After 40 Years Of Massive Subsidies Wind & Solar ‘Industries’ Still Begging For More
August 21, 2022 by stopthesethings 3 Comments
Back in 1983 the American Wind Industry Association claimed that solar and wind would be “competitive and self-supporting on a national level by the end of the decade if assisted by tax credits and augmented by federally sponsored R&D”. That was 39 years ago. Over that span of time, there has been no lack of assistance in the form of tax credits and federally sponsored R&D, along with a raft of punitive mandates and targets designed to cripple conventional generators and favour chaotically intermittent wind and solar.
Now, as then, bold claims from renewable energy rent seekers about wind and solar being truly competitive with nuclear, coal or gas turn to water as soon as talk turns to cutting subsidies to wind and solar.
With their 40th birthdays approaching, the wind and solar ‘industries’ are a pair of perpetual infants who – like Peter Pan – are determined to never grow up.
Lisa Linowes and Robert Bryce wade into the Swamp to find that the wind and solar rent-seekers have won the day by turning the Production Tax Credit into a permanent feature of America’s new crony capitalist system.
Big Wind/Solar Roll Taxpayers, Landscape: Legislative Bonanza: A Terror Unleashed
8 August 2022
The Schumer-Manchin bill provides that after 2024 the traditional PTC and ITC programs expire, but the benefits live on through the new “Clean Electricity” tax credit program.”
“Based on published project footprints of recently sited wind projects in Wyoming, Oklahoma, New Mexico, and Colorado, new wind turbines will spread across 30 million acres (50,000 sq. mi.) by 2032.”
The Schumer-Manchin bill passed by the US Senate this weekend and heading to the House erases any doubt whether Congress is serious about lowering inflation, addressing energy costs, or protecting the environment.
Ironically dubbed the Inflation Reduction Act of 2022, Schumer-Manchin will do nothing to reduce inflation. But what it will do is far worse. Schumer-Manchin will unleash the largest industrialization of U.S. open lands not seen since the damming of our western rivers. The modern “environmental” movement will finally realize its dream of transforming the mid-section of the United States, from North Dakota to Texas and Nevada to Ohio, into a massive electric generating facility powered by wind and solar.
Schumer-Manchin makes the wind and solar credits permanent, not phased out as advertised. …The environmental destruction that will be left by developers marching across the country carpeting our ridgelines and open lands with 600-foot spinning turbines, solar panels, substations, and miles of high voltage transmission is impossible to quantify. Habitats will be degraded and destroyed, viewsheds industrialized, and wildlife killed or displaced. Federal and state agencies will be hamstrung by new permitting rules – also part of Schumer-Manchin – that will impair their ability to avoid and minimize project impacts.
It’s been reported that Schumer-Manchin extends the PTC and ITC for 10 years through to 2032, but that’s not what the language says.
The credits phase out after 2032, but only after annual greenhouse gas emissions from U.S. electricity production drop by 75% or more below 2022 levels. To achieve this level of emission reduction, the US would have to severely constrain the public’s access to reliable generation, which won’t happen. The numbers below speak for themselves.
The upshot is that the wind industry, after 30-years, has found a path to making the 1992 PTC permanent!
Billions of dollars more in PTCs and ITCs will pour into Big Wind and solar projects that are not accounted for in the 10-year, $260 billion price tag Senator Wyden cited. New wind and solar projects built after 2032 will be PTC/ITC eligible!
Also remember that the PTC is earned on each megawatt hour produced during the first 10 years of project life, which means that facilities placed in service in 2025 earn the subsidy well past 2032. In all cases these payouts will be in addition to the $113 billion already anticipated in PTCs/ITCs under current law!
The Schumer-Manchin bill provides that after 2024 the traditional PTC and ITC programs expire, but the benefits live on through the new “Clean Electricity” tax credit program. Eligible facilities are those placed in service after 2024 that produce zero emissions. “No longer we’re picking winners and losers. It’s tech neutral,” boasted Senator Wyden (D-OR) who put the cost of the bill’s clean energy credits at $260 billion over ten years.
