In four years, wind energy may be far enough along that tax incentives could drop off, U.S. Sen. Chuck Grassley said, but he doubts fellow Republicans will extend those tax credits before the November election.
Grassley, who toured Acciona Windpower May 29, said he was glad to see President Obama endorse an extension of the Production Tax Credit recently, but wondered why Obama did not speak up in February when Congress threatened to remove it from the tax bill.
“It will pass,” Grassley said of the PTC, “but not before the election.”
That means the PTC, which has helped spur further development of wind farms and other alternative energy projects since 1992, will sunset on Dec. 31. This is not the first time it has been allowed to sunset.
Republicans, he said, are concerned about offsets – where will the federal budget make up for the $4 billion to $5 billion in lost tax revenue caused by the PTC? About $1 billion comes from wind energy.
Now he is pessimistic, he said.
“I’m very happy to have the president’s support, but it would have been nice if he had come out in February, because we would have had a better chance to get it done,” Grassley said. “(Now) there may be a lull in manufacturing.”
Acciona Windpower’s Vice President of Operations and Services Bill Morgan and Director of Supply Chain and Logistics Tom Waggoner showed Grassley around the West Branch plant, the largest in Acciona Windpower’s company, and encouraged him to get the PTC passed.
“We’re working more in Canada now,” Morgan said among nacelle shells planned for NaturEner’s Rim Rock wind farm. “They are not as tied to incentives as the U.S. They’ve found a way to do business without them there. It could have something to do with mandates. (But here) it is difficult for the industry to move forward (without the PTC). The longer the PTC is extended, the less up and down (in the market).”
Acciona Windpower CEO Joe Baker introduced Grassley to employees before closing the doors to members of the media so they could talk privately.
“(Grassley) has been an excellent steward of renewable energy,” he said. “He doesn’t just talk about renewable energy. His commitment is long-standing … and most importantly he is leading a bipartisan effort in the Senate to get the PTC passed as soon as possible.”
Grassley said afterward that employees asked questions about the PTC, cap and trade, and the environment.
Grassley said he found the size and weight of the turbines most interesting. The 1.5-megawatt turbines weigh about 75 tons, Morgan said.
“When you see the generators on the towers, they look small,” Grassley said. “But they are massive and so heavy. I thought I knew a lot about (them) but this brings reality to it.”
Grassley also got to see the 3 MW turbines that will soon go up in Mechanicsville in a 6 MW wind farm called Pioneer Grove. That wind farm is being built to demonstrate the models.
Morgan and Waggoner said researchers in France are working on a 6 MW turbine.
“So there is movement,” Grassley asked.
“Yes, and in the U.S.,” Waggoner said. “That is to be expected.”
Morgan told Grassley that when the plant opened, there were 72 employees working two shifts in 2008 and 2009; today there are 103 working one shift.
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