Legal

U.S. wind production tax credit (PTC) as wildlife terminator

MasterResource.org

July 30, 2012
By Paul Driessen

“The American Bird Conservancy (ABC) and other experts estimate that well over 500,000 birds and countless bats are being killed annually by turbines. The subsidized slaughter “could easily be over 500” golden eagles a year in western states, Save the Eagles International biologist Jim Wiegand told me. Bald eagles are also being butchered. The body count for the two species could soon reach 1,000 a year.”

Extending the industrial wind production tax credit (PTC), in addition to its other problems, threatens eagles and other majestic birds in consequential ways. Do the Washington, DC environmentalists know this? Do they care?

Back in 1995, Paul Gipe’s book, Wind Power Comes of Age (New York: John Wiley & Sons) forthrightly dealt with the fierce, internal debate within the Sierra Club and other groups about the ‘avian mortality problem.” Christopher Flavin of the Worldwatch Institute even said in a foreword to Gipe’s book (pp. xiv–xv):

To its credit, Wind Energy Comes of Age tackles even the most nettlesome issues plaguing the wind industry, including the problem of bird kills, often referred to euphemistically as ‘avian mortality.’ Although the magnitude of the problem is not yet fully clear, Paul raises important warning flags about the dangers of not taking it and other environmental issues seriously. Unless the industry heeds Paul’s warnings, it will lose the environmental high-ground that helped get it where it is today. . . . Even those who feel stung by his criticisms would do well to remember the fate of the nuclear power industry, and others that chose to ignore early problems.

Well, 17 years later, we can say this major environmental problem is clear, and Big Environmentalism is giving Big Wind a pass, an undeserved pass.

Background
A catch phrase for extending the PTC beyond its expiration date of 12/31/12 is that an “all of the above” energy policy is needed. But “all of the above” in this context is a forced redistribution scheme where the good subsidizes the bad. And it falls flat when rephrased as “all of the above and below” where radical environmentalists and “progressive” politicians reject the “any of the below” (i.e., hydrocarbons).

Instead, as America needs an all of the sensible energy policy. If an energy option makes sense – technically, economically and environmentally– it should be implemented. If it flunks, it should be scrapped.

Industrial wind energy mandates, renewable portfolio standards, subsidies, feed-in tariffs and production tax credits fail every test. They flunk environmental standards disastrously. Machines are put into the pristine. And they enable the slaughter of countless eagles, hawks, falcons, owls, herons, cranes, egrets, other birds and bats.

Big Wind: “You Didn’t Build That”

The wind PTC epitomizes “you didn’t build that.” If any business “didn’t get there on your own,” or was “successful because, along the line,” somebody (in government) “gave you some help” – it is Big Wind.

Industrial wind energy has been mandated, propped up, subsidized, built and protected by government. Elected and unelected officials at the federal, state and local levels have given it every unfair advantage that taxpayer and ratepayer money, legal favors and exemptions, and crony corporatism could bestow upon it.

Meanwhile, in numerous cases, the same legislative, regulatory, environmentalist and industrialist cronies have penalized and marginalized Big Wind’s hydrocarbon and nuclear competitors – often for the same reasons that are ignored with wind energy.

Drawbacks Aplenty

Industrial wind is actually our least sustainable energy resource. It requires perpetual subsidies to survive. The tax revenues it takes from productive sectors of the economy, the insufficient and unreliable nature of wind electricity, and the exorbitant electricity rates that wind turbines impose on factories and businesses, kill two to four jobs for every “green” job created. Wind is a net job loser.

Big Wind also imposes excessive environmental impacts. It requires vast amounts of raw materials and land for turbines, backup power and long transmission lines. The extraction and processing of rare earth metals and other materials devastates large agricultural, scenic and wildlife habitat areas and harms people’s health, especially in China.

Worst, the turbines are returning numerous bird and bat species to the edge of extinction, after decades of patient, costly efforts to nurse them back to health. These are not sparrows and pigeons killed by housecats. They are bats that eat insects and protect crops. They are some of our most important and magnificent raptors, herons, cranes, condors and other majestic sovereigns of our skies. They are being chopped out of the air and driven from numerous habitats.

The American Bird Conservancy (ABC) and other experts estimate that well over 500,000 birds and countless bats are being killed annually by turbines. The subsidized slaughter “could easily be over 500” golden eagles a year in western states, Save the Eagles International biologist Jim Wiegand told me. Bald eagles are also being butchered. The body count for the two species could soon reach 1,000 a year.

