The Obama Budget And Wind Power

The promise of "wind" as an alternative source of energy has failed — repeatedly.

Reprinted from the Institute for Energy Research (IER)

In the 1970s and 1980s, the proponents of wind power claimed that renewables would be cost-competitive in a few years if they just received some subsidies for a few years. But thirty years later, renewables proponents are still clamoring for subsidies from U.S. taxpayers. Despite a trillion dollar deficit, President Obama is once again responding to the renewable promoters and asking Congress to approve his budget with billions of dollars in energy subsidies.

The President’s proposed budget would renew and extend a number of renewable subsidies including the 1603 program which pays for as much as much as 30 percent of development costs of renewable-energy projects.[i]  The budget also includes an extension of the production tax credit for the wind industry that is scheduled to expire this year.[ii] The production tax credit is worth 2.2 cents per kilowatt-hour of electricity produced during the first 10 years of a wind farm’s operation.   In addition, the budget request would provide $95 million for developing wind energy technology.[iii]

Budget experts indicate that the production tax credit to wind producers costs U.S. taxpayers roughly $1 billion a year. U.S. taxpayers are also loaning billions of dollars directly to renewable firms through the Federal Financing Bank (a part of the U.S. Treasury). According to a study of the industry’s top 20 lenders by Bloomberg New Energy Finance, the Federal Financing bank loaned more money to “clean energy” firms than any other bank in the world—a whopping $10.1 billion in 2011 alone.[iv]

If a 4-year production tax credit extension passes, as proposed in H. R. 3307, it would add another $6 billion to the $20 billion in taxpayer dollars the wind industry has received over the past 20 years. The United States borrows these funds (typically from China) and gives them, in part, to European companies that manufacture wind turbines.

The “Value” of Wind Power
Despite, the U.S. government giving billions in subsidies and loans to wind and other “clean energy” firms, there are important questions we should be asking—“just how valuable are these sources of energy?” As Irish journalist Kevin Myers writes in his blog, wind power in Ireland produces electricity from only 22 percent of its capacity. So, he asks, would you spend $100,000 on a car if it meant that $78,000 of the purchase price was wasted? But, it gets worse since the car may not operate when it is needed. On a really cold day when 5,000 megawatts of wind power were needed, wind was producing under 50 megawatts—just one percent of the requirement.[v] Following on with this analogy, it will cost the consumer another $100,000 to provide a reliable car that can operate in cold weather.

Would you operate your family budget in this way? Most families could not afford that kind of luxury. If wind cannot be relied upon to provide power when needed most, then why build it in lieu of some of power that would be reliable and dependable? Why should politicians have that kind of luxury with taxpayers’ money?

Wind capacity continues to grow, but expectations for wind capacity growth in developed countries are not rosy given cut-backs and or expiring subsidies and low natural gas prices making wind even less economic despite the subsidies.  European countries, who were the first on the renewable band wagon have found that they cannot continue to afford to pay for their renewable “luxury”. There are important lessons to be learned about the dangers of choosing winners and losers in the energy marketplace from Germany’s and Spain’s experience. Spanish taxpayers have paid dearly to make their nation a global leader in renewable energy and Germany has generated some of the highest electricity rates in the world through their feed-in tariffs for renewables.

Conclusion
According to Rep. Mike Pompeo of Kansas, the wind industry “simply cannot continue to rely on the American taxpayer. Each time it comes up to a year of expiration, they say, ‘If we just get a few more years our technology will mature and we will become more competitive.’ It’s time for them to figure out how to do that.”[vi]

[i] Bloomberg Business Week, Obama’s budget would extend treasury grants for wind, solar, February 13, 2012 http://www.businessweek.com/news/2012-02-13/obama-s-budget-would-extend-treasury-grants-for-wind-solar.html

[ii] New York Times, Obama’s Pitch on Energy , February 14, 2012, http://www.nytimes.com/2012/02/15/opinion/obamas-pitch-on-energy.html?_r=2&nl=todaysheadlines&emc=tha211

