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Obama’s Clean Power Plan is a Direct Subvention for Wind Power

Obama’s Clean Power Plan is a Direct Subvention for Wind Power

Feds unveil plan to grow wind power while sparing rare whale-watching species

By Samuel Hammond 3 February 2013

After months of secrecy, the Obama administration has revealed a plan to provide $2 billion over the next 20 years through the Department of Energy (DoE) to build the nation’s largest and most efficient wind farms and to expand the Department’s existing renewable energy portfolio standard (REPS) to support solar and other renewable energy technologies.

But President Obama’s Clean Power Plan is nothing more than an indirect subsidy for wind power that will only provide a small step towards a more ambitious goal aimed at eliminating carbon emissions from the energy industry.

The $2 billion in direct subsidies announced today will go towards two new $200 million wind turbines at the sprawling wind farm in Wyoming, one of the largest in the world, and the largest in the U.S. But the plan will not provide any additional funding to extend the current subsidies for natural gas-fired power plants that are now exempt from the new Clean Power Plan.

The wind project alone will cost taxpayers $2.5 billion, and the DoE is offering $1 billion in direct subsidies to support the project, a much more modest sum than the $3.3 billion that the U.S. Treasury will spend on the wind farm in total—although the DoE will spend $3.3 billion in total building the new facilities.

In other words, the wind farm alone will still cost American taxpayers hundreds of millions of dollars more than it will save.

With the support of the Obama administration’s political allies, including the unions, the oil industry, the auto industry and the electric power industry, the plan also includes $1 billion in tax credits to be applied to a small number of already existing coal-fired power plants on the grounds that these plants are more carbon-intensive than nuclear plants.

However, the administration has also indicated that the tax credit will be expanded to cover up to 90 percent of the total cost of the projected wind projects, thereby making it one of the largest direct subsidies

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