Wind energy advocate touts growth, need for continued tax credit

Source: DAVID SHAFFER , Minneapolis Star Tribune  • Posted: Monday, March 30, 2015

Tom Kiernan, CEO of the American Wind Energy Association, photographed at the St. Paul Hotel, Thursday, March 19, 2015 in St. Paul, MN. ] (ELIZABETH FLORES/STAR TRIBUNE) ELIZABETH FLORES •

Wind turbines spinning over prairie cornfields are permanent fixtures of the Minnesota landscape. The state is the headquarters for Xcel Energy, the electric utility with the most wind power in the United States. Yet wind power is growing in other states. Texas now has the most wind power of any state, followed by California and Iowa. Minnesota is eighth. Tom Kiernan is chief executive of the American Wind Energy Association (AWEA), the Washington, D.C.-based, 1,000-member trade group for the wind power industry. On a recent visit to St. Paul, he talked to the Star Tribune about the industry’s outlook.

Q: How much U.S. electricity comes from wind power?

A: Just less than 5 percent of U.S. electricity is generated by wind energy. The amount has tripled in the last five years.

Q: How much of the nation’s power do you think could come from wind, and by when?

A: The U.S. Department of Energy just released a report showing that we can get to 10 percent wind energy by 2020, 20 percent by 2030 and 35 percent by 2050.

Q: What are the report’s other major findings?

A: First, that attaining these goals will save consumers money. It also shows that the industry is ahead of the cost reduction plan and that we currently have more wind deployed than was projected. So the Department of Energy’s recommendation of attaining 10 percent of U.S. electricity needs from wind by 2020 and 20 percent by 2030 is doable. It will increase employment from 50,000 jobs in the wind industry to over 600,000 jobs. It will increase private-sector investment to $50 billion per year on average. The WindVision report lays out a compelling case that can be achieved to the benefit of consumers.

Q: What is happening with the price of wind energy?

A: The cost for wind energy production has come down dramatically. In the last five years, wind energy costs have been reduced by 58 percent and we project continuing significant reductions, providing affordable, clean and homegrown electricity.

Q: The federal government has offered a production tax credit of 2.3 cents per kilowatt hour for the first 10 years of a wind farm. What is the status of the credit, and what should Congress to do about it?

A: The credit was extended until the end of 2014, so it has expired. This has been one of the challenges in the industry — our tax incentive is on again, off again. Virtually all other sources of electricity have permanent tax incentives. This has led to somewhat of a boom-bust in the wind industry. We are asking Congress to extend the production tax credit as long as possible over a multiyear period so the industry can have the stability and certainty that virtually all other forms of electric generation have with their permanent tax incentives.

Q: Is there a point at which wind farms will be economical without tax credits, and if so, when might that be?

A: AWEA has always said we don’t think the production tax credit has to be permanent. There are a few isolated places in the country where a wind farm may now be competitive without the production tax credit. But for wind to be competitive throughout the country, we do need to extend the production tax credit for as long as possible. We don’t have a sense of when that transition should occur, but clearly with the costs coming down dramatically we are on a trajectory to not need the production tax credit forever.

Q: Minnesota was a pioneer in wind power and requires most utilities to get 25 percent of their electricity from wind by 2025. What is happening in other states?

A: Minnesota is an extraordinary leader on wind energy, taking the significant wind resources that you have and creating a set of policies to turn wind into affordable, clean and homegrown electricity for your consumers. You currently power over 700,000 homes in the state with wind energy. We are encouraging other states to follow Minnesota’s lead by strengthening their renewable portfolio standard because it is good for consumers, it is good for rates and it diversifies the energy portfolio. That’s the direction we think states should go.

Q: Clean-energy supporters have been pushing Minnesota legislators to raise the state’s renewable energy standard to 40 percent. In your opinion, does that have a chance?

A: Absolutely. The economics of energy and renewable energy in general show that a strong renewable energy standard is good for economies. It is good to increase private investment in the state. You end up diversifying the energy mix so consumers have more stable and predictable electric rates.