Phil Gramm, a former United States senator from Texas and economics professor at Texas A&M, has published a piece in the Wall Street Journal attacking wind power subsidies as a distortion of the energy marketplace.
The ending of that subsidy, in the form of a tax credit, will adversely affect the wind power industry in Texas, according to a recent New York Times article.
Wind power subsidies are costly compared to other forms of energy
Gramm points out in his article that the United States has spent $24 billion since 1992 to encourage the development of a wind power industry in the form of direct spending, tax credits, loan guarantees, and other support. The subsidies cost $52.48 per million watt hours, as opposed to nuclear power at $3.10, hydropower at 84 cents, coal at 64 cents, and natural gas at 63 cents. Wind power also benefits from federal mandates as well as state support.
Wind power subsidies distort the energy market place
The problem, according to Gramm is that supporting costly wind power is displacing other, cheaper forms of energy production, such as natural gas. The subsidies are so high, Gramm suggests, that wind farm owners could actually pay utility companies to buy the electricity they generate and still make money. Additionally, wind power only works when the wind is blowing, causing utility companies that use wind to also have backup sources in case of calm weather.
Wind power in Texas depends on tax credits
The New York Times points out that the wind power industry in Texas depends on the tax credits due to expire at the end of 2012. Texas Republicans such as Sen. John Cornyn and Gov. Rick Perry, who had previously supported the wind power tax credit, are now supporting its abolishment in the name of tax reform. Wind farms have until the end of the year to qualify for the tax credit, should it expire, thus sparking a boom in construction being rushed before the deadline. The tax credit lasts for 10 years.
Texas oilman T. Boone Pickens had been proponent of wind power
Ironically, one of the most famous oilmen alive, T. Boone Pickens, had at one time been a proponent of wind power. According to Gigaom.com, Pickens could not get his wind farm built in Texas due to the recession that started in 2008 and the lack of power transmission lines. An attempt by him to build a wind farm in Minnesota fared no better. Pickens appears to be withdrawing from the wind power industry and concentrating instead on natural gas.
Phil Gramm's Proposal to End Wind Subsidies Could Hurt Wind Industry in Texas
This article
Phil Gramm's Proposal to End Wind Subsidies Could Hurt Wind Industry in Texas
can be opened in url
http://newsallpolitics.blogspot.com/2013/01/phil-gramms-proposal-to-end-wind_4.html
Phil Gramm's Proposal to End Wind Subsidies Could Hurt Wind Industry in Texas
