Late PTC Extension Squeezes First-Half Commissioning Of U.S. Wind Projects


Late PTC Extension Squeezes First-Half Commissioning Of U.S. Wind Projects The delay in the extension of the federal production tax credit (PTC) for wind has resulted in zero commissioned wind projects in the U.S. for the second quarter. In fact, the American Wind Energy Association (AWEA) reports that only a single GE 1.6 MW wind turbine – located at North Dakota's Lake Region State College – has been commissioned in the nation so far this year.

The uncertainty over the PTC – which was technically allowed to expire Dec. 31 last year before being extended on Jan. 2 – has had serious consequences for developers and suppliers. With project timelines for wind farms spanning 18-24 months, the impact continues to be felt well into 2013.

Elizabeth Salerno, AWEA's director of industry data and statistics, tells NAW that the slowdown now being felt this year was expected as early as last summer as Congress deliberated an extension.

‘We knew that there would be a gap in project development this year,’ Salerno states. ‘The first- and second-quarter numbers are a clear demonstration that the wind industry is still feeling the effects [of the late PTC extension].’

She adds that wind turbine manufacturers and component suppliers have been particularly affected, as most are still waiting for orders.

According to AWEA, approximately 950 MW of installed capacity was under construction in the U.S. during the second quarter, bringing the total year-to-date amount under construction to approximately 1.3 GW.

Despite the sluggishness, Salerno notes that it appears brighter days are ahead.

‘We've seen a lot of new procurement from utilities, which are locking in long-term rates at competitive prices,’ Salerno says, noting that more than 20 requests for proposals (RFPs) have been issued. Another ‘clear signal’ is that some utilities are signing contracts for even more megawatts than what they sought in their initial RFPs.

Taken together, U.S. utilities announced plans for nearly 5 GW of installed capacity for the first six months of the year.

AWEA notes that project construction is under way across eight states, and 2013 power purchase agreements have been signed in 11 states, with the bulk of recent activity occurring in the central region of the U.S. Wind projects in California, Michigan and New York are also being supported through strong state policies and competitive prices, the association adds.

Tom Kiernan, AWEA's CEO, notes that the current low level of installs should serve as a cautionary tale against future policy delays.

‘The late PTC extension has caused serious harm,’ he says, ‘and we urgently need policy stability going forward for the American wind energy industry to reach its full potential.’

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