Need for tax credits demonstrate's wind power inefficiencies

Fuel Fix:

The growth of wind power projects could come screeching to a halt if Congress fails to extend the renewable energy Production Tax Credit by the end of the year, according to a new American Wind Energy Association report being released later this week.

While critics oppose the continuation of what they call “wind welfare,” Texas leads the nation in wind power, which makes up about 14 percent of the Texas grid’s generation capacity. Failing to extend the renewable energy tax credit could lead to a dramatic 70 percent to 90 percent drop off in new wind power installation projects, said Rob Gramlich, AWEA senior vice president.

“Wind is the unfortunate poster child for unstable government policy,” Gramlich said, adding that the tax credit’s past and current stops and starts “lead to disruption and layoffs.”

For instance, Dokka Fasteners recently said it is closing its Michigan wind power manufacturing plant largely because of uncertainty on U.S. energy policy and the tax credit, as well as congressional gridlock.

The argument for the tax credit is that wind power is becoming increasingly competitive with traditional coal and natural gas-fired power plants, but that cheap natural gas from U.S. shale and other factors are preventing an equal playing field for now. So the AWAE contends the competitive tax credit is needed until wind is truly equally competitive in the next decade as wind turbine costs keep coming down.
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The market could force companies to become more efficient without the subsidies.   That is what is happening right now in the fossil fuel business as companies cope with reduced prices and increase their own production at lower cost in the process.  For wind to be truly competitive those in teh business must find ways to more efficiently produce energy.  The old business plan of creating artificial scarcity of fossil fuels and giving subsidies to wind energy is no longer working.