On May 24 this year, President Obama visited wind turbine blade manufacturer TPI Composites in Newton, Iowa. There he announced that his “To Do List” for Congress, included extending the wind energy’s Production Tax Credit (PTC). The PTC, which expires at the end of 2012, gives 2.2 cents per kilowatt hour(kwh) to wind energy producers. For all of 2012, U.S. wind farms are expected to provide about 3.5 percent of U.S. electric power, or 145 billion kwh, making wind producers eligible for $3 billion in tax credit subsidies.
On May 30, candidate Mitt Romney took up Obama’s Iowa challenge to his energy policies. Romney’s campaign spokes person told the Des Moines Register that Romney “will allow the wind credit to expire in 2012, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits.”
Through 2011, the wind industry had the option of a 30 percent investment tax credit that could be received as up-front cash grants, instead of having to wait until power was generated. Of the most recent $1 billion in wind energy grants handed out by the government, 85 percent – a total of $849 million – has gone to foreign wind turbine companies, such as Germany’s Siemens , Spain’s Gamesa, India’s Suzlon, and Denmark’s Vestas. Spanish utility company, Iberdrola S.A. alone has collected $545 million in recent years through its American subsidiary.
The head of Vestas, the world’s biggest wind turbine maker, has said that the U.S. wind turbine market is likely to fall by 80 percent next year if the PTC for wind expires. Vestas also warned that failure to extend the PTC could force it to cut 1,600 U.S. jobs. By contrast, a study by Wood MacKenzie reports that new U.S. oil and gas production could create an additional one million U.S. jobs by 2018.
The residents of Obama’s home state of Illinois sweltered along with the rest of us as the Midwest experienced record high July temperatures. Power demand soared as all ACs were on full. The Illinois legislature has enacted strong renewable portfolio standards(RPS), and 2,900 megawatts(MW) of wind power (same as Minnesota) were standing ready with electrons. And that’s just what they did – stood by with motionless turbine blades. Fortunately, Illinois nuclear plants ran around the clock, and all Illinois ACs stayed on.
As usual on those hot muggy days, there wasn’t a ‘breath of air’. Chicago temps were high on July 6, and 2,900 MW of wind capacity managed 4 MW, enough to power a very small Chicago neighborhood. For that week, Illinois wind turbines averaged about 10 percent of rated capacity.
During 2012 to date, our nation’s 50,000 MW of wind capacity are producing an intermittent and unpredictable 29 percent of capacity. This is a major reason why wind energy needs those subsidies.
Subsidy data from the U.S. Energy Information Administration(EIA) shows that on a per unit of energy produced basis, oil and gas producers receive $0.28 cents; nuclear receives $1.79; biofuels got $20.37; and for wind it was $32.59.
Britain is a world leader in wind with a subsidized program to take advantage of the windiest conditions in Europe. But its program continues to fail. Figures released in early January showed that as temperatures plunged to well below freezing and electric power demand soared, electricity production at Britain’s 3,100 wind turbines fell from an average of 8.6 percent of Britain’s electricity mix to just 1.8 percent. On the evening of Dec. 20, Britain’s average temperature fell to minus 5.6 Celsius. At 6:30 that evening, Britain’s wind farms, which have a generating capacity of 5,200 MW of electricity, were actually generating 40 MW.
As Jeremy Nicholson, director of the UK Energy Intensive Users Group, states, “What is worrying is that these sorts of figures are not a one-off. It was exactly the same last January and February when high pressure brought freezing cold temperatures, snow and no wind.” Nicholson added, “We can cope at the moment because there is still not that much power generated by wind. What happens when we are dependent on wind turbines for more of our power, and there is suddenly a period when the wind does not blow and there is high demand?”
Queen Elizabeth’s husband, the Duke of Edinburgh, summed up the issues with Britain’s wind program, describing wind supporters as people who “believe in fairy tales.” Governor Romney has this one right. It’s time for “all sources of energy to compete on their merits.”
Rolf E. Westgard is a professional member, Geological Society of America, and teaches classes on energy for the University of Minnesota Lifelong Learning program.
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