I want to believe in the wind.
Each megawatt of wind power costs about $53 to generate, making it more expensive than coal, nuclear or natural gas generation, according to data from the Electric Reliability Council of Texas, the state’s grid operator. Even with economies of scale, it’s still going to be more expensive than other sources, based on projections by the American Wind Energy Association.
About half the states, including Texas, now require that part of their electricity come from renewable sources, and wind has vaulted in popularity, just as ethanol once held our fancy as the favored fuel of the future.
Wind power is an open trough of government subsidies, tax credits and state mandates. Taken together, it’s a massive corporate welfare effort that means big money for the wind-power developers and big costs for the rest of us.
For every $100 million of investment, wind-power developers have received more than $74 million in federal tax credits and other benefits, according to a recent study by Bernard Weinstein and Terry Clover, professors of applied economics at the University of North Texas. In Texas, we ladle on additional state and local incentives, including corporate income tax breaks and local property tax abatements.
The federal subsidies include renewable energy tax credits of about 2 cents for every kilowatt-hour produced. Those credits are set to expire at year’s end, but the industry is lobbying Congress to extend them. Some industry executives told The Associated Press recently they fear a slowdown in wind development if the credits expire.
The uncertainty of when wind power will come into the grid adds to the market volatility. Those variations put stress on the system and drive up wholesale power prices. Yet wind companies aren’t required to pay any of those costs. Instead they’re ultimately passed on to us.
Wind certainly has a place in our overall generating scheme. We need to diversify our energy sources, and we need to develop renewable ones. But it’s an auxiliary source. We
also need generation that’s reliable and makes economic sense.