Does Senator’s Plan
Sen. Lisa Murkowski’s new energy blueprint, dubbed “Energy 20/20: A Vision for America’s Energy Future,” is certainly inclusive. The Alaska senator’s “all of the above” plan calls for the continued domestic development of nearly every source of energy – including oil, gas, coal, nuclear, wind, solar and hydropower.
In the document, Murkowski, ranking member of the Senate Energy and Natural Resources Committee, outlines many of the steps she thinks the U.S. should take to become entirely independent of OPEC by 2020.
One notable facet of Murkowski’s plan is her call for a new definition of clean energy – which may or may not be favorable for the wind energy industry.
“‘Clean energy’ should have a specific, verifiable definition based on actual impacts,” she wrote in the energy blueprint. “‘Clean’ should be defined as ‘less intensive in global lifecycle impacts on human health and the environment than its likeliest alternative.’ By 2020, the federal government should implement this definition of clean energy across all its programs and policies.”
Murkowski does not expressly indicate whether she thinks the current definition of “clean energy” is too broad or too specific, nor how the “likeliest alternative” would be determined. However, it should be noted that she makes references to “clean coal” and thinks there should be no controversy surrounding hydropower’s classification as a renewable source of energy.
“Hydropower is often excluded from consideration as a renewable resource because it has been politically controversial,” she wrote. “Political considerations should not be used to exclude a particular resource from the definition of ‘clean’ or ‘renewable.’ Hydropower is the largest source of clean, renewable electricity in the United States.”
Many states have taken steps to broaden the definition of clean energy after the prospects for meeting their renewable portfolio standards (RPS) became slim. For instance, Oregon modified its RPS to allow incineration facilities using municipal solid waste to qualify for its RPS.
Abolish clean energy subsidies
Although newly appointed Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., has been a strong supporter of federal renewable energy incentives – and has even co-sponsored legislation to, among other measures, extend the wind energy production tax credit (PTC) and institute a federal clean energy standard – he is likely to be challenged by Murkowski.
In her blueprint, Murkowski said she supports clean energy research and development (R&D), which is more than can be said for some House Energy and Commerce Committee members who have used failed solar company and loan-guarantee recipient Solyndra as an excuse to oppose all clean energy research initiatives.
However, Murkowski said clean energy investment should be limited to R&D, as production-based incentives, such as the PTC, could end up hindering the long-term growth of the industry.
“Perpetual reliance on production and deployment subsidies can actually inhibit the long-term growth and development of new energy modes,” the blueprint states. “Instead, the federal government should focus its attention and limited resources on R&D for clean energy.
“By 2020, we need to eliminate most of the government’s current subsidies and implement a new system of clean energy finance that is cost-effective, technology-neutral and conducive to private investment,” the document adds.
Todd Foley, senior vice president of policy and government relations at the American Council on Renewable Energy (ACORE), says that although Murkowski’s historic support for renewable energy is commendable, stripping tax-based incentives is not the answer.
“We continue to support the production and investment tax credits for at least a period of time,” he tells NAW. “They’re still needed in the market. Now is not the time to pull the rug out from under the feet of the industry.”
Rather than subsidize clean energy, Murkowski said, the federal government should simplify the process for awarding leases for the development of wind, solar and geothermal projects on public lands. In addition, policymakers should introduce legislation to streamline the permitting process for offshore wind projects, she recommended.
Nonetheless, Murkowski stressed that wind energy and solar power are intermittent resources that need to be balanced with energy-storage technologies.
“Wind power is intermittent; the winds are unpredictable,” her blueprint states. “Moreover, wind speed fluctuates on multiple timescales: hourly, daily and seasonally. Due to this unpredictable variability, wind power must be stored in order to meet electricity demand. As previously noted, storing electricity is very challenging today. To make wind power cost-competitive, we should focus on R&D for energy-storage technologies.”
Master limited partnerships
One alternative to subsidizing renewable energy is to modify the tax code to allow renewables to qualify for master limited partnerships (MLPs), which allow regular investors to purchase shares in publicly traded partnerships. Although MLPs have been used for decades in the oil and gas industries, they are not currently available to renewable energy. In her energy blueprint, Murkowski encourages such a modification.
