Windmills: So Many Installed, So Little Power Actually Produced

Energy is and will always be an economic topic of great importance.  When a topic is of great economic importance, it also becomes a topic of political importance.  And when something is of political importance, politicians have a tendency to get involved…with your money.

Conservatives are opposed to subsidies for any industry, including the energy industry.  Subsidies distort markets, shift costs from the industry at hand to the taxpayer, and disguise the true cost of producing a particular product — all of this is usually on the taxpayers’ dime. 

Bloomberg (the paper, not the climate-crazed mayor) reports:

“The cost of running and maintaining wind farms has fallen 38 percent in four years as competition among contractors increased and turbine performance improved, bringing closer the day that the technology matches fossil fuel.”

While this improvement is positive, the amount of dependence these companies have on subsidies is astounding.  Bloomberg says that “without the U.S. credit, the market for wind towers may fall to $100 million to $500 million next year from $2 billion to $2.5 billion at present,”If that doesn’t scream artificial demand, what does?

Yet, President Obama and other liberals foolishly insist on continuing tax credits and subsidies for wind in the U.S.

Heritage has explained that in due time, these technologies will develop and improve if – and only if – the market demands.   And that is perfectly fine.  Nevertheless, even with improvement and more market demand for this kind of energy, it may never be the most viable source in terms of actual production.  The reason for this is pretty clear, as Heritage’s David Kreutzer points out:

“Windmills cannot be turned on at will — in industry jargon, they are not dispatchable — the power they produce depends on how much wind blows.  At 25 percent, the average capacity factor for wind power is well below those of conventional sources.”

He also reminds us that while wind power generation actually dropped 24 percent between January and July, over the same period, natural gas power jumped 53 percent.

What really hits this disparity home is this:

“The phenomenal growth in natural gas production occurred without anything like the production tax credit that subsidizes wind power by an amount equal or greater than 40 percent of the wholesale price of electricity. As we have shown before, an equivalent subsidy for oil would be about $50 per barrel.”

The point is, if wind power improves enough to compete with other forms of energy production in the free market, then more power to it!  In the meantime, it’s truly a waste of money and resources to continue wind subsidies.

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