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.
The Interior Department this week advanced a Norwegian company’s proposal to install the nation’s first floating wind turbines off the coast of Maine and said it would also review the state of Virginia’s plan to gauge wind resources off its shore. The two announcements signaled continued momentum in the Obama administration’s plan to expedite offshore wind development from Georgia to Maine. The agency late last month said it will hold the nation’s first competitive lease sales for offshore wind in 2013 off the coasts of Virginia, Massachusetts and Rhode Island
The Federal Energy Regulatory Commission today accepted a new definition of the “bulk electric system” that changes which transmission lines and facilities must follow mandatory reliability standards. In line with the advice of the North American Electric Reliability Corp., the proposal sets a strict threshold of 100 kilovolts, rather than giving regional grid overseers authority to choose what should count as part of the bulk electric system.
All year, the wind industry’s lobbying arm has been asking Congress for one thing: an immediate extension of its prized tax credit for wind farms that begin construction next year. But a brief renewal of the production tax credit will not be all the support the industry needs over a longer time frame, and a growing mix of proposals is being floated on Capitol Hill to give the industry the certainty it says it needs. The result is a cloudy picture of what the industry can expect lawmakers to deliver, as the narrow debate over wind remains overshadowed by the larger fight over the “fiscal cliff” and increasing fear that Congress will not meet the end-of-the-year deadline to avoid those sweeping tax increases and spending cuts.
Lost among the fiscal cliff debates on marginal tax rates and the sequester is a bipartisan package of important tax cuts that the House and the Senate should take up and pass immediately, regardless of whether Democrats and Republicans can reach a larger compromise. I refer to a package of tax cuts passed earlier this year by the Senate Finance Committee, commonly referred to as the “tax extenders package,” which I feel has not received the attention it deserves as a major component of the fiscal cliff. While I hope the negotiations to avert the fiscal cliff are successful, we should not wait for a “grand bargain” to materialize before we finish our work on tax extenders. Tax extenders are different from the other fiscal cliff issues.
AWEA says Congress should extend the credit as part of a package to address the looming “fiscal cliff” of across-the-board tax increases and spending cuts.
“It’s down to the wire on wind, and Congress has a choice. If they do nothing, the wind industry will fall over its own fiscal cliff and America will lose most of its wind installations next year,” said Rob Gramlich, senior vice president for public policy at AWEA, in a statement.
Opponents of an expiring wind energy tax break are urging lawmakers to vote against its extension and arguing the phaseout of the credit floated by an industry trade group would carry an exorbitant price tag, as wind supporters in Congress and the Obama administration continue to argue that an extension to the credit is vital to protect jobs. The back-and-forth fight over whether to extend the wind production tax credit beyond its scheduled end-of-the-year expiration continued to simmer in the background of the larger debate over the looming “fiscal cliff.” The credit is seen as a likely candidate for inclusion in a larger deal, and advocates and opponents yesterday continued to lay out their arguments for and against it. Sen. Mark Udall (D-Colo.), a leading advocate for extending the credit, appeared yesterday at a forum with Energy Secretary Steven Chu, where the pair argued that extending the PTC was necessary to maintain jobs in the industry, especially among domestic manufacturers that have increased their supply of wind turbine components in the recent years that the credit has been in place.