Wind group: Tax credit a job-saver

— The one-year extension of a U.S. tax credit for wind power will save as many as 37,000 jobs in an industry that’s expected to stall this year, the American Wind Energy Association said Wednesday.

The effects may not be evident until 2014.

The production tax creditwas set to expire at the end of 2012, and the extension was part of Tuesday’s passage of a bill to avert the so-called “fiscal cliff” that would have imposed income tax increases for most U.S. workers along with deep cuts in spending. The bill will cover all wind projects that start construction in 2013.

The wind industry lobbied all through 2012 for an extension of the credit. Development will probably pick up in the second half of the year but may not drive significant growth until next year, analysts said.

Energy developers were racing to complete work by Monday to qualify for a tax credit of 2.2 cents per kilowatt-hour for power from wind farms that were completed in 2012.

Manufacturers and installers of wind turbines had sought the revised language in Tuesday’s bill to allow for the 18 months to 24 months needed to develop new wind farms, according to Washington-based American Wind Energy Association.

“Though too late for this year, it will allow the U.S. market to see some recovery in 2014,” said Justin Wu, HongKong-based head of wind analysis at New Energy Finance.

The American Wind Energy Association said the budget deal agreed on Tuesday night by Congress will protect all projects that begin construction in 2013, even if they’re not completed until later.

Officials at Nordex, a Hamburg-based turbine developer,are unsure what the extension will mean for business, said Ralf Peters, a company spokesman, citing competition from cheap shale gas.

“It remains to be seen in which direction the pendulum will swing in 2013,” Peters said. “What’s clear is that the taxcredit extension adds weight to wind.”

Nordex opened a plant in Jonesboro in 2010. It has a production capacity of about 200 megawatts a year, which could be extended to 750 megawatts if the company were to hire more people, Peters said. It has about 200 employees in the U.S.

In August 2012, Denmarkbased LM Wind Power announced it would lay off morethan half its work force at its Little Rock plant.

The company, the largest manufacturer of windturbine blades in the world, had 300 full-time and 140 temporary employees at the Little Rock plant at the time of the announcement. LM Wind Power laid off 80 hourly employees, 14 salaried employees and all the temporary workers.

A spokesman for LM Wind Power in Denmark did not respond Wednesday to a request for comment.

The U.S. Energy Information Administration said Dec. 19 that wind-farm installations in the country would top 12 gigawatts in 2012 as developers rushed to complete their projects. That would exceed the record 10 gigawatts in 2009, according to data compiled by Bloomberg.

Without an extension to the credit, installations were forecast to plunge to 1.5 gigawatts this year, researcher Bloomberg New Energy Finance said Nov. 13. Even with the extension, Vestas said that the “late timing” of the announcement would lead to a “significant reduction” in installations relative to previous years.

The tax credit helped make wind the largest source of new capacity in the U.S. in 2012, according to New Energy Finance.

“Now we can continue to provide America with more clean, affordable, homegrown energy, and keep growing a new manufacturing sector that’s now making nearly 70 percent of our wind turbines in the U.S.,” Rob Gramlich, the interim chief executive officer of the American Wind EnergyAssociation, said in a statement after the House passed the budget bill.

Wind energy has the potential to supply as much as 20 percent of America’s electricity by 2030, according to projections from the U.S. Energy Department.

Vestas Wind Systems A/ S, the biggest wind-turbine maker, and Gamesa Corp. Tecnologica SA led gains among European peers.

“It’s really good news for Vestas, because the American market and how it develops is extremely important,” said Chief Marketing Officer Morten Albaek. “It’s a good way of starting the new year.” Information for this article was contributed by Ian Wilson,Alex Morales and Stefan Nicola of Bloomberg News and Jessica Seaman of the Arkansas Democrat-Gazette.

Business, Pages 21 on 01/03/2013

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