The House Science, Space, and Technology Committee this week held a hearing on the efficiency and effectiveness of federal wind energy incentives.

The first witness, Frank Rusco, director of energy and natural resources for the Government Accountability Office, summarized his March 2013 GAO report on federal financial support for wind energy. Rusco testified that nine agencies administer 82 programs providing $4 billion in financial support to the wind industry in 2011 in the form of grants, loans, loan guarantees, and tax expenditures (targeted tax breaks). Some wind projects received support from seven initiatives, Rusco found.

Rob Gramlich, Interim CEO of the American Wind Energy Association (AWEA), disputed those numbers, arguing that of the 82 initiatives only two are wind-specific, dozens are defunct, and fewer than 1% of wind projects built in recent years took both a tax credit and a Department of Energy loan.

Gramlich, however, did not dispute Rusco’s finding that 99% of federal support went for deployment of wind energy rather than R&D (pp. 17-18), nor his assessment that ”it is unclear whether the incremental support some initiatives provided was always necessary for wind projects to be built” (p. 43).

Citing Rusco’s testimony in his opening statement, Oversight Subcommittee Chairman Paul Broun (R-Ga.) suggested that instead of subsidizing firms that would install wind turbines anyway, Congress should fund R&D to make wind energy more competitive.

A fair point but one that indicates a more fundamental problem. When government subsidizes activities that would happen anyway, the money goes to free riders. The subsidy is a clear case of government waste. When government subsidizes activities that would otherwise be unprofitable to undertake, the money may simply prop up investments that consume more wealth than they create. If so, the subsidy is a waste of economic resources.

As three MIT scholars wrote in their assessment of President Carter’s energy programs:

The experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed and if a technology is not commercially viable, no amount of government support will make it so.

Too bad the Constitution does not mandate a recitation of those words prior to every congressional debate on energy policy!

My main reason for writing this post, however, is twofold. First, if Matt Damon or anyone else in Hollywood ever wants to make a reality-based movie about a conflict between community activists and greedy energy developers, he should look no further than the testimony of Audra Parker, CEO of the Alliance to Protect Nantucket Sound. Second, anyone seeking a clear overview of the economics of wind energy, should read the testimony of Cal State Fullerton professor Robert Michaels, who testified on behalf of the Institute for Energy Research.

The Nantucket Alliance formed in 2001 in response to “multiple threats” posed by Cape Wind, an offshore wind project encompassing “130 wind turbines, each 440 feet in height, spanning an area the size of Manhattan.” Parker’s detailed testimony concludes by asking the Committee to request an independent GAO analysis of the Cape Wind project, examining the costs and benefits for consumers as well as impacts on “historic, tribal, environmental, public safety, and other public interest factors.”

Parker charges that, “Federal agencies have prioritized the interests of the developer over public safety and to the detriment of the environment.” She names names, beginning with the Coast Guard:

The USCG prioritized the financial interest of the developer over the safety of mariners and the public. The USCG initially recommended a buffer zone of 1.5 nautical miles (nm) between the proposed footprint and the main channel, but later removed it due to the economic interests of the developer.

U.S. Coast Guard emails discovered through FOIA include:

• “If 1.5 NM offset applied to Cape Wind proposal in Nantucket Sound, this would drastically reduce the size of the wind farm footprint (might well scuttle it).” (Exhibit 13)
• “If Cape Wind were to use these measures, the proposed wind farm would hold too few WTGs [wind turbine generators] to be economical.” (Exhibit 14)
• Referring to the local port Captain, “He purposely did not recommend the creation of “buffers of navigation” around the turbine array because he believes that would have caused a change in the “footprint of the project” that could unnecessarily “kill the project”. (Exhibit 15)

The protector of species too:

In another example, the U.S. Fish and Wildlife Service (USFWS) found that Cape Wind should shut down wind turbines on a temporary and seasonal basis to reduce bird kills in its draft biological opinion, but did not require such mitigation in the final opinion solely because Interior and Cape Wind rejected a shut down as too costly. USFWS stated that it “considered” temporary shut-down as a reasonable and prudent measure to minimize impacts on listed species, but that “it was determined by BOEMRE and [Cape Wind Associates] to not be reasonable and prudent.” (Exhibit 16) USFWS itself never made an independent finding of whether a temporary shut-down would be reasonable.

