U.S. Wind Set to Rebound as Lobby Pursues Tax Credit

The U.S. wind-power industry is expecting a tough battle in Congress as it seeks another extension of a federal tax credit that received a one-year renewal at the last minute in January.

“Keeping the production tax credit is our top priority,” Tom Kiernan, incoming chief executive officer of the American Wind Energy Association, said at the trade group’s annual conference today in Chicago. “The political climate in Washington is getting tougher.”

The U.S. added a record 13,124 megawatts of turbines last year as wind developers raced to complete projects ahead of the Dec. 31 expiration of the production tax credit. With no certainty in 2012 that it would be renewed, energy companies put future plans on hold and the industry may slump as much as 78 percent this year, according to data compiled by Bloomberg.

The credit was renewed Jan. 1, reviving the industry for the next two years as new wind farms are planned and built, Kiernan said. General Electric Co., the biggest U.S. wind-turbine supplier, said today it’s won orders for 1,000 megawatts of new turbines this year.

The tax credit pays 2.3 cents a kilowatt hour for power produced from renewable-energy projects that begin construction by the end of the year. The Internal Revenue Service increased the rate by one-tenth of a cent in April because of inflation.

Still, the renewable-energy industry is under attack by oil, gas and coal producers at both the state and federal levels, said Iowa Governor Terry Branstad.

Largest Employer

“We don’t have the money that the oil and gas industry have,” Branstad said today at the conference. “We need to get the farmers and community leaders to speak up.” The Republican governor has helped his state become the wind industry’s largest employer.

The wind industry is facing efforts in at least 16 states to dismantle so-called renewable portfolio standards, laws that require utilities to get an increasing amount of their power from renewable resources.

“We are defending and winning state RPS goals across the country,” said Gabriel Alonso, chief executive officer of developer EDP Renewables North America and chairman of the board at Washington-based AWEA.

Preserving those laws and winning an extension of the tax credit will support the installation of 8,000 megawatts of turbines a year, a level he considers “vibrant.”

The U.S. has more than 60 gigawatts of wind-energy capacity in operation, mostly in Texas, California and Iowa. That’s enough to supply about 14.7 million homes, AWEA said.

(Corrects increased credit amount in fifth paragraph.)
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