Expiring Wind PTC: Who Stands Where?

Photo by Francesco Gola. Some rights reserved.

In the intensifying battle over the extension of the wind energy production tax credit, a new tactic has emerged. The main lobby for extension, the American Wind Energy Association, on Wednesday announced its support for a middle ground solution. AWEA recommends a one-year extension, followed by a five-year gradual decrease in the PTC until it goes away completely. If gradually reduced until 2019, according to industry analysis, the PTC could be eliminated and a minimally viable industry could exist and be able to continue achieving cost reductions.

Our friends at Grist worry that this tactic essentially admits that the PTC is not actually needed, and that other renewable energy sources whose production tax credits expire soon, like solar, are left in a weaker position.

The tax credit, originally passed in 1992, has been extended three times. But now 17 days remain until its expiration, and the stakes are high for both sides.

Conservative groups argued in a letter to lawmakers Wednesday that the credit “essentially transfers taxpayer dollars from your constituents and subsidizes the states with such mandates.” The states without renewable electricity standards, mostly in the Southeast, Appalachia, and the Gulf Coast, generally have less installed wind power.

In addition, Republicans have pointed to the credit as a way to help close the deficit, as it will cost $12.1 billion over ten years. Not all Republicans are convinced, though. Joining many Democrats in voicing support for the extension are Republicans whose districts house more than 80% of wind installations.

Separately, the Department of Energy has offered some good news to the wind industry. DOE announced that seven projects will receive up to $4 million in grants to complete engineering, design, and permitting processes, and three of these will be selected to receive up to $47 million over four years with a target opening of 2017.

For readers to whom the above means anything, it is probably needless to say that DOE is optimistic about the energy potential from offshore wind generation. Data suggest that 4,000 GW of energy could be tapped in state and federal waters, which is four times the capacity of all existing US electric power plants.

One response to this post.

  1. […] that has Congress extended the wind Production Tax Credit (after a long battle detailed here and here) and outgoing Interior Secretary Ken Salazar said he is optimistic that the Cape Wind project in […]

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: