By NORMAN ROGERS
Renewable electricity, mostly wind power, is useless in every dimension. It is extremely expensive but is made to look cheap by hiding an 80% subsidy. It is an exorbitantly expensive method for reducing CO2 emissions. Industry lobbyists and sinister environmental organizations, like the Sierra Club, have manipulated public policy to milk taxpayers and electricity users for billions.
According to the Sierra Club, wind power electricity is economically viable without government assistance. This pronouncement of the Sierra Club has no relationship to reality. For the Sierra Club the most worrisome thing about wind power, something they avoid mentioning, is that the propellors kill birds.
The government subsidizes wind power. Some of the subsidies are upfront. Others are hidden in tax rules or created by using law to change the bargaining balance between wind power providers and electric utilities. The biggest federal hidden subsidy is “tax equity financing”, a masterpiece of accounting obscurantism. The biggest state level subsidy is renewable portfolio laws. These laws require the use of renewable energy to generate electricity and require ever increasing proportions of renewable energy in the electric grid. Wind and solar are the main types of renewable electricity. These laws may be the biggest subsidy, although their subsidy nature is obscure and probably invisible to the naïve legislatures that passed them.
Renewable portfolio laws that force utilities to purchase renewable power in ever-increasing amounts makes the market for renewable power a sellers’ market by increasing demand. Only a limited number of big companies with experience and financial resources can build massive, utility-scale wind or solar farms. Given the competitive calculus, these companies are only willing to build plants with long-term contracts that reduce risk. Typically, there are 20- or 25-year contracts called power purchase agreements or PPA’s. A wind farm with a guaranteed contract to purchase all the power generated for 25 years becomes something more like a treasury bond than a business. Frequently the utility is even obligated to pay for ghost power that was not generated because the grid could not accept the amount of power available in certain circumstances.
Having guaranteed long-term contracts signed before a shovel of dirt is turned changes everything. The wind farm owner can accept a far lower return on his investment because he has less risk. Further, the wind farm can be flipped to an infrastructure investment fund that specializes in long-term, low-risk investments. That is the exit strategy for wind farm owners.
The risks are borne by the utilities and ultimately by the government, the ultimate backer of electric utilities. The utilities tend to be enthusiastic believers in wind and solar, not because those are good solutions or economic, but because the utilities are willing to agree to any irrational nonsense that enhances profits. They are empowered by public utility commissions to pass exorbitant costs along to their customers.
Due to the complicated and deceptive nature of government subsidies it is difficult to directly compute the size of the subsidy. Here we use an alternate method of estimating the subsidy. We look at what price a wind power company, operating without subsidies or long term contracts, would have to get for its electricity to make a reasonable profit. We compare that to how much an electric utility would be willing to pay for the power, absent government compulsion. If the price the wind power company needs for the wind power is greater than what a utility would be willing to pay, then the difference must be made up with a subsidy, either from the government or from electricity users.
Wind power is intermittent power. It waxes and wanes with the wind. For that reason, a utility cannot count on wind power. The utility must have power plants it can count on to keep the lights on. It only makes sense to purchase wind power when the cost of the wind power is less than the cost of alternative power sources available to the utility. Due to its sporadic nature, wind can never replace reliable, dispatchable plants. Wind can only sporadically substitute for reliable plants in those temporary periods when wind is cheaper than using the cheapest alternative source of electricity.
What price does a wind power company have to get for wind power to make a reasonable profit? We estimate if a wind power company builds a one-billion-dollar wind farm it needs $154 million per year from power sales. Of the $154 million $20 million is for operating expense and the rest is net revenue. Assuming the wind farm has a life of 20 years this corresponds to 12% interest on the billion-dollar investment. That is a reasonable return for entering a highly risky business. But if the wind power company has a 20-year guaranteed contract to deliver power, the risk changes and 8% interest may be profitable.
A $1 billion wind farm would have a nameplate capacity of 400 megawatts. The nameplate capacity is the maximum output power when there is sufficient wind. But since the wind isn’t always blowing strong, the average power would be typically be around 38% of 400 megawatts or 152 megawatts. This amounts to 1,337,000 megawatt hours per year. To meet the 12% interest rate goal the electricity would have to sell for the high price of $115 per megawatt hour. To meet an 8% goal, in the case of a guaranteed long-term contract, the company would need about $75 per megawatt hour.
