After Gutenberg

Credit: Clipper Windpower

While growth in certain parts of the United States has been strong in recent years, wind power only generates a tiny fraction of US electricity. A significant driver of this recent growth has been the federal production tax credit, which is scheduled to expire in December.

In “Using the Federal Production Tax Credit to Build a Durable Market for Wind Power in the United States (PDF)”, Ryan Wiser, Mark Bolinger, and Galen Barbose of the Lawrence Berkeley National Laboratory observe:

The United States is endowed with a sizable renewable resource base, and yet only 2.7% of the nation’s electricity supply came from non-hydro renewable energy sources in 2006. Other countries have already made significant strides towards using renewable energy. Denmark meets roughly 20% of its electricity needs with wind alone, for example, while Spain is at 9% and Germany and Portugal are at 7%. Despite having a much-more-robust wind resource than any of these countries, the U.S. currently meets less than 1% of its electricity needs with wind power.

Nonetheless, new investments in renewable generating capacity in the United States have been accelerating in recent years. Wind power has been at the forefront of this growth. The year 2006 was the largest on record in the U.S. for wind power capacity additions, with over 2,400 MW of wind added to the grid. And, for the second consecutive year, this made wind power the second-largest new resource added to the U.S. electrical grid in capacity terms, well behind new natural gas plants, but ahead of coal.

Among the most significant drivers of this recent growth has been the federal production tax credit (PTC) [Section 45 of the Internal Revenue Code], which offers a sizable incentive for investors in wind and other renewable power plants. Impetus has also been provided by a growing number of state renewable energy policies, the rising cost of fossil fuels, improved renewable energy technologies, and the prospect of future carbon regulations.

Bruce Morley, chief executive of Wind Holdings, LLC, told the Denver Post that the project could use Vestas wind turbines. The Danish firm, Vestas Wind Systems, recently announced the building of a blade-manufacturing plant in Colorado. There is a growing market for megawatt wind turbines in the United States.

The authors conclude that a longer-term extension of the federal PTC may provide a number of benefits, to include:

1. Accelerated wind deployment
2. Reductions in installed wind project costs
3. Increased domestic wind turbine and component manufacturing.

The leveraged cost of electricity from wind power is higher than biomass-fired, electric power generation. Nonetheless, it can brought on line much quicker than other forms of generation and is a more proven technology than carbon capture and storage. When Jerry Patterson, Commissioner of the Texas General Land Office, welcomed the U.S. Department of Energy announcement that Texas would be home to one of two large-scale wind turbine research and testing facilities, he noted “President Bush is a Texan, who understands the energy business, …but, we also need to diversify our portfolio to include renewable energy sources such as wind power.”

As this blog previously has noted, General Electric makes highly regarded turbines, yet Vestas remain the predominant choice among wind energy developers in North America and elsewhere. Given the double jeopardy of climate change and peak oil, it would seem prudent for Congress to consider the recommendations from Lawrence Berkeley National Laboratory. Renew the PTC; America needs Green Jobs.