Altamont Pass–Still Standing, Killing

In the 86-square-mile area blanketed by the Altamont Pass wind facility, no eagles have nested for over 20 years, and golden eagle nest sites have declined by half near the actual facility, even though both areas are prime eagle habitat, says Wiegand. Wildlife expert Dr. Shawn Smallwood estimates that 2,300 golden eagleshave been killed by Altamont turbines over the past 25 years.

The wind industry keeps the publicly acknowledged death toll “low” and “acceptable” by employing deliberately flawed methodologies, says Wiegand. Companies have crews search around turbines that are not operating; search only within narrow radiuses of turbines, thus missing birds that were flung further by the impact or limped off to die elsewhere; search for carcasses only every 2-4 weeks, allowing scavengers to take most of them away; avoid using dogs to sniff for bodies; not count disabled or wounded birds and bats; and pick up carcasses, under the guideline of “slice, shovel and shut up.”

U.S. Fish & Wildlife Service: Double Standard

High security at most wind turbine sites makes independent analysis almost impossible, adds ABC wind energy coordinator Kelly Fuller. Even the faulty (fraudulent?) raw bird kill data are rarely made public and are difficult to access even through the Freedom of Information Act.

Amazingly, the U.S. Fish & Wildlife Service does not require that the information be made public. What little does get released is too often filtered, massaged and manipulated – and now the FWS may allow the industry to put even these suspect body counts into private data banks that would not be subject to FOIA.

The FWS and Justice Department prosecuted and fined oil companies for the unintentional deaths of just 28 small migratory birds (no raptors and no rare, threatened or endangered species) over several months throughout North Dakota. They fined ExxonMobil $600,000for accidentally killing 85 birds over a five-year period in five states. But they have never prosecuted or penalized a single wind turbine company for its eco-slaughter. Now they are going much further.

The Service has proposed to grant “programmatic take” permits that would allow wind turbine operators to repeatedly, systematically, legally and “inadvertently” injure, maim and kill bald and golden eagles–turning what has been outrageously selective (non)enforcement of endangered species laws into a 007 license to kill. While the new rule “is not specifically designed for the wind industry” (as an industry spokesman helpfully pointed out), Big Wind will be by far the biggest beneficiary.

The FWS says it can do this based on illusory “advanced conservation practices” that are “scientifically supportable,” approved by the Service, and “represent the best available techniques to reduce eagle disturbance and ongoing mortalities to a level where remaining take is unavoidable and incidental to otherwise lawful activity.” The Service also claims “mitigation” and other “additional” measures maybe implemented where necessary to “ensure the preservation” of eagles as a species.

When its goal is to restrict development, the FWS frequently defines species, subspecies or “distinct population segments” for sage grouse, spotted owls, “jumping mice” and other wildlife – or labels a species “imperiled” in a selected location, even when it is abundant in nearby locations. With eagles, the proposed “take” rules strongly suggest that the Service could easily say the presence of eagles in some parts of the lower-48 states or even just Alaska would mean their preservation is ensured, even if they are exterminated or driven out of numerous habitats. (Ditto for other species imperiled by wind turbines.)

Attempts to “mitigate” impacts or establish new population segments will almost certainly mean imposing extra burdens, restrictions and costs on land owners and users outside of turbine-impact areas.

Another vital, majestic species being “sliced” back to the verge of extinction is the whooping crane, North America’s tallest bird. Since 2006, installed turbine capacity within the six-state whooping crane flyway has skyrocketed from 3,600 megawatts to some 16,000 MW – and several hundred tagged and numbered whooping cranes “have turned up missing and are unaccounted for,” says Wiegand. And yet, another 136,700 MW of new bird Cuisinarts are planned for these six states!

The Service knows this is happening, and yet turns a blind eye – and Big Wind is not about to admit that its turbines are butchering whooping cranes, bald eagles, Peregrine falcons, bats and other rare species.

Conclusion

This subsidized slaughter and legalized carnage cannot continue. Every vote to extend the PTC, or approve wind turbines in or near important bird habitats and flyways, is a vote for ultimate extinctionof majestic and vital species in numerous areas all over the United States.

Wind energy is not green, eco-friendly, sustainable or sensible. Extending the subsidized slaughter is not something any members of Congress, state legislatures or county commissions – Republican or Democrat – should want to have on their conscience.

——————————

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow (www.CFACT.org) and author or Eco-Imperialism: Green Power – Black Death.

