“The Schumer-Manchin bill provides that after 2024 the traditional PTC and ITC programs expire, but the benefits live on through the new “Clean Electricity” tax credit program.”
“Based on published project footprints of recently sited wind projects in Wyoming, Oklahoma, New Mexico, and Colorado, new wind turbines will spread across 30 million acres (50,000 sq. mi.) by 2032.”
The Schumer-Manchin bill passed by the US Senate this weekend and heading to the House erases any doubt whether Congress is serious about lowering inflation, addressing energy costs, or protecting the environment.
Ironically dubbed the Inflation Reduction Act of 2022, Schumer-Manchin will do nothing to reduce inflation. But what it will do is far worse. Schumer-Manchin will unleash the largest industrialization of U.S. open lands not seen since the damming of our western rivers.…
Three important questions are tied to the future of industrial wind power to continue to expand in the nation’s electricity mix.
1. Can the wind industry survive without the PTC?
The industry can no-longer claim to be nascent. There are more megawatts of wind operating in the US than nuclear power with tens of thousands of megawatts in development.
Moreover, for nearly a decade the wind industry has touted that it was ready (or nearly ready) to move off the PTC and grow on its own dime. The phase-down was intended to provide a glide path to traditional sources of construction financing.
But in 2020, tax equity still represents between 50-65% of project costs.
The industry used the phase-down as a six-year extension of the tax credit. In the period from 2016 to 2020, developers made no apparent effort to reduce reliance on the subsidy.…
“In recent years, wind energy development costs have dropped while capacity factors increased dramatically. As such, the benefit to developers of the adjusted PTC is staggering.”
Wind power’s Production Tax Credit (PTC) has not expired as of 2020. And there is no certainty that it will ever be allowed to expire.
Under the phase-out, 2019 was supposed to be the last year wind projects could qualify for the PTC. Projects that started construction in 2019 and are placed in service within four years would earn 40% of the PTC or 1¢/kwh during the first 10-years of operation. But during the final hours before the December 2019 holiday break, Congress voted for a 1-year extension of the PTC through to 2020 and increased its value to 60% or 1.5¢/kwh.
Projects that started construction in 2019 would still earn the 40% PTC.…