RELIABILITY OF RENEWABLE ENERGY: WIND

Jordan Lofthouse, BS, Strata Policy

Randy T Simmons, PhD, Utah State University

Ryan M. Yonk, PhD, Utah State University

The Institute of Political Economy (IPE) at Utah State University seeks to promote a better understanding of the
foundations of a free society by conducting research and disseminating findings through publications, classes,
seminars, conferences, and lectures. By mentoring students and engaging them in research and writing projects, IPE
creates diverse opportunities for students in graduate programs, internships, policy groups, and business.

THE RELIABILITY OF RENEWABLE
ENERGY: WIND
INTRODUCTION
As governments continue to mandate and subsidize the
use of wind power for electricity generation, voters and
taxpayers must consider the reliability of this energy
source. The Institute of Political Economy at Utah State
University explored wind power’s reliability in terms of
its economic, physical, and environmental
implications. Wind power is not able to sustain itself
in the market without subsidies or mandates, and it
cannot consistently meet electricity demands. Because
wind is inconsistent, wind-powered electricity
generation is dependent on more reliable forms of
energy, usually fossil fuels. Therefore, wind power is
not a worthwhile investment of tax dollars because it
is not a reliable energy source, and the financial
investments needed to make it reliable outweigh its
limited environmental benefits.
ECONOMIC RELIABILITY
Wind energy is not economically reliable because it is
heavily dependent on the Production Tax Credit (PTC)
and other subsidies, as well as state mandates like
renewable portfolio standards (RPS). This dependency
means that taxpayers are paying for an industry that
cannot sustain itself.
Because of subsidies and tax credits, the United States
has one of the fastest growing wind power markets in
the world, expanding by a factor of 22 since 2000. 1
Despite more than two decades of government
assistance, only 4.4 percent of total U.S. electricity
was generated by wind in 2014.2
The main driver of wind growth is government policies,
not market forces. During President George W. Bush’s
administration, the U.S. Department of Energy (DOE)
set a goal to have 20 percent of the nation’s electricity
produced by wind by 2030.3 This federal pressure is
accompanied by state implementations of RPS.
Twenty-nine states have adopted RPS, which typically
mandate that 15–25 percent of total state energy
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consumption is supplied by renewable energy by
2025.4
The most influential policy incentive for promoting
wind energy production has been the PTC. The PTC was
established temporarily in 1992 and provided a credit
valued at 2.3 cents per kilowatt-hour for the first 10
years of a renewable energy facility’s operation. Over
the past two decades, the PTC has expired several
times. Each time the PTC has expired, investments in
wind energy have plummeted. The government
renewed the PTC after each crash, allowing the wind
industry to continue receiving government assistance.5
The credit expired again in 2013, but a provision was
added to the American Taxpayer Relief Act in January
of that year, which stated that if a project began
construction before the year 2014, it would continue to
receive the tax credit.6 When the PTC initially expired
in 2013, new wind installations fell by 92 percent. The
three previous expirations in 2000, 2002, and 2004 saw
similarly dramatic drops.7
Without the PTC, private investors do not perceive
wind energy to be a profitable investment. While
speaking of his own investments in wind energy,
Warren Buffett noted, “[O]n wind energy, we get a tax
credit if we build a lot of wind farms. That’s the only
reason to build them. They don’t make sense without
the tax credit.”8 While the PTC exists, private investors
are able to profit at the taxpayers’ expense. For fiscal
year 2013 alone, wind received nearly $6 billion in
electricity production subsidies and support, which
comprised almost 40 percent of total subsidies for
renewable electricity sources.9
Through mandates and subsidies, governments are
distorting energy markets in favor of wind power. The
PTC was originally intended to give the wind industry
the kick-start it needed to be self-sufficient. Despite
wind energy’s 23-year reliance on temporary
government assistance, the Obama Administration’s
proposed 2016 budget would make the PTC permanent.
Making the PTC permanent shows that politicians and
bureaucrats do not think that the wind industry can
sustain itself in the market.
Constructing wind installations is often difficult
because communities oppose projects that will affect
their real estate value. One solution to this problem is
placing wind turbines offshore. Though offshore wind
offers a greater capacity of available wind, the cost is
prohibitively high in most cases. According to a DOE
report, offshore wind would cost $2,400–5,000 per
kilowatt-hour, which is at least 24 times as expensive
as onshore wind-generating electricity.10
Reaching the DOE’s goal of 20 percent wind energy by
2030 will require high initial investments in both
turbines themselves and expanded transmission
systems. 11 Such large investments to meet this goal
are impractical and would require tens of billions of
taxpayer dollars. These costs would be passed on to
average Americans in higher tax rates and higher
electricity rates. In short, wind energy is not
economically reliable because of its heavy dependence
on tens of billions of dollars of government assistance.
PHYSICAL RELIABILITY
Wind is not physically reliable because it is inefficient
and inconsistent. On average, wind installations in the
United States produce only 30 to 35 percent of their
potential energy output.12 In a United Kingdom study,
wind installations operated at less than 20 percent of
their potential output for approximately 40 percent of a
given year.13
Wind is often extremely variable in the short term.
When looking at energy production within 30 to 90
minute intervals, there are frequently swings of 10
percent in electricity output. Traditional energy sources
must compensate for any inconsistency in wind energy
to avert a dramatic shortage in energy.14 Until methods
of storing massive amounts of energy are viable on a
grid-wide scale, intermittent energy sources like wind
cannot replace conventional sources.
Compensating for wind’s inconsistency with traditional
sources of electricity results in higher operation and
maintenance costs for conventional power plants.
Traditional power plants are not meant to be ramped
up and down quickly to compensate for wind's
variability. These power plants may burn more fuel,
emit more pollution, and require more maintenance