7 comments

1 Ken Langford { 07.30.12 at 9:50 pm }

The more I read about the methods of our government and government supported agencies such as AWEA, environmental organizations etc., it becomes clear that control is the primary objective in accomplishing the government’s plans. Logic be damned!
2 Paul Driessen: PTC as Wildlife Terminator (environmental reasons to clean out tax code) | JunkScience.com { 07.31.12 at 7:36 am }

[…] MasterResource Share this:PrintEmailMoreStumbleUponTwitterFacebookDiggRedditLike this:LikeBe the first to like this. This entry was posted in Clean energy, Endangered species and tagged energy subsidies, government subsidies, really stupid idea, subsidy farming, Wind power. Bookmark the permalink. ← Debate: Bill McKibben vs. Alex Epstein on Fossil Fuels […]
3 Ed Reid { 07.31.12 at 9:01 am }

Ken,

Which came first, the real moron or the oxymoron?

“Enquiring minds want to know.”

– See more at: http://www.masterresource.org/2012/07/windpower-versus-wildlife/#sthash.tA4Cdust.dpuf

Wind power versus rural power (2012)

January 20, 2012

The Ontario Federation of Agriculture (OFA) is calling on the provincial government to suspend the invasion of rural Ontario with industrial wind turbines.

Earlier this week OFA took a hard look at our own concerns with wind turbines. We have always been concerned with the price paid for wind power and the fact that it is not dispatchable – it is not stored for use during peak demand periods, making it highly inefficient. This was noted by Ontario’s Auditor General in his recent Annual Report in December 2011.

In addition, our technical concerns with regard to setback issues, induced current and noise impacts remain unaddressed.

OFA believes that the amendments to the Planning Act made under the authority of the Green Energy Act are not having the desired effect of providing for good planning. Removal of municipal input into industrial wind turbine projects has alienated the rural population and ignored competing community needs and policies.

All of these issues have been emphasized clearly by our members. Over the past few weeks we have clearly heard OFA members tell us of health concerns, concerns over the loss of farmland, encumbrances on their farm properties and many more issues related to the imposition of wind turbines across our rural landscape.

Most disconcerting of all is the impact wind turbines are having on the relationships across rural communities. When wind developments come to a community neighbours are pitted against neighbours. The issue of industrial wind turbine development is preoccupying the rural agenda.

OFA is telling the Ontario government our members have had enough. Rural Ontario cannot continue to be torn apart by wind turbines. The province needs to immediately suspend any further developments until our farm families and rural residents can be assured their interests are protected.

On behalf of rural Ontario, OFA needs to see the government enable community involvement in wind developments to ensure local planning issues and priorities are addressed. We need wind power to be priced right and made dispatchable so it can be used when we need it, rather than selling it at a loss during the nighttime. We need health and nuisance concerns addressed immediately and we need serious studies done on reasonable setback distances for the newer and larger turbines being planned.

The onus is on our provincial government to ensure the interests of rural Ontarians are protected. Our members are clearly telling us now that they are not. There are very serious concerns with wind energy as it is currently rolling out.

OFA supports green energy – Ontario needs a reliable, affordable source of renewable energy for our future. But we all need to work to ensure that green energy projects will respect concerns for noise, community involvement and price, balanced against the effective provision of that power.

Courtesy of Mark Wales, President, Ontario Federation of Agriculture

The Great Green Wind Scam’s Web of Lies

forestJanuary 1, 2012
The Maine Woods

A Publication of the Forest Ecology Network

TMW_Jan_2012_lores-1

 

 

Table of Contents:
The Villains of Mountaintop Industrial Wind – page 3
The Great Green Wind Scam – page 5
Wind Integration: Does It Reduce Greenhouse Gas Emissions? – page 6
Wind Power Won’t Cool Down the Planet – page 7
Why the Wind Industry Is Full of Hot Air – page 8
A Letter to the Department of Environmental Protection – page 10
Industrial Wind Update – Municipal and Legal – page 11
Nature of the Noise Issues – page 12
Wind Projects in Maine – page 16
Real Estate Values and Grid-Scale Wind Energy Facilities – page 18
Is There an Environmentalist in the House – page 21
Flaws in the Wind Power Permitting Process – page 22
Thoughts on Climate Change, Energy, and Forests – page 30

 

Wind farms: suspicious error by consultant condemns Tasmanian eagle to extinction

16 June 2010
SaveEag
 

Spain: Still in business, these “experts” threaten other species by using the same the method

Save the Eagles International blows the whistle on a firm which provides advice to Australian authorities. Says STEI president Mark Duchamp: “if an engineer certified a bridge for 100 cars but it collapsed the next day under the weight of a single automobile, you would fire him wouldn´t you?” He continues: “if a zoologist reported that a wind farm posed no risk to an endangered species, but a reality check revealed that he found “1” when the reply was “100”, would you still trust him?”

