American Wind Energy Is Surging, But for How Long?
"It is urgent that Congress extend the Production Tax Credit now, before the end of the first quarter, or risk losing a new manufacturing sector to foreign countries." -- Denise Bode, CEO, American Wind Energy Association
The American wind industry totals almost 47 GW through the end of 2011, according to the Q4 FY2011 market report released by the American Wind Energy Association (AWEA). The figure is approaching the 52 GW capacity of China, which overtook the United States for the number one spot in 2010.
Last year, Texas, Iowa and California retained the top three spots, respectively, for state rankings in overall wind power. Unsurprisingly, the two biggest states in the lower 48 also ranked in the top three in terms of wind turbines in construction. Texas takes second with 857 MW and California comes in third with 847 MW. But the top spot goes to Kansas, with a whopping 1,189 MW scheduled to come online this year. And much progress has also been made in Ohio, which was the fastest-growing state in wind power in 2011. "This shows what wind power is capable of: building new projects, powering local economies and creating jobs," said Denise Bode, CEO of AWEA.
GERMANY AND CHINA: STIFF COMPETITION
In his State of the Union Address, President Obama said he did not want to cede the wind industry to China or Germany. The three nations are the world's leading wind markets in terms of production capacity, representing over 57 percent of the global total. America assumed the top spot when it overtook Germany in 2008 with more than 25 GW of installed capacity, then China surged to take the lead in 2010 with over 44 GW.
But in order to remain competitive in wind power, which has been taking a hit from the low price of heavily subsidized natural gas, Congress must pass an extension of the Production Tax Credit (PTC), the primary financial assistance vehicle for the American wind industry. In his address, Obama called on Congress to take action, saying, "We've subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs."
AMERICAN WIND ENERGY: ANOTHER BREAKOUT YEAR?
If the PTC is not extended, it will be more difficult for the wind industry to capitalize on recent gains. With over 6.8 GW installed in 2011 -- a 31 percent increase from the previous year -- the industry is well-poised for another breakout year. But the PTC is set to expire in December. "Traditional tax incentives are working," said Bode. She argues that the reason for the wind industry's surge is the PTC, which she says "leveraged an average of more than $16 billion a year in private investment over the last several years and supported tens of thousands of manufacturing jobs."
"We need Congress to move on clean energy," said Bill Ritter, director of the Center for the New Energy Economy at Colorado State University. The former Colorado governor was at Buckley Air Force Base in Aurora, Colorado, where Obama was pitching federal funds for renewable energy. "But in an election year, I'm hearing that there is little chance."
Martin, Christopher. "U.S. Wind-Turbine Installations Rose 31% in 2011, AWEA Says." Bloomberg News. January 26, 2012.
American Wind Energy Association. U.S. Wind Industry Fourth Quarter 2011 Market Report. January 2012.
Obama, Barack. State of the Union Address 2012. January 24, 2012.
World Wind Energy Association WWEA. World Wind Energy Report 2010. April 2011.
Jaffe, Mark. "In Aurora, Obama pitches federal funds for renewable energy." The Denver Post. January 27, 2012.
image: Sebastien Celis, Flickr Creative Commons