Wind-Energy Sector Gets $176 Billion Worth of Crony Capitalism, by Robert Bryce.
It takes enormous amounts of taxpayer cash to make wind energy seem affordable. [T]he total value of the subsidies given to the biggest players in the U.S. wind industry is now $176 billion … since 2000.
Who’s getting these subsidies?
General Electric — the biggest wind-turbine maker in North America … has received $1.6 billion in local, state, and federal subsidies and $159 billion in federal loans and loan guarantees. (It’s worth noting that General Electric got into the wind business in 2002 after it bought Enron Wind, a company that helped pioneer the art of renewable-energy rent-seeking.)
NextEra Energy, the largest wind-energy producer in the U.S., has received about 50 grants and tax credits from local, state, and federal entities as well as federal loans and loan guarantees worth $5.5 billion.
Last year [Elon] Musk’s companies — Tesla Motors, Solar City, and Space Exploration Technologies — have collected subsidies worth $4.9 billion. NextEra’s haul is also more than what was collected by such energy giants as BP ($315 million) and Chevron ($2.2 billion).
The levels of subsidies is obscene:
[T]he latest renewal of the production tax credit will cost U.S. taxpayers about $3.1 billion per year from now until 2019. That subsidy pays wind-energy companies $23 for each megawatt-hour of electricity they produce.
Last winter in Texas, peak wholesale electricity prices averaged $21 per megawatt hour. Thus, on the national level, wind-energy subsidies are worth nearly half the cost of wholesale power, and in the Texas market, those subsidies can actually exceed the wholesale price of electricity.
Of course, wind-energy boosters like to claim that the oil-and-gas sector gets favorable tax treatment, too. That may be so, but those tax advantages are tiny when compared with the federal gravy being ladled on wind companies. … on an energy-equivalent basis, wind energy’s subsidy is nearly three times the current market price of natural gas.
Two years ago, Berkshire’s CEO, Warren Buffett, explained why his companies are in the wind business. “We get a tax credit if we build a lot of wind farms. That’s the only reason to build them,” he said. “They don’t make sense without the tax credit.”
Wait, there are more subsidies.
Keep in mind that the $176 billion figure in wind-energy subsidies is a minimum number. It counts only subsidies given to companies on AWEA’s board. Not counted are subsidies handed out to companies like Google, which got part of a $490 million federal cash grant for investing in an Oregon wind project. Nor does it include the $1.5 billion in subsidies given to SunEdison.
It’s crony capitalism, playing political favorites with public money:
According to Wikipedia, crony capitalism “may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.” Wind-energy companies are getting favoritism on every count.
