'Think globally, act locally': News items underscore PTC and manufacturing jobs

on April 19, 2012 | 6 min read

Developments both global and local in the past few days underline the value of wind power's primary incentive, the federal wind energy Production Tax Credit (PTC), and its importance to the creation of new American manufacturing jobs.

Global: On Tuesday, Global Wind Energy Council (GWEC) Executive Director Steve Sawyer said GWEC expects the world wind market to double over the next five years, with another 255,000 megawatts (MW) being added to the 238,000 MW already in the ground at the end of 2011. At the going cost for new installations today, that amounts to a cool $433 billion in new business, or $86 billion/year.

Where are those new turbines going? According to the European Wind Energy Association report on Mr. Sawyer's remarks: “Sawyer said he expects a strong 2012 for the global wind sector, but uncertainty over whether the U.S. government will extend its Production Tax Credit (PTC) for the wind sector will likely result in reduced results for 2013. He added that GWEC statistics indicate that the Asian wind power sector will overtake the EU in terms of cumulative capacity for the first time in 2013. Those statistics also reveal that by 2013, Asia will have 125 GW of wind power while the EU will have 120 GW. North America will have 72 GW by the same time.”

Reading between the lines: if Congress allows the PTC to expire, the U.S. wind manufacturing sector, which has expanded dramatically over the past several years (with the domestic content of turbines installed here rising from 25 percent in 2005 to over 60 percent today), will be left to languish while other countries' manufacturers surge ahead. With the incentive set to expire at the end of the year, the supply chain is already feeling the effects of the uncertainty. A recent study found that extending the PTC will allow the industry to grow to 100,000 jobs in just four years, while an expiration will kill 37,000 jobs.

Local: At the other end of the spectrum, there's a short letter to the editor in today's edition of the Dowagiac (Mich.) News that focuses on the local reality that underlies those global outlook numbers. The author, Meg Mullendore-Cluckey, is Village Manager of Cassopolis, Mich., and she urges Congressman Fred Upton (R-Mich.) to support a PTC extension, writing in part: “Thousands of domestic energy production jobs could be cut if Congress does not extend the Production Tax Credit which helps the private sector develop domestic energy and most importantly, create jobs.

“Right here in the Cassopolis area, K&M Machine is a part of this success, producing parts — and jobs — for the wind industry. These are just the sorts of businesses and jobs we should be encouraging in southwest Michigan … Michigan has become a manufacturing powerhouse for the wind energy industry. Supporting over 4,000 jobs across our state, the wind industry has at least 31 facilities manufacturing components in Michigan alone … I would urge Rep. Upton to support his constituents who want more manufacturing jobs in Michigan. Support Michigan workers. Support the PTC.”

The PTC provides an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from utility-scale turbines. It is set to expire on Dec. 31.

A House bill seeking to extend the PTC has 90 cosponsors, including 20 Republicans, while a Senate bill to extend it was introduced March 15 by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S. A PTC extension has been endorsed by a number of newspapers across the country, including the Houston Chronicle, The New York Times, the Denver Post, and the Daily Oklahoman.

Further endorsements of the wind energy production tax credit.

Related articles:

Senator Levin visits Michigan wind component maker, urges PTC extension, April 18, 2012
Wind power drives strong interest in U.S. renewable electricity generation, April 17, 2012
WindTV: WINDPOWER in Atlanta, spotlighting PTC expiration risk to manufacturing growth, April 16, 2012

AWEA Annual Market Report underscores need for PTC extension, April 13, 2012

Iowa city prospers, hopes for PTC extension, April 12, 2012

Denver Post editorial writer: PTC extension 'important to nation, Colorado,' April 11, 2012

From Nevada, Michigan, Montana: Calls for PTC extension, April 10, 2012

Sierra Club, BP agree: Extend the PTC, April 9, 2012

South Dakota newspaper joins others in endorsing PTC, April 6, 2012

National Governors Association: Extend the PTC, April 6, 2012

Sen. Bennet tours factories, pushing jobs and PTC extension, April 5, 2012