Wind Marches on Despite Uncertainity

Caught in Political Bickering

Bill Opalka | Nov 29, 2011

Share/Save  

Wind has continued its recovery from the depths of 2010 but continues to be dogged by the specter of a policy train wreck, courtesy of Congress, in the next year or so.

That’s not quite the way the American Wind Energy Association (AWEA) put it, but the implication was clear as the benefits of enjoying a relative eternity of policy support start to wind down. Without the lapse of tax credits or a cash grant in lieu of the credit, policies and development prospects going into next year are pretty uncertain.

“We’re seeing just how effective stable tax policy can be,” said Rob Gramlich AWEA senior vice president of policy. A three-year extension of a production tax credit winds down in 2012. Cash grants in lieu of the tax credit expire in two months.

“In that period of relative stability, we’ve been bringing in a lot of manufacturing into the country and development has been going strong,” he added.

The U.S. wind industry installed 1,204 megawatts in the third quarter, and about 3,360 megawatts on the year so far. About 2,000 megawatts began construction from July to September. There are more than 8,400 megawatts under construction, which is more than in any quarter since 2008, AWEA says.

But that acceleration for projects under construction is due to the expiring policies. Renewable energy allies in Congress are trying to extend both programs, but their fates are uncertain in the current political climate.

That will mask much of the underlying issue.

“Fourth quarters tend to be much larger than the previous three, and this year will be no different,” said Liz Salerno, director of statistics for AWEA.

Total installations for the year expected to be 6,500 megawatts to 7,500 megawatts for the year. Total capacity is at 43,461 megawatts.

Colorado was the runaway leader for the quarter, brining 500 megawatts online. Ohio, which didn’t have utility scale wind a year ago, now has more than 100 megawatts.

What the industry liked to highlight was the inroad into the South, which has been hostile territory until lately.

Alabama Power, a subsidiary of Southern Company, recently signed their first wind power purchase agreement with the Alabama Public Service Commission finding that wind was lower cost than procuring energy from its own resources.

What about 2013, a mere 15 months away?

According to AWA says policy uncertainty has many leading wind developers saying they have no projects scheduled for 2013, which is starting to threaten both development companies and the U.S. wind energy supply chain. 

Not a model to sustain a wind, or any other business.

Related Topics

Comments

Level playing field

I have a proposal, even though it isn't likely to receive much consideration. Let's transfer all the subsidies, incentives, tax breaks, and grants from the enormously profitable fossil fuel industries and users to the burgeoning alternative energy industries. Fossil fuel has been the recipient of that taxpayer largesse for how many decades? At the end of a similar timespan, we can then evaluate the mature producers of wind, solar, and geothermal energy to see if they should continue to receive those benefits. In fact, let's hold them to a much higher level of accountability. Let's only allow them to receive that assistance for half the timespan enjoyed by the fossil fuel producers. So, in 40 or 50 years, we can insist that they stand on their own in the marketplace. Doesn't that seem fair and reasonable?

The Contradictions of Wind Proponents

The AWEA and Secretary of Energy (Dr.) Chu have been hopping up and down talking about how wind energy is reaching market parity with other technologies but, at the same time, claiming we need to continue the PTCs and cash grants to promote wind development.  So, which statement is the truth and which a lie?

Looking at the expense of building wind; the massive consumption of building materials and expensive rare-earth metals; the need for long distance transmission running most of the time at fractional rating; the poor capacity factor of wind; the need to provide backup power from primarily fossil-fueled power resulting from the low capacity factor and high variability--well, I guess I have pretty much concluded that wind power is just a huge scam perpetrated upon the American taxpayer.  The GEs, Siemens, and other major wind equipment suppliers are laughing their way to the bank because they are selling both wind and fossil-fuel generating equipment, transformers, switchgear etc.

Probably the biggest hoax in all this is that with fossil plants having to run part-load and low returns meaning the lowest capital backup generation that needs the highest quality fuel being built (simple cycle gas turbines), we are wasting fuel and not making any significant cuts in CO2 emissions. 

It is time to quit wasting money commericializing "feel good" technologies that are not ready to compete.  Put some of the money into further R&D but quit forcing technologies that do not accomplish anything by throwing taxpayer money at them.

I propose a "certainty":  Wind power is not economical so quit the PTCs and cash grants and loan guarantees that subordinate the taxpayers to private investors (who are quite possibly using the "green" investment to avoid taxes on their other enterprises).