Public costs of wind power pile up as industry digs in against expiration of tax credit

spanish fan

Imagine Washington policymakers one day proposing a spectacular renewable energy and jobs program, one that assigned a laborer equipped with a lovely Spanish-style but, of course, American-made, fan to every home.

The symmetrical logic of reducing our loathsome dependence on fossil fuels while creating more than 114 million jobs is powerfully alluring. If you could resist the impulse to ask what this revolutionary program would cost.

Something on a much less ridiculous scale has been going on for decades at the intersection of power generation and your government, which has insisted, through its policies, that American taxpayers support alternative energy sources like wind power.

To give you an idea of how competitive the wind power industry is, the possibility a federal production tax credit for wind farms might not be renewed for the first time since 1992 has sent companies in the nation’s wind power capital, Texas, into a panic, the Texas Tribune reports.

This in spite of the $7 billion state electric ratepayers contributed to build power lines from West Texas wind farms to cities where the power could actually be used. And that all of the taxpayer and ratepayer support produces a very small number of jobs at a cost of $1.6 million each.

Vestas, a Danish turbine manufacturer, is closing its Houston research and development facility in advance of the tax credit vote, the story says. William McWhirter with Trinity Industries in Dallas says a decline in wind tower production next year will hurt the manufacturing company.

Sarah Howell, a spokeswoman for BP Wind Energy, a creator of Texas wind farms, says the impact of a lapsed tax credit on the industry would be “devastating.”

Little remarked upon by the people opining in the story is how much supporting the wind power industry costs and that those costs have always been borne by taxpayers and ratepayers.

Without subsidy, the actual cost to generate wind power on-shore is expected to be at least 50 percent and as much as 75 percent more than for natural gas, according to projections made in a June 2011 study by the Electric Power Research Institute. (Please see projection charts on pages 1-11 and 1-12 in the study.)

Offshore wind power is expected to cost two to almost three times as much to produce as natural gas, the Research Institute study says. And those cost differences are not expected to change appreciably by 2025, the study says.

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Contact Mark Lisheron at 512-299-2318 or mark@texaswatchdog.org or on Twitter at @marktxwatchdog.

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