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Vote windAs the US Election campaign reaches its thrilling climax, it’s been

fascinating to see just how high wind power is on the political agenda. We examine the power of wind as a vote-winner, and look

ahead to what we can expect from the new Administration.

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Wind power is one of the fastest-growing sources of energy around the world. It is popular because it is abundant and provides many communities with a clean, local source of electricity. Assisted by technological innovation and years of government subsidies, the cost of wind power — and solar power — has fallen sharply, so much so that the two industries say that they can sometimes deliver cleaner electricity at prices competitive with power made from fossil fuels.

In the United States, which passed Germany to become the country producing the most wind power, the Department of Energy has estimated that wind power could account for 20 per cent of the nation’s electricity supply by 2030.

The American Wind Energy Association said the growth of wind power was helped by a federal stimulus package that extended a tax credit and provided other investment incentives for the industry. According to the association, wind projects account for more than a third of all the new electric generation installed in recent years, while over the last six years, domestic wind turbine production has grown twelvefold, to more than 400 facilities in 43 states. A recent study found that in 2012 the industry would support 78,000 jobs, but that number could fall to 41,000 in 2013 without an extension of the production tax credit.

Wind and solar companies are telling Congress that they cannot be truly competitive and keep creating jobs without a few more years of government support.

But the lobbying by the wind and solar industries comes at a time when there is little enthusiasm for alternative-energy subsidies in Washington.

Overall concerns about the deficit are making lawmakers more skeptical about any new tax breaks for business in general. And taxpayer losses of more than half a billion dollars on Solyndra, a bankrupt maker of solar modules that defaulted on a federal loan, has tarnished the image of renewable power in particular. Solyndra was financed under a now-expired program, part of the 2009 stimulus package, that provided government loan guarantees for clean-

energy projects, some of which administration officials expected to be risky. It was especially popular with solar companies, allowing renewable energy companies to get 30 per cent of the cost of a new project back as a cash grant once construction is complete. Without the cash grant program, a company can still take the 30 per cent credit, but must spread the benefit over a period of years. The industry says the grant program is more effective because it encourages a broader range of private investors to help finance its projects.

As of early this year, the cash-grant program, known as the 1603 program, had awarded $1.76 billion for more than 22,000 solar projects, according to the Treasury Department.

The wind and solar companies argue that the tax breaks they are seeking are different. The tax credits can be taken only by businesses that are already up and running, so taxpayers are less likely to be stuck subsidizing a failing company, proponents say.

Support for green energy is emerging as one of the starker divides in the presidential race, raising questions about the renewable energy sector’s ability to thrive.

Visiting critical swing states, the candidates tailored their messages to two very different energy constituencies. President Obama went to Oskaloosa, Iowa, to highlight the 7,000 wind industry jobs created in the state and criticize Mitt Romney for opposing the renewal of a wind energy tax credit that is set to expire at the end of the year.

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“At a moment when homegrown energy is creating new jobs in states like Iowa, my opponent wants to end tax credits for wind energy producers,” the president said during a stop on a farm that has several wind turbines. Accusing Mr. Romney of dismissing new sources of energy like wind as imaginary, Mr. Obama said: “If he knew what you’ve been doing, he’d see that in places like Newton, where a few years ago, a Maytag plant shut down and jobs dried up, folks are now back to work manufacturing enormous new towers and blades for some of the most high-tech wind turbines on the planet.”

“This is a program that doesn’t pick winners or losers,” said Rhone Resch, president and chief executive of the Solar Energy Industries Association. “It’s hard to argue against a program like this that is creating jobs.”

Without the new breaks, industry executives warn, they will be forced to scale back production and eliminate jobs in a still-weak economy.

The American division of Iberdrola, a big Spanish producer of wind turbines, is already feeling the impending loss of one tax break that expires this year. “We’ve seen the prospects for new wind farms really fall off,” said Donald Furman, a senior vice president at Iberdrola Renewables, which announced this week that it was laying off 50 employees. “We’re not getting out of the business and we’re not in any financial trouble, but we are doing the prudent thing so that we don’t have issues.”

For his part, Mr. Romney traveled to the tiny coal-mining town of Beallsville, Ohio, a state that produces and consumes a lot of coal. There, he told a crowd of miners that Mr. Obama’s policies had raised the cost of energy and hurt the coal industry, which he would strive to protect if elected.