[iii] The Hill, Obama’s budget doubles down on renewable energy, February 13, 2012, http://thehill.com/blogs/e2-wire/e2-wire/210295-obamas-budget-doubles-down-on-renewable-energy

[iv] Bloomberg, U.S. Government Arranged Most Loans for Clean Energy in 2011, January 17, 2011, http://www.businessweek.com/news/2012-01-17/u-s-government-arranged-most-loans-for-clean-energy-in-2011.html

[v] Independent, Kevin Myers: Energy policy based on renewables will win hearts but won’t protect their owners from frostbite and death due to exposure, February 7, 2012, http://www.independent.ie/opinion/columnists/kevin-myers/kevin-myers-energy-policy-based-on-renewables-will-win-hearts-but-wont-protect-their-owners-from-frostbite-and-death-due-to-exposure-3012098.html

[vi] Wall Street Journal, Wind-Power Firms on Edge, February 2, 2012, http://online.wsj.com/article/SB10001424052970203363504577186993654897460.html

Tags: federal budget, president obama, renewables, wind power

 

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Comments

  1. Harold Clark says:

    When crooks are in power: the wirly gigs were nothing but a typicale 'polititon and crooked business partnership.'. I notice in our area that the windy projects are always giving? something in the community to bolster their image. When all they are doing is giving away tax payer money. Much of this is going to foreign companies, in our area it's an Italian company. There so many of these foolish things araound the country now, that are already abandoned. In other words the subsidies have run out or they are broken down etc. and not repaired. Leave it to the shysters in Washington to get payoffs from the windy lobbies and they will continue untill we get some honest people in D.C. Follow the money, H. Truman had it right when he said any politition who gets rich in office is a CROOK> Looks like we have a lot of CROOKS in D.C.

  2. Obamanomics –all of the taxpayer's money to the federal government equals filthy rich socialist crooks and politicians.

  3. Mr. Clark thinks that we have a lot of crooks in DC. Have to agree with him on that. But also in New York at the UN. The example of Spain proving that alternative energy is just not viable doesn't concern the powers-that-be. This is not really about making our planet healthier. Pared down it is about power &control as well as redistributing wealth. But that redistribution is not really to the "poorer nations", it is to the likes of GE.

  4. LukeAppling says:

    Obama cares nothing about America only how to destroy it through regulations and the economy. His tactics ,have been planned for years and with a half-white person in the White House the left feels they have their opportunity. As Rahm Emanuel said "never let a crisis go to waste" and they plunged America into 5 trillion dollars of additional debt, more than all previous Presidents combined. their strategy of "green jobs" sounds good but they have failed in Spain, Italy, Portugal, England, and now Holland is removing their wind mills. For each job the "green scam"developed they lost two other jobs. america is dong the same with Solyndra, Chevy Volt[$250,000 per vehicle for taxpayers],First Solar,Massachusetts Beacon Power,Evergreen solar, Fisker Electric auto, ENER1, LightSquared, Siga Technologies, Bright Source et al. Every one of these companies gave campaign donations to Obama and democrats which became bribes for the" Green scam". If in doubt check out every one keep a bag handy you may vomit at the tactics of Obama to destroy our beloved country.

  5. Congress has to approve these expenditures (at least according to my copy of the Constitution) so it is up to us to make our displeasure known to those we elected. We have a chance to retire 1/3 of the Senate this year and all of the House so lets get it done. This article is the first time I have ever heard of the Federal Financing Bank. There are so many back doors for fleecing the taxpayers that it is pathetic.

  6. why not let obama, ried, piglosi, sebellius, napolitano,etc. provide the wind. They sure are blowing alot of smoke at the american people every day with their lies!.

  7. Most of congress is full of it and let it off, IN YOUR FACE every time they open their mouth from their bottoms. Ron Paul is the only one that will tell it like it is.

  8. HOW MUCH IS A VOTE WORTH ANYWAY?

  9. Kevin Beck says:

    The only "wind power" coming from Washington, DC is whenever some ignorant political hack speaks his mind.

    It's a terrible thing to waste one's mind…but these hacks do it every day and get paid for it.

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