Google buys wind Energy; Cost to Taxpayers likely to be more than $350 million
0 comments Posted by Unknown at 6:15 PM
Google buys wind Energy; Cost to Taxpayers likely to be more than
$350 million
On
September 13, 2013, Google announced[i] that it had signed a contract to buy the entire output of the
239.2 megawatt Happy Herford “wind farm” that is being developed by Chermac
Energy near Amarillo, Texas. The
project is expected to begin operation in late 2014.
Undoubtedly the developer of the facility, Chermac Energy[ii] is pleased to have a 20-year contract[iii] for the sale of the electricity that will be produced. The Google deal will provide the
developer a guaranteed cash stream that will make it possible for Chermac to
obtain financing for the project.
Undoubtedly, Google is pleased with all the favorable publicity the
company has received for being so environmentally committed even though the
wind-generated electricity will not be used in a Google facility. Instead, according to Google, the
electricity will be sold in the wholesale market and Google will purchase the
electricity it needs from the utilities serving its facilities or a wholesale
supplier. Google will “retire” the
renewable energy credits (REC) resulting from the deal.
The
“big losers” in the Google transaction will be taxpayers, a point that none of
the media stories have mentioned.
Specifically, taxpayers will have to pick up the cost of the tax breaks
that the “wind farm” owner (currently Chermac) will enjoy. As explained below, the tax burden that
will be shifted from the “wind farm” owner to remaining taxpayers will be at
least $170 million and probably more.
The
most lucrative federal tax break for the project owners will probably be the
federal wind “production tax credit” (PTC). This tax break will provide the owners
with a tax credit, currently set at $0.023, for each kilowatt-hour of
electricity that the “wind farm” produces during the first 10 years of
operation. The $0.023 rate
applicable during 2013 is subject to upward adjustment for inflation and
undoubtedly will be increased during the next 10 years.
Also, the “wind farm” owners will likely qualify also for another
lucrative federal tax break known as “accelerated depreciation” which allows the
owners to depreciate for tax purposes the entire capital cost of the wind energy
equipment over a 5-year period, thus providing a significant cash flow
benefit.
The
actual cost of the PTC to taxpayers can only be estimated at this time since the
amount paid depends on the amount of electricity produced as well as the rate at
the time of production. The benefit
to the owners and added tax burden to remaining taxpayers can be estimated with
a few assumptions.
Specifically:
1.
The stated capacity of the planned Happy
Hereford “wind farm” is 239.2 megawatts (MW) or 239,200 kilowatts
(kW).
2.
Amount of electricity produced
each year will only be known after the fact since this will depend on wind
conditions at the site and condition of the turbines. Two large existing “wind farms” in the
Amarillo areas had capacity factors[iv] of about 45% during 2011,[v] among the highest in the US.
3.
Assuming that Happy Hereford will
achieve a capacity of 45%, the project would produce approximately 942,926,400
kilowatt-hours (kWh) of electricity each year (that is, 239,200 kW capacity x
8760 hours per year x .45 capacity factor = 942,926,600 kWh).
4.
Production of 942,926,400 kWh x
the 2013 rate of $0.023 would produce an annual PTC break for the “wind farm”
owners and annual cost to taxpayers of $21,687,307. At this rate, the tax break would be
$216,873,070 over 10 years if production continued at the same level.
5.
If the PTC rate is increased due
to inflation adjustments to an average of $0.026 during the 10 year
operation, the average annual PTC break would be $24,516,086 per year and
$245,160,860 over the 10-year period.
Google had earlier announced the purchased the output of two other
wind farms:
1.
In July 2010, Google
announced[vi] the purchase of 114 MW of the capacity of NextEra’s Story County
II “wind farm” in Iowa. This
project began producing electricity in 2009. Assuming a capacity factor of 35%, this
project would produce 349,524,000 kWh of electricity per year and earn
production tax credits of $8,039,052 in one year at a rate of $0.023 (the 2013
rate) or $80,390,520 in 10 years if the average rate over the 10 years turns out
to be $0.023.
2.
In April 2011, Google
announced[vii] the purchase of the output of NextEra’s 100.8 Minco II “wind farm”
in Oklahoma. This project began
producing electricity in 2011.
Assuming a capacity factor of 40%, this project would produce 353,203,200
kWh of electricity per year and earn production tax credits of $8,123,674 in one
year when receiving a rate of $0.023 (the 2013 rate) or $91,832,830 over 10
years if the average rate over that time turns out to be $0.026.
