Tag Archives: Production Tax Credit

The Economics of Wind II: Subsidies — the why and how much | Lewiston Sun Journal

[Here is the top of the second part in a two-part series by the Lewiston Sun Journal on wind energy. I’m disappointed in the series. The writing was not as clear and meaningful as it should have been for an issue of such importance and the editing seemed nonexistent. But I promised to post the link to the second of the two parts, so here it is. – KM]

Big wind developers receive substantial federal funds and whether they ought to or not is a major bone of contention as more wind farms pop up in Maine.

The arguments from both sides of the issue go something like:

Pro: Lots of other energy sources (coal, oil, nuclear) are subsidized, too.

Con: Wind, given the size, gets more than its fair share.

Pro: Subsidies are important to jump-start the industry.

Con: If it can’t stand on its own, tough. It shouldn’t stand at all.

And maybe trumping those arguments: Maine has said, in law, it wants more wind power — and, nationally, subsidy is simply part of how wind power gets paid for.

First Wind, for example, received $40.4 million last fall for putting up 38 wind turbines in eastern Maine, an upfront cash payment of the federal Production Tax Credit (PTC) stepped up through the stimulus funds.

“It’s a pretty established set of criteria you have to meet and if you happen to meet it you’ll receive this grant; if you don’t, you won’t,” said spokesman John Lamontagne in Boston.

In 2007, at the request of a Tennessee senator, the U.S. Energy Information Administration looked at federal energy subsidies by industry and found, in sheer dollars, refined coal got the most money and support at $2.1 billion, three times that of wind. Unrefined coal and nuclear both got more than wind as well. But compare all three by their ratio of subsidies-to-output and wind jumps to the top as most expensive.

Click on the link to the rest of today’s story by Kathryn Skelton in the Lewiston Sun Journal.

Here’s a link to the first of the two parts if you missed it yesterday.