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Why Competing Clean Energy Companies Worry about Wind-Power's Struggle to Win Public Support
One panelist at this week's Inovation Summit talked about his company's efforts to create a better battery to store electricity. Another panelist was there to talk about her company's efforts to make a better biofuel.
So why were they talking about wind-power?
During a time when the buzz seems all about businesses and financial institutions everywhere looking out just for themselves, it may have seemed a bit odd for Phil Giudice and Katrina Landis - the CEOs for Liquid Metal Battery and BP Alternative Energy, respectively - to be coming to the defense of a separate industry.
As members of a panel talking about energy innovation, both Giudice and Landis pointed to the wind energy industry as an example of challenges renewable fuels - sometimes also known as alternative or sustainable or clean - face in the United States.
In particular, they noted that production tax credits were set to expire at the end of 2012, and that without them, the wind turbine manufacturing and production industry, with an estimated 78,000 jobs nationwide, might be facing serious layoffs.
Letting such tax credits expire sent the wrong message about the government's support of wind energy, they said, with Giudice going so far as to say that these are "dire times, from a clean energy government" policy standpoint.
And just what is the U.S. policy on energy?
That's a question that's very hard to answer, in part because there are so many different ways to answer it.
Policy can be set out in speeches, carried out by legislation or regulation, negotiated in treaties and molded to meet the needs and wants of any federal, state or local community that sees fit to get involved.
As it turns out, the production credit in question concerns more than just wind. The U.S. tax code currently offers a credit for electricity produced "from wind, biomass, geothermal or solar energy, landfill gas, trash, hydropower, and marine and hydrokinetic renewable energy facilities."
That's from a summary of a bill currently before the House that seeks to extend the credit through 2016. Introduced in November of last year, the bill currently has 96 co-sponsors in the House, and was referred upon introduction to the House Committee on Ways and Means. And that is where it still sits.
In general, the credits are designed to help make the production of such energies competitive per kilowatt-hour with more conventionally produced energies, such as those from fossil or nuclear fuels. (It probably should be noted here that those more conventionally produced fuels have benefited from tax incentives for decades.)
The example of the wind energy industry rests in the idea that no new wind production projects are currently being planned in the United States past the end of this year -- some believe because of a perceived lack of support.
And, indeed, that was the reason that the Spanish wind energy company, Gamesa, gave when it announced on May 7 that it was pulling out of a project to build and install a prototype wind turbine off the Virginia coast, and instead was choosing a site closer to home, in the Spanish Canary Islands.
The Associated Press reported that the project, already approved by Virginia regulators and which was to have been carried out in partnership with a major U.S. shipbuilding company in Newport News, VA, had a potential to create up to 10,000 jobs.
In this economy, losses of those magnitude are having effects felt throughout the market.
- AJ Plunkett is a veteran reporter and editor based in Virginia with more than 27 years of experience. As a reporter, she's gone from covering the oil industry and Navy in South Texas, to military and defense industries of Hampton Roads, to the budget battles fought in the halls of the Pentagon and Congress. She has followed stories to Saudi Arabia and Somalia, as well as across the United States.
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