The main competitor to wind power will typically be natural gas generation. The marginal cost of generating electricity with natural gas depends on the cost of the gas and the efficiency of the generating plant. That cost is typically $20 per megawatt hour.
In an unsubsidized world the wind power company needs $115 per megawatt hour, but the electric utility would only be willing to pay $20 per megawatt hour. The difference must be made up by a subsidy from taxes or higher electric rates. The subsidy required is about 83% of the cost of wind power, or $95 per megawatt hour. We offer this as a fair estimate of the wind power subsidy.
Notice that we are comparing the full cost of wind power with the marginal cost of natural gas power. The marginal cost is only a function of the cost of gas and the efficiency with which gas is converted to electricity. The capital cost of the natural gas plant is rightfully attributed to the core generating infrastructure and must be paid regardless of the presence of wind power. Typically the advocates of wind power mistakenly include the capital costs of natural gas in their comparisons, making natural gas seem more expensive.
The U.S. has advanced wind power foolishness to the point where about 10% of our electricity comes from wind. Assuming a subsidy of $95 per megawatt hour, the U.S. is wasting about $41 billion every year on subsidies for wind power, which is around $300 per household annually.
Texas has gone overboard with wind power. Their massive wind system requires an annual $10 billion subsidy. That amounts to nearly $1000 per household in Texas. The subsidy money comes from federal taxes or increased electricity prices. Other states are subsidizing Texas’ wasteful spending via the federal taxes they pay.
Is Wind Power a Good Way to Reduce CO2 Emissions?
The premise behind renewable power is that it does not generate CO2 and thus helps alleviate the supposed climate crisis. In order to eliminate the emission of a metric ton of CO2 by substituting wind power for natural gas power, one must generate about 3.5 megawatt hours of electricity by wind rather than natural gas. The subsidy required will be about $330 per metric ton of emissions eliminated. But one can purchase a carbon offset that reduces the same amount of CO2 emissions, in the carbon offset market, for about $10 per ton. $330 is an exorbitant price for a carbon offset.
There is little point in reducing CO2 emissions because the Chinese and Indians are rapidly increasing emissions by building coal generating plants. The effect of U.S. wind power on reducing emissions is negligible compared to rapidly increasing world emissions.
The very idea of reducing CO2 emissions is a dubious quest. The science supporting climate fear is speculative. It is not speculative science that increasing CO2 in the atmosphere greens the Earth and increases agricultural productivity. Plants need CO2. They are hungry for CO2.
The Non-Economies of Scale
As one increases the amount of wind power in the electric grid a problem starts to emerge. Wind power is peaky. If all turbines are at maximum output the amount of power is about 2.5 times the average. If wind power on average is more than 20% of the electricity there start to be episodes when there is more wind power than the grid can absorb.
Then the only choice is to curtail the wind output or store the excess electricity for later use, generally in batteries. In either case the cost of the wind power is increased. As a practical matter it is harder to reduce output from a coal plant to make room for wind power. In the case of a nuclear plant, it makes no sense because the cost of nuclear fuel is extremely low, perhaps 4 times less than natural gas. For this reason state renewable portfolio laws requiring 50% or 60% renewable electricity result in very expensive batteries added to the wind or solar farms.
Kill the Wind Industry
It’s difficult for politicians, or anyone, to admit they’ve been conned. It’s time that everyone admits it and we kill the wind power industry.
Norman Rogers is a retired entrepreneur. He has written many articles on climate and energy as well as the Amazon book Dumb Energy. This article was originally published by RealClearEnergy and made available via RealClearWire.
I agree with “ It’s difficult for politicians, or anyone, to admit they’ve been conned.”
That applies to Trump zombies more than renewable wind energy.
Sheesh! Thanks for your insightful contribution to this topic, Jeffy B! I can’t wait to see more of your dazzling wit.
At least Trumpers are awake and understand the truth. And love the USA. You Democrats are blustering lemmings with no independent thoughts. Fools. Indoctrinated. Communists. America haters. You sure fit in, Jeff. Go smoke your communal marijuana and turn on CNN.
Have you seen Biden recently?
I’m curious why you do this. You can’t think this commentary will change minds or votes.
So are you just sadly trying to “own the chuds” in an attempt to validate your existence? Or is this a desperate attempt to have someone notice you exist?