Tech neutral? On the surface, maybe. But make no mistake, this is nothing more than a repackaged wind and solar subsidy program with a few batteries thrown in for good measure. Let’s explain:
New zero-emission resources, including small modular nuclear or hydrogen generation, won’t reach commercial scale anytime soon. Of the other technologies eligible for the PTC/ITC under current law, wind and solar are the only ones being built in a material way and the only ones that will continue under Schumer-Manchin. The others (geothermal, qualified hydro, municipal solid waste, open-loop biomass etc.) are either too capital intensive, require too much labor to be viable, can’t meet the zero-emission requirement, or are out-of-favor with the environmental community.
As further proof, Schumer-Manchin explicitly retains 1992 as the base year for inflation adjustments. That’s the year the Energy Policy Act of 1992 – which created the PTC – was adopted! The bill’s authors are reasonably certain that no other resource but wind (and maybe solar), will try to claim the production credit. All other provisions in the bill addressing inflation adjustments amend the base year to 2021, 2022 or 2023.
Destroying the Environment to Save It
For those less concerned with cost and more concerned with saving the planet, think again.
The environmental destruction that will be left by developers marching across the country carpeting our ridgelines and open lands with 600-foot spinning turbines, solar panels, substations, and miles of high voltage transmission is impossible to quantify.
Habitats will be degraded and destroyed, viewsheds industrialized, and wildlife killed or displaced. Federal and state agencies will be hamstrung by new permitting rules – also part of Schumer-Manchin – that will impair their ability to avoid and minimize project impacts. Incidental take permits will be issued for protected species at a level never seen before. Politics, not science, will drive permit approvals as the emphasis shifts to operational mitigation. After a project is built, there may be a year or two of post-construction monitoring after which people will move on, but the harms will continue.
How do we know this? Because it’s been happening for two decades. Under Schumer-Manchin we will see more of the same but at an accelerated level involving highly conflicted lands.
Development patterns for the last few years inform how much wind and solar is likely to be built over the next decade. The wind industry managed to install 61,000 new megawatts (MW), or roughly 30 thousand turbines, during the period when the PTC was phasing down. Under a full PTC/ITC regime, an unlimited timeframe to build within, and an industry that will weaponized Schumer-Manchin to force approval of its projects, we could easily see a doubling of the current wind capacity bringing the total to nearly 280,000 MW by 2032.
Utility-scale solar will be built at an equal pace. By the end of the first half of 2022, 66,000 MW of solar was operating with another 74,000 MW in the pipeline. The pipeline will get built and much more will follow. The destruction of Nevada’s deserts is already underway. Schumer-Manchin will make it impossible to stop. Meanwhile, solar developers are targeting our richest farmlands (think food supply and food security) from Maryland to Iowa while promoting the idea that the soil will revert to full food production immediately after the panels are removed. Experts at the North Carolina Cooperative Extension explain why this is not true. None of this considers the explosion of new battery storage and potentially 30,000 MW of offshore wind that Schumer-Manchin will push forward.
The land requirements will be enormous. Based on published project footprints of recently sited wind projects in Wyoming, Oklahoma, New Mexico, and Colorado, new wind turbines will spread across 30 million acres (50,000 sq. mi.) by 2032.
The wind industry will push the narrative that the space between turbines is dual use and shouldn’t count as part of the project but that argument doesn’t fly anymore. The space is filled with turbine noise, flashing lights and flickering shadows cast over a mile away. Ask visitors to Texas who describe West Texas as an alien landscape where one can drive for miles and miles and see nothing but wind turbines. For solar, there is no space between panels for animals to thrive, and any vegetation in the way will be mowed down and the land left barren.
The degradation of these sprawling industrial complexes on our historic, visual, and environmental resources has been ignored by the media and dismissed by wind and solar boosters for years. Those who raise concerns, few of whom are part of national environment groups, have been attacked, marginalized and dismissed as NIMBY (“not in my backyard”).
Senator Manchin knows this which makes his support of Schumer-Manchin so surprising. When he was governor of West Virginia, his State experienced an alarming situation with bat mortality at the 44-turbine Mountaineer wind project owned and operated by NextEra (formerly FPL Energy).
