John McClaughry: End life support for Big Wind

Editor’s note: This commentary is by John McClaughry, who is vice president of the Ethan Allen Institute www.ethanallen.org.

The fate of Big Wind in Vermont is currently resting with a piece of legislation that has become hotly controversial in Congress.

To understand why, it’s necessary to grasp that Big Wind is almost entirely a product of a host of federal and state subsidies. Most of these are disguised as “tax expenditures” that allow Big Wind investors to offset their taxable income from other sources. For instance, Big Wind investors can depreciate their investments over five years – and take 50 percent bonus depreciation the first year.

The really crucial federal handout is the Production Tax Credit (PTC). Under this provision a Big Wind developer can collect a $23 credit for every megawatt hour of electricity produced. (“Big Wind” means ridgetop turbines producing more than 100 kW of electricity. There are also many state and federal incentives for renewables generally, including small wind.)

The current crisis facing Big Wind’s profitability is the fact that the bonus depreciation and the PTC expired at the end of 2013. Big Wind, and the renewable industrial complex generally, has mounted a frantic lobbying campaign to get Congress to pass the “extender” bill to revive the expired provisions to enable more Big Wind money making. The Washington Post described the bill as “a full employment plan for lobbyists” and “fiscal irresponsibility plain and simple,” because there is no revenue source to cover the $85 billion in first-year tax expenditures ($13 billion for Big Wind.)

Vermont Sens. Patrick Leahy and Bernie Sanders and Rep. Peter Welch are enthusiastic supporters of reviving the Big Wind PTC. It’s hard to explain the enthusiasm of these three for subsidy-sucking Big Wind, when so many of their constituents are opposed to it.

The “extender” bill is currently on hold in the Senate, partly because of opposition to many of the handouts contained therein (especially from anti-subsidy Tea Party Republicans), and partly because of Senate Democratic Leader Harry Reid’s tyrannical refusal to allow Republicans to offer amendments not approved by him.

Get your three liberal members of Congress to back off from their support for including the PTC in the extender bill.

 

One might view the Big Wind subsidies somewhat more favorably if wind power were a dependable and economically competitive energy source. It is not. It delivers irregular power during the 25 percent of the time (New England average) that suitable wind is blowing, at roughly twice the cost of power from the New England grid (or Vermont Yankee, which will go off line in three months).

When the wind blows at night, and power demand is low enough so that it can be met with baseload generation, the wind power producers actually pay the utilities to accept their power. More amazingly, when there is no wind, the turbines must suck power out of the grid to keep the huge blades slowly moving to prevent metal fatigue. This is called “parasite load.”

Congress, urged on by Leahy, Sanders and Welch, may pass the extender bill after this year’s election. If the PTC extension is included, Big Wind will get strong new life support.

And even more help is on the way. Gov. Peter Shumlin and his ally Rep. Tony Klein will almost certainly ask next year’s Vermont Legislature to enact a Renewable Portfolio Standard (RPS). This new mandate would require Vermont utilities to purchase increasing portions of their power from renewable sources, regardless of the cost to the ratepayers.

The new RPS would be an important component of Shumlin’s Comprehensive Energy Plan of 2011, that promises to mandate, tax and subsidize until 90 percent of Vermont’s energy consumption comes from renewable sources, including Big Wind, by 2050. The reason for this, of course, is to save our grandchildren from the “horrid future” Shumlin confidently predicts for them if we don’t take heroic steps now to combat the dreaded Menace of Global Warming.

If you have had enough of the expensive Big Wind subsidy carnival, what should you do? Get your three liberal members of Congress to back off from their support for including the PTC in the extender bill. Its expiration will almost certainly guarantee that no large wind project will ever again be built in Vermont.

But don’t stop there. Make it clear to candidates for governor and the Legislature that you want Shumlin’s absurd “90 percent by 2050” mandate repealed, and the Renewable Portfolio Standard scrapped.

Just to drive the final nail in the Big Wind coffin, you could also ask them to enact a standby state production tax of $23 per megawatt hour on electricity from new Big Wind projects, that would cancel out any revival of the federal PTC.

