Don’t believe claims that wind energy does not cost Ohio a penny. Although the fuel is free, this industry has an addiction to subsidies. Subsidies do cost someone.
The Wind Production Tax Credit is a federal subsidy given to the wind industry which amounts to $0.022/kWh for electricity produced. It was designed, in 1992, to help a new industry grow. Is an industry still an infant after 20 years? This subsidy has been renewed eight times, with this year being the 9th. The U.S. Senate, with the help of five Republicans (including Sen. Rob Portman), recently, agreed to renew this credit. A twp-year extension will cost our children $12 billion in additional debt, not including interest. After 20 years, the entire renewable industry generates less than 5 percent of our nation’s electricity.
Despite their low output, renewables were given 75 percent of the energy subsidies in 2013. Wind is currently being subsidized more than 80 times that of conventional fossil fuels, per unit of energy production. The American Tradition Institute hired analysts George Taylor and Thomas Tanton to calculate the cost of wind generation, as a FULL-time replacement. Their analysis shows wind costs $0.15/kWh if natural gas is the back-up and $0.192/kWh if coal is the back-up. What do you pay per kWh?
Our Energy Information Administration estimates that federal subsidies, alone, give the wind industry $56.29/MW hour. This is so high that it allows wind producers to pay the grid to take their electricity even when it is not needed, so they can claim the federal credit. Foreign-owned companies are making a huge profit, at our expense, despite selling their product at a loss, because our tax dollars make up the difference; meanwhile, wind interrupts the efficient operation of our traditional plants.
We are frequently told these incentives make the market fair since coal, gas, and nuclear receive subsidies; however, wind requires the constant back-up from those fossil fuel burning power plants because their energy output looks like a polygraph test. It forces fossil fuel plants to ramp up and down as wind speeds vary every moment across a region. Not only does this require fossil fuel plants to remain fully operational, but it makes their electricity more expensive. Wind facilities in Ohio have not, annually, even produced 30 percent of their advertised potential. Ohio wind speeds at 100 meters average a mere 6m/s, which does not place even place us in the top 20 states for wind generation potential.
Yet, current Ohio law mandates the purchase and generation of renewable energy. When wind comes to a town, county commissioners are asked to approve a payment-in-lieu-of-taxes which allows developers to pay up to $9,000/turbine. Their payments create an annual media frenzy, with big checks given to local governments and schools. If they abided by the rules of the Ohio tax code, though, they would pay, an estimated, $45,000/turbine annually. County commissioners give them an 80 percent tax reduction when they say yes to a PILOT.
History tells us that these handouts will, eventually, cost each of us in our electric bills. Denmark has more turbines, per capita, than any place in the world, and their electric bills have tripled in the past 20 years. Germany has announced that renewable subsidies will be slashed because electric rates have increased more than 80 percent since 2000. They are building 10 coal plants to be completed in the next two years. Last year, England paid wind developers 32.6M pounds to turn OFF because their energy was produced when it wasn’t needed. Their rates have risen 50 percent. In Scotland, 80 million pounds have been paid to wind producers to shut them OFF and 40 percent of their residents live in fuel poverty. Spain recently announced slashes to their wind subsidies. In 2009 a Spanish economics professor claimed that each green MW of energy destroyed 5.39 jobs in the private sector and each green job cost them $774,000. These events have driven wind developers here, where the subsidies are still flowing.
China is home to some of the largest turbine manufacturers in the world. They also have 90 percent of the world’s Neodymium, required for every industrial wind turbine. They produce a mere 0.23 percent of their energy from renewables. We sell them a lot of coal, though.
In the USA, electricity rates are rising in 9 out of 11 of the top wind power consumption states. According to the Energy Information Administration, the rates are: Colorado up 14 percent, Idaho up 33 percent, Iowa up 17 percent, Kansas up 29 percent, Minnesota up 22 percent, North Dakota up 24 percent, Oklahoma down 1 percent, South Dakota up 26 percent, Texas down 19 percent. Many economists agree that Texas rates are dropping because of deregulation, not because of the wind.
Electricity rates affect the cost of everything Ohio produces, sells, buys, and consumes. According to the steel manufacturers association, the industry employs 60,000 people and spends $18 billion on electricity annually. A 10 percent increase in electric rates translates to $30,000/year/employee. Timken, a steel company in Ohio, estimates spending $2 million this year just for our renewable energy riders.
Last year, for the first time, the American Wind Energy Association hosted an Ohio Wind Energy Summit. They are here because of our mandates, our generous PILOT, and our vast land. In addition to our two operational wind sites, the Ohio Power Siting Board has certified eight more to begin construction. Ohio Senate Bill 310, being debated now, will freeze our mandates. Encourage our senators to support it. Ohio Senator Cliff Hite is an obstacle. Do you remember what, then U.S. Sen. Barrack Obama, said about his energy policy? Under his policy, electricity rates will necessarily skyrocket. Get ready, Ohioans, someone is getting ready to pay a lot more for energy.
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