Nearing grid parity, wind industry wants to “finish the job”
As much as they wished otherwise, the seemingly annual rite whereby the wind industry trots out all those nifty pie charts and bar graphs explaining why extending the Production Tax Credit for renewable energy (PTC) makes good sense is once again upon us.
But this year is different because the wind industry is in the middle of a period of scaling up that is making wind power cost competitive with conventional sources of electricity. And it’s different because the industry is not asking for permanent support, according to American Wind Energy Association CEO Denise Bode.
“We just want to finish the job,” Bode said today on a call with reporters. Bode and other wind industry representatives echoed the key findings of a report published today by Navigant Consulting.
In the absence of a PTC extension ["Scenario 1" in graph below], the Navigant study predicted another period of stagnation in new wind power capacity—with total wind investment falling by nearly two-thirds, from $15.6 billion in 2012 to $5.5 billion in 2013—echoing the “boom and bust” pattern of wind industry development that has characterized the American case over the last 15+ years. In the years following PTC expiration, installations dropped by between 73 and 93 percent, resulting in nearly catastrophic job losses for the wind industry and its suppliers.
“If this doesn’t [get extended]we really do face some tough times,” said John Purcell vice president of wind energy at Leeco Steel.
According to Purcell, the steel industry has added 3,000 steel manufacturing jobs tied to the wind sector since 2005.
“This has truly been a success story for the steel industry and the fabricators we supply steel to,” Purcell said.
Leeco Steel will sell 150,000 tons of steel plate to the wind industry in 2012 alone.
While the industry would obviously prefer the stable investment climate provided by a four-year extension, the lack of productivity in the current Congress thus far may mean the industry would have to settle for a shorter one-year extension of the PTC like the one passed at the end of 2010.
Major findings of the Navigant study include:
With no PTC extension…
* The U.S. wind market will shrink by 75% in 2013, down to 2 GW from the projected 8 GW in 2012.
* Total wind supported jobs will drop by nearly half, from 78,000 in 2012 to 41,000 in 2013.
* Total wind investment will drop by nearly two-thirds, from $15.6 billion in 2012 to $5.5 billion in 2013.
With a 4-year extension of the PTC…
* Total wind supported jobs will grow to 95,000 by 2016.
* Total wind investment will grow to $16.3 billion in 2016.
* The U.S. would avoid 170 million tons of CO2 emissions through 2016 (and beyond)
Article by Timothy Hurst, appearing courtesy Earth & Industry.