Notes

⁵¹ AWEA, "The U.S. Wind Industry," February 1995, p. 4. The jobs argument is used to support subsidization of other favored renewable energies. Stated the Union of Concerned Scientists on California's proposal to restructure California's electric industry: "Investments within California for geothermal development have totaled about $5 billion, wind development about $3 billion, biomass-electric development about $2 billion, solar thermal-electric development about $1.5 billion, and solar domestic and pool heating about $1.5 billion, totaling somewhere around $13 billion, or more than a 2:1 ratio in favor of capital investment in California's economy vs. ratepayer subsidies." "Comments of the Union of Concerned Scientists on the Commission's Proposal Governing Electric Services Industry Restructuring," June 18, 1994, p. 17.

⁵² Percy Greaves, Mises Made Easier (Dobbs Ferry, NY: Free Market Books, 1974), p. 37. For an explanation of "opportunity cost," see, generally, Henry Hazlitt, Economics in One Lesson (New York: Arlington House, 1979 [1949]).

⁵³ "European countries are maintaining or increasing government-sponsored funding and continue to dominate wind energy research, development, and demonstration, which totals about $140 million annually worldwide." DOE Task Force Study: Annex 1, p. 61.

⁵⁴ Christopher Flavin, "Wind Power Soars," in Vital Signs, 1995, Lester Brown, Nicholas Lenssen, and Hal Kane, eds. (New York: W.W. Norton, 1995), p. 54.

⁵⁵ DOE Task Force Study: Annex 1, p. 61.

⁵⁶ Ibid., Annexes 2-4, p. 183.

⁵⁷ "After spending 15 years and investing millions of dollars, America's alternative-energy industry is selling out to Japanese and European concerns -- just as some experts believe alternative technologies may be about to pay off." Bill Paul, "U.S. Falls Behind in Alternative Energy," Wall Street Journal, August 15, 1989, p. A6.

⁵⁸ The Energy Daily, January 31, 1996, p. 4.

⁵⁹ Total U.S. exports in 1994 were approximately $833 billion. Department of Commerce, Statistical Abstract of the United States, 1995 (Washington, DC: U.S. Department of Commerce, 1995), p. 802. Solar exports are currently estimated to be $300 million per year. Julie Halpert, "Harnessing the Sun and Selling It Abroad," New York Times, June 5, 1996, p. C1.

⁶⁰ "AWEA's growth reflects the fairly broad interest of American industry in a technology which a 1976 Department of Energy study estimated could supply nearly one-fifth of all U.S. electric power demand by the year 1995." Hearings before the Subcommittee on Energy Conservation and Power and the Subcommittee on Fossil And Synthetic Fuels of the Committee on Energy and Commerce, House of Representatives, 98th Cong., 2nd Sess., DOE's Fiscal Year 1985 Budget (Washington, DC: Government Printing Office, 1984), p. 810. More recently, an estimate was made that wind could supply 20 percent of world electricity demand "even when environmental, land use, and systems constraints are taken into account." Michael Grubb and Niels Meyer, "Wind Energy," p. 157.

⁶¹ Wind Project Performance, p. 1.

⁶² Quoted in James Bruggers, "Stirring Ill Winds," p. 1.

⁶³ CEC, Wind Project Performance, p. 1.

⁶⁴ The concern over retirements suggests that operating cost estimates of only one cent per kwh (Paul Gipe, Wind Energy Comes of Age, p. 233) are too low. In addition to periodic maintenance and repair, landowner royalties between 2 and 5 percent of revenue (ibid., p. 403) and property taxes are paid.

⁶⁵ Cyril Penn, "Kenetech's Altamont Pass Repower May Be Blown Away as Congress Threatens Renewable Tax Credit Wipe Out," California Energy Markets, September 22, 1995, pp. 11-12; Charles McCoy, "Kenetech Chooses Saunders as CEO, Explored Options to Increase Its Value," Wall Street Journal (December 13, 1995), p. B6.

⁶⁶ Wall Street Journal, May 30, 1996, p. B4.

⁶⁷ Llana DeBare, "Twisting in the Wind," The Sacramento Bee, February 18, 1996, pp. ??.; Arthur O'Donnell, "Heads Roll at Kenetech: Annual Report Delayed by Red Ink," California Energy Markets, April 5, 1996, p. 2; Arthur O'Donnell, "Kenetech Still Bleeding," California Energy Markets, May 17, 1996, p. 3.

⁶⁸ The $45 million, 45-MW project, expanding a 5-MW project that became operational in 1994, was terminated due to "gearbox oil leakage and blade delamination." Ted Rieger, "SMUD Cancels SEPCO Cogen Project and Kenetech Wind Expansion," California Energy Markets, May 17, 1996, p. 12.

⁶⁹ "[Environmental organization] hesitancy [to endorse natural gas] is reinforced by the beating some took when they mistakenly endorsed nuclear power in the 1960s." Christopher Flavin, "The Bridge to Clean Energy," p. 17.

⁷⁰ Arthur O'Donnell, "Enron Acquires Zond, Forms Renewables Unit," California Energy Markets, January 10, 1997, p. 13.

