|Wind Power in Peril|
|Written by Eric Vermeiren|
|Wednesday, 25 April 2012 17:29|
While at first it may seem rational for our elected officials to pull funding for renewable energy tax credits (or at least not extend the credits) in an era of fiscal austerity - there's a lot at stake as Congress stalls with regard to the Wind Energy Production Tax Credit (PTC).
The PTC is a per kilowatt-hour tax credit of around 2.2 cents/KWh for wind-generated electricity. Enacted as part of the Energy Policy Act of 1992, the credit has gone through several cycles of expiration and renewal. The inconsistent nature of this tax credit has been a significant challenge for the wind industry, creating uncertainty for long term planning and preventing steady market development. Despite its uncertainty, wind power has been the fastest growing source of new electricity production in the U.S. for the last ten years.
However, as the future of the PTC extension hangs in the balance, wind producers across the country have been cancelling projects and laying off thousands of people. U.S. wind energy employment currently stands at 75,000, but some big names have already announced plans for major downsizing. Iberdrola Renewables and Vestas – two global wind power developers - have stated they would move ahead with laying off over 3,000 fulltime employees if the tax credit is not extended. A full 37,000 American wind industry workers could be laid off over the course of the next year if Congress does not take action in extending the credit.
Some budget hawks have cited the cost of continuing the PTC – estimated to be around $1 billion a year – as reason for allowing it to expire. However, a recent study by Navigant Consulting found that American wind power generates between $15 to $20 billion a year in private investment and could grow to employ 100,000 people in just four year. As headlines continue to blast the decline of the American manufacturing machine, American wind has become one of the fastest growing U.S. manufacturing industries. The irony is also not lost on how the Senate recently rejected President Obama’s attempt to end subsidies to the oil and gas industry, worth some $20 billion.
Another common criticism of wind power is its high cost of production, but in reality, the cost of producing onshore, utility-scale wind power has been declining steadily and is now cost competitive with coal.
If the U.S. is serious about addressing its mounting energy crisis with an “all of the above” strategy, then allowing the PTC to expire would be the most irrational move of all. Domestically produced wind power is in our country’s economic, environmental, and national security interests and supporting it should be a bipartisan homerun. The certainty that extending the PTC provides can spur the continued growth and development of the nascent yet thriving domestic wind power industry and ensure its vitality amidst growing pressure from heavily subsidized competitors abroad – namely China.
Expanding American wind could reduce electricity costs (by creating a network of clean and stable-cost energy production) and create thousands of new, skilled jobs. But if Congress fails to extend the PTC, the very future of American wind will be compromised. “We know that as an industry there are not projects currently scheduled for next year. Turbine manufacturers have not received orders for 2013,” said Elizabeth Salerno, Senior Director at the American Wind Energy Association (AWEA).
If you’d like to read more about the importance of continued support for the domestic wind power industry, click HERE
To show your support for extending the PTC, click HERE
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