Pointless Power: Without Massive & Endless Subsidies Wind Power Makes Absolutely No Sense

Warren Buffett said: “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.” Buffett might have continued, that subsidies are the only reason anyone invests in these things.

Buffett might be an opportunistic profiteer, but at least he’s honest.

In Australia, the rent seekers that populate our wind ‘industry’ are generally less forthcoming, with plenty of them still claiming that there are no subsidies for wind power. A complete nonsense, of course.

Over the life of the Federal government’s Large-Scale Renewable Energy Target wind and large-scale solar will pocket around $60 billion worth of direct subsidies, which doesn’t include soft loans and other backhand financial compliments.

Maybe it’s something about the honesty of the characters that occupy the American Midwest. As Janna Swanson reports from Iowa, they may be cynical and mercenary, but, just like Warren Buffett, at least they’re upfront about where their profits come from.

The economics of industrial wind and solar in Iowa
Wind Watch
Janna Swanson
30 April 2020

First, industrial wind and solar make no sense economically. Both past and present CEOs of MidAmerican Energy have admitted that the turbines in Iowa will be 100% paid for by tax credits. The first indication of this was on Simon Conway’s WHO Radio show. Simon interviewed CEO Bill Fehrman in 2017, who admitted that 100% of the cost of the turbines comes from taxes. In a May 30, 2018, article written the Des Moines Register’s Donnelle Eller, current CEO Adam Wright said:

MidAmerican will receive about $10 billion in federal production tax credits for the investment, covering the capital costs needed to build the wind farms.

Even though the production tax credits are being phased out, MidAmerican said this newest project will qualify for the full amount of credits.

Rick Olson, the president of Iowa Lakes Electric Co-op, told me that the entire cost of the wind turbines they built in 2007-2008 were also 100% paid for by the federal government. With the production tax credit (PTC) extended in 2015 to phase out by 2020 (now to 2021) the Rural Electric Co-ops could not afford to build new turbines because the payment relies on taxes and the RECs are tax exempt. Recently those public power utilities are asking for a piece of the pie if they are going to have to compete with the investor-owned utilities’ special deals with the federal government. Iowa Lakes Electric Co-op has recently reported that their turbines, though in good condition, are making less energy than projected because of a simple lack of wind. This makes their energy even more expensive all around.

Recently MidAmerican’s Matt Fehr told me in a conversation that it was “not real” money, because the government does not balance its books. It is the uncertainty of the future of wind and solar that is likely the reason that they have recently hatched a coronavirus-inspired plan to ask the IRS to not hold them to the PTC deadline for 2 years and that they receive cash instead of a tax credit.

How is it that in 2018 wind installations were being built that will qualify for the “full amount of credits,” when the PTC was supposed to be declining every year starting in 2016? It has to do with “safe harbor”:

Although it’s being talked about a lot these days, for anyone who doesn’t know what that is, there are two ways that projects typically qualify for the PTC. First, the 5% safe harbor clause is essentially a clause in the PTC (which was extended in 2015), allowing wind projects to be considered as having begun construction by the end of the year if a minimum of 5% of the project’s total capital cost is incurred before January 1st. This means that ground doesn’t have to be broken for a project to have “started construction” in the eyes of the IRS. An alternate and second way of satisfying the clause is through the Physical Work Test, which delineates certain construction tasks that are significant enough to contribute towards PTC qualification. Whatever method is used, it doesn’t change the fact that the project has to be in service within four years of the start of construction. No matter how it qualified at the time, the clock starts ticking.

They barely pay any tax on these structures as well. Iowa Code 427b.26 requires only that turbines pay 0% the first year, 5% the second year, 10% the third, increasing by increments of 5% until a cap of 30%. Yet in Huron County, Michigan, we see wind developers contesting their taxes.

Also, wind companies are taking advantage of a piece of legislation from 1986 that allows the wind company to replace some of the wind turbine and begin the 10 years of tax credit over again:

Repowering is an opportunity for a developer to requalify an existing wind project for the renewable electricity production tax credit for wind projects under Section 45 of the Internal Revenue Code of 1986 based on new placed-in-service and begun-construction dates while retaining some of the existing project. (North American Windpower, August 2017)

Does this make any difference to anyone else? It’s all a matter of private property and private contracts, right? No. Wind developers admit a long list of negative impacts for neighbors up to a half-mile from any 500-foot wind turbine by offering contracts called “Neighbor Agreements” (click for example) that seek to get neighbors to sign off on negative impacts (as well giving the wind developers a blanket easement to their property) for some money. By the time they offer you this “deal,” though, your County Supervisors have already allowed them to build turbines 1,200-1,500 feet from the foundation of your home.

This is part of the reason that since 2015, 260 government entities across the US have banned or blocked industrial wind at the urging of their constituents. Many more communities have fought and lost to lawmakers that sought the money over the security of their constituents. In Iowa Code 331.301, Supervisors are not tasked with making money for the County but rather to “protect and preserve the rights, privileges, and property of the county or of its residents, and to preserve and improve the peace, safety, health, welfare, comfort, and convenience of its residents.” We are not the only country having problems with industrial wind. Even Germany’s wind industry is at a standstill because of rural backlash. Norway, too!

Data from the US Energy Information Administration show that in the US we use only one-third of the more than 100,000 MW installed wind capacity. The only way we would be able to use more is for the wind to blow 24/7, 365 days a year, at a steady 30 mph or so. Energy companies plan to instead squeeze out more reliability installing massive batteries and thousands of miles of new transmission lines, which only underscores the problem with using a diffuse intermittent source such as wind on a large scale. And they never count these costs when they talk about industrial wind being “cheap.” Industrial wind replaces nothing; it can only displace the energy from traditional sources for a short time. This is a grand scheme of the Averch-Johnson Effect. Look to see who is behind pushing these projects and you will see large investor-owned utilities.

