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

UMaine in business of certifying turbine blades

ORONO, Maine (AP) — The University of Maine has tested its largest wind turbine blade to date.

UMaine's Advanced Structures and Composites Center completed static strength testing this month of a 184-foot-long wind turbine blade built in North America for a Spanish company.

PG&E discloses more emails with state regulators

California's largest power utility released a dozen more emails Monday that it said showed improper back-channel discussions between the utility and top state regulators.

Follow Power Engineering on Twitter

Latest News

Wärtsilä to deliver natural gas engines to Montana-Dakota Utilities

Wärtsilä will supply a 19-MW Smart Power Generation power plant to Montana-Dakota Utilities (...

Clyde Bergemann to supply emissions control equipment to Polish cogeneration power plant

The Clyde Bergemann Power Group Europe has received at $10 million contract, from SBB Energy,...

India nuke deals still thorny for US despite 'breakthrough'

India and America's declaration of a breakthrough in contentious nuclear energy cooperation h...

W.Va. bill requires lawmakers to OK state carbon plan

A West Virginia Senate panel is considering requiring lawmakers to approve state plans to com...

US nuclear reactor shuts down during snowstorm

Officials say a Massachusetts nuclear power plant was forced to shut down during the blizzard...
Natural Ventilation

Power Engineering Photo of the Day

Solar energy supporters, utilities spar over legislation

Solar energy supporters are pushing back against a bill backed by Indiana's utilities that wo...
TEPCO Tokyo Electric Power Company water treatment radioactive contaminated Fukushima Daiichi nuclear power plant Nuclear Regulation Authority

TEPCO to miss radioactive water treatment deadline

Tokyo Electric Power Co. (TEPCO) said it would miss a self-imposed deadline to decontaminate ...

Power Engineering Current Issue

03/01/2014
Volume 118, Issue 3
1403PE-cover

Products Showcase

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

Buyers Guide Categories

Buyers Guide Company Listings

Power Industry Wire News

Walter Energy Suspends Dividend

Walter Energy Suspends Dividend

Synergy Resources Corporation Launches Common Stock Offering

Synergy Resources Corporation Launches Common Stock Offering

Surfrider Foundation Opposes Obama Administration Five-Year Plan to Open Offshore Drilling in the Atlantic and Arctic

Surfrider Foundation Opposes Obama Administration Five-Year Plan to Open Offshore Drill...

Veteran Backhaul Radio Engineer Jeff Rivard Joins LightPointe

Veteran Backhaul Radio Engineer Jeff Rivard Joins LightPointe

Abakan Appoints Stephen Goss as Chief Operating Officer

Abakan Appoints Stephen Goss as Chief Operating Officer

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 >>