California wind farm starts operations but US wind industry in peril

Posted at September 14, 2012 » By : » Categories : News » Comments Off on California wind farm starts operations but US wind industry in peril

A 140 MW wind project in California was officially announced as operational this week, but the US wind power market is in peril unless tax credits are extended warns the Natural Resources Defense Council (NRDC).

The Pacific Wind project, which is being developed and owned by EDF Renewable Energy, formerly enXco, is now supplying the local grid thanks to a 20-year power purchase agreement with San Diego Gas and Electric Company.

The array of REpower MM92 turbines will generate enough power to supply some 56,000 homes with carbon-free electricity.

This and other developments like it are supported by the federal Production Tax Credit (PTC), as well as local initiatives such as California’s 33% mandate for renewable energy.

“Policy support, such as California’s 33% mandate for renewable energy and the federal Production Tax Credit, are critical to level the playing field and provide for a stable wind industry,” says Mark Tholke, vice president of EDF Renewable Energy’s southwest region.

The Pacific Wind project could generate more than $300 million in economic benefits for local businesses, government and households over its lifetime, says EDF Renewable Energy.

But projects like these cease if the PTC is not renewed beyond 2013, when it is due to expire. Attempts by the Obama Adminstration to extend the tax credit have not so far succeeded and time is running out.

According to a report out this week from the NRDC, the failure to extend the tax break could put thousands of US jobs and millions of dollars in tax revenue at risk.

Currently, the US generates some 50 GW a year from wind power, which has tripled over the last four years, and employs 75,000 Americans.

But the NRDC warns that if Congress fails to renew the PTC, which currently gives generators a $0.022/kWh tax credit, the industry could be “stopped in its tracks”.

Furthermore, says the NRDC report, wind power “offers significant benefits to entire communities where these projects are built — from new earnings opportunities for farmers and landowners to additional tax revenues” to support education, infrastructure, and economic development.

Proposals to approve the PTC as part of a larger package of tax credits have been approved by the Senate Finance Committee, but approval is still required by the Senate or the House of Representatives.

The resolution of the deadlock could rest with the US presidential elections, with the incumbent Barack Obama pledging to renew the tax credits while his opponent Mitt Romney has said he will let it lapse.

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Related stories:
US Cape Wind project clears latest hurdle (16-Aug)
US presidential candidates look set to fall out over renewable (3-Aug)
US Senate rejects motion to extend renewables tax credits (15-Mar)
Obama promises to make renewable energy tax breaks permanent (24-Feb)

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