Via local radio: A 150 million dollar Sask Power construction project in the Swift Current area was destroyed last night by a tornado. Included in the damage is a 300 ft. crane laying on it’s side.
It was a wind energy project.
Via local radio: A 150 million dollar Sask Power construction project in the Swift Current area was destroyed last night by a tornado. Included in the damage is a 300 ft. crane laying on it’s side.
It was a wind energy project.
I like irony. Tends to be ironic…. but that is officially the laugh of the day.
Wow I’m slow today. I didn’t even notice the irony when I heard that on the news.
Calculating the Full Cost of Wind Energy
Written By: S. Fred Singer
Published In: Environment News
Publication Date: June 1, 2003
Publisher: The Heartland Institute
The availability of truly astounding tax benefits goes a long way toward explaining why some companies are so eager to build �wind farms.�
Of course, the tax burden escaped by wind farm owners is shifted to remaining taxpayers. Notably, wind energy promotional documents issued by the U.S. Department of Energy do not acknowledge the huge value to wind farm owners of the generous depreciation benefits that reduce both federal and state income tax liability.
Accelerated Depreciation and Tax Credits
The Federal Production Tax Credit is only one of several subsidies available to wind farm owners and developers and others in the wind industry. The value of five-year double-declining-balance accelerated depreciation permits wind farm owners to deduct hundreds of millions of dollars from income before they calculate their potential federal and state corporate income tax liability and before deducting the lucrative Production Tax Credit.
The value of accelerated depreciation alone in 2003 for a wind farm coming on line on January 1, 2003, could be $0.0533 per kilowatt-hour (kWh). When the $0.018 per kWh production tax credit is added, the value of the two federal tax benefits in 2003 would add up to $0.071 per kWh.
In most states, accelerated depreciation available to wind energy also can be used to reduce state corporate income tax liability. For example, in a state that fully conforms its corporate income tax to the federal system, and with a 10 percent corporate tax rate, the wind farm owner could reduce its state income tax liability by the equivalent of an additional $0.015 per kWh–for a total of $0.086 per kWh.
The value of tax benefits and other subsidies available to the wind industry in 2002 exceeded $300 million and are a part of the true cost of wind energy. These costs are being shifted from wind farm owners to remaining taxpayers.
Renewable Portfolio Standards and More
In addition, the Renewable Portfolio Standards adopted by several states are another form of subsidy for wind farm owners. Such standards are a particularly insidious subsidy because they force higher costs on millions of electric customers without their knowledge.
The standards force suppliers of electricity to purchase electricity from wind farms or other �renewable� energy facilities, generally without regard to higher costs. In some cases, a few electric customers who agree voluntarily to pay a premium price for electricity produced from renewable sources pay part of the extra cost. However, the remaining cost of the electricity, as well as the cost of administering the programs, is passed on to electric customers in their monthly electric bills.
There are still other elements of the full, true cost of wind energy. These include:
* the cost of providing the back-up generation that must be kept immediately available to compensate for the intermittent, highly variable, and largely unpredictable output from wind turbines;
* the extra costs of providing transmission for that electricity; and
* other costs incurred in keeping transmission systems in balance.
Calculating the Impact
Consider this example of how tax policy subsidizes uneconomical wind farms.
A 100 MW (100,000 kW) �wind farm� with a capital cost of $1 million per MW (total capital cost of $100 million) coming on line in 2003 could take a $40,000,000 depreciation deduction from income.
With a 35 percent marginal tax rate, the �wind farm� owner could reduce his federal income tax liability by $14,000,000 before taking advantage of the federal Production Tax Credit.
If the wind farm began operation on January 1, 2003, and produced at an annual average 30 percent capacity factor, it would produce 262,800,000 kWh (100,000 kW x 8760 hours x .30 capacity factor). Therefore, the value of the depreciation deduction in 2003 in reduced federal tax liability would be equal to $0.0533 per kWh ($14,000,000 divided by 262,800,000).
The initial year depreciation deduction would be only 20 percent in the first tax year if the wind farm did not qualify for the �bonus� accelerated depreciation authorized by the Job Creation and Worker Assistance Act of 2002. However, the owner still would be able to take a depreciation deduction of $20,000,000 for the first tax year and then another deduction of $32,000,000 in the second year, with attendant reductions in tax liability. State income tax liability would be similarly affected.
Despite all the tax breaks and special treatment, the Energy Information Administration, in its Annual Energy Outlook 2003, projects wind will supply 27/100 of 1 percent of U.S. energy consumption in 2025. Fossil energy sources would supply 87.27 percent of U.S. energy consumption that year–more than 320 times the contribution of wind energy. Legislators should weigh these costs and benefits and realize that investing in wind farms is truly a losing proposition.
S. Fred Singer, professor emeritus of environmental sciences at the University of Virginia and president of the Science and Environmental Policy Project, shares his thoughts on environment and climate news stories of the month. Singer�s The Week That Was columns can be found at http://www.sepp.org
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Taxes Taxes Taxes Taxes Taxes Taxes
oh goodness, the horrible, horrible irony….
energy deregulation.
In Alberta.
Enmax: 5.95cents/kwh floating not locked in.
Direct Energy:3 year contract locked in@8.00cents/kwh
Alberta Energy Savings L.P.:5 year locked in @7.69cents/kwh
What do you Sask People pay/kwh.
Speaking of irony, Kate, did you just say that you have a laptop pc called “Libretto”? And you said that it doesn’t cut it…
You’re right, like Libranos, Librettos don’t cut it…
Ah, I just saw that someone named “Slim” also caught the irony with respect to Kate’s Libretto computer.
