Suppose you could produce $50 of electricity but it cost you $100 to do so. Would that make any sense? It would if you work at the White House.
In a speech at a wind-turbine blade manufacturer in Iowa, President Obama called for extending two sets of subsidies that turn energy economics upside down and force higher costs on consumers and taxpayers.
The first extension is for the production tax credit (PTC), which is set to expire at the end of the year. It provides wind-energy producers with a subsidy of about 40 percent of the wholesale cost of electricity. So, when a wind-energy producer sells $50 worth of electricity, Uncle Sam adds another $20 for a total revenue of $70 to the producer.
The second extension is for the Advanced Energy Manufacturing Credit—originally funded in President Obama’s “stimulus” bill. This 30 percent credit cuts the cost of $100 worth of equipment to just $70.
So there you have it. Fifty dollars of actual revenue is bumped up to $70 with the PTC and $100 of costs are cut to $70 after the special tax credit. That is, $50 = $100 after taxpayers make up the difference.
When wind-energy advocates claim that wind power is on the verge of being competitive, they mean that after the PTC and the manufacturing credit, wind is almost, maybe someday soon, or maybe later (and only if you ignore transmission costs and fickleness of supply problems) on par with conventional power. What a deal.
Perhaps not all of the costs of the wind farm will qualify for the manufacturing credit, but don’t despair. There is more. Many states and regions have renewable power mandates that force consumers to buy renewable electricity—regardless of costs. So there is almost no limit to how expensive renewable electricity can be and still generate a profit for the supplier.
And even that’s not all. Many renewable energy projects and manufacturers receive federal loan guarantees that cut millions of dollars off their costs. In green-energy math, $50 may be greater than $100.
No matter how slick the financial shell games may be—subsidies on top of subsidies on top of mandates—overpriced electricity cannot boost the economy. It may seem like a boost if you are the one getting the subsidy…at least for a while. The workers at the Iowa plant better hope their presidential green-energy photo op works out better for them than it did for Solyndra’s employees.
"Many states and regions have renewable power mandates that force consumers to buy renewable electricity—regardless of costs." == 29 states plus D.C and Puerto Rico have adopted required percentages of electricity from renewable sources. In 2010, the average price of residential electricity in these states was 31.9% higher than it was in the other 21 states. Industrial rates were 30.7% higher and commercial rates were 27.4% higher. The 5 states with the highest rates, all with renewable requirements, were: Hawaii 28.1 cents per kilowatt-hour, Connecticut 19.25, New York 18.74, New Jersey 16.57 and New Hampshire 16.32. Idaho, without requirements, was 7.99. http://www.newsandopinions.net
As long as our lamestream media remains deeply embedded with the Obama regime…"$50 = $100" will become our permanent "new math". (Does the GOP stay away from exposing these lies because they are that damn afraid of attacking the "green energy" myth…or are they concluding that Americans are just too stupid to wrap their little heads around such complicated lies?)
I was never good at math.
All the PTC does is partially close the gap to the favourable subsidies, tax provisions and damage guarantees given to other forms of generation. Leveling the playing field by getting rid of the billions of public money that goes to fossil, nuclear and hydro would eliminate the need for the PTC. If you start adding in the negative externalities, the arguments become very different: how little base load can we get away with when renewables are so cheap? More jobs are just a bonus.
http://www.quora.com/Clean-Energy/Renewable-Energ…
Not to mention the fact that current world wide wind capacity meets only a tiny fraction of the daily usage.
If Obama can extend subsidies and cut credits so that $50 = $100, why can't he reverse the process to cut our National Debt from $15 Trillion to $7 Trillion?
S L Olnhausen
If Obama can extend subsidies and cut credits so that $50=$100, why can't he reverse the process to cut our National debt in half?
David: You make some interesting points here…however, you are wrong…if you want to really understand the math of wind, I invite you to come to Windpower 2012 in Atlanta next week and then visit a wind farm in the Kansas…This is where you will understand the math…not at the Heritage Foundation in Washington DC.
Furthermore, I still am puzzled that you are not writing on the repeal of Price Anderson, the cap of liability for nuclear plants…if you want parity, then repealing of this liability cap is a must…I hope to see you write on that one soon…
David: You make some interesting points here…however, you are wrong…if you want to really understand the math of wind, I invite you to come to Windpower 2012 in Atlanta next week and then visit a wind farm in the Kansas…This is where you will understand the math…not at the Heritage Foundation in Washington DC.
Windpower 2012 in Atlanta? is this where they explain how and where wind starts and stops? Why it's only felt and not seen? Where they teach wind efficiency? How intermittent won't effect a thing? Why it's important to waste miles of land for all wind energy can't give us? With these considered, I'd rather take Heritage's math than ignorance. Wouldn't you, Jimmy?
$50 = $100 UNDERstates the bad economics. The $100 omits the cost (operating + capital + corporate overhead) of generators backing up solar and wind facilities. Back-up is essential because solar and wind are UNreliable.
The only reason why renewable energy is not competing with oil is that companies get oil almost free of charge. If oil sold for what it costs to make it out of limestone, gasoline would probably cost $12 per gallon. We are making a bad mistake sucking our oil dry for trivial purposes like generating heat. We are going to bitterly regret it, especially if a major war breaks out.