Poster comments on wind energy

Comments following this essay:

Jon Boone { 06.17.10 at 11:24 am }

There is much to admire about this essay. By any objective measure, industrial wind technology cannot succeed as a source of energy on its own merits. Its power performance is inimical to modern standards and its mode of energy delivery destabilizes the essential match between supply and demand, for whatever it generates is highly variable, minute-by-minute. However, if one evaluates industrial wind technology NOT as a source of energy but rather as a mechanism for delivering significant income mostly through tax avoidance, it may be nonpareil?particularly for CFO?s of multinational energy corporations with a lot of taxable income.

Glenn Schleede has written a number of informative essays documenting how this is achieved?through federal production tax credits (that currently generate 2.2 cents for every kWh sent to the grid, with no indexing for CO2 reduction or fossil fuel saved); through incredibly generous federal double declining capital depreciation schedules, which allow the capital costs of wind projects to be fully recovered in as little as three years, depending upon the mode of financing; through a variety of state renewable portfolio standards laws in about 30 states presently (with national laws pending), requiring the state to purchase wind generation, even at irrational prices; and various state and local tax giveaways.

According to the Palm Beach Post, Florida Power & Light Energy, a subsidiary of Florida Power & Light Co, the nation?s third largest utility and the owner of the nation?s largest stock of wind projects, claimed its quarterly earnings would surpass its parent company by 2012. I quote from that article: ?FPL Energy boasted a 2006 profit of $610 million, triple its earnings in 2005. That followed an earnings increase of 200 percent between 1998 and 2002, then significant profit growth each year thereafter, mostly fueled by wind power projects.? General Electric, the one of the world?s largest producers and distributors of wind equipment and the company which bought up Enron?s wind plants in 2001, paid no federal income tax last year, despite having revenues in the billions.

It is no accident that corporations like these, as well as BP, AES, and Sieman?s, either have purchased wind projects outright or entered into ?equity partnerships? with them. In addition to the lucrative tax sheltering, these companies then market wind for its unearned environmental cachet. And of course, many buy the notorious green tags, in the process avoiding cleaning up their dirtiest burning coal facilities, reaping even more income.

Mr. Graf does his analysis no favors by accepting the assumptions of Cape Wind operatives in order to move the discussion along. The lack of veridical information about wind performance deserves more than a few winking parenthetical asides. The evident collusion among regulatory agencies (and here I include FERC), grid officials, and wind LLCs to keep wind performance proprietarily confidential?despite the huge public subsidies that enable it?is nothing short of scandalous. All to keep politicians happy. No one should accept any claim made by a wind LLC without verifiable evidence…

SPPI Note:

Some of Glenn Schleede’s papers on wind power can be found here:

Evaluation of Kennedy Jr’s Statement in West VA about Wind Energy, Deluded Delusional or Dishonest?

The True Cost of Electricity from Wind is Always Underestimated and its Value Always Overestimated

Wind Energy will be an early test of Obama?s White House Staff