⁷¹ Wind Project Performance, p. 1.

⁷² Public Law 95-617, 92 Stat. 3117 (1978). "Avoided Cost" is the cost that the utility avoids incurring by purchasing electricity from external suppliers rather than building the generating capacity themselves.

⁷³ CEED Study, pp. 1-7.

⁷⁴ Ibid., pp. 2-3.

⁷⁵ Ibid. Also see Paul Gipe, Wind Energy Comes of Age, pp. 33-34.

⁷⁶ CEED Study, pp. 2-3.

⁷⁷ Testimony of Sharon Pollard, secretary, Office of Energy and Natural Resources, Solar Development Initiative Act of 1987 and the Renewable Energy and Energy Conservation Competitiveness Act of 1987, Hearing before the Subcommittee on Energy Research and Development of the Committee on Energy and Natural Resources, United States Senate, 100th Cong., 1st sess. (Washington, DC: Government Printing Office, 1987), p. 88. For a history of federal subsidies to renewables, which began on a large scale with the Energy Tax Act of 1978, see Robert L. Bradley, Jr., "The Rise and Coming Fall of Political Electricity," manuscript dated January 1996, pp. 90-99.

⁷⁸ Michael Lotker, "Solar Generation Flowers, Fades," Forum for Applied Research and Public Policy, Summer 1992, pp. 90-91.

⁷⁹ "The rush to build wind turbines brought many poorly designed machines to market which failed miserably in the field. The reputation of the wind industry was further damaged by naive and sometimes dishonest operators who oversold their products. These problems left a legacy of public scorn and skepticism about wind power that has only recently begun to fade." Michael Brower and Michael Tennis, "Catching a Steady Breeze: Putting Wind Power to Work on Electric Utility Systems," The Electricity Journal, March 1995, p. 33. Also see Murray Silverman and Susan Worthman, "The Future of Renewable Energy Industries," The Electricity Journal, March 1995, pp. 15-16.

⁸⁰ Alfred Cavallo et al., "Wind Energy: Technology and Economics," in Thomas Johanson et al., Renewable Energy: Sources for Fuels and Electricity (Washington, DC: Island Press, 1993), p. 150.

⁸¹ Michael Grubb and Niels Meyer, "Wind Energy: Resources, Systems, and Regional Strategies," ibid., p. 173.

⁸² Public Law 102-486, 102 Stat. 2776 at 3021-22 (1992).

⁸³ Ibid.

⁸⁴ Ibid., p. 3022.

⁸⁵ Ibid., pp. 2969-70.

⁸⁶ The EPAct also made permanent a 10 percent energy investment tax credit for solar and geothermal, and under separate IRS rules, wind investments received accelerated depreciation. Ibid., p. 3024.

⁸⁷ DOE Budget Study.

⁸⁸ ETAP has granted over $20 million to various renewable energy programs alone. California Energy Markets, May 19, 1995, p. 3.

⁸⁹ Paul Gipe estimates the total expenditure on wind energy development by world governments (in nominal dollars) at over $2 billion, $1.4 billion in the U.S. Gipe, Wind Energy Comes of Age, p. 73.

⁹⁰ CEC, 1994 Electricity Report, p. 104.

⁹¹ ICF Kaiser Study, prepared for Enron Corp., September 1995.

⁹² Statement of Angus Duncan, American Wind Energy Association, Renewable Energy Incentives, Hearing before the Subcommittee on Energy Conservation and Power, Committee on Energy and Commerce, House of Representatives, 99th Cong., 2nd sess. (Washington, DC: Government Printing Office, 1985), pp. 189-90.

⁹³ Business Council on Sustainable Development, Changing Tide: Tomorrow's Clean Energy -- Today, November 1996, p. 8.

⁹⁴ An electricity surplus developed for several reasons including: the replacement by new relatively energy efficient technologies and appliances of older technologies; overcapacity developed because (a) publicly regulated monopolies utilities operated under cost-plus rate of return system whereby the higher capital cost meant higher rates of return and (b) they did not have accurate estimates of future demands and prices; and firms that were not vertically integrated (both producers and suppliers of energy) had to have excess generating capacity available in reserve for emergencies.

⁹⁵ The chairman of the DOE-appointed task force was Daniel Yergin, president of the industry consulting firm Cambridge Energy Research Associates and co-editor (Energy Future, 1979) and author (The Prize, 1991) of books allied to the eco-energy planning perspective. The 32-member task force was dominated by a prorenewable group of academics, industry executives, trade group heads, and environmental representatives; freemarket, fuel-neutral representatives were absent.

⁹⁶ DOE Task Force Study, Annex 1, p. 61.

⁹⁷ Paul Gipe, Wind Energy Comes of Age, p. 93.

⁹⁸ Ibid., pp. 71-72. He adds (p. 96): "Centrally directed R&D's most spectacular failure was in the ultimately unsuccessful attempt to build the giants of the wind turbine world: the multimegawatt machines."

⁹⁹ Ibid., pp. 89-90.

¹⁰⁰ This estimate is composed of 6 cents per kwh for direct ratepayer costs and 4 cents per kwh for DOE subsidies. The DOE "social cost" of wind is calculated below.

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