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  • Bob Stannard

    Spoken like a true nuke, oil, coal and fracking believer.

  • Don Peterson

    Big Wind is representative of how our government works now.

    Public policy has been hihacked by special interests, with results taking a back seat to political theatre. During the show, the crooks rob the box office.

    But climate change denialism should not be taken as an effective stand against corrupt government.

    So what would you propose to do, Mr. McLaughry, to lessen the impact of a steadily warming planet– or should we just ignore it as a liberal hoax?

  • Tom Sullivan

    “It’s hard to explain the enthusiasm of these three for subsidy-sucking Big Wind, when so many of their constituents are opposed to it”
    Wouldn’t that indicate a majority of the three’s constituents support renewables? That’s not too hard to explain is it?

  • krister adams

    Oil companies are not only among the nastiest polluters in the world but receive some of the biggest tax breaks, incentives, free passes. Please do not denigrate people or organizations trying to make the world a cleaner, healthier place. However I realize if this were to occur, the Republicans/Ultra Conservatives such as yourself would be out of business…

    • John McClaughry

      Do us the favor of listing the “tax breaks, incentives, and free passes” made uniquely available to the US petroleum industry (as opposed to corporations generally).
      Hint: there’s percentage depletion on the first 1000 bpd of small producers.
      Hint” there were the royalty giveaways of the Clinton administration to producers in the Gulf (since corrected).
      Now, your turn:……

      • John Greenberg

        John,

        Why does it matter whether “’tax breaks, incentives, and free passes’ [have been] made uniquely available to the US petroleum industry (as opposed to corporations generally)?” Why should ANY corporations get them? In a globalized market, one COULD make the argument that our competitors are providing these subsidies so we must, but isn’t that precisely the opposite of the idea the US supposedly presents in “free trade” talks? And in any case, THAT argument wouldn’t begin to approach justifying the magnitude of US corporate tax breaks and incentives.

        As to other examples unique to the petroleum industry, you could take a look at the below-market leasing rights that have been granted to the petroleum industry on federal lands as another example, as well as the free-pass on the pollution they have created over the years.

  • Lance Hagen

    Here is the question I have yet to see the proponents of the ‘climate change is a crisis’ answer.

    If Vermont is successful at achieving its goal of 90% renewables by 2050, what will be the predicted impact on global warming or severe weather events, in measurable terms? Since climate models have been used to predict the ‘crisis’ in global warming, surly they could be used to assess the impact of Vermont’s 90% renewable goal.

  • Matt Fisken

    Viewing the Big Wind only through the lens of economics is myopic. The environmental and health implications of building these monsters, at least in certain places, is a much more convincing argument against them. If you make the point that developers are able to guarantee a return at the expense of previously intact ecosystems and families, then you’re speaking a language most Vermonters can understand.

    • John Greenberg

      Matt:
      “The environmental and health implications of building these monsters, at least in certain places, is a much more convincing argument against them.”

      If you think so, then please make the “more convincing argument.” It’s not self-evident.

      • Matt Fisken

        John,

        I think my previous comment speaks for itself, but…

        I know you don’t believe that people or ecosystems are suffering from these build-outs, but it’s hardly my responsibility to convince you of that. Nor should everyone with different values than you need to “prove it.”

        For the record, and to distance myself somewhat from many who are against Big Wind, I am not suggesting that nuclear power is (still) the answer to our insatiable appetite for electricity.

        My answer is still for us to learn to be less insatiable and (to borrow a concept from James Howard Kunstler) stop confusing energy with technology. My mind remains open to what that will look like in 2050, but I am fairly certain our centralized, distributed, power grid will make like the dinosaurs and fossilize.

        • John McClaughry

          I largely agree. I have long favored distributed, modular smaller scale (200 Mw) nuclear plants, burning up light water rector “waste”. I am partial to Amory Lovins “Soft Energy Path” of 1976, although not all of it survived technical criticism (and I still donate to Amory’s Rocky Mountain Institute).

