Energy Law Wisconsin Blog

AWEA’s Jeff Anthony Outlines the State of Wind Power

The Wind Power Happy Hour met at Sun Prairie’s Cannery Grill on Monday, May 21. The guest speaker was Jeff Anthony, Director of Business Development for the American Wind Energy Association (AWEA). Anthony noted that the wind energy industry offered terrific opportunities for Wisconsin manufacturers and showed a series of slides to illustrate his point. In particular, Anthony observed that as of 2005, only 30% of the content in wind turbines was made by U.S. manufacturers, but as of 2010, the American-made content had risen to 60% and in 2012, it is anticipated to be almost 70%.

Wisconsin has a number of successful companies in the wind turbine manufacturing supply chain, including Ingeteam in Milwaukee and Gearbox Express in Mukwonago. Even states that have poor quality wind resources, such as those located in the Southeastern United States, have significant opportunities to become manufacturing partners in the U.S. wind industry. To underscore this point, AWEA is holding its Windpower 2012 Conference & Exhibition in Atlanta, Georgia this year.

Anthony noted how closely wind development was tied to policy and currently wind dvelopers and manufacturers are sitting on their edge of their seat, wondering if Congress will renew the Production Tax Credit, which expires at the end of 2012. He showed a chart with illustrations of what had happened in past year when Congress delayed renewing the tax credit and each time this happened, there was a sharp drop-off in wind energy development the following year, due to the uncertainty in the marketplace as to whether the credit would be renewed.

Anthony noted that back-and-forth policy does not exist for the oil and gas industry or the nuclear industry. Both industries are the beneficiaries of very substantial incentives that are permanently built into tax code. In contrast, wind must ask Congress to renew its policy supporting wind from year to year, which puts it at a disadvantage to the other industries.

During the Q&A session, Anthony addressed questions about the impact that the 18 month delay in implementation of the wind siting rules might have had on Wisconsin. Mr. Anthony said that the suspension of the rules very clearly had a harmful effect on Wisconsin’s wind construction industry, as more than $1 billion of projects were cancelled or postponed during the prolonged uncertainty that followed suspension of the rules. Mr. Anthony was less certain about the impact of the rules suspension on manufacturing jobs. He said to his knowledge no plants had closed own and any manufacturing impact was more likely in the form of lost opportunities to add new plants and manufacturing jobs in Wisconsin. He also offered attention-catching figures that showed the during the time the rules were suspended, Wisconsin’s neighboring states put up roughly 50-100 times the amount of wind capacity as did Wisconsin.

Anthony was less certain about the impact of the rules suspension on manufacturing jobs. He was not aware of any plants that had closed down; he said if there was an impact, it more likely would be in the form of “lost opportunities”.

With the final wind siting rules now in place, the current challenge for Wisconsin is to regain the momentum it previously had in wind energy manufacturing and construction and once become a leader in the manufacturing of wind turbine components. Mr. Anthony put up slides illustrating the fact that there are hundreds of different components in a modern wind turbine. Many facilities in Wisconsin and other industrial states that formerly produced components for industries such as the auto industry, have been retooled to provide these components.

To conclude, Mr. Anthony addressed a question about the relationship between the natural gas industry, which is seeing record low prices, and the wind industry. Wind and natural gas are currently the lowest cost sources of energy when all costs are included and are therefore natural competitors. But, he added, wind generation facilities and natural gas generation facilities can be operated very effectively in tandem to meet energy needs, so they are also natural allies. Mr. Anthony noted that the U.S. Chamber of Commerce, which is a proponent of low-cost natural gas, is also a proponent of the extension of the Production Tax Credit for wind.

People who wish more about this issue can see Jeff Anthony’s slides from his presentation here: Wind Power Happy Hour Slides.

Written on May 31, 2012 at 12:34 pm, by Michael Allen