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Published on April 3rd, 2014 | by AWEA

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Renewable Energy Production Tax Credit Gets Important Last-Minute Push

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April 3rd, 2014 by
 

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Originally published on the AWEA website (image added).

Washington, D.C., — The renewable energy Production Tax Credit (PTC) and Investment Tax Credit (ITC) were included today with bipartisan support, as the U.S. Senate Finance Committee reported out a tax extenders package whose swift passage is critically important to the continued growth of the U.S. wind energy industry.

“We’re grateful to all the supporters of renewable energy on the Senate Finance Committee,” said Tom Kiernan, CEO of the American Wind Energy Association. “This provides a critical signal for our industry, which has created up to 85,000 jobs and has a bright future ahead, as we grow from 4 percent of the U.S. power grid to an expected 20 percent and beyond, so long as we have a predictable business climate.

“Passage by the full Congress will preserve an essential incentive for private investment that has averaged $15 billion a year into new U.S. wind farms, and create more orders for over 550 American factories in the supply chain.”

The PTC and the alternate Investment Tax Credit were added overnight to a modified “Chairman’s mark,” after an earlier draft released Monday left them and several other provisions for further negotiation.

They prevailed on a critical 18-6 vote during the committee markup late Thursday morning, on a motion by Sen. Pat Toomey (R-PA) to strip them out. Five Republicans joined the committee’s Democrats in voting down that amendment: Sens. Chuck Grassley (R-IA), John Thune (R-SD), Rob Portman (R-OH), Mike Crapo (R-ID), and John Cornyn (R-TX).

A number of Senators on both sides of the aisle highlighted the success of the PTC and ITC. Grassley spoke at length in favor of the tax credits, and called Toomey’s arguments against their extension “intellectually dishonest,” considering billions of dollars a year in permanent incentives for other forms of energy with which renewable energy competes.

Thune then withdrew a proposal to phase down the tax credit, saying that discussion belonged in comprehensive tax reform, not the debate over the extenders package, and that the industry “deserves certainty” and that any transition should be “workable and sensible” as AWEA has proposed.

Sen. Michael Bennet (D-CO) called the PTC “vitally important” to his state, because it brings factory work from overseas to the United States, “driving not just economic growth but job growth and wage growth.”

Chairman Ron Wyden (OR), and fellow Democrats Debbie Stabenow (MI), Maria Cantwell (WA), Ben Cardin (MD), Tom Carper (DE), also spoke passionately for renewable energy and its economic benefits, including both land-based and offshore wind.

The tax credits now advance toward extension with over 50 other expired provisions of the tax code, in the absence of a comprehensive tax reform deal in Congress.

Extension on the terms in the Senate Finance Committee markup would let wind energy developers qualify if they start construction by the end of 2015, instead of the end of 2013, supporting the wind energy industry as well as the other renewable power sectors that qualify for the tax credits.

Image Credit: American flag & wind turbines via Shutterstock

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About the Author

The American Wind Energy Association (AWEA) is the voice of wind energy in the U.S., promoting renewable energy to power a cleaner, stronger America. Keep up with all the latest wind industry news at: http://www.aweablog.org/blog/



  • NorskeDiv

    Dump the subsidies for wind. Requiring gird operators to purchase wind power is already enough of a subsidy, since natural gas plants are left idling (still using fuel) while not being able to feed any electricity into the grid. Grid operators are legally required however to provide reliable power, so they have no option but to keep hot reserves for when wind production drops.

    It’s all well and good to say that “we should” change our power consumption paradigm and quickly change demand so that it is concert with supply, but this is a fantasy and a modern industrial society can’t run on such a grid. For one thing, Aluminum smelters must be run at all times, power loss can damage or destroy them. Aluminum is a needed input for almost all green tech.

    What’s even more regrettable is that wind power always comes tied with natural gas, which will only encourage even more fracking. It’s completely unsustainable.

