The Institute for Energy Research (IER), a Washington, D.C.-based group, has released a new report that claims U.S. government-funded studies ignore significant costs of wind power and questions the role of the federal production tax credit (PTC) within the wind industry.
Titled ‘Assessing Wind Power Cost Estimates,’ the study was written by Dr. Michael Giberson, an economics professor at Texas Tech University. According to IER, the report details the costs of wind power that commonly go unreported in studies performed by government-funded groups such as the National Renewable Energy Laboratory (NREL).
IER says the report highlights several categories of costs that NREL and others fail to recognize in their studies on the levelized cost of energy (LCOE). Rather than approaching the cost of wind power from the point of view of the wind project developer, the group says Giberson takes a broader view of the cost of wind power to all Americans, including electricity consumers and taxpayers.
IER notes that it published the study as the federal wind PTC is set to expire and charges that Congress' one-year extension of the subsidy in January is set to cost taxpayers $12 billion.
‘As Big Wind's lobbyists fight tooth and nail to extend the wind production tax credit, it is important that we look at the true costs of wind power to taxpayers and ratepayers,’ says IER President Thomas Pyle.
‘Despite being propped up by government mandates and billion-dollar subsidies for decades, wind power continues to be an expensive and boutique energy source that the American people cannot rely on for power when they need it," Pyle continues. "Although lobbyists for the wind industry prefer to downplay the real costs of wind power, Dr. Giberson has produced a fact-based study that demonstrates just how expensive it really is.’
According to IER, the study finds the following:
– The LCOE for wind power is $109/MWh rather than NREL's estimate of $72/MWh – a more than 50% increase.
– NREL's cost estimates exclude key categories of costs such as the cost of transmission and grid balancing for far-away, intermittent wind sources.
– PTC-subsidized wind power projects distort electricity markets because they can bid as low as -$35/MWh and still proï¬�t through the PTC.
– Adding wind power via the PTC cannot reduce the overall cost of power to the economy; it merely shifts costs to taxpayers.