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How Congressional Gridlock Stalled Wind Power’s Growth In 2013

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"How Congressional Gridlock Stalled Wind Power’s Growth In 2013"

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The GIF above comes from a new interactive map that tracks the growth of wind farms, courtesy of the Department of Energy. And as you can see, it shows a boom in wind power up through 2012.

But the boom stalled out in 2013 and flatlined in 2014, thanks to gridlock in Congress.

The production tax credit (PTC) for wind is a subsidy that’s been built into the tax code for years to encourage growth for that particular form of renewable energy. It was reinvigorated by the 2009 stimulus, and scheduled to expire in 2012. Then it was extended at the very last minute through the end of 2013, and altered so that wind projects merely had to begin construction by the end of the year to qualify. But Congress was unable to come together on energy policy once again, so the PTC died at the end of 2013 and hasn’t been renewed. That on-again-off-again approach to the PTC led to a boom-and-bust cycle, as wind installations spiked then collapsed in response.

As a result, new wind installations in 2013 fell 93 percent from where they were in 2012 — a year that saw a record 13,100 megawatts of new wind capacity installed overall.

The Energy Information Agency’s (EIA) latest short-term outlook — released this month — still anticipates that wind will grow to 77,000 megawatts of capacity nationwide by the end of 2015. That’s 4.6 percent of America’s total electricity generation. In 2012, wind was only 3 percent. Still, it’s telling that EIA’s outlook shows that growth occurring almost entirely in 2015.

eia-shortterm-renewables

Thanks to the 2013 stall, EIA anticipates that in 2014 U.S. wind power will add up to 1.6 quadrillion Btu (a measure of energy, as opposed to electricity) which is barely up at all from 1.59 quadrillion in 2013. But in 2015, EIA thinks it will grow again to 1.8 quadrillion Btu, presumably as the wind industry reorients itself in a non-PTC world.

As for the tax credit itself, supporters have suggested extending it for another few years, followed by a multi-year phaseout. That would give the wind industry some lead time to plan for the loss of the PTC and strategize accordingly, without the guesswork and whiplash that’s been introduced by the recent spate of expirations and last-minute extensions.

More fundamentally, the failure to build the future damage of climate change into the price of fossil fuels today leaves renewables like wind at a market disadvantage. The PTC is an admittedly ad-hoc and inadequate fix for that problem. A more comprehensive, rational, and efficient solution would be a nationwide cap-and-trade system or a carbon tax, which would level the playing field between all fossil fuels and all renewables.

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