Wind energy tax credit likely over, but effect may not hurt like before

Dec. 31 is a curious date for Texas wind energy producers.

That's when transmission services providers expect to energize the last power lines built under the state's $7 billion Competitive Renewable Energy Zone initiative, the long-running effort to connect windy West Texas to the state's energy-thirsty big cities. The 3,600-mile project has been credited with spurring even more investment in Texas, the country's wind power leader.

But 2013's last day is also an ominous one for wind folks. It's the expiration date of the federal Renewable Electricity Production Tax Credit, the fate of which has driven booms and busts in the industry. The multibillion-dollar credit, which Congress passed in 1992, helps wind stay economically competitive with other energy sources, including low-priced natural gas. Without it, the industry can't keep pace, even as production costs fall.

Last year, as the credit neared its demise, Congress extended it as a part of a last-minute budget package, but only for a year. This year, with Congress focused on finding a way to turn the government back on and pay its bills, lawmakers have yet to draw up a proposal for the credit, making a swift renewal increasingly unlikely.

So how would Texas wind power fare if the 2.3-cent-per-kilowatt-hour incentive lapsed? That would depend on how long the credit is unavailable, observers say. But for a couple of reasons, the effect probably won't be as harsh as in past uncertain times.

Jeff Clark, executive director of the Austin-based Wind Coalition, said he's not too worried about the ticking clock. “There's a lot of projects in the pipeline right now,” he said.

The 202-megawatt Baffin Wind Farm, in Kenedy County, is one project that's depending on the tax credit. However, owner and developer Iberdrola Renewables LLC isn't concerned.

Comments (0)

This post does not have any comments. Be the first to leave a comment below.

Post A Comment

You must be logged in before you can post a comment. Login now.

Featured Product

Kipp & Zonen - Smart SMP Pyranometers

Kipp & Zonen - Smart SMP Pyranometers

Equipped with an extremely low power, smart interface the Smart SMP pyranometers offer industry standard digital and amplified analog outputs within the well-known CMP series housings. The output range is programmed so that all SMP pyranometers have identical sensitivities, allowing easy installation and exchange for recalibration. Serial communication allows access to measurement data, instrument status, operating parameters and calibration history. Building on the proven CMP Series design and technology that is used around the world, the new SMP pyranometers add digital signal processing and interfaces optimised for industrial data acquisition and control systems.