WASHINGTON, June 28, 2013 – In the recent column Offshore wind: The enormously expensive energy alternative (Communities June 7, 2013) writer Steve Goreham states that “Unfortunately, offshore wind is enormously expensive.”
Newly built onshore wind development is cost competitive with all forms of electricity production, according to investment analysis firm Lazard and data from the Energy Information Administration.
$25 billion in private investment last year alone drove record year growth for our industry, as we installed 42 percent of all new American electricity generation. That’s partially because wind turbine costs are now 90 percent less than they were in 1980.
American innovation, technology developments, and industry competition all contributed to those cost declines. While the first full-scale U.S. offshore wind turbines have yet to be constructed, there is every reason to believe that cost reductions will occur in that sector as well.
Like all forms of energy production, wind power development is supported through lower taxes. These policies make sense, as access to low-cost energy is a primary driver of economic growth.
However, for a fair comparison of energy incentives, one must have historic perspective. DBL investors recently completed an analysis and found that the federal commitment to oil and gas was five times greater than for renewables during the first 15 years of each set of incentives. Moreover, while the wind energy’s main incentive – the Production Tax Credit – has been allowed to expire several times, many of the fossil fuel incentives have been permanent fixtures in the tax code, some up to 100 years.
Developing our wind resources – both onshore and off - protects consumers from fluctuations in the often volatile fossil fuel markets, akin to a 30 year mortgage on a home, as wind power purchase agreements are long-term and have fixed rates. Although natural gas prices recently hit historic lows, they are on the rise again and wind power is a wise hedge against those increases.
Experience in Europe has shown that offshore wind can be a source of significant job creation and economic growth for local communities. Our country needs to seize the opportunity to become a global leader in this still-emerging technology.
The above reader column was written in response to columnist Steve Goreham’s June 7, 2013 column Offshore wind: The enormously expensive energy alternative. Reader response articles will be reviewed, and are encourged but no guarantee to publish is implied by acceptance.
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