PTC Extension Not Enough to Save Some Wind Industry Jobs

According to the Institute for Energy Research , in spite of the New Year's Day one-year extension granted to the Production Tax Credit for wind energy as part of the fiscal cliff bill, some employee layoffs and wind project cancellations continue. Here are the details.

* Regardless of the Production Tax Credit extension, the institute stated this week, wind power is reaching a saturation point for the next several years as some state renewable portfolio standards mandating specific levels of power to be generated by renewable technologies are reaching their mandates.

* According to the Institute for Energy Research, it is the renewable portfolio standards, unconnected from costs and markets, that has driven the wind capacity additions, not the tax credit.

* The institute points to the recent news that wind industry giant Vestas still plans to reduce its workforce this year by another 2,000 jobs, in spite of the renewal of the tax credit.

* However, Vestas stated that the late timing of the tax credit extension -- not saturation of the market -- is the cause of the continued plans to reduce its workforce. "Vestas adjusted the company's workforce in 2012 based on the PTC not being extended," the company, which currently employs a global workforce of 18,000, stated.

* Vestas added that while the production tax credit provides certainty for the wind industry, late timing of the extension will result in a significant reduction in 2013 installations due to the time it takes from when an order for a wind installation is placed to the project's completion.

* According to the Pueblo Chieftain , workers at a wind tower factory in Colorado went on 24-hour work weeks for January due to a slowdown caused by Congress' yearlong delay in extending the credit. The cut in worker hours was done at Colorado plants in lieu of further layoffs and will allow workers to get partial state unemployment benefits for up to 18 weeks.

* Seven hundred of the 1,800 workers at Vestas' Colorado facilities have been laid off in the past year, the Chieftain reported.

* In addition, the Institute for Energy Research reported, Spanish company Iberdrola Renewables has confirmed that it will no longer be pursuing the development of a wind farm in Hammond, N.Y., and plans to cancel 100 wind projects in the United States.

* According to a Jan. 3 article in the National Journal, the one-year extension of the tax credit ensures that the industry will be back this year to try and get it extended for an even longer period of time. Meanwhile, others -- including the utility companies who have invested in wind -- are questioning the benefits of the tax credit.

* John O'Donnell, a lobbyist for Xcel Energy, stated that he doesn't think extending the benefits of extending the tax credit goes beyond the wind developers to reach the customers paying electricity bills or the utilities buying wind from renewable energy generators.

* Xcel -- who had the largest wind capacity of any utility in 2011 -- is now considering whether or not to continue buying wind or being a member of the American Wind Energy Association, the National Journal reported.

* Exelon, the country's biggest nuclear generator and 11th-ranked utility in terms of wind generation, is also questioning the production tax credit, stating that the credit distorts electricity market prices and hurts the company's bottom line, according to the National Journal. The company is vowing to work with legislators in the coming months to make them aware of the "unintended negative consequences" that will result from the continuation of the Production Tax Credit.

Source: http://news.yahoo.com/ptc-extension-not-enough-save-wind-industry-jobs-213800717.html

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