ALBANY, N.Y. - It's deja vu all over again for Bruce Bailey. As founder and president of Latham-based alternative energy company AWS Truepower, Bailey is again watching the looming demise of a key federal tax break meant to encourage more wind power projects.
ALBANY, N.Y. — It's deja vu all over again for Bruce Bailey. As founder and president of Latham-based alternative energy company AWS Truepower, Bailey is again watching the looming demise of a key federal tax break meant to encourage more wind power projects.
Should Congress not renew a subsidy called the Production Tax Credit, due to end Dec. 31, it would mark the fourth time since 2000 the credit has lapsed when Congress declined to renew it. Each time, wind projects plummeted afterward.
Bailey said he is "mentally prepared for the production tax credit to go away," although he rated the odds of it being extended at the last minute — like it was last year during the so-called "fiscal cliff" negotiations — at 50-50.
His 29-year-old alternative energy planning company, which helps develop wind and solar energy projects, has worked in more than 30 states, as well as 60 countries. Calling the repeated peril to the wind credit "perpetual politics," Bailey said his company is shifting more attention overseas to deal with "uncertainty" in U.S. energy policy.
With an office in India, AWS Truepower also recently incorporated in Brazil, Bailey said. It also has created partnerships with similar alternative energy companies in Turkey and Poland, where wind energy projects continue to move forward.
The firm has also added services beyond its original mission of providing mapping and projections for wind and solar site availability, and now offers due diligence services to potential buyers or investors in existing wind farms, and construction monitoring for wind farm construction in countries like Canada, Mexico and Peru, Bailey said.
Eric Whalen, of Environment New York, said in 2000, 2002 and 2004 — years when the wind credit was allowed to expire temporarily_new wind installations dropped by 93 percent, 73 percent and 77 percent, respectively, in the following years. He said the political outlook for extending the credit beyond 2013 appears "pretty dismal."
Renewal of the wind tax credit, which can provide up to $1 million to developers of a large turbine, is a politically contentious issue. In addition to tea party congressional Republicans, opposition to continuing the wind credit comes from the American Energy Alliance, a Washington, D.C.-based industry group linked to petrochemical interests that promote expanded drilling for fossil fuels, including in the protected Arctic National Wildlife Refuge in Alaska, and approval of the proposed XL pipeline to bring Canadian tar sands oil to refineries in Texas and the Gulf Coast.
''This lack of certainty over the wind credit creates a boom and bust cycle, which is really detrimental to wind project developers," said Valerie Strauss, executive director of Alliance for Clean Energy New York, an Albany-based lobbying group for alternative energy companies.
One such local business is Gloversville-based Tetra Tech Construction. Its website says it has built 21 wind projects in the U.S. It is currently involved in building the Orangeville wind farm outside of Buffalo, owned by Chicago-based Invenergy, and the only wind farm project under construction this year.
A Tetra Tech official declined comment, referring questions to a corporate office; phone calls to that office were not returned.
An Invenergy spokeswoman declined comment.
''The potential loss of the Production Tax Credit certainly presents a challenge for renewable projects, not just in New York state but around the country," said Dayle Zatlin, a spokeswoman for the New State Energy Research and Development Authority, which implements programs to encourage more alternative sources in the state's electricity mix.
Zatlin said the agency is "evaluating a number of funding alternatives or structural changes that could help offset the loss of the (tax credit) and reinvigorate the market."
Wind energy plans have been shrinking in the state, as the industry faces a glut of cheap natural gas from hydrofracking, uncertainty over federal support and dwindling financing. The amount of wind power expected to one day plug into the state's electrical grid has fallen by more than two-thirds since 2009 as developers shelve projects.
In October 2013, there were 27 wind projects totaling 2,100 megawatts expected to connect to the grid, according to the New York Independent System Operator, a not-for-profit group that manages the state's electrical system to ensure there is adequate power to meet demand. However, only one of those projects was proposed this year; 11 projects were at five years old or older, and whether work ever begins is unclear. Four years ago NYISO counted 70 pending wind projects totaling nearly 9,200 megawatts.
Since 2011, the state has added less than 300 megawatts of wind power; by comparison, a single fossil fuel-fired power plant can be 500 megawatts. Between 2007 and 2010, the state added 1,000 megawatts of wind power, or about two regular power plants.
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