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ON the Federal PTC and on Setbacks

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Wind Power Panic: AWEA’s Last Stand (death spiral looms for taxpayer-dependent industry)

by Lisa Linowes
February 13, 2012

If you haven’t heard from the American Wind Energy Association (AWEA), you probably will.

Ominous, scary ads are running nationwide warning of the crushing blow to American jobs if Congress fails to extend the Production Tax Credit (‘PTC’), the 20-year ‘temporary’ subsidy most credited for market growth in the wind sector. The PTC is due to expire at the end of this year.

Most of the ads target particular House members who, so far, have resisted the industry’s demands for their PTC earmark. The pressure is particularly heated right now as Congress negotiates the payroll tax holiday bill, which is viewed by many as the last best chance to attach an extension of the PTC before November’s presidential election.

AWEA is also leaning on its friends to do its bidding. Politicos from wind-friendly states like Iowa, and Kansas have written letters to members of the Congressional conference committee that’s now hashing out the tax bill. The letters repeat the same tired talking points about jobs.

Jobs Fallacy

It’s embarrassing to see these politicians blindly repeat what they’ve been told with no apparent understanding of the costs and impacts of pro-wind policies. Government (taxpayers) do not create jobs on net. Resources taken from the private sector reduced demand and thus (unseen) jobs to create the seen (wind) jobs.

But higher energy costs and misallocated resources in the process make us all poorer. Henry Hazlitt refuted ‘green jobs’ decades before the term was invented in Economics in One Lesson via his explanation of seen-versus-unseen jobs.

A Ballooned Subsidy

Do you think Senator Harkin or Governor Brownback realize that since the PTC was adopted in 1992, its annual cost has ballooned from $5 million a year in 1998 to over $1 billion annually today. Or that this open-ended subsidy of 2.2¢/kWh in after-tax income represents a pre-tax value of approximately 3.7¢/kWh? In many regions of the country the PTC equals, or exceeds the wholesale price of power!

Even if the PTC were to sunset, taxpayers are still obligated to cover nearly $10 billion in tax credits for wind projects built in the last decade. This is in addition to the nearly $20 billion in debt already accrued for wind projects built under Section 1603.

Wind Jobs vs. Employment

Like AWEA’s ads, our windy politicos complain about the loss of jobs if big wind is not coddled further by the government. How would they respond if told that despite the billions in public funding since 2008, the wind sector lost 10,000 direct and indirect jobs, bringing the total to 75,000 jobs? [1]

Or that States like Vermont have found that “above-market energy costs tied to renewables have the deleterious effects of reshuffling consumer spending and increasing the cost of production for Vermont businesses.” These increased costs reduce any positive employment impacts of renewable energy capital investment.

It takes only 0.1 jobs per megawatt to operate a wind plant. Most of the sector’s jobs are temporary construction positions with less than 20,000 involved in the manufacture of industrial parts that could be used in turbines.

If we accept that earmarks for the wind industry are still appropriate, the PTC is highly inefficient and should, at least, be updated to respond to current market conditions. For example, since it is uniform across the country the PTC supports poorly sited wind development in some areas while in other areas pays for projects that would have been built regardless of the credit.

The policy also ignores other crucial factors driving wind development in the U.S. including State mandates and energy prices. With more than half the states mandating renewable development, some policy experts question why projects receive benefits from both State renewable portfolio policies and the PTC. Good question.

Pushback to Wind Push

Finding politicians to mouth support for big wind is not hard. But the American public is not as easily manipulated. In a letter this week to the Las Vegas Review Journal, one reader responded to AWEA’s call to action by contacting Representative Joe Heck and asking him to “kill all the tax breaks and subsidies for wind, solar, and ethanol energy,” adding that “if they cannot stand alone without government help, they will have to reinvent their technology or go out of business.”

This weekend, a letter signed by over 200 ranchers and residents was sent to the Nevadan congressional delegation, asking them to vote NO on any further extensions of the PTC. Similar letters were sent from states across the U.S. representing two-thousand signers.

Conclusion

When Enron (the parent of Enron Wind Corp.) declared bankruptcy in 2001, the government said no to a bailout, and 4,000 workers were laid off in Houston, Texas, and elsewhere around the world. But on that day forward, economies became more efficient with skilled employees leaving failure to gain viable consumer-driven employment. Today, mirage “green” jobs can go to real jobs in the booming real energy industry.