Also the guardians of flight safety:

Despite FAA’s safety-first mandate, it made mitigation recommendations to accommodate Cape Wind’s profitability at the expense of public safety. The proposed 25 square mile, 440 foot high Cape Wind footprint lies in the center of three busy airports in a heavily trafficked low altitude airspace. 400,000 flights per year traverse the airspace over Nantucket Sound transporting millions of passengers through an area characterized by frequent fog and quickly changing weather patterns. However, despite objections by all three local airports and even after acknowledging multiple aviation safety impacts and expressing uncertainty regarding the effectiveness of proposed mitigation options, the FAA deferred to Cape Wind’s economics and bottom line. In discussion of potential unresolved radar interference due to Cape Wind, the acting head of the FAA’s Obstruction Evaluation group stated, “Shutting them down midstream will create an undue burden on the developer and could possibly bankrupt them.” (Exhibit 17)

Why would our valiant agencies behave this way? A section of Parker’s testimony discusses ”significant coordination between the Patrick and Obama Administrations through the Department of Interior (DOI) to push Cape Wind forward and gain financial assistance for Cape Wind through the loan guarantee program.”

But all this corner-cutting will help bring down electric rates for consumers, right? Ha!

Despite a potential $4.3 billion in combined federal and state incentives, which should make electricity cheaper, Cape Wind will impose nearly $3 billion in above-market costs on ratepayers, Parker contends. For example, NSTAR has a contract to buy 27.5% of Cape Wind’s power at a starting price of 19 cents per kilowatt hour (kWh), “with a guaranteed annual increase of 3.5% over the 15 year contract life, culminating in a final year price of over 31 cents per kWh. This is an average rate of 25 cents per kWh, in contrast to current MA rates of only 7 cents per kilowatt hour.”

Turning now to the economics of wind in general, Dr. Michaels begins with the basic fact that wind power is non-dispatchable (the wind cannot be switched on or off at our command) and intermittent (wind power is often greatest when it is least valuable — at night — and least during peak hours when it would be most valuable). Ensuring electric supply reliability — balancing supply and demand across the grid from second to second — becomes increasingly difficult as more wind power is integrated into a service area. In Texas, for example, wind’s hourly contribution to electric load (demand) can decline from 25% to zero and vice versa.

The gap between wind’s rated capacity (the power it could produce at peak output) and what it actually produces is often huge. During a June 2006 hotspell in California, wind’s average contribution to meeting peak demand ”was only 256 MW, barely 10 percent of potential production had capacity been fully utilized.” For planning purposes, the Electricity Reliability Council of Texas (ERCOT) ”treats a megawatt of wind capacity as equivalent to only 8.7 percent of a megawatt of dispatchable fossil-fueled capacity.”

Wind is mandated and subsidized for a very simple reason: Otherwise it could not ‘compete.’ The “levelized cost” of wind energy (the cost per megawatt-hour of combined capital and operating expenses over the lifetime of the facility) is significantly higher than that of gas. For new units placed in service in 2017, the Energy Information Administration (EIA) estimates a $96/MWh levelized cost for wind versus a $66.1/MWh levelized cost for conventional natural gas combined cycle and a $63.1/MWh levelized cost for advanced combined cycle.

Note: The levelized cost of wind does not include the cost of fossil-fuel generation run in inefficient “spinning reserve” mode to back up wind farms when the wind stops blowing.

One factor making wind more costly is the frequent necessity to construct new long-distance transmission lines. Whereas a natural gas power plant can be built close to the community it serves, wind farms must be built where the best wind resources are, which may be hundreds of miles from the nearest load area. “Over the next five years ERCOT plans on building $8.7 billion of new high-voltage transmission, approximately $5 billion going to facilities that will be solely used to transmit wind power from central and western Texas to consuming areas.” Such costs, of course, are passed on to ratepayers.

EIA’s analysis may understate wind’s costs, Michaels suggests. Research in Denmark and the UK indicates that wind energy’s productivity declines rapidly over time:

A typical onshore wind turbine in the UK starts with a normal load factor (operating hours as a fraction of total hours) of around 25 percent. After five years the average factor is 15 percent, after ten years it is 10, and after 18 years it is 2 percent. Most cost-benefit calculations of wind units have assumed economic lifespans of 20 to 25 years and slower declines in productivity. If these figures continue to hold, a fifteen-year economic lifespan would substantially raise wind’s capital cost above its already high figure.

Even on environmental grounds, the case for wind is weak. Michaels does not discuss avian and bat mortality but rather the cost-effectiveness of wind as an air pollution control strategy. Regulations requiring the use of pollution control equipment or allowing permit trading within a declining emissions cap reduce more pollution at less cost than do policies mandating the substitution of wind for coal or gas. Citing a Bentek study, Michaels also argues that in areas where coal rather than gas provides backup generation, wind can actually increase net criteria pollutant emissions ”even after netting out the emissions reductions due to wind.”

One longstanding rationale for wind energy programs — the need to diversify away from rapidly-depleting fossil fuels – now seems rather dated:

Renewables policies were based in large part on an expectation that the end of inexpensive gas and oil was near. Instead of exhaustion, the nation now looks forward confidently to centuries of clean, inexpensive and secure energy. Instead of a “bridge fuel” to a renewable future, shale-based hydrocarbons are now the future.

