Fact check: Mauldin's missteps in PTC bashing
Paul Mauldin takes direct aim at wind power's primary incentive, the federal wind energy Production Tax Credit (PTC), in a column in SmartEnergyPortal.net. It's pretty stirring, but unfortunately overlooks some very basic facts.
The cost of wind power is coming down. Researchers from Lawrence Berkeley National Laboratory (LBNL) said recently in a widely publicized report (which Mr. Mauldin seems to have somehow completely missed) that the cost of wind-generated electricity is now at an all-time low (see National lab report: Wind turbine prices drop as designs improve, U.S. supply chain develops, November 1, 2011). LBNL said wind turbine prices have dropped sharply in recent years, due largely to the scaling up of turbine size to reduce cost of energy (COE) and the growth of a domestic supply chain as the U.S. dollar has declined against other major currencies.
That phrase "growth of a domestic supply chain" is key. During the past four years, the wind industry has grown at an annual rate of 37 percent. Today, over 400 facilities across 43 states manufacture for the wind energy industry, and 60 percent of a wind turbine’s value is now produced here in America, compared to 25% prior to 2005. American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power. Also, more than $70 billion of investment has been made since 2005.
With wind today, we are seeing a virtuous circle--developing more wind farms is leading to more demand for turbines and turbine parts, spurring the development of a new manufacturing industry, creating new jobs, and fostering increased competition, which results in lower costs.
Mr. Mauldin's misguided criticism of wind power's cost is based solely on offshore wind--an industry that shows great promise but has as yet installed no American projects, and for which there is no domestic supply chain.
Failure to extend the PTC will disrupt the industry and cause loss of American jobs. Businesses need certainty and stable tax policy in order to make business and investment plans and support jobs.
The PTC has driven tremendous growth in wind’s manufacturing sector. American wind power accounts for 75,000 American jobs today, and can grow to almost 100,000 jobs four years from now and, according to a Bush Administration study, support 500,000 American jobs less than 20 years from now.
The U.S. now has over 400 manufacturing facilities in 43 states involved in wind turbine manufacturing – 12-fold growth in domestic manufacturing over the last six years. As the non-partisan Congressional Research Service notes, “Wind turbine manufacturing is at the core of the multifaceted wind power industry. Because of the use of castings, forgings, and machining, turbine manufacturing is a significant contributor to U.S. heavy manufacturing.”
Remarkably in an age of job outsourcing, wind power is actually “insourcing” a whole new manufacturing sector. Sixty percent of a wind turbine's value is now produced here in America, compared to 25 percent prior to 2005.
The stakes right now could not be more clear. Economic studies have shown that Congressional inaction on the PTC will eliminate 37,000 American jobs, shutter plants and cancel billions of dollars in private investment. With PTC uncertainty, layoffs have already begun and further job losses and even plant closings will accelerate with each month we near PTC expiration in December.
Wind power is an American success story that can create affordable electricity and tens of thousands of new American jobs. But we need Congress to act and let wind finish the job.