Wind energy industry seeing growth; tax credit uncertainty looms

Source: by Christopher Doering, Des Moines Register • Posted: Monday, November 4, 2013

Wind energy installations are gaining momentum, but uncertainty looms over the future of a tax credit has helped the industry grow, according to a trade group.

The American Wind Industry Association said Thursday utilities are taking advantage of the extension of the Production Tax Credit , which provides a 2.2-cent-per-kilowatt-hour benefit for electricity generated from utility-scale turbines during the first 10 years of a facility’s operation.

The tax credit expired at the 2012, but was renewed early this year. The uncertainty over the credit’s future prompted a slowdown in wind, according to the industry. The credit is slated to expire again at the end of 2013 unless it is renewed by Congress. Only renewable energy projects that start construction before Dec. 31 would be eligible for the tax credit.

“American wind businesses are back to work and the pipeline is filling up,” said Tom Kiernan, chief executive of American Wind Energy Association. “We want to continue that momentum, but need predictable policies forthe industry to avoid future slowdowns like the one experienced at the beginning of 2013.”

Emily Williams, a senior policy analyst with the wind association, said the group has “seen a lot of interest in taking advantage of the (Production Tax Credit) from utilities across the country.”

The trade group said utilities have signed more than 5,670 megawatts (MW) of new power purchase agreements (PPAs) and received approval to build over 1,870 MW of utility owned wind power. These 7,500 MW of new wind projects are helping spur wind manufacturing companies to increase hiring, and driving construction starts. An estimated 1,100 MW of new projects broke ground during the third quarter.

The United States generated 3.5 percent of its electricity from wind energy in 2012. In Iowa and South Dakota, wind now comprises more than 20 percent of the states’ electricity needs. Iowa, which leads the country in percentage of energy from wind, has been responsible for 14 percent, or 1,050 MW, or the 7,500 MW of new wind projects this year.

The projects in Iowa are from MidAmerican Energy Co., which announced in May it would boost wind generation, consisting of up to 656 new turbines, by the end of 2015.