Shredded: After 30 Years Wind & Solar ‘Industries’ Still Can’t Compete With Nuclear, Coal or Gas

Back in 1983 the American Wind Industry Association claimed that solar and wind would be “competitive and self-supporting on a national level by the end of the decade if assisted by tax credits and augmented by federally sponsored R&D”. That was 36 years ago. And there was no lack of assistance in the form of tax credits and federally sponsored R&D, along with a whole bunch of other punitive mandates and targets designed to cripple conventional generators and favour chaotically intermittent wind and solar.

Now, as then, claims from renewable energy rent seekers that wind and solar are truly competitive with nuclear, coal or gas evaporate the instant policymakers start talking about removing subsidies to wind and solar.

With their 40th birthdays approaching, the wind and solar ‘industries’ are a pair of perpetual infants who – like Peter Pan – are determined to never grow up.

We’ll hand over to Robert L Bradley from the Institute for Energy Research and Merrill Matthews from The Hill for the situation in the United States, where the wind and solar lobbies are crying ‘foul’, once again, because there’s serious talk about slashing subsidies to wind and solar.

Subsidized Wind, Noncompetitive Wind
Institute for Energy Research
Robert L Bradley
18 December 2019

The PTC was intended to be a temporary subsidy for a fledgling industry but has morphed into a massive handout for large corporations, many of which are foreign owned—all at the expense of the American taxpayers. It’s a textbook case of corporate welfare…. It’s past time for the wind industry to sink or swim on its own merits.

– Thomas Pyle (American Energy Alliance), “PTC Elimination Act Protects American Families,” April 22, 2015..

The governmental quest to make wind competitive as grid electricity rests on historical and theoretical sand. Historically, it has been believed that wind power is a young industry, requiring outsized tax preferencesbureaucratic R&D, and sales guarantees to rival fossil-fuel-generated electricity. Theoretically, it was believed that large-scale production from such protectionism would make wind competitive enough to remove the subsidies.

In fact, industrial-size wind turbines have a long history of entrepreneurial effort, and their technologies are as dependent on taxpayer and ratepayer subsidies today as they were several decades ago. (The essay “The Economic Fall and Political Rise of Renewable Energy” fills in much of this history.)

Competitiveness has not arrived—for the fundamental reason that dilute, intermittent energy cannot compete against densestorable, portable rivals. Little wonder that James Hansen, father of climate alarmism, has dismissed renewables as “almost the equivalent of believing in the Easter Bunny and Tooth Fairy.”

Yet wind companies (like on-grid solar companies) have long proclaimed their impending competitiveness, as if no one were keeping score.

And with the impending expiration of the federal Production Tax Credit (it has been extended eleven times since it first expired in 1999), distress calls are being heard from familiar quarters.

Old Wind Power
A simple review of Wikipedia’s History of Wind Power refutes the infant industry argument. “For more than two millennia wind-power machines have ground grain and pumped water,” the entry begins. Regarding power generation,

… wind power found new applications in lighting buildings remote from centrally-generated power. Throughout the 20th century parallel paths developed small wind plants suitable for farms or residences, and larger utility-scale wind generators that could be connected to electricity grids for remote use of power.

Illustrations of antique generators are provided, such as Charles Brush’s Windmill for (1888) and Grandpa’s Knob Summit (1941).

Charles Brush’s windmill of 1888, used for generating electricity.

On a hilltop in Rutland, Vermont, Grandpa’s Knob wind generator supplied power to the local grid for several months during World War II. The Smith- Putnam machine was rated at 1.25 megawatts in winds of about 30 miles per hour. It was removed from service in 1945.

In the modern energy era, wind proponents have sung the siren song of competitiveness. A consultant representing the American Wind Industry Association (AWEA) testified in 1983 (36 years ago):

The private sector can be expected to develop improved solar and wind technologies which will begin to become competitive and self-supporting on a national level by the end of the decade if assisted by tax credits and augmented by federally sponsored R&D.

Three years later, Michael Bergey of the AWEA testified: “The U.S. wind industry has…demonstrated reliability and performance levels that make them very competitive.”

Other proclamations of competitiveness have been made for decades, summarized here. And just a few years ago, in the heat of a subsidy renewal debate, the same bluster came forth. “America’s wind farms are ready to go it alone,” stated the AWEA last year. Senator Chuck Grassley (R-Iowa) similarly declared that wind has “matured as an industry” and was “ready to compete.”

