PANIC AS PRODUCTION TAX CREDITS SET TO EXPIRE IN JANUARY (SURE THEY WILL)
The first time I saw a wind farm was in 1996 as I was driving from Los Angeles to Palm Springs. I’d read about these things and seen pictures of them, but I was mesmerized; the San Gorgonio Pass wind farm looked like something right out of a science fiction movie. Cool – and creepy at the same time.
The giant wind turbines fascinated me then and they fascinate me now; there’s just something mysterious about them. Maybe it’s a “back to the future” thing; maybe it’s because the gigantic blades appear to rotate too slowly; maybe it’s because I don’t entirely understand how they work; maybe it’s all of the above.
What I do know, however, is that the wind industry is in a panic mode as it tries to persuade Congress to extend its production tax credits (PTC), which are set to expire at the end of the year.
Faced with the possible loss of PTC, the industry is already hemorrhaging jobs and cancelling projects. In its desperation to convince naysayers that wind turbine generated energy is not only a viable source of alternative energy, but an affordable one as well, the industry is proposing a “compromise,” which amounts to basically a continuation of PTC. (Whose definition of “compromise” does that sound like?)
About those production tax credits, courtesy of Forbes:
Since first being adopted in 1992, the “temporary” production tax credit for wind energy has ballooned from $5 million per year in 1998 to over $1 billion annually today. And even if ended, taxpayers are still obligated to cover nearly $10 billion in tax credits for projects built during the last decade. That’s in addition to an almost $20 billion debt for wind projects eligible under the Section 1603 extension, the renewable energy bailout of 2011. In many parts of the country, the PTC actually exceeds the wholesale price of power.
Okay, I think I see the problem. Does this remind anyone else of the wisdom of building Chevy Volts at a cost of $89,000 per car and selling them for $49,000? Welcome to “investing in the future” – Obama-style.
Yeah, I know – the wind industry’s PTC program began in 1992 – long before President Greens Jobs, a rabid fan of wind energy, came into office – so why should I get after him? Solyndra. And dozens of other “green energy” companies that have gone down the alternative energy toilet – only after O poured billions of dollars into them, of course. Let’s be honest: this guy never saw a soon-to-fail alternative energy company he didn’t like. And when he continues to “like” them with billions of taxpayer dollars – Houston, we have a problem.
But, hey – at least O’s “spreading the money around,” as he’s fond of saying. Part of the concern? He’s “spreading it” to other countries. More from Forbes:
Of the stimulus grants so far, more than 80% have gone to wind farms (covering up to 30% of all project costs). A Meadow Lake wind development project in Indiana that is owned and operated by Horizon Wind Energy received $276 million. Horizon is a wholly-owned subsidiary of EDP Renovaveis, a Portuguese company. The turbines are manufactured by Vestas in Denmark, and are mounted atop 350-foot towers imported from Vietnam.
Yet after receiving over $50 million in U.S. stimulus subsidies, Denmark’s Vestas Wind Systems A/S, the world’s largest wind turbine maker, recently announced it will cut more than 800 jobs here and in Canada, representing 20% of its North American workforce. According to Reuters, Vestas executives admitted that without more tax credits and stimulus funds, the company will have trouble competing, and told customers that “it would stop non-profitable projects. ” Continue reading…
So after 20 years of “temporary” production tax credits, the wind industry continues to cost American taxpayers billions of dollars – with no end in sight.
Consider the planned 130-turbine Cape Wind development off Nantucket Sound for example. Acting on the Massachusetts legislature’s Green Communities Act of 2000 requiring that 20% of the state’s power come from renewable sources by 2025, Governor Patrick approved a merger of two local utilities – NSTAR and Northeast Utilities of Connecticut – to create a new company that must purchase 27.5% of their output from the project.
Customers who chose to purchase the “NSTAR 100” option from the Maple Ridge wind farm in upstate New York and Kirby Wind Power in Maine have already seen their current energy bills rise by 33% and there is worse to come – across the country.
Two things are abundantly clear: Without taxpayer handouts and excessive regulation (two hallmarks of the Obama Regime), wind energy – particular offshore wind energy – will go the way of the Edsel. Or would that be the Chevy Volt?