Wind energy development in the United States has slumped. Despite record installations in 2012, and eking out a 1-year, $12 billion extension [1] of the wind production tax credit (PTC), new wind capacity last year fell to just 1,087 megawatts, a level not seen in more than a decade. Development in 2014 is showing signs of improvement, but the year may not fare much better.
The industry blames Congress and the uncertainty surrounding the PTC for the slowdown. But such thinking is overly simplistic and ignores the fundamental challenges facing big wind. This slump, like others that plagued development in prior years, can be traced directly to generous government assistance, current energy prices, and the inherent limitations of wind power.
Slowdown Reasons
The Section 1603 cash grants enacted under ARRA fueled a wind bubble as developers raced to build and qualify their sites.…
Last month, GE’s Chief Financial Officer, Jeff Bornstein, complained that IRS rules defining ‘begin construction’ were still too vague and holding up delivery of 400 to 500 turbines. “We expect that clarification to come from the Treasury in the next week or two,” he said. “We’ve seen that clarification and we think it is helpful.”
And sure enough, GE got exactly what it wanted. Last week, the IRS delivered its third guidance document–and it’s troubling.
Despite eking out a one-year extension of the wind production tax credit (PTC) last year, only 836 MW of new wind was installed in the first six months of this year, the second lowest since 2008 (in 2013, a single two megawatt turbine was erected in Q1/Q2).
Yet surprisingly, with the PTC nominally expired not unlike in 2013, the industry is advertising 14,600+ MW of new wind under development, including 2,000 MWs added to the pipeline this year, after the PTC expired!…
“After years of debate there is still disagreement and uncertainty regarding appropriate safety setback distances. This uncertainty has benefited the wind industry. Thousands of turbines are erected throughout the U.S. that are dangerously close to where people live.”
Last month, Ohio infuriated wind proponents by passing Senate bill 310, a bill that delays the state’s renewable electricity standard for two years and eliminates the requirement that half of the renewables mandate be met with in-state resources.
Within days of SB310 passing, Ohio Governor John Kasich approved a change to the safety setback distances for wind turbines. Under the new law, setbacks will now be measured at the property line of the nearest adjacent property as opposed to the wall of a nearby home. In practice, this will require minimum distances of at least 1,300 feet from property lines to each turbine base.…