Wind Power Developers Race Clock to Secure Subsidy
As the rest of the world prepares to toast the new year, the wind industry is hard at work on its own year-end tradition, rushing to make sure projects qualify for an important subsidy before it is set to vanish at the stroke of midnight on Tuesday.
Developers are signing deals, ordering equipment and lurching ahead with construction starts to qualify for a tax credit that is worth 2.3 cents a kilowatt-hour for the first 10 years of production. This month, giant turbine-makers like Vestas and Siemens have announced major new orders, including a deal worth more than $1 billion with MidAmerican Energy, an Iowa-based utility majority-owned by Warren E. Buffett’s Berkshire Hathaway, and another with the Cape Wind project in Nantucket Sound.
In previous years, the projects had to be in commercial operation by New Year’s Eve. This year, they need only have begun.
“What we see right now is a race to the finish line, where we’re trying to get projects signed,” said Mark Albenze, chief executive of the Wind Power Americas unit of Siemens Energy. “It’s a little bit of a different dynamic, whereas in ’12 our projects teams were the ones stressing out in December and now it’s our acquisition team.”
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