The problem is more fundamental than PR misdirection. The free input of wind is dilute and unreliable, requiring vast amounts of infrastructure (land, steel, fiberglass, concrete, lubricating oils, storage, transmission lines) to produce power. Diluteness and intermittency, now as then, is the curse of industrial wind turbines, as it is for central-station solar panels.

Cronyism Does Not Expire
On-grid solar and wind have turned into crony rivals for market share and the renewable subsidy dollar. “We now have a subsidy arms race,” noted Stephen Moore. Wind complains that solar is getting more government favor, and both complain that competition from cheap natural gas is too great for them to go it alone.

This predicament brings to mind the warning from Milton and Rose Friedman back in 1980 (Free to Choose: p. 49):

The infant industry argument is a smokescreen. The so-called infants never grow up. Once imposed, tariffs are seldom eliminated.

Little wonder that Congress has never let the original Production Tax Credit in the Energy Policy Act of 1992 permanently expire.

Public Policy

The wind PTC, estimated by the U.S. Treasury to cost taxpayers $40 billion between 2018 and 2027 from existing or in-construction projects, should expire for new construction as scheduled. Solar’s Investment Tax Credit (dating from 2005 and extended several times) should not be extended to become the new lifeline for wind power.

Another aged subsidy for wind (and solar) installations, the must-buy provision of the Public Utility Regulatory Policies Act of 1978 (PURPA), is due for wholesale revision short of repeal to let the market, not federal regulators, shape electrical generation.

The obvious policy is let the consumer decide, a fair-field-and-no-favor environment where taxpayers are not involved. The relatively small remaining subsidies for mineral energies (most of which were repealed in the 1970s) can easily be removed to this end. Free-market neutrality is a natural, easy solution to replace the “all of the above” conundrum where a variety of complicated regulations and tax provisions prop up politically correct energies.
Institute for Energy Research

It’s time to hit the off switch for solar, wind power tax breaks
The Hill
Merrill Matthews
17 December 2019

Ronald Reagan told us more than 50 years ago, “a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” Were he making that observation today, he might also include renewable energy tax breaks.

The solar Investment Tax Credit is scheduled to wind down, which means special interests are pushing for an extension — part of an end-of-the-year grab bag of tax breaks known as a “tax extenders” bill.

A Republican Congress passed, and President George W. Bush signed, the Energy Policy Act of 2005, a wide-ranging effort to increase U.S. energy independence and security at a time of declining oil and natural gas production. Two key components of the law were the solar Investment Tax Credit (ITC) and the Production Tax Credit (PTC) for wind energy.

Both were reauthorized in 2015, again by a Republican Congress, as part of a deal to allow the United States to begin exporting crude oil. But as Texas Rep. Kevin Brady, then chairman to the House Ways and Means Committee, points out, it was supposed to be a one-time extension, which is why he doesn’t support the effort today.

The ITC provides a 30 percent tax credit for both residential and commercial solar projects that began before 2020. The credit decreases to 10 percent beginning in 2022 and only applies to commercial projects.

Now solar energy lobbyists are seeking an extension to the extension — or as Reagan might say, “eternal life.”

But the world of energy has changed significantly since 2005.

To begin with, the United States is no longer under the thumb of other oil and natural gas producing countries.

The fracking boom has made the United States the world’s leading producer of oil and gas. Today, cleaner-burning natural gas, which releases about half the carbon dioxide of coal, is so abundant and cheap that it’s becoming the energy source of choice for U.S. electricity generation.

In short, energy security in no longer the pressing concern it once was.

In addition, the renewable energy industry is sending mixed messages. We frequently see news stories claiming the cost of producing both solar and wind power has become very competitive with fossil fuels.

For example, Business Insider summarized a 2018 report from financial adviser Lazard claiming, “The cost of producing solar power is rapidly declining: It now costs $50 to produce one megawatt-hour of solar power, according to a new analysis. Coal, on the other hand, costs $102 per megawatt-hour to produce.”

Or how about this recent story in Forbes, “The cost of renewable energy has tumbled even further over the past year, to the point where almost every source of green energy can now compete on cost with oil, coal and gas-fired power plants, according to new data released today.”

If true, then why should taxpayers continue subsidizing solar power?

The stated reason for initially subsidizing wind and solar power was so they could reach economies of scale where they could be competitive with fossil fuels. And frequent news stories seem to imply “mission accomplished.”

But when government subsidies for renewables are threatened, we hear a different message: that solar and wind power would likely collapse without subsidies.

