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August 15, 2012

As Wind Energy Whips Up U.S. Jobs, DOE and AWEA Back Production Tax Credit



According to the 2011 Wind Technologies Market Report, just released by the U.S. Department of Energy (DOE), the United States remained one of the world’s largest and fastest-growing wind markets in 2011, with wind power representing a remarkable 32 percent of all new electric capacity additions and accounting for $14 billion in new investment.

The new report finds that the percentage of wind equipment made in America also increased dramatically. Nearly 70 percent of the equipment installed at U.S. wind farms last year—including wind turbines and components such as towers, blades, gears, and generators—is now from domestic manufacturers, doubling from 35 percent in 2005. 

“This report shows that America can lead the world in the global race to manufacture and deploy clean energy technologies,” said Energy Secretary, Steven Chu. “The wind industry employs tens of thousands of American workers and has played a key role in helping to more than double wind power over the last four years. To ensure that this industry continues to stay competitive, President Obama has called on Congress to extend the successful clean energy tax credits, which are benefitting businesses and manufacturers nationwide.”

In 2011, roughly 6,800 megawatts (MW) of new wind power capacity was added to the U.S. grid, a 31 percent increase from 2010 installations. The United States’ wind power capacity reached 47,000 MW by the end of 2011 and has since grown to 50,000 MW—enough electricity to power 13 million homes annually, or as many as the cumulative number of residences as in Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut. The country’s total installed wind energy capacity grew 16 percent from 2010, and has increased more than18-fold since 2000.

In addition, five states now meet more than 10 percent of their total electricity needs with wind power—and 13 generated more than 5 percent:  South Dakota (22.3 percent), Iowa (18.8 percent), North Dakota (14.7 percent), Minnesota (12.7 percent), Wyoming:(10.1 percent), Colorado (9.2 percent), Kansas(8.3 percent), Oregon (8.2 percent), Idaho (8.2 percent), Oklahoma: (7.1 percent), Texas (6.9 percent), New Mexico (5.4 percent) and Washington (5.3 percent). 

The growth in the industry also has led directly to more American jobs throughout a number of sectors and at factories across the country. The wind sector employs 75,000 American workers, including workers at manufacturing facilities up and down the supply chain; as well as engineers and construction workers,  who build and operate the wind farms. Indeed, according to the American Wind Energy Association annual report, seven states boast at least 4,000-5,000 wind-related jobs each. The top ten on the list included: Iowa (6,000-7,000), Texas (6,000-7,000), Illinois (6,000-7,000), Ohio (5,000-6,000), Colorado (4,000-5,000), California (4,000-5,000), Michigan (4,000-5,000), Pennsylvania (3,000-4,000), Florida (2,000-3,000) and Oregon (2,000-3,000).  

Technical innovation allowing for larger wind turbines with longer, lighter blades has steadily improved wind turbine performance and increased the efficiency of power generation from wind energy. At the same time, wind project capital and maintenance costs continue to decline, driving U.S. manufacturing competitiveness on the global market. For new wind projects deployed last year, the price of wind under long-term power purchase contracts with utilities averaged 40 percent under 2010 costs and about 50 percent lower than in 2009, making wind competitive with a range of wholesale power prices seen in 2011.

Despite these recent technical and infrastructure improvements and continued growth in 2012, the report finds that 2013 may see a dramatic slowing of domestic wind energy deployment due in part to the possible expiration of federal renewable energy tax incentives. The Production Tax Credit (PTC), which provides an important tax credit to wind producers in the United States and has helped drive the industry’s growth, is set to expire at the end of this year.

“In hard economic times we’re creating jobs and delivering clean, affordable electricity,” Denise Bode, CEO of the American Wind Energy Association, stressed in the group’s 2011 annual report. “But we will lose all these consumer benefits and a brand-new, growing manufacturing sector if Congress allows the Production Tax Credit to expire. Businesses need certainty. That is why it is urgent that Congress extend the PTC now, or risk losing a bright new manufacturing sector.”

A recent report by Chicago-based Navigant Consulting found that, if Congress allows the PTC for wind to expire, jobs in the wind industry will be cut in half—meaning a loss of 37,000 American jobs and a one third cut to American wind manufacturing jobs—while private investment in the industry would drop by nearly two thirds. And Navigant found that these job losses will begin now and accelerate with each month the PTC nears the expiration deadline at the end of the year. Meanwhile, extending the PTC will enable the wind industry to expand to nearly 100,000 American jobs in just four years and stay on track toward supporting 500,000 American jobs by 2030. 

A House bill seeking to extend the existing Production Tax Credit (PTC) for wind energy (H.R. 3307, the “American Renewable Energy Production Tax Credit Extension Act”) has garnered the support of 90 cosponsors, including 20 Republicans. Extension legislation was introduced in the Senate on March 15 by seven Senators including three Republicans.

PTC extension efforts have received the endorsement of a broad, coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A PTC extension also has the support of the U.S. Chamber of Commerce; and the bipartisan Governors’ Wind Energy Coalition, comprising of 23 Republican and Democratic Governors nationwide.

View an interactive map of U.S. wind manufacturing facilities here.

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Edited by Brooke Neuman


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