Last week I wrote about the Affordable Care Act and how government policy, despite being well-intended, can be ineffective. This week, I’ve been reading a few articles about wind power. Some of this stuff was pretty eye-opening to me. I am not going to say it was surprising to me, because I’ve always been skeptical of government energy schemes. And by the way, wind power is bipartisan tomfoolery. It was during the Bush administration when the lofty 20-percent goal was set. That’s 20 percent of U.S. electricity coming from wind by 2030. Since then, the Obama administration doubled down and is asking for permanent government subsidies for wind energy. Before I go any further with this, I feel like I need to make something clear. I do not deny that human activity has an effect on climate. I believe that manmade carbon dioxide does have an effect the ozone layer. I am not nearly as alarmist as some global warming folks, but I believe it’s real. So assuming that some level of global warming is happening, the question becomes, “What do we do about it?” I think it would be great if we could wean ourselves off carbon-based fuels, but there just really isn’t any technology available to do that. You can’t plow fields with an electric tractor. You can’t transport people in electric planes, and you can’t haul freight with an electric locomotive or semi. I actually looked into buying an all-electric car. It was actually kind of cool, but it only went 62 miles between charges, and that’s only if you aren’t driving into a headwind. I’m serious. It actually said that in the specifications. The same thing is true about the generation of electricity. Burning coal or firing up a nuclear reactor are fairly economical ways to generate electricity. So as harmful as it may be to the environment, there’s really no good alternative to burning up fossil fuels right now. At the same time, we keep traveling more and using more electronic devices. So what does the government do? It tries to come up with ways to reduce carbon emissions and increase renewable energy sources. It’s a noble goal because at least the government is doing something to address problems, but doesn’t it have to make sense? I mean, doesn’t there have to be some semblance of efficacy? Doesn’t it have to produce the desired result? Sometimes the government reminds me of one of my college roommates. We would be hanging around trying to decide what we were going to do on a Saturday night. He would say, “Let’s do something, even if it’s wrong.” Remember that 20 percent wind power by 2030? In 2014, we were at 4.4 percent. And to get to that 4.4 percent level, wind energy has received $30 billion in federal subsidies and grants over the past 35 years. See, I’ve never been convinced that wind energy was feasible without huge government subsidies because there are all kinds of roadblocks to generating electricity efficiently by wind. First, they’re pretty expensive on the front end. Beyond the cost of the turbine itself, you have the cost of transporting the thing to where it’s going to be erected. The big commercial ones run between $3 and $4 million a copy installed. Then, sometimes – not always – roads have to be built or re-radiused to accommodate the giant cranes that have to be hauled to the site to erect the turbine. Once it’s built, there’s the most basic question of all: What happens when the wind doesn’t blow? Studies show that wind turbines only average between 20 to 40 percent of capacity, depending on the location. This means that electric companies have to keep coal-fired plants on standby to balance the variable load they’re getting from wind. When those plants are idled down and not running at capacity, they’re a lot less efficient. Wind power proponents don’t really take that into account when they talk about the cost of wind power. Aside from that, the windiest places are generally a long way from the places that need the electricity the most. And since lots of turbines are erected in the middle of nowhere, there are no power lines available to carry the electricity they generate to the nearest grid. That means many times power lines have to be erected as well, at a cost ranging from $1 million to $4 million per mile. In 2013, Texas completed a renewable energy project which added 3,600 miles of transmission lines to remote wind farms. This cost state taxpayers $7 billion, according to a Newsweek article. A recent study by the Strata Institute of Political Economy at Utah State University concluded that regardless of how cost factors are considered, the true cost of wind energy in the United States is, on average, at least 48 percent higher than most estimates claim. Wind power proponents, like the American Wind Energy Association, say wind power costs are reaching all-time lows today, nearing $40 per megawatt hour. A 2013 study by Michael Gilberson, of the Center for Energy Commerce at Texas Tech University, put the cost as high as $109/Mwh. I am not exactly sure who to believe, really. But after reading Gilberson’s study, it seems to me his analysis is valid and wind power costs a lot more than its proponents let on. Here’s a portion of Gilberson’s conclusion: So far as we were able to determine while researching these costs, no one in or out of the U.S. government has provided a systemic cost-benefit analysis of the Production Tax Credit. This serious lack of analysis has been recognized by renewable policy experts, but remains unaddressed. Dr. Ryan Wiser of the Berkeley Lab testified to the Senate Finance Committee in 2007 on the many benefits expected from an extension of the PTC, but explained “these possible benefits must be judged against the costs to the Treasury ... as well as the alternative uses of the funds requirement to support such an extension.” Six years have passed since this testimony to Congress, but no comprehensive assessment of the costs and benefits associated with the PTC for wind has been produced. Seems to me the government really doesn’t have a good handle on the true cost of wind power yet is willing to throw money at it anyway. It also seems to me no one in the private sector would build a wind farm if not for the availability of generous government subsidies. The hope is that over time the industry will grow to the point where the cost of turbines fall, capacity increases and wind power becomes so affordable there will be no need for government subsidies. That would be great and I’m all for it. I’m just not sure it will ever happen.
