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Wind Production Tax Credit Needs Extension Now
If left to expire at the end of this year, the federal tax credit for production of electricity from utility-scale wind turbines could cause a growing industry in the Midwest to come to a screeching halt. In Minnesota this would mean stalled growth in manufacturing and turbine construction jobs, a shrinking market for a growing number of graduates with degrees and certificates in wind-related fields, and a loss of economic opportunity for rural communities.
Examples in small towns throughout the Midwest illustrate what a growing and innovative industry like wind energy can mean for both communities and for newly trained, highly skilled workers ready to build, erect and maintain wind turbines. A community college in Iowa that offers degrees and certificates for turbine manufacturers and installers gets almost weekly inquiries from employers in the field. At least two community colleges in Minnesota offer similar programs. A small town in Nebraska got a much needed economic boost from the new jobs and lease payments that an 81-turbine wind farm provided. And rural communities throughout southwest Minnesota are reaping the economic benefits of hosting utility-scale wind farms.
But growth in the industry, as with any industry, relies on stability and consistency, and the federal government is currently sending mixed signals. Leaders in Washington on both sides of the aisle have supported using “all of the above” options when it comes to U.S. energy policy, and numerous federal agencies, the Obama administration and several Great Lakes states (including Minnesota) have joined an agreement to expedite of wind energy development in the Great Lakes. But by stalling on the approval of the wind production tax credit, the federal government is creating uncertainty where wind developers and investors feel it most: Cost.
In addition, passing short-term tax credits or stalling on credit decisions cause boom-bust reactions within the industry, as developers rush to finish projects before the credit expires or wait to move forward on projects until a decision is made. This instability in the industry causes instability in job growth, employment prospects for students and long-term economic development in rural communities.
The federal government needs to pass the wind production tax credit now so Minnesota and the entire Midwest region can move forward confidently and consistently with an innovative, job creating and community building wind industry.
Posted in Economic Development | Related Topics: Business Growth Energy Wind Energy Federal Government
8 Comments
April 12, 2012 at 11:13 pm
Mike, your information is old and even then was not true, The full cost of Coal, Gas and especially Nuke is hinden. Nukes have never been cheap. There are massive subsides, and the public insures them because they are too dangerous and risky for any insurance company at any price. There are 100’s of tons of Nuke waste from plants and weapons with a half-life of over a million years. Vitrefying the nuke material and dropping in subduction zone might work, but the cost is astronomical. So much for cheap. Coal has enormous costs from the damage done with mining, to how about the Fish of MN and Wisconsin are poisoned with mercury, Also Michigan and Canada. What does that cost? Then the cost of climate change; storms,ocean rising, drought and flood. Did I mention damage from acid rain including death of forests.
The fossil fuels are limited and the more used the less left and the price skyrockets.
Now Solar, and its form in wind, will only get cheaper and there will be no hidden costs, not polution, and can be generated locally near its use, another savings [Powerlines lose about 1/3 of the power in transmission line loss.] And no more mercury into our lakes and fish and no added carbon to the atmosphere.
If subsides that the major fossil fuel power forms now get were instead invested in Solar and Various wind, the unit cost would drop even faster.
Finally, Wind and Solar are much more democratic because I can put both on my commercial building or home and generate my own power. No with a Nuke or Coal. There are co-generation units that burn natural gas and generate heat and electricity, but still adds carbon to the atmosphere.
A full airing of all the issue in energy would show the public that the energy cartels are swindling us and the public would understand why we need to do it our selves.
April 12, 2012 at 3:19 pm
The major problem with wind energies cost efficiency is the lack of ability to store excess energy. The NRRI out of Duluth has done some great work on solving that issue so we can capture about 85-90% of that energy and use it as needed by pumping it 300 ft. or more uphill into holding ponds. This technology is allready being used in California very successfully. Not only does it help the wind energy buisness but the energy now wasted in what is called “power factor correction” can also be stored in said ponds. The actual generation cost of wind is now very competative with coal but when you can utilize that 40 mph wind at 4 am the actual costs go up to that 3X Mike spoke of.
April 12, 2012 at 3:11 pm
Minnesota Renewable Energy Standard calls for local utilitis to have 20 - 30% of its energy production to come from renewables by 2021. We need the wind production tax credit to help utilities meet this goal. As mayor of a small city, we need this legislation as an economic development tool to allow us to bring wind power to our cities. It would help us market our industrial park as a ‘net zero energy’ park making it more attactive to businesses.
Minnesota’s GreenStep Cities program promotes ‘green initiatives’ and wind energy is one key aspect of the program. If the State of Minnesota has these programs, doesn’t it make sense for our federal programs to support these efforts?
Andrea Lauer
Mayor, City of Royalton
320-630-2229
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April 12, 2012 at 1:36 pm
True, wind is costlier than natural gas, especially with gas prices so low these days. But take a look at this report/graph from the Energy Information Administration’s 2011 Annual Energy Outlook:
http://205.254.135.24/oiaf/aeo/electricity_generation.html
It does a great job outlining the different aspects of the costs of energy generation across several generation sources as they come online over the next few years. Wind holds up pretty well down the road, especially against the growing cost of coal and nuclear power. Biggest cost issue is transmission of course, but one column that really catches my eye is the Variable Operation & Maintenance cost. Once wind is installed the cost of maintaining doesn’t fluctuate the way it does with coal, natural gas and nuclear.
Natural gas is definitely a cheaper option right now. But as already stated it carries environmental concerns with it and natural gas prices will not stay this low forever.
April 12, 2012 at 12:35 pm
Wind & solar is now cost effective in 26 states per a program I recently heard. Natural gas is very cheap but the fracking process is extremely polluting & will cause oil companies to dig up most of southern MN for the silica sand that they need(can you spell “carcinogen”). Wind & solar energy is clean, employs people out in the country & if we can start making the technology here and hold off subsidized foreign made products(what took down Solyndra) we can have plenty of energy without polluting the environment we live in. Nuclear has waste, is extremely expensive, shuts down in summer cuz its too hot to keep the pools cold & where do we store the old rods(we are running out of Indian reservations).
April 12, 2012 at 10:45 am
Please refresh my memory of why we need to provide our tax money to wind energy that costs 3X the cost of coal, nuclear & natural gas on a kWh basis? How does the higher energy cost help the poor and middle class?
April 12, 2012 at 7:32 am
One of the biggest problems with said tax credit is where the money is going, oversees. Production of most of these huge wind turbines is oversees, like Germany. We are starting to do more of the building of these machines here but not fast enough. A couple promising new technologies may change that.
Dan Conner says:
April 22, 2012 at 1:16 pm
It’s a fallacious argument to malign power from wind mills because it is subsidized. So is oil. On top of general oil subsidies, help is given to oil companies on cheap oil leases, of course their are depletion allowances, etc., etc. The oil industry get billions and billions of dollars from taxpayers.