“We have 250 years of coal,” he said, “Why the heck wouldn’t we use it?”

The coal industry, which like the wind and solar power industry has been hurt by competition from the low price of natural

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“Because of federal investments, renewable energy use — sources like wind and solar — has

nearly doubled. Thousands of Americans have jobs because of those efforts.”

President Obama

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gas, has been objecting to new environmental regulations that it says make it all but impossible to build new coal-fired plants. Mr. Romney also promised that the nation would rely only on North American energy by the end of a second Romney term.

Although Mr. Obama has backed off from his 2008 promise to make climate change part of the national conversation, his administration has aggressively supported the development of green industries through the stimulus act, government purchasing, subsidies and mandates, and the amount of renewable energy produced across the country has significantly expanded. Although Mr. Romney has expressed support for clean technology, he has been

signaling that he would shift away from government involvement in the alternative energy arena in favor of emphasizing the exploitation of fossil fuels.

Indeed, in laying out the economic benefits of domestic energy production, his campaign website sticks to fossil fuels. “Before the first barrel of oil is pumped out of the ground, entire industries are hard at work creating the equipment and providing the services used in drilling, production and the long chain of supporting industries that brings energy from inside the earth to the consumer,” it says.

“The United States is blessed with a cornucopia of carbon-based energy resources,” it says.

“Developing them has been a pathway to prosperity for the nation in the past and offers similar promise for the future.”

The economics of wind and solar have been hurt by another development, the crash in the price of natural gas, which is a competing fuel for the production of electricity. The electric car has not yet emerged as a mass-market product to put a dent in oil consumption. The “smart grid” would be especially useful in helping manage a system with large amounts of wind and solar power, which vary in production over the course of the day, but such generating technologies have yet to adequately penetrate the market.

The politics of spending money on green energy are somewhat scrambled.

“There are now so many jobs in the clean energy world, you have Republicans who come to bat for clean energy,’’ Mr. Webber said. “A lot of these jobs are in rural, Republican districts,’’ he added, citing wind farms and ethanol production, which are big in Iowa, a swing state. “You have rural Republicans teaming up with urban Democrats to push for more wind,’’ he said.

Mr. Obama, who has been a steadfast supporter of clean-energy programs, has already begun making a case for new government investment in clean energy projects as a way to foster both energy independence and employment at a time when Capitol Hill evaluates new laws in terms of job creation as well as budget cost or savings.

“Because of federal investments, renewable energy use — sources like wind and solar — has nearly doubled,” Mr. Obama said at a stop at Buckley Air Force Base in Aurora, Colo., where he promoted the increasing use of renewable power by the military and repeated a call for Congress to approve the tax credits. “Thousands of Americans have jobs because of those efforts.”

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But those jobs are seemingly not safe given the uncertainty over the future of PTC, with recent manufacturing layoffs across the country, including Cedar Rapids, IA, where Clipper Wind Power downsized its operations in reducing the company’s staff by 32 per cent, from 550 employees to 376. In Brighton, CO, Vestas Wind Systems cut about 30 workers, leaving about 200 still employed. These cuts follow more than 90 layoffs at the company’s tower plant in Pueblo.

Walker Component Group, a Denver-based cable supplier for Vestas Wind Systems, has also had to cut a portion of its workforce, reducing its staff by 15 workers to 24.

Confirming that the layoffs at Walker Component Group were directly tied to Congress’ inaction to extend tax relief for wind power, company President Craig Walker told the Denver Post, “[T]he thing that distresses me is that there is so much controversy about it in Washington.

“Not here,” Walker continued, “not at other energy companies.”

Immediately responding to the layoffs at Clipper Wind power, the Cedar Rapids Gazette in Iowa editorialized that “the tax credit is a necessary tool, although it shouldn’t live forever. But Congress keeps playing games with this tax break, and the uncertainty has helped feed a boom-bust cycle in this industry over the past decade.”

This continues the drumbeat of support in Iowa, from opinion articles and recent editorials in the Des Moines Register and Denver Post to repeated statements by Sen. Chuck Grassley (R-IA), Govs. Terry Branstad (R-IA) and Sam Brownback (R-KS), and other leading Republicans.

