GAO report: The govt has gotten a little heavy-handed with these wind subsidies, huh?

posted at 8:41 pm on April 8, 2013 by Erika Johnsen

The wind lobby’s do-or-die attitude in the run-up to the fiscal cliff last year was a very telling moment for the industry: Without the highly generous production tax credit and other subsidies they receive courtesy of the federal government (and by that, I of course mean taxpayers), no way can they possibly sustain the pace at which they’ve become accustomed to running — and boy, do they know it.

They managed to sneak through their all-important PTC just under the fiscal-cliff wire, and in an added bonus, the IRS magnanimously decided to up the value of credit still further to account for inflation last week. Even better, the GAO has a new report out detailing the many instances of overlap when it comes to federal wind initiatives, all of which together help to divert billions of taxpayer dollars every year:

The Government Accountability Office recently identified 82 federal wind-related initiatives implemented by nine agencies in fiscal year 2011. The nearly seven dozen initiatives were fragmented across agencies and had overlapping characteristics, and several that financed deployment of wind facilities provided some duplicative financial support, the report found.

Sixty-eight of the 82 programs overlapped with at least one other initiative “because of shared characteristics,” the 95-page report found. The five agencies that had the most initiatives, and therefore were looked at closest, were the Departments of Energy, the Interior, Agriculture, Commerce and Treasury. Those five departments collectively implemented 73 of the 82 proposals examined by the GAO. …

According to an April 3 notice in the Federal Register, wind, geothermal and “closed-loop” biomass projects will now get 2.3 cents per kilowatt-hour of electricity produced, up from 2.2 cents.

As I’ve argued before, I have nothing at all against green energy in theory, as long as it’s something consumers actually want to buy — and the Obama administration just doesn’t seem to want to give them that chance. It’s always easy to throw money around and send the town criers out to trumpet about how much you really, truly care about perceived planetary wellness, but in terms of substantive long-term solutions, the federal government is actually doing green energy a huge disservice with all of these perpetually increasing perma-subsidies.

Flooding the industry with cash and cronyism is hardly a way to encourage price efficiency, and encourages rent-seeking rather than merit-based competition. And hey, check it out — that’s something even a rationally self-interested green-energy executive can get behind:

Government subsidies to new wind farms have only made the industry less focused on reducing costs. In turn, the industry produces a product that isn’t as efficient or cheap as it might be if we focused less on working the political system and more on research and development. After the 2009 subsidy became available, wind farms were increasingly built in less-windy locations, according to the Department of Energy’s “2011 Wind Technologies Market Report.” The average wind-power project built in 2011 was located in an area with wind conditions 16% worse than those of the average project in 1998-99.

The Department of Energy admits that this trend is due at least in part to the 2009 federal subsidy: Because the grants that companies receive aren’t based on how much power they produce, “it is possible that developers have seized this limited opportunity to build out the less-energetic sites.” Meanwhile, wind-power prices have increased to an average $54 per megawatt-hour, compared with $37 in 2005.

… Yet as long as these subsidies and tax credits exist, clean-energy executives will likely spend most of their time pursuing advanced legal and accounting methods rather than investing in studies, innovation, new transmission technology and turbine development.


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Obama is trying to get some green company to design windmills that work on a reverse pattern of currents to enable the massive sucking going on- thanks to his incompetent policies- to be tapped tas a near-endless source of energy.

profitsbeard on April 8, 2013 at 8:45 PM

Obamas’ mini-me Cadillac Deval Patrick can’t wait to get his big green scam going. It’s called Cape Wind, and dumb and dumber are about to pour $2 billion large taxpayer dollars to ensure that it gets built.

shanimal on April 8, 2013 at 8:53 PM

I’ll say it again: this is an effort to relinquish energy production from oil and gas – not because it’s dirty, costly or rare, but because the progressives don’t own it.

Wind is the least efficient of all the “green” energies simply because windmills cost more to operate than they generate in revenue. They’re more often than not inoperable – not just because it’s not windy all the time – but because the massive blades necessary to generate any kind of usable energy are hell on bearings. The equipment wears out. And it’s expensive to fix. The maintenance staff for a wind farm typically rivals that of the cleanup crew after a democratic function; only the wind farm needs it for 3 shifts instead of 2.

BKeyser on April 8, 2013 at 8:56 PM

The entirety of the wind power industry was a wealth transfer scheme from the productive to democrat donors, cronies, and family members. The who thing was sold as a solution to a hoax.

tom daschle concerned on April 8, 2013 at 9:03 PM

Word has it here in NC that a well-known computer company — named after a fruit — has declared itself as “green” since they make enough electricity from their solar cells. The trouble is, they use NONE of it. Rather, they sell that to the local power company since the subsidized rate is so high. And then they use the local, low-cost stuff made by the local nuke plant.

geek49203 on April 8, 2013 at 9:39 PM

… Yet as long as these subsidies and tax credits exist, clean-energy executives will likely spend most of their time pursuing advanced legal and accounting methods rather than investing in studies, innovation, new transmission technology and turbine development.

Then again, what if the studies done by actual experts (engineers, not “advocates”) show that wind power cannot ever break even on its own, much less make a profit?

Factoring in maintenance, life-cycle costs, environmental damage (being a giant bird Cuisinart), and the fact that like it or not, the wind doesn’t always blow, you could make a good case that wind power is a dead-end development on purely practical grounds.

Handing a report like that to hardcore believers (like Obama), opportunists (like the “wind power entrepreneurs”), and those who simply want an excuse to ban oil, gas, nuclear and etc. (the EPA, both DOEs- Energy and Education, etc.), I suspect there’s a good chance said report would swiftly be buried deeper than Jimmy Hoffa. Followed by everyone on the “green energy” side demanding more subsidies, all in the name of “saving Holy Mother Gaia”. And lining their pockets at taxpayers’ expense.

In short, exactly what we are seeing right now.

clear ether

eon

eon on April 8, 2013 at 10:02 PM

Interesting timing; Drudge is reporting a brand new solar failure. Flabeg Solar received $10.2 million in Federal funds and an additional $9 million from the state of Pennsylvania.
The list just keeps on growing; but given the “reliability and economical utility” of these “green” investments what else would you expect?

mad scientist on April 8, 2013 at 10:08 PM

…c r o o k s ….

KOOLAID2 on April 8, 2013 at 10:17 PM

Interesting timing; Drudge is reporting a brand new solar failure. Flabeg Solar received $10.2 million…

mad scientist on April 8, 2013 at 10:08 PM

Fleabag Solar?

de rigueur on April 8, 2013 at 10:45 PM

Wait — Isn’t wind power like free or something?

Dasher on April 9, 2013 at 9:03 AM

It won’t end until the next big scam arrives. They’ll keep it simple and emotional. That’s why 3 card monty and the shell game worked so well.
There was a home show in town last weekend and was being broadcast remotely on radio. The announcer was interviewing a guy who was selling solar power equipment for the home. He was asked how much did it cost and he said that the power from the sun was free, then added that the equipment wasn’t. Of course, most people stopped listening when he said ‘free’.

Kissmygrits on April 9, 2013 at 9:19 AM

Ladies and gentlemen this is called looting the treasury.

jukin3 on April 9, 2013 at 10:53 AM