US Congress orders suspension of wind power subsidies
By Ivan Couronne, AFP
January 17, 2014, 12:09 am TWN
WASHINGTON--Historic subsidies propping up U.S. wind energy ended on Jan. 1 and Congress refused to renew them, despite supporters arguing that the aid has made renewable power cheaper than coal.
The United States has subsidized wind-sourced electricity since 1992 to promote the use of green energy and crack America's dependence on the fossil fuels blamed for climate change.
Last year, billions of dollars in wind production tax credits, or PTCs, amounted to some 2.3 cents per kilowatt hour for an industry that has struggled to compete against oil and gas.
But winds of change are blowing. The repeatedly renewed credits expired at the end of 2013, along with many other renewable energy benefits.
Wind energy is now an industry that can “stand on its own,” argued Senator Lamar Alexander and other anti-tax-credit lawmakers last month.
“Our nation's energy policy must make economic sense for taxpayers and not manipulate markets,” he and Senator Joe Manchin of coal-producing West Virginia, wrote in a position letter.
“After more than 20 years and tens of billions of tax-payer dollars, it's time to let the wind PTC expire and continue to invest in new technologies.”
Wind power has experienced a boom, growing from 1.3 percent of the nation's electricity production in 2008 to 3.5 percent in 2012.
This leaves it still far behind coal at 37 percent, natural gas at 30 percent and nuclear power at 19 percent.
Fueled by steady growth in wind farms and the falling cost of equipment like turbines, wind energy is now on average the second-cheapest US energy source.
According to the Department of Energy, the average cost of natural gas from a new plant in 2018 will be 6.7 cents per kWh, compared with 8.7 cents for wind, 10 for coal and 11 cents for nuclear power.
Energy from offshore wind farms remains at 22 cents per kWh.
But the end of the tax credit hardly marks the death knell for a budding industry.