As the American Wind Energy Association's (AWEA) WINDPOWER 2012 Conference and Exhibition convenes this week in Atlanta, the wind industry finds itself at a bit of a crossroads.
On one hand, the U.S. wind industry is on track to topple all previous records for annual wind energy installations. Further, the record pace of installations also means wind will surpass the 50 GW milestone. And, when it comes to output, wind energy represents 35% of all new generation, trailing only natural gas.
On the other hand, developers and supply-chain participants are deeply concerned about wind energy's future, namely due to the possible expiration of the production tax credit (PTC), the key federal incentive that provides an investment tax credit of $0.022/kWh for the production of electricity from utility-scale wind turbines.
‘We know these are dark and difficult days for many businesses in our industry, especially in our supply chain and manufacturing sectors,’ Peter Kelley, AWEA's vice president of public affairs, tells NAW.
The uncertainty has resulted in job losses, difficult production decisions and wind project cancellations.
‘The bleeding has to stop now,’ Kelley stresses. He explains that as efforts are continuing on Capitol Hill to extend the PTC, AWEA is encouraged by the level of bipartisan support.
‘We believe that the political logjam is about to shift, and the PTC is very well positioned to become a reality in the months ahead,’ Kelly says, adding that the PTC has the broadest bipartisan support of any matter in Congress.
In fact, bipartisan stability of the PTC since then-President George W. Bush signed the Energy Policy Act of 2005 has produced as much as $20 billion a year in private investment in the U.S., according to AWEA.
President Obama has made clean energy investment – including a PTC extension and clean energy manufacturing – part of his "To Do List" for Congress before it breaks for its August recess.
Congress is divided, however, and because this is an election year, neither side will likely agree to anything that resembles a victory for the opponents. Two previous attempts to extend the PTC have failed for that same reason.
In March, the U.S. Senate voted to reject an amendment to the Surface Transportation Bill that would have extended the PTC for one year. Before that, efforts failed in February to tie the PTC onto an omnibus payroll tax bill.
Manufacturing
Although extending the PTC is AWEA's top legislative priority, a central tenet of its message is manufacturing – and its corresponding impact on job creation.
Kelley is quick to point out that while some eyebrows were raised at the choice of this year's WINDPOWER venue, the Southeast dovetails nicely with the manufacturing theme.
Although many were unaware of the region's impact on manufacturing, the Southeast has emerged as a manufacturing hub for the wind industry, with more than 90 factories – including nine plants in Georgia – in the region.
‘The New South fits the description of ‘Manufacturing the Future Today,’ which is this year's conference theme, Kelley says.
Importantly, if Congress can keep taxes and policy stable, wind energy manufacturing can continue to expand in regions such as the Southeast, Kelley stresses.
A recently released study by Navigant Consulting found that with stable tax policy, the wind industry can grow to nearly 100,000 U.S. jobs in the next four years – including 33% growth in the manufacturing sector.
‘Wind power is not only about producing affordable, homegrown energy; it's about made-in-the-USA manufacturing,’ Kelley says. ‘We have communicated that message to Washington D.C., to ensure that Congress takes action as soon as possible to extend the PTC.’
