The American Wind Energy Association is hoping to strike a compromising tone with U.S. legislators, pleading for a six-year extension of the Production Tax Credit that has promoted the development and expansion of wind farms and the manufacturing and fabricating sector that support them, but assuring its membership will thrive without subsidy after that term expires.

AWEA is treating the extension of the PTC as critical to its members’ competitiveness. However, the extension is just one challenge for the industry: some of the trade assocation’s fabricating members are struggling to compete with subsidized imports of wind towers.

The PTC “has succeeded in incentivizing an average of $15.5 billion a year in private investment in U.S. wind farms over the past five years,” AWEA stated in a letter to Capitol Hill, underscoring the positive economic impact of the policy.

Federal tax credits to producers of wind energy have been in place for two decades, and the American Recovery and Reinvestment Act of 2009 (the “stimulus” package) extended a 2007 federal production tax credit (PTC) to operators of “renewable” energy projects until December 31, 2012. It also gave developers of such projects access to an investment tax credit (ITC), and other incentives to developers and operators of the plants, and to consumers of “renewable” energy.

The question to be answered soon is whether to let the credits expire, or to extend them —and for how long, and how much.

AWEA, which includes manufacturers of wind turbines, like General Electric and Siemens, as well as fabricators of wind towers and electric utilities, is seeking a six-year extension at a decreasing rate of subsidy.

The cost of the six-year extension is estimated at $50 billion, but there may be interim measures: some bipartisan support for a one-year extension, at an estimated $12.1 billion.

In a proposal to the U.S. Senate Finance Committee chairman (who’s panel endorsed a one-year extension last summer), AWEA laid out a case for the subsidies, noting its members have shown developmental progress in recent years but cannot survive against a range of competitors with federal support.

In a proposal to the U.S. Senate Finance Committee chairman (who’s panel endorsed a one-year extension last summer), AWEA laid out a case for the subsidies, noting its members have shown developmental progress in recent years but cannot survive against a range of competitors with federal support.

AWEA is requesting continuance for all of 100% of the current, 2.2 cents/kilowatt-hour credits for projects starting in 2013. The credit would fall to 90% percent for projects completed in 2014, 80% in 2015, 70% in 2016 and 60% in 2017 and 2018.

Since the announcement of the letter, Bode has resigned her position with AWEA.

The Congress is not the only obstacle for supporters of wind energy. Builders of wind towers have charged their competitors in China and Vietnam are receiving unfair government subsidies, and the U.S. Commerce Dept. ruled last spring in their favor. It indicated Chinese wind towers were being sold at 20.85-72.69% below fair market value, and Vietnamese towers are selling at 52.67-59.91% below the rate. A final ruling on the countervailing duties is due soon from the U.S. International Trade Commission, but a ruling on penalties for those subsidies is not due for several more weeks.

At the same time, the wind-energy industry is pleased with support from the U.S. Dept. of Energy, which has approved subsidies for seven new offshore projects in Maine, New Jersey, Ohio, Oregon, Texas and Virginia. The $4-million award will fund engineering, design and permitting of the projects.

"AWEA applauds the winning teams and Secretary Chu and his staff at the Dept. of Energy for today's announcement, which is a significant milestone in efforts to launch the first generation of offshore wind projects in the United States," stated Christopher Long, AWEA's manager of offshore wind and siting policy.