House members are on tap to quiz the Federal Energy Regulatory Commission’s new acting chairwoman about the agency’s role in a changing energy landscape, marked by a dive into cheap natural gas and renewables, new environmental regulations, and LNG exports.
As it seeks investors, a project off the Massachusetts coast that aims to be the nation’s first offshore wind farm must reach fast-approaching benchmarks or risk missing out on hundreds of millions in critical funding. To qualify for a tax credit that would cover a major portion of its capital costs, Cape Wind either must begin construction by Dec. 31 or prove it’s incurred tens of millions of dollars in costs by then. Also, a $200 million investment — the only one of a specific dollar amount Cape Wind has announced — is conditioned on whether developers can fully finance the rest of the project by year’s end.
Opponents of an expiring renewable energy tax credit are rolling out a new study and ad campaign today arguing that some states receive more benefits than others. It’s the latest move in a long-running effort by the American Energy Alliance, a conservative advocacy group, and the Institute for Energy Research, its affiliated think tank, to eliminate the production tax credit, which supports the generation of wind electricity and a handful of other renewable sources. The credit is set to expire at the end of this year, although a modification enacted in January means wind developers can continue to claim it through at least 2015 as long as certain conditions are met.
“Wind energy is not a gigantic portion of New York State’s energy mix, but it is growing rapidly,” says Eric Whelan of Environment New York. The group’s report demonstrates “the environmental benefits that we could capture if we move forward in building more clean energy,” Whelan adds.
A large wind farm project planned for northeast Nebraska has been shelved because the builder couldn’t get a power company to commit to buying the electricity it would generate. The project planned by TradeWind Energy of Lenexa, Kan., is on hold unless the company gets a deal signed to sell the energy.
“We’re still very much interested in building that project, and yet the hoped-for export (contract) … just didn’t come together in time for us to be able to make the commitments we need to meet the start of construction that the IRS is requiring by the end of this year,” said Frank Costanza, executive vice president of TradeWind Energy. In order to qualify for the tax credits, Tradewind would have to spend 5 percent of the project’s total cost of $400 million to $500 million by the end of December. But without a commitment to buy the electricity, Tradewind cannot take the risk
Tax breaks for wind-power producers are set to expire in a little more than a month, threatening hundreds of manufacturing and energy jobs in the state if nothing is done. In Iowa, much of the attention has focused on the federal Renewable Fuel Standard in which the federal government guarantees a market for biofuels. But for Iowa’s turbine manufacturers and power companies, it’s the federal production tax credit that is the center of concern.
Iowa’s future as a wind power leader relies on more utility customers than the state can provide. The state ranks third nationally in wind energy production, with 3,198 turbines generating 25 percent of the state’s energy, as well as some reliable income for landowners who negotiated their place on the state’s alternative power grid. The next big step requires extending the power grid, and that’s the goal of the Rock Island Clean Line, a cross-country transmission line to take Iowa’s wind power eastward to more customers. Wind energy cannot be stored. So to get the maximum value of the state’s existing turbine network, it makes sense to connect to more customers.
Iowa’s hugely successful wind industry isn’t just an economic driver, it’s having a major impact on cutting pollution and saving water. Wind energy generation in Iowa avoids more than 8.4 million metric tons of climate-altering carbon pollution — the equivalent of taking 1.7 million cars off the road, according to a new report released by Environment Iowa.
Efforts to extend the credit have already met with pushback from stakeholders on the other side of the issue. The American Energy Alliance has so far been one of the most vocal opponents of the credit and is planning a major drive against the credit set to begin next week with the release of a series of digital and print ads in the Washington, D.C., market as well as national ads railing against the subsidy for wind producers. AEA is also helping to organize a fly-in next week to marshal grassroots organizations from across the country to put pressure on members of Congress not to renew the subsidy. According to Benjamin Cole, a spokesperson for AEA, the fly-in will focus on strengthening opposition to the credit among members who have already said they want to see it expire