Producer Tax Credits Blowing Hot and Cold in the Wind

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Now that hydrogen power producing hybrid technology has a profile as the cleaner practical way to go for many major energy hungry markets and applications, will it be long before the fruits of the intense, commercially driven research and development in this technology produces a new highly efficient co-generative capacity for large scale power generation?

Response to this question from the representatives of clean energy sources and from traditional carbon chewing and spewing sources will assist in creating the energy pie chart with a sense of perspective and priorities. Perhaps a two dimensional 'source' pie chart is not enough as there is a third dimension where relative costs of power production and overriding environmental concerns must be given weight.

In its annual report, the American Wind Energy Association (AWEA) reports that total installed wind electric generating capacity expanded by nearly 10% during 2002 with 410 MW of new equipment going into service. The total installed capacity across 27 states was 4,685 MW at the end of the year. In 2001, 1,696 MW of wind energy capacity was installed. The Association called for a multi year extension of the existing federal wind energy production tax credit (PTC) that is currently due to expire at the end of 2003. The association claims that when the PTC was allowed to expire in 1999 and 2001 the impact on the wind energy industry was devastating. An extension of the credit was included in both the House and Senate versions of last year's energy bill, which died when Congress could not reach final agreement before adjourning in December 2002.

In 2002, the 263 MW Stateline project on the border of the states of Washington and Oregon became the largest wind project in the nation with the addition of another 37 MW, topping the 278 MW Mountain King Ranch wind project located in Texas. Both windfarms are owned by FPL energy (NYSE:FPL) (Juno Beach, Florida), which also commissioned the 66 MW Mountaineer wind energy center on Backbone Mountain in West Virginia. The company also developed the 98 MW Hancock County wind energy center in Iowa.

The Los Angeles department of Water and Power, the country's largest municipal utility, is planning to build a 120 MW wind power facility. The $162 million Pine Tree wind project, 100 miles north of Los Angeles in the Mojave Desert, is scheduled to start operating in July 2004 and, after final approvals, will be constructed by Wind Turbine Prometheus. The private Toronto company was purchased, in January 2003, by Arise Technologies of Kitchener, Ontario. It will be the largest municipally owned wind plant in the U.S.

California leads the wind energy stakes with 1,822 MW installed, followed by Texas with 1,095 MW and Iowa with 423 MW.

The acceptance and public demand for green energy is increasing with a reported 75% of US utilities set to offer a mass market green power program by the end of 2003. This is underlined by announcements by several universities of purchases of wind-powered electricity. Catholic University of America in Washington DC is leading the way, with the purchase of windpower for 12% of its electricity needs. 'Dark green power', derived from non-combustible renewable sources like solar, wind, or hydro, has now become part of the user/buyer's lexicon.

AWEA had projected a record year for 2003 with over 2,000 MW of new windpower installations, but the current uncertainties in the market have made it scale the projected figure back to between 1,500-1,800 MW.

The best prospects for renewable energy sources are best conveyed in a compounded cliche.

"Its horses for courses and never say never but the piper must be paid".