Wind farm taxpayer subsidies come with a now controversial beneficiary: China
Credit: By Staff reports | Iowa Business Daily | May 12, 2020 | iabusinessdaily.com ~~
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U.S. Sen. Charles Grassley says he backs taxpayer subsidies of wind farms because they are good for his home state of Iowa.
But today, some 30 years after Grassley conceived the federal wind tax credit program, which birthed rows of turbines across the country’s emptiest spaces, he has another, somewhat improbable cheerleader: China.
China’s curious role in support of taxpayer wind energy subsidies in the U.S. is now raising suspicion, as Grassley tries to convince Trump Administration officials that their COVID-19 stimulus measures should include a boost to his beleaguered wind program.
The U.S. Treasury Department released a letter to Grassley last week suggesting it plans to “modify the relevant rules,” allowing wind farm developers facing a Dec. 2020 deadline four more years to finish their taxpayer subsidized projects.
The wind subsidy program was supposed to make wind energy makers self-sufficient within a decade— or by 2002. However, it is currently in year 29.
According to an analysis last year by the Texas Public Policy Foundation, the wind Production Tax Credit (PTC), which goes to “corporations who either erect new wind turbines or refurbish turbines.” has cost U.S. taxpayers $65.1 billion.
A huge chunk of that taxpayer money has gone directly to companies in which the largest shareholder is the Communist Party of China (CCP).
Grassley’s Senate colleague, U.S. Sen. Tom Cotton (R-AR) said Sunday that many Chinese companies operating in the U.S. are doing so for the sole purpose of spying on our country.
Americans “need to have their guard up against Chinese espionage,” Cotton said.
He is proposing legislation that would ban taxpayer-funded researchers from also accepting funding from Chinese-affiliated firms.
A University of Arkansas electrical engineering professor was arrested Monday and charged with secretly accepting $500,000 from the CCP.
“Steadfast in our approach”
The Chinese were minor, inconsequential players in wind energy when Grassley, 86, started arguing for U.S. taxpayer support of the industry in 1992. Now, they dominate the space, controlling five of the world’s ten largest wind turbine manufacturers.
According to a 2016 Navigant Research report, Chinese companies controlled 28.2 percent of the wind turbine manufacturing market, versus 9.2 percent for U.S.-controlled companies. It reported that China had five times as many workers employed making turbines (509,000) as did the U.S. (102,500).
Chinese-owned Goldwind is the second-largest wind turbine producer in the world, having installed more than 19,000 turbines in 17 countries. It controls 25 percent of the Chinese market— more than twice its next largest competitor.
Goldwind Chairman Wu Gang has worked in wind power since the late 1980’s. He previously served as the Chinese Communist “Party Committee” secretary at Goldwind’s parent company, Xinjiang New Energy.
In 2010, Goldwind opened a U.S. subsidiary, headquartered in Chicago, with an eye towards exploiting Grassley’s tax credit program here.
It has since purchased wind farms in Montana and partnered with Warren Buffett’s Berkshire Hathaway on a wind farm project in West Texas.
“At Goldwind, we are steadfast in our approach to the United States and broader North American wind markets,” said David Sale, Chief Executive Officer of Goldwind Americas.
Buffett, whose Des Moines-based Mid-American Energy owns 2,600 wind turbines in Iowa, is a longtime backer of Grassley’s subsidy program, which he has used to reduce his company’s tax bill.
“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffet said in 2014. “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
Wind subsidies started phasing out in 2017 and were supposed to finally expire at the end of 2019.
There are 58,000 wind turbines in the U.S.
In 1983, Iowa became the first state to mandate its utilities derive a percentage of their power from wind or solar. The state reports that 42 percent of its generated electricity came from wind in 2019, versus 35 percent from coal and 13 percent from natural gas.
That’s six times the national average for wind power generation of seven percent.
Nationwide, 38 percent of electricity is derived from natural gas, 24 percent from coal and 20 percent from nuclear.
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