Wind Power

U.S. Wind Power Market Stifled in 2004

Wind energy projects totaling more than 2,000 megawatts (MW) in capacity – enough to power more than half a million American homes – are awaiting the expected renewal of a major federal tax incentive, according to the American Wind Energy Association (AWEA) said in its quarterly U.S. market outlook.

Washington DC – August 19, 2004 [SolarAccess.com] Wind energy projects totaling more than 2,000 megawatts (MW) in capacity – enough to power more than half a million American homes – are awaiting the expected renewal of a major federal tax incentive, according to the American Wind Energy Association’s (AWEA) quarterly U.S. market outlook. New projects in the pipeline amount to more than $2 billion in business, said AWEA executive director Randall Swisher. Those businesses are ready to provide millions of dollars of badly-needed tax revenues and hundreds of skilled jobs to rural counties around the nation, once Congress renews the wind energy production tax credit (PTC). Swisher pointed to the Colorado Green Wind Project, a large wind farm installed last year in eastern Colorado, as an example of the benefits that wind energy development can bring to rural areas. In rural Prowers County, population and jobs had been falling for years. Since the Colorado Green Wind Project was built, a chain reaction of economic development has added jobs, royalty payments for the property owners, and sharply-increased local and county tax revenues. The project is providing clean power for approximately 52,000 average American households. Many companies, large and small, were involved in the construction, from the building of access roads, the pouring of foundations, to the electrical infrastructure for the project. At the height of construction, nearly 400 workers from across the country came to the area to build the project, boosting income for many local businesses such as motels and restaurants. Owners of the property where the turbines are located will receive between $3,000 and $6,000 annually for each of the projects 108 turbines. The project has created 15-20 ongoing, full-time well-paying local jobs. County sales tax revenues jumped 62 percent in one year, from $95,000 to $154,450. The tax base increased by 29 percent, resulting in annual increases of: $917,000 for the school district general fund; $203,000 for the school district bond fund; $189,000 to the Prowers medical center; and $764,000 to the county general fund. The wind industry installed a near-record 1,687 megawatts (MW) in 2003, but most new wind energy projects are on hold this year because of the uncertainty created by the Federal delay in renewing the tax incentive, AWEA said. The industry has installed less than 30 MW of new capacity so far this year, and the trade group said it doesnt expect more than 350 MW total in new projects by the end of the year. The chart at the link below provides some specific examples of wind projects stalled due to the expiration of the PTC. Each of these projects could produce economic and environmental benefits in their communities – and these listed are a fraction of the projects ready to go forward. If the wind industry were to consistently grow at a rate of 18 percent per year, AWEA said, six percent of the nations electricity could be generated by wind power by the year 2020, resulting in over $100 billion of investment. Over the last five years, U.S. wind capacity has expanded at an annual average rate of 28 percent, showing that the supply chain can ramp up quickly to meet the nations power needs. Without a PTC extension, however, the U.S. will likely see very few new installations this year.