Mr. Duchamp claims he found two errors amounting to that much distortion in a report assessing the risk posed by 7 wind farms to the survival of the Tasmanian Wedge-tailed Eagle. “As a result, the risk was misrepresented and the species is now condemned to rapid extinction”. He pinpoints the errors in an open letter reproduced below.

STEI holds the authors of the report, Biosis Research Pty. Ltd., responsible for this biodiversity disaster. “All over the world, conservationists were disturbed to learn that rare TWT eagles are being killed in significant numbers at the Woolnorth wind farm” says Duchamp, who can’t understand why these consultants are still in business. “They are now assessing a highly sensitive windfarm project in Victoria, but are using the same erroneous parameters that failed in Tasmania. They claim to have corrected them, but this is not true. They even added more distortion.” This manipulation, says STEI, allows them to predict insignificant mortality where in fact 200 to 300 eagles will die.

eagpicWedge-tailed Eagle crippled by a wind turbine at Starfish Hill wind farm, South Australia. Turbine blades travel at speeds up to 300 kph at the tip, but appear to move leisurely. This fools the birds.

Australians may have been misled about other species as well, warns Duchamp. On numerous occasions the services of BIOSIS have been used, and negligible mortality has been predicted. He has in mind the cases of the White-bellied Sea Eagle, the Orange-bellied Parrot, the Swift Parrot, and the Brolga, some of them listed as endangered.

STEI concludes: “the fate of Australia’s spectacular bird life should not be left in the hands of “hired guns” consultants in the pay of windfarm interests, public or private.”

Save the Eagles International is a platform constituted by ornithologists and nature conservationists advocating for a realistic assessment of the bird/windfarm problem. Please scroll down to view their open letter exposing the catastrophic error, the misrepresentations and the manipulations.

Eag2Golden Eagle mangled to death by a wind turbine blade at Altamont Pass, California.This huge wind farm holds a record: it is estimated to have killed 2,300 golden eagles in 20 years (Dr. Smallwood et al. 2004).

Wildlife Rulings Challenge Wind Farms

Washington, DC, United States (May 5, 2010) — Two recent high-profile decisions on wind development and wildlife mean that developers looking to develop wind farms on sites considered endangered bat territory in the Eastern United States might consider getting an Incidental Take Permit (ITP) to eliminate any risk, while Wyoming’s sage grouse rules still dominate in Western U.S.

The first decision, from Judge Roger Titus of the U.S. District Court for the District of Maryland in December, Beech Ridge v. Animal Welfare Institute (AWI), is clearly having a higher impact on developers, as it showed the courts’ willingness to disallow earlier survey work. Because bats are at greater risk from wind turbines and do not have the same protections as birds, developers who fail to carefully address the complexities of siting wind farms in bat territory may face increased legal challenges.

The much-awaited second decision, from U.S. Fish and Wildlife Service (USFWS) in March, stopped short of putting the greater sage grouse under Endangered Species Act (ESA) protection, as some had expected. Instead, the flagship species for Western sagebrush habitat was put on a candidate list as warranted for future action, meaning states will continue to be responsible for its management.

BatPrivate landowners, corporations, state or local governments, tribes or other non-federal landowners who conduct activities that might incidentally harm (or “take”) endangered or threatened wildlife on their land can be sued under the Endangered Species Act unless they obtain an incidental Take Permit from the USFWS. In Beech Ridge v. AWI, Judge Titus ruled that, without an ITP on the Indiana bat, Chicago-based Invenergy LLC could not build more than the 40 turbines already under construction in West Virginia and could operate them only in winter, when the bats hibernate. Invenergy has initiated the one- to two-year ITP process for the first time in its history in order to erect an additional 33 turbines that it was planning to build, according to David Groberg, Invenergy’s vice president of business development and lead developer of the project.

Some commentators have written that the judge overreached. But Dr. Thomas Kunz, director of the Center for Ecology and Conservation Biology at Boston University, who testified extensively in the case, said he believes Judge Titus considered the survey work done by Invenergy’s consultant BHE Environmental Inc inadequate. The court opinion notes that despite recommendations from Fish & Wildlife and the West Virginia Department of Natural Resources to set up mist nets to capture bats during the fall migration when the majority of bat mortality occurs, BHE mist-netted only in the summer. But BHE president John Bruck said the scope of all of its mist-netting and bat cave surveys were coordinated with and approved by the Fish & Wildlife regional field office.

