CFACT collegian Tyler McNeal of the University of Minnesota, Twin Cities, was recently published in the prestigious Stanford Undergraduate Economics Journal. Tyler’s well thought out and well researched piece draws attention to the massive amounts of money that wind turbines are losing every year. His conclusion is that it is fairly obvious and concerning that wind turbines cannot survive without massive government subsidies.
This is even more reason for concern being that Minnesota is mandated to obtain 25% of the energy for its power grid from wind energy by 2025. Tyler explains how one wind farm in Minnesota, which is touted as one of the high production facilities, lost $14.6 million in 2012 and $12.7 million in 2013. Without government subsidies, it is literally impossible for these industries to stay afloat.
“Wind energy should not have to be bailed out by the tax payers, if wind energy is as competitive as the energy companies are telling us it should stand on its own two feet, not propped up with government subsidies.”
It is factual research like Tyler’s that our nation’s leaders and lawmakers should be paying attention to; not the agenda driven falsehoods that wind and solar can power our world affordably without the support of fossil fuels. Well done Tyler. We hope you continue to bring sane and fact based arguments to the environmental and scientific fields!
You can read the full version of Tyler’s exceptional work, “Profile Costs as a Component of Integration Costs in Wind Energy” in the Stanford Undergraduate Economics Journal here. Below are excerpts of explanations of his research as well:
“Xcel Energy, our hometown utility company, proudly trumpets the success of wind energy saying, ‘The cost has declined, making wind energy competitive with natural gas generation, and with our advanced forecasting capabilities, wind is becoming a more predictable, dependable part of our system.’ My analysis of our electricity commodities market tells me a very different story however. Wind energy is far from the bastion of competitive economic strength that is implied by the aforementioned statement. My research showed that one high production wind farm owned by the Southern Minnesota Municipal Power Agency (SMMPA) lost $14,626,863 in 2012 and and in 2013 the losses added up to $12,735,001. This is a lot of money lost on a single wind farm and this number doesn’t even factor in the other costs I mentioned earlier. I can only begin to imagine the results I would find if I analyzed a low production wind farm in Minnesota, the losses would be far greater.
“At this point we finally come to a rather sad conclusion: wind energy is only profitable when government gives handouts to the energy producers and utility companies. After all, would you keep doing the same business behavior if you lost upwards of $10,000,000 each year? Additional research has shown that as energy sources like wind become a larger component of the electricity grid mix the overall value of that electricity decreases. This is troublesome because as I mentioned in the beginning Minnesota has been mandated to increase wind to 25% of our grid. If we are worried about losing tens of millions now with the current amount of wind we have, just wait until this number becomes hundreds of millions as more wind becomes a larger part of our electrical grid. Wind energy should not have to be bailed out by the tax payers, if wind energy is as competitive as the energy companies are telling us it should stand on its own two feet, not propped up with government subsidies.”