A nice generalization, Jeff. Will you please point out one, or a few, instances where Trump zombies have been conned? Was it Russia? Was it the Pee Pee Tape? Or perhaps a phone call to Ukraine? Are you speaking of Hunter Biden’s laptop? Or do you refer to the letter subscribing said laptop as a Russian hoax, signed by 50+ intel dudes. Tell us Jeff. Perhaps the Abraham Accords, 1.4% inflation, $2.35/gal. gasoline duped those Trump zombies. Tell us, Jeff, give us an example.
Jeff obviously has no reasonable response to the facts you pointed out.
His mud slinging remark is just mud on his small mind sliding off in the summer heat.
Excellent article, both wind and solar generation, in their current theoretical and primitive technological forms are actually extremely detrimental to the environment, wildlife and economy. Politicians are not conned, they are bought and their votes traded like the useless carbon “credits” scam. Politicians serve the special interests who buy them to create regulations forcing the use of uneconomical/unreliable energy generation and spend public funds to subsidize the companies their patrons own. An actual analysis of the scope, materials needed and costs to publish a coherent, viable plan for complete energy transition (including battery storage) to comply with net zero policies in any given state has never been published. There are not sufficient proven or known recoverable reserves available worldwide for some of the raw materials needed in any event. The nominal value ascribed to the subsidies, carbon credit trades and failed projects are included in GDP numbers further inflating that fake narrative.
It kills birds and takes up too much real estate too. The Kennedy clan fought against wind power when it was proposed as an alternative power source near their fabulously wealthy estates in MA. Typical sophist, hypocrite Democrats.
You think oil spills don’t kill birds, too? Apparently you missed the whole Exxon Valdez thing.
Tell ya what Deputy Dawg – research the number of birds killed in that one incident compared to the number of birds killed since the erection of the first wind generator to date and report back to us.
Jeff, you have implied Democrat leaders have never conned their followers. On the contrary, the most blindingly obvious, and fundamental, example is Dems have successfully conned their followers into believing there really is such a thing as free stuff.
Wonder if Jeff knows what a woman is?
If you get your power from an electric cooperative you need to engage with your locally elected cooperative board and let them know what you think about this issue because those who believe wind and solar power will work in Alaska are speaking to them. The Biden Administration is in the process of handing out BILLIONS of dollars to force wind and solar and HUNDREDS OF MILLIONS of dollars were recently earmarked for Alaska.
It works on St. Lawrence Island where the wind blows all the time.
Yep, there are always exceptions to the rule. Microgrids in extremely remote areas with reliable wind that would otherwise depend on diesel fuel to power small generators would be stupid not to look at alternative sources of power.
Please provide a power study for St. Lawrence Island that proves your assertion.
Tununak and Tooksuk Bay also completely use wind power. Their electric cost went way down. Diesel is very expensive out there. There are a lot of other villages that use wind power effectively. Here are the details if you are interested. ‘https://www.akenergyauthority.org/Portals/0/Programs/Wind/Case%20Studies/ToksookBayWindFarm2016.pdf?ver=2019-06-19-133905-007
You forgot about the soft costs of that project. Hundreds of thousands of taxpayer dollars have had to be reinvested in that project for a broken blade, software, cracked rotor hub that required a retrofit of ALL of the turbines, and ongoing costs for vendors for maintenance. The “cost savings” does not include these numbers, only the reduced diesel costs. In the real business world, we use balance sheets to show the truth.
Don’t have one. Look it up.
Works as well as the defunct windmill farm monstrosity west of Anvil Mountain above Nome. That was all grant money, the cost added to the national debt. The windmill towers remain, destroying the skyline and generating zero (0) kilowatts of energy.
Anything works from the perspective that subsidies (free stuff) can be used to balance the equation.
And built by AVEC who would never have been able to do this without the $800,000 per month subsidy the state provides, yet again proving that wind is not practical without socialist style subsidies. Troll elsewhere Greg.
Maybe wind generation does produce electricity on St. Lawrence Island, but that is only part of the issue.
How much electricity? Enough to pay off the installation cost? Most likely not yet, even if you ignore the government subsidies. But, a positive ROI may be possible in several decades. Oh… wait… that far exceeds the expected lifetime of a wind turbine.
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Well… assume that maintenance and replacement are actually zero dollar cost. Calculate out how many years it will take to produce a positive ROI versus the installation cost. Get back to us, OK.
