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The luster is coming off wind power as an economically viable, environmentally friendly, community-friendly source of America’s energy future—and for some very good reasons. To start, rural residents across America are increasingly rejecting the encroachment of wind-energy projects in their communities whenever they get a chance to voice their opinions in local ballots.
The Manhattan Institute’s Robert Bryce reported in National Review (“Big Wind Gets Spanked in Michigan”) that citizens in 37 jurisdictions in 10 different U.S. states have rejected or restricted the expansion of wind power in local referenda so far this year. Our home state of Michigan is a bellwether of this trend, as voters in 20 rural towns in the “Thumb region” rejected wind-power ballot initiatives in May.
As Bryce reports, “The fact that rural communities from Maine to California are rejecting Big Wind doesn’t fit the popular media’s narrative that wind energy is ‘green,’” and “[T]hese results haven’t been reported by mainstream media.”
For many of these communities, concerns about land use, noise, aesthetics, lower property values, and bat and bird mortality all played an important role in their overwhelming votes against wind power.
And just how important is wind power today, anyway? The International Energy Agency estimates 13.8 percent of the total world energy supply was produced from renewable-energy sources in 2014. Of the renewable energy, 10.1 percent came from biofuels and waste, while 2.4 percent came from hydro sources. The remaining 1.3 percent was from “other renewables”—geothermal, wind, and solar, with wind providing 0.46 percent of global energy consumption in 2014. That prompted science writer Matt Ridley to observe that when rounded to the nearest whole number, “there is still no wind power on earth.”
In the U.S., wind energy did account for 2.5 percent of the total energy produced in 2016, according to the Energy Information Administration (EIA), so wind is contributing a larger share of America’s energy than elsewhere. For electric power, the EIA reports that fossil fuels made up 85 percent of the electricity generated, while renewables represented 15 percent. Of the electric power produced from renewables in 2016, 37.6 percent (5.6 percent of U.S. electricity generation) came from a wind, an all-time high.
The EIA attributes the increase in wind power over the past decade in the United States to improvements in wind-turbine technology, increased access to transmission capacity, state-level renewable portfolio standards, and federal tax credits and grants.
There are environmental benefits to using wind power. The Department of Energy (DOE) calculates the environmental benefits of wind power based on the estimate that a typical wind turbine displaces 1,800 tons of carbon-dioxide emissions per year. With a domestic wind power capacity of 400 gigawatts, DOE forecasts that wind could account for 35 percent of U.S electricity demand and result in a 14 percent reduction in carbon-dioxide emissions compared to 2013 levels.
But when one considers the full cost of wind power, one gets a much less rosy picture of how wind compares to other forms of energy in the U.S. marketplace. For the past 25 years, American taxpayers have been subsidizing wind-power production through the 1992 Production Tax Credit (PTC) and Consolidated Appropriations Act. The federal PTC is an inflation-adjusted per-kilowatt tax credit for electricity generated by qualified energy resources and sold to an unrelated person during a taxable year. Warren Buffett has invested billions of dollars in renewable energy and stated, “We get a tax credit if we build lots of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
In 2009, the American Recovery and Reinvestment Act (ARRA) gave wind-power projects the option of receiving a 30 percent investment tax credit (ITC) rather than the PTC. The ITC allows wind producers to deduct 30 percent of their investment costs directly from their taxes. The ARRA also created the Section 1603 program, which allows wind power developers to receive cash grants in lieu of tax credits for 30 percent of their investment costs for construction projects that began by the end of 2011. Two separate reports that examined the influence of federal and state subsidies on the cost of wind found that producers of each megawatt hour of wind energy received approximately $17 in subsidies.
The Institute for Energy Research (IER) calculated in a 2015 report that the cumulative amount of federal subsidies from the PTC, ITC, and Section 1603 to the wind industry over the past 10 years was nearly $19 billion. Moreover, IER found taxpayers in 30 states paid more in taxes to the federal government over the past 10 years to support wind subsidies than wind producers in those states actually received in subsidy allocations. Of those 30 net-paying states, 11 states had no wind production and received zero subsidies but still paid their share of the tax burden related to federal wind subsidies.
In another IER study (2015), using data from the EIA and the Federal Energy Regulatory Commission, it found that electricity generated from new wind resources is nearly four times more expensive than from existing nuclear plants and nearly three times more expensive than from existing coal facilities. Additionally, compared to new fossil-fuel plants, electricity generated from new wind farms is 15–54 percent more expensive.
Finally, in a 2015 report from Utah State University and Strata Policy, researchers found the true cost of wind energy in the United States is, on average, 48 percent higher than most estimates claim (because generating electricity from wind power entails many hidden costs).
Back in 2008, DOE touted wind energy and projected that it would contribute 20 percent of the U.S. electricity supply by 2030. Based on more recent energy forecasts from the EIA, those earlier forecasts for the role of wind and other renewable energies were overly optimistic. The EIA now estimates that all renewables together (solar, wind, hydropower, and biomass) will provide about 25 percent of the nation’s electric power in 2030 and 29 percent by 2050.
For total energy (not just electric power) produced and consumed, the America of tomorrow will still be very much of a fossil-fuel future despite all of the hype, hope, and subsidies for renewables. More than three decades from today, in the year 2050, EIA estimates that fossil fuels will still be the main energy source in the United States, providing nearly 80 percent of the country’s energy. All renewables (combined) will provide less than 15 percent of America’s energy in 2050.
It’s also important to note that the optimistic forecasts from the EIA about the future of wind energy didn’t take into account the recent voter backlashes against wind power from citizens in states such as Michigan. It turns out that many rural Americans might express support for wind power—at least, in theory—but then turn against wind when they learn that their quality of life is negatively affected by the presence of large and ubiquitous wind farms in their communities.
[Originally Published at RealClearEnergy]