The PTC is one earmark many Americans know about, and their opinion of it is remarkably consistent: The cost of the PTC is excessive, the benefits elusive and, frankly, big wind’s pitiful performance measured against industry promises makes this entitlement an easy one to sunset.

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[1] Lawrence Berkeley National Laboratory reports (p. 7): “The American Wind Energy Association, meanwhile, estimates that the entire wind energy sector directly and indirectly employed 75,000 full-time workers in the United States at the end of 2010 – about 10,000 fewer full-time-equivalent jobs than in 2009, mostly due to the decrease in new wind power plant construction.” A recent AWEA blog (February 3, 2012) confirms the 75,000 is still current.

Wind Ordinance Debate: The 1,000-foot Set-Back Standard (Are environmentalists underregulating themselves?)

by Tony Fleming
January 23, 2012

Editor Note: Environmentalists like regulation except when it comes to ‘green’ energy. This post asks: what is the growing acceptance of  the thousand-foot voluntary ordinance based on?]

In Indiana and elsewhere, many counties are falling all over themselves to adopt the so-called “1,000-foot voluntary industry setback” between large wind turbines and residences.1 In some states, it has become part of “model” wind ordinances created by wind developers and energy agencies.

This buffer zone (who said these structures were environmental?) is starkly smaller than those mandated in several countries widely touted by industry proponents as wind “success” stories. In Denmark, for example, the setback is four times total turbine height (or about 2,000 feet for a large turbine), along with a built-in mechanism for compensating abutters for property-value losses.

In Holland, it is 1 km (3,280 ft). Germany’s noise-based setback ranges up to a full mile (1.6 km).

Dozens of jurisdictions scattered around the U.S. and Canada have also adopted larger setbacks, often in the ½- to 2-mile range from abutting residences. All of these larger setbacks are in line with what is recommended by many independent scientific bodies, medical authorities, and acoustical engineers.2

With so many localities adopting the much smaller 1,000-foot distance as a de facto setback, however—seemingly with little public discussion—a reasonable person would expect to find reams of scientific and legal information to back it up.

Conflicting Evidence

But despite a concerted and sustained research effort by myself and others, finding a straightforward explanation published by any government agency (or the wind industry) documenting the origin and technical rationale for such a small setback has proven extraordinarily elusive.

Instead, what one finds is a remarkably opaque policy-making process wherein any scientific studies reviewed or substantive deliberations that may have occurred are not readily evident from the sparse number of documents publicly available. This post is a progress report, summarizing my attempts to uncover the origin and basis of this setback.

Midwestern States

The first place I turned for an explanation is the Indiana Office of Energy Development (OED), the clearinghouse for state energy policy. The OED wind energy website contained no documents of the state’s own making even mentioning things like “model wind ordinance” or “setbacks,” but it did turn up copies of wind ordinances from fifteen Indiana counties. 3

Nearly every one of these counties has adopted a 1,000-foot setback from occupied structures, but none provides any discussion, or even a hint of accompanying regulatory language, of why this distance was chosen. A further search turned up several in-state news reports that mentioned the term “voluntary industry setback,” but they offered nothing about its origin.

Visits to the websites of energy-related agencies in other Midwestern states also shed no light on the origin of “1,000 feet,” though it did appear in both the 2003 and 2007 versions of the Wisconsin Draft Model Wind Ordinance,4 which was subsequently taken down from the Wisconsin Public Service Commission website.

One 2009 news article from Wisconsin offered some interesting insight, however: when questioned by wind farm neighbors affected by noise and shadow flicker about the 1,000-foot setback in use at that time, a spokeswoman from the Wisconsin Public Service Commission was quoted as saying: “We didn’t come up with that number. It is not a PSC requirement.”

That left local residents wondering, “if the PSC didn’t come up with it, who did? And who decided it was safe?”

California

Since my efforts to find a state agency in the Midwest who could speak to the source of the 1,000-foot setback were not bearing fruit, I next looked to the state that is widely viewed as being the epicenter of all things renewable—California—which has had some three decades of experience with large wind turbines.

There, the wind industry’s preferred setback had for years been 1.1 to 1.5 times the height of the turbine including the blade, measured to the nearest property line and based on the fall zone of the tower.5 Variations on this theme persisted over the years, with setbacks ranging up to three-to-four times turbine height.

A study published in 2006 for the California Energy Commission summarized the history of setback requirements in the state and attempted to quantify setback distances for debris throw (that is, the radius measured from the turbine base which could potentially be impacted by fragments of blades and other debris resulting from the breakup of a turbine in high winds).

