(snip)"By DOUG ABRAHMS
Gannett News Service
WASHINGTON - Wind-power companies received an early Christmas gift over the weekend when Congress tucked a provision that extended tax credits for green power inside a year-end spending bill.
The 1.9 cent-per-kilowatt-hour tax credit, which was to expire at the end of 2007, was extended an additional year, through 2008.
Wind turbines are most prevalent in Texas, California, Iowa, Minnesota, Oklahoma and Oregon. Locally, wind-power companies have eyed sites in Herkimer, Oneida and Madison counties for development.
This year, the industry will add about 2,750 new megawatts - enough to provide electricity to some 650,000 homes. Wind power has become the largest source of renewable energy, but energy companies said that business could have slowed if the tax break were allowed to expire.
General Electric Co. has sold out all its orders for wind turbines through 2007, said Victor Abate, vice president for renewables. Some companies had ordered turbines for 2008, taking a chance that Congress would extend the credit, which makes wind-generated electricity comparable in price to power made from coal and natural gas plants, he said.
"If the (tax credit) hadn't passed, it would have been a tremendous amount of pain for the industry," Abate said. "The reality is you need to do this for a long time."
In 2004, wind projects slowed to a crawl because the tax credit was set to expire. Since then, GE has quadrupled its wind turbine output, Abate said.
The industry hadn't expected the tax credit extension to pass this year. But Sen. Harry Reid, D-Nev., who will become the new majority leader in January, asked that the provisions be added to the spending bill that was approved early Saturday.
"It was a priority of his," said Jon Summers, a Reid spokesman.
Wind, geyser and solar power will receive the same one-year extension of the tax credit, but wind power is by far the largest beneficiary. Wind turbines will provide nearly 20 percent of all the new electricity added to the U.S. grid this year, second only to natural gas-fired plants, said Randy Swisher, executive director of the American Wind Energy Association.
"The market is strong," he said. "There is a big demand for wind in the U.S."
High natural gas prices and better equipment have made wind power more competitive, Swisher said. And many states now require their utilities to generate 10 percent or 20 percent of their electricity from renewable power."(snip)
so, as I read it, the US taxpayer winds up subsidizing 1.9 cents/kwh in electricity cost difference of generating with wind vs natural gas / nuclear / coal to investors in wind farm projects in order to insure that they are profitable thus will attract investors. On top of that, various state gov'ts are mandating that 10-20% of future electricity demand must be met with wind generators ... regardless of relative electricity pricing vs natural gas / nuclear / coal ... thus guaranteeing a 'market' for wind power even if it is not actually cost competitive.
It's also a bit curious that an independent congressional vote wasn't called for on the matter, but that instead the wind farm tax credit continuation was tacked onto a 'must pass' 11th hour spending bill.



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