As
indicated earlier, the actual 10-year cost of the wind Production Tax Credit
(PTC) tax break for the owners of the three projects will depend on their actual
production and the PTC rates that are in effect during each of those 10
years. Based on the assumptions
outlined above, the three projects signed up by Google probably will cost
taxpayers between $370 million and $417 million for the production tax credits
received by the “wind farm” owners over the first 10 years of each of the
projects’ operation.
In
summary, one big winner in the Google purchase of wind-generated electricity
from three “wind farms” would be Google because of all the favorable press
attention. The other big winners
will be the project owners because of the lucrative tax breaks. The big losers will be taxpayers who
must pick up the tax burden escaped by the owners or, perhaps more accurately,
their children and grandchildren who will inherit the huge and growing national
debt, now about $17 trillion.
Glenn R. Schleede*
Ashburn, VA
*
Schleede is semi-retired after working on energy matters in the federal
government and the private sector for more than 35 years.
[ii] Identified by Google as a small Native
American-owned company based in Oklahoma.
While Chermac is the “developer,” it would not be unusual for the project
to be sold to a new owner once all regulatory hurdles ahead of construction are
crossed.
[iii] Technically, a “Purchased Power
Agreement” (PPA). See Google’s
explanation at: http://static.googleusercontent.
com/external_content/untrusted_dlcp/www.google.com/en/us/green/pdfs/renewable-energy.pdf
[iv]
A “wind farm’s” annual “Capacity Factor” is determined by dividing the
generating unit’s metered production (in megawatt or kilowatt-hours) by the
product of the unit’s rated
capacity (in MW or kW) times 8760 hours in a year. Capacity factors for “wind farms”
depend, of course, on wind conditions in the area. Capacity factors differ significantly
from one location to another.
The U.S. Corn-to-Ethanol Program
..... The US has been spending energy and
other resources which produced CO2 emissions, and billions of dollars
for about 8 years to build out the enterprise (cropping +
corn-to-ethanol processing + gather/transport/blending), plus spending
about 30 - 45 billion dollars in subsidies, tax credits and depreciation
write-offs to achieve next to nothing regarding reducing the CO2
equivalent emissions of light duty vehicles. In fact, the
corn-to-ethanol enterprise, on an A to Z basis, likely produced a net
INCREASE in CO2 emissions.
Far
greater CO2 emission reductions, at a much lesser use of energy and
other resources, and at a much lesser capital cost, would be achieved
just by increasing the CAFE requirements. No wonder the US
corn-to-ethanol program is seen as an expensive, ineffective folly in
foreign lands.....
Read the entire article at:
http://theenergycollective.com/willem-post/287061/us-corn-ethanol-program
Study Evaluates the True Costs of Wind Power
WASHINGTON — The Institute for Energy Research released today a study titled Assessing Wind Power Cost Estimates.
The study, written by Dr. Michael Giberson, an economics professor at
Texas Tech University, details the costs of wind power that commonly go
unreported in studies performed by government-funded groups such as the
National Renewable Energy Laboratory (NREL). The study is published as
the federal wind Production Tax Credit (PTC), a massive subsidy to the
wind power industry, is set to expire at the end of the year. Last year,
the PTC received another one-year extension that government analysts
project will cost taxpayers $12 billion.
“As Big Wind’s lobbyists fight tooth and nail to extend the wind
Production Tax Credit, it is important that we look at the true costs of
wind power to taxpayers and ratepayers,” IER President Thomas Pyle said
upon release of the study.
“Despite being propped up by government mandates and billion dollar
subsidies for decades, wind power continues to be an expensive and
boutique energy source that the American people cannot rely on for power
when they need it. Although lobbyists for the wind industry prefer to
downplay the real costs of wind power, Dr. Giberson has produced a
fact-based study that demonstrates just how expensive it really is.”
The study highlights several categories of costs that NREL and others
fail to recognize in their studies on the Levelized Cost of Energy
(LCOE). Rather than approaching the cost of wind power from the point of
view of the wind project developer, Dr. Giberson takes a broader view
of the cost of wind power to all Americans, including electricity
consumers and taxpayers.
As Giberson states in the study, “While expenses faced by wind
project developers are an important element of the overall cost of wind
power, the addition of wind power to the power grid involves a number of
other costs … Such costs include the expense of transmission expansions
needed to develop wind power, other grid integration expenses, and
added grid reliability expenses.”
The study finds:
- Under more accurate assumptions, the LCOE for wind power is $109 per MWh rather than NREL’s estimate of $72 — a more than 50 percent increase.
- NREL’s cost estimates exclude key categories of costs such as the cost of transmission and grid balancing for far-away, intermittent wind sources.
- PTC-subsidized wind power projects distort electricity markets because they can bid as low as negative $35 per MWh and still profit through the PTC.
- Adding wind power via the PTC cannot reduce the overall cost of power to the economy — it merely shifts costs to taxpayers.