    • Bob_Wallace

      “Requiring gird operators to purchase wind power is already enough of a subsidy, since natural gas plants are left idling (still using fuel) while not being able to feed any electricity into the grid”

      That is incorrect. Grid operators always keep a certain amount of capacity in a state where they can quickly bring it on line. Hydro, for example, can be and is used for some of that reserve and burns no fuel. Batteries are starting to replace gas peakers.

      Gas peakers can go from dead stop to full spin in about 15 minutes. Since it is easy to predict input from wind farms there’s no need to keep peakers spinning for hour after hour as wind (or solar) delivers reliable supply. And some wind farms are starting to install 15 minutes of storage so that they can guarantee production in 15 minutes blocks.

      Fracking and natural gas are things we must phase out. But coal is a larger health and environmental problem, NG helps us get coal plants closed by giving us fill in for wind/solar while we perfect storage.

  • stopcronycapitalism

    Just great. According the the US Energy Information Division, as the wind development increases there is a corresponding increase in coal and gas developments since wind is only a very expensive supplement that requires a form of energy we can depend on to produce most of the electricity we use. In other words, poor Americans are forced to spend their tax dollars on something they don’t want, don’t need and are sick of paying for. In the meantime, rich wind developers and crooked politicians sit back and reap the benefits of their behind the scenes arrangements. How did we end up with so many egomaniac losers in Washington DC?

    • A Real Libertarian

      “According the the US Energy Information Division, as the wind
      development increases there is a corresponding increase in coal and gas
      developments”

    • Bob_Wallace

      Please show us that Energy Information Division stuff. (I’ve never heard of that organization.)

      Now let me point out a problem with that claim. I’m going to use data from the DOE – EIA.

      Take a look at the graph. You’ll notice that the percentage of our electricity from fossil fuel in the US is dropping.

      You’ll also notice that the percentage of our electricity from renewables is increasing. (And that nuclear is basically flat.)

      And then I’ll give you another graph, one of where our renewable generation is growing. You’ll notice that it’s mostly wind.

      Wind is going up. Fossil fuel use is coming down.

      So, the data gives lie to the claim, wouldn’t you agree?

      • stopcronycapitalism

        US Energy Information Administration, “Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010″. “Page xix has an interesting graph, showing the addition of new generating capacity from 1995 to 2010. Lots of new natural gas plant was added from 1999 to 2005, after which its annual increase remained fairly steady. Almost no new coal was added from 1997 to 2006. after which its annual increase is steady from 2007 to 2009,and then substantially increased in 2010 (more than one-fourth of all new capacity added that year, more than wind) 2007-2009 also corresponds to a substantial increase in wind. The variations in natural gas addition from 2007 to 2010 correspond almost exactly with those of wind.”
        I attend all the Energy Facility Siting Counsel meetings in Oregon. All of a sudden we are getting virtually as many natural gas applications in this state as wind farm applications. The most recent application states that it is necessary due to the need to provide back-up energy to wind farms. There are currently at least two requests from Bonneville Power to update their facilities to accommodate the increased wind power needs. There is no way that wind farms can exist independently of some source of energy that is reliable and can be ramped up and down to keep our lights on when wind energy fluctuates. Every wind farm requires either coal, gas or some other reliable energy producer working in the background. It is time to admit this reality. We have one county in eastern Oregon where their largest energy user is the wind farms. So far as coal goes, there have been up to this point no coal generating plants shut down as a result of the increase in wind energy, The fact that they are planning to shut the one in Oregon down and it will not be producing energy for wind farms is one of the reasons electric users will now have to pay for new gas plants unless we want our lights to go on and off depending upon how the wind is blowing. Thanks for the question.

        • Bob_Wallace

          First, most of the NG capacity being added is in preparation to massive coal plant shutdowns which are happening and will be happening over the next few years.

          Second, you are confusing capacity and production. We may be adding NG plants but we don’t use them all that much.

