Wind Power Tax Credit Expires in December
Date: 27-Nov-03
Country: USA
The $31 billion energy bill, which included tax breaks, grants and funding for virtually every kind of energy production, collapsed this week amid a Senate deadlock.
A 3-year extension of the wind credit, which pays developers 1.8 cents for every kilowatt-hour of wind energy they produce, had been included in the energy bill. The credit is set to expire on Dec. 31.
The world's top wind turbine maker Vestas Group (VWS.CO: Quote, Profile, Research) put off its decision to build a wind turbine plant in Portland, Oregon, this year because of the uncertainty of the credit.
The tax break, first approved in 1994, has sometimes suffered months-long gaps, most recently in 2001, when it expired ahead of Congressional renewal.
Wind industry backers say the gaps have created a roller coaster in U.S. wind production growth because companies become fearful of investing in the alternative energy source. They say the tax-break gaps hamper wind power growth in the United States which grew last year at a rate of only 10 percent compared to global growth of 28 percent.
"We've been looking to establish a manufacturing facility in the U.S. but have not done that only because of the boom and bust cycle of the wind energy industry in the U.S." Scott Kringen, a sales representative with Vestas in Oregon, told Reuters.
Vestas makes wind turbines in Australia, Germany, Denmark, and Scotland among other countries. Kringen said most of those countries offer more stable, longer-term policy support for wind than does the United States.
"Failure to extend the (credit) means that contracts are put on hold, workers are laid off, and the momentum that had built up this year in the U.S. wind energy market is once again brought to a halt," Washington, D.C.-based American Wind Energy Association Director Randall Swisher said in a statement.
Wind provides energy for about 1.3 million people in the United States, where it produces more than 5,325 megawatts of energy. It makes up just a few percentage points of total U.S. electric production.