To read the full study, click here (PDF).
To read the executive summary, click here (PDF).
Misleading Article about Wind Energy in Fort Wayne (IN) Journal Gazette
A
highly misleading article, “Winds of change blow across Ohio,” by the
CEO of the Van Wert (OH) Area Chamber of Commerce, Susan Monroe, was
published by the Fort Wayne (IN) Journal Gazette on October 7, 2013.[1]
Ms. Monroe claims that the 304 Megawatt (MW) Blue Creek Wind Farm,[2]
built in Northwestern Ohio by a subsidiary of Spain-based Iberdrola,
provides substantial energy and economic benefits.
However, her claims
appear to be based heavily on information from Iberdrola, not on an
objective analysis of facts about wind energy. Those facts call into
question key points made in the article. For example, Ms. Monroe
appears to not know that:
· Electricity from wind is very high in true cost and low in true value.[3]
· The
principal reasons that companies such as Iberdrola build “wind farms”
(including Blue Creek) are generous government tax breaks and subsidies
provided to “wind farm” owners.
· The
cost of government financial subsidies for wind energy are borne by
taxpayers, including Ohio taxpayers, and are in addition to the cost of
electricity from wind that shows up in electric bills.
· Her favorable appraisal of wind energy ignores the adverse environmental,[4]
economic, electric system reliability, scenic and property value
impacts of “wind farms.”.....
Read the entire article at:
Green Madness: Climate Policies To Add 41% To Electricity Prices By 2030
0 comments Posted by Unknown at 10:45 AM
Green Madness: Climate Policies To Add 41% To Electricity Prices By 2030
Britain’s “energy and climate change” policies – including subsidies for
wind farms and nuclear power stations – will add 41 per cent to the price
of electricity in the UK by 2030 according to forecasts by the energy
department. Green measures including billions of [...]
While the demand for
power in Spain has plummeted nearly 6 percent since 2007 because of the slide
in economic activity, the share of mandated renewable output has increased.
By ANDRÉS CALA
October 9, 2013
MADRID — Years of disastrous
policies, coupled with the economic crisis, have recast renewable energy in
Spain. Once touted as the embodiment of progress, wealth and sustainability,
the industry is now seen as an unwanted and costly extravagance.
The policy turnaround
started in 2010 but picked up momentum with a government decree in July aimed
at closing a widening gap between the cost of electricity generation and what
consumers pay — known as the tariff deficit.
The decree’s impact has all
but erased public support for renewable power, raising alarms in the industry
inside and outside Spain.
“We’ve gone from misery to
ruin,” said Jaume Margarit, director of the Association of Renewable Energy
Producers.
The wind energy industry - putting renewable energy above treasured wildlife - is seeking America’s first ever permit to kill golden eagles.
The
Shiloh IV Wind Project, a large Solano County, Calif., wind farm, would
be allowed to kill five golden eagles a year for five years under a draft plan released Thursday by the U.S. Fish and Wildlife Service, according to the San Francisco Chronicle.
If the plan is approved, the farm
would make history as the first renewable energy project afforded a
permit to kill eagles, the Chronicle reported.
A
2008 study funded by the Alameda County Community Development Agency
estimated that 10,000 birds, mostly protected species, are killed every
year at a single wind farm in Altamont Pass, Calif, according to Fox
News.
The Audubon Society and other organizations have been pushing for stronger regulations....
“A violation of the Bald and Golden Eagle Protection Act can
result in a fine of $100,000 ($200,000 for organizations), imprisonment
for one year, or both, for a first offense. Penalties increase
substantially for additional offenses, and a second violation of this
Act is a felony,” according to U.S. Fish and Wildlife Services.
But with the involvement of the
Department of Justice and its leftist ways, would this majestic raptor
ever receive justice? Or would Eric Holder consider such a pursuit “for
the birds”?
Read the article in its entirety at:
The mindless EPA has taken us back to 1970.
When private enterprise built the first railroad in China in the
19th century, the Chinese mandarinate sent out work crews to tear
up the tracks.
So things went in the Middle Kingdom for approximately 1500
years. Emperors and dynasties came and went but the day-to-day
affairs were administered by a self-perpetuating class of
intellectuals intent on stopping anything that might resemble
economic progress.
It might be worth studying a little Chinese history these days
because American affairs are now being run by a Washington
mandarinate that dances to its own tune and has very fixed ideas of
what the world should be like — namely that industrial activity is
something toward which we should be very suspicious if not
downright hostile.