          In 2011 the capacity factor for NG was 24.2% and in 2012 it was 28.8%. In other words, NG plants sit idle about 3/4ths of the time.

          NG will be used as a fill in for wind/solar until we bring more storage on line. Think of it this way – 100% coal being replace by 75% wind and 25% NG. (The proportions will vary.)

          All electricity generators require backup. Everything stops working from time to time. Nuclear does need something operating in the background because when it goes offline unexpectedly it’s a huge blow to the grid.

          Wind does not require “spinning backup”. Wind (and solar) are very predictable which means that replacement can be brought on line as needed.

          Then, do attend to the data behind the graphs. It is the EIA electricity prodution data. It is how much electricity we made from each source per year. Fossil fuel use is going down as wind increases. That’s reality. You can check the numbers yourself.

          http://www.eia.gov/electricity/annual/

          • stopcronycapitalism

            I think you are mixing up your percentages. I recognize the difference between rated capacity and actual production. In the case of wind power, their actual power generation is approximately 25% of the rated capacity which is what they use when they state that a development can light X number of homes. As to reliability, the wind changes from hr. to hr., minute to minute. The demands on the back-up power source for wind is in no way comparable to an emergency generation back up for a coal or gas powered plant that only needs back-up in case of a significant mechanical breakdown. The reason back-up for wind is so environmentally unfriendly is because it has to ramp up and down over and over as the wind changes. This makes it very inefficient and makes for more pollution. You may want to check with the Department of Energy as you are the only person I have ever hear state that wind is “predictable”. Also, if you look at a graph of wind speeds throughout the day, you will see that there are ongoing changes. Yes, the back up energy source has to be prepared to ramp up to meet 100% of the on-line wind energy at any time, day or night. Back-up energy MUST increase consistent with whatever wind or solar development occurs. Even the courts have determined that wind cannot be considered “baseload” as it is unreliable.

          • Bob_Wallace

            No, I gave you accurate CF numbers for NG in the US for 2011 and 2012. Those are based on capacity and production numbers from the DOE – EIA.

            You can get the capacity numbers here -

            http://www.eia.gov/electricity/annual/html/epa_04_03.html

            And the production numbers here -

            http://www.eia.gov/electricity/annual/html/epa_03_01_a.html

            Feel free to do the calculation yourself.

            Your CF number of 25% for wind is badly wrong. Median CF for US onshore turbines is 36.75%. More recently installed turbines are generally returning CF numbers in the 40s with a couple of wind farms breaking 50%.

            http://en.openei.org/apps/TCDB/

            https://www.wind-watch.org/documents/u-s-wind-capacity-factors-2011/

            Yes, wind output does change from, well not so much minute to minute, but it does vary. Load also varies, always has. The grid is well designed to deal with that variability.

            When the wind slows down other generation (generally hydro, NG, or storage) has to ramp up to fill in. That is not a huge problem for the grid since it is fairly easy to predict wind speeds ahead of time. And transitions up and down are gradual.

            There’s no need to keep backup generation spinning for wind (or solar). There’s enough lead time so that backup can sit idle for hours and days.

            However with large thermal generators the grid must be ready at all times to quickly replace a large plant that drops out unexpectedly. There’s no “15 minute” warning that will allow NG turbines to be spun from off to full speed. That lost generation has to be replace immediately or the grid could cascade down into blackout.

            Back-up energy does not need to increase when wind and solar is added to the grid. When we bring wind and solar onto grids we simply burn less fossil fuels.

            I really don’t think you grasp how grids work. We use “baseload” generation because that’s what we had. Big, difficult to start and stop thermal plants. But that does not mean that is the only way to operate a grid.

            We can build a grid that gets its major supply from wind and solar. We can use what tidal and geothermal is available. We make all that 24/365 reliable and load following with hydro, storage, and dispatchable generation.