      • John,
        Here is another impact.

        Over 1000 minks were born deformed or born dead a few months after 4 large 3 MW wind turbines were placed in operation within 1000 feet of the breeding farm.

        A safer distance would have been about 6600 feet = 2 km.

        Starting in January 2014, when the farmer brought it to the attention of health authorities, the news created great consternation within government circles in Denmark, where wind energy is a heavily subsidized holy cow.

        Just a little background:

        In the early days of wind energy, Denmark had many small 100 to 500 kW wind turbines on the outskirts of small towns. Those units emit little infrasound.

        When I drove through Denmark in 1985, I was surprised how few of them were operating, even though there was plenty of wind.

        In rural areas those units are being replaced with large capacity units, 2 – 3 MW, the same as on Lowell Mountain. Those bigger units DO emits much more infrasound, as proven by measurements by DANISH university professors, which indicate the bigger the unit, the more infrasound.

        The below article has had more than 7000 views. It was reviewed by THREE nationally known acoustics engineers; one of them testified on Lowell before the VT-PSB.

        http://theenergycollective.com/willem-post/84293/wind-turbine-noise-and-air-pressure-pulses

  • John Greenberg

    John McClaughry’s arguments here are as completely full of holes as usual.

    McClaughry balks at spending $85 billion on a bill for which he blames “Big Wind,” while noting, just in passing that only $13 billion of the bill goes to “Big Wind.” So what happened to the other 85% of the money?? Silence.

    McClaughry notes that wind projects are allowed to accelerate their depreciation over 5 years (instead of roughly 20-25), but fails to note that OTHER forms of energy have enjoyed similar tax benefits for decades. See http://cs.thomsonreuters.com/ua/fixa/cs_us_en/ass_life_tbl/hid_help_asset_lives.htm and http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US06F for details. Not to mention the many OTHER tax benefits which have benefited other energy sources for decades.

    The production tax credit? Available to new nuclear projects as well.

    All in all, McClaughry presents a remarkably distorted picture. Here’s the rest of it: energy in the US has been subsidized since the early 19th century. EVERY energy source has been and still is subsidized. See (http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf ) “Big Wind” is the least of it.

    Even the Nuclear Energy Institute, hardly a neutral source, puts subsidies for renewables LOWEST on its list (along, of course, with nuclear): “Analysis2 shows that the federal government’s primary incentive to nuclear energy has been in the form of R&D (see table below). Nuclear energy was the beneficiary of about half ($74 billion) of the government’s spending on energy R&D, but almost 60 percent of the total spent on nuclear energy research since 1950 was spent before 1975.” The table that follows also shows how NEI sees the allocation of federal incentives: 44% to oil, 14% to natural gas, 12% to coal, 11% to hydro, and 9% each to nukes and renewables (which a footnote characterizes as wind and solar). http://www.nei.org/Issues-Policy/Policy-Resources/Testimony/Testimony-for-the-Record-for-the-Energy-Tax-Reform

    Finally, McClaughry disdains the issue of global warming and simply ignores the environmental problems associated with other forms of producing energy, despite the fact that we all end up paying for them.

    There’s a reason why countries all around the world are turning to renewables, including “Big Wind” despite its intermittency. Neither the US nor Vermont is alone in this. Perhaps McClaughry might want to ask himself why, instead of presenting such a ludicrously one-sided discussion. Naa.

    • Teaching the pig to sing, Mr. Greenberg, teaching the pig to sing.

    • Lance Hagen

      Talk about a distorted view.

      If one looks at how much power is generated for each subsidy $ spent, Wind is a bigger loser. Considering TOTAL subsidy $ from 1947 to 2013, the amount of power generated for each $ is:

      Wind = 36.9 kWh/$

      Nuclear = 96.4 kWh/$ (if one uses subsidy $ numbers from Mediamatters, who are strong opponents of nuclear power, so their numbers are most likely high)

      Nuclear = 220.1 kWh/$ (if one uses subsidy S numbers from NEI, which most likely are low)

      So if subsidies to Nuclear were a big mistake, subsidies to Wind are even a bigger mistake, by a factor of 2.6x to 6.0x. Sort of like shooting yourself in the leg after shooting yourself in the foot.

