While the US Energy Information Administration (EIA), argues onshore wind is one of the cheapest forms of electric power — cheaper than nuclear, new coal or hydro, and solar — a new study from researchers at Utah State University shows when you take into account the true costs of wind, it’s around 48 per cent more expensive the EIA claims.
“True costs,” as defined in the report means, “… the price tag consumers and society as a whole pay both to purchase wind-generated electricity and to subsidize the wind energy industry through taxes and government debt,” says Ryan Yonk Ph.D., one of the report’s authors in a press release.
“After examining all of these cost factors and carefully reviewing existing cost estimates, we were able to better understand how much higher the cost is for Americans,” says Yonk.
Growth Due to Subsidies
As reported in Breitbart.com on July 7, among the factors the report accounted for were: “The federal Production Tax Credit (PTC), a crucial subsidy for wind producers, has distorted the energy market by artificially lowering the cost of expensive technologies and directing taxpayer money to the wind industry; States have enacted Renewable Portfolio Standards (RPS) that require utilities to purchase electricity produced from renewable sources, which drives up the cost of electricity for consumers; Because wind resources are often located far from existing transmission lines, expanding the grid is expensive, and the costs are passed on to taxpayers and consumers; Conventional generators must be kept on call as backup to meet demand when wind is unable to do so, driving up the cost of electricity for consumers.
Breitbart quotes Yonk stating, “Wind power has experienced tremendous growth since the 1990’s, but it has largely been a response to generous federal subsidies.”
According to the report, among the most important costs wind power promoters fail to recognize are the opportunity cost of the substantial subsidies diverting resources and capital from more efficient energy producing technologies and other goods and services to which they would have flowed absent government intervention in the market.
The study reports for example, in 2010, wind energy received 42 percent of direct federal subsidies for energy, more than any other type of electricity generation, despite producing just 2 percent of the nation’s total electricity. The Production Tax Credit alone amounts a $5 billion per year subsidy to wind producers. Billionaire investor Warren Buffett, who has invested heavily in wind power has admitted, “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
According to Breitbart, despite accounting for all the factors noted, the study may still underestimate the real costs of wind energy because doesn’t account for the environmental damage and purported harms to human health caused by wind power.
Randy Simmons, Ryan Yonk, Megan Hansen, The True Cost of Energy: Wind https://heartland.org/policy-documents/true-cost-energy-wind