No, the wind industry hasn’t given up on their expired production tax credit
posted at 7:31 pm on February 5, 2014 by Erika Johnsen
For the wind lobby, the expiration of their all-important wind production tax credit at the start of the year is hardly a reason to abandon their constant quest to redeem it; after all, the credit has had several other close shaves with expiration over the years, only to have Congress relent and tack it back on to some bill or other at the last minute. After a brief expiration, the industry managed to procure just such a retroactive extension in the debt-deal deliberations at the start of 2013, good for just the one year, and with the added provision that energy companies need only to have begun development of new wind projects by the time the credit expired at the start of the new year in order to qualify for its benefits (a mighty generous subsidy of a little more than two cents per kilowatt-hour of electricity provided for the first ten years of a wind farm’s operation).
That would help to explain why 2013’s fourth quarter was witness to a whole rash of new wind projects getting off the ground, and the number of wind power megawatts currently under construction in the U.S. is now at a record high — and why the wind lobby is continuing their ever-vigilant push for the PTC’s renewal. Via WaPo:
Wind power advocates urged Congress on Thursday to quickly restore the production tax credit that expired at the end of 2013, saying that a prolonged period without it threatens gains made in recent years.
Officials from a wind power company, a steel company and the American Wind Energy Association said the loss of the 2.3-cents per kilowatt hour tax credit will directly translate into lost jobs. Despite continued demand, steel companies, wind energy firms and utilities will not devote their money and resources to wind power without the certainty that the credit provides, they said.
“We have to have a quick extension” of the credit, said Jaime Steve, director of government affairs at Pattern Energy, which runs wind power projects in the United States, Canada and Chile. “This is about people’s jobs. …
Congress allowed a variety of tax breaks, worth a total of about $50 billion a year, to expire on Dec. 31. The 2013 production tax credit, designated specifically for wind power, cost $12 billion over 10 years.
Ugh. Despite more than thirty years of generous government subsidization, the wind industry still quite literally lives and dies by the corporate welfare they receive via taxpayer largesse, and you can be darn sure they’ll but up a fight for it. They’ll do everything they can to once again persuade Congress to capitulate to their demands for continued top-down market manipulation, but perhaps they should examine the scenario currently playing out in Spain. In just the past year, the government was forced to acknowledge the fiscal and economic disaster they brought on themselves with their heavy renewables subsidization, and they are now engaged in a precipitous comedown from their ambitious renewables central planning — and yes, their wind industry is also flipping out about it, via the WSJ:
The new formula, described in more than 1,500 pages of documents, calculates a level of “reasonable profitability” that each type of project can expect during its decadeslong life span. The calculations take into account, for example, how long a wind farm has been generating power and how much in subsidies it has already received. The level of “reasonable profitability” would determine the size of future subsidies the project can receive.
AEE, Spain’s wind-energy association, said wind farms representing 37% of the country’s installed wind-power capacity would receive no further subsidies under the proposal and would have to derive revenue only from selling electricity at market price. The rest of the wind farms would see their subsidies halved, AEE said in a written statement, and some companies would have trouble paying debts if the proposal passes.
The proposal “is a historic mistake,” the association said.
“Reasonable profitability“? Yeah, that’s a thing that Spain does now. Perhaps the “historic mistake” was doubling down on so much unsustainable subsidization without regard to price efficiency, no?