US Wind Industry Wilts as Wind Welfare Gets Slashed
The wind industry exists – and ONLY exists – for one single purpose: to wallow in a massive subsidy stream that – in order to keep this monstrous Ponzi scheme alive – will need to outlast religion.
In Australia, the – already overflowing – wind power subsidy trough is designed to be refilled with $3 billion annually from 2019; and to continue being filled at that colossal rate, until 2031.
From hereon, the cost of the greatest subsidy rort in the history of the Commonwealth will exceed $45 billion – every last cent of which will be recovered from Australian power consumers through retail power bills.
But, with commercial retailers boycotting wind power – flatly refusing to sign up to long-term power purchase agreements – wind power outfits here are screaming ‘blue murder’. It’s still all about dreadful ‘uncertainty’ – or so we’re told:
Faced with a recommendation, made a month or so back, from the Senate Inquiry into the great wind power fraud, that the mandated subsidy – in the form of renewable energy certificates (RECs) – should be limited to a period of 5 years – rather than running from 2001 to 2031 – the wind industry, its parasites and spruikers started howling like Banshees about their imminent “doom”.
The response has left STT just a little perplexed.
You see, the impression given by the wind industry and its worshippers is that wind power outfits are driven by a kind of ‘divine altruism’, under which their only objective is to power the world for free, while saving the planet from the ‘dreaded’ CO2 gas; and otherwise spreading health, wealth and happiness all over the planet.
But, truth be told, ‘altruism’ is running a poor second to the ‘main wind industry game’ – pocketing massive and endless subsidies:
It shouldn’t be so. You see, on the wind-worshippers’ ‘case’, wind power is the ‘perfect product’: it’s already “free” and, it’s getting cheaper by the day (see this piece of fantasy from ruin-economy).
Back in the real world, however, the ‘perfect product’ is having more than just a little trouble selling itself on its own merits.
Here’s a pair of pieces from the US, that simply confirm the bleeding obvious: THESE THINGS DON’T WORK – on any level.
Wind power growth faces sharp decline without federal aid, report says
9 September 2015
The growth of wind power projects could come screeching to a halt if Congress fails to extend the renewable energy Production Tax Credit by the end of the year, according to a new American Wind Energy Association report being released later this week.
While critics oppose the continuation of what they call “wind welfare,” Texas leads the nation in wind power, which makes up about 14 percent of the Texas grid’s generation capacity. Failing to extend the renewable energy tax credit could lead to a dramatic 70 percent to 90 percent drop off in new wind power installation projects, said Rob Gramlich, AWEA senior vice president.
“Wind is the unfortunate poster child for unstable government policy,” Gramlich said, adding that the tax credit’s past and current stops and starts “lead to disruption and layoffs.”
For instance, Dokka Fasteners recently said it is closing its Michigan wind power manufacturing plant largely because of uncertainty on U.S. energy policy and the tax credit, as well as congressional gridlock.
The argument for the tax credit is that wind power is becoming increasingly competitive with traditional coal and natural gas-fired power plants, but that cheap natural gas from U.S. shale and other factors are preventing an equal playing field for now. So the AWAE contends the competitive tax credit is needed until wind is truly equally competitive in the next decade as wind turbine costs keep coming down.
“America has been lulled into complacency during downturns in energy prices before, believing cheap energy would last forever, only to be hit harder each successive time when energy prices inevitably increased,” the report states. “Smart energy policy can help us avoid falling into this trap as we have before by ensuring that America maintains a diverse portfolio of energy options.”
Businesses and investors need “long-term clarity” on credits and public policy in order to make decisions on major wind projects that take years to complete, the report added. The AWEA said wind energy supports 73,000 direct jobs nationwide and enough energy to power 18 million homes. The association also argues the growth of wind power saves lives because of the decreased reliance on fossil fuel power and its carbon emissions.
The Production Tax Credit is competitive and gives a 2.3 cents credit for every kilowatt-hour of electricity sold for the first 10 years of a project’s life. The tax break renewal was estimated to cost $6.4 billion over 10 years. Gramlich added that there are some federal incentives for every type of power generation and that wind is not being singled out. The tax credit still supports wind projects that were already in progress before the end of 2014, but the AWEA report stated that the policy uncertainty will slow the rate of cost reductions in wind power projects.
