Wind Energy Needs Government Support to Remain Viable
As of December 31, 2012 Congress has the option to allow the production tax credit (PTC) for wind power to expire. Wind generation has become an essential source of electric power in the United States. It is a renewable resource that has remained competitive with traditional fossil fuel based generation due to tax benefits. Recent reports, such as the IEA’s World Energy Outlook, have underscored the importance of integrating clean and renewable energy sources as a way of curbing carbon emissions. The current low price of electricity means that wind power producers cannot price their power competitively. This removes incentives for wind farm developers to do business in the United States, since business will decline sharply if they cannot remain competitive in the marketplace.
Currently, wind power production is at its peak in the US, and on track to rival coal as the second largest power source in the nation by 2035 according to the IEA. Since 1992, every time tax credits and incentives have been allowed to expire, wind energy production has seen a steep decline. Wind power not only provides a clean and sustainable source of energy to the US, but the industry has provided thousands of jobs as well. A wind power generation recession in the United States would mean job losses all across the country; something the US can hardly afford.
With the PTC set to expire, companies seeking to provide new wind power facilities starting service in 2013 will be ineligible, and therefore non-profitable. Without government policies in place to promote clean, renewable power generation, power from fossil fuels will continue to dominate the market. While this power may be cheap and easy to produce now, fossil fuel resources are finite, and uncontrolled carbon emissions will contribute to a global temperature rise well beyond a level that the world is prepared to handle. The EIA warns in its report that policy changes are desperately needed in order to mitigate the rise in global temperature. Extending the PTC for wind generation may be one of the policies that can point us in this direction.
Energy Curtailment Specialists, Inc.
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