U.S. WIND GETS ITS MOJO BACK

Extended U.S. Tax Credit Blows Fresh Air Into Wind Projects

Housley Carr, February 27, 2013 (Engineering News-Record)

“Wind-farm construction in the U.S. nearly ground to a halt after ending in a frenzy late last year. But the pace of turbine installation is set to pick up substantially later this year, largely thanks to the recently enacted extension of the federal production tax credit, say utility and wind-sector experts…

“The tax-credit extension approved by Congress and signed by President Obama in January as part of the "fiscal cliff" compromise provides a $22/MWH tax credit for the first 10 years of a wind farm's operation. For the first time, the latest extension applies to all projects under construction by Dec. 31, 2013, even if they are not completed until next year. Under the previous tax credit, a wind farm had to be completed and operational by the end of 2012 to qualify.”

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“Several utilities already are moving to take advantage of the lower wind-power prices the tax-credit extension provides…Last year, with lower wind-turbine prices and strong competition among developers, wind-power prices offered by developers in regions with the best wind resources, such as the Great Plains, were often below $40/MWH; without the tax-credit, most offers likely would have been above $60/MWH—a big difference to utilities already concerned about the generally higher cost of renewable energy…

“A spokeswoman for Duke Energy Renewables, which built 800 MW of new wind capacity in 2012, says the tax-credit extension ‘removed uncertainty; and enabled utilities to plan RFPs and long-term power purchase deals. [Washington energy lobbyist Frank Maisano] predicts a stronger rebound in wind-farm construction in the Great Plains and Midwest, with fewer regulatory hurdles and less opposition from environmental groups.”

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