          • stopcronycapitalism

            I am not sure where you get the figure “median CF for US onshore turbines is 36.75%. The average CF for the numerous NYS facilities is about 22%.
            The wind production does change from minute-to-minute. The fact that the grid is designed to deal with load variations has nothing to do with it now being asked to deal with supply variations.
            The idea that it is fairly easy to prpedict wind speeds ahead of time is simply baloney as is the statement that there is no need to keep backup spinning.
            In terms of your comparison to failed conventional sources is ludicrous. You are saying that something that happens 1% of the time is comparable to what happens 100% of the time.
            Wind does not replace coal. It may replace some gas, but the mechanics are much more complex than you allude to.
            “We use baseload because that is what we had” is a knee slapper. We use baseload because it provides us the most reliable, low cost way of providing our modern society with electricity.
            No matter what the topic, there are some people that are hopelessly wrong. I get the feeling that you are an evangelist, and we are arguing about your religion. Probably a waste of time for both of us.

          • Bob_Wallace

            “I am not sure where you get the figure “median CF for US onshore turbines is 36.75%. The average CF for the numerous NYS facilities is about 22%.”

            Breaking News!!!

            There’s more to the US than just NYS.

            I gave you the DOE link.

            The grid constantly deals with demand:supply imbalance. Wind is not giving the grid any problems.

            Wind is easier to integrate onto the grid than are large thermal plants. That comes from ERCOT which deals with large amounts of wind generation on its grid.

            “Wind does not replace coal. It may replace some gas, but the mechanics are much more complex than you allude to.”

            Can’t get your head around that? Let me simplify it.

            Replace a coal plant with a natural gas plants. Got that?

            Bring some wind on line and the grid needs to burn less gas. Got that?

            Bring some more wind on line and the grid needs to burn even less gas. Got that?

            Now, down the road that gas is probably going to get replaced by storage. Wind will fill up the storage. Gas will drop away. And that is how wind will, and is, replacing coal. Understand now?

            Paid off coal seems inexpensive. Are you aware of the external costs of coal?

            Are you aware that wind is now cheaper than some paid off nuclear plants?

            Are you aware that both wind and solar are cheaper than either new coal or new nuclear generation?

            Do you need links?

          • Bob_Wallace

            It does not need to be a waste of time unless you have a closed mind.

            I’m willing to lay out the facts as I know them.

            If my facts are wrong and you have better data then I will learn from the facts you bring. Facts, and not opinions.

            If you are someone who is able to take on new facts and change your opinions then one or both of us will come away wiser.

  • Nealicus

    Is wind really responsible for 4% of US energy at the moment?

    • Bob_Wallace

      Preliminary 2013 data says 4.51%. EIA won’t release final numbers for a few more months.

      Right now wind is probably over 5%. Remember, a lot of wind got installed in 2014 but only produced for part of the year. This year everything that went in before 12/31/2013 will put in a full 12 months.

      I’m hoping for 6% for 2014. We went up from 3.5% in 2012 by 1%. Going up 1.5% doesn’t seem too much to ask….

  • TheAntiProgressive

    Greenie crony capitalism on display……

    • Bob_Wallace

      So you approve only of black crony capitalism?

  • Matt

    Latest Supreme court ruling, money is free speech and corporations are people. Campaign limits are a restriction on free speech. So expect the rich boys to own even more of the US government from now on. Only limit now is you can’t stand outside a voting booth and pay someone to vote. You have to give the money to a party/PAC/candidate.

  • JamesWimberley

    The tax breaks blow, and then they don’t, and then they pick up again. Talk about intermittency. How about some baseload policy?

    • http://zacharyshahan.com/ Zachary Shahan

      Hahaha :D
      That’s only for the big boys — oil, gas, and coal — unfortunately. Why support a maturing industry when you can give money to some of the richest industries in the world?

    • http://electrobatics.wordpress.com/ arne-nl

      Very astute analogy!

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