A Cautionary Note for Kansas Wind Power


A piece in the Wall Street Journal contains some useful information that we should keep in mind as we consider the future of energy in Kansas, even though the focus of the column is the debate over wind power on Nantucket Sound. (Blowhards, January 24, 2009).

One thing is the hypocrisy of “green” power proponents:

Bill Delahunt, the windy Cape Democrat, also denounced the action as “a $2 billion project that depends on significant taxpayer subsidies while potentially doubling power costs for the region.” … Good to see the Congressman now recognizes the limitations of green tech, such as its tendency to boost consumer electricity prices — but his makeover as taxpayer champion is a bit belated. Green energy has been on the subsidy take for years, including in 2005 when Mr. Delahunt was calling for “an Apollo project for alternative energy sources, for hybrid engines, for biodiesel, for wind and solar and everything else.” The reality is that all such projects are only commercially viable because of political patronage.

This column informs us of the subsidy that wind power receives.

Tufts economist Gilbert Metcalf ran the numbers and found that the effective tax rate for wind is minus 163.8%. In other words, every dollar a wind firm spends is subsidized to the tune of 64 cents from the government. The Energy Information Administration estimates that wind receives $23.37 in government benefits per megawatt hour — compared to, say, 44 cents for coal.

This directly contradicts an incoherent comment left on this blog a while ago, which claimed that coal power received huge subsidies compare to wind.

Background: The subsidy report referred to is TAXING ENERGY IN THE UNITED STATES: Which Fuels Does the Tax Code Favor?


One response to “A Cautionary Note for Kansas Wind Power”

  1. scott owens

    When you build houses like this – http://timbercreekzeroenergyhouse.com/
    under $40 month for energy costs a couple of extra dollars on the overall cost of the fuel source doesn’t really seem that bad.

    I think for a number of years people who drove Suburbans and HumVees got tax breaks/subsidies and even got to write off parts of their fuel bill while those of us who abandoned those vehicles to things that road like – well cars – did not get those subsidies.
    Where was your outrage then ?

    Where does oil come from ?
    Aren’t we subsidizing that product by having military might in the areas it is produced – in the middle east ?
    Isn’t there a value to being energy independent instead of beholden to people who want to blow us up – after they rip every penny from our pocketbooks ?

    Do you think strip mining leaves the country better off for our children – don’t answer that unless you lived or are from coal areas. I am – and I know that answer.

    Does producing all the toxins that coal plants benefit the people who live down wind – every study ever shows direct correlations between the location of coal power plants and increased health costs for all living in those areas.
    What is that worth in a subsidy ? A penny a kWh ?

    But you really have to think that it is your right to consume all that God put on the earth in YOUR life time and bespoil the earth at the same time to not be in favor of reducing our use of ANY fossil fuel.

    I on the other hand would like my children and their children to have something left. Why don’t you ?

    Go take a look at a study the State of Texas did on energy and its costs/taxes/subsidies

    How much did the Tennessee Valley project cost ?
    How much did the Hoover Dam cost ?
    How much was the Three Mile Island cleanup ?
    In 2006 the Federal Government spent $30 Million on geothermal subsidies … whooo hooo ,,, break the bank.

    The dollars percentage spent on wind TODAY may be higher but the overall dollars spent on wind is so much lower that that of coal.

    And …
    go read all of the Tufts professors comments and thoughts.
    I don’t think one of them is suggesting we stop trying to minimize man made climate change impact.
    And professor Metcalf sure paints some more coal expense coming if we bury the CO2 in the ground – that is sure gonna raise that subsidy from 44 cents.

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