“Congress should consider wholesale reform of the Internal Revenue Code as part of a broader approach to resolve inconsistent tax characteristics within the energy sector [and] make MLPs more widely available by amending the Internal Revenue Code of 1986 to extend the MLP structure to include biodiesel, biomass, hydropower, solar, wind and virtually every other kind of alternative energy source, with the exception of nuclear energy,” the blueprint states.
Foley says Murkowski’s support for MLPs shows promise for bipartisan support for this change.
“[Murkowski’s] support for enabling renewable energy to access that very successful policy is very important,” he says. “We have seen significant bipartisan support for enabling renewable energy to access master limited partnership financing. MLPs have been highly successful in driving capital formation and deployment to the extraction industries, and there’s no doubt in our minds that access for renewable energy [to MLPs] would also help bring much greater levels of capital – and cheaper capital – to renewable energy.”
Murkowski also recommended the use of reverse auctions, in which multiple sellers compete to be selected by one buyer – in contrast to a traditional auction, in which multiple buyers bid for acceptance by a single seller. In a reverse auction, a renewable energy generator would compete with potential suppliers to draw out the lowest price or best value.
In releasing her energy blueprint, Murkowski stressed that the document is not intended to be an introduction of policy, but rather a discussion-starter. Because of her high rank in energy matters, it is likely to do just that. But for right now, perhaps all that can be agreed on with any certainty is what Murkowski states as the opening line of her plan: “Energy is good.”
For PTC Rules
Thirty members of the House Sustainable Energy and Environment Coalition (SEEC) have sent a letter to the Internal Revenue Service (IRS) and the U.S. Department of the Treasury, encouraging them to act swiftly in issuing guidance to clarify the eligibility qualifications for the wind energy production tax credit (PTC).
After the PTC language was changed to allow projects to qualify for the tax credit if they start construction before Jan. 1, 2014, rather than begin operation before that date, the industry has been awaiting further guidance from the IRS and the Treasury on what it technically means to begin construction.
In their letter, the committee members urged the agencies to act swiftly on the issue.
“Because the PTC has been extended for one year only, it is imperative that you work to clarify the specific criteria that will define the commencement of construction as soon as possible,” they wrote.
Rep. Ed Perlmutter, D-Colo., an SEEC member, stressed that the guidance is necessary to provide certainty to the wind energy industry.
“The PTC is important to the wind turbine manufacturers, but also to all the small businesses along the supply chain and the farmers and landowners who want turbines on their property,” Perlmutter says. “Clarifying the rules to ensure the PTC applies to those projects that are ‘commenced construction’ in 2013 will provide the certainty for these businesses to invest in the future and maintain and create thousands of good-paying, private-sector jobs in Colorado and throughout the country.”
The European wind energy industry is being hit by the economic crisis, and a difficult situation should not be made worse by politicians undermining investor confidence, warned top industry figures in Vienna, the European Wind Energy Association (EWEA) reports.
At the opening of EWEA’s annual wind power conference, politicians and industry representatives also spoke of the need to secure the further growth of wind energy in Europe after the current 2020 renewable energy target runs out, and of the disparity between fossil fuel and renewable energy subsidies.
Arthouros Zervos, president of EWEA, criticized “sudden or retroactive changes to support schemes” and warned that “the wind industry can be a driver for growth, for jobs and exports, but not if government policies drive away investors.”
Zervos told industry leaders and ministers that the wind industry is suffering serious job losses and will suffer more difficulties this year. He called for binding renewable energy targets for 2030 as a way to create investor confidence.
Meanwhile, Fatih Birol, chief economist at the International Energy Agency, said global fossil-fuel subsidies totaled $523 billion in 2011, compared to just $88 billion for renewable energy.
According to Francesco Starace, CEO of Enel Green Power and chair of EWEA 2013, policy will be critical to ensuring the success of the European wind energy industry.
“Many are the challenges that the European wind industry will face at the domestic level, which require attention now: [European Union (EU)] energy policy after 2020, the further development of electricity infrastructure, and the competitiveness and integration of wind energy in the electricity market are among the most pressing,” he said. “Furthermore, for preparing a proper future, the present should be adequately dealt with, and therefore, for reaching the 2020 targets, EU member states have to guarantee efficient and reliable renewable energy policies.”
Wynne As Premier
Ontario’s Liberal Party has chosen former Education Minister Kathleen Wynne as the province’s next premier.