The latest directive from this mandarinate is the Environmental
Protection Agency’s new regulatory rulemaking on coal plants. Now I
know that the EPA hates coal and is doing everything it can to wipe
it off the face of the earth. That much is given. What is
remarkable is how the agency’s latest salvo erases all the progress
that has been made in improving government regulations over the
last thirty years.....
That no one will build new plants with carbon
capture-and-storage is assured because the technology
is still completely hypothetical. There has never
been a full-fledged CCS coal plant built anywhere in the world and
there have been several notable failures.....
http://spectator.org/archives/2013/09/27/federal-mandarinate-decrees-en
Wind Energy: Chalk It Up as a Loss
By Ben
Acheson
"Isn't it about time
that we looked at all the evidence cumulatively? Isn't it about time that we
just chalked it up as a loss and tried something
else?"
Another week, another plethora of news reports attacking wind farms...
Another week, another plethora of news reports attacking wind farms...
In the last year alone we have seen news reports outlining how wind farms have surrounded some of Britain's most untouched landscape and blighted some of our most bucolic and treasured towns and villages. We have heard horror stories about planning departments ignoring guidelines and forcing homeowners to live next to monstrous whirling steel turbines. We have been warned that property values have plummeted due to the inappropriate placement of wind farms and we have seen hundreds of anti-wind protest groups spring up across the nation, incensed at the lack of democracy in the planning system.
We have read how turbines impact human health and after years of mockery from pro-wind groups, we now have the first peer-reviewed, science-based report confirming that turbines do have harmful impacts on humans.
We have watched videos of turbines exploding in high winds and crashing to the ground in storms. We have witnessed precious habitats and ecosystems torn apart to make way for turbines and we have seen stories about birds being chopped to bits. We have heard how offshore wind farms will destroy precious undersea carbon stores, affect aquatic animals and close important fishing grounds....
We have read that schoolchildren are being utilised as pro-wind propaganda tools and we have even seen how the United Nations has ruled that the UK is in breach of international law regarding public participation and the right to receive information in regard to wind farm developments. In the last few weeks, we have heard how IPCC climate change projections, which formed the basis for renewable energy targets, have been called into question by leading scientists.
We have watched as turbines have had to be shut down in high winds and how consumers foot the bill when they are. We have seen their minimal contribution the UK energy supply, even when they are needed most. We have been affected when energy bills have skyrocketed thanks in part to a misguided focus on wind energy. Unfortunately we have also heard how millions of households have been forced into crippling fuel poverty, now having to choose between food and fuel.
We have read about noise abatement orders and residents' legal challenges. We have seen some communities torn apart by wind farm proposals and others handed bribes in return for their silence. We have read how landowners pocket exorbitant amounts of cash in return for housing turbines and we have seen developers reap vast profits from the UK's subsidy regime. We have heard how peat bogs have been ripped up and forests torn down to make way for wind farms. We are now being told that wind energy has not made even the slightest difference to carbon emissions.
We have even seen those who peddle ridiculous pro-wind arguments about green jobs debunked and refuted. There is enough credible evidence and enough of an opposition to end a policy of support for industrial wind energy. Yet still we see wind farms popping up all around the country.
Isn't it about time that we looked at all the evidence cumulatively? Isn't it about time that we just chalked it up as a loss and tried something else?
Read the article in its entirety at:
http://www.huffingtonpost.co.uk/ben-acheson/wind-energy-chalk-it-up-a_b_3974632.html
God, Rush [Limbaugh], and Global Warming
by E. Calvin BeisnerNow I ask you, does an infinitely wise designer plan something to be so fragile that a proportionately tiny stress will cause it to collapse? Does a good architect, for instance, design a building so that if you lean against a wall, the rest of the building reacts by magnifying the stress of your weight until the building collapses?
But that's what's assumed in the theory of catastrophic, anthropogenic (manmade) global warming (CAGW): that a proportionately tiny stress can cause catastrophic consequences. The theory is that CO2's rising from 27 thousandths of 1 percent to 54 thousandths of 1 percent of the atmosphere - which itself is a relatively tiny part of the entire climate system, which includes the oceans, land masses, all living things, and even energy from the sun and cosmic rays from stars in distant galaxies - will raise earth's temperature so much as to threaten catastrophic harm to human and other life.
Such a result would come only from a design that made positive feedbacks vastly outweigh negative feedbacks. In other words, it would make the rest of the climate system magnify rather than offset the warming effect of CO2. Yet natural systems are dominated by negative rather than positive feedbacks - otherwise they'd all have collapsed long ago.
So God's wisdom in designing earth's climate system is hard to reconcile with belief in CAGW.
Likewise, belief in CAGW is difficult to reconcile with belief in God's power and faithfulness."
See the entire article at: http://www.christianpost.com/news/god-rush-and-global-warming-104798/
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