Gov. Deval Patrick, who has been trying to strong-arm Nstar into purchasing electricity from his pet energy project Cape Wind, announced today that the utility will buy 27.5 percent of the proposed offshore wind project’s electricity as part of a deal allowing the mega-merger of Nstar and Northeast Utilities.
The wind industry is predicting massive layoffs and stalled or abandoned projects after a deal to renew a tax credit for wind production failed Thursday in Washington. The move is expected to have major ramifications in states such as Illinois, where 13,892 megawatts of wind projects-enough to power 3.3 million homes per year-wait to be connected to the electric grid.
Even as renewables advocates today lamented lawmakers’ move not to use a bipartisan payroll tax deal as a vehicle to extend a much-watched clean power tax credit, they vowed to keep pressing for a reprieve ahead of a year-end expiration date that could trigger layoffs in coming months. The final payroll tax cut deal signed by congressional conferees today, which shifts the rules governing federal employee pension contributions (see related story), didn’t give the production tax credit (PTC) for wind, biomass, solar and other renewable energy sources life beyond this year, despite support from top Senate Democratic negotiator Max Baucus of Montana. The omission emerged as the Obama administration continues to warn of adverse consequences if Congress does not act soon to extend the credit.
As House and Senate negotiators work to nail down a payroll tax cut deal, corporations and interest groups are urging lawmakers to include a key renewable energy tax credit extension in the package.
The wind power industry in this country has grown fast in recent years, but that could come to a screeching halt. The industry depends on a federal subsidy to keep it competitive with other forms of electricity. It’s a tax credit wind farms get for the power they produce. That credit expires at the end of the year, and it’s not clear whether Congress will renew it.
Windpower Magazine and other sources are reporting that extension of the 2-cent per megawatt hour production tax credit for wind energy projects has been excluded from the compromise Payroll Tax bill in congress.
An extension of US energy-related tax credits, including the production tax credit for wind power, will not be included in a congressional deal to extend a payroll tax cut that could be released as soon as Wednesday evening, a Republican lawmaker involved in negotiations said. The PTC and other energy tax credit extensions “never were going to be in it,” said House of Representatives Energy and Commerce Chairman Fred Upton, Republican-Michigan, in a interview.
Among other changes, the Obama administration is seeking to eliminate $4 billion in subsidies to fossil fuels, aid that Dr. Chu calls unnecessary; it is also proposing to drop research on onshore wind because it is “an established technology,’’ the energy secretary said. Offshore wind will still get research help.
With the clock winding down, House and Senate negotiators still were working Tuesday at drafting legislation to extend the 2 percent cut in federal payroll taxes for the rest of the year. What wasn’t known was whether that legislation also would include extending the federal Production Tax Credit that companies such as Vestas-American Wind Technology want to help recruit new customers for its wind tower turbines.
As plans for wind farms rising out of the ocean along the Atlantic and Gulf coasts inch closer to fruition, a new study from Carnegie Mellon University suggests that hurricanes could destroy a significant number of turbines in some of these areas, even coming close to wiping them out.
Although turbines are designed to both harness and withstand the forces of wind, they can be severely damaged by too much of it. In the United States, Europe and Asia, turbines have caught fire, blades have shredded and towers have crumpled when hit by stormy gales.