Texas wind power hits record output -- and subsidy

The state's biggest power grid says electricity provided by wind farms hit a record at 10:21 a.m. Nov. 10, when 8,521 megawatts made it to transmission lines. Lest the achievement draw uncritical cheers, however, along come the free-marketers at the Texas Public Policy Foundation in Austin to point out that big wind means big taxpayer subsidies.

According to the Electric Reliability Council of Texas, which serves most of the state, wind power at its peak on Nov. 10, a Saturday, accounted for 25.9 percent of all electricity demand, which was at a relatively low 36,423 megawatts. The Wind Coalition, an industry group, also notes that wind power topped 6,800 megawatts the entire day and capped a three-day run that saw wind power remain near or above 5,000 megawatts. The previous record for wind power to the grid was 8,368 megawatts, hit on June 19 and again Nov. 9, the coalition said. As a percentage of electricity demand on ERCOT, the Nov. 10 share was just about triple wind's typical share, which was 8.5 percent for all of 2011, according to ERCOT data.

The Texas Public Policy Foundation sees another number: $22, as in the federal production tax credit for every megawatt-hour of wind power put on the grid. That means for, say, that three-day run when wind topped 5,000 megawatts, wind drew at least $7.92 million in subsidy (72 hours x 5,000 megawatts x $22 per megawatt-hour). In their November report, researchers Bill Peacock and Josiah Neeley figure wind's federal production tax credit in Texas at $597 million last year alone, even after accounting for the PTC's 10-year limit. Using past figures and making projections for future years, the report comes up with more than $4 billion in wind subsidies for the 10-year period from 2006 to 2015.

-- Jim Fuquay 

Editor's note: Since there have been some interesting comments on this, here's a link to the March 2012 report by the Congressional Budget Office on federal energy subsidies. The Star-Telegram also published a rebuttal from the American Wind Energy Association on Nov. 28, which likewise has drawn a number of comments. A link to that item is here.

Comments

[Dexter J.]

Texas people must be thankful for breaking a record. It's a big help for every family when financial status is concern.

[Ken Starcher]

really great article, shows how to save natural gas using wind and make the natural gas last longer. Wonder if we have any way to see how much NAtural Gas subsidies there were from 2006 - 2015?? oh wait there is , EIA.GOV has that numbers .. hmmm shows 2,82 billion in subsidies shared with oil in 2010, figure they only got like 20% of that, so over 10 years thats let s see... 5 billion in 15 years?

[Richard Howe]

Wind obtains $4 billion in wind subsidies for the 10-year period from 2006 to 2015......

The issue of subsidies for renewable energy is a concern to me as well as to most people, so I have begun to research this topic in more detail. Although the message we frequently hear is that renewable energy sources are receiving too much in subsidies, what I have found in various studies is that when taken in the context of a longer period of history, all energy sources have benefited from significant and long-term subsidies.

One of these studies is a September 2011 report, titled "What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future", by DBL Investors.The research reported in this paper states that through the end of 2009, the energy sector receiving the largest subsidies over time has been the oil and gas industry, with a cumulative amount of $447B over the period of 1918-2009. This averages approximately $4.9B per year for 90 YEARS! It is no surprise that the technological revolution allowing for the cost-effective extraction of natural gas from shale occurred thanks to more than three decades of government subsidies for research, demonstration, and production. (See “New Investigation Finds Decades of Government Funding Behind Shale Revolution”, December 20, 2011, http://thebreakthrough.org/archive/new_investigation_finds_decade).

So, if we think we must phase out subsidies on renewable energy sources any time soon, shouldn't we first make sure that subsides for other more mature energy sources are phased out first?

[William Loeb]

I always knew WIND POWER was a great was a great solution.... But I have 2 questions.... Who is subsidizing who...???
and
What does all this mean to me.. and my electri bill..
Thanks
Bill Loeb

[Jeff]

Your numbers, and the TPPF's, aren't accurate. Not all projects qualify for the PTC, and the PTC is temporary.