US Wind Sector Urges Tax Credit, Power Line Work
US: June 3, 2008
HOUSTON - The United States must keep offering tax credits for alternative
energy projects and take steps to simplify building of large power lines if
the country is to meet a goal of getting 20 percent of its electric supply
from wind power by 2030, a panel of experts said on Monday.
The production tax credit for alternative energy is set to expire at the end
of the year. Industry leaders said the credit must be extended to avoid the
"stops and starts" that have plagued the US wind power industry, which
relies on subsidies to make prices of renewable power competitive with other
fuel, such as coal and natural gas.
The House of Representatives has approved an extension of the tax credit but
the Senate has not agreed on how to pay for the subsidy.
Department of Energy Assistant Secretary Andy Karsner called the production
tax credit policy a victim of a government "archaic scoring" that needs
reform.
"We've got to get beyond this if we want to scale-up" the industry to take
advantage of healthy wind resources, Karsner said at the opening day of
Windpower 2008, the American Wind Energy Association's annual exhibit and
conference in Houston.
US tax credit policy needs to be more predictable and long-lasting and must
not not favor one alternate resource above others, Karsner said.
Building adequate transmission lines to move power from wind production
zones in the sparsely populated mid-section of the nation to large cities is
another obstacle outside the control of wind developers and turbine
manufacturers.
Many proposals involve constructing hundreds of miles of high-voltage power
lines that cross state borders as well as utility and reliability agency
boundaries, requiring numerous regulatory approvals.
"We need a consistent roadmap to build transmission," said Hunter Armistead
of Babcock & Brown LP.
Vic Abate, vice president of GE Energy Renewables, said as many as 40,000
new turbines could be needed to meet the ambitious 20 percent wind targets
seen in Europe and the US
Maintaining quality control will be a "key long-term challenge," Abate said
as manufacturing capacity dramatically expands, putting pressure on turbine
makers to improve equipment reliability, before and after installation.
Recognizing that renewable power may be more expensive than conventional
electricity because of its intermittent nature is another major challenge
for the industry moving forward, said Michael O'Sullivan, senior vice
president for FPL Energy LLC, a unit of FPL Group, the largest operator of
US wind farms.
"If people want renewables, they have to decide to pay for it," O'Sullivan
said. "Renewables are not cheap."
(Reporting by Eileen O'Grady; Editing by David Gregorio)
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