Even in Iowa, which boasts that 40% of our electricity is generated by wind turbines, please remember that that is still only about 4% of all the energy we consume, and we are only 1% of the US population. That 4% has already covered about 1,500,000 of our acres with industrial wind projects, negatively affecting homes and businesses within as well as on the perimeters of these project areas.

Many people believe that somehow wind turbines will reduce a sizable amount of emissions. While turbines will reduce some emissions, once you take the emissions of their manufacture, transport, and construction, as well as batteries, excess power lines, and grid inefficiencies that they impose, it is not worth the huge amount of money and angst. We have cut more emissions by switching from coal to natural gas than wind turbines could ever hope to achieve. The same people boosting industrial wind and solar because of a concern from carbon emissions are also shunning nuclear even though it is emissions free.

There is no way that more power plants, more power lines, and the batteries they now require could somehow be cheaper. Wind turbines have shown that they last 20-25 years all told and 10-15 before they require $1,000,000 each in “repowering.” A traditional power plant lasts 60-75 years. We can have traditional power without turbines or solar, but it is not possible to have it the other way.
Wind Watch

Wind power makes no sense; never has, never will.

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. I am guessing that this allowance for the “wind company to replace some of the wind turbine and begin the 10 years of tax credit over again” might be why at Steel Winds at Lake Erie in Lackawanna just south of Buffalo New York, after a mere 10 years is replacing all of it’s turbines at a cost of $1.52 million each.

    https://steelwinds.horsepower.net

  3. 8james38 says:

    The situation Earth is in is dire, and we must all both understand what the problems are, and what the ideal solutions are.

    As to the science part, one area of research involves energy generation. Many have formed the opinion that wind and solar
    are the best forms of “green energy”. I disagree. Wind and Solar are both useful in some places, especially those without
    an electric grid, but they are not ideal at all for grid level power because they are unpredictably variable and very dispersed.
    It takes a lot of equipment and space to gather enough of either energy to contribute much to an electric grid.

    As a grid is fed more energy from them, it also must have rapidly deployable alternate power sources – usually natural gas plants –
    which can replace the wind/solar input when the wind drops or clouds interfere. This means building and maintaining two
    energy production systems instead of one, and in the case of natural gas (or any fossil fuel) the result is increased atmospheric CO2.

    Just the cost of building and maintaining these backup systems wipes out any saving due to the “free” wind and solar energy.

    The ideal energy source has zero greenhouse gas emissions and maintains steady output no matter what the weather is doing – all at a reasonable cost.

    That is a description of nuclear power – if we can eliminate the safety concerns, the high cost, and the waste problem. The Moltex Energy reactor is just that. It uses present stockpiles of “nuclear waste” as fuel. It is inherently safe, operating at atmospheric pressure with a system that simply cannot explode or melt down under any circumstance. In the industry, this level of complete safety is called “walk-away safe”, meaning the operators could simply walk out the door, and the reactor would continue operating normally, or it would shut down automatically if necessary.

    The Moltex Reactor, the “Stable Salt Reactor” is a much simpler design, and is much less costly to build and maintain.
    The bottom line is that the SSR delivers safe, steady power at half the cost of coal. There is simply no reason that we should not begin global construction of these reactors. They have no drawbacks, and will perform extremely well even in the unlikely event that something better is developed. Energy at half the cost of coal, with zero emissions, is a hard level of success to beat.

    Go to Moltex Energy to see excellent descriptions of this break-through reactor design. This is the solution to global energy production. The first commercial SSR is planned for construction in Canada. See Moltex Energy for reports on that project.

    • wal1957 says:

      Nuclear is off limits in Australia unfortunately.
      The numbnuts in government are so terrified of nuclear that they recently signed a deal with the French to supply submarines for us. The problem is that these subs were originally designed with a nuclear powerplant. So now they are redesigning the subs so that they can run on diesel electric!
      Sheer madness!
      If the gerbil warming doomsayers really are afraid of CO2, the only known method of reliable 24/7 baseload power generation available now that is CO2 emissions free is nuclear.

    • Two points 8james38, firstly while I see no reason not to take advantage of reliable, affordable nuclear generation technology, such as SSR, once it has been proven in service. However at present large scale investment in SSR would be irresponsible, like “buying a pig in a poke”.
      Secondly currently by far the most reliable, lowest cost base load generation technology available in Australia is coal, as either supercritical or ultra-supercritical technology.

    • Jeff Walther says:

      “That is a description of nuclear power – if we can eliminate the safety concerns, the high cost, and the waste problem. ”

      Nuclear electricity generation is, objectively, the safest form of electricity generation used by humans, including wind and solar. Ridiculous to insist on eliminating safety concerns.

      When you look at the lifetime return, and if one actually builds them rationally, taking advantage of experience building, the cost need not be high. Korea builds reactors for $2.5 billion each. The USA used to build reactors for less than $1 B in 2005 dollars.

      http://www.phyast.pitt.edu/~blc/book/chapter9.html

      Finally, waste is a solved problem. No one has been harmed by spent nuclear fuel. The complaints by the anti-nuke folks are alarmist FUD.

      What’s needed is not to solve these non-existent problems and it is not necessary to build a new type of reactor. What is necessary is to educate the public and overcome the generations of paid anti-nuclear propaganda.

      Not to say that those new types of reactors aren’t nice. But we know how to build the old type, and they are perfectly good and better than anything else we currently build.

  4. Reblogged this on uwerolandgross.

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