Tax Credit in Doubt, Wind Power Industry Is Withering

Last month, Gamesa, major maker of wind turbines, completed the first significant order of its latest innovation: a camper-size box that can capture the energy of slow winds, potentially opening new parts of the country to wind power. But by the time the last of the devices, worth more than $1.25 million, was hitched to a rail car, Gamesa had furloughed 92 of the 115 workers who made them. “We are all really sad,” said Miguel Orobiyi, 34, who worked as mechanical assembler at Gamesa plant for nearly 5 years. “Hope they call us back because they are really good jobs.” Similar cuts are happening throughout American wind sector, includes hundreds of manufacturers, from multinationals make giant windmills to smaller local manufacturers that supply specialty steel or bolts. In recent months, companies have announced almost 1,700 layoffs. At its peak in 2008 and 2009, industry employed about 85,000 people, according to the American Wind Energy Association, industry’s principal trade group. About 10,000 of those jobs have disappeared since, according to the association, as wind companies have been buffeted by weak demand for electricity, stiff competition from cheap natural gas and cheaper options from Asian competitors. Chinese manufacturers, who can often underprice goods because of generous state subsidies, have moved into American market and have become an issue in the larger trade tensions between the countries. In July, the United States Commerce Department imposed tariffs on steel turbine towers from China after finding that manufacturers had been selling them for less than the cost of production. And now, on top of the business challenges, the industry is facing a big political problem in Washington: the Dec. 31 expiration of a federal tax credit that makes wind power more competitive with other sources of electricity. The tax break, which costs about $1 billion a year, has been periodically renewed by Congress with support from both parties. This year, however, it has become a wedge issue in presidential contest. President Obama has traveled to wind-heavy swing states like Iowa to tout his support for the subsidy. Mitt Romney, Republican nominee, has said he opposes the wind credit, and that has galvanized Republicans in Congress against it, perhaps dooming any extension or at least delaying it until after the election despite a last-ditch lobbying effort from proponents this week. Opponents argue that the industry has had long enough to wean itself from the subsidy and, with wind representing small percentage of total electricity generation, taxpayers’ investment has yielded an insufficient return. “Big Wind has had extension after extension after extension,” said Benjamin Cole, a spokesman for American Energy Alliance, a group partly financed by oil interests that has been lobbying against the credit in Washington. “Government shouldn’t be continuing to prop up industries never seem to be able to get off their training wheels.” Without tax credit in place, wind business “falls off a cliff,” said Ryan Wiser, staff scientist at Lawrence Berkeley National Lab. who studies market potential of renewable electricity sources (…..)

Link: http://www.nytimes.com/2012/09/21/business/energy-environment/as-a-tax-credit-wanes-jobs-vanish-in-wind-power-industry.html

Acerca de ignaciocovelo
Consultor Internacional

One Response to Tax Credit in Doubt, Wind Power Industry Is Withering

  1. Professor Uziel Nogueira says: I bet China will be the dominant producer of wind power equipment in a few years. The reason is two fold: first, the Chinese government has deep pockets to subsidize new renewable energy sources such as solar and wind power. Second, conversely the US government cannot afford subsidies due to unsustainable public debt. The US profit maximization model is incompatible for long term financing of renewable energy projects while China’s model is perfectly suitable due to financial guarantees by the State. In sum, China’s economic model is far superior to the American model as far as development of renewable energy sources are concerned. Consequently, China will dominate clean renewable energy sources in the 21st century.

    http://www.nytimes.com/2012/09/21/business/energy-environment/as-a-tax-credit-wanes-jobs-vanish-in-wind-power-industry.html

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