Three important questions are tied to the future of industrial wind power to continue to expand in the nation’s electricity mix.

1. Can the wind industry survive without the PTC?

The industry can no-longer claim to be nascent. There are more megawatts of wind operating in the US than nuclear power with tens of thousands of megawatts in development.

Moreover, for nearly a decade the wind industry has touted that it was ready (or nearly ready) to move off the PTC and grow on its own dime. The phase-down was intended to provide a glide path to traditional sources of construction financing.

But in 2020, tax equity still represents between 50-65% of project costs.

The industry used the phase-down as a six-year extension of the tax credit. In the period from 2016 to 2020, developers made no apparent effort to reduce reliance on the subsidy.…

[The new proposal] would qualify as the 13th federal subsidy extension for wind power, dating back to 1992. Yet back in 1986, amid California’s wind subsidies, a representative of the American Wind Energy Association (AWEA) stated: “The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive.”

“Bipartisan senators ask Mnuchin to extend safe harbor deadlines for wind, solar projects,” reads the April 24th headline from Utility Dive.

The Brief explains:

• A group of bipartisan senators on Thursday asked the Department of Treasury to extend safe harbor deadlines to ensure renewable energy developers are able to secure the tax credits they need to finance their projects.
• In order to qualify for the production tax credit (PTC) or the investment tax credit (ITC), project developers have to meet certain construction deadlines, but many in the industry are seeing lengthy project delays as a result of supply chain disruptions, workforce shortages and other COVID-19-related setbacks. 

“… we have set ourselves the ambition to become a net zero company by 2050 or sooner and to help the world get to net zero…. We will need support from partners, investors, policy makers, customers – and trade associations…. (Bernard Looney, CEO, BP, 2020)

“BP’s $100-million annual investment in clean energy equals only about 1 percent of the company’s overall expenditures of $12.5 billion.  While this positions the company to gain market share in a growing industry, it does little to reduce vulnerability to policies that reduce demand for carbon-intensive products.” (Seth Dunn and Christopher Flavin, 2002, p. 41)

BP is a fossil-fuel company with token investments in solar, wind, and biofuels. The new CEO, Bernard Looney, is taking the company back to the John Browne’s “beyond petroleum” days.…

“Simon’s idea is simultaneously simple and startling. Once grasped, its truth is undeniable. Yet its implications are profound — none more so than the realization that the amount of resources on earth is not fixed.” (Donald Boudreaux, below)

Some articles are worth revisiting to keep the fundamental ideas fresh in our minds. I recently ran into one of them by the noted economist and educator Donald J. Boudreaux.

It was Professor Boudreaux, in fact, that switched his major to economics and pursued teaching when a professor explained the cause of the then-experienced natural gas shortages.

A few years back, the American Institute for Economic Research (AIER) published a piece by Boudreaux, simply titled “There Are No Natural Resources.” I reprint the article in full:

Recently I had a very enjoyable conversation over dinner with some impressive undergraduates at Bowling Green State University.