Wynne will succeed Dalton McGuinty, who announced his resignation last October, leaving Ontario’s wind energy future uncertain.
In a statement, the Canadian Wind Energy Association (CanWEA) congratulated Wynne on her victory and said it looks forward to working with her on clean energy.
“We look forward to engaging with Premier-designate Wynne and working collaboratively to ensure Ontario continues to attract new investments, create new manufacturing jobs and provide Ontarians with the clean and flexible electricity system they want,” said Robert Hornung, CanWEA’s president. “As Canada’s leader in the production of wind energy, Ontario now meets about three percent of its electricity demand with wind.
“The growth of wind energy has injected hundreds of millions of dollars into communities across the province, allowed landowners and farmers to participate directly in a clean energy economy, helped once-ailing manufacturing facilities diversify, and provided good, homegrown jobs for college graduates,” he added. “With a stable policy environment, wind energy can deliver even more benefits to Ontario.”
Ontario currently has over 2 GW of installed wind energy capacity, which is enough to power 600,000 average homes, according to CanWEA.
CanWEA has spoken out against the Ontario Progressive Conservative (PC) Party’s continued support for a private member’s motion put forward by Member of Provincial Parliament Lisa Thompson, Huron-Bruce, that calls for a moratorium on wind energy development.
Those in favor of the wind energy moratorium claim that wind turbines have harmful effects on human health. However, some industry insiders have suggested that the wind power opposition may be politically motivated.
According to CanWEA, a moratorium on wind energy development would put thousands of jobs and millions of dollars in new investments at risk and is not warranted based on the review of scientific evidence to date.
“We are keen to work with all political parties to ensure the responsible and sustainable development of wind energy in Ontario, but that dialogue must be based on fact and not misinformation spread by those opposed to clean and affordable wind energy,” says Robert Hornung, president of CanWEA.
“We are discouraged to see the PC Party of Ontario official website displaying a petition in support of a moratorium against an industry that is operating responsibly in every province of this country and 90 countries around the world,” he continues. “The wind industry here in Canada is comprised of hundreds of companies that employ thousands of people, a majority of them here in Ontario. It is disappointing to see this at a time when Ontario is being celebrated globally for ending dirty coal production and attracting clean energy investments.”
CanWEA notes that the balance of scientific and medical research to date, including a report by the province’s own chief medical officer of health, has found that sound produced by wind turbines does not harm human health.
In addition, several legal proceedings have reviewed expert information on wind energy and human health and have found no justification for halting wind energy development. Health Canada is planning a study on wind energy and human health, but has not sought any moratorium while the study is undertaken.
According to CanWEA, the PC Party’s website also contains incorrect information about wind energy, including the assertion that new wind development is driving up electricity rates in Ontario.
“I would encourage members of the PC Party to consult with the Ontario Energy Board, which has clearly indicated that wind energy has been only a minor contributor to recent increases in Ontario’s electricity rates,” Hornung says. “Looking forward, the PC Party is focused on the development of new electricity generation from sources that are more expensive than wind energy.
“The wind energy industry wants to work productively with all levels of government and stakeholders to ensure jobs, investments and affordable clean energy continue flowing,” he adds. “A moratorium would prevent thousands of farmers and landowners, and dozens of municipalities, from participating in Ontario’s clean energy economy, ultimately hurting rural Ontario.”
Rep. Mike Pompeo, R-Kan., is renewing his push to eliminate all energy tax credits, including for wind power.
Pompeo has introduced the 2013 Energy Freedom & Economic Prosperity Act, which would remove all energy tax credits – including the production tax credit and the investment tax credit – but would retain the “general business deductions” available to the oil and gas industries.
Pompeo, who introduced similar measures last year, claims the legislation would put all sources of energy on a level playing field. However, critics say the fossil-fuel industries would continue to benefit from write-offs, such as those for intangible drilling costs, while less mature industries – such as the wind energy sector –would lose the momentum they have gained over the past decade.
Eleven congressmen have signed on to co-sponsor the bill, which is also supported by several groups with ties to fossil fuels, such as the American Energy Alliance and Americans for Prosperity. w
Does Senator’s Plan Support Wind?
NAW_body NAW_body_bi NAW_body_b_i NAW_body_bNAW_body_i