Port: I thought the wind industry didn't need subsidies any more?
I was told, repeatedly, that the wind subsidies would be allowed to expire. That the industry was ready to stand on its own feet. That there was no appetite to renew the production tax credit. I told them I would believe it when I see it. This is the part where I say "I told you so," because guess what was tucked into the $1.37 trillion, end-of-the-year spending deal Congress passed before the holidays?
MINOT, N.D. — "Please don’t use those tired old arguments about how renewable energy can’t stand on its own without subsidies."
That quote is from a recent letter to the editor written by former state lawmaker Ed Gruchalla, a Democrat who represented the Fargo-area's District 45 in the North Dakota House of Representatives from 2007 to 2013.
It was part of Gruchalla's whine about the lack of demand for a solar power project near Casselton from Geronimo Energy. "The proper permits were obtained, land owners lined up, and then everything came to a standstill," he wrote. "All the project lacks is someone to step up and buy the power. What business or government entity wouldn’t want to include, clean, non-polluting energy use as part of their portfolio?"
I'd point out that utility companies have a duty to satisfy the real-world energy demands of our region, not the political whims of ideologues. Given that our regional energy grids are already chock full of intermittent power from wind farms, the demand for intermittent solar power is probably limited.
Speaking of wind power, and getting back to that quote, weren't wind subsidies supposed to have expired by now?
That's what I was told. Earlier this year I was writing about what I believe to be a wind energy bubble . Thanks to politics, energy sources like wind and solar have enjoyed heavy subsidies from the taxpayers. In our region, the most palpable consequence of this policy has been the proliferation of wind farms. There has been a veritable land rush to build wind farms in North Dakota and the surrounding region.
The wind energy companies argue that the construction is being driven by the markets and demand. A more likely explanation is that there was a rush to build these projects in order to capitalize on a subsidy which was set to expire last year. Wind companies had to break ground on their projects before the end of the year to get in on it.
I call it a bubble because that's what inevitably happens when the government creates artificial demand for something with a subsidy. We should build wind farms because they make sense for our energy grid, not to harvest tax dollars.
In response to my writing, I got invited to a couple of sit-downs. One was with a couple of North Dakota lobbyists for the wind industry. The other was with the head of government affairs for one of the largest utilities in our region.
During both of these meetings, I was told, repeatedly, that the wind subsidies would be allowed to expire. That the industry was ready to stand on its own feet. That there was no appetite to renew the production tax credit.
I told them I would believe it when I see it.
This is the part where I say "I told you so," because guess what was tucked into the $1.37 trillion, end-of-the-year spending deal Congress passed before the holidays?
A renewal of the production tax credit.
Wind energy flacks can accurately say it was a somewhat austere renewal. It's just for one year , and those who want to qualify for it must bring their projects online by 2024 to get 60 percent of the PTC.
Still, if the wind industry really is ready to stand on its own feet, if Mr. Gruchalla is right and the subsidies argument about renewables is "tired" and "old" why was the PTC renewed at all?
At some point the PTC will need to end. When it does, I think we're going to find out we built far more wind energy capacity than we really needed.
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Rob Port, founder of SayAnythingBlog.com, a North Dakota political blog, is a Forum Communications commentator. Listen to his Plain Talk Podcast and follow him on Twitter at @RobPort.