Congress Fuels Wind Energy Boom with Tax Credit

WASHINGTON, DC, March 13, 2002 (ENS) - The U.S. wind energy industry is set to spin into high gear with the passage by both houses of Congress of an extended production tax credit for electricity generated by wind power.

American Wind Energy Association (AWEA) executive director Randall Swisher said that with the tax credit back in place "wind energy development in the U.S. should resume the blistering pace it set last year when more wind capacity was installed than in any previous year in U.S. history."


The King Mountain Wind Ranch near Odessa, Texas, added almost 77 meagwatts of capacity to the state's wind power capacity in 2001.(Photo courtesy Cielo Wind Power)
The 1.5 cent per kilowatt hour tax credit, which had expired December 31, 2001, will be extended retroactively for two years to December 31, 2003.

The measure was passed as part of an economic stimulus and unemployment insurance bill (H.R. 3090) approved by the House on March 7 and by the Senate on March 8. The House approved the package by an overwhelming vote of 417-3. The Senate approved the same package by a vote of 85-9, with six members not voting.

President George W. Bush has indicated that he will sign the bill containing the tax credit into law.

Swisher said the reinstatement of the tax credit means that about $3 billion in wind energy investments forecast over the next several years are now back on track. "More importantly, hundreds of furloughed wind industry employees can now go back to work building and installing new high-tech wind turbines." he said.

Formed in 1974, the 700 member AWEA is the national trade association of the U.S. wind energy industry including turbine manufacturers, wind project developers, utilities and academics.

The delay in extending the tax credit put the high flying industry on pause after 2001, a year in which it installed more than twice as much new generating capacity, close to 1,700 megawatts (MW), as in any previous year. The previous record was 732 MW installed in 1999.

Texas alone installed more new wind capacity in 2001 (915 MW) than the previous record for the entire United States, due to a strong state law encouraging renewable energy.

The nationís largest wind energy producer, FPL Energy, in mid-December flipped the switch for two large windfarms - the 278 megawatt King Mountain Clean Energy Center near Odessa, Texas, and the 263 megawatt Stateline Clean Energy Center near Walla Walla, Washington.

In all, FPL Energy began operating 844 megawatts of wind power during 2001, more than double its prior capacity of wind energy.

Elimination of the federal production tax credit for wind power would have negatively impacted future construction of these renewable energy power plants across the country, said Dean Gosselin, FPL Energy vice president of wind development, and immediate past president of the American Wind Energy Association.


Three wind turbines at Bushland, Texas (Photo courtesy National Renewable Energy Lab)
"Many suppliers of wind energy components slow or close their production lines, and even those who would like to move forward with wind projects will be unable to do so," Gosselin said.

New high-tech wind turbines are energizing rural economic development, providing supplementary income for farmers and ranchers who lease small portions of their land to wind developers. Wind leases can provide landowners with income of about $3,000 per turbine, per year, for about 20 years.

"We know there are many more opportunities for wind energy throughout the country and great support in many regions for new wind power facilities," Gosselin said.

Swisher said the industry association aims to provide six percent of the nation's electricity from wind by 2020.

The AWEA is working for the five year extension of the production tax credit contained in the energy policy bill (S. 517) now being debated in the Senate.