A bipartisan group of 166 lawmakers are accusing Energy Secretary Steven Chu of attempting to change the role of the nation’s power marketing administrations without congressional approval. Forty senators — including Democrats Jeff Merkley of Oregon, Tom Udall of New Mexico and Maria Cantwell of Washington — and 126 House members questioned Chu’s actions in a letter last week. At issue is a March memo from Chu ordering the power marketing administrations (PMAs) to leverage partnerships, rate-making power and financing to upgrade transmission and bolster renewable power generation (E&ENews PM, March 16).
Renewable energy attracted a historic level of investment in 2011, with solar surging past wind to become the green energy technology of choice in 2011. At the same time, rapid growth and fierce competition within the renewable sector have compressed prices and led to overcapacity, driving down producers’ margins.
The four Vestas wind turbine factories located in the United States are the best argument for Congress to renew the production tax credit supporting renewable energy, said Ditlev Engel, the Danish company’s CEO. “I’m convinced that if all wind turbines were produced in Europe, the PTC wouldn’t be renewed,” Engel said in a meeting with financial analysts. “Having factories in the U.S. is a strong argument for the PTC to be renewed and save American jobs.”
Most renewable energy supporters agree that the boom-and-bust cycle created by reliance on temporary tax breaks and eleventh-hour extensions has not been an ideal arrangement, although lawmakers have been unable to agree on steadier forms of support. The wind industry is the latest to face a potential bust if its prized tax incentive disappears as scheduled at the end of this year. While congressional aides predict the incentive will win a last-minute reprieve, attention in some policymaking circles has turned to an alternative arrangement with the potential to give the industry the certainty it desires while appeasing deficit hawks and skeptics of government backing for certain energy sources: a phaseout of the credit over a set period of years.
A key tax break for the wind industry was barely discussed today at a House hearing dedicated to getting recommendations from economists on how to evaluate the merits of more than 100 expiring tax incentives. But lawmakers made clear that the fate of the incentive — and the rate at which it could be phased out — remains on their radar. Rep. Kenny Marchant (R-Texas) was the only member of the House Ways and Means Subcommittee on Select Revenue Measures to devote virtually his entire time for questions to energy-related tax incentives. He pointed to “provisions with the stated purpose of incentivizing investment in certain types of energy,” although he did not explicitly mention the wind production tax credit, which expires Dec. 31.
The Iowa Supreme Court upheld a regulatory decision Friday that allowed a huge expansion of wind energy by the state’s largest utility, rejecting a challenge from a rival company who claimed it was unnecessary and unfair to other energy producers. The court voted 5-0 to uphold a 2009 decision by the Iowa Utilities Board that gave Des Moines-based MidAmerican Energy Co. the ability to nearly double its wind power generation and guaranteed the firm could raise customers’ rates in the future to recover much of the cost of expansion. The court rejected a challenge by Florida-based NextEra Energy Resources, a producer that sells electricity in the wholesale market.
The head of the world’s biggest wind turbine maker, Vestas, said on Sunday that the U.S. wind turbine market is likely to fall by 80 percent next year because of the expected expiry of an important tax credit.
The U.S. production tax credit (PTC) for renewable energy is due to finish at the end of 2012, and, in an election year, it is widely believed that Congress will not pass legislation to renew it before the expiry.
he International Energy Agency has released a new report examining historical trends in the cost of wind energy over the past several decades. Those costs fell precipitously between 1980 and 2000 because of innovation and efficiency gains, but started to rise in the early 2000s due to commodity and raw materials prices.
A freshman Democratic senator from Delaware today introduced a bill that would give wind farms, solar arrays and other renewable electricity sources a new way to line up investors. The bill from Sens. Chris Coons (D-Del.) and Jerry Moran (R-Kan.) would change the tax code to let renewable power companies be structured as master limited partnerships. The measure rides a wave of enthusiasm among policy experts for a financing model that has been used by others in the energy industry since the Reagan administration.
Vic Abate expects that many makers of gearboxes, towers, and blades for wind turbines will go under next year. He should know: As vice president of General Electric’s (GE) renewable energy business, Abate is the executive who will seal their fates. With a federal tax credit that subsidizes the U.S. wind industry set to expire at the end of 2012, GE is scrutinizing its supply chain. That’s significant as the Fairfield (Conn.)-based company is the market leader in wind, with a 29.4 percent share in 2011, according to the American Wind Energy Association (AWEA). Uncompetitive vendors will be culled, Abate says, while stronger suppliers will be offered operational and financial assistance. “We’re in the process of picking winners and losers,” he says