A tax credit that provides incentives to produce wind energy, a financial lifeline for the wind power industry, will likely be extended if Congress approves a tentative deal between Senate Democrats and Republicans to avert the “fiscal cliff.” President Barack Obama said on Monday that a deal with Congress to stop a range of spending cuts and tax increases was “within sight,” although not yet finalized.
U.S. EPA Administrator Lisa Jackson announced yesterday that she is stepping down after four years in office, a move that is likely to spark a tough confirmation battle over her eventual successor. Jackson said in a statement that she was awaiting “new challenges,” having made “historic progress” on various issues, including air pollution, toxic chemicals and children’s health issues. She will depart after President Obama’s State of the Union speech next month. Bob Perciasepe, the deputy administrator, will serve as acting EPA administrator, assuming no one is confirmed by the time Jackson departs. He is also a possible contender to replace Jackson permanently (Greenwire, Nov. 1).
MidAmerican Energy Holdings Co., the power provider owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), completed 300 megawatts of wind farms in California ahead of the expiration of a tax credit at the end of this year. MidAmerican Renewables LLC completed the 168-megawatt Pinyon Pines Wind I and the 132-megawatt Pinyon Pines Wind II projects near Tehachapi, the Des Moines-based company said today in a statement. The 100 Vestas Wind Systems A/S (VWS) 3-megawatt turbines will supply Edison International (EIX)’s Southern California Edison with electricity under long-term contracts.
DESPITE ITS promise, the American wind industry is caught in the crosswinds of American politics — and that uncertain situation set up a surreal contrast when wind enterprises gathered here to tout their technologies.
The American Wind Energy Association’s conference exhibition hall was full of European and multinational firms that are busy plunging scores of turbines into their waters. German developers talked about how the industry has transformed rusting homeland harbors into bustling ports, while British officials boasted that industry investment in offshore wind will leap from $8 billion in the last decade to $80 billion in the next eight years.
Colorado political and business leaders made a big push to develop a wind-turbine industry, which in the space of about six years created more than 5,000 jobs. Now, that is in jeopardy as the federal wind-production tax credit — equal to 2.2 cents for each kilowatt-hour that a wind farm produces — is set to expire at the end of this year.
Forget about parties, resolutions or watching the ball drop. To Iberdrola Renewables, New Year’s Eve will mean checking on last-minute details like the data connections between 169 new wind turbines in New Hampshire, Massachusetts and California and its control center in Portland, Ore. All over the country, developers are in a sprint to get new wind farms up and running before Tuesday, when the federal wind production tax credit will disappear like Cinderella’s ball gown. After that, the nation’s wind-farm building will be at a virtual standstill.
As I note in Friday’s paper, construction of new wind farms is going to grind to a halt with the end, at least temporarily, of the wind production tax credit. What’s next? The credit is worth 2.2 cents per killowatt-hour generated, beyond whatever the electricity can be sold for on the regional market. At some hours of the day, most or all of the revenue will come from the tax credit.
Wind turbine installations have been exceeding the construction of natural gas plants in recent months as developers rush to complete projects before the expiration of a tax credit for renewable energy. New wind capacity reached 6,519 megawatts by Nov. 30, beating the 6,335 megawatts of natural gas additions and more than double those of coal, according to data from Ventyx Inc., which is owned by the Swiss power transmission equipment maker ABB Ltd. “Wind will very likely beat gas, but it may be close,” said Amy Grace, who leads North American wind industry analysis for Bloomberg New Energy Finance in New York. “I think it’s very likely that we get over 8 gigawatts for 2012.”
Natural gas may have reshaped the domestic energy market in 2012, lowering energy prices and marginalizing the coal industry, but America’s shale boom hasn’t undermined renewables.
With the prospects of averting the “fiscal cliff” growing bleak since last night’s collapse of action in the House, the wind industry’s lobby is continuing its push for an extension of a key tax credit with a video featuring one family whose livelihood is tied to the credit’s future.