due to the added stress from frequent ramping. 15
Traditional energy sources like fossil fuels have
specific advantages in electricity production. Electricity
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producers know the amount of available fuel and can
ship it where it is needed before it is converted into
electricity. Wind, on the other hand, is not shippable
and it is impossible to gauge its exact availability. The
electric grid is simply not set up to handle power
sources that are so unpredictable.
An additional problem of wind energy is the massive
areas needed to generate significant amounts of
electricity. Consistent wind blowing at the right speed
would require an area about the size of Texas to meet
the total U.S. electricity demands as of 2005. Because
wind is inconsistent, however, this estimate is highly
inaccurate.16 Much more space would be needed.
Even though the government is incentivizing and
mandating the use of wind, integrating increased wind
energy into the U.S. power grid will require billions of
dollars in infrastructure upgrades and construction of
high-capacity transmission lines. The ability to
generate wind energy in the United States is outpacing
ability to transmit it to where it is most needed. 17
Average Americans will have to pay for these
infrastructure overhauls with higher tax rates and
higher electricity rates.
Entrepreneurs in the wind industry are already facing
the hard reality of the transmission problem. Wind
turbines in much of Wyoming could produce 50 percent
more electricity than the same turbines in more
populated areas such as New York, but large-scale
wind energy production in Wyoming is unfeasible
because costly transmission infrastructure must first
be built.18
In short, wind energy is not physically reliable because
it is not consistent or storable. Intermittent power
sources like wind rely on other forms of energy when
they cannot meet demand.
ENVIRONMENTAL RELIABILITY
Wind power is environmentally reliable because it
leads to a small net carbon reduction, but
environmental benefits are limited. Increasing wind
energy capacity will require conventional power plants
to operate at lower efficiency levels to supply
electricity when wind cannot. Wind power may
actually result in more greenhouse gas and pollutant
emissions in some cases due to the inefficiency of
repeatedly ramping up backup power plants.19
Wind power also increases the mortality rates of birds
and bats. In North America, wind turbines kill an
estimated 214,000–368,000 birds annually.20 The high
speed of wind turbine blades cause rapid air pressure
changes that can cause bats' lungs to explode. 21 In
2012 alone, wind turbines killed an estimated 600,000
bats in the United States. 22 These figures are
significant because many bat species have low
reproduction rates and would be potentially vulnerable
to local extinctions in areas of high numbers of wind
turbines.23
ROLE OF NEW TECHNOLOGY
Emerging technology seeks to alleviate the variability
of wind power. These technologies could store large
amounts of electricity, improve long-distance
transmission capability, and improve current wind
turbine efficiency. These technologies, however, are
still being developed and are not likely to be
implemented on an industrial scale in the foreseeable
future.
CONCLUSION
Wind is not consistent and cannot be relied upon to
generate the electricity demanded by U.S. consumers.
REFERENCES
1
Department of Energy. (2013, August 6). Energy dept. reports:
U.S. wind energy production and manufacturing reaches record
highs. Retrieved from http://energy.gov/articles/energy-dept-
reports-us-wind-energy-production-and-manufacturing-reaches-
record-highs
2
Institute for Energy Research. (n.d.). Wind. Retrieved from
http://instituteforenergyresearch.org/topics/encyclopedia/wind/
3
Department of Energy. (2008, July). 20% Wind Energy by 2030:
Increasing Wind Energy’s Contribution to U.S. Electricity Supply.
(p. 1). Retrieved from
http://www.nrel.gov/docs/fy08osti/41869.pdf
4
Database for State Incentives for Renewables and Efficiency
(DSIRE). (2014). Renewable Portfolio Standards. Retrieved from
http://www.dsireusa.org/resources/detailed-summary-maps/
5
Union of Concerned Scientists. (n.d.) Production tax credit for
renewable energy. Retrieved from
http://www.ucsusa.org/clean_energy/smart-energy-
Read the full report at usu.edu/ipe
To compensate for the variability of wind, grid
operators use traditionally reliable energy sources like
fossil fuels to supply energy when wind cannot. The
ability to generate wind energy is outpacing the ability
to transmit it, but long-distance electricity
transmission will require extensive upgrades to
existing infrastructure. The costs of these upgrades
will be passed on to American electricity consumers.
The widespread support for wind energy rests largely
on the idea that wind will result in a cleaner
environment. Wind energy, however, is not as clean as
most people assume due to the fact that wind energy
requires backup forms of electricity generation. Wind
power may actually result in more greenhouse gas and
pollutant emissions than conventional power
generation due to the inefficiency of repeatedly
ramping up backup power plants.
Subsidizing wind energy is direct government
interference with the U.S. energy marketplace.
Government entities that pick winners and losers in the
energy industry bind the hands of innovators who want
to supply cheaper energy. Wind power is not worth
billions of dollars in subsidies and mandates because
it is not reliable as an energy source. The financial
investments of public money needed to make it reliable
outweigh its limited environmental benefits. Markets,
not mandates or subsidies, are the best way to
determine whether wind power will become reliable or
economical within the next few decades.
solutions/increase-renewables/production-tax-credit-
for.html#.VDay3NTF-DE
6
U.S. Department of Energy. (n.d.) Renewable electricity
production tax credit (PTC). Retrieved from
http://energy.gov/savings/renewable-electricity-production-tax-
credit-ptc
7
Power of Wind. (n.d.) Renewable energy production tax credit:
Stability drives growth. Retrieved from
http://powerofwind.net/powerofwind/ptc2
8
Pfotenhauer, Nancy. (2014, May 12). Big wind’s bogus subsidies.
Retrieved from http://www.usnews.com/opinion/blogs/nancy-
pfotenhauer/2014/05/12/even-warren-buffet-admits-wind-
energy-is-a-bad-investment
9
U.S. Energy Information Administration. (2015, March 23). Direct
Federal Financial Interventions and Subsidies in Energy in Fiscal
Year 2013. Retrieved from
http://www.eia.gov/analysis/requests/subsidy/
10
U.S. Department of Energy. (2008, July). 20% wind energy by
2030: Increasing wind energy’s contribution to U.S. electricity
supply. (p. 9). Retrieved from

