Energy official visits Iowa, urges action on wind credit
Mark Parriott, general manager of the TPI Composites wind turbine blade manufacturing plant in Newton, left, speaks with Deputy Secretary of Energy Daniel Poneman during a tour of the plant Wednesday. Poneman said President Barack Obama backs an extension of tax credits. / Dan Piller/The Register
WTON, IA. — Deputy U.S. Secretary of Energy Daniel Poneman toured the TPI Composites plant that makes wind turbine blades Wednesday, and talked up the need for Congress to extend tax credits for wind projects that will expire at the end of the year.
Probably nobody among the 700-plus TPI employees at the plant would disagree with Poneman’s stance on the tax credit. Their jobs may depend on it.
TPI plant manager Mark Parriott was circumspect about how many jobs might be lost at Newton if the tax credit isn’t extended, but job losses happened before in 2009 when the credit lapsed and wind project construction faltered.
“It was just good to hear the deputy secretary here talking about what the administration is trying to do” with the production tax credit, said Parriott.
Iowa employs more than 2,000 workers at wind assembly plants at Newton, West Branch, Cedar Rapids and Fort Madison. The American Wind Energy Association contends that up to half of wind component manufacturing and assembly jobs nationwide could be at risk if the production tax credit is allowed to lapse after Dec. 31.
Poneman said President Barack Obama, who visited the Trinity Industries wind tower plant across the road from TPI in Newton in 2009, is a “strong supporter of extending the production tax credit,” which amounts to 2.2 cents per megawatt hour of generation.
Supporters of the wind tax credit, who include such politically disparate characters as conservative Republican U.S. Rep. Steve King of Iowa and ultra-liberal Democrat Rep. Henry Waxman of California, have so far struck out in two attempts to attach the credit to other congressional legislation.
Time is of the essence, wind backers say, because the lag time to get projects rolling means that if Congress doesn’t pass the extension at least in the first half of the year, 2012 will go down as a lost year for new wind construction.
Iowa wouldn’t suffer immediately, because MidAmerican Energy of Des Moines, backed by the ample checkbook of owner Warren Buffett of Omaha, is building the last 400 megawatts of new wind generation added to the 600 new megawatts it built in 2011.
Those new projects will bring Iowa’s wind generation total to about 4,250 megawatts, second only to Texas’ 9,200-plus megawatts.
But the workers at TPI in Newton need new wind farms being built throughout the country. American Wind Energy Association President Denise Bode warns that as many as 37,000 jobs nationally could be at risk without the wind tax credit, which most lenders say is necessary to cushion the economic uncertainties of wind energy.
“Congress needs to understand that, with (the credit’s) uncertainty, layoffs have already begun and further job losses and even plant closings will accelerate with each month we near expiration in December,” Bode said.
Wind’s political popularity has been undermined in the last year by the sudden profusion of cheap natural gas, now trading at a 10-year low because of surges in production from new shale fields in Texas as well as in Ohio, Pennsylvania and West Virginia.
Even New York is believed to be on the cusp of a natural gas boom if environmental qualms can be overcome.
In Iowa, Alliant Energy has announced a policy switch away from coal to more natural gas. MidAmerican Energy executives said that if they can’t build the nuclear generator now under discussion in the Iowa Legislature, they too would turn to more natural gas production.
Poneman noted Wednesday the 10-year low in natural gas prices “has made natural gas a much more attractive fuel for utility generation.”
Beyond that, Poneman said, the Obama administration supports a national clean energy standard that would require a certain percentage of electricity generation to come from renewable sources.
Such a mandate would give wind energy the same powerful kick that the Renewable Fuel Standard bills passed in 2005 and 2007 gave ethanol. But so far Congress has declined to act.