USA: Wind Farms Canceled, Layoffs Starting

Government dependence is risky business

The major federal tax and grant subsidies for windpower and other qualifying renewables are scheduled to expire at year-end. And claims of robust economics, competitiveness, and growth have given way to fear of a freer, less preferential market in 2013 and beyond. Wind’s artificial boom/upcoming bust is the risky business of political capitalism.

Last Friday’s edition of Environment & Energy Daily ran this story (sub. req.):

The American Wind Energy Association estimates that 10,000 jobs will be lost by September — primarily among manufacturers of wind turbines and components facing a dearth of orders for next year. By the end of the first quarter of 2013, the industry will have shed about 37,000 jobs without quick action on a PTC renewal, according to a widely cited study AWEA commissioned from Navigant Consulting. The industry estimates it employed about 78,000 people at the beginning of this year.

So in the next six-to-nine months, nearly one-half of the industry’s jobs will be gone just because a special tax break has lapsed? How lousy is this industry? What have we gotten for decades and tens of billions of dollars expended to date?

And what is the plan for the inevitable task of dismantling the industrial wind turbines that no longer spin but look like some industrial death scene from Planet of the Apes?

Competitive–or Almost So?

What about the repeated claims that windpower is almost competitive? Back in 1986, a representative of the American Wind Energy Association told Congress:

The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive. It has come to the point that the California Energy Commission has predicted windpower will be that State’s lowest cost source of energy in the 1990s, beating out even large-scale hydro. [1]

He added: “We are not quite there. We have hopes.”

Just last week (26 years later!) a new report from the United Nations Environment Program (UNEP) and the Renewable Energy Policy Network for the 21st Century stated that wind will be “fully competitive” with gas-fired power generation by 2016.

As reported by North American Windpower:

Based on current trends, it is predicted that the average onshore wind project worldwide will be fully competitive with combined-cycle gas turbine generation by 2016 – even in the U.S., where gas prices are expected to rebound to a point where they cover the cost of extraction, UNEP says. At present, this is true only of a minority of wind projects – those that use the most efficient turbines in locations with superior wind resources.

Such is just the latest in a long list of false hopes, exaggeration, and falsified promises from the industrial wind lobby. They present half-truths, white lies, and falsehoods to get taxpayer/ratepayer subsidies, and then warn against losing jobs to try to keep the government largesse going.

The same will be true in the future, as it has been in the past. Such is the inherent fate of dilute energy that is higher cost and intermittent, requiring blending with dense, reliable energy.


Back to the E&E News piece, here is more angst from the proponents of extending the PTC:

Wind farm developers generally say they have placed few, if any, turbine orders for next year because of uncertainty over the PTC’s fate, and several companies have already announced plans to cancel or suspend projects that already have been in development.

Just this week, developer Gamesa canceled a 30-turbine project in Pennsylvania, the third project cancellation in that state in less than a month, following Iberdrola Renewables’ decision in May to abandon two planned wind farms, according to press reports. Also last month, Invenergy delayed until at least 2015 plans for a 15- to 18-turbine wind farm in Roanoke, Va., citing uncertainty around the production tax credit.

NRG Systems, which manufactures turbine components, announced last month it would lay off 18 employees to reduce its work force to 100, with the company’s CEO saying at the time that the decision was required in the face of a “deeply unstable” industry.

“The constant threat of expiration of the PTC is an example of how government can negatively impact the private sector. … And the slowdown in the wind sector because of the games that Congress is playing with the PTC should serve as a canary in the coal mine for the broader economy,” said Joshua Freed, who directs the clean energy program at the centrist think tank Third Way.

Time is of the essence because of the 12- to 18-month lead time wind farms require before they can become operational and begin generating the tax benefits, industry sources say. Even if the credit is extended in November or December, industry representatives predict a significant downturn in 2013 compared to what is expected to be a banner year for turbine deployment this year.

The good news? Resources wasted in the wind sector can be redeployed in the resource-needy oil and gas sector! To wit: Dear Wind Industry: We Need Your Workers and Materials (and taxpayers need your cessation).


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