Backgrounder on wind energy and the State of the Union
Publication date: 24 January 2012
Several media outlets are reporting that President Obama will mention wind power and manufacturing jobs in his State of the Union address this evening, including reports that Bryan Ritterby of American Wind Energy Association (AWEA) member company Energetx Composites of Holland, MI will be First Lady Michelle Obama’s guest for the speech (AWEA’s Michigan Fact Sheet). This would mark the fifth time wind power has been mentioned in the SOTU in the last decade, by President George W. Bush in 2006 and 2007 and previously by President Obama in 2009 and 2011.
Denise Bode, CEO of the American Wind Energy Association (AWEA), issued the following statement today as background for reporters covering the speech.
“Wind energy is one of the few sources of agreement in a divided Washington. But with an expiration of wind’s key federal incentive, the Production Tax Credit (PTC), looming at the end of the year, these good manufacturing jobs are in peril.
Wind energy has installed more than a third of all new electric generation in this country in recent years and is powering one of America’s fastest growing manufacturing sectors. Over the last six years, U.S. domestic production of wind turbine components has grown 12-fold, to more than 400 facilities in 43 states. And with stable tax policy wind power is poised to grow to almost 100,000 jobs in just four years and stay on track toward supporting 500,000 jobs by 2030 according to forecasts by the George W. Bush administration.
Wind power is on schedule to generate 20 percent of America’s electricity by 2030 and already generates 20 percent of the electricity in Iowa and South Dakota. And this success story is spreading all across the U.S.
However, with uncertainty over the PTC, layoffs have already begun and studies have forecast they will increase with each month we near expiration.
Fortunately, a growing bipartisan coalition understands this urgency. Political and business leaders including more than a dozen Republican cosponsors and groups like the National Association of Manufacturers, Edison Electric Institute and American Farm Bureau Federation realize that wind power is not a Republican or Democratic issue, it is a manufacturing jobs issue. Extending the PTC will keep these good American manufacturing jobs here and keep providing a new source of clean, affordable energy to American consumers.”
Bipartisan support for the PTC:
Bipartisan legislation recently introduced by Representatives Dave Reichert (R, WA-08) and Earl Blumenauer (D, OR-03) seeks to grant a four-year extension to the existing Production Tax Credit (PTC) for wind energy (H.R. 3307, the “American Renewable Energy Production Tax Credit Extension Act”). This legislation has garnered the support of 56 cosponsors including 13 Republicans.
This legislation recently 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, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A four-year PTC extension also has the support of the bipartisan Governors’ Wind Energy Coalition comprised of 23 Republican and Democratic Governors from across the U.S.
Wind energy also enjoys strong support throughout the windy heartland including in Indiana where the Republican legislature recently passed and Governor Mitch Daniels (R) recently signed legislation setting goals for renewable energy generation.
What others are saying about wind energy:
Kansas Governor Sam Brownback (R):“The wind industry has utilized a production tax credit, which has helped the industry see steady growth this decade. I support the continued use of those tools as a way to spur investment in our communities and create sorely needed jobs.”
Iowa Governor Terry Branstad (R):“We cannot overlook the impact of the wind industry on economic development and jobs in Iowa,” Branstad also on the record supporting congressional approval of a long-term extension of the wind energy production tax credit to give businesses looking to invest some stability and predictability.
New Jersey Governor Chris Christie (R): “The wind power movement is providing us with a unique opportunity to advance energy as industry,” Christie said. “By doing so, we have the ability to leverage our tremendous resources with ground-breaking technologies, allowing New Jersey to increase its use of renewable energy sources while advancing an industry that will lead to long term job creation.”
Bipartisan Governors’ Wind Energy Coalition: “Although tax credits for wind energy have long enjoyed bipartisan support, they are scheduled to expire next year. Wind-related manufacturing will slow if the credits are not extended, and some of the tax credit’s benefit will be lost if Congress pursues a last minute extention. It is important to have consistency in policy to support the continued development of wind manufacturing in the United States.”
Senator John Thune (R-SD): In a recent Senate hearing Senator John Thune (R-S.D.) highlighted the broad, bipartisan support for tax credits and the importance of the PTC, noting specifically a 300 MW project in South Dakota slated to get off the ground—with the help of the PTC—in 2013. Also noted the PTC’s history of bipartisan support and wind’s enormous potential in South Dakota, but cautioned that the current tax credit uncertainty “impacts not only wind developers, but suppliers as well.” Senator Thune added, “American businesses need greater certainty.”
Congressman Steve King (R-IA): “I represent the number one renewable energy congressional district in all of America… There are other things China is challenging us on, but when it comes to clean, renewable energy, I’d say the fifth district of Iowa stands up against any country or any other congressional district.”
Bipartisan letter signed by 15 Senators including Tom Harkin (D-IA) and Chuck Grassley (R-IA): “With our very extensive wind resources, we know that in the future this industry can contribute vastly more to meet our electricity needs. However, for this to occur, Congress has a responsibility to provide certainty in federal policies so that this industry can continue to expand and meet demand. An immediate extension of the PTC is the best way to provide this certainty.”
Media endorsements: Wind power jobs were also the focus of a recent Denver Post editorial endorsing a PTC extension, “sooner rather than later.” (http://www.denverpost.com/opinion/ci_19761267) The paper’s editorial board called for speedy action by Congress on extending the PTC for wind power, noting that “thousands of jobs could be lost in Colorado and other states” if lawmakers don’t act soon. In particular, the paper stated, “We hope that Sen. Mark Udall and Reps. Diana DeGette and Cory Gardner will use their positions on their respective chambers’ energy committees to advocate for an extension sooner rather than later.”
The New York Times editorial board also recently called on Congress to “make sure to extend [the PTC] again. It, too, has been an important source of jobs.” (http://www.nytimes.com/2012/01/07/opinion/one-bad-energy-subsidy-expires.html?_r=1)
Newton, Iowa’s positive wind manufacturing jobs success story was also recently featured on FoxNews.com in an OpEd piece penned by Steve Lockard of TPI Composites (http://www.foxnews.com/opinion/2011/12/28/will-congress-let-us-keep-creating-american-jobs/)
About the Production Tax Credit:
The PTC is a tax incentive that helps keep electricity rates low and encourages development of proven clean energy projects. Private investment generated over the last four years of relative PTC stability averages $17 billion a year.
The wind energy PTC will expire in 2012 unless Congress takes action. Failure to extend the PTC would lead to job losses and will put the brakes on the progress America has made to include clean, affordable, homegrown energy as part of the U.S. electricity portfolio.
Facing the threat of the PTC expiring, wind project developers have become hesitant to plan future U.S. projects and American manufacturers have seen a marked decrease in orders. The wind industry is facing the recurrence of the boom-bust cycle it saw in previous years when the PTC was allowed to expire. In the years following expiration, installations dropped by between 73 and 93 percent, resulting in major job losses.
A recent report by Navigant Consulting finds that if Congress allows the PTC for wind to expire, jobs in the wind industry will be cut in half, meaning a loss of 37,000 American jobs and a one third cut to American wind manufacturing jobs, while private investment in the industry would drop by nearly two thirds. And Navigant found that these job losses will begin now and accelerate with each month the PTC nears the expiration deadline. Meanwhile, extending the PTC will allow the wind industry to grow to almost 100,000 American jobs in just four years and stay on track toward supporting 500,000 American jobs by 2030.
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