Wind power is more expensive, so adding wind power can lower costs???

When all of the costs are included, wind energy costs were found to be nearly double government estimates while raising energy costs for consumers. Yet U.S. taxpayers are subsidizing wind energy at a cost of $12 billion a year.

A study (available here) by Dr. Michael Giberson, PhD., with Texas Tech University’s Center for Energy Commerce, found that the most frequently cited estimates of wind energy costs fail to include all of the costs, including wind power capacity and integrating wind power into transmission grids. The complexity of the power grid and the technical nature of most studies make it hard for policy makers and the general public to understand them, he wrote.

The federal government devotes substantially more financial resources to subsidize the production of wind power than it does to study wind power. The GAO counted over 80 separate federal programs offering economic support to wind power producers, though the largest program by a wide margin is the Production Tax Credit. State and local governments offer additional support. Government subsidies for wind power naturally raise questions concerning costs and benefits associated with the policy. Indeed, a complete policy analysis would assess both costs and benefits in a complete and consistent manner. Perhaps surprisingly given the extent of federal policy support for wind power, no systematic effort has been made to calculate the overall net benefit (or cost) of public policies supporting wind power.

The money quote: “So long as wind power remains more expensive than the alternatives, adding wind power cannot reduce the overall cost of power to the economy….”

The study was also reported in the news:

Study: Wind Power Costs Taxpayers Billions of Dollars

According to a new study conducted by Texas Tech University Professor Dr. Michael Giberson for the Institute for Energy Research, the government and wind lobby aren’t telling taxpayers the whole truth about how much wind energy really costs. The study comes as the wind lobby is set to receive another extension on massive subsidies with little results to show for it….

According to the study, wind energy costs taxpayers $12 billion per year and shows wind power costs $109 per megawatt hour, nearly double government estimates of just $72 per megawatt hour. The study also shows wind power doesn’t decrease the cost of electricity as environmental groups and government advocates claim, but instead shifts costs onto taxpayers. In addition, wind energy subsidies allow those who start wind projects to easily game the system.

“Wind power projects often obtain additional production subsidies, and these subsidies allow the wind project owner to profit even when power prices go negative,” the study states.

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14 responses to “Wind power is more expensive, so adding wind power can lower costs???

  1. “Perhaps surprisingly given the extent of federal policy support for wind power, no systematic effort has been made to calculate the overall net benefit (or cost) of public policies supporting wind power.” Why the tone of surprise? Wind power subsidies are the children of rent-seekers and feel-gooders, looters and moochers. The rent-seekers know what the studies whould show and the feel-gooders are happy to lower my standard of living if it gives them a nice glow.
    Wind power’s costs have little to do with fixed costs. If they did, expanding wind power might lower the unit cost — vis the B-2, “$1b per plane!”, but if the run had gone to 100 aircraft, the R&D and tooling would have been distributed and the cost more like $250m, on par with large civilian aircraft. The incremental costs of wind power are large and adding more will surely increase unit costs.

  2. When you’re starting to invest, there are millions of books, videos, conferences, and websites you can utilize to learn, but nothing teaches as thorough a lesson as losing your own money. Most people don’t remember the first time they got a slightly better rate of return than savings account interest, but everyone remembers the first time they ended up in the red.

    That’s the problem with federal government investments. It’s not their money, so they never learn that lesson. They just keep throwing good money after bad. Even a stock broker playing the market with other people’s money runs the risk of losing accounts, getting fired, and not being able to get work due to a bad reputation. Congressmen and presidents face no consequences. Since none of the consequences are likely to affect them, it’s easy to see how they could forget to take potential consequences into account.

  3. In the New New Math, 2+2 = spend more OPM.

  4. Hey if you can’t beat them join them!

    Anyone want to start a wind farm with me? There will be plenty of poultry for our annual BBQ!
    Come on guys …

  5. So, it takes a Ph. D. economist(?) to figure out if you add all the costs and subsidies wind power isn’t economical? The number that would be built or operated without subsidies might be a clue to the economics.

    • And, ironically, a clue to the real environmental impact. There’s some slop factor in this, but generally speaking a more costly item has a larger environmental footprint than a less costly item. The resources required to build and run wind and solar facilities are much greater than for the same power in conventional systems. So, unless proven otherwise, they are actually far dirtier than coal, methane or nuclear.

    • Warren Buffett spilled the beans on May 5, 2012 at a shareholder meeting-

      ““With respect to wind power, they receive 2.2 cents subsidy per kilowatt hour for 10 years. That makes wind projects work. They would not work without it. Neither wind nor solar projects would be working without their subsidies. You cannot count on wind for the base load. It works and it is clean, but if the wind is not blowing, people do not want the risk of having their lights go off. Therefore, it is only for supplemental generation.”

  6. Worst is that all cost calculations have totally surrealistic lifespan assumptions of turbines, especially for sea based windfarms

  7. Robert of Ottawa

    The purpose of the wind and solar farms isn’t to produce electricity; It is to produce subsidies. Here in Ontario, these fraudulent subsidy farmers are paid ridiculous uneconomic prices if they do actually produce any useful energy. They also get paid when they do not produce energy and when they could but don’t as it isn’t need.

    A cardboard cut-out of a bird masher would suffice.

  8. But, but, but…if we buy 10,000 widgets at twice their value, we achieve savings from economy of scale.
    Right?

    When I took calculus, I was introduced to a great formula that stated that the limit of an achievable college degree as IQ approaches zero is “Liberal Arts”.
    Political Science and Law are Liberal Arts.

  9. Instead of tax credits, wind farmers should be required to post a bond to be used to clean up the sites after the inevitable failure of the whole idea.

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