Dr. Kunz said BHE made a stronger case for the plaintiff by failing to present acoustic evidence of the presence of Indiana bats (pictured above). Such acoustic evidence, said Bruck, was never requested by the Fish & Wildlife field office and the recordings were made by an employee of a BHE subcontractor without any authorization or supervision. Furthermore, Bruck said, the technology to accurately analyze acoustic data to a specific species did not exist and scientific reviews remain mixed as to the accuracy of identifying specific bat species from acoustic data.

“For bats,” said Laurie Jodziewicz, siting manager for the American Wind Energy Association, “I think the jury is still out as to how to best site projects. We don’t really know that yet, but we’re learning more and more each day. Bats appear to be a much bigger issue for the industry because there is some kind of attraction [to turbines], and the impacts are higher.”

Indeed, says Invenergy’s Groberg, the Beech Ridge case has spurred the firm to “take another look” at how it handles ESA issues. “It raises lots of questions around Indiana bats. We had a take of an Indiana bat in Ohio, where no one expected it, far from hibernacula [bat caves], in farm country. The range of the Indiana bat is broad, including even Pennsylvania and New York,” he said.

In fact, said Kunz, developers who count on their site being far enough away from bat hibernacula to eliminate the risk of impacts, “may find themselves sorely disappointed.”

One developer, Highland New Wind Development LLC, however, seems to have adopted that view for its proposed project in Highland County, Virginia, despite USFWS recommendations and the threat of a lawsuit from Highland Citizens for Responsible Development, an action group that has been fighting the wind farm since 2005.

Since the project’s inception in 2002 when it applied for a USDA federal loan, USFWS has told Highland Wind that because two at-risk species of bat populate the area, it should get an ITP. Highland Wind spokesman Frank Maisano said the developer “is likely” to pursue an ITP, but that “in-depth studies” it had conducted had identified no endangered bats in the area and that the developer was not required to get one before construction. Furthermore, he said Highland Wind told him that because the site is about 20 miles from bat hibernacula and consists of bald-top, not forested, ridges, the project “is not likely to have a big impact” on bat populations.

Kunz said that bats appear to be attracted to forest edge habitats.

Laurie Berman, president of Highland Citizens, said Highland Wind “knows it has an issue to deal with, and we don’t understand why they want to wait [to get an ITP].” The group will decide its course of action in the next few weeks, she said. Its Roanoke-based law firm, Wood Rogers PLC, has advised the Highland County Board of Supervisors that allowing Highland New Wind to proceed without the ITP would place the county, as well as the developer, in legal jeopardy.

Kim Smith, a USFWS biologist in Virginia who has followed the Highland project since 2002, noted that getting the ITP is, indeed up to the developer, but that “if they don’t get one and take occurs, they are not protected.”

RenewableEnergyWorld.com’s Jennifer Zajac blogged about these issues, here.

Sage Grouse
On the other side of the country, USFWS’s “warranted for listing” ruling for the greater sage grouse means developers of sites in its habitat are still subject to state, rather than federal ESA, management rules. Of all of the Western states that comprise sage grouse habitat, Wyoming is one of the most important and has the most advanced—some in industry would say extreme—rules for its management.

Following Governor Dave Freudenthal’s August, 2008 Executive Order, Wyoming’s policy prohibits development in core sage grouse (image below) habitat unless “it can be demonstrated by the state agency that the activity will not cause declines in Greater Sage-Grouse populations.” “Core” habitat is defined as land with larger breeding populations and old-growth sagebrush and comprises approximately 23% of the state, said Brian Rutledge, executive director and vice president of Audubon Wyoming and a member of the Governor’s Sage Grouse Implementation Team.

Sage GSince the governor’s order, the wind industry has seen the policy as discriminatory. AWEA’s Jodziewicz said, “We don’t agree that there are places where under no circumstances wind can be developed, to have 20% of the state of Wyoming off-limits, considering that oil and gas [installations] are [already] present.”

Jodziewicz said that even though wind farms are not specifically banned unless developers are allowed to build to study and determine the mitigation measures needed to assure a net negative impact, it is a de facto ban. Rene Braud, director of permitting and environmental affairs for Horizon Wind Energy and member of the Sage Grouse Team added, “The core strategy leaves us with no options. Some of the best wind is in sage grouse habitat. There is no science, no studies on the effects of wind facilities on sage grouse. We are offering studies, but are precluded from building in sage grouse habitat so we have no opportunity to collect data.”

Rutledge disagrees. “From scientific study, we know that grouse are disturbed by vertical development, even juniper growth, by overhead motion, noise, roads and traffic, which makes it pretty rough on wind. One of most challenged ecosystems in North America is sagebrush and prairie grasslands [and] the sage grouse is a flagship species for the ecosystem. We are pro-wind, but we want to see it developed in a green manner, so we have said, do your research in the 70% that is [less] occupied by sage grouse and leave the 23% alone,” he says.