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Now, while you are doing all that calculation, how about you demonstrate that the energy generated over the wind farm’s life time exceeds the energy required to manufature, ship, install, maintain, and eventually dispose of it.
Subsidies do not reduce the cost of wind power, they hide the cost and complicate rational analysis.
Rational analysis of energy options is inherently complicated. Subsidies actually prevent rational analysis.
I lived in Texas until not long ago we had choice of electricity providers . there was one that touted their “green” sources they charged triple the per KWHr rate of the gas fired option yes,triple!! So much for the economics of renewables
The wind doesn’t always blow.
It does in Gambell. Ever heard of the Gambell lean? It’s a walking style.
Unlike, indeed, The Masked Avenger.
Good Article. Climate fear peddling has been used for over a hundred years in our country, but most disastrously since the EPA began. Take your pick of any weather and it has been sold as a crisis requiring increased govt. control, more taxes and less freedom. Private, small scale wind/solar/hydro energy can be good in many situations. Solyndra style projects (thanks obama) are still defeating reality today. Dennis Prager : Prager U has some great articles explaining the true cost and environmental effects of renewables.
Thank God the world did not run out of oil in the 1970’s as was proclaimed truth unquestionable.
I think you meant to say Solyndra style projects are being defeated by reality.
Fire Island is a prime example of the most expensive electricity in South central. Rusts flying service is busy year round sending out maintenance crews to keep the mills churning.
The only good part of the project is Todd Rust is gettin rich off of Chugach customers footing the bill for high dollar miniwatts of power.
I remember when CIRI was pushing the Fire Island project using fake numbers based on make-believe projected hikes in natural gas price combined with obscene Obama-era subsidies.
Cost of natural gas plummeted, but the scam artists got their money. Now their allies need to tear down the Eklutna Dam in an effort to create an electricity shortage – so they can steal more. Its gross.
I’m pretty sure that if you all were receiving payments of a couple thousand dollars a month for having a windmill out in your field, you’d be all over them.
There are thousands of farmers in the US “heartland” that that benefit from having these units installed, and I’m pretty sure that this article will not make Mr. Rogers, who is very involved with the Heartland Institute, very popular with them.
This piece is about as honest as a Joe Biden press conference.
You want to talk about subsidies? How about the trillions of dollars the US has spent trying to ensure Mideast peace and security in order to maintain safe production and transit of oil? The first security pact between the US and Saudi Arabia was in 1945 when Roosevelt was president. This deal has made the Saudis (not our friends) filthy rich. Recall who the 911 attackers were…
Wind has been used since 1,200 AD beginning with the Dutch- 9,000 windmills were built, and no subsidies were required. Ask any farmer who has used wind energy to pump water from the ground (for over 100 years) how essential wind energy is.
Wind energy works well, especially when wind farms can be built in different wind regimes to harness that free energy when the wind isn’t blowing in one area- the windmills in another area where the wind is still blowing fill the void.
The author has learned absolutely nothing from history. The USA has enough natural resources to be free of any reliance on oil from countries that hate us, and do not share our culture.
Too bad MRA carries propaganda that only serves to benefit those who hate us. You’d think MRA would put America first.
The excuse for government control of power sources through subsidies and market distortion is based on the carbon hoax. Same with food, water, and shelter.
A note to The Editor: Mr. Rogers states his rejection of wind power quite vehemently, yet never really offers up any better alternatives.
Your readers would be grateful if you would, as a supplement to this diatribe, ask him to outline for us his recommendations for powering the world in a sustainable manner. We are all eager to hear his views on the matter.
Oh, and keep in mind that the world’s sources of oil and gas are finite, as are the planet’s ability to tolerate its combustion.
Great article and explanations concerning the solar rip-off of this State. Keep an eye in the sky and watch the apparent cloud seeding who no one can say yes or no, it is not happening. Not a big deal unless being done with microplastics. If a farmer or gardener in this State, check the germination of any seed you have grown and plant. Germination down by at least 30%? Sunlight issue and clouds. Just saying.