Studies conducted on site estimated levels of bat mortality “…among the highest ever recorded in the world.” This and other catastrophic environmental events prompted West Virginia Reps. Rahall and Mollohan, both Democrats, to hold congressional hearings in 2007. Rep Mollohan’s opening comments captured the issue this way:
[T]here is little reason to believe that the wind energy projects that are being built in environmentally sensitive areas will be any less deadly to wildlife than those built in the past. The cumulative impact of all these projects on wildlife has to be of concern to Congress.… [W]ind energy developers are not going to voluntarily take all the steps that are reasonably necessary for the protection of wildlife. They just aren’t going to do it. These developers are for-profit corporations that, like any other, are answerable to shareholders. Their basic imperative will always be to get turbines up and running and thereby generating some amount of electricity, not much, by the way, and more importantly for their owners major tax credits.
Rep. Mollohan’s statement is as true today as it was in 2007, when the U.S. claimed just 11,600 MW of operating wind. Unfortunately, nothing came of the hearings after congressional Democrats, joined at the hip with Big Wind, crushed the effort for federal action. As for the Mountaineer project, NextEra would not allow further studies after the bat kills were discovered and, according to Rep. Mollohan, “refused to alter its operations in a way that could reduce bat mortality.”
Senate Democrats still promote the notion that adding renewables to the grid reduces electricity prices. This is false. Tax credits provide a significant out-of-market revenue source for developers by shifting costs to taxpayers at large. Wind and solar are not cheaper, they’re subsidized! When wind and solar energy floods the grid in excess of demand, they depress market prices which harms more reliable (unsubsidized) generators. There is no justification for any government program that undercuts healthy, competitive businesses, but that’s what’s happening.
No traditional source of electric generation has ever received an open-ended, unlimited subsidy comparable to the federal PTC paid for every megawatt hour of energy put on the grid. But there’s another reality that keeps the subsidies flowing. After 30-years the business of Big Wind and solar is no longer about energy production. It’s about tax avoidance. An entire industry has grown around renewable energy tax policy and that industry holds tremendous sway on Capitol Hill.
Schumer-Manchin is part of the single-minded, “hurry up and get it done” mentality behind the renewables push in the United States. This coupled with the unconstrained flow of taxpayer subsidies to any developer who shows up has left no time for communities, businesses, or governments to consider the conflicts and consequences of their actions. The wind and solar industries, wrapped in a faux green cloak, have convinced the public that they’re best positioned to save the planet while doing little to address the destruction their projects cause.
Environmentalists, concerned citizens, and all our elected representatives must fight back against this stunning legislation. We cannot allow a doubling down on a major public policy failure. The incentives of corporate America are now to damage our open spaces and precious wildlife–and misallocate resources in a teetering economy.
Manchin-Schumer Energy Deal Proves the Power of The Swamp
Real Clear Energy
2 August 2022
Never doubt the power of The Swamp.
That’s the apparent lesson to be learned from Senator Joe Manchin’s reversal on the energy-related provisions of the pending reconciliation bill. Last month, Manchin derailed the measure which included some $300 billion in energy-related provisions. Manchin was pilloried by climate activists and by former Obama advisor, John Podesta, who declared that Manchin had “single-handedly doomed humanity.” But last Wednesday, Manchin switched his position and agreed to a deal with Senate Majority Leader Chuck Schumer which has been dubiously dubbed the “Inflation Reduction Act of 2022.”
The Manchin-Schumer deal shows, yet again, that the Washington Favor Factory never sleeps. The 700-plus-page bill is filled with outrageously expensive subsidies for the solar and wind sectors and lavishes lollipops on nearly every energy-related special interest in Washington. The legislation is so broad and has so much corporate welfare that it has been endorsed by – get this – Exxon Mobil and the Natural Resources Defense Council.
On Friday, Exxon CEO Darren Woods called the spending bill “a step in the right direction…We’re pleased with the broader recognition that a more comprehensive set of solutions” is needed. A day earlier, Manish Bapna, president of NRDC issued a statement that said “This is the ultimate clean energy comeback — the strongest climate action yet in the moment we need it most. Congress must pass it without delay.”
Exxon is cheering the provisions that could expand domestic drilling. The NRDC is cheering because the bill includes tax credits for a myriad of alt-energy programs, including, of course, more tax credits for wind and solar.
The energy-related parts of the bill are expected to cost $369 billion. That’s an increase of more than 20% over the cost estimates published just a few weeks earlier. (Talk about inflation!) And while the cost has been pegged at $369 billion, the final invoice for all of the measures in the bill could be far higher. That brings me to my first point: the bill reveals (again) how perverted the parliamentary process in Congress has become.
