RELIABILITY OF RENEWABLE ENERGY: WIND

Jordan Lofthouse, BS, Strata Policy

Randy T Simmons, PhD, Utah State University

Ryan M. Yonk, PhD, Utah State University

The Institute of Political Economy (IPE) at Utah State University seeks to promote a better understanding of the
foundations of a free society by conducting research and disseminating findings through publications, classes,
seminars, conferences, and lectures. By mentoring students and engaging them in research and writing projects, IPE
creates diverse opportunities for students in graduate programs, internships, policy groups, and business.
 consumption is supplied by renewable energy by
2025.4
THE RELIABILITY OF RENEWABLE
ENERGY: WIND The most influential policy incentive for promoting
wind energy production has been the PTC. The PTC was
established temporarily in 1992 and provided a credit
INTRODUCTION valued at 2.3 cents per kilowatt-hour for the first 10
years of a renewable energy facility’s operation. Over
As governments continue to mandate and subsidize the the past two decades, the PTC has expired several
use of wind power for electricity generation, voters and times. Each time the PTC has expired, investments in
taxpayers must consider the reliability of this energy wind energy have plummeted. The government
source. The Institute of Political Economy at Utah State renewed the PTC after each crash, allowing the wind
University explored wind power’s reliability in terms of industry to continue receiving government assistance.5
its economic, physical, and environmental The credit expired again in 2013, but a provision was
implications. Wind power is not able to sustain itself added to the American Taxpayer Relief Act in January
in the market without subsidies or mandates, and it of that year, which stated that if a project began
cannot consistently meet electricity demands. Because construction before the year 2014, it would continue to
wind is inconsistent, wind-powered electricity receive the tax credit.6 When the PTC initially expired
generation is dependent on more reliable forms of in 2013, new wind installations fell by 92 percent. The
energy, usually fossil fuels. Therefore, wind power is three previous expirations in 2000, 2002, and 2004 saw
not a worthwhile investment of tax dollars because it similarly dramatic drops.7
is not a reliable energy source, and the financial
investments needed to make it reliable outweigh its Without the PTC, private investors do not perceive
limited environmental benefits. wind energy to be a profitable investment. While
speaking of his own investments in wind energy,
ECONOMIC RELIABILITY Warren Buffett noted, “[O]n wind energy, we get a tax
credit if we build a lot of wind farms. That’s the only
Wind energy is not economically reliable because it is reason to build them. They don’t make sense without
heavily dependent on the Production Tax Credit (PTC) the tax credit.”8 While the PTC exists, private investors
and other subsidies, as well as state mandates like are able to profit at the taxpayers’ expense. For fiscal
renewable portfolio standards (RPS). This dependency year 2013 alone, wind received nearly $6 billion in
means that taxpayers are paying for an industry that electricity production subsidies and support, which
cannot sustain itself. comprised almost 40 percent of total subsidies for
renewable electricity sources.9
Because of subsidies and tax credits, the United States
has one of the fastest growing wind power markets in Through mandates and subsidies, governments are
the world, expanding by a factor of 22 since 2000. 1 distorting energy markets in favor of wind power. The
Despite more than two decades of government PTC was originally intended to give the wind industry
assistance, only 4.4 percent of total U.S. electricity the kick-start it needed to be self-sufficient. Despite
was generated by wind in 2014.2 wind energy’s 23-year reliance on temporary
government assistance, the Obama Administration’s
The main driver of wind growth is government policies, proposed 2016 budget would make the PTC permanent.
not market forces. During President George W. Bush’s Making the PTC permanent shows that politicians and
administration, the U.S. Department of Energy (DOE) bureaucrats do not think that the wind industry can
set a goal to have 20 percent of the nation’s electricity sustain itself in the market.
produced by wind by 2030.3 This federal pressure is
accompanied by state implementations of RPS. Constructing wind installations is often difficult
Twenty-nine states have adopted RPS, which typically because communities oppose projects that will affect
mandate that 15–25 percent of total state energy their real estate value. One solution to this problem is

Read the full report at usu.edu/ipe

placing wind turbines offshore. Though offshore wind producers know the amount of available fuel and can
offers a greater capacity of available wind, the cost is ship it where it is needed before it is converted into
prohibitively high in most cases. According to a DOE electricity. Wind, on the other hand, is not shippable
report, offshore wind would cost $2,400–5,000 per and it is impossible to gauge its exact availability. The
kilowatt-hour, which is at least 24 times as expensive electric grid is simply not set up to handle power
as onshore wind-generating electricity.10 sources that are so unpredictable.

