Electricity from renewables has more than doubled in the last five years. Wind energy in particular has been a success story—creating more than 75,000 jobs.
States like Iowa and South Dakota get almost 30 percent of their electricity from the wind. But this could all change if tax credits which support clean energy industries are allowed to expire at the end of this year. I spoke with Dave Hamilton, Director for Clean Energy of the Sierra Club's Beyond Coal Campaign, about wind's future in the current political environment and the Sierra Club's new initiative Wind Works.
TakePart: What exactly is the PTC?
Dave Hamilton: The PTC, Production Tax Credit for wind and geothermal energy, is essentially a payment to generators for the amount of clean energy they put on the grid—two and a half cents per kilowatt hour. It was passed in the 1992 Energy Policy Act, part of a relatively green tax package in that energy bill.
It was intended to start leveling the playing field for what was then a very small renewable energy industry. It was designed to give them incentives to grow in an economy where oil, gas and nuclear producers were subsidized by the government. In the 1992 tax package, for example, there was about $1 billion of green stuff and then $2 billion for independent oil and gas drillers. But we still thought we were winning just because we were getting on the board.
What effect did the PTC have?
Ultimately the PTC fundamentally changed the economics of the energy industry and the competitiveness of the wind industry, to the point where last year wind was three percent of our national energy, from just a fraction of a percent 20 years ago. It's shown just a remarkable growth rate in the last five to seven years.
Why is the PTC at risk now?
We've had a fundamental political shift, especially with the 2010 elections. The coal and gas guys used to work behind the scenes to try and undermine renewables, but now you've got this siege on clean energy in Congress and other places where they are trying to classify it as unreliable and too costly and attack it from a frontal position in a way that didn't used to happen.
In Congress right now, energy subsidies are receiving a lot of attention. Democrats in the Senate have said, "Alright, we will renew the clean energy subsidies and we will do it by cutting subsidies for fossil energy." The Republicans have really gone to bat on that and said, "We don't believe that raising taxes on petroleum is ever the right way to do anything."
One disadvantage the wind tax credit has always had is that it's always had a expiration date on it—it always gets extended for a finite number of years. It thus becomes part of something the tax community calls the "extender package." The extender package is always a football; some believe it to be a shakedown mechanism for the tax legislators to get late-inning campaign contributions because the extender package is always done at the last minute. Because of this, the PTC has lapsed three different times during its 20 years. Never for very long, but still the uncertainty alone is a huge disruption in the industry.
President Bush said that we should have 20 percent of the country's electricity supply coming from wind by 2030. But now you have legislators saying wind is "boutique" and that clean energy is crony capitalism. This puts the wind industry in a place where there is no continuity and no certainty—a place where any industry would be hard-pressed to operate effectively.
What is the Wind Works Campaign all about?
The campaign is really to try to call legislators out on this issue. The wind industry estimates they could lose as many as 37,000 jobs—mostly in fairly new manufacturing industries—in the next six months if Congress just sits on this until the end of the year. With that in mind, it's time to start going to elected officials who have wind jobs in their district but are in the House Republican ranks and say, "Excuse me, what kind of noise are you making about this, and if you aren't making noise, exactly whose job do you think ought to be lost? Are these jobs somehow expendable in a time when we are trying to piece together a recovery, when manufacturing is actually at a premium in this country?"
There is this political situation where people are sitting on their hands and every day they do this it costs Americans jobs. The American Petroleum Institute and others are running millions of dollars of ads against President Obama saying his attention to clean energy is immoral and crony capitalism. So are Republicans with wind jobs in their states staying silent because there is a major election tactic going on? We just want to get out there and ask these questions.