New EIA Report on "Renewable" Energy -- Useful data, Lacks Objectivity

Ladies & Gentlemen:

In case you haven't already seen it, you may want to check out the US EIA's recently released report, Renewable Energy Consumption and Electricity Preliminary 2006 Statistics, August 2007 which you can find at (Click to read)

Several comments:

1. "BTU from Wind." For those not "steeped" in EIA data and calculations, please don't be misled by the first table that shows up on the web site which shows "BTU consumption" for each renewable energy source. As EIA explains (e.g., See page 4, at http://www.eia.doe.gov/emeu/mer/pdf/pages/sec12_a_doc.pdf) "There is no generally accepted practice for measuring the thermal conversion rates for power plants that generate electricity from hydro, wind photovoltaic, or solar thermal energy sources. Therefore EIA calculates a rate factor that is equal to the annual average heat rate factor for fossil fueled power plants in the United States."

2. Net electricity generation is a better measure of the contribution of renewables. Data on net generation (in thousand kWh) for 2002-2006 are shown in Table 3 of the full report (which can be downloaded from the above site.) The following table shows the 2006 numbers -- along with their respective share of total US electricity net generation. In case you are interested, the data for all 5 years is attached to this email.

3. Incomplete discussion of subsidies for wind energy. EIA's new report has a section on wind energy that lists factors driving growth in electricity from wind. The report lists (i) Production Tax credit, (ii) RPS and state mandates, (iii) High natural gas prices, and (iv). concerns about potential "global warming." EIA has an unfortunate habit of ignoring all the other tax breaks and subsidies that are encouraging the construction of "wind farms" such as:

a. Five-year double declining balance accelerated depreciation that permits corporations to recover through depreciation deductions from otherwise taxable income, all "wind farm" capital costs over 6 tax years (52% in first 2 tax years). This applies to Federal corporate income taxes and to corporate income taxes in most states. (Most electric generating units are depreciated for tax purposes over 20 years using 150% rather than 200% declining balance.)

b. Utility "green energy" programs forced on them by state PUCs, governors and legislators -- or adopted to burnish "green" images (but with cost borne by electric customers).

c. Presidential Executive Order requiring federal agencies to buy "green energy" -- and similar directives from some governors. (The higher costs are "hidden" in agency program costs.)

d. Numerous state and local property, sales, and business tax exemptions or reductions for "wind farm" equipment.

e. Industrial development bond financing for "wind farms" (which results in subsidized loan rates).

f. Propaganda programs conducted and/or financed with tax dollars by the US Dept of Energy's Office of Energy Efficiency and Renewable Energy (DOE-EERE) and the National Renewable Energy "Laboratory" (NREL). Both organizations stress and exaggerate the "benefits" of wind energy and studiously ignore the true costs (environmental, economic, scenic, property value). New York's NYSERDA also engages in this type activity. Both organizations give money to contractors and grantees that produce biased "studies," "reports," and "analyses" which are then "advertised" on DOE and NREL web sites.

g. DOE-EERE and/or NREL provided financing (using tax dollars) for so-called state "wind working groups" that produce biased studies, reports, and analyses favoring wind energy and with "work group" members lobbying state PUCs and legislatures, and local government officials to approve "wind farms."

h. Regulatory subsidies provided by FERC, state PUCs and by "Independent System Operators" (ISO) that favor "wind farm" owners; e.g., arbitrary assignments of "capacity value."

i. State PUCs and/or ISOs that approve new transmission lines to serve wind farms while passing the costs along to unsuspecting electric customers; e.g., Texas & Minnesota.

(The EIA report does mention the web site, http://www.dsireusa.org/, which has information on many but certainly not all federal and state tax breaks and subsidies for renewables.)

When evaluated on the basis of either existing or potential contribution in supplying energy for US requirements, wind energy is almost certainly THE most heavily subsidized of all energy sources -- a FACT that is directly contrary to persistent claims by the wind industry that wind doesn't get it's "fair share."

Regards,

Glenn R. Schleede
18220 Turnberry Drive
Round Hill, VA 20141-2574
540-338-9958