Maybe we should ask those who benefit most from such subsidies.

As billionaire investor Warren Buffet said in 2014, “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.”

Well, at least now we know.

But there is another reason to not extend the solar tax credit. The wind energy industry, which taxpayers have been subsidizing since 1992, will demand parity.

While most of the solar ITC is set to go away in 2022, commercial solar projects will still receive a 10 percent tax credit — in perpetuity. Wind energy’s PTC ends this year. If Congress extends the solar ITC, the wind energy lobby will want its credit extended too, essentially doubling the cost to taxpayers.

While Ronald Reagan may be correct that federal bureaus have eternal life, let’s make sure that doesn’t apply to federal tax subsidies. Let the solar ITC and wind PTC pass away. It may upset billionaire Buffet, but taxpayers will be much better off.
The Hill

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Reblogged this on ajmarciniak.

  2. Fossil fuels come with high intensity storage built in. Renewables DONT. Therefore Renewables can NEVER be competitive with fossil fuels. How the Renewable industry gets away with its false claims beats me.

  3. Raphael Semmes says:

    It is time to work the political leadership to put an end to this taxpayer and electric ratepayer ripoff. Take resolutions on this issue to your own political party organizations. An example is the one recently unanimously passed by the 16-county 3rd Congressional District Republican Executive Committee in eastern North Carolina:

    http://www.beaufortobserver.net/Blog-3931.112112-16037.114136-Republicans-oppose-Gov-Coopers-green-energy-program.html

    Here is the whole resolution:

    A Resolution opposing Gov. Roy Cooper’s NC Green Bad Deal

    WHEREAS, Governor Roy Cooper has issued Executive Order 180 to foist more wind and solar electricity on the taxpayers and electric ratepayers of North Carolina, and

    WHEREAS wind and solar electric production cannot stand on its own two feet in a free market, but only exists through corporate welfare subsidies either from the taxpayer or the electric ratepayer, and other government special interest favors, and are prime examples of crony capitalism, and

    WHEREAS wind and solar electricity have proven around the world to be very expensive and highly unreliable, causing electric rates of three times what NC now pays in countries that have installed major wind and solar capacity, and already being cited in NC by Duke Energy as a basis for rate increases here, and

    WHEREAS wind and solar electric production poses threats to wildlife, being a major killer of birds and bats, and to human health, as well as loss of farmland and deforestation, and

    WHEREAS, solar panels only produce electricity when the sun shines and wind turbines only when the wind is blowing, making them undependable intermittant sources of electricity, unsuitbable for baseload and requiring very expensive backup capacity from more reliable sources, and

    WHEREAS human health conditions aggravated for people living around wind turbines include sleep disorders, stress related disorders, and cardio-vascular disease, and the World Health Organization has recently warned that wind turbines pose a significant threat to human health, and

    WHEREAS the Environmental Health Agency of Finland has released a study showing that the negative impacts of wind turbines on human health do not start to diminish until a person is twenty kilometers (about ten miles) from the wind turbine, and

    WHEREAS, scientists of the US Environmental Protection Agency has cited solar panels as a potential source of GenX and related contaminants in the groundwater, and

    WHEREAS cheaper and more reliable alternatives for electric production with no emmissions exist including nuclear power and a new natural gas electric generating system developed by a North Carolina company, and proven to work with a demonstration electric plant it has built in Texas,

    Be it therefore RESOLVED that the Third Congressional District Republican Party opposes Governor Cooper’s “Green Bad Deal” for North Carolina, and

    Be it further resolved that we call for elimination of all crony capitalist special priveleges for wind and solar electric production that currently exist in North Carolina law that subsidize these special interests by either taxpayer money or electric ratepayer money including the unfair exemptions from county property taxes.

    Adopted unanimously January 4, 2019 at Washington, NC

  4. Peter Pronczak says:

    It’s interesting how children are being manipulated to reinforce RE. For example some school kids are putting together solar panel lights that have the usual triple or double ‘A’ batteries like the rest of the common sizes that wear out and are thrown into landfill. It all comes under the Green mantra of ‘appropriate technology’ for under developed countries: as in the overpopulation vs underdevelopment argument.

    Oddly Western countries could be exporting redundant paper coned audio speakers that with some wire, simple coils, auto spark plugs and more, can generate 240volts for a light-bulb. Silly really, free electricity with no batteries. https://www.youtube.com/watch?v=TQRn5AJl2Scwatch

  5. Reblogged this on Climate- Science.press.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: