NextEra sees life after tax credits
John Ketchum, NextEra’s senior vice president for finance, said he expects another “step change” in efficiency and cost for wind turbines, which are already getting taller and using wider blades.
“And we continue to expect further advances in the efficiency of wind technology as you get toward the end of the decade,” he said at Platts 17th Annual Financing U.S. Power Conference here.
“We’ve been pretty vocal in supporting a phaseout of the production tax credit as you get to the end of decade,” he said. “We think by that time, given what we see in terms of technology advancements, you won’t need it in the better wind resource regimes in the country.”
Ketchum said keeping the wind tax credit to 2020 would “bridge the gap” until U.S. EPA’s Clean Power Plan takes effect.
Renewable energy firms are increasingly discussing, head-on, the tax credits that have sustained their industry for a decade but may soon end.
A key question is whether dramatic cost cuts in solar and wind will be enough to make up for the loss of tax breaks.
Juno Beach, Fla.-based NextEra claims to run a business division that’s the world’s largest generator of energy from wind and sun.
Ketchum, who will eventually become NextEra’s chief financial officer, envisioned the Clean Power Plan providing two waves of clean energy demand.
The first, he said, will be from states that embrace the federal carbon regulations and buy renewables in 2017 and 2018. The second will be from states that resist the Clean Power Plan, lose in court and then install renewable energy starting in 2018.
Ketchum said he doesn’t see the investment tax credit, used widely in the solar business, remaining at 30 percent. Like many others, he believes this incentive will get dialed back to 10 percent at the end of 2016.
As for wind: “We do feel optimistic about getting a two-year PTC extension.”