PTC Crisis: The Future of Wind Energy in the US

While the country’s attention has been focused on the election, the fate of the one of Illinois and America’s most important industries lies in the hands of Congress and their decision to renew the PTC set to expire in 2012. In the meantime, thousands of jobs and a clean source of energy for the US has been put on hold most likely until the election is over. Victor Moran is a Manufacturing Supervisor for Winergy and a current student in the MEM program. He understands the wind issue intimately and explains the gravity of the situation in the post below. 

There are currently over 40,000 wind turbines in the United States, which are capable of producing 50,000 megawatts of power—enough energy for 13 million homes or all the households in Michigan, Ohio, Iowa, Colorado, and Nevada combined. The wind industry provides over 75,000 jobs in America and has driven over $15 billion in private investments in the US economy each year for the past five years and the manufacturing sector now includes over 500 wind-related facilities in 44 states. The driving force behind such fantastic growth is primarily the PTC or Production Tax Credit, a tax incentive that helps developer’s secure private financing for wind projects and keeps electricity rates low.

Winergy Drive Systems, the company I work for, is a prime example of the impact the PTC has had in creating jobs and clean energy in the US. Winergy started in 2001 with only eleven employees and now operates two factories in Elgin with over 380 employees. We are a global leader in manufacturing gearboxes for wind turbines around the globe and have installed over 14,000 in the US alone. Winergy CEO Terry Royer has spoken on behalf of over 450 companies during the White House Press Conferences to explain how losing the PTC not only represents the loss of over 37,000 wind industry jobs, but the loss of an entire industry in the US that can provide clean energy more consistently that fossil fuels and other limited resources.

Wind is a clean source of energy that has virtually no pollution properties. Each year over 20 billion gallons of water are saved that otherwise would have been used by conventional power plants. Since 1980, the price of wind power has dropped 90% and a Synapse Energy Economics study from earlier this year found that wind reduces overall energy costs for consumers saving households anywhere from $63 to $147 per year in the Midwest. Other sources of energy such as oil, natural gas, and coal have had permanent support from the government totaling over $500 billion from 1950 to 2006 according to Management Information Services Incorporated. In contrast, wind is an unlimited resource, and will not always need the PTC to operate in the long term. As the supply chain localizes and production gets more efficient, the manufacturing cost of wind turbines will continue to drop. As an example, back in 2005 only 25% of the required components for building a wind turbine were manufactured in the US, today over 67% of those components were completed here, which means jobs, investment, and wealth for American families. Wind power provides long term stability by allowing utilities to lock in prices for twenty to thirty years and insulating utilities and their rate payers from volatile fossil fuel price shifts.

As the industry continues the expansion, more jobs will be created all around the country with experts estimating over 500,000 American jobs in wind energy by 2030. Without the PTC, total wind investment will drop by nearly two-thirds from $15.6 billion in 2012 to $5.5 billion in 2013. Total wind-supported jobs will drop by 37,000 from 2012 to 2013 and we will effectively concede these jobs to China and other countries around the world. In a White House Press Conference, Heather Zichal, the Deputy Assistant to the President for Energy quoted companies reactions to their uncertainty about the PTC saying, “We don’t foresee any projects for 2013 in the United States.”  and “All of our construction base will be laid off or moved to Canada without the PTC.”

As MEM students, there are multiple reasons to help save the wind industry. Illinois is the fourth for overall installed wind capacity in the US and second for most new wind energy capacity installed in 2011. Many of these jobs are concentrated in the Chicagoland area and provide employment for MEM students and alumni. More importantly, all MEMers understand the importance of investing now for greater potential in the future. The wind industry is environmentally friendly and will help preserve our planet on the long term while the other resources destroy the environment. I chose to work for a multibillion company with a strong focus on innovation seven years ago because I knew these innovations were helping our planet. As the wind industry matures it will stabilize and be self sufficient, but it needs time, effort, and resources to make it happen. We need to invest in our planet, we need to work towards a clean energy policy, and we need our politicians to support it simply because it is the right thing to do.

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