Deputy Secretary Daniel E. Poneman visits Oregon
Deputy Secretary of Energy Daniel E. Poneman recently visited the new Shepherds Flat wind farm in Oregon. He subsequently wrote the following article which is cross-posted from the U.S. Department of Energy blog.
Last week I had the privilege of visiting one of the largest wind farms in the world--a project at the forefront of America’s energy economy. Along with clean, renewable energy, Oregon’s Caithness Shepherds Flat wind farm is creating jobs and revenue for the region.
Turbines at Shepherds Flat officially began generating energy last fall, and the project is able to create up to 845 megawatts of emission-free wind power (enough electricity to power nearly 260,000 homes). This $2.3-billion project was supported by a $1.3-billion partial loan guarantee from the Energy Department in 2010, and directly created 400 construction jobs and 45 permanent operating jobs for this community in north central Oregon. All while still allowing ranchers to use the surrounding land just as they have for generations.
Shepherds Flat is producing power and the revenue to pay back its loan. It is a perfect example of how the public and private sector can work together to bring safe, clean, reliable energy to market. One of the aims of the Energy Department's loan guarantee program was to bring private capital in off the sideline, and in this case, that includes $1.3 billion in commercial debt, $693 million in equity from companies like Google and GE, and $226 million in letters of credit.
As clean energy technologies become increasingly important for the global economy, it’s more important than ever that the U.S. continue playing to win. Projects like Shepherds Flat are getting built and are providing jobs and clean energy to Americans all across the country. The recent extension of the Production Tax Credit (PTC) is also helping the wind industry continue to surge forward. President Obama fought hard to secure an extension of the PTC, legislation that’s helping make 2013 another great year for wind energy and the economy. Now, instead of layoffs, we’re hearing stories from American wind companies that are retaining and re-hiring workers instead of moving business overseas.
Last year was the best yet for the U.S. wind industry. More than 13,000 MW of power were installed and, in the fourth quarter alone, more than 8,000 MW were deployed--an all-time record for the industry and twice as much wind as the previous record set in the fourth quarter 2009. Today, the U.S. has more than 45,000 wind turbines, providing enough electricity to power 14.7 million homes--roughly equivalent to the number of homes in Colorado, Iowa, Maryland, Michigan, Nevada and Ohio combined.
Given this success, some might ask if it’s necessary to keep investing in wind energy through such tools as the Production Tax Credit. Here it is important to recognize that, while the wind industry is coming on strong, its capital costs are still relatively high compared to more traditional sources of energy; we must continue to find ways to level the playing field in capital markets so renewable energy projects can obtain capital at reasonable market-based rates. In addition, intense competition for leadership in manufacturing for that industry continues from countries in Europe and China. With the benefit of the loan guarantee program and PTC tax credit, we have made serious progress regaining our manufacturing base. In 2005 we had to import 70 percent of the components for a wind turbine from overseas, whereas today we are able to supply 70 percent of our parts domestically. That means advanced manufacturing and the jobs that go with it are coming home. With foreign governments continuing to subsidize the competition, now would be the wrong time to abandon our support for this nascent industry.
It comes down to a basic choice: We can either sit by and let the energy technologies of tomorrow be produced by our foreign competitors, or we can continue investing in projects like Shepherds Flat, which together support tens of thousands of jobs nationally and have helped double U.S. renewable electricity generation in the past four years. The President spoke directly to this issue in his recent inaugural address: “We cannot cede to other nations the technology that will power new jobs and new industries--we must claim its promise. That is how we will maintain our economic vitality and our national treasure--our forests and waterways; our croplands and snowcapped peaks. “
It was good to see that promise fulfilled in the high desert of Oregon.
WASHINGTON – As part of President’s Obama’s all-of-the-above approach to American energy, the U.S. Departments of Energy and the Treasury has announced the availability of $150 million in Advanced Energy Manufacturing Tax Credits for clean energy and energy efficiency manufacturing projects across the United States. This important tax program is focused on strengthening America’s global competitiveness in clean energy manufacturing, increasing our energy security and creating new jobs and opportunities for American workers.
“Since 2009, the Advanced Energy Manufacturing Tax Credit program has supported innovative American manufacturers that boost our nation’s competitiveness in the global race for clean energy,” said Energy Secretary Steven Chu. “These new investments will continue that momentum, supporting the President's commitment to American-made energy, increasing energy security, and creating jobs.”
“As the economy continues to heal, the President has been clear that we have to do everything we can to boost growth and job creation today and build a more sustainable foundation for tomorrow,” said Acting Secretary of the Treasury Neal S. Wolin. “Manufacturing the clean energy products of the future in America will create good, middle-class jobs right now and help lay the groundwork for the long-term resilience of our economy.”
The Advanced Energy Manufacturing Tax Credit was established by the American Recovery and Reinvestment Act to support investment in domestic, clean energy and energy efficiency manufacturing facilities through a competitively-awarded 30 percent investment tax credit. The initial round provided $2.3 billion in credits to 183 projects across the country. The $150 million in tax credits are being made available today because they were not used by the previous awardees.
Over the past four years, the United States has more than doubled clean, renewable energy generation from wind, solar, and geothermal sources, and has strengthened its position as a global leader in the clean energy race. At the same time, the American manufacturing sector has begun to rebound, with 500,000 manufacturing jobs added since the beginning of 2010. These tax credits will help continue this growth, while enhancing the country’s energy security and boosting local economic development.
The program supports manufacturing of a range of clean energy products, from renewable energy equipment to energy efficiency products to advanced energy storage and carbon capture technology. A full list of eligible projects is included in the attached fact sheet.
These remaining tax credits will be allocated on a competitive basis. Projects will be assessed by the Department of Energy based on the following criteria: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions. The Department of Energy will also consider additional factors including diversity of geography, technology, project size, and regional economic development. The full solicitation is available on the IRS website HERE.