http://www.nrel.gov/docs/fy08osti/41869.pdf
11
Department of Energy. (2008, July). 20% wind energy by 2030:
Increasing wind energy’s contribution to U.S. electricity supply. (p.
13). Retrieved from http://www.nrel.gov/docs/fy08osti/41869.pdf
12
Open Energy Information. (n.d.) Transparent cost database -
Capacity factor. Retrieved from http://en.openei.org/apps/TCDB/
13
Aris, C. (2014, October 27). Wind power reassessed: A review of
the UK wind resource for electricity generation. (p. 4.) Adam Smith
Institute. Retrieved from
http://www.adamsmith.org/research/reports/wind-power-
reassessed-a-review-of-the-uk-wind-resource-for-electricity-
generation/
14
Aris, C. (2014, October 27). Wind power reassessed: A review of
the UK wind resource for electricity generation. (p. 2.) Adam Smith
Institute. Retrieved from
http://www.adamsmith.org/research/reports/wind-power-
reassessed-a-review-of-the-uk-wind-resource-for-electricity-
generation/
15
Bentek Energy. (2010, April 16). How less became more…
Wind, power and unintended consequences in the Colorado
energy market. Retrieved from https://www.wind-
watch.org/documents/how-less-became-more/
16
Indersscience Publishers. (2007, July 25). Renewable energy
wrecks environment, according to researcher. Retrieved from
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tm
17
Pentland, W. (2011, May 3). Transmission bottlenecks bad news
for renewable energy. Retrieved from
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mission-bottlenecks-bad-news-for-renewable-energy/
18
Wald, M. L. (2008, August 26). Wind energy bumps into power
grid’s limits. The New York Times. Retrieved from
http://www.nytimes.com/2008/08/27/business/27grid.html?page
wanted=1&_r=3&adxnnlx=1412892352-
wdYLFNnLcP3ozn5auKUX8Q&
19
Bentek Energy. (2010, April 16). How Less Became More…
Wind, Power and Unintended Consequences in the Colorado
Energy Market. p. 55, 69. Retrieved from http://docs.wind-
watch.org/BENTEK-How-Less-Became-More.pdf
20
Koch, W. (2014, September 15). Wind turbines kill fewer birds
than do cats, cell towers. USA Today. Retrieved from
http://www.usatoday.com/story/money/business/2014/09/15/wi
nd-turbines-kill-fewer-birds-than-cell-towers-cats/15683843/
21
National Wind Coordinating Collaborative. (2010.) Wind turbine
interactions with birds, bats, and their habitats: A summary of
research results and priority questions. Retrieved from
http://www1.eere.energy.gov/wind/pdfs/birds_and_bats_fact_sh
eet.pdf
22
Hayes, M. A. (2013). Bats Killed in Large Numbers at United
States Wind Energy Facilities. Bioscience. Retrieved from
http://bioscience.oxfordjournals.org/content/63/12/975.abstract?i
jkey=22cc9eb69ca58d4c07e733864d825a72492ae18b&keytype2=t
f_ipsecsha
23
National Wind Coordinating Collaborative. (2010.) Wind turbine
interactions with birds, bats, and their habitats: A summary of
research results and priority questions. Retrieved from
http://www1.eere.energy.gov/wind/pdfs/birds_and_bats_fact_sh
eet.pdf