Coming out of The New York Times of all places, “Number of Green Jobs Fails to Live Up to Promises.” Unsurprisingly, it has the green groups riled up.

A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.

(Note that it took seven months, as in 210 days or almost 60% of a year, to figure out wage standards for an industry. Good enough for government work.)

This isn’t the first report on the green jobs fiasco. There are numerous reports of outrageous amounts of money spent “creating” very few jobs. There are reports of stimulus-receiving green-tech factories closing (or moving abroad), some after receiving praise from Obama himself.  Could the failure of promoting ‘green’-jobs have been predicted? Well, you could have looked at Spain, or Germany.

Finally, does the Times seem pessimistic on the results of the Brookings Institute study? Because that’s not the impression I got from reading certain other blogs, which loudly cheered the alleged 2.7 million green jobs. Upon closer inspection, it turns out that a large portion of those jobs are in fields not traditionally seen as representing the future of green-technology, such as waste management or mass transit services. It’s also worth noting that the ‘number of jobs saved or created’ should be secondary to the amount of wealth produced. The fewer workers necessary to produce this (again, contra the green blogs who snub the oil industry for its efficiency), the more workers freed up to focus on other parts of the economy.

It is rumored that President Obama is set to announce another attempt at job creation later this fall. Let us hope that he avoids the ‘not actually shovel ready’ green jobs approach and instead focuses on liberating the economy.

This is the new claim being thrown around by renewable energy proponents with supporting data by the Energy Information Administration (EIA). Check the link here:

During the first quarter of 2011, renewable energy sources (biomass/biofuels, geothermal, solar, water, wind) provided 2.245 quadrillion Btus of energy or 11.73 percent of U.S. energy production. More significantly, energy production from renewable energy sources in 2011 was 5.65 percent more than that from nuclear power, which provided 2.125 quadrillion Btus and has remained largely unchanged in recent years. Energy from renewable sources is now 77.15 percent of that from domestic crude oil production, with the gap closing rapidly.

Looking at all energy sectors (e.g., electricity, transportation, thermal), production of renewable energy, including hydropower, has increased by 15.07 percent compared to the first quarter of 2010, and by 25.07 percent when compared to the first quarter of 2009. Among the renewable energy sources, biomass/biofuels accounted for 48.06 percent, hydropower for 35.41 percent, wind for 12.87 percent, geothermal for 2.45 percent, and solar for 1.16 percent.

It’s questionable how well nuclear energy would survive without federal subsidies, but its worth pointing out the banality of what is being claimed above, as its clearly being used to continue the green assault against nuclear energy in favor of other sources that rely on even more federal subsidies. From the EIA report, nuclear energy produced 2.125 quadrillion Btus in the first 3 quarters of 2011. A combination of hydro-electric power, geothermal, biomass, solar, and wind produced 2.245 quadrillion Btus.

Breaking total ‘renewable energy’ production down percentage wise, we have (roughly):

• Hydro-electric: .795/2.245 =  ~35%
• Geothermal: .055/2.245 = 2.5%
• Solar/PV: .026/2.245 = 1.16%
• Wind: .289/2.245 = 12.9%
• Biomass: 1.079/2.245 = 48%

Roughly 83% (biomass and hydro) of the ‘renewable’ energy touted above isn’t favored by many present day environmentalists. Hydro-electric power production, while having low carbon dioxide emissions, upsets environmentalists for other reasons — so throw that out, noting that hydro was not included in California’s renewable energy targets. Wood-biomass is hated by many environmentalists as well, and ethanol (included by the EIA as a subset of biomass) is hated by almost everyone. Roughly 90% of the energy included in biomass came from those sources.

So if you add the remaining energy options, the ones that are favored by the Obama Administration showered with subsidies, you get 0.37 quadrillion Btus (from wind, solar, geothermal — which doesn’t receive the same attention as wind/solar), representing roughly 17% of the energy produced by nuclear power in the United States, and a much smaller fraction of total energy production.

Today The New York Times ran two dueling opinion pieces featuring Robert Bryce, author of a number of books, and Tom Friedman, who chose this column to unleash his inner Paul Ehrlich. The latter column will make regular NYT readers anxious and depressed, the former will make them angry.

