U.S. Subsidies, 2010

When discussing the economic merits of wind energy and the large subsidies wind energy receives, the rejoinder from a typical proponent is usually something about how much more subsidies the gas and oil companies receive, and if we’d just level the playing field, wind would be competitive.  This is, of course, pure nonsense.  The actual numbers, which proponents seem universally unaware of (don’t confuse us with the facts!), tell a different story. The best set of actual subsidy amounts in the U.S. comes from the EIA, which is part of the DOE.  Generally these reports come at request of Congress, and I’m pretty sure the EIA takes care to get them right.  The previous report was dated September 8, 2008 and covered FY2007 data.  That report was the source of this chart (click to enlarge):

Proponents would point out the 854M for coal and the 1267M for nuclear, while opponents would point out the 23.37/mwh for wind.  While the subsidies in absolute dollar amounts were larger for coal and nuclear, those subsidies produced much more electricity than wind’s.

In July 2011 the EIA released an updated report [backup link], covering FY2010.  Given Obama’s support of renewable energy, it should come as no surprise that the subsidies to renewable technologies have increased a great deal.  Since wind is a large part of the renewable pie, wind’s numbers have increased apace.  They’ve increased to the point where even in absolute dollars the subsidies for wind now surpass all the traditional technologies.  Here’s the chart for all types of energy sources:

If we look at just the electricity-generation sector, the amount paid out to wind energy becomes even more striking:

But in spite of that largess, the amount of electricity produced by wind remains pitiful:

Note that the 2008 report has a column that showed the subsidies per mwh produced, while the 2011 report does not.  The 2011 report does take note of this, along with a long-winded nonsensical explanation of why this information is omitted.  Fortunately, the previous two tables provide us with the information needed to figure the numbers out for ourselves.  And after doing so, it becomes clear why the EIA didn’t want to do so.  Here’s the results (I used table 4, page 13 to get more accurate numbers for the renewables).

It would be nice if wind proponents would quit throwing the “subsidies” argument out at us, now that the numbers are uniformly arrayed against their favorite industry.  But I’m not holding my breath – adherence to facts is not a strong suit of most proponents.

There is a good article [backup link] in the Canadian Free Press about the same topic, with similar calculations (they were more ambitious and used a different set of numbers but came up with strikingly similar results).

Just FYI, I wrote a short posting about the earlier report.

4 thoughts on “U.S. Subsidies, 2010”

  1. Thanks for showing light on this subject. We hear so much about extravagant CEO pay. The total CEO pay for the 500 largest US companies, the S&P 500 is 5 billion dollars, which is less than the 6 billion dollars in US subsidies given to wind and solar. And don’t forget another 6 billion for biofuels.

    The difference is purchasing an S&P product or service is voluntary, yet no one would be foolish enough to build a wind turbine or solar farm or use biofuels. So the government wastes our money forcing us to purchase these “green” products.

  2. you might want to check that last table. I think the mwhr should likely be million mwhr. and then same for last column.

  3. Thanks for noticing the middle column was mislabeled. I had noticed it earlier myself also but got distracted before I fixed it, then promptly forgot all about it. Keeping track of the units of measure is always a chore. It’s nice to know someone is actually looking at what I’ve posted. The columns should now be correctly labeled – and the last column remains $ per mwh.

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