Production tax credit tops AWEA conference agenda

The American Wind Energy Association opened its annual gathering with dire predictions.

Bill Opalka | Jun 04, 2012


Failure to extend the production tax credit would devastate the domestic wind energy supply chain and virtually wipe out wind power development next year. The American Wind Energy Association (AWEA) opened its annual conference on June 4 with that message, rolling out an array of political supporters from across the spectrum to show widespread backing in an election year.

The conference theme is “Manufacturing the Future Today,” with an emphasis on clean energy employment, particularly in the Midwest and South. The industry expects to set a record this year with more than 10 GW installed, but little activity next year without the certainty of the credit.

Domestic manufacturing to supply the industry has grown since the last expiration of the credit with less reliance on imports, as foreign-based suppliers have set up shop in North America.

“This time is very different, from all of our perspectives,” said Ned Hall, a past AWEA chair and global vice president at AES Corp. “We’re not importing equipment. It’s not jobs being lost in Europe, but throughout the supply chain, it’s American jobs.”

“Right now, we can’t contract for long-term power beyond 2012 because no one knows what is going on,” said Gabriel Alonso, CEO of EDP Renewables.

The federal production tax credit expires at the end of the year and is currently bogged down in Congress. Projects put online this year are qualified for 10 years for the 2.2 cent per kWh credit.

AWEA says the industry has grown to support 500 manufacturing companies and overall employment in the supply chain, development and other segments tops 75,000. Democratic and Republican governors were on stage to take credit for some of those jobs and to tout clean energy manufacturing policy successes. Those policies include state tax breaks.

Gov. Mike Beebe, Democrat of Arkansas, said 2,000 manufacturing jobs in the state from its own policies and the long-term PTC-generated demand helped it weather the economic downturn. “Get these things done, and for more than one year,” he said in reference to Congress.

Kansas is on pace to add 1,400 MW this year, and lead the nation, receiving $3bn in investment, said Republican Gov. Sam Brownback. “We want to be known as a renewables state, but we have to balance the economy and environment,” he added.

In a press conference after the opening events, he floated an idea not often mentioned in these discussions: a four-year phase-out of the PTC to give the industry certainty and time to prepare for its eventual end.

Heather Zichal, the deputy assistant to the president on energy and climate change for President Obama, reiterated administration support for the PTC extension as a “top 5” priority for Congressional action before the August recess. Obama highlighted this priority with a visit two weeks ago to Iowa-based wind blade manufacturer TPI Composites and a meeting with wind industry officials to help set the legislative agenda.

A bipartisan coalition of 100 Congress members is supporting a four-year extension in the U.S. House of Representatives. Seven senators are sponsoring legislation for a two-year extension in that body.

Ted Turner, founder of CNN, tried to draw parallels between the cables news industry taking on the broadcast networks and renewable energy starting to compete with entrenched fossil fuel power sources.

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Wind subsidies

No matter what you believe about dangerous man-made global warming, wind power does not make sense. Without subsidies, the business simply would not exist. Not only are there direct subsidies but there are hidden ones–that the consumer pays for– in providing transmission facilities, backup power stations and the like.

Many studies have demonstrated that the carbon dioxide reduction is trivial.   If there really was a good reason to reduce carbon dioxide, switching from coal to gas–of which the United States now has an abundant supply–or promoting safe and reliable nuclear power would be much better policies.

But when we look at what the climate is actually doing–rather than what the computer models tell us–for the last 10 to 15 years we find that there's been no significant warming. So we can only conclude that computer models are worthless and that the lack of warming proves that man-made carbon dioxide has little effect on the climate.

In a rational world, wind and solar power would not even be considered.

More than anything else, the United States needs a rational government with a rational, economic, energy policy.

Rethinking PTC

The rose-colored glasses approach is to say it ain't broke, however the results of PTC is an industry that is highly, if not solely, dependent on subsidy.  There is no doubt that wind and other renewable energies are the way to go for clean sustainable energy independence.  Where we have failed is in allowing special interests to hijack monies and legislation in support of economic models that further take cash out of the pockets of energy consumers.  Economics of scale does not mean that bigger turbines are cheaper in delivering the product.  In fact, the deep pockets of utilities and developers are so stretched that the most conservative estimate of $80Billon in transmission infrastructure is being legislated and regulated out of the pockets of the consumer.  We need to be asking ourselves as wind industry experts; 1) how to pass the savings of 'free' energy on to the public, 2) how can wind re-energize the economic engine of this country to 10% of GDP, and 3) instead of subsidizing utilities and developers, what model puts money in the investment hands of the consumer? Look to distributed power generation inside of demand centers to meet all of the above.  Little change needs to be made to transmission lines, and when, then it is organic.  The economics of scale turns from 'bigger is better' into 'mass production' and lower costs.  Utility sized turbines and PTC have a place in the energy future of our country; however it cannot be the centerpiece, as it has become, of a national energy policy.