Scribd Logo
Upload

Welcome to Scribd!

  • 301 views

    CWG - Renewable Energy Subsidies

    Uploaded by

    TPPF
    This document discusses renewable energy subsidies in Texas. It argues that federal subsidies undermine the state's competitive energy market and mask the full costs of renewable energy. Major wind and solar companies receive billions in federal loans and tax breaks. While renewable standards have been met, subsidies continue to drive aggressive installation. Without subsidies, few renewable projects would be viable given their high costs and inability to meet fluctuating demand. The document recommends eliminating mandatory renewable standards and subsidies to move Texas toward a market-driven system with lower electricity costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    CWG - Renewable Energy Subsidies

    Uploaded by

    TPPF
    301 views2 pages
    This document discusses renewable energy subsidies in Texas. It argues that federal subsidies undermine the state's competitive energy market and mask the full costs of renewable energy. Major wind and solar companies receive billions in federal loans and tax breaks. While renewable standards have been met, subsidies continue to drive aggressive installation. Without subsidies, few renewable projects would be viable given their high costs and inability to meet fluctuating demand. The document recommends eliminating mandatory renewable standards and subsidies to move Texas toward a market-driven system with lower electricity costs.

    Original Description:

    CWG - Renewable Energy Subsidies

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses renewable energy subsidies in Texas. It argues that federal subsidies undermine the state's competitive energy market and mask the full costs of renewable energy. Major wind and solar companies receive billions in federal loans and tax breaks. While renewable standards have been met, subsidies continue to drive aggressive installation. Without subsidies, few renewable projects would be viable given their high costs and inability to meet fluctuating demand. The document recommends eliminating mandatory renewable standards and subsidies to move Texas toward a market-driven system with lower electricity costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    301 views2 pages

    CWG - Renewable Energy Subsidies

    Uploaded by

    TPPF
    This document discusses renewable energy subsidies in Texas. It argues that federal subsidies undermine the state's competitive energy market and mask the full costs of renewable energy. Major wind and solar companies receive billions in federal loans and tax breaks. While renewable standards have been met, subsidies continue to drive aggressive installation. Without subsidies, few renewable projects would be viable given their high costs and inability to meet fluctuating demand. The document recommends eliminating mandatory renewable standards and subsidies to move Texas toward a market-driven system with lower electricity costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Texas Public Policy Foundation

