Wind Tax Credit Up in Air

Wind Tax Credit Up in Air ; Doe Says Extension Would Rejuvenate Turbine Investment

Sep 01 - Rocky Mountain News

Since a federal tax credit for wind energy expired in December, hardly anyone is putting up new wind turbines to generate electricity.

So the U.S. Department of Energy is urging Congress to extend the credit by the end of this year for at least another three years, said David Garman, an acting undersecretary at the DOE.

"We understand that tax credit is very important to the wind industry," Garman said Monday at the World Renewable Energy Congress in Denver. "And we fully support the policy."

Garman pointed out that 1,700 megawatts of new wind energy was installed in 2003. In contrast, new installations have been negligible this year.

Also, the future of some planned projects hinges crucially on the extension of the credit.

Xcel Energy, which recently got the official nod to seek bids on building 500 megawatts of wind- power plants in Colorado, is hoping the credits will be in place by the end of this year.

The U.S. lags behind Japan and Germany not only in wind energy, but also other renewable energy sources, such as solar and bio- mass, as a percentage of total electricity generated in the country.

That is partly because those two governments support renewables and have committed to achieving certain targets in the future.

Germany plans to generate 20 percent of its power from renewable sources by 2020.

Its renewable industry posted $12 billion in annual sales in 2003 and employs 120,000 people, said Rainer Hinrichs-Rahlwes with the German ministry of environment, nature, conservation and nuclear safety.

"If we are serious about tackling global poverty, climate change and energy security, then we should commit ourselves to renewable energy," Hinrichs-Rahlwes said.

The U.S. does not have any such targets; it is left up to each state to pursue its own policy. Renewables (excluding hydro) accounted for 2 percent of total U.S. electricity in 2002.

John Mogford, group vice president for gas, power and renewables at BP, said it is important to have some kind of market reassurance for the industry to invest millions of dollars in renewables.

But the kind of policies that worked in Japan or Germany may not work in the U.S., Mogford said.

Also, the cheap cost of fossil fuels such as coal, oil and natural gas make it harder for renewables to compete in the U.S. market, Mogford added.

"The question is, how much incentive do we need to have enough of a market to compete with suppliers?" Mogford said. "We are quite ambivalent on what (policy) works and what doesn't."

In Colorado, voters will decide in November whether to have 10 percent of the state's electricity - 1,100 megawatts - from renewable sources by 2015.

Former Colorado House Speaker Lola Spradley, R-Beulah, resorted to the ballot initiative after she repeatedly failed to get the state legislature to pass bills to spur investment in renewable energy.

Deflecting criticisms from some foreign delegates that the U.S. is not doing enough to promote renewables, Garman said the country's total renewable energy (including hydro) at 116,000 megawatts is more than the combined total of Germany, Denmark, Sweden and the United Kingdom.

"People do take potshots at the U.S.," Garman said. "We waited longer to adopt renewables. But when we moved, we moved big."

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