A piece in the Wall Street Journal contains some useful information that we should keep in mind as we consider the future of energy in Kansas, even though the focus of the column is the debate over wind power on Nantucket Sound. (Blowhards, January 24, 2009).
One thing is the hypocrisy of “green” power proponents:
Bill Delahunt, the windy Cape Democrat, also denounced the action as “a $2 billion project that depends on significant taxpayer subsidies while potentially doubling power costs for the region.” … Good to see the Congressman now recognizes the limitations of green tech, such as its tendency to boost consumer electricity prices — but his makeover as taxpayer champion is a bit belated. Green energy has been on the subsidy take for years, including in 2005 when Mr. Delahunt was calling for “an Apollo project for alternative energy sources, for hybrid engines, for biodiesel, for wind and solar and everything else.” The reality is that all such projects are only commercially viable because of political patronage.
This column informs us of the subsidy that wind power receives.
Tufts economist Gilbert Metcalf ran the numbers and found that the effective tax rate for wind is minus 163.8%. In other words, every dollar a wind firm spends is subsidized to the tune of 64 cents from the government. The Energy Information Administration estimates that wind receives $23.37 in government benefits per megawatt hour — compared to, say, 44 cents for coal.
This directly contradicts an incoherent comment left on this blog a while ago, which claimed that coal power received huge subsidies compare to wind.
Background: The subsidy report referred to is TAXING ENERGY IN THE UNITED STATES: Which Fuels Does the Tax Code Favor?