May 10, 2012

Wind power faces financial blow

By Alexei Rubenstein, WCAX, 8 May 2012

MONTPELIER, Vt. – Northern Power Systems in Barre now has a new CEO. In a cost-cutting move last week the company replaced its chief executive and trimmed its workforce. Officials say it’s a sign of the times in the wind industry.

“They’re already seeing up to– depending on the state– up to 50 percent reduction in sales forecasting. So it means real jobs here in Vermont,” said Gabrielle Stebbins of Renewable Energy Vermont.

A federal incentive– the Production Tax Credit or PTC– is set to expire at the end of this year. It and other incentives are the backbone of the Obama administration’s push for green jobs.

It’s played a pivotal role in the development of industrial-sized wind farms in Vermont, paying wind producers 2.2 cents per kilowatt hour of power generated over a 10-year period. The Lowell Mountain project plans to wrap up and squeak by just before the PTC expires. For Green Mountain Power the tax credit amounts to about $50 million. Other big proposals like Deerfield and Georgia Mountain are anxiously waiting in the wings.

“It’s safe to say that for any beginning new emerging industry to get that support from the government is critical,” Stebbins said.

But with future contracts now drying up over renewal of the federal incentive, big wind manufacturers, like Northern Power and those that supply components like NRG in Hinesburg, say they have never seen a worse climate.

“It’s been a real trial and tribulations for the industry nationwide or worldwide as the United States becomes a bigger player in the world wind market and as we have more companies that work in the wind sector– this roller coaster of up and down is difficult for the industry– they would like to have a long-term extension,” said Andy Perchlick of the Department of Public Service Clean Energy Development.

Opponents of the tax credit, which in Vermont include some environmental groups opposed to ridge line development, say big wind is not sustainable.

“They’re inefficient, they’re imprecise. They create support for projects regardless of whether or not the projects are actually working and what they’re environmental impacts might be,” said Matt Levin of Vermonters for a Clean Environment.

They say the steep drop in the price of natural gas is also to blame for wind power’s woes, not just the tax credit.

“It’s a sad thing to make so much progress and then pull the rug out of the feet of the businesses,” Stebbins said.

Uncertain times in Vermont’s green energy economy.

A report released last week by several Washington-based think tanks warned that more than 70 percent of the renewable programs now on the books are set to expire in the next two years, setting up the potential for a showdown between the President and the GOP-controlled House.

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