Despite the obstacles in both territories, development in both regions is moving forward.

Invenergy’s Groberg said the company has other projects that are moving forward within the range of the Indiana bat, and Highland New Wind has “lots of interest” from potential investors, said spokesman Maisano.

Meanwhile, in Wyoming, Bob Budd, chairman of the Sage Grouse Team said, “We are refining what we need to do in the core areas, and outside the core areas, we are trying to make [development] as easy as we can. It is going to evolve a tremendous amount, as we get more scientific information as to what is needed by the species.”

Marsha Johnston is a DC-based freelance journalist, specializing in renewable energy, wildlife/wild space conservation and sustainable development issues. She can be found at StewardingtheWild.wordpress.com.

RENEWABLE ENERGY Not Cheap, Not “Green” (1997) – Part 2

August 27, 1997
by Robert L. Bradley Jr.

The total cost of wind power is higher than the advertised estimates for several reasons.

1. Wind receives a 1.5 cent per kWh federal tax credit, escalating with inflation, which is approximately one-third of its (as-delivered) selling price. Accelerated depreciation is also given to wind-powered facilities, further lowering their tax rate. Gas-fired electricity generation does not have a tax credit or an option of accelerated depreciation, and natural gas extraction has a total deduction (primarily a scaled-back percentage depletion allowance) of less than 2 percent of its wellhead price. [17] State severance taxes, which totaled $45 billion for oil and gas extraction between 1985 and 1994, swamp the wellhead deduction. [18] Thus wind power’s entire tax credit should be added back in for an apples-to-apples comparison with gas-fired alternatives. Local tax incentives for wind, such as in California, would increase the add-back.

2. Low-cost wind depends on select sites with strong, regular wind currents (Class 4 and above wind speeds), whereas other power generation facilities can be built in larger increments in far more places, or converted or re-powered in existing locations. Remote wind sites [19] often result in additional transmission line construction, estimated to cost as much as $300,000 to $1 million per mile, [20] in comparison with locally sited gas-fired electricity. The economics of transmission are poor because, although the line must be sized at peak output, wind power’s low capacity factor ensures significant under-utilization. That adds 0.5 cent per kWh, sometimes more and sometimes less, to the leveled cost of wind. [21]

3. Because wind is an intermittent (unpredictable) generation source, [22] it has less economic value than fuel sources that can deliver a steady, predictable source of electricity. Utilities obligated to provide firm service must either “firm up” the intermittent power at a premium (estimated by power traders to be around 0.5 cent per kWh) [23] or penalize the provider of interruptible supply. Output uncertainty also increases financing costs of outside lenders compared with more predictable, proven power generation. [24] Therefore, a premium has to be added to the interruptible wind rate to compare it with firm generation alternatives such as gas-fired combined-cycle plants.

4. Wind power becomes more expensive if any account is taken of negative environmental externalities as mainstream environmentalists do for fossil-fuel plants (full-cost pricing). Whereas coal and gas plants have incurred higher costs for emission reductions pursuant to Clean Air Act mandates (and in some cases have been penalized in resource planning decisions where state regulators add “externality adders” to plant costs), no penalty has been imposed for the environmental problems of wind farms–noise, land disruption, visual blight, avian mortality, and air emissions associated with the incremental materials required in wind turbine construction. [25] Neither has there been an allowance for the substantial social cost of taxpayer subsidies. [26]

All-inclusive wind prices, factoring in the hidden incremental costs mentioned, are quite different from the advertised price of new wind capacity. [27] Complained San Diego Gas and Electric about its “winning” wind-power bids of about 8 cents per kWh in a 1993 auction, SDG&E observes that the resulting price to wind developers of 6-6.5 cents per kilowatt-hour when added to the 1.8 cent [federal and state] tax credit is so far above the five cents/kilowatt- hour revenue wind developers have reportedly claimed they require as to indicate that the BRPU auction would result in unfair costs to consumers. Before the [California Public Utilities] Commission commits to such high prices, wind developers should be asked to explain why the price customers must pay to them is so much higher than what they claim they need. [28]

San Diego Gas & Electric’s bid experience was approximately the same as the calculated cost of a proposed (but more recently canceled) 45 MW wind project in northern California that would have sold power to the Sacramento Municipal Utility District. [29] A new 35-MW wind-power project in West Texas, where the winds are better, has a 25-year fixed-price contract for 4.7 cents per kWh. Adding in the federal tax credit, 0.5 cent per kWh for incremental transmission expenses for the 400-mile trip to Austin, and 0.5 cent for nonfirm delivery, however, the cost is around 7 cents per kWh from the get-go–not including the implicit costs due to the incidence of off-peak production and higher financing costs.

