There’s been a lot of investment in Nolan County, Texas. Things are booming.
That’s pretty much the entire point of an op-ed piece in the Wichita Eagle by Scott Allegrucci. (Money Blowing in the Wind in Texas, January 16, 2009)
He’s the director of the Great Plains Alliance for Clean Energy, based in Topeka. This organization’s website states that “GPACE seeks to correct an imbalance in the information citizens and their elected representatives have received regarding the critical and complex energy policy decisions facing our state.”
If that’s really GPACE’s goal, Mr. Allegrucci didn’t advance it in this piece. That’s because he promotes the benefits of spending on wind energy without considering the true cost of wind energy. Further, he ignores the tremendous subsidy poured into wind energy production.
Last year the Texas Public Policy Foundation released a report titled Texas Wind Energy: Past, Present, and Future. This report contains information about the realities of wind power. It provides the balance that GPACE says it seeks to provide but fails to deliver in Mr. Allegrucci’s op-ed.
For example, did you know that every bit of wind power that’s produced receives a subsidy? Last year, as the subsidy was about to expire, wind power advocates warned that without the subsidy, wind power production would cease. No new plants would be built. It’s these subsidies that have created the growth in Nolan County that Allegrucci writes about. These subsidies produce some peculiar incentives. From page 25 of TPPF’s report:
The financial handouts available to wind developers are so generous that, in Texas, many wind-energy producers “will offer wind power at no cost or even pay to have their electricity moved on the grid, a response commonly referred to as ‘negative pricing.’ Wind providers have an incentive to sell power even at negative prices because they still receive the federal production tax (PTC) credit and renewable energy credits.”
Directing subsidies of any type into a concentrated area produces the results described by Allegrucci in this county. There’s nothing remarkable about that. But what about the rest of Texas? From the executive summary of the TPPF report:
The distinction between wind and wind energy is critical. The wind itself is free, but wind energy is anything but. Cost estimates for wind-energy generation typically include only turbine construction and maintenance. Left out are many of wind energy’s costs — transmission, grid connection and management, and backup generation — that ultimately will be borne by Texas’ electric ratepayers. Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $4 billion per year and at least $60 billion through 2025.
It’s a common error, assuming that since no one owns the wind, wind power is free once the turbines are built. That’s far from the case, though. Page 23 tells us this:
The true cost of electricity from wind is much higher than wind advocates admit. Wind energy advocates ignore key elements of the true cost of electricity from wind, including: (i) The cost of tax breaks and subsidies which shift tax burden and costs from “wind farm” owners to ordinary taxpayers and electricity customers. (ii) The cost of providing backup power to balance the intermittent and volatile output from wind turbines. (iii) The full, true cost of transmitting electricity from “wind farms” to electricity customers and the extra burden on grid management.
The reality is that the boom in Nolan County is being paid for by electricity customers throughout Texas. Not by their choice, too.
When considering wind power, balance requires us to consider these factors. The illustration that a concentrated area experiences a boom from a subsidized, expensive, and unreliable source of power doesn’t paint a picture of sound public policy.