      • John Greenberg

        Lance,

        We’ve been through all this many times. Your statistics are simply bogus. They are based on an EIA report which lists ONLY some of the subsidies for one year. The report is quite explicit about its limitations, though you appear to feel you can simply ignore them. http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf Since we have been all over this, I will take the liberty of simply copying and pasting comments made previously.

        Specifically, in the report’s own words: “this report … is limited to subsidies that are provided by the federal government, provide a financial benefit with an identifiable federal budget impact, and are specifically targeted at energy markets. … These criteria do exclude some subsidies beneficial to energy sector activities (see box entitled “Not All Subsidies Impacting the Energy Sector Are Included in this Report”) and this should be kept in mind when comparing this report to other studies that may use narrower or more expansive inclusion criteria.” (p viii)

        The box just referred to then specifies this as an example of one exclusion: “For example, Section 199 of the American Jobs Creation Act of 2004, referred to as the domestic manufacturing deduction, provides reductions in taxable income for American manufacturers, including domestic oil and gas producers and refiners. The value of the Section 199 deduction in FY 2010 is estimated at $13 billion and approximately 25 percent is energy-related.” Since the report finds a TOTAL of $37+ billion, this is not a small exclusion.

        Here’s are 3 others: “This report includes the impacts of accelerated depreciation schedules identified as specific to the energy sector, but excludes schedules with applicability beyond the energy sector. Subsidized credit for energy infrastructure projects is frequently provided by export credit agencies and multilateral development banks. However, entities such as the Export-Import Bank of the United States also provide support …. Tax-exempt municipal bonds allow publicly-owned utilities to obtain lower interest rates than those available from either private borrowers or the U.S. Treasury.”

        Several more are mentioned and then, as I’ve noted more than once: “This report also does not attempt to quantify the potential subsidy resulting from limits to liability in case of a nuclear accident provided by Section 170 of the Atomic Energy Act of 1954, the Price-Anderson Act.“ (pp. ix-x)

        The list I’ve quoted is far from complete, yet its exclusions are in the tens of billions of dollars and may well total more than what is actually included.
        (For a detailed analysis, please see: “EIA Energy Subsidy Estimates: A Review of Assumptions and Omissions” by Doug Kaplow: http://www.earthtrack.net/files/uploaded_files/EIA%20subsidy%20review%20final_17Mar10.pdf)

        In other words, the report is quite explicit about BILLIONS of dollars of exclusions, yet you never seem to think it relevant to point that out. Kaplow’s analysis, which I haven’t read in detail, suggests that, beyond the STATED exclusions, there are many others as well.

        To sum up the point so far, the EIA report is a very partial and very limited look at “Direct Federal Financial Interventions and Subsidies in Energy” (only).

        Equally important, the report covers ONE fiscal year: 2010. As I noted above, federal energy subsidies began right around the birth of the US and were firmly in place during the 19th and 20th centuries. It should be obvious to anyone that an industry which as enjoyed 100 years of subsidies has more than a small economic advantage over one which hasn’t. Even the NEI, cited above, notes “60 percent of the total spent on nuclear energy research since 1950 was spent before 1975” which means, of course, that those funds are NOT cited here. It’s also not coincidental that 2010 was the first full fiscal year of the Obama presidency, and includes the major impact of his stimulus spending to counter the worst depression since the 1930s.

        Finally, the fails to consider ANY of the externalized costs of power sources, but EPA has only recently noted that coal production, to give just one example, results in thousands of deaths from heart disease and asthma each year, not to mention the illness, lost work, etc. http://www.epa.gov/airquality/powerplanttoxics/health.html

        SOMEONE pays for all those things, and it isn’t the coal industry. I would call that a subsidy. What would you call it?