Reaching the DOE’s goal of 20 percent wind energy by An additional problem of wind energy is the massive
2030 will require high initial investments in both areas needed to generate significant amounts of
turbines themselves and expanded transmission electricity. Consistent wind blowing at the right speed
systems. 11 Such large investments to meet this goal would require an area about the size of Texas to meet
are impractical and would require tens of billions of the total U.S. electricity demands as of 2005. Because
taxpayer dollars. These costs would be passed on to wind is inconsistent, however, this estimate is highly
average Americans in higher tax rates and higher inaccurate.16 Much more space would be needed.
electricity rates. In short, wind energy is not
economically reliable because of its heavy dependence Even though the government is incentivizing and
on tens of billions of dollars of government assistance. mandating the use of wind, integrating increased wind
energy into the U.S. power grid will require billions of
PHYSICAL RELIABILITY dollars in infrastructure upgrades and construction of
high-capacity transmission lines. The ability to
Wind is not physically reliable because it is inefficient generate wind energy in the United States is outpacing
and inconsistent. On average, wind installations in the ability to transmit it to where it is most needed. 17
United States produce only 30 to 35 percent of their Average Americans will have to pay for these
potential energy output.12 In a United Kingdom study, infrastructure overhauls with higher tax rates and
wind installations operated at less than 20 percent of higher electricity rates.
their potential output for approximately 40 percent of a
Entrepreneurs in the wind industry are already facing
given year.13
the hard reality of the transmission problem. Wind
Wind is often extremely variable in the short term. turbines in much of Wyoming could produce 50 percent
When looking at energy production within 30 to 90 more electricity than the same turbines in more
minute intervals, there are frequently swings of 10 populated areas such as New York, but large-scale
percent in electricity output. Traditional energy sources wind energy production in Wyoming is unfeasible
must compensate for any inconsistency in wind energy because costly transmission infrastructure must first
to avert a dramatic shortage in energy.14 Until methods be built.18
of storing massive amounts of energy are viable on a
grid-wide scale, intermittent energy sources like wind In short, wind energy is not physically reliable because
cannot replace conventional sources. it is not consistent or storable. Intermittent power
sources like wind rely on other forms of energy when
Compensating for wind’s inconsistency with traditional they cannot meet demand.
sources of electricity results in higher operation and
maintenance costs for conventional power plants. ENVIRONMENTAL RELIABILITY
Traditional power plants are not meant to be ramped
up and down quickly to compensate for wind's Wind power is environmentally reliable because it
variability. These power plants may burn more fuel, leads to a small net carbon reduction, but
emit more pollution, and require more maintenance environmental benefits are limited. Increasing wind
due to the added stress from frequent ramping. 15 energy capacity will require conventional power plants
to operate at lower efficiency levels to supply
Traditional energy sources like fossil fuels have electricity when wind cannot. Wind power may
specific advantages in electricity production. Electricity actually result in more greenhouse gas and pollutant

Read the full report at usu.edu/ipe

emissions in some cases due to the inefficiency of To compensate for the variability of wind, grid
repeatedly ramping up backup power plants.19 operators use traditionally reliable energy sources like
fossil fuels to supply energy when wind cannot. The
Wind power also increases the mortality rates of birds ability to generate wind energy is outpacing the ability
and bats. In North America, wind turbines kill an to transmit it, but long-distance electricity
estimated 214,000–368,000 birds annually.20 The high transmission will require extensive upgrades to
speed of wind turbine blades cause rapid air pressure existing infrastructure. The costs of these upgrades
changes that can cause bats' lungs to explode. 21 In will be passed on to American electricity consumers.
2012 alone, wind turbines killed an estimated 600,000
bats in the United States. 22 These figures are The widespread support for wind energy rests largely
significant because many bat species have low on the idea that wind will result in a cleaner
reproduction rates and would be potentially vulnerable environment. Wind energy, however, is not as clean as
to local extinctions in areas of high numbers of wind most people assume due to the fact that wind energy
turbines.23 requires backup forms of electricity generation. Wind
power may actually result in more greenhouse gas and
ROLE OF NEW TECHNOLOGY pollutant emissions than conventional power
generation due to the inefficiency of repeatedly
Emerging technology seeks to alleviate the variability ramping up backup power plants.
of wind power. These technologies could store large
amounts of electricity, improve long-distance Subsidizing wind energy is direct government
transmission capability, and improve current wind interference with the U.S. energy marketplace.
turbine efficiency. These technologies, however, are Government entities that pick winners and losers in the
still being developed and are not likely to be energy industry bind the hands of innovators who want
implemented on an industrial scale in the foreseeable to supply cheaper energy. Wind power is not worth
future. billions of dollars in subsidies and mandates because
it is not reliable as an energy source. The financial
investments of public money needed to make it reliable
CONCLUSION outweigh its limited environmental benefits. Markets,
not mandates or subsidies, are the best way to
Wind is not consistent and cannot be relied upon to
determine whether wind power will become reliable or
generate the electricity demanded by U.S. consumers.
economical within the next few decades.