Bryce argues that though wind and solar farms do not produce emissions, they require a whole lot of land, significant natural resource inputs, and new transmission lines. He believes that these shortfalls are under appreciated by renewable energy proponents, and the scaling of renewable energy might have other environmental consequences. California appears to have plenty of land, but that is to meet a 33% renewables goal, which is unlikely to satisfy environmentalists, and California has much more land than other states. The takeaway is that all energy choices have their tradeoffs:

The math is simple: to have 8,500 megawatts of solar capacity, California would need at least 23 projects the size of Ivanpah, covering about 129 square miles, an area more than five times as large as Manhattan. While there’s plenty of land in the Mojave, projects as big as Ivanpah raise environmental concerns. In April, the federal Bureau of Land Management ordered a halt to construction on part of the facility out of concern for the desert tortoise, which is protected under the Endangered Species Act.

Wind energy projects require even more land. The Roscoe wind farm in Texas, which has a capacity of 781.5 megawatts, covers about 154 square miles. Again, the math is straightforward: to have 8,500 megawatts of wind generation capacity, California would likely need to set aside an area equivalent to more than 70 Manhattans. Apart from the impact on the environment itself, few if any people could live on the land because of the noise (and the infrasound, which is inaudible to most humans but potentially harmful) produced by the turbines.

Friedman, on the other hand, penned a bizarre column foretelling a rapture-esque doomsday if humanity does not change its cancerous, consumption heavy ways:

You really do have to wonder whether a few years from now we’ll look back at the first decade of the 21st century — when food prices spiked, energy prices soared, world population surged, tornados plowed through cities, floods and droughts set records, populations were displaced and governments were threatened by the confluence of it all — and ask ourselves: What were we thinking? How did we not panic when the evidence was so obvious that we’d crossed some growth/climate/natural resource/population redlines all at once?

…

We will realize, he [Paul Gilding, author of The Great Disruption] predicts, that the consumer-driven growth model is broken and we have to move to a more happiness-driven growth model, based on people working less and owning less. “How many people,” Gilding asks, “lie on their death bed and say, ‘I wish I had worked harder or built more shareholder value,’ and how many say, ‘I wish I had gone to more ballgames, read more books to my kids, taken more walks?’ To do that, you need a growth model based on giving people more time to enjoy life, but with less stuff.”

Sounds utopian? Gilding insists he is a realist.

“We are heading for a crisis-driven choice,” he says. “We either allow collapse to overtake us or develop a new sustainable economic model. We will choose the latter. We may be slow, but we’re not stupid.”

It’s easy to get in the news through predicting doomsday (see here), but humanity has been forced to listen to this warning time and time again:

The battle to feed all of humanity is over.  In the 1970′s the world will undergo famines–hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now.  At this late date nothing can prevent a substantial increase in the world death rate, although many lives could be saved through dramatic programs to “stretch” the carrying capacity of the earth by increasing food production.  But these programs will only provide a stay of execution unless they are accompanied by determined and successful efforts at population control.  Population control is the conscious regulation of the numbers of human beings to meet the needs, not just of individual families, but of society as a whole.

Nothing could be more misleading to our children than our present affluent society.  They will inherit a totally different world, a world in which the standards, politics, and economics of the 1960′s are dead.  As the most powerful nation in the world today, and its largest consumer, the United States cannot stand isolated.  We are today involved in the events leading to famine; tomorrow we may be destroyed by its consequences.

- Paul Ehrlich, 1968

And yet humanity is still here, living longer, healthier lives than the past.

I almost choked on a complimentary pretzel during a recent flight when I read the final page of the April edition of Scientific American, this country’s premier science periodical for mainstream audiences. The page was titled “Clean Tech Rising” and the subtitle read, “China outshines the U.S. as the top investor, while Europe is a close third.” It featured bar graphs indicating what different nations are spending on so-called clean energy, like biofuel, wind, and solar power. The attendant text warned that “The U.S. has been a major player in clean energy technologies, but China is now the leader.” It recommended that, “…stepping up U.S. investment could enhance the country’s competitiveness…”

Now, it might or might not be true that China is spending more than the U.S. on “clean” energy. The ruling Communist government is not known for openness and transparency, so I take “official” investment data with a grain of salt. However, it is unequivocal that the Chinese are building coal power plants at an unprecedented rate. Estimates vary, from 4 new coal plants every week to 1 plant every week. All we know for sure is that coal, and not renewable energy, is powering the Middle Kingdom’s meteoric economic growth. This is why China, which became the world’s number one emitter of greenhouse gases only three years ago, now has a carbon footprint 40 percent bigger than the next largest emitter (the United States).

The task of science is to present the truth, no matter how it might offend one’s sensibilities. By highlighting only China’s clean energy investment, Scientific American’s presents an unscientific half truth. It then compounds this error by making a policy recommendation (“Stepping up U.S. investment [in renewable energy] could enhance the country’s competitiveness…”) based on this half truth. The whole truth is that China’s competitiveness is predicated on its building coal power faster than has ever been done in human history.

Using Scientific American’s logic, the inescapable conclusion is that the U.S. should embrace coal, too, in order to enhance our competitiveness on the international market.