A December 1996 report from the Northwest Energy System, a group of electricity stakeholders in the Pacific Northwest, including environmental groups, reconfirmed the severe economic plight of wind as well as other renewable energies.
Utility-scale solar, wind and geothermal technologies still are more expensive than gas-fired combustion turbines and current market prices. . . . Several renewable resource projects designed to confirm various technologies under Northwest conditions . . . are anticipated to produce electricity that is from one and one-half [wind] to four times [geothermal] more costly than gas-fired combustion turbines. [30]

That estimate for wind does not account for implicit costs, which would add approximately 1 cent per kWh to its price, making it double the cost of gas-fired generation and triple the cost of widely available economy energy in the Pacific Northwest.
Paul Gipe, in his treatise on wind power, estimates that the best technology (as of 1995) could deliver wind power for $1,050 per kW, or for between 7.5 and 8.3 cents per kWh. [31] This estimate, adding the incremental costs discussed earlier, again confirms the conclusion that as of the mid-1990s wind energy was double the cost of new gas-fired generation and triple the cost of surplus energy (called economy energy, which refers to the price of electricity on the spot market).

New gas-fired combined-cycle capacity in the same period, the early to mid-1990s, could generate electricity for between 3 and 5 cents per kWh, according to the Federal Energy Regulatory Commission (FERC). [32] San Diego Gas & Electric and the Sacramento Municipal Utility District estimated the cost of their gas-fired generation alternative at about 4 cents per kWh. [33] This is firm generation with the flexibility to be located near customer demand; thus it avoids the subtle costs that wind faces.

A gas-fired project can even lock in long-term gas prices to remove price risk for consumers and ensure a price saving over renewable-energy projects with relatively high capital costs. The advantage is imperviousness to short-run gas prices, even a near doubling of prices such as occurred last winter. Because of a “backwardation” curve, long-term prices became substantially below near-term prices, reflecting the long-term supply optimism of the market. [34] The result was that 10-year fixed gas prices and the resulting price of electricity were little changed. [35]

RENEWABLE ENERGY: Not Cheap, Not “Green” – Part 1

August 27, 1997

by Robert L. Bradley Jr.

Problems of Wind Power
Of immediate concern to eco-energy planning is wind power, beloved as a renewable resource with no air pollutants and considered worthy of regulatory preference and open-ended taxpayer and ratepayer subsidies. Despite decades of liberal subsidies, however, the cost of generating electricity from wind remains stubbornly uneconomical in an increasingly competitive electricity market. Many leading wind-power providers have encountered financial difficulty, and capacity retirements appear as likely as new projects in the United States without major new government subsidy. [6]

On the environmental side, wind power is noisy, land- intensive, materials-intensive (concrete and steel, in particular), a visual blight, and a hazard to birds. The first four environmental problems could be ignored, but the indiscriminate killing of thousands of birds–including endangered species protected by federal law–has created controversy and confusion within the mainstream environmental community.

Unfavorable Economics
Relative prices tell us that wind power is more scarce than its primary fossil-fuel competitor for electricity generation–natural gas, used in modern, state-of-the-art facilities (known in the industry as combined-cycle plants). [7] That is because wind power’s high up-front capital costs and erratic opportunity to convert wind to electricity (referred to as a low capacity factor in the trade) more than cancel out the fact that there is no energy cost for naturally blowing wind. [8]

Low capacity factors, and still lower dependable on- peak capacity factors, are a source of wind power’s cost problem. In California, for instance, where some 30 percent of the world’s capacity and more than 90 percent of U.S. wind capacity is located, wind power operated at only 23 percent realized average capacity in 1994. [9] That compares with nuclear plants, with about a 75 percent average capacity factor; coal plants, with a 75 to 85 percent design capacity factor; and gas-fired combined-cycle plants, with a 95 percent average design capacity factor. [10] All those plants produce power around the clock. Wind does not blow around the clock to generate electricity, much less at peak speeds.

