Wind Power Tax Break Extended Through 2013

The fight over the immediate future of wind energy policy in the U.S. ended with victory for the industry late Tuesday night when the House followed the Senate’s lead and passed a fiscal cliff deal that includes a one-year extension of the production tax credit. President Obama was expected to quickly sign the bill [PDF].

The one-year extension wasn’t the long-term fix that wind developers and manufacturers were hoping for, and it probably sets the stage for more fights down the road. But the industry staved off disaster and, on the plus side, the extension makes facilities that are under construction before Jan. 1, 2014, eligible for the 10-year, 2.2-cents per kilowatt-hour credit, whereas the version of the law that expired at the end of 2012 required turbines to be operating by the deadline.

Katana Summit turbine tower plant, Nebraska (image via Nebraska Dept. of Economic Development)

That change could allow developers to squeeze many more qualifying projects into the pipeline, since large projects can take more than a year, sometimes several years, to build.

“On behalf of all the people working in wind energy manufacturing facilities, their families, and all the communities that benefit, we thank President Obama and all the Members of the House and Senate who had the foresight to extend this successful policy, so wind projects can continue to be developed in 2013 and 2014,” Denise Bode, the outgoing CEO of American Wind Energy Association, said in a statement.

The AWEA says 75,000 people work in the wind energy industry in the U.S., and that half those jobs were at risk if the PTC was abandoned.

The months leading up to the end-of-2012 expiration saw a rush to get new projects up and running out of fear the subsidy would vanish, and wind was expected to account for 45 percent of U.S. electricity generating capacity added in 2012, more than any other fuel source, according to the Energy Information Administration.

The PTC also became a political issue in the 2012 campaign, one that was especially potent in states such as Iowa and Colorado, where manufacturers of things like turbine towers, blades and nacelles had set up shop. Orders had begun drying up for projects planned for 2013 and beyond, and thousands of jobs were shed, seemingly fulfilling the AWEA’s dire prophecy of a PTC cliff.

As for the cost of the extension, the Joint Committee on Taxation in August estimated that modifying the expiration date to make turbines under construction by the end of 2013 eligible would cost the federal government $116 million in 2013 and a cumulative $12.1 billion by the end of 2022.

Earth Techling

5 Comments on "Wind Power Tax Break Extended Through 2013"

Harquebus on Thu, 3rd Jan 2013 12:22 am 



Wind and solar generators do not return the energy invested in their manufacture and maintenance. EROEI. If they could and then some, that would be perpetual energy and all of our “dreams” will have come true.

MrEnergyCzar on Thu, 3rd Jan 2013 12:48 am 



Solar takes 2.5 years to recoup the embodied energy in the manufacturing, I’m sure wind is less since it’s EROEI is better, at like 8 to 1…

MrEnergyCzar

BillT on Thu, 3rd Jan 2013 2:00 am 



Really MrEnergy? Has ANYONE done a lifetime energy cost analysis on these behemoths? Not that I have found. Everyone brags about their ‘renew-ability’, but no one wants to prove that, over their useful lifetime, they actually produce a net in energy.

Start in the mines for all of the ores needed, (don’t forget to factor in the energy used to make, maintain and salvage, the machines used to mine that ore), haul it, refine it, smelt it, machine it, assemble it, haul it again, install it, maintain it, and then dismantle it. All have transport steps in between to be included in the energy costs.

I doubt that, considering ALL energy input, they are even a NET producer of energy, and when oil goes, so goes the idea of ‘alternates’. When these wear out, the age of renewables that require manufacture, are over. 2050 max.

But then, I don’t expect the climate change to allow us even that much time.

deedl on Thu, 3rd Jan 2013 7:46 am 



@BillT: of course anyone has. Do you think a nation of engineers and scientists as germany would rollover their energysystems without such an analysis? In Germany you don’t even buy a pack of toiletpaper without evaulating every option 😉 Here are some EROEIs on windpower for germany:

* 1,5 MW Turbine Type E66 on the german coast: EROEI 16 to 21 [1]
* 2,3 MW Turbine Type E82 on the german coast: EROEI 51 [2][3]
* 200 MW offshorepark with 5 MW Turbines: EROEI 16 [4]

And here are your sources:
[1]http://festkoerper-kernphysik.de/erntefaktor_details
[2]http://www.vdi-nachrichten.com/artikel/Mehr-Windkraft-an-Land-rueckt-Oekologie-ins-Blickfeld/54733/1
[3]http://www.enercon.de/p/downloads/Windblatt_04_11_de_web.pdf
[4]http://www.ier.uni-stuttgart.de/forschung/projektwebsites/lci_bmwi/ergebnisse/offshore-windkraft.pdf

Just because there are no publications in english does not mean that there are no publications at all. No one should expect leading studies in the language of countries that are lacking behind in renewable energy deployment.

Interesting to note that eroei strongly increases with turbine size and that offshore deployment is less efficient than onshore deployment. This is in germany the case because offshore means 20 miles away from the coast beyond the horizon, so you dont see them from the beaches. That increases cost for offshore in germany and lowers eroei despite the large turbines. In denmark and GB, where offshore means next to the beach, eroei of offshores maybe different.

December 2012 germany produced 25% of its electricity using renewables. This percentage is stable over the whole year due to the seasonal complementation of wind and solar (summer: lot of sun, little wind; winter: much wind, little sun). Here you can find a current article about the renewable situation in december 2012:

http://cf01.erneuerbareenergien.schluetersche.de/files/smfiledata/1/4/7/8/8/2/V3PVWindGend2012.pdf

Also of interst is the following link:

http://www.renewablesinternational.net/germany-releases-monitoring-report-for-energiewende/150/537/59408/

The graphics show average consumer prices for electricity. The dark blue bar is cost of electricity production, delivery and company margin. the light blue on is the cost for grid use and maintainance, the dark orange are tariffs and the light orange is taxes. You can see that last year the cost of production decreased slightly. This is thanks to solar power, which arrives on time every noon to serve the peak demand which drives peak prices down.

There are few countries in the world that have a larger share of industry in their GDP than germany, so if resourse poor energyhungry germany can go renewable on electricity, every other nation can too. Combined with a dense grid of electrified railroad subways and trams, transportation in germany will be secured in a post carbon world.

Ed on Thu, 3rd Jan 2013 11:03 pm 



Very well put deedl. Germany is leading the world. One of the reasons is your political system lets the Greens have a significant say on policy decisions. We in the UK are way behind Germany on renewables, to our shame.