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Big subsidies for wind, solar don’t make sense  

Credit:  BY: Kerri Houston Tolozcko | CommonWealth Magazine | November 13, 2013 | www.commonwealthmagazine.org ~~

Since coming into office nearly six years ago, President Barack Obama has pushed America into charting a course toward energy independence that employs a portfolio that includes every possible fuel source. He calls it his all-of-the-above strategy.

What he really means is all of the energy located above ground. Under his leadership the federal government has shown a marked preference for experimental energy sources over those that come from fossil and nuclear fuel. There is nothing wrong per se with the wind and solar power the president prefers; it’s just that these fuels are not mature enough yet to generate the base load the American economy requires.

The Obama administration is moving to shut down coal, limit natural gas, and block exploration of new sources of oil at the same time it is heavily subsidizing the development of so-called alternative energy sources. Not only does this not make sense, it throws the costs of energy as experienced by the ratepayer, especially for wind power, all out of whack. S. Michael Holly, chairman of Sorgo Fuels and Chemicals, recently wrote: “Many US special interests are misrepresenting wind power costs, including the wind industry, environmental groups, utility monopolies, independent system operators, educational and research institutions, and even federal and state governments.”

Without heavy subsidies, wind power may not make much sense; it may not make much sense with subsides, either. Energy production and distribution needs to be cost-competitive, upstream as well as down in order for it to be a benefit to economic growth. Sinking hundreds of millions of taxpayer dollars in the form of loan guarantees into projects like Cape Wind, the off-shore wind farm developers want to construct in the waters off Cape Cod, is not in the long-term interests of ratepayers.

Schemes like Cape Wind only balance out through the contribution of generous subsidies, production tax credits, and mandates that the energy produced be purchased by local utilities according to a kind of renewable fuels standard established by state governments.

Even with all that, however, ratepayers can expect to pay two to three times as much for power generated by Cape Wind turbines arising from Horseshoe Shoals than they do for what is already being produced by conventional means.

As Holly wrote, “the United States government has hidden from the public the additional costs to taxpayers for tax write-offs on windmills of about six cents, and to ratepayers for extra transmission of about two cents and backup of at least six cents, which drive total costs for wind power from bid prices of 4 cents to total costs over 18 cents. Despite the high costs and low environmental benefits, the US has been mandating, subsidizing, and misrepresenting an incredible $30 billion of windmills per year to meet 45 percent of US capacity additions.”

In some cases wind power as a supplement to existing energy formulas may be a sound economic proposition. It is a mistake to think,. However, that at this stage of its technological development and with the transmission issues involved that it is ready to be a one-for-one replacement of electricity created by burning coal or natural gas or through nuclear power. Masking the real costs does nothing to enhance wind’s attractiveness as an alternative power source. If anything, such a move makes it even less attractive because the secret cannot be kept for long: without subsidies and tax credits and loan guarantees, energy projects like Cape Wind remain too dubious to be allowed to move forward. The taxpayers are already on the hook for too much of the expense; there’s no need to load them down with more.

Kerri Houston Tolozcko is a senior fellow at Frontiers of Freedom, an organization founded by the late Sen. Malcolm Wallop, a Republican from Wyoming. Tolozcko is a native of West Harwich on Cape Cod.

Source:  BY: Kerri Houston Tolozcko | CommonWealth Magazine | November 13, 2013 | www.commonwealthmagazine.org

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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