This study looked solely at public safety resulting from debris throw, and did not attempt to examine noise or other setback issues. The authors came up with a setback distance somewhat less than 1,000 feet, while acknowledging that the result is contingent upon the assumptions made.

Using a slightly different set of assumptions, for example, physicist Terry Matilsky of Rutgers University presents a convincing mechanical analysis indicating that a 1,700-foot setback is needed to protect abutters from both debris and ice throw, a number mirrored by real-world debris-throw experience.

Interestingly, the California study reported (p. 13) that, of the several counties which had existing fixed setbacks of 1,000 feet or less, none set forth any technical explanation for the setbacks. The report also observed that the authors of these setbacks were, in most cases, “wind industry people” or “ad-hoc public/industry groups” and generally noted the difficulty of both obtaining published rationales for the setbacks, and of relating the statutory setbacks to known or calculated debris-throw distances for the specific turbine models involved.

Like its Midwestern counterparts, the information from the State of California ultimately didn’t answer the question at hand, nor was any official government entity evidently willing to publicly justify the “1,000 foot setback” based on empirical evidence—an unsatisfactory result from the perspective of science, which deals in hard numbers and measurable, repeatable outcomes, and certainly not commensurate with the apparent zeal with which this and similarly small setback distances have been adopted by so many local and state governments.

Further, the anecdotal evidence from both Wisconsin (“we didn’t come up with that number”) and California (“wind industry people”) pointed towards the wind industry as the likely source. And who better to speak to this question than the manufacturers of large wind turbines! Yet, what I found there scarcely brought clarity, and left me even more skeptical.

Wind Company Recommendations

Vestas, for example, the Danish company and world leader in wind turbine manufacturing, had this to say to its own staff in the 2007 Mechanical Operating and Maintenance Manual for its V90 turbine: “Do not stay within a radius of 400 meters (1,300 feet) from the turbine unless it is necessary.”

It also went on to say “Make sure that children do not stay by or play near the turbine” (contrary to the setbacks in question, which may place households with children well within that range).

General Electric, the largest domestic turbine manufacturer, has refused to site towers that do not meet their own minimum published standards (1.5 times hub height + rotor diameter) for ice throw, or about 1,300 feet for a 350-foot turbine with a 300-foot rotor.

Finally, the large German turbine manufacturer RETEXO recommends setbacks of 2 km (6,562 feet) from its turbine hub, citing both safety and noise considerations.

Wind Trade Group Recommendations

Industry trade groups mostly lack such specificity when it comes to setbacks. the National Wind Coordinating Committee ‘s 1998 Permitting and Siting Guide,6 for example, suggests that setbacks of 1,000 feet to one-half mile may be needed for noise mitigation; however, the 2002 version of the guide, as well as several newer NWCC publications on siting issues, are silent on setback distances, nor do they discuss the underlying technical basis for specific setback distances, instead relying on malleable terms like “appropriate setbacks” without defining what they are.

The current siting handbook published by the American Wind Energy Association (AWEA), the principal U.S. industry trade group and lobbying organization, provides no specific guidance on setbacks, only that developers need to ascertain if local setback ordinances exist.

Wind Powering America’s “Wind Energy Guide for County Commissioners also does not mention any specific setback distance. Statements previously attributed to the AWEA website,7 have suggested setbacks of 1,600 to 2,467 feet (mainly related to noise), a range that implicitly suggests that local considerations should be taken into account and that one size setback does not fit all situations.

Visits to the websites of several domestic wind developers also failed to find any mention of a “voluntary 1,000 foot setback.” More typical are misleading statements like “An operating wind farm at a distance of 1,000 ft. is no noisier than a kitchen refrigerator” and “Regulatory agencies agree that 50 decibels at approximately 1,000 ft. present no sound issues for residents.” 8 Based on my research, it seems rather disingenuous to say regulatory agencies “agree” when they are essentially silent on the merits of the issue.

My inability to find a clear, scientific explanation for the “1000-foot setback” at any of the above sources finally led me to start looking at local wind ordinances from around the country and world, with the idea that someone, somewhere had already done the work of ferreting out the origins of “1,000 feet.” But like the Indiana county ordinances, most local ordinances are just that, an ordinance, without any underlying technical background to accompany it, or at least not that is posted on a readily available webpage. And most county officials in Indiana typically will tell you that they simply followed another county’s ordinance with little modification.

