I don’t know much about sailboat racing but I’ve heard yachtpeople speak of a dreaded point in a race where a speeding sloop, under full sail, slips into a “dead spot” on the lake where there is no wind. And all forward motion stops. And they languish, defeated, in a motionless, de-energized piece of flat, still water called “the doldrums.”
There is danger of the same sort lurking just ahead in the renewable energy industry. It’s called the Renewable Energy Production Tax Credit and it is set to expire at the end of 2008 … which is not too far away.
A lot of nervous whispering is starting to occur indicating that the expiration of the Renewable Energy Production Tax Credit (PTC) stands to place $19 billion in renewable energy investment in peril and 116,000 U.S. jobs at risk.
Talk about sailing into a dead spot. The outcome of an expiration of this PTC would be disastrous to a very promising new Michigan industry that’s just getting under way. And it would be disastrous on many other fronts as well, not the least of which is Michigan’s agricultural economy. But from an economic point of view, investment in Michigan wind component manufacturing and solar manufacturing and installation would dry up quickly and lethally.
Current total installed wind power capacity in the United States is now at about 16,800 MW, or enough to power the equivalent of 4.5 million average households. Wind was the second largest source of new electrical capacity in the nation for the past three years, just behind natural gas. This is no time for the renewable energy industry to stop moving forward. Fortunately, legislation has been introduced by U.S. Senators Max Baucus and Charles Grassley (S. 2886) on April 17, 2008 that includes tax credits for the production of renewable electricity and refined coal through December 2009. But “introduced” does not mean passed. This legislation will need our support.
The American Wind Energy Association (AWEA) credits the industry’s expansion to the stability that the PTC offers, which assures investors and utilities alike. The PTC cures the “boom-and-bust” cycles that have plagued the industry in prior years; cycles which increase costs along the entire supply chain and prevent businesses from growing appropriately and for the long term.
The top five states for total installed wind in 2007 were Texas (4,446 MW), California (2,439 MW), Minnesota (1,299 MW), Iowa (1,271 MW) and Washington (1,163 MW). The top five states with new capacity added in 2007 are Texas (1,618 MW), Colorado (776 MW), Illinois (592 MW), Oregon (447 MW) and Minnesota (405 MW). Michigan is still not on either of those lists, and probably won’t be for awhile, pending the passage of an RPS for our state. Currently, Michigan has only 3 MW of installed wind, ranking 46th among the 50 states.
That’s not to say the Michigan environment won’t change for the better; change is under way. But we’re not there yet. The real play in Michigan wind, once RPS is in place, will be in offshore wind capacity. That is some years out, but that’s where Michigan stands to gain tremendous technological and generation advances that will secure our state’s productivity, safety, and desirability in the decades to come.
The race for leadership in the alternative and renewable energy industry is far from over, and I am confident that there will be far more winners than losers. But the threat of losing momentum is real, and it is up to all of us to see that our lawmakers do not falter at this most crucial point; we must all do our part to see that the Renewable Energy Production Tax Credit continues after 2008. Please contact your federal representatives to make sure that they are aware that the Renewable Energy Production Tax Credit must continue for the betterment of our state and our national economy.
NextEnergy paid for placement of this article. The group's views do not necessarily reflect those of WWJ Newsradio 950 or CBS Radio.
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