Peak demand for electricity and peak wind speeds do not always coincide. [11] A study by San Diego Gas & Electric in August 1992 concluded that wind‘s dependable on-peak capacity was only 7.5 megawatts per 50 MW of nameplate capacity (a 15 percent factor). [12] The CEC consequently has recalculated the state’s 1994 wind capacity from 1,812 MW to 333 MW, an 18 percent dependable capacity ratio. [13]

The cost of wind power declined from around 25 cents per kilowatt-hour in the early 1980s to around 5-7 cents (constant dollars) in prime wind farm areas a decade later. [14] By the mid-1990s, wind advocates reported that a new generation of wind turbines had brought the cost down below 5 cents per kWh and even toward 4 cents per kWh in constant dollars. [15] A DOE estimate was 4.5 cents per kWh at ideal sites. [16] However, even at the low end of the cost estimate, the total cost of wind power was really around 6-7 cents per kWh when the production tax credit and other more subtle cost items were factored in, as discussed later. The all-inclusive price in the mid-1990s was approximately double the cost of new gas-fired electricity generation–and triple the cost of existing underused generation.

The total cost of wind power is higher than the advertised estimates for several reasons.

1. Wind receives a 1.5 cent per kWh federal tax credit, escalating with inflation, which is approximately one-third of its (as-delivered) selling price. Accelerated depreciation is also given to wind-powered facilities, further lowering their tax rate. Gas-fired electricity generation does not have a tax credit or an option of accelerated depreciation, and natural gas extraction has a total deduction (primarily a scaled-back percentage depletion allowance) of less than 2 percent of its wellhead price. [17] State severance taxes, which totaled $45 billion for oil and gas extraction between 1985 and 1994, swamp the wellhead deduction. [18] Thus wind power’s entire tax credit should be added back in for an apples-to-apples comparison with gas-fired alternatives. Local tax incentives for wind, such as in California, would increase the add-back.

2. Low-cost wind depends on select sites with strong, regular wind currents (Class 4 and above wind speeds), whereas other power generation facilities can be built in larger increments in far more places, or converted or repowered in existing locations. Remote wind sites [19] often result in additional transmission line construction, estimated to cost as much as $300,000 to $1 million per mile, [20] in comparison with locally sited gas-fired electricity. The economics of transmission are poor because, although the line must be sized at peak output, wind power’s low capacity factor ensures significant underutilization. That adds 0.5 cent per kWh, sometimes more and sometimes less, to the levelized cost of wind. [21]

3. Because wind is an intermittent (unpredictable) generation source, [22] it has less economic value than fuel sources that can deliver a steady, predictable source of electricity. Utilities obligated to provide firm service must either “firm up” the intermittent power at a premium (estimated by power traders to be around 0.5 cent per kWh) [23] or penalize the provider of interruptible supply. Output uncertainty also increases financing costs of outside lenders compared with more predictable, proven power generation. [24] Therefore, a premium has to be added to the interruptible wind rate to compare it with firm generation alternatives such as gas-fired combined-cycle plants.

4. Wind power becomes more expensive if any account is taken of negative environmental externalities as mainstream environmentalists do for fossil-fuel plants (full-cost pricing). Whereas coal and gas plants have incurred higher costs for emission reductions pursuant to Clean Air Act mandates (and in some cases have been penalized in resource planning decisions where state regulators add “externality adders” to plant costs), no penalty has been imposed for the environmental problems of wind farms–noise, land disruption, visual blight, avian mortality, and air emissions associated with the incremental materials required in wind turbine construction. [25] Neither has there been an allowance for the substantial social cost of taxpayer subsidies. [26]

All-inclusive wind prices, factoring in the hidden incremental costs mentioned, are quite different from the advertised price of new wind capacity. [27] Complained San Diego Gas and Electric about its “winning” wind-power bids of about 8 cents per kWh in a 1993 auction,

SDG&E observes that the resulting price to wind developers of 6-6.5 cents per kilowatt-hour when added to the 1.8 cent [federal and state] tax credit is so far above the five cents/kilowatt- hour revenue wind developers have reportedly claimed they require as to indicate that the BRPU auction would result in unfair costs to consumers. Before the [California Public Utilities] Commission commits to such high prices, wind developers should be asked to explain why the price customers must pay to them is so much higher than what they claim they need. [28]

San Diego Gas & Electric’s bid experience was approximately the same as the calculated cost of a proposed (but more recently canceled) 45 MW wind project in northern California that would have sold power to the Sacramento Municipal Utility District. [29] A new 35-MW wind-power project in West Texas, where the winds are better, has a 25-year fixed-price contract for 4.7 cents per kWh. Adding in the federal tax credit, 0.5 cent per kWh for incremental transmission expenses for the 400-mile trip to Austin, and 0.5 cent for nonfirm delivery, however, the cost is around 7 cents per kWh from the get-go–not including the implicit costs due to the incidence of off-peak production and higher financing costs.