Subsidies for wind power pale beside subsidies for nuclear
I long ago swore off the Wall Street Journal‘s editorial page — the last straw for me was their cruel swipe at departed “dope fiend” Jerry Garcia back in 1995. But on Monday a friend forwarded me a WSJ editorial whaling away at renewable power’s production tax credit:
Solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and … nuclear power $1.59. Wind and solar have been on the subsidy take for years …
Now, they insinuate, it’s time to kick wind and solar out of the nest to fly (or not) on their own, just like Uncle Nuke did, decades ago.
What’s up?, my pal asked, knowing that I not only have a thing for wind power but used to be a walking encyclopedia of nuclear power costs. After a quick trip down memory lane, pencil in hand, here’s my brief on federal subsidies for windmills and nukes.
The score (in 2007 dollars):
- Reactor subsidies, 1950-1990: $154 billion, or $3.75 billion a year.
- Wind power subsidies, 1983-2007: $3.75 billion 25-year total.
Over the past 25 years, the entire federal subsidy for wind power has been no greater than the subsidy bestowed on nukes each year from the fifties through the eighties.
My wind power subsidy estimate uses the WSJ’s $23.37 per megawatt-hour figure, which came from the new Energy Information Administration report, "Federal Financial Interventions and Subsidies in Energy Markets 2007" (PDF). Most of that is the $19.00/MWh production tax credit; the remainder is primarily for research and development.
I applied this $23.37 figure to all U.S. wind power production from 1983, the first year for which the feds tabulated wind energy output (a mere 2,800 megawatt-hours), through last year’s 31.9 million MWh. The 25-year total of $3.75 billion is derived in this simple spreadsheet (XLS).
For reactors, I looked up my 1992 report for Greenpeace, "Fiscal Fission: The Economic Failure of Nuclear Power" (PDF). In this “Report on the Historical Costs of Nuclear Power in the United States,” Cora Roelofs and I compiled capital, operating, and subsidy costs for the entire U.S. nuclear power industry on an annual basis from 1968, when the first commercial-size reactors entered service, to 1990. We also reached back to 1950 to pick up costs for R&D during the industry’s protracted pre-commercial incubation.
The total 1950-1990 subsidy cost came to $97.0 billion in 1990 dollars, which equates to $153.8 billion in 2007 dollars. About half of that was for R&D. The remainder, summarized in the same spreadsheet and fully dissected in my Greenpeace report, was for federal regulation, shortfalls in enrichment and waste funds shunted to taxpayers, and tax breaks that allowed utilities to pay taxes later with less-valuable money (this latter category alone was worth $41.5 billion).
The total nuclear-industry subsidy of nearly $154 billion apportioned over the 41-year period comes to $3.75 billion a year, coincidentally matching the entire 25-year subsidy for wind power.
This comparison is far from comprehensive. On the nuclear side, I excluded vast categories of government support for nuclear power, most notably the Price-Anderson Act, which since 1957 has shielded utilities from full liability for potential costs to society from reactor accidents. I also omitted a dozen other categories of public subsidy ranging from the ideological support that crowned nuclear power an official technology, in Prof. Steven Mark Cohn’s memorable phrase, and smoothed the path to capital, to the more concrete support the industry obtained from U.S. Bureau of Mines uranium exploration programs.
On the wind side, my procedure of calculating annual subsidies from the current per-MWh subsidy doubtless understates early support for wind power, when R&D per MWh would have been greater. Still, I think the bottom-line finding of nuclear power’s 25-to-1 subsidy advantage over wind power is about right.
As for the WSJ editorial, was it irony or just coincidence that as it ran on Monday, John McCain was posing in front of a wind turbine factory in Oregon and the Energy Department was issuing its most upbeat wind power assessment yet?
When the WSJ editors write …
Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.
… you have to wonder if even they believe it.