Shepherds Flat Wind Farm – More DOE Subsidies
What We Are Up Against
Justin Rolfe-Redding, a doctoral student at George Mason University, discussed ways for wind-energy proponents to get their message out. Rolfe-Redding said that polling data showed that “after reading arguments for and against wind, wind lost support.” Rolfe-Redding continued, “The things people are educated about are a real deficit for us.” After discussing the pros and cons of wind energy, he said, “enthusiasm decreased for wind. That’s a troubling finding,” suggesting the solution is to “weaken counterarguments” against wind as much as possible. He suggested using “inoculation theory” by telling people that “wind is a clean source, it provides jobs” and adding that “it’s an investment in the future.” He also said that proponents should weaken objections by “saying prices are coming down every day.”
Isn’t it interesting to see how similar arguments forwarded by wind-energy proponents are to those that the Obama administration used to justify the Solyndra fiasco?
The majority of the money for the Shepherds Flat wind farm is coming from federal taxpayers (over 65%), and will provide a boon for General Electric and its partners Google, Sumitomo, ITOCHU, and Caithness Energy. BusinessWire has an article on investor roles. BTW, GE’s president, Jeffery Immelt is head of Obama’s Jobs Council. Can anyone say “conflict of interest?”
From a memo written by Carol Browner and Larry Summers, we learn that Shepherds Flat investors will provide equity of about 11% of the total cost, but they will receive an “estimated return on equity of 30%.” Further, the carbon dioxide reductions associated with the project “would have to be valued at nearly $130 per ton for CO2 for the climate benefits to equal the subsidies,” which is “more than 6 times the primary estimate used by the government in evaluating rules.”
What Is NOW Being Built
The Shepherds Flat Wind Farm is an 845 megawatt (MW) wind farm under construction in Oregon. The wind farm is being built by Caithness Energy using General Electric (GE) 2.5 MW wind turbines, and it will supply electricity to Southern California Edison. In April, 2011, Google announced they had invested $100 million in the project. The wind farm is estimated to have an economic impact of $16 million annually for Oregon. It is supposed to be the largest land-based wind farm in the world when completed in 2012.
Here is what the Department of Energy (DOE) has to say about it.
What Will It Cost Taxpayers?
The Shepherds Flat wind farm is expected to cost a total of $2 billion, and it is getting $1.2 billion in DOE subsidies. After it provides 400 construction jobs, will provide 35 permanent jobs. That equates to $34 million per job. From an Oregon taxpayer perspective, granting Oregon tax credits of $30 million, it will take 77 years of tax revenues from the jobs created to recoup the initial tax credit investment, well beyond the expected life of the wind farm.
If we look only at the $490 million cash grant that will be given to GE and its partners when Shepherds Flat is finished, the cost of those 35 permanent “green energy” jobs will be about $14 million each.
DOE Picks (and subsidizes) Another Winner
While Congress take a long, hard look at green energy subsidies, they should also ask questions about the oversight and accountability. It’s not very encouraging that DOE cannot/will not say how many jobs are associated with the subsidies it continues to hand out. If we’re going to provide billions of dollars in subsidies for green energy, we should know exactly what we’re getting in return without having investigations tell us. Or is DOE and its loan guarantee program out of control?
But that’s just my opinion.