solutions/increase-renewables/production-tax-credit-
REFERENCES for.html#.VDay3NTF-DE
1
Department of Energy. (2013, August 6). Energy dept. reports:
6
U.S. Department of Energy. (n.d.) Renewable electricity
U.S. wind energy production and manufacturing reaches record production tax credit (PTC). Retrieved from
highs. Retrieved from http://energy.gov/articles/energy-dept- http://energy.gov/savings/renewable-electricity-production-tax-
reports-us-wind-energy-production-and-manufacturing-reaches- credit-ptc
record-highs
7
Power of Wind. (n.d.) Renewable energy production tax credit:
2
Institute for Energy Research. (n.d.). Wind. Retrieved from Stability drives growth. Retrieved from
http://instituteforenergyresearch.org/topics/encyclopedia/wind/ http://powerofwind.net/powerofwind/ptc2
3
Department of Energy. (2008, July). 20% Wind Energy by 2030:
8
Pfotenhauer, Nancy. (2014, May 12). Big wind’s bogus subsidies.
Increasing Wind Energy’s Contribution to U.S. Electricity Supply. Retrieved from http://www.usnews.com/opinion/blogs/nancy-
(p. 1). Retrieved from pfotenhauer/2014/05/12/even-warren-buffet-admits-wind-
http://www.nrel.gov/docs/fy08osti/41869.pdf energy-is-a-bad-investment
4
Database for State Incentives for Renewables and Efficiency
9
U.S. Energy Information Administration. (2015, March 23). Direct
(DSIRE). (2014). Renewable Portfolio Standards. Retrieved from Federal Financial Interventions and Subsidies in Energy in Fiscal
http://www.dsireusa.org/resources/detailed-summary-maps/ Year 2013. Retrieved from
5
Union of Concerned Scientists. (n.d.) Production tax credit for http://www.eia.gov/analysis/requests/subsidy/
renewable energy. Retrieved from
10
U.S. Department of Energy. (2008, July). 20% wind energy by
http://www.ucsusa.org/clean_energy/smart-energy- 2030: Increasing wind energy’s contribution to U.S. electricity
supply. (p. 9). Retrieved from

Read the full report at usu.edu/ipe

 mission-bottlenecks-bad-news-for-renewable-energy/
http://www.nrel.gov/docs/fy08osti/41869.pdf
18
Wald, M. L. (2008, August 26). Wind energy bumps into power
11
Department of Energy. (2008, July). 20% wind energy by 2030: grid’s limits. The New York Times. Retrieved from
Increasing wind energy’s contribution to U.S. electricity supply. (p. http://www.nytimes.com/2008/08/27/business/27grid.html?page
13). Retrieved from http://www.nrel.gov/docs/fy08osti/41869.pdf wanted=1&_r=3&adxnnlx=1412892352-
12
Open Energy Information. (n.d.) Transparent cost database - wdYLFNnLcP3ozn5auKUX8Q&
Capacity factor. Retrieved from http://en.openei.org/apps/TCDB/
19
Bentek Energy. (2010, April 16). How Less Became More…
13
Aris, C. (2014, October 27). Wind power reassessed: A review of Wind, Power and Unintended Consequences in the Colorado
the UK wind resource for electricity generation. (p. 4.) Adam Smith Energy Market. p. 55, 69. Retrieved from http://docs.wind-
Institute. Retrieved from watch.org/BENTEK-How-Less-Became-More.pdf
http://www.adamsmith.org/research/reports/wind-power-
20
Koch, W. (2014, September 15). Wind turbines kill fewer birds
reassessed-a-review-of-the-uk-wind-resource-for-electricity- than do cats, cell towers. USA Today. Retrieved from
generation/ http://www.usatoday.com/story/money/business/2014/09/15/wi
14
Aris, C. (2014, October 27). Wind power reassessed: A review of nd-turbines-kill-fewer-birds-than-cell-towers-cats/15683843/
the UK wind resource for electricity generation. (p. 2.) Adam Smith
21
National Wind Coordinating Collaborative. (2010.) Wind turbine
Institute. Retrieved from interactions with birds, bats, and their habitats: A summary of
http://www.adamsmith.org/research/reports/wind-power- research results and priority questions. Retrieved from
reassessed-a-review-of-the-uk-wind-resource-for-electricity- http://www1.eere.energy.gov/wind/pdfs/birds_and_bats_fact_sh
generation/ eet.pdf
15
Bentek Energy. (2010, April 16). How less became more…
22
Hayes, M. A. (2013). Bats Killed in Large Numbers at United
Wind, power and unintended consequences in the Colorado States Wind Energy Facilities. Bioscience. Retrieved from
energy market. Retrieved from https://www.wind- http://bioscience.oxfordjournals.org/content/63/12/975.abstract?i
watch.org/documents/how-less-became-more/ jkey=22cc9eb69ca58d4c07e733864d825a72492ae18b&keytype2=t
16
Indersscience Publishers. (2007, July 25). Renewable energy f_ipsecsha
wrecks environment, according to researcher. Retrieved from
23
National Wind Coordinating Collaborative. (2010.) Wind turbine
http://www.sciencedaily.com/releases/2007/07/070724160209.h interactions with birds, bats, and their habitats: A summary of
tm research results and priority questions. Retrieved from
17
Pentland, W. (2011, May 3). Transmission bottlenecks bad news http://www1.eere.energy.gov/wind/pdfs/birds_and_bats_fact_sh
for renewable energy. Retrieved from eet.pdf
http://www.forbes.com/sites/williampentland/2011/05/03/trans

Read the full report at usu.edu/ipe