Earlier this year Maryland Governor Martin O’Malley generated a high profile controversy over the possible siting of 25 wind turbines on state’s the Eastern Shore. Many fear these wind turbines will interfere with Naval Air Station Patuxent River’s operations, specifically the installation’s radars. In light of those fears, the Maryland legislature passed HB 1168, prohibiting the wind turbines within 56 miles of Pax River.

Mindful of Pax River’s singular importance as the employer of some 22,000 Marylanders, U.S. House of Representatives Democratic Whip Steny Hoyer made an unprecedented personal appeal in testifying in Annapolis on behalf of a project moratorium until the completion of a study of the turbines’ effect on the Navy’s radar systems.

Astoundingly, Governor O’Malley then vetoed the bill. In his veto message, O’Malley claimed that the “real” threat to Patuxent River comes not from wind turbines, “but from rising sea levels caused by climate change.”[1]

To her credit, U.S. Sen. Barbara Mikulski has yet to give up the fight. Citing "very serious" concerns about the project's effect on Pax River, she has offered an appropriations amendment, directing the Navy “to refrain from executing any agreement with respect to the operation of the proposed wind energy project until the study is provided to the congressional defense committees.”[2] [3] And the U.S. Senate is hardly the only remaining government hurdle. The Somerset County Commissioners still need to act on an enabling ordinance. [4] [5]

Beyond this specific political squabble, an even bigger hurdle exists for most wind energy projects: overcoming investment economics. Without a generous federal subsidy in the form of the Wind Power Production tax credit, or “PTC,” only a fraction of wind power projects would be built. The subsidy gives producers $23 per megawatt hour for the first 10 years of operation. However, the PTC expired at the end of 2013 for projects not already begun.

Between 2009 and 2013, federal revenues lost to wind power developers in the form of subsidies and tax credits are estimated to have amounted to about $14 billion, including $6 billion from PTC and another $8 billion from an alternative energy subsidy provided in the 2009 economic stimulus package. Wind and solar each receive more than 50 times more subsidy support per megawatt hour than conventional coal, and more than 20 times more in terms of average electricity generated by coal and natural gas.[6] According to a 2008 Energy Information Agency (EIA) report, the average 2007 subsidy per megawatt hour for wind and solar was about $24, compared with an average $1.65 for all others.[7] Small wonder, then, that wind-production tax credit program opponent Sen. Lamar Alexander (R-TN), calls it “Washington's most conspicuous, wasteful taxpayer subsidy.”[8]

No less of a savvy investor than Warren Buffett readily acknowledges weak economic fundamentals for wind energy without subsidies. While his company Berkshire Hathaway has invested billions on wind generation, according to Buffett: “[O]n wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”[9]

Skeptics may wonder if another O’Malley-favored wind project will ever be built. Last year the Maryland legislature authorized an offshore wind project that would benefit from an O’Malley-favored requirement that the state’s power utilities purchase “alternative energy” at inflated rates. In response to questions about whether that project will ever be built billions without tax incentives and subsidies, Governor O’Malley told the Washington Post: “There’s a saying in the Koran that everything is possible in God’s time, but nothing is for sure.”[10]

The marketplace distortions the subsidies create cause some in the wind industry to oppose renewing the credits. The head of one company writes: “Government subsidies to new wind farms have only made the industry less focused on reducing costs. In turn, the industry produces a product that isn't as efficient or cheap as it might be if we focused less on working the political system and more on research and development. After the 2009 subsidy became available, wind farms were increasingly built in less-windy locations.”[11]

The irony, then, of this continuing controversy over the Somerset County wind power project and the Pax River Naval installation is that without a return of generous subsidies, the project may never be built.