Robert Bradley, Jr.
Founder and CEO of the Institute for Energy Research
Principal, MasterResource: A Free-Market Energy Blog..
Wind power subsidies just gone on and on and on as far as the eye can see and the ear can hear, with absolutely no end of the corporatism in sight.
“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.
- Renewables advocates have been asking Congress to extend these provisions for weeks, citing the loss of potentially billions of dollars in investments if these projects are not able to proceed.
A letter from six Green New Deal-light senators to Treasury Secretary Steven Mnuchin states in part:
… we urge you to extend the continuity safe harbor, provided under existing Treasury Department guidance, for both the production tax credit (PTC) and energy investment tax credit (ITC), from four years to five years for projects that started construction in 2016 or 2017. This modest adjustment to the PTC and ITC guidance would help preserve tens of thousands of jobs and billions of dollars in investments and provide some certainty in these challenging times.
… the COVID-19 crisis has disrupted supply chains, construction operations, and permitting timelines, delaying projects otherwise on track to be in operation by the end of 2020. While existing IRS guidance provides certain exceptions for specified setbacks in construction, these exceptions do not anticipate nor fully capture the wideranging interruptions now faced by developers.
Providing a temporary extension of the continuity safe harbor of five years, in lieu of the current four, would address the unforeseen interruptions developers are experiencing due to COVID-19 and provide the certainty businesses need to move forward with existing projects.
Such 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.” Which brings to mind what Milton and Rose Friedman stated in 1997:
The infant industry argument is a smoke screen. The so-called infants never grow up.
The uneconomic remains so because of basic energy physics in light of consumer preference. And in this case, the uneconomic is also cronyism unbound.
It is time for a flight to quality; to dense, reliable energies.
Editor’s Note: Natural gas is the cleanest of those dense, reliable energies and Robert Bradley is absolutely correct. End the damned subsidies for these corporatist government rent seekers. It’s time for tar and feathers; not more worthless subsidies enriching the already rich special interests investing in milking the government.