Wanted: Predictable energy policy
The U.S. Department of Energy (DOE) recently released the numbers for wind energy in 2010, and to be honest, they’re a little disappointing. Although the total amount of wind power capacity on our nation’s utility system continues to increase, the percentage of all new generation capacity coming from wind has taken a hit—from 43 percent in 2008 and 42 percent in 2009 to 25 percent last year.
The wind industry is far from struggling. In fact, 25 percent is the fourth highest percentage of new generation provided by wind in the last 10 years. Still, it’s not a trend we’d like to see continue.
A recent blog article attributes the decrease to the 2008-2009 global recession, and that has certainly been a major factor, but there’s another reason that the wind energy industry has been talking about for a long time. The most important U.S. policy that encourages wind power is the federal wind energy production tax credit (PTC). The PTC will expire at the end of 2012, and right now there’s nothing else on the table.
Of course, that’s nothing new for wind. The PTC has been allowed to expire three times already, and each time the wind energy industry saw a significant decrease in construction and production. The industry didn’t come to a screeching halt, but it was close. The impacts were felt in manufacturing facilities across the country, by farmer and ranchers who wanted to lease out their land, and by homeowners who couldn’t obtain the clean energy they wanted for their homes.
If the PTC is allowed to expire again, it’s not going to be pretty. The U.S. wind power industry has expanded dramatically over the past decade, and as it has expanded, the impact of on-again, off-again short-term federal incentives has grown. As another thoughtful blog article puts it, “EIA Shows Start of Major Energy Shift: Can We Keep it Going?”
Today, there are 400 U.S. manufacturing facilities making wind components across 43 states. Each typical wind turbine brings $3,000 or more in added income each year to farmers and ranchers, while allowing continued use of their land. And 98 percent of U.S. wind turbines are on private land, like those farms and ranches. If the manufacturing facilities aren’t producing their products, workers are going to be laid off. If no new wind projects are being financed and built, farmers and ranchers who need the extra income aren’t going to get it.
The industry is already feeling the impact. Wind projects that have been planned for 2013 cannot proceed because of the uncertainty. If there are no projects scheduled to be built, no one will place turbine orders. Without turbines to manufacture, manufacturers will begin to lay off employees.
It’s time that the federal government pay attention to the Department of Energy’s numbers and what they mean for wind. Congress needs to extend the PTC or, better yet, create a national energy policy. After all, unlike almost every other developed country in the world, the U.S. has no national energy policy. When it comes to supporting clean and homegrown wind power, we’re clearly behind the times.
Flurry of positive news, but expiration of key incentive looms, July 15, 2011
Energy policy tops list of needs at wind manufacturing conference, July 14, 2011
Connecting the dots: Job losses to China … and … consistent energy policy, June 30, 2011
Demand-side policies will fuel growth in wind power manufacturing sector, June 14, 2011