Wind industry performing their traditional pre-tax credit expiration scramble

posted at 1:01 pm on December 26, 2013 by Erika Johnsen

As I mentioned last week, a handful of Senate Democrats are once again pushing for the annual revival of the all-important production tax credit on which the wind industry so thoroughly relies to stay in business, but it looks like the credit is indeed going to expire for the time being. Don’t get too excited, though; that doesn’t mean that the PTC is gone for good, as the credit has been allowed to expire temporarily before being renewed at a later date several times over throughout its more than two-decade life cycle.

Last year, Congress threw in the extension of the PTC as a last-minute inclusion to the fiscal-cliff deal, but with a slight twist on the credit’s usual provisions: Normally, a wind project would need to be in commercial operation by the time the provision expires in order to qualify for its lavish benefits, but as of the last extension, a wind project need only have begun construction in order to qualify. That means the wind industry has a little more cushion afforded to them, and they’re taking full advantage of it by getting a bunch of projects going just in the nick of time, via the NYT:

Developers are signing deals, ordering equipment and lurching ahead with construction starts to qualify for a tax credit that is worth 2.3 cents a kilowatt-hour for the first 10 years of production. This month, giant turbine-makers like Vestas and Siemens have announced major new orders, including a deal worth more than $1 billion with MidAmerican Energy, an Iowa-based utility majority-owned by Warren E. Buffett’s Berkshire Hathaway, and another with the Cape Wind project in Nantucket Sound. …

“What we see right now is a race to the finish line, where we’re trying to get projects signed,” said Mark Albenze, chief executive of the Wind Power Americas unit of Siemens Energy. “It’s a little bit of a different dynamic, whereas in ’12 our projects teams were the ones stressing out in December and now it’s our acquisition team.” …

However, executives said, developers are unlikely to start any projects without a credit in place because they cannot compete with power generation from other sources like cheap natural gas. And with prospects for a redesign of the whole tax code looking dim at the moment, clean-energy advocates are calling for yet another extension of the subsidy.

Referring to the credit, Kevin A. Lynch, managing director of external affairs at Iberdrola Renewables, which develops and operates green energy projects, said: “In the near term, projects that do not have the P.T.C. attached to them are probably difficult to justify economically for buyers to purchase, and therefore for us to build.”

“Difficult to justify economically.” You don’t say.


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Just have to malinvest limited resources in the name of democrat campaign contributions donchaknow.

Murphy9 on December 26, 2013 at 1:10 PM

Senate Democrats for Big Wind. Senate Democrats full of Big Wind.

Unfortunately, there’s too many Senate R’s full of Big Whatever too…

Marcola on December 26, 2013 at 1:10 PM

I guess as long as Washington is killing off all that is great in America, we might as well pay them to kill off one of the great symbols of America.

Deano1952 on December 26, 2013 at 1:11 PM

Natural campaign slogan for group opposing wind industry tax credits:

Breaking Wind.

Marcola on December 26, 2013 at 1:13 PM

Where is the Democratic OUTRAGE! at “subsidies”?

GarandFan on December 26, 2013 at 1:20 PM

an Iowa-based utility majority-owned by Warren E. Buffett’s Berkshire Hathaway,

Same guy benefitting from the delay of Keystone XL because he owns the railroad currently moving the oil.

Charlemagne on December 26, 2013 at 1:22 PM

Same guy benefitting from the delay of Keystone XL because he owns the railroad currently moving the oil.

Charlemagne on December 26, 2013 at 1:22 PM

bnsf (and others, CN/CP do a lot too) does mostly east-west routes on oil, keystone would not cut into that. north – south already has pipelines.
any losses from building keystone easily overcome by shipping of the frak sands/pipes/materials and less insurance liabilities for unit oil trains.

dmacleo on December 26, 2013 at 1:30 PM

Our Big government geniuses know best…..

….and weirdly, that always translates into growing THEIR power and influence, and reducing our choices and individual liberty.

Weird.

Oh, wait. Maybe not so much, foretold to us on January 11, 1989.

http://www.youtube.com/watch?v=5eqYdr2iEhM

PappyD61 on December 26, 2013 at 1:40 PM

Has, and will remain the least-economical option for power generation of all the still-not-ready-for-prime-time green energy producers. It’s impossible to recoup the cost of manufacture, installation -and most importantly, maintenance of these worthless eyesores.

BKeyser on December 26, 2013 at 1:47 PM

an Iowa-based utility majority-owned by Warren E. Buffett’s Berkshire Hathaway,

Same guy benefitting from the delay of Keystone XL because he owns the railroad currently moving the oil.

Charlemagne on December 26, 2013 at 1:22 PM

…all these people have a connection to JugEars…I’m sure!

KOOLAID2 on December 26, 2013 at 1:47 PM

27 comments or bust!

Bishop on December 26, 2013 at 1:49 PM

Bishop on December 26, 2013 at 1:49 PM

LOL!!! You really know your blogs, Bishop

Deano1952 on December 26, 2013 at 2:11 PM

One study early this year showed that a wind turbine cannot hope to generate enough electricity in its expected life of service to equal the energy used in manufacture, transportation, installation, and maintenance. The best they can do is roughly break even.

In other words, there is no benefit of any kind to “wind power” other than the faint hope those who laugh on the way to the bank with their tax credits and subsidies will spend the money wiser than the federal government did.

This doesn’t include the environmental costs, starting with the mass killings of bird and bats.

Adjoran on December 26, 2013 at 2:12 PM

Oh, wait. Maybe not so much, foretold to us on January 11, 1989.

http://www.youtube.com/watch?v=5eqYdr2iEhM

PappyD61 on December 26, 2013 at 1:40 PM

Thanks for linking to this. I’d forgotten how much I miss him. Both Presidents Bush are decent men, but not public speakers. With President Reagan we had both.

(Yes, I am explicitly ignoring policies and actions in office, even though I like most of what all three did.)

Kevin K. on December 26, 2013 at 3:01 PM

To continue the subsidy under the new budget deal (Murray/Ryan) they’ll have to come up with some “pay for’s” – no “Pay For’s” no PTC!

Another Drew on December 26, 2013 at 3:49 PM

Normally, a wind project would need to be in commercial operation by the time the provision expires in order to qualify for its lavish benefits, but as of the last extension, a wind project need only have begun construction in order to qualify.

Quick, somebody get Joe a shovel and tell him to dig a small hole: “construction has started.”

rbj on December 26, 2013 at 5:06 PM

As an environmentalist, I want to know when the environmental groups start making a stink about these energy squandering, bird-killing projects. I guess I will wait a long time before any environmental groups do anything for the environment.

thuja on December 26, 2013 at 5:13 PM

If there was only a way to make the windmills julienne cowbirds and starlings efficiently. Think of all of the starving kitties that could be fed! The circle of life.

trl on December 27, 2013 at 1:07 AM

Why can’t we all be smart enough to be subsidized?

Why do we have to be the stupid ones that pay for subsidies?

right2bright on December 27, 2013 at 10:01 AM