Still, opponents like the American Energy Alliance argue the AWEA and other groups are guilty of doublespeak for touting the vibrancy of wind power while begging for more government subsidies. The wind industry keeps pushing back the timeline on when it will become truly cost competitive, the alliance adds, so it is time for wind power to stand on its own two feet. Critics also contend wind power is unreliable because wind is intermittent.
Houston-based Calpine, which owns natural gas-fired power plants, opposes the tax credit under the argument that it limits a competitive market.
“Government should not pick winners and losers by subsidizing certain market participants,” Calpine spokesman Brett Kerr said in an email response. “The (tax credit) should not be renewed and market participants should all compete on the same level playing field. Additionally, if the policy goal is carbon reduction, the best approach is to put a price on it and let market sort out most efficient reductions, not having subsidies and set-asides.”
The tax credit is a partisan hot potato that is largely supported by Democrats but has limited GOP backing. The Senate Finance Committee recently approved a bundle of two-year, business tax credit extensions, including the Production Tax Credit, but the full Senate has not yet taken up the legislation. After an August recess, Congress is primarily focusing now on the Iran nuclear deal and government funding legislation.
Gramlich said Congress typically addresses tax credit extensions nearer to the end of the year.
In Texas, the state government requires utility companies to buy a certain amount of their electricity from renewable sources such as wind and solar. An effort to dismantle the state program, called the Renewable Portfolio Standard, failed in the Legislature last spring.
Domestic market for distributed wind turbines faces several challenges
Today in Energy
27 August 2015
The domestic market for distributed wind turbines has weakened since the record capacity additions in 2012. Last year’s installations of mid-size and small wind turbines were the lowest in a decade. Relatively low electricity prices, competition from other distributed energy sources, and relatively high permitting and other nonmaterial costs have presented challenges to the distributed wind market in the United States.
Most distributed wind turbines installed in 2014 were connected directly to distribution lines to serve local loads. Distributed wind turbines can also be installed either off-grid or grid-connected at local sites to offset all or a portion of a site’s electricity consumption. Compared with electric utility wind facilities, distributed wind turbine installations are often smaller units, below 1 megawatt (MW), and thus may not appear on EIA’s survey of utility-scale electric generators, which has a 1-MW threshold at the project level. Although some large-scale turbines (1 MW or greater) are used in distributed generation applications, large-scale turbines are more often used at wind farms for wholesale power generation, which is sent through transmission lines to more distant customers.
Based on information in the U.S. Department of Energy’s Distributed Wind Market Report, most of the 2014 distributed wind capacity was installed on institutional sites, such as schools, universities, and electric cooperatives. Government installations on city, municipal, or military facilities made up more than one quarter of 2014 installed capacity. Other sectors (industrial, commercial, agricultural, and residential) were relatively small in terms of capacity, but larger in terms of number of installations, as the average turbine size on these sites is relatively small compared with institutional and government sites.
Some customers who install these turbines are eligible for federal tax credits, in particular the investment tax credit (ITC), which provides a 30% cost incentive for turbines with capacities of 100 kilowatts or less. The investment tax credit was one of the largest factors in both the increase in installations from 2010 to 2012 and the decline after 2012. In 2009, as part of the American Recovery and Reinvestment Act, the U.S. Treasury allowed projects to receive cash payments instead of tax credits. To qualify, projects had to be under construction or in service by the end of 2011 and must have applied for a grant by October 1, 2012.
Even though these tax credits are still available, the expiration of the cash payment option drastically reduced the installation of small and mid-size wind turbines. Further affecting the outlook for distributed wind is theU.S. Internal Revenue Service requirement, added this year, that small wind turbines meet performance and safety standards in order to qualify for the ITC.
Other factors cited in the recent decline in distributed wind installations are the relatively low price of grid electricity and lower cost of solar photovoltaic systems, which also receive the 30% ITC. Nonhardware costs associated with distributed wind, such as permitting, financing, installation, and supply chain costs, have not fallen as much as they have for solar photovoltaics. U.S.-based manufacturers and supply-chain vendors in the distributed wind market have been vulnerable to market downturns, preventing the market from growing at a faster rate. For these reasons, U.S.-based manufacturers may look to international opportunities, particularly in Japan and South Korea, to find more favorable markets.
Today in Energy