But a few localities did compile background information in support of their ordinances, and conveniently made it available in the form of online reports and outlines. Of these, the 2008 Setback Recommendations Report for the Town of Union9 (Rock County, Wisconsin) is one of the most comprehensive in regards to presenting a wide range of setback distances from around the world, and discussing their underlying technical basis (see pp. 97-105).

In this process, the town’s Large Wind Turbine Citizen’s Committee made a concerted effort to determine the basis for the 1000-foot setback used in Wisconsin’s 2003 and 2007 model wind ordinances, culminating in the filing of two freedom of information requests to the state agencies that created the ordinance (see pp. 125-199).

No direct answer was given by the agency to support the technical basis of the setback, only incomplete minutes of meetings from 1995-2001, from which it can be inferred that lawyers representing Florida Power & Light (aka, “Nextera,” a major wind developer in Wisconsin and elsewhere, including California, around the time all these “1,000-foot” setback ordinances were developed) may have written that part of the Wisconsin model ordinance.

No direct answer was given by the responding agency to support the technical basis of the setback, only what appear to be incomplete minutes10 of meetings from 1995-2001, from which it can be inferred that lawyers representing utility companies with pending wind projects were actively involved in the process and may have written that part of the Wisconsin model ordinance. This inference was confirmed in a letter from the Chair of the Town of Union Planning and Zoning Committee, describing this process to his state senator, and from which the following is excerpted:

The Committee sought to learn the basis for the PSC recommendation and required a Freedom of Information request to learn that there was no rationale for the 1,000 foot setback—that the distance had been provided by a Florida utility.

Some Observations … and Many Unanswered Questions

The results of my efforts to date can thus be summarized by the following observations.

First, it is extremely difficult to find any publicly available information from state agencies or the wind energy industry that directly addresses the scientific basis for adopting “1000 feet” or similarly small distances as the de facto setback between wind turbines and residences (or any other kind of occupied premise, including public open space).

The vast majority of county ordinances posted on the Internet, and particularly those that mandate such small setbacks, lack any published rationale explaining why a particular setback was established. This seems to be a major regulatory disconnect in view of the apparent zeal with which a considerable number of counties, and some state model wind ordinances, are adopting a 1,000-foot setback.

Second, the relatively frequent use of a 1,000-foot setback appears to result not from a confluence of independent studies or literature reviews, but rather from the common (and readily admitted) practice of one jurisdiction simply “cloning” another’s ordinance with little deliberation or modification. Indeed, other than the California debris-throw study, I found no scientific studies, or recommendations from independent authorities or wind turbine manufacturers, that supported a setback as small as 1,000 feet—and the California study pointed out that 1,000-foot setbacks were in use years before the study itself was commissioned, and could find no technical basis for them.

Simply adopting a setback ordinance because someone else did too does not constitute a scientific basis for that setback, but it does tend to result in a frequent repetition of that distance, both among zoning officials and the media, leading to a perception that it is some kind of “standard” based on empirical evidence.

Third, if there is a consensus among independent authorities, it is towards much greater setbacks, measured in miles or kilometers, not feet. The same pattern seems to be the case with jurisdictions that have taken the time to research the topic and reach their own independent conclusions.

Setback distances of 2,500 feet or more are increasingly common among such jurisdictions, with some recently adopted ordinances specifying as much as 2 km (3 Australian provinces) to 2 miles (an Oregon County). Thus, there is quite a sharp contrast between the “voluntary 1000-foot industry setback” and the kinds of distances these other entities are adopting or recommending.

These contradictions present a number of troubling questions.

Does the 1,000-foot setback have any basis in science? Or is it simply an artifact of wind industry expedience? The anecdotal evidence certainly suggests the latter is the case, as there is little doubt from either the Wisconsin or California experiences that industry representatives and lobbyists, including those with projects in the pipeline, played the major role in formulating those ordinances.

The quote from the Town of Union letter indicates that 1000 feet was simply pulled out of a hat. And, if 1,000 feet does have a justifiable basis in science and legal theory, why aren’t government agencies and wind proponents extolling it? Where are the studies and the independent peer review process showing that a setback of 1,000 feet adequately removes the human health and safety issues associated with ice and debris throw, noise, shadow flicker, and other well documented side effects of large wind turbines?

