Sen. Lamar Alexander has a proposal for Democrats: End subsidies to wind power producers and use that money to double funding for federal energy research at the Department of Energy.
“Washington has a bad habit of picking winners and losers, and an addiction to wasteful subsidies of all kinds – we need to end these policies,” the Tennessee Republican said during a hearing on DOE’s 2016 budget request Wednesday.
For years, many Republican lawmakers have been looking to end the Wind Production Tax Credit (wind PTC) which has been extended nine times since 1992. The wind PTC pays wind farm operators for the first 10 years of electricity produced. The wind lobby has fought hard to reinstate the subsidy after it expired at the end of last year.
But with Republicans in control of the Senate, even the wind industry has begun offering compromises just to get the PTC passed. Alexander’s offer would mean Democrats, who overwhelmingly support wind power, would have to choose between tax subsidies for wind companies and increasing research funding.
“The most conspicuous example of this addiction is the wasteful wind subsidy – which costs taxpayers about $6 billion every year we extend it, enough to double basic energy research at the Department of Energy,” Alexander said, adding that the savings from ending the tax would go towards doubling DOE energy research.
“There is a place for limited, short-term subsidies to jumpstart new technologies, but it is long past time for wind to stand on its own in the marketplace,” he added.
The DOE currently spends about $5 billion a year on basic energy research, but Alexander wants that to double so the U.S. can become more competitive. The veteran Republican said Congress has increased funding to programs like the Advanced Research Projects Agency-Energy “which has resulted in more than 400 projects.”
“ARPA-E is successful because it stops funding projects that don’t meet their research milestones and funding is limited to five years,” Alexander said, adding that DOE-funded laboratories “are also home to the world’s largest collection of scientific user facilities operated by a single organization, used by more than 31,000 researchers each year.”
But is the Obama administration willing to let wind subsidies go? The Energy Department recently released a massive report which says the U.S. could get 35 percent of its power from wind by 2050. The DOE report notes that political uncertainty surrounding the wind PTC’s extension has hampered the industry’s growth, saying it was because of this that wind power wasn’t expected to grow as fast as in the past.
“At the same time, prior expirations of federal incentives have created a boom-bust cycle for wind power,” the DOE found. “Because of electricity market conditions and the latest expiration of the federal production tax credit (PTC), this robust growth is not projected to continue.”
Conservative groups have also argued that the wind PTC is essential to the Obama administration’s “Climate Action Plan.” The wind PTC, they argue, is needed to ramp up green energy use while coal-fired power plants are retired.
“A vote for the PTC is a vote for Obama’s climate agenda,” according to the free-market Institute for Energy Research. “A key ‘building block’ of EPA’s CO2 rule for existing power plants is increased wind generation. But wind energy depends on the PTC: wind installations dropped 92 percent after the PTC expired at the end of 2012.”
Wind turbines have also come under criticism from environmentalists because the swirling blades are responsible for the deaths of hundreds of thousands of birds and bats every year. A 2013 study found that federal estimates under-count how many birds are killed by turbines every year, arguing that wind farms kill 573,000 birds annually.
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