“This week, once again, we are seeing the effects of policy uncertainty hit hard,” said Denise Bode, CEO of the American Wind Energy Association. “The people of Colorado and Iowa understand the importance of wind energy to their states and to America, and that’s why they and their representatives in Washington strongly support extending the PTC. But unfortunately, jobs in Iowa, Colorado, and across the country will continue to be at risk until Congress acts.”

There was some cause for encouragement in August as a meeting of the Senate Finance Committee, tasked with looking at the extension of the tax credit appeared to enjoy strong bipartisan support.

By an overwhelming bipartisan margin of 19-5, the committee passed an extenders package that included an extension of the wind energy Production Tax Credit (PTC). On critical amendment votes, all the Democratic members and GOP Sens. Chuck Grassley (R-IA) and Pat Roberts (R-KS) supported the extension of the PTC.

Also in the committee’s markup is an extension of the Investment Tax Credit (ITC), which provides an incentive for the development of offshore and community wind projects.

“We applaud the committee for this act of leadership to move critical policies forward in a difficult environment,” said Denise Bode, CEO of the American Wind Energy Association. “This was an extremely

important step to provide critical certainty to keep people at work in wind energy manufacturing and construction.”

Chairman Max Baucus (D-MT) included an extension of the PTC and the ITC for wind projects started in 2013 in the modified chairman’s mark (essentially a revised base bill) of the Family and Business Tax Cut Certainty Act of 2012.

Introducing amendments in support of the wind PTC were Sens. Jeff Bingaman (D-NM), John F. Kerry (D-MA), Debbie Stabenow (D-MI), Maria Cantwell (D-WA), Bill Nelson (D-FL), Benjamin Cardin (D-MD) and Kent Conrad (D-ND).

Meanwhile, three senators from each party who are not members of the committee submitted a letter to committee leaders in favor of wind energy. Sens. Michael Bennet (D-CO), John Boozman (R-AR), Scott Brown (R-MA), Tom Harkin (D-IA), Jerry Moran (R-KS), and Mark Udall (D-CO) urged the committee to extend the PTC in the markup.

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An extension of the PTC enjoys widespread, bipartisan support from groups as diverse as the National Governors Association, the U.S. Chamber of Commerce, the National Association of Manufacturers, Edison Electric Institute, the American Farm Bureau Federation, environmentalists, labor unions, and others. Members of the House and Senate from both parties have indicated their agreement that the PTC should be renewed.

Perhaps one of the best indicators of the importance of the PTC extension can be found in Iowa, a state that gets 20 per cent of its power from wind and the state with more major manufacturing facilities than any other. A poll, conducted by Public Opinion Strategies for the American Wind Energy Association, shows that that “an overwhelming majority of Iowa voters would be less likely to support an anti-wind candidate for office.”

The Hawkeye state currently employs as many as 7,000 people in the wind industry and is a top manufacturing state with more than 200 companies across 50 counties. Unfortunately, with the Production Tax Credit set to expire at the end of this year, as many as 3,000 jobs are immediately at risk.

In response to the recent position announced by Governor Romney’s staff (that he would allow the PTC to expire in 2013), Congressman Tom Latham (R-IA) made the following statement:

“I’m disappointed that the statement by Governor Romney’s spokesperson shows a lack of full understanding of how important the wind energy tax credit is for Iowa and our nation. It’s the wrong decision. Wind energy represents one of the most innovative and exciting sectors of Iowa’s economy. Nearly 7,000 hardworking Iowans are employed by over 250 businesses associated with the wind energy industry in our state, making Iowa the top state in wind energy employment. A continuation of the wind energy tax credit is in the best interest of our nation’s all-of-the-above energy policy for American energy independence and for our economy. I invite Governor Romney to step forward and re-evaluate the statement issued by his campaign spokesman.”

This year, the US passed the milestone of 50 gigawatts of electric generating capacity, and there is a clear desire to see many more green energy milestones pass by.

Steve Thompson, general manager of Availon in Des Moines, IA told the Des Moines Register, “if Congress will let us finish the job, wind energy can do for America what it has already done for Iowa: create U.S. manufacturing jobs right here at home.”