In China – wind and solar now account for 37% of the total power capacity in the country, an 8% increase from 2022, and widely expected to surpass coal capacity, which is 39% of the total right now, in 2024. Source: Global Energy Monitor. Additionally, all told, 2023 saw unprecedented wind and solar growth in China. The unabated wave of construction guarantees that China will continue leading in wind and solar installation in the near future, far ahead of the rest of the world. So Norman your article is nonsense. At least you put “Dumb” in the title of your book. But you have increased your odds of being an opening night speaker at the RNC in Milwaukee July 15th. If Trump makes Norman the Secretary of energy we can count on 100% coal generated electricity by 2028. Make America Coal Miner’s Lung Again!
Oh child. Do you actually think these posts through before posting?
So you’re just going to lap up the propaganda from this article with no sources besides the authors feelings and clear bias? Of course you will, you’re just another sheep.
“China’s latest monthly power report excluded data on usage rates by generation source, after recent data showed declining utilisation at renewable power plants, a trend that was expected to continue.”
“Usage rates for wind and solar had been expected to drop further after the government relaxed rules on renewable power utilisation in May.”
“In the first four months of the year, the average operating hours of wind and solar power plants dropped by 77 hours and 42 hours to 789 and 373 hours, respectively. Hydro plant operating hours rose by 48 hours to 783 hours on average and thermal power plants rose by 23 hours to 1,448 hours, respectively.”
‘https://www.reuters.com/world/china/china-stops-publishing-data-that-showed-falling-renewable-power-plant-usage-2024-07-01’
For All you people who THINK?? we can afford windmills and solar to produce enough power, I remember what happened to Texas about 3-5 yrs ago. Due to the Democrat’s propaganda, they based much of their electrical grid to windmills and when they had that hard winter,(normal winter for us up here) they all froze and many died, frozen in their homes(no heat) due to the fact windmills DO NOT WORK in the winter storms etc.. so anytime you lovers of windmills and solar idiots proclaim something this person just remembers alot of my friends in Texas suffered due to the propaganda their Democrats pushed just for the $$$ in their pockets.
The main problem in Texas was that the natural gas production system that is used to fuel their turbine generators froze up in the low temperatures. None of their stuff down there is winterized appropriately for these types of conditions, or at least it wasn’t. I understand that they have done things to correct the problem now but at the time that was the largest problem they had. Yes, wind power was also an issue because wind turbines generally cannot produce electricity if there is no conventionally generated electricity on the grid. They are usually grid following devices due to the type of generators that they use. If Texas’ baseload natural gas generation hadn’t failed, their wind turbines would have kept spinning along just fine.
The major nuke plant nearest to Houston was offline due to frozen cooling water systems that were undergoing maintenance at the time also.
When the Californians learn how many large birds are slaughtered by their turbines, the emotional outcry will be heard around the world.
No one else is allowed to slaughter large California birds.
It’s never been intended to work, just to suck up money to distribute to cronies,while preferably making the public miserable.. That the bonus!! They get to cackle fiendishly while you shiver in the dark!!
Wow, Chuck, how can you even get out of bed in the morning with an attitude like that?
I know that my enjoyment of life irritates some liberal control freak somewhere.. That is a motivation. they lie awake late nights worrying that someone somewhere is having fun of which they do not approve I suspect you might harbor that kind of feelings, pupoy!! Careful,I have a rolled up magazine since I ditched using newspapers
98% of the “people” in these comments don’t deserve the air we breath.
This article would have far more impact if the author had rolled out the numbers for individual households – not just the subsidies, but the reality of our power bills.
“Assuming a subsidy of $95 per megawatt hour…which is around $300 per household annually.”
“Texas has gone overboard with wind power…That amounts to nearly $1000 per household in Texas.”
Wind power is far from useless. It is our current method of using it that is problematic. Am I the only one who can recall that the farm my father was raised on, like nearly every other farm in the western united states had several windmills that pumped water and offered electricity? Those windmills were relatively cheap and usually built, installed and maintained by the farmer himself.
Ever seen the large wind farm in the SF Bay Area. Its in an idealspot for wind. But the blades are early never turning. They locked them to save on the cost of upkeep decades ago I’ve been there dozens of times. There are more wind farms north of there in the California delta. Which has predictable daily winds huge turbines that actually do turn. Uganda must get plenty of our taxes dollars for those. The older ones in the Altamont Pass were a Carter-Eraroject bought and paid for by Uncle Sugar. That never went into full service once the cronies got their loot. It was shut down from the get go. Never intended to to anything but rob the public
Not Uganda. pG&E.. Different kleptocracy.. Autocorrect changed it