EIA: Wind power projects most affected by extension of PTC

production tax credit EIA wind energy solar biomass natural gas coal

Renewable power capacity in the U.S. will grow more with the extension of the production tax credit passed as part of the American Taxpayer Relief Act (ATRA) of 2012, with the largest increase occurring with wind power projects, according to the U.S. Energy Information Administration.

A report from the EIA shows that the extension will create “a large increase in wind generation” in the near term. The projection of wind power capacity is increased by 34 percent compared to the Annual Energy Outlook 2013 reference case, which does not include reference to the extension of the credit. The total projected renewable energy generation is 9 percent higher in 2016 compared to the reference case, according to the EIA.

The EIA stated a crucial new feature of the extension is a relaxation of the requirement in previous versions of the PTC that a qualifying wind project is in service by a specified date. The PTC extension requires that qualifying wind projects be under construction by the end of 2013.

The Internal Revenue Service stated April 15 that a plant is under construction if it has either started “physical work of a significant nature” or if it has incurred at least 5 percent of the project’s estimated total cost. The EIA stated its analysis assumes the effective length of the PTC extension is “equal to the typical project development time for a qualifying project, or roughly three years for a wind project.

Long-term growth, however, is less significant, with the difference between the reference case and the ATRA projection by 2040 at only 2 percent, although wind power capacity still shows a 17 percent increase in that time period.

“These results indicate that, while the short-term extension does result in a net increase in wind generating capacity, some construction that otherwise would have occurred later in the projection period is simply completed earlier to take advantage of the extended tax credit,” the report states. “The increase in wind generation partially displaces other forms of generation in the reference case, both renewable and nonrenewable, particularly solar, biomass, coal and natural gas.”

The EIA also noted that although an additional 20 GW of wind power capacity will be created under the ATRA between 2012 and 2016, the exact timing of the short-term capacity additions is relatively uncertain.

“Following the buildup in capacity completions leading up to the expected PTC expiration at the end of 2012, the first quarter of 2013 saw very little wind project development activity,” the report states. “As developers have a chance to react to the new IRS clarification, EIA expects that power purchase agreements and financing activity will resume, and the timing of this resumption likely will affect the timing of building new capacity in the near term.”

Read more financial news

Sponsored by FLSmidth
Related Articles
Hydropower tops power generation share in Canada over next decade

Hydropower tops power generating sources in Canada, report says

Hydropower will continue to be the dominant power generation source in Canada over the next ten years, according to a report from research and consulting firm GlobalData.

Pattern Energy Group owns 100% of Texas wind energy project

Pattern owns 100% of Texas wind energy project

Pattern Energy Group Inc. (Nasdaq: PEGI) completed the acquisition of the remaining ownership interests in the 283-MW Gulf Wind power plant in Texas.

Follow Power Engineering on Twitter
Latest News
Most U.S. nuclear power plants operating at highest level, NRC says

Most U.S. Nuclear Power Plants Operating At Highest Level, NRC Says

A majority of U.S. nuclear power plants are operating at the highest performance levels in th...
Federal regulators back keeping Colorado Coal mine open

Federal Regulators Back Keeping Colorado Coal Mine Open

The Office of Surface Mining Reclamation Enforcement issued its decision Tuesday, five days b...
Manitoba Hydro names Darren Rainkie interim president and CEO

Manitoba Hydro Names Interim President and CEO

While it continues to search for a new permanent president and CEO, the Manitoba Hydro-Electr...
Silver Spring Networks, Inc., a developer of software and networking platforms for major utilities, yesterday announced that Michael Bell has been appointed president and CEO of the organization.

Silver Spring Networks Names President and CEO

Silver Spring Networks, Inc., a developer of software and networking platforms for major util...
SCPSC approves updated construction schedule and costs for SCE&G Summer nuclear power plant

SCE&G Updates Costs, Construction Schedule For Nuclear New Builds

The two reactors under construction at the V.C. Summer nuclear power plant in South Carolina ...
Dominion to no longer bill for some charitable donations

Dominion To No Longer Bill For Some Charitable Donations

The energy giant, which owns the state's largest electric utility, said in a recent regulator...
08/29 Weekly Coal Production Report EIA

08/29 Weekly Coal Production Report

The Weekly Coal Production Report has been updated for the week ended Aug 29, 2015.

Dungeness B nuclear reactor online after planned outage

Dungeness B Nuclear Reactor Online After Planned Outage

The Dungeness B nuclear Unit 22 is back online following a 16-week planned maintenance outage.
Power Engineering Current Issue
07/01/2015
Volume 119, Issue 7
1507pe_C1
Products Showcase
Areva delivers reactor vessel head to Belgium nuclear power plant

Areva delivers reactor vessel head to Belgium nuclear power plant

Areva delivered a nuclear reactor vessel head to Electrabel for Unit 4 at the Doel nuclear power plant in Belgium.

GE announces launch of latest aeroderivative gas turbine, LM6000-PF+

GE announces launch of latest aeroderivative gas turbine, LM6000-PF+

GE is launching its latest aeroderivative gas turbine, the LM6000-PF+, which employs technologies from four GE businesses, bringing power online faster and more efficiently than ever before.

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015

Buyers Guide Categories
Buyers Guide Company Listings

Power Industry Wire News

Despite Downturn, Some Suppliers to Oil & Gas Industry Are Growing, an Industrial Info News Alert

Despite Downturn, Some Suppliers to Oil & Gas Industry Are Growing, an Industrial Info ...

2015 National Advanced Biofuels Conference & Expo Announces Preliminary Agenda

2015 National Advanced Biofuels Conference & Expo Announces Preliminary Agenda

Energy Partner Paul Kaufman Joins Sheppard Mullin Del Mar

Energy Partner Paul Kaufman Joins Sheppard Mullin Del Mar

Algae Biomass Summit Showcases Advances in Engineering and Analysis

Algae Biomass Summit Showcases Advances in Engineering and Analysis

Dais Looks to Further Build on Aqualyte V4 Following Strong Performance and Improved AHRI Certification Results of Aqualyte V3

Dais Looks to Further Build on Aqualyte V4 Following Strong Performance and Improved AH...

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>