Wind Turbine Installations Soar as Tax Credit Deadline Looms
From Tulsa World
By Ehren Goossens & Christopher Martin
New wind capacity reached 6,519 megawatts by Nov. 30, beating the 6,335 megawatts of natural gas additions and more than double those of coal, according to data from Ventyx Inc., which is owned by the Swiss power transmission equipment maker ABB Ltd.
“Wind will very likely beat gas, but it may be close,” said Amy Grace, who leads North American wind industry analysis for Bloomberg New Energy Finance in New York. “I think it’s very likely that we get over 8 gigawatts for 2012.”
Congress hasn’t renewed the production tax credit, which provides incentives for wind farms completed before Dec. 31. Efforts to take advantage of the subsidy trumped interest in gas-fired stations, even though natural gas prices have plunged due to a surge in supply stemming from the use of hydraulic fracturing technology.
A surge of wind-farm connections in November and December could double the amount of wind capacity added this year to as much as 12 gigawatts, according to New Energy Finance.
“It shows that wind has firmly planted its foothold as a valuable energy source,” said Jacob Susman, CEO of New York wind developer OwnEnergy Inc. “Five years ago we had to drag utilities in kicking and screaming. Now they’ve got teams of experts who understand its value.”
To qualify for the tax credit, which pays owners of wind farms 2.2 cents per kilowatt-hour of power they produce over 10 years, projects must be online and producing power by Jan. 1.
Unless Congress extends the incentive, wind turbine installations may fall 88 percent next year to as low as 1.5 gigawatts, New Energy Finance forecasts.
A bill to extend the wind production tax credit was passed in the Senate Finance committee in August.
In an effort to head off opposition to an extension, the American Wind Energy Association this month proposed a six-year phase-out of the credit, ending the subsidy at the start of 2019. The industry group says 37,000 jobs will be lost if the credit lapses now.
“The reason we’re having an historic year is because the incentives are in place,” said Elizabeth Salerno, chief economist at director on industry data at the wind association. “There’s more at stake now than there ever has been.”
Some utilities oppose the plan, noting that the strength of installations shows wind can survive without subsidy, said Joseph Dominguez, a senior vice president of Exelon Corp., the nation’s largest owner of nuclear plants.
“The wind energy industry has matured and is thriving today; the PTC is no longer needed,” Dominguez said earlier this month. “Rather than a reasonable phase-out, AWEA is essentially asking for a six-year extension of the now 20-year old PTC.”
Utilities in 29 states are required to get an increasing amount of their supplies from renewable resources such as wind and solar, whether or not Congress renews tax credits for wind.
General Electric Co., the largest supplier of wind turbines in the U.S., has benefited from the surge in orders, said CEO Jeffrey Immelt.
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