Wind energy loses in tax legislation
Wind advocates had hoped that the PTC rider on the tax bill would get the measure passed in time to help the financing of wind projects scheduled for this year. Since the early 1990s the PTC has been lost and reenacted four times, and each time the absence of the PTC has resulted in significant losses in wind energy projects and jobs.
“It looks like we’re not going to succeed, despite a valiant effort, as we see the legislation dealing with these tax extenders very narrowly focused,” said Todd Foley, senior vice president for policy & government relations, American Council on Renewable Energy
Foley was quoted further in the RenewableBiz website as saying “while the tax credit of 2.2 cents per kilowatt-hour for projects put into service before year’s end doesn’t lapse until December 31, as a practical matter, projects not under construction within the next month or so will not be completed in time to qualify.
“We’ve done some market analysis and there is a cliff, especially for wind after March,” Foley said. “Our research shows there may be a 52 percent decline because of this uncertainty.”
The loss of the PTC is seen as a threat to jobs in production of turbines and towers. Iowa has such facilities at Fort Madison, Cedar Rapids, West Branch and Newton that employ about 2,000 workers.
Steve Lockard, chief executive officer of TPI Composites, which employs about 800 workers making turbine blades at Newton, told congress recently that a study estimates that up to half of the 75,000 jobs nationally in the wind industry could be threatened if the PTC was not renewed.
The setback in congress won’t affect Iowa’s biggest wind project, the 407 megawatt expansion of MidAmerican Energy’s wind complex in Adair, Calhoun and Marshall Counties that is under construction and will be completed in time to allow owner Berkshire Hathaway to claim the tax credit before it expires at year end.
The MidAmerican project comes on top of a 597 megawatt project completed in Adair County last year and brings MidAmerican’s total wind capacity to more than 2,200 megawatts, the largest of any investor-owned utility in the U.S.
With more than 4,200 megawatts of wind capacity, Iowa now has more than 20 percent of its electricity generation in wind, making it the second-largest state in wind capacity behind Texas and the largest on a per capita basis.
The prevalance of wind energy in Iowa has united politicians off all ideological viewpoints. U.S. Rep. State King, in an essay, called wind “an essential conservative principal.”
But wind energy has run into headwind as a surge in production of natural gas from shale fields has not only dropped the price of gas to ten-year lows, making it an attractive option for utilities, but also displaced wind as an electricity generation alternative more environmentally friendly than utilities’ longtime mainstay fuel, coal.
Wind also has the disadvantage, in the eyes of most utilities, that unlike coal or natural gas it can’t be stored, is subject to the vagaries of intermittent wind patterns and thus is unsuitable as a so-called “baseload” fuel available on call 24/7.
Further extension of renewable energy tax credits has been made more difficult by high-profile losses at solar energy Solyndra, as well as the recent closing of a biofuel plant in Georgia. Both projects had received tax credits or federal loan guarantees.