New graphics reveal impact of impending PTC expiration on wind industry
A pair of new graphics from AWEA provide a closer look at (1) how the impending expiration of the federal wind energy Production Tax Credit (PTC) disrupts the industry well before the actual expiration date, causing layoffs at wind development companies and component suppliers that gradually spread throughout the industry; and (2) the timetable, after an extension of the credit, until new wind projects go in the ground--illustrating why one-year extensions don't help nearly as much as long-term, predictable policy would.
The first graphic, showing projected job losses, illustrates how, because of the lead time involved in manufacturing, turbines previously ordered will continue to arrive at wind farms and be installed this year, even as layoffs are occurring in the industry's supply chain. While the industry is expected to have a strong year as measured in new installations, the reality will be that employment is steadily declining, at a time when the U.S. economic recovery remains fragile.
The second chart, showing what happens after a PTC extension, basically indicates that new wind farms supported by the PTC, will be going online and producing electricity 18 months later, due to the lead time required to develop projects, secure financing, and manufacture equipment.
Taken together, the graphics should serve as a valuable education tool to quickly convey to members of Congress, media, and others how the industry works and the time constraints under which it operates with respect to a key incentive like the PTC that strongly affects its financing.
The PTC provides an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from utility-scale turbines. It is set to expire on Dec. 31.
A House bill seeking to extend the PTC has 90 cosponsors, including 20 Republicans, while a Senate bill to extend it was introduced March 15 by seven Senators, including three Republicans. PTC extension efforts have received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, and the Western Governors’ Association. A PTC extension also has the support of the U.S. Chamber of Commerce, the National Governors Association, and the bipartisan Governors’ Wind Energy Coalition, which includes 23 Republican and Democratic Governors from across the U.S. A PTC extension has been endorsed by a number of newspapers across the country, including the Houston Chronicle, The New York Times, the Denver Post, and the Daily Oklahoman.
Further endorsements of the wind energy production tax credit.
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