October 21, 2013
Ohio, Opinions

Wind farm endorsement blows past facts; Heavily subsidized Ohio farm unlikely ever to be self-sufficient

Joan Null, Larry Long, Glenn R. Schleede and Tom Stacy | The Journal Gazette | October 21, 2013 | www.journalgazette.net

We are very concerned that the article about the Blue Creek Wind Farm, “Winds of change blow across Ohio” (Oct. 7), submitted by Van Wert area Chamber of Commerce CEO Susan Munroe, is highly misleading.

Munroe claims that the 304 megawatt Blue Creek Wind Farm, built in northwestern Ohio by a subsidiary of Spain-based Iberdrola, provides substantial energy and economic benefits. However, her claims appear to be based heavily on information from Iberdrola, not on an objective analysis of facts about wind energy. Those facts call into question key points made in the article. For example, Munroe appears not to know that:

•Electricity from wind is very high in true cost and low in true value.

•The principal reasons that companies such as Iberdrola build wind farms (including Blue Creek) are generous government tax breaks and subsidies provided to wind farm owners.

•The cost of government financial subsidies for wind energy is borne by taxpayers, including Ohio taxpayers, and is in addition to the cost of electricity from wind that shows up in electric bills.

•Her favorable appraisal of wind energy ignores the adverse environmental, economic, electric system reliability, scenic and property value effects of wind farms. These adverse effects have been demonstrated in the U.S. and other countries where wind farms have been built.

Munroe’s article cites $5 million in lease payments and local tax payments by the wind farm owner, Iberdrola, as having a favorable economic effect, but she seems not to recognize that these payments pale in comparison to:

•The $172,688,076 grant from the U.S. Treasury Department awarded to Iberdrola on Aug. 20, 2012, accounting for nearly 30 percent of the capital cost of the Blue Creek Wind Farm. The cost of that grant money is borne by taxpayers, including taxpayers in Ohio.

(Spain-based Iberdrola is a substantial recipient of U.S. government tax breaks and subsidies. Iberdrola’s Feb. 24, 2011, news release announcing 2010 earnings (“highest ever”) included the following: “The Group has benefited from more than $1 billion in U.S. government incentives for wind power, the largest obtained to date by any renewables company.” News releases on 2011 and 2012 earnings do not state the amount of Iberdrola’s U.S. wind tax breaks and subsidies, but the company continues to receive them for each of its U.S. wind farms either as production tax credits ($0.023 per kilowatt hour of electricity produced, a 10 percent investment tax credit or a U.S. Treasury cash grant such as that for Blue Creek. Iberdrola is also eligible for 5-year depreciation deductions.)

•The higher costs of electricity that will be paid by Ohio’s electric customers due to the state’s “renewable portfolio standard” that requires that an increasing share of electricity sold in the state be produced by using “renewable” energy sources such as Iberdrola’s wind farm.

Munroe speaks of the “private investment” of $600 million in Blue Creek, apparently without recognizing that:

•Nearly $173 million of that money came from the U.S. Treasury grant mentioned above.

•Very little of the $600 million represents economic value added to the local or state economy. Except for the temporary construction jobs, a few permanent jobs and some local purchases, most of the $600 million was spent elsewhere – in other states or countries – for the turbines, turbine components, blades, towers and electrical equipment used in the project.

Munroe correctly states that “businesses everywhere are deeply concerned about the cost and security of energy” but, as noted above, she apparently is unaware of the high true cost of electricity from wind and the fact that electricity from wind turbines is low in real value because it is available only intermittently, volatile and highly unreliable. Wind turbines produce electricity only when wind speeds are in the “right” range. Other generating units, powered by conventional energy sources (such as natural gas, coal, oil, hydropower, nuclear energy and, perhaps, biomass) must always be immediately available to compensate for the intermittent, volatile output from wind turbines. This necessity adds to the true cost of using wind energy, and the unreliability of output from wind turbines adds to the burden on grid managers in keeping electrical grids in balance (supply and demand, voltage, frequency).

Electricity from wind turbines is low in value because it can’t be counted on to be available when needed, and it is most likely to be produced at times when it is least needed. Wind turbines tend to produce most of their electricity at night in cold months, not on hot weekday afternoons in July and August when demand for electricity is highest. Furthermore, the electricity from wind tends to be low in value because the output can’t be counted upon to be available at the time of peak demand, unlike reliable (“dispatchable”) generating units that can be called upon to produce whenever needed.

Undoubtedly, Munroe is correct in asserting that members of her local Chamber of Commerce are interested in reducing monthly utility bills. Business owners and their association leaders need accurate information about energy, both to understand the costs that businesses will bear and the effect of government requirements on energy reliability and costs.

Businesses that are planning to provide equipment or services to the wind industry especially need objective information about wind energy. In fact, there is very little evidence to suggest that electricity from wind will ever be commercially viable; i.e., be able to compete with other energy sources without government tax breaks and subsidies. Participating in industries that are dependent on federal tax breaks and subsidies can be dangerous, particularly at a time of massive federal deficits and a national debt of about $17 trillion.

Joan Null and Larry Long are representatives of Whitley County Concerned Citizens; Tom Stacy is with Save Western Ohio; and Glenn R. Schleede is a former federal government adviser on energy. They wrote this for The Journal Gazette.

URL to article:  https://www.wind-watch.org/news/2013/10/21/wind-farm-endorsement-blows-past-facts-heavily-subsidized-ohio-farm-unlikely-ever-to-be-self-sufficient/