Windpower Layoffs Making PTC Extension Increasingly Moot

“The spate of layoffs that wind industry advocates have warned about has accelerated in recent weeks, with workers losing their jobs in key wind states such as Iowa and Colorado in a trend expected to continue at least into next year.”

- Nick Juliano, “Wind Layoffs Mostly Hitting Constituents of PTC Supporters,” Greenwire, August 29, 2012.

Energy reality continues to set in for the government-dependent energy sector, industrial windpower. Part of the reckoning is economic–the increased competitive gap between electricity generated from natural gas versus wind. But the bigger part is the looming expiration of the Production Tax Credit (PTC) for wind. Twenty years of such political favor has not been enough for a product that is intermittent (read: sub-industrial grade).

As reported in Greenwire last week:

More than 2,200 jobs have been cut, are at risk or were never created, although an untold number more likely have been affected through cuts at smaller companies that may not have generated formal announcements. The downturn has affected jobs in at least a dozen states, from Massachusetts to Oregon to Arkansas.

A map of the specific losses in regard to local Congressional races (Republicans in Red; Democrats in Blue) was compiled by E&E News (sub. req.).

Interestingly, but not surprisingly in our era of Big Government, every Republican (save one neutral), not only Democrat, in the above 18 districts supports an extension of the PTC. The states affected are Colorado (4); Arkansas (2); Iowa (2); Massachusetts (2); Pennsylvania (2); and one facility each in Minnesota, North Dakota, Oklahoma, Oregon, Texas, and Vermont.

In these districts were a good many freshman Republicans who on June 27 wrote to the House Republican leadership:

Manufacturers and developers in our districts have told us that within weeks, or months–as soon as their last component part is shipped off to the project site–they will be faced with little to no orders for 2013, and will begin to deal with layoffs and plant closures. Developers are now canceling projects beyond this year for fear that they won’t be able to secure the private backing necessary to finance their investments.

The 17 signatories added that they “do not support permanent tax credits” and were in favor of fundamental tax reform, but “more than half the jobs in the industry are expected to be gone by this time next year if the PTC is not extended.” Right, temporary tax credits. Remember what Milton Friedman once said? “There is nothing so permanent as a temporary government program.”

Meanwhile, the race is on to install new wind installations by year-end to qualify for the tax credit. Reports Juliano:

The industry is expected to install about 11.8 gigawatts of new turbines in 2012, more than a third of which is expected to come online in the last two weeks of December as developers race to meet the PTC expiration deadline, according to Bloomberg New Energy Finance. But installations next year are projected to be less than half that level even with an extension of the credit. The analysis firm projects 5 GW installed in 2013 if the PTC is extended, or just 2 GW without the credit.

The good news is that scarce resources are leaving an artificial, no-future industry for industries supported by fundamental consumer demand. The message is clear: Dear Wind Industry: We Need Your Workers and Materials (and taxpayers need your cessation).