Stalled Energy Bill Equals No Growth Wind Industry

WASHINGTON, DC, May 13, 2004 (ENS) - After a boom year in 2003, the American wind power industry has stalled this year because its production tax credit has been stalled in Congress.

On Tuesday, the Senate passed legislation containing a three-year extension of the credit, to December 31, 2006, but it comes too late to help the wind industry this year, according to a report issued Wednesday by the American Wind Energy Association (AWEA).

Last year the industry installed a near-record 1,687 megawatts (MW) of new capacity, enough to power about 500,000 homes, bringing about $2 billion of new investment to rural areas of the country. the association said. But this year is a different story.

The AWEA now projects that new 2004 installations will be less than 500 MW. The association warned that the number of new installations planned is dropping daily and will continue to drop until Congress extends the production tax credit.

But the measure passed by the Senate as part of a corporate tax package must still be approved by the House of Representatives and a Senate-House conference committee before it is ready to go to President George W. Bush to be signed into law.

Since wind power plant developers require at least six months of lead time to arrange for the purchase of equipment, to obtain permits, and to arrange for the financing and construction, the longer a production tax credit extension is delayed, the less likely a project can be completed before year's end.

“Congress must act quickly to extend the production tax credit so thousands of people in the wind industry can get back to work," said AWEA Legislative Director Jaime Steve.

The damage to the industry affects companies all along the supply chain - fiberglass manufacturers that make wind turbine blades; makers of other components such as towers, generators, and gearboxes; and trucking companies that haul turbines and other equipment to new wind farm sites.

“There are many wind projects throughout the country ready to move forward that will create jobs, spur significant rural economic development, and produce clean, emission-free electricity for consumers,” said Steve.

If the wind industry were to consistently grow at a rate of 18% per year, AWEA said, six percent of the nation's electricity could be generated by wind power by the year 2020, resulting in over $100 billion of investment in rural America.

Over the last five years, U.S. wind capacity has expanded at an annual average rate of 28%, showing that the supply chain can ramp up quickly to meet the nation’s power needs. But without a production tax credit the U.S. will likely see very few new installations this year.