Wind industry touts jobs, investments in pitch to GOP
The wind industry is staking a claim on “Trump country.”
“Eighty-six percent of all wind farms are in Republican districts,” said Tom Kiernan, head of the American Wind Energy Association. “The vast majority of the investment each year is in Republican districts.”
Last year, those investments included $14 billion and the creation of more than 14,500 full-time equivalent jobs in mostly red states that backed Donald Trump’s successful bid for the White House, according to AWEA’s annual market report released today by the trade group.
The uptick in jobs pushed the wind industry to more than 100,000 workers — outpacing the coal mining industry’s roughly 50,000 employees, according to federal statistics (see related story).
“We’re trumpeting the success of the wind industry,” Kiernan said in an interview.
AWEA is emphasizing its success as a business and in hopes of convincing conservatives in Congress to protect the wind production tax credit (PTC) and advocate for more transmission.
The report highlights milestones achieved by the wind industry last year: hitting benchmarks for total jobs, installed turbines and — perhaps most critically — the share of electricity generated from turbines in a handful of states.
The industry added 8,203 megawatts of new capacity for the year, a slight decrease from 2015 but still the fifth-largest annual growth in its history.
Cumulative installed U.S. wind capacity now exceeds 82,000 MW, surpassing conventional hydropower, the report says. And across all forms of power generation, wind now accounts for 5.5 percent of American power, compared to 4.7 percent in 2015.
Fueling wind’s expansion on mostly farmland and ranching areas last year was a continuing dip in costs — more than 66 percent over the past six years — and federal tax incentives of 2.3 cents per kilowatt-hour that are now being phased out, Kiernan said. The industry is now tracking more than 18,000 MW of wind construction this year in 31 states, with the largest additions in Texas, Oklahoma, Kansas, North Dakota, Nebraska, Minnesota, Maine, Missouri and Illinois.
Leading the pack this year with the largest planned wind additions are utilities like Ohio-based American Electric Power Co. Inc., Minnesota’s Xcel Energy Inc., the Tennessee Valley Authority, and Indianapolis Power & Light Co.
Meanwhile, Navigant Consulting estimates that through 2020, wind power will stimulate an additional $85 billion in economic activity while more than doubling its employment base to nearly 250,000 workers.
Much that activity will come as utilities add wind to their generation portfolios, but also as more private-sector companies make direct purchases of wind energy to power their operations, the firm said.
“The facts are clear — American wind power is a massive driver of jobs and economic growth for the U.S. economy,” Chris Brown, president of Vestas Americas, one of the nation’s largest wind blade and turbine manufacturers, said in a statement.
“Each project means tens of millions of dollars flow to rural areas through jobs, taxes, and lease payments to farmers and ranchers, enriching those families and communities.”
‘A deal is a deal’
Despite rumblings on and off Capitol Hill that the PTC will be targeted for repeal in the case of a Trump tax reform package, some administration officials have said they support a five-year phaseout, and Kiernan said he’s received some assurances from lawmakers that the incentives are safe (Greenwire, Jan. 20).
“We have talked to both sides of the aisle and both chambers up in Congress, and they’re talking about ‘a deal is a deal’ and honoring that agreement where the wind industry tax reformed itself,” Kiernan said. “Given discussions that we’ve had, we understand both sides of the aisle are continuing to appropriately support that past agreement.”
The wind sector, Kiernan added, has essentially “tax reformed itself” by proposing the five-year phaseout of the PTC, which this year is slated to fall to 80 percent of its current value, with additional 20-percentage-point drops in the next two years.
Even so, analysts have suggested the PTC could be eliminated before its projected expiration should tax reform advance, and challenges are bubbling up on the federal and state levels.
This week, Energy Secretary Rick Perry ordered a study by mid-June that analyzes what effect federal subsidies are having on baseload power generation (Climatewire, Dec. 22, 2016).
In a memo to his chief of staff, Perry charged that renewable energy tax credits “create acute and chronic problems for maintaining adequate baseload generation and have impacted reliable generators of all types.”
Similar criticisms have been made by industry officials and politicians in traditional fossil fuel states like Oklahoma and North Dakota, which have seen substantial growth in wind farms over the last few years.
North Dakota state House members this month called on Sen. John Hoeven (R-N.D.) to push for repeal of federal subsidies for wind, citing negative effects on the state’s lignite coal industry, which directly employs nearly 4,000 people and generates roughly $3.4 billion. And Oklahoma Gov. Mary Fallin (R) this week signed a bill ending a tax credit for wind producers in the Sooner State.
But Kiernan said the wind sector’s job growth and expansion fueled by technological advances in turbines and generators is already making a “business case” that’s resonating with Republicans and Democrats from the Dakotas, Iowa, Oklahoma, Texas, Kansas and New York.
And wind industry officials, utility executives and other experts contend that the pressures on existing baseload fossil plants have more to do with their age, efficiency and environmental standards than with direct competition from wind power.
AWEA officials also stress that just 2.8 percent of all government energy subsidies have gone to wind power over the past 70 years, and that virtually all forms of domestic energy receive some form of government support.
“Moreover, any impacts wind projects have on competing energy sources are due to market-based outcomes resulting from wind energy’s zero fuel cost, an outcome that occurs with or without the production tax credit,” the group said in a recent statement.