Pumping more Money to a failed system? WTH!
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A huge potential dropoff in wind energy installations in 2013 was averted by extending the PTC through this year. Photo credit: Dave Rogers/Flickr
The 13th-hour deal approved by both houses of Congress on New Year’s Day includes a provision extending the much discussed wind power production tax credit. The credit, which gives a tax break of 2.2 cents for every kilowatt-hour of energy produced by wind, was set to expire at the end of 2012 and will now include projects that complete construction in 2013.
According to wind energy industry players, the PTC remains crucial for the continued ascendance of wind power. The American Wind EnergyAssociation, a lobbying group, said in a press release that the PTC’s extension could save up to 37,000 jobs. The group’s outgoing CEO, Denise Bode, thanked President Obama and Congress for the move.
When discussions over the PTC stalled in Washington over the last months of 2012, wind farm builders raced to start their turbines spinning before the deadline in order to qualify for the credit. Thanks to that push, the Energy Information Administration estimated that the industry would set a record for total wind power installations in the U.S., potentially topping 12,000 megawatts of installed capacity. The country topped the 50,000 megawatts milestone of total installed capacity earlier in 2012.
Without the tax credit, installations would likely have plummeted in 2013. According to Bloomberg, that drop could have been to as low as 1,500 megawatts. The world’s largest wind turbine manufacturer, Denmark-based Vestas, released a statement praising the PTC’s extension but noting there will still be some effects of Congressional reticence to pass the deal: “Even though the late timing of the extension will result in a significant reduction in 2013 installations relative to previous years due to the time it takes from when an order is placed to project completion, the U.S. market will nonetheless be stronger as a result of the PTC extension.”
The PTC extension comes as a welcome addition to a terrifically contentious fiscal cliff deal. As President Obama has finally started to include climate change among his enumerated priorities, keeping renewable energy afloat is obviously a critical piece. We’ll see if the credit survives into 2014 as well.