This legislation will cost hundreds of billions of dollars and have far-reaching impacts on the economy. One media outlet dubbed it “the biggest and most consequential climate change bill ever passed by Congress.” But key provisions in the legislation — including incentives for solar energy via the investment tax credit which author and Substack writer Michael Shellenberger recently estimated could total $260 billion – were never debated in Congress. That’s remarkable. Why? The ITC is the most-expensive energy-related provision in the federal tax code. Last year, solar energy got 267 times more in federal tax credits per unit of energy produced than the nuclear sector did.
Nor any debate about another extension of the production tax credit, the subsidy used by the wind industry. The PTC, which is the second-most-expensive energy-related provision in the federal tax code, expired at the beginning of this year. It was designed as a “temporary” subsidy but it has been extended 13 times, and it has become the main financial incentive that is driving the growing land-use conflicts between the wind industry and towns and counties all across the country. Despite these conflicts, as Shellenberger notes, the subsidy for wind energy could, if certain conditions are met regarding domestically produced content, rise from the current 2.6 cents per kilowatt-hour to 3.1 cents per kilowatt-hour.
These subsidies for solar and wind are blatant examples of corporate welfare being handed out in the name of climate change. Despite staggering costs – and the deleterious impact that the wind and solar subsidies are having on the integrity of the electric grid – these handouts aren’t being debated. Indeed, the total cost and potential impact of the legislation are hardly being mentioned by big media outlets, perhaps because the language in the bill is so convoluted it takes an expert to understand what the legislation will do.
Congress isn’t discussing any of these facts. Instead of debate and deliberation, all of these measures are being rushed through the reconciliation process that allows legislation to pass with just 51 votes in the Senate. Manchin-Schumer reminds me of the 5,593-page Covid relief and spending bill that was approved by Congress in late 2020. The legislation was the longest bill ever approved by Congress. Joe Concha, a columnist for The Hill, dubbed it the “swampiest thing ever.” Concha added that it was “exactly what one would expect from a dysfunctional, tone-deaf Congress: a pork-filled cluster…”
That’s what the Inflation Reduction Act of 2022 is: a pork-filled cluster. Manchin and Schumer have delivered for the NGO-corporate-congressional-climate complex which wants more spending on weather-dependent renewables despite the ongoing energy crisis in Europe, where countries like Germany, Italy, Holland, and others are rushing to purchase and burn as much coal as they possibly can.
Oh, and by the way, the Newcastle coal benchmark now stands over $400 per ton. Nineteen months ago it was selling for $50 per ton.
Finally, be wary of the claims about how world-changing and climate-saving the deal will be. A one-page summary of the deal published by Senate Democrats claimed it “lowers energy costs, increases cleaner production, and reduces carbon emissions by roughly 40 percent by 2030.” That last claim was dutifully reported by the New York Times without any context or skepticism. The Times said the deal will “put the United States on track to slash its greenhouse gas emissions to roughly 40 percent below 2005 levels by 2030.”
Let’s look at the numbers. In 2005, US emissions totaled some 5.9 billion tons. Between 2005 and 2021, those emissions declined by about 20 percent, or roughly 1.2 billion tons. Thus, to slash emissions by another 20 percent — and do so in just eight years — will require cutting another 1.2 billion tons of emissions. For perspective, that’s nearly equal to all of the energy-related emissions from U.S. industry in 2021. (According to the EPA, industrial emissions last year totaled 1.4 billion tons.) Put another way, cutting that much emissions would require cutting domestic oil use by more than half. (Last year, oil-related emissions totaled 2.2 billion tons.) Call me a skeptic, but that will not happen.
Furthermore, as Shellenberger has reported, the Joint Committee on Taxation determined that the Manchin-Schumer bill will raise taxes “by $3 billion more on Americans earning below $200,000 per year than on Americans earning between $200,000 and $500,000 per year.” In addition, Arizona Sen. Kyrsten Sinema reportedly wants changes in the bill. The Wall Street Journal cited one investment firm that “put the chance of the deal’s passage at just 65 percent, saying that among other risks, progressives may not agree to permitting overhauls that help boost fossil-fuel production.”
In short, this deal may be a long way from becoming law. But whether it becomes law or not, it shows again that the Washington Swamp will always deliver to special interests.
Real Clear Energy