Last week, diverse a group of 19 companies sent a letter to Congress asking them to extend the production tax credit (PTC)? for wind power. Among the companies were a combination of green and traditional businesses including: Yahoo, Ben & Jerry?s, Johnson & Johnson, Seventh Generation, Sprint and Starbucks. The 19 companies are part of the Business for Innovative Climate & Energy Policy (BICEP), a project undertaken by Ceres.
These businesses are concerned that allowing the PTC to expire would raise the price of wind power. Support for the credit comes from both Republicans and Democrats, who stress the need for a level playing field for renewables to compete effectively against oil and gas which enjoy billions of dollars in subsidies every year. Only those anti-tax politicians on the far right oppose the extension, which is more than ironic considering that allowing the credit to expire would be equivalent to raising taxes on these companies. According to the letter,
?In the past decade American businesses have significantly ramped up their purchase of American wind energy. For consumers of wind electricity, the economic benefits of the PTC are tremendous. Electricity rates, which reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market. Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks. We are concerned that allowing the PTC to expire will immediately raise prices for the renewable electricity we buy today.?
The cost of wind power has dropped 90 percent since 1980, largely due to the production tax credit which has spurred investment and brought economies of scale into the industry. It is one of the fastest growing energy sources (second only to solar, which is still far behind in total power provided) and accounted for 35 percent of all new capacity installed in the past four years. We now have 47 GW of wind power installed which represents a little more than 3 percent of our national demand.
The letter goes on to point out that wind power can help to spur business growth. According to American Wind Energy Association estimates, failure to extend the credit could contribute to a net loss of 91,000 jobs. Of the $79 billion of private investment that has gone into wind power, $20 billion occurred in the past five years.
In short, wind power is not only good for the environment; it is good for the economy, too.
Of course, not all business leaders are in favor of wind power. Donald Trump is vehemently opposed to it. He took out an ad in Scotland opposing wind development, though the ad was banned by the Advertising Standards Authority.
His problem? He claims it will spoil the view at his $1.2 billion golf resort, why else?
Meanwhile, Siemens, in anticipation of the tax credit expiration, is already preparing to lay off over 600 workers, about a third of its U.S. wind power workforce. The company has invested over $100 million in the industry here.
At the same time, the state of South Australia announced that that they produced over 50 percent of their power from wind earlier this month. Their power sector has reduced its emissions by 27 percent over the past five years.
The U.S. wind production tax credit which provide 2.2 cents per kWh, was originally signed into law by President George H.W. Bush. It is set to expire at the end of this year if not renewed by Congress.
[Image credit:Vattenfall: Flickr Creative Commons]
RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
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Source: http://www.triplepundit.com/2012/09/wind-power-tax-credit-business-leaders/
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