The thousands of reports of such issues from around the world from people who live in such proximity to wind plants can’t all be psychosomatic machinations of people ideologically opposed to wind installations: more than a few are from people who are hosting turbines and receiving significant lease payments. Perhaps most importantly, why are the small setbacks promoted by many U.S. wind developers so at odds with the much larger setbacks recommended by various independent bodies and experts who have no stake in this debate?

Conclusion: Are Renewable Energy Advocates Underregulating Themselves?

I can think of one explanation: the production tax credit, the primary Federal incentive to the wind industry, which has existed for decades, and whose value as a tax-avoidance vehicle is exquisitely dependent on producing the maximum number of kWh from any given wind project. It is not hard to imagine the structure of this tax-avoidance vehicle creating an intense need in this heavily subsidy-dependent industry to maximize the density of turbines in a given wind project, a goal that is greatly impeded by more protective setback regulations.

And, it is clearly much easier to achieve this goal when the developer can begin the local siting discussion with a lax setback requirement as the baseline. Along with terms like “voluntary industry setback,” this helps create the illusion for local officials and the public that 1,000 feet is an authoritative, widely accepted standard that is protective of the community, when in fact, there is little hard evidence standing behind it.

ENDNOTES

1. Although it is the most common distance in Indiana, 1,000 feet is just one of several arbitrary and unreasonably low setback distances in use in the Midwest, such as Wisconsin’s current 1,250 feet and Ohio’s vanishingly small 750 feet. “Voluntary industry setback” or similar descriptors, typically offered up by wind developers and compliant extension agents in an attempt to pacify the natives, appear regularly in various media accounts and pro-wind presentations. Here is one of many examples: ”Let Science be the Guide for Whitley Wind-farm Law,” The Fort Wayne Journal Gazette, Jan. 26, 2011, page 6A.

2. The National Research Council (1/2 mile or more), French National Academy of Medicine (1.5 km), and the UK Noise Association (1 mile) are just a small sampling of many such recommendations.

3. Wind ordinances from 15 Indiana counties can be found here. They are virtual clones of one another, suggesting that little or no independent research or critical thinking was involved in their creation.

4. None of these early setbacks take noise or ice/debris throw into account. Most of the early California wind farms were constructed in remote, largely uninhabited areas like Altamont Pass, and the main concern with setbacks was preventing turbines from falling on or interfering with adjacent turbines via the so-called “wake effect”6

5. Wind Turbine Breaks Up in Storm, Throws Debris 500 meters (1,650 feet)] http://www.wind-watch.org/video-turbinecollapses.php

6. The 1998 guide was superceded by the 2002 edition and is no longer available at the NWCC website. The list of currently available NWCC siting documents is available here.

7. The refrigerator analogy is an oft-cited claim by wind developers17, but like “1,000 feet”, pinning down its origin and scientific basis is an extremely slippery business. Try Googling the statement. Or save yourself a lot of time and see what someone else discovered who did just that, here. References to this or similar statements (with widely varying distances) can be found at literally hundreds of Internet sites, one of the most instructive being this video.

8. “Wind Capital Group claims its turbines don’t make any more noise than a home refrigerator, but KQ2 returned three different times over the span of a week, and we heard a much different story. The sound was the roar of the turbines filling the air, making Charlie’s property sound more like an airport than a horse farm”.

- Channel KQ2 in St. Joe, Missouri reports on a wind farm operating adjacent to Charlie Porter’s horse farm, February 17, 2009 http://stjoechannel.com/index.php.

9. The Town of Union’s final wind siting committee report and large wind ordinance can both be downloaded here.

10. In addition to demonstrating the ubiquitous presence of FP&L attorneys as participants in the Wisconsin Wind Power Siting Collaborative—the committee charged with developing the model ordinance and its attendant guidelines—a careful reading of the meeting minutes reveals a number of other irregularities and discrepancies. Among them are an overwhelmingly industry-dominated composition (at times there were no representatives outside of industry, utilities, and pro-wind agencies), failure to incorporate substantive changes into drafts, at least one discussion of a “FP&L project” outside of official meeting minutes, and a strong tendency to quickly squelch counties that were going off the pro-wind reservation while the model ordinance was being developed.

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Tony Fleming is a professional geologist from Indiana and long-time student of the energy industry. His primary areas of professional interest include glacial geology, geophysics, ground water, and the geo-ecology of wetlands and natural areas. He received graduate degrees in Geology & Geophysics and in Water Resources Management from the University of Wisconsin, and a BS in Geology from Beloit College.

And this from NBC


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