A big year is in store for the wind energy industry in 2012, both in the policy arena and out in the field. With the Production Tax Credit (PTC), wind power’s key policy incentive, set to expire at the end of the year, industry members and advocates will be pushing for a PTC extension so that the industry can grow to nearly 100,000 jobs just four years from now. Meantime, wind turbines developers will be busy getting wind farms built and online by year’s end.
Yesterday the American Wind Energy Association (AWEA) looked back at the year in wind power for 2011. Now it’s time to take a look ahead at the trends that promise to define 2012 and beyond.
1 – Boom phase of the notorious boom-bust cycle. Anyone who has followed the industry for a period of time is familiar with the up-down nature of the wind industry’s growth pattern, caused by Congress’s short-term extensions of the PTC. While the PTC has been around since the 1990s, Congress has extended it mostly in one- and two-year increments and even has allowed the credit to expire on occasion. The result is a boom and bust pattern that is difficult for businesses to plan around. Congress has yet to act on an extension to the PTC, which is set to expire at the end of 2012. Under-construction numbers are up; 8,400 MW were counted at the end of the third quarter in 2011. Expect them to continue to surge as 2012 gets underway.
2 – Appropriately, WINDPOWER heads to the Southeast. The Wind power industry has been quietly establishing a presence in the Southeast for some time—particularly in the form of manufacturing plants. Today at least 74 manufacturing plants in the region serve the wind power industry. Also, utilities in Alabama and Louisiana recently signed contracts for wind power, and projects are under development in North Carolina and Florida. It should come as no surprise, therefore, that for the first time, the WINDPOWER 2012 Conference & Exhibition, the largest annual wind energy event in the world, will take place in Atlanta, Ga., June 3-6, 2012. The event, considered the industry’s annual town square and marketplace, bustled with activity last year in Anaheim, Calif., drawing 16,000 people.
3 – Cost of fuel holds steady for wind power: zero. In 2012 utilities will continue to embrace the price-locking benefit of wind power by signing long-term power contracts for the affordable energy source. That’s because unlike the volatile prices of fossil fuels, wind power’s fuel cost is fixed: zero. The fuel cost was zero last year, and it’s guaranteed to stay at zero in 2012 as well. And wind power chalks up big zeros in other key areas: zero water use, zero air emissions, and zero water pollution.
4 – Congress takes action quickly and wind power generates more jobs. Congress ended the year without extending the PTC, but it can still act. If Congress extends it quickly in 2012—and a strong bipartisan contingent of members of Congress and business leaders are pushing for an extension—the industry will continue to add jobs and foster economic activity. A new study released this month finds that with stable tax policy the wind industry can grow to nearly 100,000 American jobs in the next four years. Included in those numbers: the wind manufacturing sector would grow by one third, to 46,000 American manufacturing jobs. Such job additions will keep the wind sector on track toward supporting the 500,000 jobs by 2030 projected in a report by the U.S. Department of Energy during the George W. Bush administration.
5 – Congress fails to take action, raises taxes on wind and kills 37,000 jobs. The recently released report from Navigant Consulting also found that if Congress allows the PTC to expire, jobs in the wind industry will be cut in half, meaning a loss of 37,000 American jobs and a one-third cut to American wind manufacturing jobs, while private investment in the industry would drop by nearly two thirds.
“American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power,” said Denise Bode, AWEA CEO. “But these jobs could vanish if Congress allows the Production Tax Credit to expire, in effect enacting a targeted tax increase, and sending our jobs to foreign countries. Congress must act as early in 2012 as possible to keep this American manufacturing success story going.”