In his paper, Measuring the Environmental Benefits of Wind-Generated Electricity,

Joseph Cullen, Assistant Professor of Economics at Washington University, investigates

the capacity of wind- powered electric generators to offset emissions produced by fossilfuel electric generators in ERCOT, Texas main power grid. 1
Cullens paper focuses on the cost-effectiveness of wind electricity generators. Wind
turbines are subsidized in Texas through the state-level Renewable Portfolio Standard
(RPS) and the federal Production Tax Credit (PTC). While RPS credits range anywhere
from $5/MWh to $50/MWh of electricity produced, depending on the state, Production
Tax Credits are generally fixed at $20/MWh.2 Cullen cites the availability of subsidies as
the driving reason for installation of wind turbines in Texas over the past several
decades, and illustrates that each year after RTC expired, annual installments of wind
turbines nearly dropped to zero.3

1 Cullen, Joseph. 2013. "Measuring the Environmental Benefits of Wind-Generated

Electricity."American Economic Journal: Economic Policy, 5(4): 107-33

Wiser, Ryan, and Galen Barbose. 2008. Renewables Portfolio Standards in the United States: A
StatusReport with Data Through 2007. Lawrence Berkeley National Laboratory Environmental Energy
Technologies Division. Berkeley. http://emp.lbl.gov/sites/all/files/PRESENTATION%20lbnl-154e-pptrevised.pdf

American Wind Energy Association (AWEA). 2008. Factsheets.

http://www.awea.org/Resources/Content.aspx?ItemNumber=873&navItemNumber=588

Figure: Annual Installations of Wind Capacity in the U.S. (through 2008)

[Source for both figures: American Wind Energy Association Database]4

4 American Wind Energy Association (AWEA). 2008. Databases.

http://www.awea.org/Resources/Content.aspx?
ItemNumber=5059&navItemNumber=744

Figure: Annual Installation of Wind Capacity in the U.S. (through the first quarter of 2014)

Wind energy has high fixed costs. A 1 MWh wind turbine costs about $1 million to build and
install, but has marginal costs close to zero. Because fuel costs are zero, the maintenance
costs are the largest marginal costs.5 According to the Department of Energy, wind energy

Wiser, Ryan, and Galen Barbose. 2008. Renewables Portfolio Standards in the United States: A
StatusReport with Data Through 2007. Lawrence Berkeley National Laboratory Environmental Energy
Technologies Division. Berkeley. http://emp.lbl.gov/sites/all/files/PRESENTATION%20lbnl-154e-pptrevised.pdf

has decreased in cost by more than 90% since the 1980s due to technological
advancements.6
Joseph Cullens research questions ask: do the environmental benefits of using windpowered electric generators outweigh the costs of subsidizing them? Is the cost of
subsidizing wind power less than the cost of the emissions from traditional fossil-fuel electric
generators in Texas?7

6 Department of Energy, Revolution Now: The Future Arrives for Four Clean Energy
Technologies. September 17, 2013.
http://energy.gov/sites/prod/files/2013/09/f2/200130917-revolution-now.pdf

7 Cullen, Joseph. 2013. "Measuring the Environmental Benefits of Wind-Generated

Electricity."American Economic Journal: Economic Policy, 5(4): 107-33