Earlier this month, the Washington, D.C.-based American Wind Energy Association came to Santa Fe to release its national “market” report for 2017.
The slick marketing materials the lobbying organization dispensed at the Roundhouse claimed that wind in the U.S. is “bringing more affordable, clean, and reliable energy while growing the economy.” New Mexico was cited as a “rising star” that “added wind power capacity at a faster rate than any other state last year.” But AWEA left out more than a few facts that policymakers need to know in order to make sound decisions about energy policy in the Land of Enchantment and throughout the nation.
First, wind-generated electricity is almost entirely the product of government mandates, grants and tax credits. The federal production tax credit is now more than a quarter-century old. It was crafted to help the industry attain “maturity,” but the sun has yet to set for the taxpayer-provided perk. The credit has been renewed multiple times and its cost is considerable.
For wind farms that were built in 2016 and went online in 2017, its value was $24 per megawatt hour – an enormous sum, given that the price of a megawatt hour on the wholesale market hovered between $20 and $50 last year. (As the Institute for Energy Research noted, the tax credit “is so large relative to the economics of the industry” that “many wind operations cannot take full advantage of it – their eligible tax credit is higher than their tax liability. Thus they structure complex deals with Wall Street investment banks, effectively auctioning off their tax credits to outside financiers.”)
Big Wind also can thank government for mandating that customers buy it. The Land of Enchantment’s pols have required that investor-owned utilities make “renewable” power 20 percent of their portfolios by 2020. (Thirty percent of that generation must be from wind.) Even that’s not enough for some – U.S. Rep. Michelle Lujan Grisham, the Democratic Party’s likely nominee for governor, backs “a 50 percent renewable standard by 2030 and 80 percent by 2040.”
Second, wind is intermittent and unreliable, and that has serious consequences for grid operation. There’s a reason physicist Howard C. Hayden called wind-generated juice “the lowest quality power on the planet.” The New York Times once wrote that “because it is unpredictable and often fails to blow when electricity is most needed, wind is not reliable enough to assure supplies for an electric grid that must be prepared to deliver power to everybody who wants it – even when it is in greatest demand.” When breezes aren’t strong, backup power (usually fueled by natural gas, diesel and coal) is required to pick up the slack. As one wind critic observed, even if turbines “could be produced for [nothing], it seems likely that the costs of working around the problems caused by intermittent electricity would be greater than the compensation that can be obtained to fix those problems.”
Transmission is another challenge. Since high-wind zones tend to be in isolated regions, power must be moved long distances, necessitating the construction of costly transmission infrastructure. AWEA’s map of the Land of Enchantment shows that turbines are clustered along the state’s border with Texas, far from the Albuquerque-Santa Fe metroplex.
Finally, the economic “benefits” of wind power are largely illusory. It is certainly not cheap. As wind has grabbed a greater share of New Mexico’s electricity generation, homeowners have suffered. Residential rates rose by 34.4 percent between January 2008 and January 2018 – an increase far greater than inflation. As for job creation, Big Wind’s numbers can’t be trusted. As Lisa Linowes of the Industrial Wind Action Group explains, “the Bureau of Labor Statistics … reported 4,390 [wind] technicians working nationwide as of May 2017,” but AWEA claimed the “job count nationwide was 9,800.”
Unreliable, expensive and the result of “green” coercion, wind power isn’t “the future” – it’s a step backward from efficient and affordable electricity.
D. Dowd Muska is the research director for the Rio Grande Foundation, a nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.