        *****************
        A last point. Your analysis stands the most plausible justification for subsidies on its head. You appear to feel that the more power is derived (THIS YEAR) from a subsidy, the better it is: that is, I suppose, more bang for the buck.

        But that misses the whole point of providing subsidies in what is otherwise supposed to be a free market. The market itself is supposed to allocate resources to achieve the greatest ECONOMIC efficiency. Established businesses, in the course of competition on a level playing field should give us the best prices WITHOUT further intervention by governments, because they should be able to produce and therefore sell at lower cost. Any subsidy based on rewarding cheaper producers with federal funds simply distorts the free market for no plausible reason at all.

        On the other hand, businesses which are still making major development and production strides have a difficult time entering existing markets, precisely because they cannot produce enough to minimize their costs. They are caught in a vicious cycle of low demand due to high price and high cost due to low demand. For these industries, providing incentives (subsidies) to get production up to efficient cost levels actually makes economic sense. But that MEANS that they will, initially at least, produce smaller output per dollar of subsidy. That’s especially the case for industries – like renewables – which create thousands of well-paid jobs in the meantime and which eliminate many of the external costs which your analysis previously ignored.

    • John McClaughry

      The remaining $72 billion in tax credits in the “extender” bill goes to a wide range of subsidies, some of which I might support (the R&D credit is a possibility).
      “New nuclear” will get a PTC when it goes on line (in Georgia). I opposed the 2005 Bush energy bill in part for including this pro-nuclear provision, and I would agree to repeal the federal Price Anderson backup insurance.
      You may have noticed (but probably not) that I am making a serious effort to remain civil, while being subjected to the hatred, scorn and insults of the fellow travelers of the renewable and climate change industrial complex. Sometimes I wonder how long I can keep this up….

  • Howard Shaffer

    And there is a reason why so many countries around the world are turning to nuclear power also! Argentina, Bangladesh, Belarus, Brazil. China, Finland, France, India, Pakistan, Russia, South , Republic of China – Taiwan, Turkey, United Arab, Emirates, United States. These are countries that have plants under construction, or plans. Others have plants too – Canada etc.

    • John Greenberg

      Howard,

      It’s true: many countries have turned TO nuclear power, but many have also turned AWAY from it: Germany, Italy, Switzerland, etc.

      On the plus side, nuclear is a low-carbon energy source, and regardless of the claims of John McClaughry and other climate change skeptics, most of the world is looking for low-carbon energy sources right now. Most, if not all, of the countries on your list are ALSO building out wind and other renewable sources.

      Nuclear is also a wonderful source for countries with authoritarian and/or socialist governments, since it exists ONLY with the major support of central (and sometimes other) governments. I notice you don’t address the primary issue John McClaughry raises of subsidies. Can you name any country which is building nukes and does NOT subsidize them?

      We shouldn’t overlook the fact that nuclear is also a source of powerful military weaponry: Pakistan and India are prime examples of this, since both used what were supposed to be civilian programs to build bombs. I notice you didn’t include Iran, Israel, or North Korea on your list!

      But this is not the place to debate all the merits and drawbacks of nuclear power.

      • John Greenberg

        Howard & John,

        Concerning nuclear subsidies, here’s a case in point from today’s Kyodo News. Japan is considering a new system for its nuclear fleet to ” enable nuclear plant operators to continue investment in new facilities and upgrade infrastructure even if electricity prices go down after the market is freed up. … Under the system, modeled on the British framework, a strike price will be set reflecting the massive costs for decommissioning of a nuclear plant and the management of spent fuels. When the market price falls below the benchmark, the differences will be complemented.” http://english.kyodonews.jp/news/2014/08/308072.html

        Guess who will “complement” them!

      • John/Howard,

        Russia and Iran are planning to sign a contact for 8 new nuclear plants this year.

