The Department of Energy and the Lawrence Berkeley National Laboratory recently declared wind “a credible source” of new electricity generation for the country. Their report noted that wind power has grown dramatically, prices falling by 20 percent to 30 percent the past four years. Only natural gas has added more electricity capacity since 2006.
The development of wind power brings benefits in the form of cleaner energy and a more diverse set of energy sources, among other things, inviting greater competition and easing the potential for price shocks. Yet, as much progress as wind has made, it still struggles to gain a firm and enduring hold in the marketplace. The complicating factors have included weak demand for electricity and plunging natural gas prices.
Put another way, this is not the time for Congress to allow the expiration of the wind production tax credit, set for the end of the year. The tax credit has been integral to the country having the second-fastest growing wind industry in the world last year, trailing only China. It makes the industry more competitive, wind power now on a projected path from the current 3 percent of the country’s electricity to 20 percent eventually.
Already doubts about whether Congress will extend the tax credit have had a detrimental effect. Investors have become skittish as the deadline approaches, many in the wind manufacturing supply chain slowing down and paring back jobs.
Worth recalling is the reason for the incentives in the first place. Wind isn’t the answer to all the country’s energy challenges. Still, it must have a significant part. More, securing a position is no easy task in an era of cheaper fossil fuels. The likes of coal and oil have received their share of favorable treatment over the years.
Now, with wind gaining momentum, it makes sense to pursue the job to its conclusion, extending the tax credit long enough to see wind compete on its own. That need not be for another decade or more. Rather, measurements could be established for phasing in the expiration.
A month ago on the Commentary page, Jack Grabner, the president of Cardinal Fastener of Bedford Heights, shared the story of his company. It makes sophisticated fasteners for wind turbines, reflecting the ripple effect, the production tax credit resulting in jobs and innovation here in Northeast Ohio. Grabner explained how all of that would be jeopardized without the renewal.
A 19-5 vote last summer in the Senate Finance Committee for a one-year extension of the credit testifies to the bipartisan support. This shouldn’t be hard. Congress must act quickly, the country embracing part of a sound energy strategy, a wind industry making its credible contribution.