Conversion to a sustainable society will be difficult and expensive

When politicians are forced to clean up after the banksters, they are left with few resources to address the problems of the real economy.

Knocking the Wind Out of U.S. Energy Options

05/25/2012
Elliott Negin, Director of News & Commentary, Union of Concerned Scientists

Unless Congress acts soon, the wind industry will have to trim its sails--and its workforce.

An essential federal tax break for the fledgling industry, scheduled to expire at the end of the year, has become a victim of Washington gridlock. President Obama was in Newton, Iowa, yesterday at TPI Composites, a leading wind blade manufacturer, to again ask Congress to extend the production tax credit, which provides a credit of 2.2 cents per kilowatt-hour of electricity produced by wind turbines--as well as geothermal, biomass and underwater turbines--for the first 10 years of production.

The president also urged Congress to expand a 30 percent tax credit instituted in 2009 for investments in companies manufacturing renewable energy components. The package, called the Advanced Energy Manufacturing Tax Credit, provided $2.3 billion in credits for solar panel parts, "smart" electric meters, fuel cell components and wind turbines.

Over the last decade, wind power has become one of the fastest growing energy sources around the world. According to the U.S. Energy Information Administration, in the United States alone wind generated 120 billion kilowatt hours last year, 20 times more than in 2000 and enough to light up more than 20 million households. That 32 percent average annual growth rate is due to a number of factors, mainly improved technology, state standards requiring utilities to ramp up their reliance on renewables--and the federal production tax credit.

The production tax credit, which debuted in 1992, helps level the playing field between wind and coal and natural gas and is critical for financing new projects. Although most wind power developers don't pay taxes because they're not yet turning a profit, they can raise capital by selling the credits to companies that do.

Unlike a number of fossil-fuel and nuclear-power subsidies that are permanent, the production tax credit has to be renewed by Congress every few years. That puts the relatively new wind industry at a distinct disadvantage, making it difficult to attract investors and plan years in advance. And if Congress doesn't extend the production tax credit this year, the industry will take a significant hit. A December 2011 study by Navigant Consulting estimated that investment in wind projects will drop 65 percent, from $15.6 billion in 2012 to $5.5 billion in 2013; the industry will have to lay off nearly half of its workforce--some 37,000 people--next year; and wind developers will install only 2 gigawatts of wind power in 2013, less than a quarter of what is expected this year. more

And even in Germany where there is a unifying concern around environmental issues, projects are stalling because of the costs necessary to address the insanity surround the problems of the Euro.

Energy Revolution Interruptus

Germany Stalled on the Expressway to a Green Future

By Frank Dohmen, Alexander Jung, Michael Sauga and Andreas Wassermann  05/23/2012

Germany's energy revolution has hardly begun, but it's already running out of steam. There is a lack of political decisiveness and companies are complaining of a dearth of incentives to invest billions in necessary infrastructure. Progress or no progress, taxpayers continue footing the bill.

German Chancellor Angela Merkel, the leader of the center-right Christian Democratic Union (CDU), will see federal diversity on display this Wednesday when she hosts Germany's governors for an energy summit in Berlin. She can expect to see 16 governors and hear 16 different opinions -- at the very least.

Each delegation has a different notion of what Germany's energy revolution should look like. The delegation from the northwestern state of Lower Saxony wants to promote offshore wind farms, while the representatives of the southwestern state of Baden-Württemberg favor projects that make more sense farther inland. The Bavarians are calling for new gas-fired power plants in the south, while politicians from the northeastern state of Brandenburg are championing the unfettered expansion of the solar industry, which is ailing in the east.

The cacophony reflects the current state of affairs. Things are all over the place in the energy turnaround at the moment, and nothing seems to be working. The key project of the coalition government of Merkel's CDU, its Bavarian sister party, the Christian Social Union (CSU), and the pro-business Free Democratic Party (FDP) is stalling before it has truly begun.

A year ago, the chancellor was still able to fire people's imaginations with her energy plans. "We can be the world's first industrialized country to successfully navigate the transition to the electricity of the future," Merkel said at the time. When she summarily fired Environment Minister Norbert Röttgen last Wednesday, she had returned to the harsh light of reality. In a considerable understatement, Merkel admitted that "the implementation of the energy turnaround still requires substantial efforts."

Brandenburg Governor Matthias Platzeck, a member of the center-left Social Democratic Party (SPD), deplores the "intolerable jumble of authority" the federal government is creating during the energy turnaround. His fellow Social Democrat Matthias Machnig, economics minister of the eastern state of Thuringia, compares the "biggest infrastructure project of the postwar era" to a marathon, adding that Germany is "only 50 centimeters past the starting line." And that, says Kurt Beck, the SPD governor of the southwestern state of Rhineland-Palatinate, is the federal government's fault. "To this day, there is no clear policy in Berlin," he says. more