US Wind In Mad Rush To Meet Tax Break Deadline

Fourteen new projects in November, totaling 774 megawatts, pushed newly installed U.S. wind power capacity for 2012 to an impressive 6,255 megawatts — but just wait. You ain’t seen nothing yet.

According to the Energy Information Administration, December installations could be double the year-to-date figure, as developers race to get projects into service in order to qualify for the expiring production tax credit for wind.

Wind Farm

image via Shutterstock

That would be a bittersweet achievement for the U.S. wind industry; with more than 12,000 MW of new capacity in 2012, wind would shatter its previous best year of 2009, when 10,010 MW were installed. But the reason for the blitz – the possible loss of the 2.2-cents/kilowatt-hour PTC – has at the same time done damage to the industry supply chain, as 2013 projects have been shelved, new orders canceled and thousands of workers laid off.

In its report on Wednesday, the EIA said wind is on target to account for 45 percent of U.S. electrical generating additions in 2012, “exceeding capacity additions from any other fuel source, including natural gas, which was the leading fuel source for electrical generating capacity additions in 2010 and 2011.”

u.s. wind installations

image via U.S. Energy Information Administration

Data from the Federal Energy Regulatory Commission this week [PDF] showed that as of the end of November, natural gas was at 6,335 MW of new additions for the calendar year, just ahead of wind. Other significant contributors to new generation this year include coal (2,276 MW) and solar (1,079 MW).

The U.S. wind industry installed 6,816 MW in 2011, 31 percent higher than 2010, for a total of 46,916 MW installed as of the beginning of 20112.

Press releases announcing new projects going into operation have been arriving fast and furious this month. On Thursday, EDF Renewable said the 161-MW Spinning Spur project in Texas was up and running; on Wednesday, Minnesota Power completed a 210-MW project in North Dakota; the day before that, a 105-MW wind farm in eastern Washington went online; last week Alliant Energy’s nearly 100-MW Franklin County project began commercial operation … the list goes on and on.

Of course, the big question is, après le deluge, what?

While the wind PTC is the rare green energy policy that enjoys some bipartisan support, so far it hasn’t had quite enough backing among Republicans to allow an extension to make it through Congress. The president is a strong supporter of the measure.

In August, the Senate Finance Committee included a one-year extension of the PTC in a big “tax extender” package. That legislation included a significant shift, from requiring projects to be in service in 2013 to simply requiring that construction begins before the end of the year. Speculation has been that such an extension, if it were to happen, would be included in a larger “fiscal cliff” deal. Just last week, the industry offered a compromise, of sorts, with opponents, suggesting an immediate full 2.2-cent/kWh extension, but followed by a gradual drawdown until the tax break disappears for projects not in service before 2019.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.

1 Comment

  • Reply January 2, 2013

    Peter Mccarthy

    We do,t have to ask if we are heading in the right direction i have so much confident that the only way this massive move will fail there as to be no wind i love it

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