Sooner rather than later on wind energy tax credit

Thousands of jobs could be lost in Colorado and other states if Congress does not act soon to extend the credit beyond 2012. Though 2011 was one of Vestas Wind Systems’ best years on record in North America, the forecast for its U.S. operations grows gloomier by the day as Congress comes closer to failing to extend a wind power production tax credit.

Last week — on the same day he announced that poor sales would require the company to cut more than 2,300 jobs, mostly in Europe and China — Vestas chief executive Ditlev Engle said failure to extend the tax credit could affect 1,600 jobs in the U.S. The impact would be significant in Colorado, where the company and its suppliers employ about 1,700 people.

The credit, which is set to expire at the end of 2012, keeps wind energy competitive with other types of power and helps companies draw financing.

We hope that Sen. Mark Udall and Reps. Diana DeGette and Cory Gardner will use their positions on their respective chambers’ energy committees to advocate for an extension sooner rather than later.

"I get it, and there is a block of senators who are working to see it is extended," Udall was quoted as saying at an event in Pueblo last week. "It will probably be part of a bigger package that would also extend the payroll tax deduction, but I can’t believe that Congress won’t get this done."

Rep. Gardner, whose district has significant wind energy investments, told us last week that he sees "a window of opportunity" for an extension to be passed early this year.

"The question is what form it will take. Whether it’s a five-year extension, whether it’s a grandfathering of projects that are permitted only, there’s no clear path yet of how it would work," he said.

Reaching a deal in the near term would provide certainty to an industry that has seen significant growth in recent years. If that means attaching the measure to the payroll tax extension, so be it.

The American Wind Energy Association said the industry accounted for about 20,000 direct and indirect jobs in 2010, up from 2,500 in 2004.

But the credit is key to keeping that growth going.

IHS Emerging Energy Research said market demand for turbines would be a record 10.7 gigawatts in 2013 were the credit to be extended. Without action, the Boston-based consultant said the demand would be 1.5 gigawatts.

"The wind-energy industry is bringing down costs and in a few years won’t need the tax credit, but for now — and in this economy — it should be extended," former Gov. Bill Ritter told The Post’s Mark Jaffe.

Wind power is an important piece of the nation’s energy policy as we look to decrease our reliance upon foreign oil and reduce emissions of greenhouse gases. Including extension of the tax credit in upcoming tax discussions could very well make it easier to find a way to cover the credit’s estimated $1.5 billion annual cost.

Otherwise, action would likely have to wait until the lame duck session, which would cripple an industry important to Colorado and other parts of the West and Midwest for at least a year.

By The Denver Post,