There seems to be some like-thinkers around here. This is good. Living on the east coast, too many people I meet seem to be Libs. This blogging forum is the next best thing to moving back out west, which is easier said than afforded, thanks to the Libranos’ responsibility for the lack of opportunity for the well-qualified to make a real living in the Maritimes.
The way it is out here, when you find a job that pays well, it’s temporary, and when you find something permanent, the pay is pitiful (and you are still taxed like there’s WWIII going on!)…
It is not “Iron”ic at all. Wind power, like all the “alternative” energy sources will not even touch the energy harvested by the average oilfield. This is to say that these alternative energy projects, while important, do constitute a waste of money for the most part. We should not be suprised or discouraged when proto-type projects fail.
I bicycled past the Gull Lake wind farm last September. It sure was impressive, even though it has proven to be vulnerable to extreme wind conditions.
If this was irony, how about the tornado that struck Edmonton back in 87? That sucker took out Refinery Row…
The wind gneration array in the Crowsnest pass still only barely sustains the local use and the maintenence costs make the profit margin slim and the energy cost to output is not that great.
The future lies in steam turbine generation using new high efficiency heat trasfer technology and super conductor generators the out put is phenominal for the energy expended to make the power something like 1 btu of heat making 500 watts of power.
But all this new generation cpacity is pointles with the decaying electrical distribution network which causes 95% of all end user interuptions.
Perhaps the wind was generated from Paul Martin’s rhetoric about how the Conservatives are making Parliament dysfunctional, not to mention more wind from Belinda’s op-ed in yesterday’s Globe.
I read this article in Wired a few months ago: Nuclear Now — How Clean, Green Atomic Energy Can Stop Global Warming. (I’m not convinced that human activity is the main cause of global warming — if such a thing even exists — but the article was thought-provoking.)
W L Mackenzie Redux Have a look at Pebble Bed Nuclear Technology, being developed in South Africa and China. There might be a solution there. Better keep the Feds away from it, or it will be a complete failure for sure. DKT
The Feds have adopted the false science of Kyoto. this was done quite calculatingly to give the Feds an excuse to tax and regulate within exclusive provincial jurisdiction….namely; the gas and oil resource economy of Albeta, Sask and BC.
Natural gas is coming on line at an incredible rate in Northern Alberta and BC and Sask. because the demand for clean burning fuel by the electrical energy industry in the US. The pipelines to eastern Canada are minimal. The new nat-gas fired steam generation is super high efficiency and the effluent is water vapor…is this a green house gas?…the out put is 1000 fold electrical energy…is there greenhouse gas there?
But the feds discourage these “fossil fuel” plants because they have this need to propagate the lie that all fossil fuels are evil, cannot be made to burn clean and efficiently and we must pay sin taxes for using them. Besides the Liberal corporate friends have their capital in foreign oil and delapidated high revenue-loe efficiency domestic hyro utilities in the east not Western Canadian gas or technologies that use it.
The reading I have done suggests that the new gas fired super-efficient steam generators are superior to Nuke plants in their energy-in to energy-out ratio, maintenance costs and environmental damage quotent ( mining and refining uranium is a messy, dangerous job).
My guess as to what we will be “allowed” to use in Kanukistan is a matter of which technology Powercor and our Librano PM is privately profiting in….that’s what has happened before when they pushed Candus on us.
Most of the solutions curently being used or considered to produce energy revolve around large generating units for efficiency.. Which then require massive distributions systems.
To heat our homes we pump natural gas thousands of kilometers from where it comes out of the ground or we use it to generate electricity which we send through thousands of kilometers of wire to heat our homes. All the while the heat that we need is right beneath our feet. When my thermometer reads minus 20 Celcius, ten feet beneath my feet it is 10 Celcius.
Ground source heat pump technology is truly on the verge of eye opening breakthroughs. These breakthroughs will allow individuals to reduce or eliminate the need to be hooked up to the big boys/girls systems. Going “off line” will soon be, not just an option but the prefered opption.
Re: doug at June 18, 2005 06:45 PM
As you know, it isn’t just the per kWh cost. (Epcor June 2005 = 5.839cents/kWh)
plus: admin charge
plus: distribution charge
plus: transmission charge
plus: rate rider charge
plus: telgst (the ever loving gst)
My electric energy cost is about 40% of the total charges.
Evidently too much wind is passing through Ottawa clear across to Saskatchewan. All the huffing and puffing by the government is having an effect albeit not the desired one.
WLMR: Yes, water vapor is a greenhouse gas. In fact, water vapor accounts for 97% of all greenhouse gases – which just goes to show how fraudulent is the science of Kyoto.
Ed – I was going to make the same point about water vapour as a greenhouse gas. It is FAR more significant than CO2 could ever possibly be (high specific heat capacity of water). But I guess the feds couldn’t find some way to credibily package water as a hazardous chemical. On the other hand, somebody else has – go see at DHMO, for a good laugh (drop me a note if you don’t get the joke). Whatever you do, DO NOT pass along this website link to the federal Liberals, or we’ll see another major environmental initiative in its wake.
For a really stunning expose of the fraud that is the Kyoto Protocol, visit the the Junk Science page and scroll down to the Kyoto counter which keeps a running total of Kyoto spending.
Estimated cost of Kyoto so far:
$50 billion and counting.
Potential temperature saving by 2050:
0.000527708�
http://www.junkscience.com/
What a colossal waste of money!
When I read this item in SDA I couldn’t stop laughing. This is the situation which the word ‘irony’ was designed for.
I then expected the news item to hit the mainstream press. A Leno or Jon Stewart scriptwriter would surely wet his/her pants when they caught ‘wind’ of this story.
Question…. this story has fallen off a cliff…. no one has picked it up. What the heck is going on here?
Specifically, is it true?
All together now: “Who’s crawling out from under the wreckage, everyone knows it’s windy…”