The Hidden Costs of Wind - Power Subsidies - Wall Street Journal


The Hidden Costs of Wind-Power Subsidies

The negative prices for wind power force local utilities out of wholesale power markets because utility-owned generation can’t compete with subsidized, mandated power, with demand growth very low or flat.


Wind turbines stand during sunset at the Avangrid Renewables’ Baffin Wind Power Project in Sarita, Tx., June 14.
Wind turbines stand during sunset at the Avangrid Renewables’ Baffin Wind Power Project in Sarita, Tx., June 14. PHOTO: EDDIE SEAL/BLOOMBERG NEWS

Your editorial “Big Wind and Tax Reform” (Nov. 11) says the production tax-credit subsidy takes billions out of the pockets of working Americans and transfers the money to rich investors. That’s not half of it.

In addition to the $24/megawatt hour in production tax credits (PTC) in the first 10 years of a project’s life, wind payments under power-purchase agreements (PPAs) with utilities and nonutilities (like Facebook, Amazon, Google, etc.) can average $70/Mwh and more over contract lengths that are typically 20 years and longer.

Thus, wind energy is guaranteed compensation from extra-market sources that is two to four times the $20 to $30/Mwh typically received by true market participants. Wind operators typically offer power to the market at negative prices to make sure that they won’t be bumped offline so that they can continue to produce and earn both the PTC and PPA payments.

Most of the new power transmission in the U.S. in recent years is being built to bring wind energy to large population centers. The cost of the billions invested in new transmission projects is passed through to electric customers at rates of return exceeding those allowed by state public utility commissions. According to a recent report on wind energy technology by the Berkeley Lab, about $20 billion in new transmission will be built annually between 2014 and 2019. For context, annual transmission expenditures are about equal to the value of all coal sold to the electric sector by U.S. producers in 2016.

Congress (and some states) made the market for renewable energy, and rich investors continue to force large chunks of unneeded energy into the nation’s power markets. The negative prices for wind power force local utilities out of wholesale power markets because utility-owned generation can’t compete with subsidized, mandated power, especially with demand growth very low or flat.

Retail electric rates should be declining because, according the wind lobby, renewables are so inexpensive. This is clearly not the case. Wholesale power prices are down but retail rates are not.

Susan Fleetwood

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Comment by Frank J. Heller, MPA on November 23, 2017 at 9:43am

It has finally sunk into the public consciousness that not only were transmission costs isolated from the cost of wind power; but the power was exported to demand markets outside of Maine. Too late, folks.....Offshore wind is going to be really expensive because underwater conduits and shore switches and grid ties are in the overall cost equation. The 'defeat'? of the Monhegan installation largely eliminated using the grid designed for Maine Yankee, for anything in reach. 

I'm being optimistic, but the 'true' cost of wind power is finally being computed, along with the flow of taxpayer subsidies to foreign owners and manufacturers.

Comment by Penny Gray on November 23, 2017 at 6:04am

Excellent letter.

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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We have the facts on our side. We have the truth on our side. All we need now is YOU.

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

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