U.S. wind industry slammed by tax uncertainty, fracking | Bedford NY Real Estate
Once a booming industry, U.S. wind power saw its growth plummet 92% last year as it wrestled with tax uncertainties and cheap natural gas.
The industry is still growing but not nearly as fast, says a report Thursday by the American Wind Energy Association. It added a record 13,131 megawatts of power in 2012 but that fell to only 1,087 MW last year — the lowest level since 2004.
One reason was investors' uncertainty that Congress would renew a federal wind tax subsidy. "People didn't know it would be passed ... so they weren't creating new projects" early last year, says AWEA's president Tom Kiernan. He says it takes about nine months to plan a wind farm, so the one-year extension in January 2013 didn't trigger a flurry of new wind farm construction until the second half of 2013.
He expects this year will see a rebound in new capacity but how much will depend on whether Congress extends the tax subsidy, which expired in January. An extension is pending in the Senate.
The AWEA report is the latest to show the challenges confronting the clean energy sector. Last year, investments in renewable energy fell 14% globally and 10% in the United States, according to an analysis Monday by the United Nations Environment Programme. It says U.S. investments in wind were $13.3 billion, down from $14.5 billion in 2012.
The UNEP attributes the declines to policy uncertainty, including the expired U.S. wind subsidy, and falling technology costs, notably solar panels and wind turbines. Yet for the U.S., it saw another factor at play as well.
"The shale revolution certainly has had an impact," says Eric Usher, manager of UNEP's seed capital programs. He notes the boom in U.S. production of natural gas, due largely to the use of fracking or hydraulic fracturing, has lowered prices and made it more difficult for wind and solar to compete.
"We do have a tough time competing with natural gas," Kiernan says. But he says the U.S. wind industry can do something that natural gas cannot — give customers a constant price for 20 or even 30 years. Natural gas prices fluctuate, depending largely on production.
http://www.usatoday.com/story/news/nation/2014/04/10/wind-solar-grow-but-investments-fall/7511733/
The industry is still growing but not nearly as fast, says a report Thursday by the American Wind Energy Association. It added a record 13,131 megawatts of power in 2012 but that fell to only 1,087 MW last year — the lowest level since 2004.
One reason was investors' uncertainty that Congress would renew a federal wind tax subsidy. "People didn't know it would be passed ... so they weren't creating new projects" early last year, says AWEA's president Tom Kiernan. He says it takes about nine months to plan a wind farm, so the one-year extension in January 2013 didn't trigger a flurry of new wind farm construction until the second half of 2013.
He expects this year will see a rebound in new capacity but how much will depend on whether Congress extends the tax subsidy, which expired in January. An extension is pending in the Senate.
The AWEA report is the latest to show the challenges confronting the clean energy sector. Last year, investments in renewable energy fell 14% globally and 10% in the United States, according to an analysis Monday by the United Nations Environment Programme. It says U.S. investments in wind were $13.3 billion, down from $14.5 billion in 2012.
The UNEP attributes the declines to policy uncertainty, including the expired U.S. wind subsidy, and falling technology costs, notably solar panels and wind turbines. Yet for the U.S., it saw another factor at play as well.
"The shale revolution certainly has had an impact," says Eric Usher, manager of UNEP's seed capital programs. He notes the boom in U.S. production of natural gas, due largely to the use of fracking or hydraulic fracturing, has lowered prices and made it more difficult for wind and solar to compete.
"We do have a tough time competing with natural gas," Kiernan says. But he says the U.S. wind industry can do something that natural gas cannot — give customers a constant price for 20 or even 30 years. Natural gas prices fluctuate, depending largely on production.
http://www.usatoday.com/story/news/nation/2014/04/10/wind-solar-grow-but-investments-fall/7511733/
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