Can U.S. Wind Energy Survive Without Government Backing?

Since the enactment of the Production Tax Credit (PTC) for wind energy in 1992, the wind power industry has become heavily dependent on government intervention to stay afloat. In the last eight years the tax credit has expired three times, causing predictable, though very strong changes in industry growth/contraction. Today, as we have seen in the past, the industry faces a likely expiration of PTC by the end of the year. As reported in the Wall Street Journal, however, there’s much more on the line this time around now that the U.S. has developed several hundred manufacturing facilities that build parts for wind turbines.

Growth in wind energy has been especially strong over the past few years. Between 2009 and 2011, the manufacturing base more than doubled to 470 companies, and analysts expect new installations to post record gains through the end of this year. Next year, unfortunately, new installations could fall by as much as 90 percent. The reason? Without the tax credit, wind power still can’t compete with non-renewable forms of energy, such as coal and natural gas, on a cost-per-kilowatt-hour basis. Click here for a 2010 Nuclear Fissionary article comparing the costs of different types of energy.

Despite wavering congressional support, the wind power industry has a few unlikely supporters. Republican Texas governor Terry Branstad, for example, supports renewing the PTC. His state holds seven of the nation’s ten biggest wind farms, and leads the country in wind power with over 10,000 megawatts (Texas Wind Energy Facts). Another proponent is Representative Steve King of Iowa, a conservative Republican and member of the House Tea Party Caucus. According to the Iowa Office of Energy Independence, the state holds the largest number of wind manufacturing jobs (2,300), and is home to more than 200 companies that build many of the 8,000 components that go into making a wind turbine. Iowa also derives over 17 percent of its energy from the wind (the national average is about a sixth of that figure).

Image