Two officials involved with wind power development expect that the industry will see eventually see a “phased” retirement of the production tax credit (PTC).
That was the assessment offered by both Carl Zichella, a Western transmission director for the Natural Resources Defense Council (NRDC) and Own Energy Orgination Director Brianne Marinucci during a Nov. 13 panel discussion at the PowerGen conference in Orlando, Fla.
When asked during a question-and-answer session for their assessment of the PTC, both said they expect a gradual “phase-out” of the wind tax credit.
The wind sector is maturing and the American Wind Energy Association (AWEA) is seeking a smooth “glide path” away from the PTC. “I think that it has to be done in an orderly way” rather than ended abruptly, Zichella said.
Booms and busts in wind power have been tied to lapse s in congressional re-authorization of the PTC. Zichella said the wind industry expects the PTC will gradually go away but hopes to see it replaced by other financial vehicles – such as real estate investment trusts (REITs) for renewable energy.
There was a major wind energy boom in 2012, in part because it appeared that the PTC might expire at the end of 2012. Despite a brief lapse, Congress did agree to a PTC extension for all new wind power projects placed into “construction” by the end of 2013 and into operation by 2015.
Exelon (NYSE:EXC) was essentially kicked out of the wind trade group after it openly called for retirement of the PTC. Exelon said the wind industry is mature enough to operate without the tax credit.
While wind has been down so far in 2013, it looks now as plenty of new projects are scheduled for commissioning in 2014 and 2015, officials said.
“Wind is the alpha renewable,” Marinucci said. Ten states now get at least 10% of their power generation from wind, she said. Marinucci is responsible for originating, structuring and negotiating comprehensive power transactions for Brooklyn, N.Y.,-based Own Energy.
Zichella is involved with grid planning and integration, renewable energy and transmission for NRDC.
The panel discussion was part of PowerGen, which is owned by PennWell, which also owns GenerationHub.