Mr. Bryce got space in a holiday week on FoxNews.com to attack me by name, AWEA, and several of our members – high-profile American energy companies like General Electric, Florida Power & Light’s NextEra Energy, and Iberdrola Renewables Inc. of Portland, Ore. Their crime was to invest tens of billions of dollars in creating a new energy source that will never run out, and one of the fastest-growing sources of U.S. manufacturing jobs, at a time when the U.S. economy most needed a shot in the arm.
As he has in previous diatribes, Mr. Bryce complains about federal tax incentives for renewables while conveniently ignoring dozens of century-old permanent subsidies – far more costly – that developed America’s oil, gas, coal, and nuclear resources in their time.
He also confuses the results-based Production Tax Credit for renewable energy – which now needs extension – with an emergency recession-era policy that got stalled wind projects a jump start, but is now just days from expiring.
I suggest anyone reading Mr. Bryce’s opinions consider that:
A year-long funding comparison is not a valid sample
Mr. Bryce’s central argument is like saying a football team "won" the 4th quarter of a game. What matters is the cumulative score over 60 minutes. He tries to use data from 2010 to prove that the wind power industry gets federal dollars and that they add up to more than oil and gas. However, he ignores nearly a century of federal subsidies going to well-established competitors of our industry, totaling over $447 billion – 50 times as much as for the renewables sector. And, the incentive for wind turbines is simply a favorable tax rate (which until the end of this month has been available as an advance refund, to help the economy out of recession), and isn’t a subsidy in the first place.
In fact, the Energy Information Administration (EIA) was hesitant even to release the information Mr. Bryce quotes, noting that “focusing on a single year’s data does not capture the imbedded effects of subsidies that may have occurred over many years across all energy fuels and technologies.”
This statement by the EIA was supported by a recent study titled, “What Would Jefferson Do?” by DBL Investors. The report notes that current incentives for renewable energy “do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy. For example: … the federal commitment to [oil and gas] was five times greater than the federal commitment to renewables during the first 15 years of each [incentive’s] life, and it was more than 10 times greater for nuclear."
The renewable energy incentive is working
Contrary to Mr. Bryce’s thesis, tax credits for the wind industry have been a proven,successful investment for the taxpayers. They drove nearly $27 billion in private investment into the economy at the depth of the recession when it was most needed, creating private jobs as well as a new homegrown energy source that will never run out. This investment has helped the industry steadily reduce the cost of electricity from wind power while competing in the marketplace alongside other energy sources that got so much more government support.
I suspect the reason he is getting increasingly shrill and personal in his diatribes is that wind power is no longer an alternative energy source, but is becoming conventional, and is big competition for his funders in other energy industries.
The cost of wind farm power has dropped by more than 90 percent since the early wind farms of the1980s, and a recent report from the Lawrence Berkeley National Laboratory found this trend is continuing. EIA supports these findings with data of their own, showing U.S. wind farms produced more than 15 times as much electricity last year as they did a decade earlier – enough to power the equivalent of nearly nine million average homes. And a new study by Navigant Consulting confirms the benefits in U.S. manufacturing jobs, while a Congressional Research Service study finds U.S. domestic production of wind turbine components has grown 12-fold to more than 400 facilities in 43 states,
A stable business environment is valuable
Companies that install and operate wind farms need a stable tax policy environment in order to make business plans, determine how much to invest, order turbines, and arrange for construction. As the credit’s expiration draws near, that period of stability is growing short. There is no lack of opportunity – as one company spokesman notes, "We have massive amounts of land still that can be developed for power production and really good wind resource" – but without knowing what the financial playing field will be, and whether they will continue to be able to compete with decades of sunk costs all financed by the taxpayers, companies and billions in private investment are being forced to the sidelines.
The wind turbines industry now faces a recurrence of previous boom-bust cycles when the Production Tax Credit was allowed to expire briefly before being renewed by Congress. In the years following expiration, installations of new wind turbines dropped between 73% and 93%.
Cutting successful policies has drastic consequences
The Navigant study finds that if Congress allows federal production tax credits for wind to expire, major job losses will be immediate. That not only threatens nearly 100,000 jobs the wind industry will otherwise have in the near term, but a total of 500,000 jobs that the Bush Administration found would result if wind produced 20 percent of America’s electricity by the year 2030 – which so far it’s on schedule to do.
Raising taxes on wind energy would also cut American wind turbines manufacturing jobs by one-third, while private investment that has recently averaged $17 billion a year would drop by nearly two-thirds, according to Navigant. The impact would fall not just on the major companies Bryce names, but more than 2,400 wind companies AWEA represents, many of them small businesses.
Let wind energy finish the job
The development of clean, renewable energy sources such as wind power is critically important for the future of the country and everyone who uses electricity now and in the future. Wind energy is clean, abundant, and homegrown, and its cost is dropping. The case for continuing to invest in its growth through a reasonable low tax rate remains strong. And to change course now would only shut down a new U.S. manufacturing sector, just as it is starting to deliver on a large scale.
By Denise Bode, AWEA CEO, www.awea.org/blog/