowatt hour for electricity rather than the 18.7 cents Cape Wind will charge, they caved in following nearly a year of negotiations with state energy officials.
According to a Wall Street Journal op-ed by Robert Kennedy Jr., NStar had experienced years of intense state political pressure before agreeing to the Cape Wind power purchases. Their CEO Tom May had argued that such a contract would impose too large a burden on their ratepayers. In order to certify with the green-power requirements, NStar had previously contracted with far less expensive land-based wind-power suppliers.
Offshore wind installations are very costly to build and maintain, second only to solar thermal. Customers who chose to purchase the “NStar 100” option (with a theoretical 100% of their electricity coming from the Maple Ridge wind farm in upstate New York and Kirby Wind Power in Maine) already saw their current 4.791 cent per kWh premiums rise by 33% to 6.39 cent per kWh on March 1.
In case you’re wondering, former Governor Mitt Romney opposed Cape Wind …not because he doesn’t like wind power, but because it would depress property values and damage the local economy which depends heavily on tourism. Project supporters accused him and federal lawmakers of “back-door deal-making” to kill the project.
Cape Wind has also entered into a separate agreement with another utility, National Grid, to sell them their electricity at the same 18.7 cents per kilowatt hour (kWh) rate NStar will pay, with a 3.5% annual increase over the next 15 years. At the end of those 15 years the compounded interest will have driven customer costs to 31.3 cents per kWh, about four times what they are paying now.
Those customers aren’t the only ones who are being fleeced. Even at high premiums the entire wind industry would be blown away by conventional power sources if not for huge taxpayer subsidies. According to a 2008 Energy Information Agency (EIA) report, the average 2007 subsidy per megawatt hour for wind and solar was about $24, compared with an average $1.65 for all others.
Since first adopted in 1992, the “temporary” Production Tax Credit (PTC) for wind energy which, unless extended is scheduled to sunset at the end of the year, has ballooned from $5 million per year in 1998, to over $1 billion annually today. And even if ended, taxpayers are still obligated to cover nearly $10 billion in tax credits for projects built during the last decade. That’s in addition to an almost $20 billion debt for wind projects eligible under a Section 1603 extension, the renewable energy bailout of 2011. In many parts of the country the PTC actually exceeds the wholesale price of power.
In the meantime, while taxpayers cover much of the added expense and mandated wind purchases and prices are being locked in at economically burdensome rates, abundant natural gas prices are plummeting, falling nearly half from about $5 /mmBTU last summer, to around $2.35/mmBTU now. (By the way, the EIA equates the energy equivalent of $3 natural gas to the same as $18 oil.)
Also, for comparison, construction costs for offshore wind power projects runs about $5,000 per kilowatt, or about the same as a nuclear plant which will provide at least three times as much capacity with continuous rather than intermittent output. An offshore wind installation costs about five times as much as a natural gas-fired generator to construct per kilowatt, plus also requires a backup power source (typically natural gas) to balance out the power grid during most of the time when the wind isn’t blowing.
Along with high taxpayer and ratepayer costs, scenic impacts and objectionable noise associated with wind power, the industry is also facing fierce blowback from environmental groups over the destructive consequences of the turbines upon wildlife. Yet while federal law enforcement officials have filed hundreds of cases against oil and gas companies and electric utilities under the Migratory Bird Treaty Act (MBTA) of 1918, somehow, the U.S. wind industry has usually gotten a get-out-of-jail free card.
For example, in August 2009 ExxonMobil pled guilty and agreed to pay $600,000 in fines on charges it killed 85 birds that came in contact with hydrocarbons in company-owned uncovered tanks and wastewater facilities located in five western states. But no charges were filed when in 2009 the Los Angeles Times reported that turbines are killing about 70 eagles each year at Altamont Pass in California. A 2008 study funded by the Alameda County Community Development Agency estimated that about 2,400 other raptors, including burrowing owls, American kestrels and red-tailed hawks along with about 7,500 other birds protected by MBTA are being killed as well.
There are lots of bat casualties too…caused by a change in air pressure near turbine blades that ruptures their lungs. A study of a 44-turbibe wind farm in West Virginia found that up to 4,000 had been killed in 2004 alone. A 420-turbine installation in Pennsylvania reportedly killed more than 10,000 in 2010.
Yet the only legal action the wind industry has ever faced was filed against NextEra Energy Resources by the State of California in 2010 for the Altamont bird kills. The company agreed to a $2.5 million settlement, and agreed to remove or replace all turbines by 2015.
But now, the wind industry itself faces human-caused endangerment, a lethal threat of economic starvation if vital subsidies aren’t extended. A 2011 report released by HIS Emerging Energy Research, an independent group in Cambridge, Mass concluded that expiration would cause wind power installations to decrease from 5.6 gigawatts a year since 2005, to 2.3 gigawatts per year from 2013 to 2016 thanks in large part to competition from low natural gas prices. As IHS analyst Matt Kaplan observed, “Fundamentally, the industry is not ready to stand alone”.
Writing in MasterResource, Lisa Linowes tells us all to expect scary stories from the American Wind Association warning of a crushing blow to American jobs if Congress lets the wind power Production Tax Credit lapse. But don’t expect them to mention that most of the industry sector’s jobs are temporary construction positions, with less than 20,000 involved in the manufacture of parts used in turbines. Lisa concludes that the Production Tax Credit is one earmark many Americans know about, and their opinion is remarkably consistent: “The cost of the PTC is excessive, the benefits are elusive, and frankly, Big Wind’s pitiful performance measured against industry promises makes this entitlement easy to sunset.”
[rest of article available at source]
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