National windmill policy? Senate Finance Committee votes to extend renewable tax credits
The U.S. Senate Finance Committee has voted overwhelmingly to extend through 2016 the renewable energy Production Tax Credit (PTC) and Investment Tax Credit (ITC) that incentivize the building of more U.S. wind farms.
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A wind farm in the Tehachapi Mountains of California. Credit: Stan Shebs/Wikimedia Commons |
In a final vote of 23-3, the Committee reported out a "tax extenders" bill preserving language that allows wind farms to qualify as long as they start construction while the tax credits are in place. Those credits expired at the beginning of the year.
The federal PTC and ITC are predominant drivers of new wind farm development, and have helped lower the cost of wind power by more than half over the last five years, while making the United States number one in the world in wind energy production.
In 2013, after the renewable energy tax credits were allowed to expire briefly, installations of new wind farms fell 92 percent. After Congress renewed the PTC, the U.S. wind energy industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014, according to the American Wind Energy Association (AWEA).
In June, proposed legislation threatened to eliminate the PTC, leading 85 companies to send a letter to Congress to protest the bill saying that, if passed, the bill would "take away an effective, business tax incentive that creates jobs, drives rural economic development and reduces energy costs for Americans across the country."
Wind fosters economic development in all 50 states and has attracted more than $100 billion in private investment to the U.S. economy since 2008. Successful companies in the private sector say extending the tax credits make sense.
"This agreement, and those previously in place, puts AWS on track to surpass our goal of 40 percent renewable energy globally by the end of 2016…We're far from being done," said Jerry Hunter, vice president of infrastructure at Amazon, referring to the company's decision to operate a new 208 MW wind farm that will deliver energy into the electrical grid that supplies current and future Amazon Cloud data centers. "We'll continue pursuing projects that deliver clean energy to the various energy grids that serve AWS data centers, we'll continue working with our power providers to increase their renewable energy quotient, and we'll continue to strongly encourage our partners in government to extend the tax incentives that make it more viable for renewable projects to get off the ground."
According to a Department of Energy (DOE) report released in early 2015, with stable policy, wind could supply 10 percent of the nation's electricity demand by 2020, 20 percent by 2030 and 35 percent by 2050. By 2030, that could result in wind supporting 380,000 jobs and increase tax payments to communities to $1.8 billion a year.
But nuclear proponents don't see the benefits of wind, calling the wind subsidies "wasteful."
"The committee voted to support the Obama administration's national energy policy that amounts to a national windmill policy. Last year, extending this wasteful wind subsidy for one year costs taxpayers more than $6.4 billion over 10 years, which is about the amount that the United States government spends on its entire basic energy research budget," said U.S. Senator Lamar Alexander (R-TN), who is also chairman of the Appropriations Subcommittee on Energy and Water Development and is a member of the Senate Energy and Natural Resources Committee. "Our country uses about 25 percent of the electricity in the world. Relying on windmills to produce that electricity when nuclear power is available is the energy equivalent of going to war in sailboats when nuclear ships are available. After 22 years of billions of dollars in subsidies, wind still produces only 4 percent of our electricity and the windmills work only about 35 percent of the time. Nuclear power produces 20 percent of our electricity and 60 percent of our clean electricity."
The tax extenders package awaits action by the full Senate and will also need to be passed by the House and signed by the president before becoming law.
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