As the press and Minnesota bloggers have noted today, the American Wind Energy Association has issued its Annual Rankings Report for 2008. The Rochester Post Bulletin's AP article is typical of what we're reading about it:
Minnesota has overtaken Iowa as the nation's third-largest producer of wind energy, behind Texas and California.
The American Wind Energy Association says Minnesota added 405 megawatts of wind power production last year and had 1,299 megawatts of wind energy at the end of 2007. That edged Iowa's 1,271 megawatts.
The organization says U.S. wind power capacity is now about 16,800 megawatts -- enough to serve 4.5 million households with electricity.
Under legislation passed last year, Minnesota set a target of generating 25 percent of its energy from renewable sources, such as wind, by 2025.
Every state legislator from Southern Minnesota voted for that renewable energy standard. The mandates help encourage investment in the wind industry through helping to encourage a market for green energy.
Minnesota is number three in terms of wind energy production according to the report, and second only to Iowa in terms of wind being a percentage of electricity generation. We were fifth in terms of added capacity in 2007. Xcel Energy led investor-owned companies in wind generation, while Great River Energy was at the front of the pack for rural electrical co-ops.
The Albert Lea Tribune applauds the rise of the area's wind industry in State now No. 3 in wind energy production:
Thanks to investment in wind energy by private interests, Minnesota is now No. 3 in the nation for wind energy production.
It shouldn’t be surprising, thanks to the large influx of wind energy projects in Mower County alone.
Wind energy will never be our sole source of energy — after all, even though it may feel like it sometimes, the wind doesn’t always blow, even in southeastern Minnesota. But the more we can complement our fossil fuels energy sources with renewable sources, such as wind and biofuels, the more we reduce our dependence on a depleting resource.
U.S. wind power capacity, according to the American Wind Energy Association, is now enough to serve 4.2 million households. That’s only a sliver of what is ultimately needed, but we’re headed in the right direction. The target set last year by our state Legislature — to generate 25 percent of our energy with renewable sources by 2025 — will further this worthy cause.
What else has stabilized investment in wind energy project? The AWEA makes the following observations about the production tax credit, which will expire at the end of this year:
Description: Under present law, an income tax credit is allowed for the production of electricity from qualified wind energy facilities and other sources of renewable energy. The current value of the credit is 2 cents/kilowatt-hour of electricity produced. The credit was created under the Energy Policy Act of 1992 (at the value of 1.5 cents/kilowatt-hour, which has since been adjusted annually for inflation) and applies to electricity produced by a qualified wind facility placed in service after December 31, 1992, and before January 1, 2009. The production tax credit (PTC) is only applicable to utility-scale wind turbines, not smaller turbines used to power individual homes or businesses.
Current Status: The PTC is scheduled to expire on December 31, 2008. Since its establishment in 1992, the PTC has undergone a series one or two year extensions, and has been allowed to lapse in three different years: 2000, 2002 and 2004 [BSP note: see chart at the beginning of this post]. The federal government’s uninterrupted commitment to the PTC from 2005 through the present has given the industry a steady base to build upon, enabling three straight years of growth. The most impressive expansion of the wind industry was seen in 2007, when a record 5200 megawatts of new wind power capacity were added.
The PTC enables utilities, wind energy developers and manufacturers to invest billions of dollars each year in equipment and facilities associated with the generation of electricity from renewable energy resources, such as wind, geothermal, biomass and hydropower. Since investment decisions are being made today for new wind power projects that are not expected to be completed until next year, wind energy companies are already reporting a decrease in investment as a result of the uncertainty surrounding tax policy. If Congress does not act soon to extend the PTC, companies will stop making investments in projects not expected to be completed before the end of the year. The result will be the loss of thousands of jobs in construction, manufacturing and maintenance at a time when renewable energy is a bright spot of surging growth in a troubled economy. Based on AWEA’s projected impact on wind installations, allowing the PTC to expire would cause a loss of approximately 75,000 jobs in a single year.
The tax credits were stripped from the Energy Independence and Security Act, made law in late 2007, by Bush and Senate conservatives.
The House voted for the Renewable Energy and Energy Conservation Tax Act of 2008, which will extend the tax credits, by a vote of 236-182. Congressman Ramstad joined Minnesota's Democratic representatives in voting for the measure. Representative Bachmann and Brian Davis's mentor John Kline voted against it. In the Senate, both Klobuchar and Coleman have supported the extension in the first Senate version of the stimulus bill, which was blocked by conservatives.
Included in this measure is an extension of a production tax credit sought by the wind and solar energy industries. Here's the AWEA's statement about the need for the tax credit:
This very impressive growth [by the wind industry] is driven by three major ingredients: strong demand, favorable economics, and most importantly for our discussion today, a three-year period of blessed relief from the on-again, off-again, boom-and-bust, cycle of the federal production tax credit (PTC) for wind power.
But the PTC and tax incentives for other renewable energy sources are now in danger of lapsing at the end of this year——and at the worst moment for the U.S economy:
- Already, major wind farm development companies are telling us that investment is drying up and they are being forced to put large projects in the pipeline for construction next year on hold.
- We currently estimate that some 75,000 jobs are being placed at risk including more than 32,000 in the direct manufacture, construction and operation of wind energy facilities.
We have shown—in spades—what we can do with a stable investment climate and federal incentive. The last thing we should be doing today, as a country, is imposing new taxes on an industry that today is hard at work producing new manufacturing jobs and fresh economic opportunities, and helping to reduce global warming pollution. We call on Congress and the President to quickly extend the PTC—the only existing U.S. incentive for wind power—in order to keep this industry growing and strong.
We wrote about other federal programs that encourage Southern Minnesota's wind industry earlier this week. Congressman Walz has also backed a tax measure that would allow local investors to reap more of the wind.
We're looking for up-to-date information about the subsidies now received by the coal and nuclear power industries and will add them as we locate them.
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