Windpower Layoffs Making PTC Extension Increasingly Moot
By Robert Bradley Jr. -- September 6, 2012“The spate of layoffs that wind industry advocates have warned about has accelerated in recent weeks, with workers losing their jobs in key wind states such as Iowa and Colorado in a trend expected to continue at least into next year.”
– Nick Juliano, “Wind Layoffs Mostly Hitting Constituents of PTC Supporters,” Greenwire, August 29, 2012.
Energy reality continues to set in for the government-dependent energy sector, industrial windpower. Part of the reckoning is economic–the increased competitive gap between electricity generated from natural gas versus wind. But the bigger part is the looming expiration of the Production Tax Credit (PTC) for wind. Twenty years of such political favor has not been enough for a product that is intermittent (read: sub-industrial grade).
As reported in Greenwire last week:
More than 2,200 jobs have been cut, are at risk or were never created, although an untold number more likely have been affected through cuts at smaller companies that may not have generated formal announcements. The downturn has affected jobs in at least a dozen states, from Massachusetts to Oregon to Arkansas.
A map of the specific losses in regard to local Congressional races (Republicans in Red; Democrats in Blue) was compiled by E&E News (sub. req.).
Interestingly, but not surprisingly in our era of Big Government, every Republican (save one neutral), not only Democrat, in the above 18 districts supports an extension of the PTC. The states affected are Colorado (4); Arkansas (2); Iowa (2); Massachusetts (2); Pennsylvania (2); and one facility each in Minnesota, North Dakota, Oklahoma, Oregon, Texas, and Vermont.
In these districts were a good many freshman Republicans who on June 27 wrote to the House Republican leadership:
Manufacturers and developers in our districts have told us that within weeks, or months–as soon as their last component part is shipped off to the project site–they will be faced with little to no orders for 2013, and will begin to deal with layoffs and plant closures. Developers are now canceling projects beyond this year for fear that they won’t be able to secure the private backing necessary to finance their investments.
The 17 signatories added that they “do not support permanent tax credits” and were in favor of fundamental tax reform, but “more than half the jobs in the industry are expected to be gone by this time next year if the PTC is not extended.” Temporary tax credits? Remember what Milton Friedman once said: “There is nothing so permanent as a temporary government program.”
Meanwhile, the race is on to install new wind installations by year-end to qualify for the tax credit. Reports Juliano:
The industry is expected to install about 11.8 gigawatts of new turbines in 2012, more than a third of which is expected to come online in the last two weeks of December as developers race to meet the PTC expiration deadline, according to Bloomberg New Energy Finance. But installations next year are projected to be less than half that level even with an extension of the credit. The analysis firm projects 5 GW installed in 2013 if the PTC is extended, or just 2 GW without the credit.
The good news is that scarce resources are leaving an artificial, no-future industry for industries supported by fundamental consumer demand. The message is clear: Dear Wind Industry: We Need Your Workers and Materials (and taxpayers need your cessation).
I often hear that “someday” green energy and wind will be economically viable, so we should subsidize it now. No, when someday comes, then go ahead and produce your windmills. Actually, don’t. It is a hazard to the birds. No joke. It’s killing birds by the thousands, including the bald eagle. Stop it.
Rob,
Thanks for the map.
I noticed that there’s no job losses in up-state New York where GE has one of its main wind turbine factories. Are GE’s wind turbines that much better than the competition (such as Vesta)?
I just don’t know Eddie. I think GE has had their share of layoffs. But that is a good question.
I do know that GE Wind was Enron Wind which was Zond before Enron purchased it in 1997 or s0.
The Bloomberg New Energy Finance report projecting 2GW of new installed wind in 2013 if there is no PTC , no 30% cash payment, no double-declining capital depreciation schedule is yet another one of those wind projections that contain as much credibility as a BCS football poll. The capital costs of wind, on a kWh production basis, are likely greater than the costs of nuclear plants. And wind projects produce no firm capacity.
No sane investor would plough this ground without considerable assurances of future profits–which cannot happen without rather vast public subsidy. State RPS platforms do not mandate wind per se–and they’re not instruments for providing income for wind investment.
But to the larger issue addressed here–that of wind jobs–let’s not agree that there are many of those jobs to worry about, at least not full time, ten years out and well paying jobs. There’s likely less than 5,000 nationwide from all source, each one at a cost of millions. Any jobs estimates from the industry’s trade organization, AWEA, should be understood as trickeration by a group well versed in its practice.
Those scabrous freshmen Republicans who espoused Tea Party sentiments about reducing the size of the national debt and government while hanging those sentiments out to dry by supporting an extension of a twenty year production tax credit for wind seem vagabonds from the Know Nothing Party of the eighteenth century.
Even John Boehner seems a captive of this nonsense, waffling because of the promise of a wind manufacturing plant in his home district.
Once again it boils down to all politics is local be it wind “temporary” tax credits or earmarks for the sole & direct benefit of local industry & its union workers.
The genie is out of the bottle and is not returning willingly.
Kermit:
There are few, if any, wind union workers, although union leadership often stooges for the industry. To the extent they are employed in temporary construction projects, they spend just enough time to qualify for a new round of unemployment insurance, which we all pay to cover.
Maybe these workers could be re-trained to work in North Dakota or Wyoming?
Eaxactly Jonathan: better for everyone, including wind workers, to get them into a long-lived, market-based industry.
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