Analysts: Wind industry must stand on its own
Energy analyst Josiah Neeley of Austin said wind energy can and will survive on its own, and that is what should happen.
“The industry absolutely can survive without subsidies,” Neeley told Texas Business Coalition.
It might not be growing as fast and fewer turbines would be spinning without government assistance, he said. But withdrawing tax subsidies for wind would not cast a death blow.
Neeley is senior fellow, energy policy director and Southwest region director for the R Street Institute, leading its energy program. The nonprofit, nonpartisan, public policy research organization’s goal is to promote a limited role for government in infrastructure, wholesale and retail electricity, research and development, fuel choice and diversity, and climate adaptation and mitigation.
He said he was not surprised to learn that wind farm productivity declined after a decade.
“It’s true of pretty much any type of energy generation source, it has a lifespan,” Neeley said.
But he said tax subsidies obscure the natural rise and fall of these power-generation sources. The free market remains the best way to determine the most efficient approach.
He spoke at a public workshop on conservative approaches to renewable energy held by the Pennsylvania Senate Majority Policy Committee on Oct. 22, 2019, saying the issue should not become part of a partisan debate.
“Discussions of energy in this country today are badly polarized, Neeley said. “All too often we fall into the habit of treating certain types of energy—such as renewables — as ‘liberal’ while others — such as fossil fuels — are considered ‘conservative.’ This is a mistake. Fuel sources don’t have ideologies, and there are plenty of reasons why people of all political stripes could be in favor of renewable energy.”
He said, however. the biggest growth area in recent years is in the corporate sector.
“Businesses like Walmart, General Motors and others have established goals to procure large amounts of renewable energy,” Neeley noted. “The growing interest in renewable energy is due to a variety of factors. Foremost among them is price. Over the past decade, we have seen substantial declines in the price of wind and solar power, to the point where, according to the most recent Lazard report on the Levelized Cost of Electricity, the cost of onshore wind and solar power without subsidies is within the range of the cost for coal-generated electricity. Businesses may also prefer renewable energy as a hedge against price volatility, to take advantage of the growing consumer preference for ‘green’ products or for other reasons.”
Neeley said wind power has a future, but it is one that can exist without assistance from taxpayers.
“Government should not be in the business of picking winners and losers in energy,” he told the Pennsylvania lawmakers. “As such, we do not favor subsidies or mandates to promote or hamper particular fuel sources. Instead, we have focused on ways to achieve better environmental outcomes by removing regulatory barriers and taxes for clean energy sources, and by increasing the use of market competition in the electrical sector.”
Neeley told Texas Business Coalition that the time has come to withdraw tax subsidies for wind, noting, “I think the wind industry ought to stand or fall on its own, without subsidies.”
Neeley said, however, that efforts to remove those tax breaks have encountered formidable opposition. Wind has a lot of supporters.
“The federal wind subsidy has a remarkable ability to come back from the dead,” he said. “The past is not always a predictor with what will happen in the future.”
