WASHINGTON — IER Senior Fellow Dr. Robert J. Michaels will testify Wednesday at 9:30 AM ET before the House Oversight Subcommittee on Energy Policy, Health Care, and Entitlements at a hearing on the wind Production Tax Credit (PTC). Michaels’s testimony shows that the wind PTC has outlived any limited usefulness and should be permanently terminated. Highlights from the testimony include:
- The emergence of Renewable Portfolio Standards (RPS) rather than the PTC has been responsible for the growth of wind power.
- Wind power is by nature intermittent and can only be integrated into a regional grid if other generation is instantly available to compensate for wind’s variability.
- The PTC complicates market operation because it allows large wind producing corporations to bid power into the grid at negative prices and still profit.
- The “zero emissions” associated with a kilowatt-hour of wind power are generally far from zero. They must be netted against emissions from plants that must operate to maintain reliability in the face of wind’s intermittency.
- In 2012 wind capacity increased by more than any other type of generation. Wind may once have been an “infant industry” but it is no longer so.
- The per MWh subsidy in real terms associated with the PTC has roughly doubled between 1992 and 2010.
- Adding wind generating capacity with unpredictable and uncontrollable output threatens power grid reliability. In most regions the wind is more likely to blow when the power it generates is least valuable.
- The per-MWh capital costs of wind exceed all-in costs of modern gas-fired plants by over 30 percent.
- A tax that forces consumers to buy needlessly expensive power when cheaper (and clean) power is available inflicts harm on their budgets, while benefitting the interests that lobby for taxpayer subsidies.
To read the full testimony, click here.