Former Sen. Phil Gramm, R-Texas, had some sad news for the American people. The federal government has played Santa Claus to the wind industry for 20 years at great cost to taxpayers.
“In the 1990s, the federal government began subsidizing wind power based on the hope that, with a helping hand, the technology would improve rapidly, costs would decline, and the industry would become economically viable,” Gramm wrote in the Wall Street Journal.
The sponsor of the bill, former Rep. Phil Sharp, D-Ind., wanted temporary provisions, not a permanent subsidy.
But the subsidies went on and on, and the cost of wind-generated power has risen.
“The Department of Energy’s ‘2009 Wind Technology Market Report’ finds average wind-power costs were higher in 2009 than they were in 1994, two years after the subsidies began,” Gramm wrote.
The federal government has given $24 billion in subsidies, tax breaks, loan guarantees and other support to the wind industry. They provide a guaranteed revenue stream, which eliminates the incentive to produce wind energy less expensively.
“The subsidies are so high that wind-power producers can pay utilities to take the electricity they produce and still make a profit,” Gramm wrote.
All energy producers receive some sort of subsidy. But according to the U.S. Energy Information Administration, the subsidies for wind power are a whopping $52.48 per million watt hours generated.
The subsidies are $3.10 per million watt hours generated for nuclear power, 84 cents for hydropower, 64 cents for coal and 63 cents for natural gas.
Wind companies actually pay utilities to take their power so they can knock down federal subsidies. This displaces cheaper forms of reliable electricity.
“The net result is that federal subsidies are triggering an inefficient and costly transformation of grid resources from low-cost megawatts to high-cost ‘maybe’ watts-electricity generated only when the wind blows,” Gramm wrote.
Because wind varies, utilities must continue to generate electricity from coal and the like as a back-up plan in case the wind dies down.
As it does, to spectacular effect. When Chicago hit a peak demand on July 6, 2012, wind farms with 2,700 megawatts of capacity were able to supply only four megawatts of electricity.
A bankrupt federal government should have abandoned such energy madness long ago. There’s simply no excuse for perpetuating it now.
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