        The spent fuel (which still has 95% of the original fuel, i.e., only about 5% is used) will be returned to Russia for reprocessing.

        http://uk.reuters.com/article/2014/05/22/uk-iran-nuclear-russia-plants-idUKKBN0E21GJ20140522

        Ten nations are the major holders of the world’s proven gas reserves at end 2013. The top six are:

        Gas reserves………..tcm……………..Exports; bcm

        Iran…………………….33,8……………….3.90
        Russia…………………31.3……………211.30; by pipeline
        Qatar…………………..24.7……………125.00; as gas 19, as LNG 106
        Turkmenistan………17.5………………40.00
        US……………………….9.3……………..37.13; net imports
        Saudi Arabia…………8.2………………..0.00

        US 2013 exports………..44.52
        US 2013 imports………..81.65; incl. LNG

        The numbers indicate Iran is a big “prize”. If it were more cooperative, it could more properly develop its gas resources. The numbers also indicate, the US, a big consumer of gas, is not in any position to export gas in meaningful quantities to Europe or East Asia for geo-political reasons, because the US needs its low-cost gas for its own economy. To pretend otherwise, using various geo-political reasons, such as “checking Russian expansionist land-grabbing”, is irrational, to say the least.

        http://www.bp.com/content/dam/bp/pdf/Energy-economics/statistical-review-2014/BP-statistical-review-of-world-energy-2014-full-report.pdf
        http://www.eia.gov/naturalgas/importsexports/annual/

        http://theenergycollective.com/willem-post/368081/russian-gas-exports-and-western-encroachments-russia

        • John Greenberg

          Thanks for providing the link to the BP energy report. It’s very interesting!

          Two points are relevant to our discussion here.

          1) While global nuclear output is still growing (.9% last year), the growth of nuclear power is far slower than virtually every other source examined. In particular, global renewable (excluding hydro, which is treated separately here) growth in power production was 16.3% and renewables now account for a larger share of global energy consumption (5.3%) than nuclear (4.4%). “Globally, wind energy (+20.7%) once again accounted for more than half of renewable power generation growth and solar power generation grew even more rapidly (+33%), but from a smaller base.” Meanwhile, nuclear power’s share of global energy production is its lowest since 1984. (All from p.5)

          2) Willem concludes: “The numbers also indicate, the US, a big consumer of gas, is not in any position to export gas in meaningful quantities to Europe or East Asia for geo-political reasons, because the US needs its low-cost gas for its own economy.”

          Looking at the price charts on page 27 suggests a different possibility. US prices for natural gas are roughly 1/3 of those in the rest of the world; the ratio to Japan, for example is closer to 5+ to 1. Obviously, getting gas from here to there isn’t free, but that price spread suggests to me a powerful motivation for producers to want to expand their markets to other countries.

          As the controversy over the Keystone pipeline clearly shows, that motivation has not escaped the notice of producers. Long story short, I wouldn’t count on US gas prices remaining low for too long.

  • Warren Buckles

    If everyone who had a wind energy sticker on their car/window/whatever were to put a big windmill on the top of their house we would either have:

    1. Lots of wind energy if the wind is blowing (provided Vermont’s transmission/distribution grid could support so many distributed small sources of energy).
    2. A lot of people not happy with noise, vibration and lousy power quality (unless a lot more is invested in the distribution/transmission system in the state).

    This is a complex technology – not as complex as nuclear or as fraught with disaster or potential for military diversion, but still complex. Integrating a non-constant energy source into a grid that was designed for constant energy feed is not easy – nor is it easy to make customers understand that if they want wind energy their electric outlets won’t behave the same way they do when backed with coal, oil or nuclear generation.

    You can’t have it both ways – if you want ‘green’ energy you will have to pay the piper – or pay somebody else for nuclear. Any other option is death by carbon loading – not us, but out grandchildren or their grandchildren.

    wb

  • David Kelley

    If we are going to subsidize wind power in Vermont it should be on a residential or farm scale, not an industrial scale. What Green Mountain Power did to the Lowell Mountain Range should qualify as an environmental disaster. To subsidize companies like Eolian for tearing up Vermont so they can ship power to Connecticut isn’t what I would call good public policy.

