During a March 7 speech, Sen. Lamar Alexander (R-Tenn) said he plans to introduce a bill to end the Production Tax Credit for wind, calling wind a source that can provide only “puny amounts of expensive, unreliable electricity.”
The credit, which is set to expire at the end of this year, has been extended on four previous occasions and has helped ensure the growth of the wind industry in the U.S. Wind power has grown to an installed capacity of 46,919 MW, or 2.9 percent of electric power generation in 2011, according to the U.S. Energy Information Administration.
If Alexander’s bill succeeds or the PTC meets its extension at year end, the wind industry will face a number of negative repercussions.
Already, several wind turbine manufacturers have threatened thousands of job layoffs. The latest bit of bad news came from Mitsubishi Heavy Industries, which announced last week that it will not build a planned $100 million nacelle manufacturing plant in Arkansas if the U.S. government does not renew the PTC before it expires at the end of 2012.
MHI currently has a 10 percent share of the U.S. market and several projects in the works, including a 49-MW contract with AES in California and a deal to supply 84 of its 2.4-MW turbines to a Duke Energy wind farm in Texas.
The biggest potential consequence of the PTC expiration has come from wind turbine giant Vestas, which has already laid off 2,335 employees worldwide and announced in January that an additional 1,600 jobs in the U.S. could be at risk if Congress does not extend the PTC.
Also in January, Portland, Ore. Mayor Sam Adams blamed the looming expiration of the PTC for 25 layoffs at Iberdrola Renewables Inc.’s Portland office. Altogether, the company made 50 layoffs to its nationwide staff of more than 900 people.
“Without the certainty of that extension, project developers are not doing projects in the U.S., and manufacturers are not getting orders,” Adams said.
In addition to layoffs, a number of developers have told the Bonneville Power Administration, which controls most of the Northwest’s transmission system, that they want to cancel or delay the transmission they reserved with millions of dollars in deposits. The BPA is currently determining how those cancellations would impact planned transmission upgrades.
A report completed by Navigant in December found that if Congress allows the PTC for wind to expire, jobs in the wind industry will be cut in half, equaling a loss of 37,000 American jobs and a one-third cut to American wind manufacturing jobs. Additionally, private investment in the industry would drop by nearly two-thirds. Conversely, an extension of the PTC would create 17,000 American jobs, according to the study.
Despite the negative forecasts of what could happen if the PTC is not extended, the extension of the tax credit has been gaining bipartisan support over the last few months. The American Wind Energy Association (AWEA) has been heralding the cause for the extension and announces supporters that include Rep. Steve King (R-IA), Governor Mary Fallin (R-OK) and Governor John Kitzhaber (D-OR), including corporate icons like Nike, Campbell’s Soup and Yahoo. Legislation extending the PTC now has 70 co-sponsors, including 18 Republicans and four Republican members of the powerful Ways and Means committee.
Denise Bode, CEO of AWEA, has said that fewer jobs will be affected if Congress chooses to extend the PTC sooner rather than later. “Our greatest fear is that the extension is delayed until later on in the year. If that happens, we are likely to lose tens of thousands of jobs in our sector.”
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