    POLICYMAKER'S GUIDE
    TO CORPORATE
    WELFARE
    Renewable Energy Subsidies
    The Issue meet a minimum annual renewable requirement, either by owning
    renewable capacity or by purchasing RECs from renewable gener-
    Federal policies that subsidize increased installation of wind ators. The RPS mandated installation of 5,000 MW of renewable
    and solar power undermine the competitive Texas energy market. energy capacity by 2015 and 10,000 MW by 2025. Supported by
    The International Energy Agency defines energy subsidies as any federal subsidies, Texas surpassed the 2025 mandate in 2010.
    government action that affects . . . the competitiveness of each fuel The goal of the Texas RPS has long since been met. The
    or technology, including grants, tax abatements, federal loans, question the Texas Legislature now faces is whether to extend RPS
    loan guarantees, and Renewable Energy Credits (RECs). and build more infrastructure for renewable industries that would
    According to Subsidy Tracker, total subsidies given only to the not exist at the current scale without federal subsidies. Congress
    largest wind operators amount to $176 billion. General Electric extended the major federal subsidies for wind and solar power
    the biggest manufacturer of wind turbineshas received $159 in December 2015. This assurance that the federal subsidies will
    billion in federal loans or loan guarantees. NextEra Energythe continue for the next five-seven years has catalyzed aggressive in-
    countrys largest wind power producerhas received $5.5 billion stallation of new wind and solar facilities. But there is no guarantee
    in subsidies. that the next deadline will be greeted as kindly by Congress.
    Those countries that most aggressively have rushed to re-
    newables have experienced ballooning subsidies that have driven The Arguments
    conventional generators out of production and led to average retail
    rates in Germany as high as three times the average U.S. electric Proponents of renewable energy attempt to justify subsidies
    rates. Many German industries have relocated to other countries for the industry arguing that the fossil fuel industry also receives
    with lower-priced and more reliable electricity. In July 2016, Ger- large amounts of federal support. However, U.S. renewable indus-
    many cut major renewable subsidies because they were unsustain- tries receive the lions share of direct federal subsidies while their
    able. output of electric power is far less than that of conventional gener-
    The full cost of renewable energy is masked by generous ators. In 2015, wind power received 72 percent of direct subsidies,
    subsidies and because the many ancillary services such as back-up yet generated only 4.7 percent of U.S. electricity. Conventional
    generation, grid adjustments, voltage and transmission are not energy sources received about 11 percent of total subsidies and
    calculated by officials or renewable energy promoters. provided 78.5 percent of total production.
    The largest share of renewable subsidies comes from the fed- This points to the falseness in claims that renewable energy
    eral government. Local governments also provide tax abatements is cost competitive with traditional fuels. Without the hundreds
    and incentives for renewables. The Competitive Renewable Energy of billions of dollars described above, very few renewable sources
    Zones (CREZ), a major indirect subsidy, is a massive new system of energy would be in operation today. In addition to the inherent
    of transmission lines that carries wind power hundreds of miles problem renewable fuels have with fuel density, the amount of
    from West Texas to population centers bordering Interstate 35. It energy stored in a given fuel per unit volume or mass, renewables
    cost Texas rate-payers $7 billion. are also more expensive due to their intermittent, seasonal, and
    Enacted in 1992, the federal Production Tax Credit (PTC) is a variable nature, making them unable to meet fluctuating and
    per-kilowatt subsidy for electricity generated using select renew- unpredictable demand.
    able sources. The PTC was initially created as a way to jump-start Renewables supporters resistance to passage of Senate Bill
    emerging renewable technology. Instead, it has been extended nine 931 in the 84th Legislature, which would have made Texas system
    times. The Congressional Joint Committee on Taxation estimates of RECs voluntary, suggests that the renewable industry under-
    the recently extended PTC will cost U.S. taxpayers around $12.4 stands its dependence on government subsidies to stay in business.
    billion through 2019. Despite the challenges the renewable energy industry might face
    The PTC is now $23 per megawatt-hour of electricity gener- under such reforms, Texans would be much better off under these
    ated, allowing wind operators to sell their power at a discounted reforms that would steer Texas toward a market-driven system
    or even negative price (below the wholesale price). In the winter of with lower electricity costs for consumers.
    2015, peak wholesale electricity prices in Texas averaged $21 per
    Recommendations
    megawatt-hour. The depressed market prices force conventional
    generators to go offline, while renewable producers remain prof- Eliminate the mandatory Texas Renewable Portfolio Stan-
    itable as a result of the subsidy. This is a threat to the fundamental dard.
    competitiveness of the Texas electric market. Support elimination of the federal production tax credit,
    The Texas Legislature imposed a Renewable Portfolio Stan- grants, and loan guarantees.
    dard (RPS) in 1999. The Texas RPS acts as an indirect subsidy for Require the Texas PUC to calculate full direct and indirect
    renewable generators by requiring that retail electric providers costs of renewables.
    Resources
    The Renewable Electricity Production Tax Credit: In Brief by Molly F. Sherlock, Congressional Research Service (July 2015).
    Wind-Energy Sector Gets $176 Billion Worth of Crony Capitalism by Robert Bryce, National Review (June 2016).
    Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2013, U.S. Energy Information Administration (March 2015).
    Energy Subsidies and External Costs, World Nuclear Association (Dec. 2015).
    SB 931. 2015. Introduced. 84th Texas Legislature (R).
    Renewable Energy and Energy Mandates, Texas Public Policy Foundation (2014).
    One Thing California, Texas Have in Common Is Negative Power, Bloomberg (April 2016).
    Renewable Generation Requirement, Energy.Gov .
    Monthly Energy Review, U.S. Energy Information Administration (March 2016).
    Focus on Capacity Additions Ignores Winds Scant Electricity Generation, Institute for Energy Research (April 2016).

    901 Congress Avenue, Austin, Texas 78701 | 512.472.2700 PH 512.472.2728 FAX | www.TexasPolicy.com

    You might also like