    • Carl Werth

      EXACTLY, David.

      100% agree with you.

    • David,
      “To subsidize companies like Eolian for tearing up Vermont so they can ship power to Connecticut isn’t what I would call good public policy.”

      It is good insider-dealing policy which gets the fabulous trio campaign contributions for doing “constituent service”, which drown the meager funds of the independent voices.

  • Paul Richards

    So after reading all of the commentary pointing fingers at each other for this subsidy and that subsidy, it seems that everyone agrees that there has been subsidies and there will probably always be subsidies. That being the case, doesn’t it make sense to put our money into the most viable energy sources? The challenge is to get a consensus on what those sources are. There will never be complete consensus of course. Everyone is free to arrive at their own conclusions. I’ll just say that for my money I would rather see us utilize the newest science we have on Nuclear and similar technologies rather than eat up our landscapes with wind turbines and solar panels. I do think wind and solar absolutely have a place in our energy makeup but not for base load needs. New homes and buildings as well as existing ones should be fitted with wind and solar generators where feasible. Plastering them on our mountaintops and wetlands makes no sense to me.
    I wonder what a world without the constant pressure of an overreaching, overspending overtaxing government obsessed with taking more and more from us would do to solve our energy needs. Oh well, no need to wonder, it will never happen. They are like a crack addict when it comes to their thirst for power and control.

    • John Greenberg

      Paul Richards,

      You write: “…it seems that everyone agrees that there has been subsidies and there will probably always be subsidies.” There’s really no question that there HAVE been subsidies; that’s an easily verified fact. But I don’t agree that there always will be, and I certainly don’t agree that there should be. I wouldn’t be surprised if many of the others who have commented here agree with these statements.

      The basic reason I can think of for subsidies in this area – or in any other area where there is a well-developed free market – is for government to attempt to counter-balance externalized costs or issues which do not otherwise enter into market transactions. Subsidies are one way of doing this; taxes, another.

      As I noted above, burning fossil fuels produces toxic emissions which harm human health and the environment, as well as greenhouse gas emissions which cause global warming. None of these are included in the price we pay for fuel or for electricity generated by using these fuels. A significant carbon tax would be one way to add back into the market price the toll caused by these fuels. Subsidizing the competition is another. But following this theory, there would be NO excuse for subsidizing fossil fuels, yet, they have received the largest share and they continue to receive major amounts of direct and indirect subsidization.

      For similar reasons, I would not support any further subsidies for nuclear power: it’s already received VAST subsidies and is now a mature industry. While it does have merits as a low-carbon energy source, it has many compensating problems which continue unabated. As already noted, roughly half of the now-nuclear powers in the world (and, by far the least stable of them) obtained nuclear weaponry by distorting their civilian programs into covert military efforts: India, Pakistan, Israel, North Korea are all examples, and Iran is feared to become one. No one has successfully found permanent disposal for highly radioactive waste anywhere in the world, despite 60 years of attempts and failures. And, as Chernobyl and Fukushima amply demonstrated, the risks of catastrophic accident are real and, in my estimation, more costly than the power itself is worth. I could go on, but I think my point is clear enough for the purpose of this argument.

      Finally, I support limited subsidies for wind, solar and other newer energy sources because they DO offer a far-less-polluting option, but only for as long as it takes to put them on equal footing with other energy sources. Once that happens, free markets can and will allocate capital and other resources to the most efficient producers, and I am confident that these sources would prevail, if the playing field were to actually become level.

      There are far better uses of taxpayer money than subsidizing these vastly profitable enterprises.

      The one other reason I can think of for subsidies — in the energy field and elsewhere — is to provide early research and development funding for industries too unproductive to attract private capital, but with the potential to create new industries for the benefit of everyone: the US government did precisely this in the case of railroads, highways, nuclear power, the internet, drug research, and many other areas. The returns to our society have been vast.

      For what it’s worth, I think we could find better ways than we have to insure that some of the return on that investment accrues to taxpayers, but that’s another issue, I suppose.

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