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KS wind turbine manufacturer says it’s time to end subsidies

By   /   July 9, 2013  /   4 Comments

NEW DIRECTION: Siemens Wind Power spokesperson Monika Wood said the time has come to reduce the industry’s dependence on government subsidies.

(Note: Siemens Wind Power has updated its comments to better reflect its stance on government subsidies. Read their new statement here.)

By Travis Perry │ Kansas Watchdog

OSAWATOMIE — A major beneficiary of green energy tax breaks says the wind power industry needs to move toward a subsidy-free future if it has any hope of survival.

Monika Wood, spokesperson for Siemens Wind Power, told Kansas Watchdog that Congress’ on-again-off-again relationship with the Renewable Energy Production Tax Credit has created instability in the wind industry and played a significant role in workforce fluctuations at a number of the company’s manufacturing facilities.

“In the U.S., the wind industry still needs a longer-term approach to provide some stability, one that allows wind power to move toward a subsidy-free future,” Wood said. “Instead of the boom-and-bust nature of incentives such as the (energy production tax credit), the industry needs long-term policies and tax reform that will provide the certainty needed to spur effective investment and create jobs.”

In June Siemens rehired nearly all of the workers it laid off from its Hutchinson wind turbine manufacturing facility. The company also brought back workers at a similar plant in Fort Madison, Iowa. Last fall Siemens laid off nearly 250 workers in Kansas – 640 nationwide – after uncertainty about the tax credit’s renewal caused a slump in production orders.

The wind energy credit – which provides more than 2 cents per kilowatt-hour to producers who generate electricity from wind, biomass or other renewable sources – was granted a one-year lease on life in January, and is again set to expire at the end of this year.

While the tax credit’s seemingly temporary renewal has, for the moment, reinvigorated the Kansas wind industry, Wood said other factors played into the decision to rehire employees. She specifically pointed to project orders from countries like Canada, Brazil and Chile.

“Our orders, and thus our employment levels, vary with customer demand and market developments,” Wood said. “Customer demand is driven by many factors, including policy decisions, competitiveness of wind power with other forms of power generation, energy demand growth and transmission constraints.”

Related: KS wind turbine facility rehires workers, but for how long?

Contact Travis Perry at travis@kansaswatchdog.org, or follow him on Twitter at @muckraker62. Like Watchdog.org? Click HERE to get breaking news alerts in YOUR state!

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Travis Perry is an investigative reporter covering news and politics for Watchdog.org's Kansas bureau. Before joining the organization, Travis graduated cum laude from Washburn University and cut his teeth as news editor for the Osawatomie Graphic, where he received numerous awards from the Kansas Press Association.

  • Gordon

    I completely agree. While I don’t think the wind energy credit costs the federal government as much as we think, (The federal government only loses money, if the money spent by the companies who one the wind farms, would otherwise be generated in some taxable fashion) it would be much better for the industry if the subsidy was removed in some clear controlled way.

    The tax credit should be renewed at a lower rate, say $.015/kilowatt for 1 year, and then be reduced to $.010/kilowatt for a 2nd year and possibly $.005 for a third year. This gives the industry stability.

  • Stan

    I agree, the same for oil to!

  • Frances Edwards

    If any other business killed as many bats and birds, including eagles, that these inefficient, dangerous turbine companies do, they would be fined and the owners/managers might face jail time. This was a stupid idea from the start. The giant turbines are a nightmare, not a reliable, cost-effective source of energy.

  • Gordon

    The number of birds killed by wind turbines is very small compared to the number killed by cars, buildings and the processes of many other industries.

    Wind turbines are now cost effective enough that the industry can survive without subsidies. But if they stop the subsidies ‘cold’ then everyone stops building new wind farms because they want to wait and see if the program gets renewed again.