United States

United States

Republicans propose eliminating PTC subsidy

The newly introduced PTC Elimination Act contrasts sharply with a Democrat bill proposed earlier this summer to extend the US' wind power sector's main support scheme

Before it can be signed into law, the PTC Elimination Bill must be approved by a majority vote in the Senate (above) and House of Representatives
Before it can be signed into law, the PTC Elimination Bill must be approved by a majority vote in the Senate (above) and House of Representatives

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Republican senators have introduced a new bill to completely phase out the main support scheme for wind power in the US at the end of the year.

The PTC Elimination Act put forward by US senator James Lankford is in sharp contrast to the Growing Renewable Energy and Efficiency Now (Green) Act – to extend the production tax credit (PTC) scheme by five years – proposed earlier this summer by Democrats.

Lankford’s PTC Elimination Act would ensure that the US wind power sectors’ main subsidy would expire as planned at the end of the year.

Lankford explained: “This production tax credit was established to help the then-fledgling renewable energy industry. 

“Now, if you drive through my state and many others with countless wind turbines, you can see that the wind industry in particular is no longer a start-up, new energy source. The wind industry simply does not need special help to thrive anymore.”

The American Wind Energy Association (AWEA) had welcomed the introduction of the Democrats’ bill, but criticised the new Republican bill.

AWEA’s senior director of federal affairs, Aaron Severn, said: “The bill singles out wind energy amid a federal tax landscape that currently includes support for all types of energy sources.  

“This targeted attack is unfair to the industry and the farmers, ranchers, and rural communities that count on wind revenues to pay their bills, pave their roads, and improve their schools and public services.”

The competing Democrat bill proposes maintaining the PTC at the current phaseout levels for 2019 and 2020 — 60% and 40% respectively — and then extending the credit at 60% of its original value through to the end of 2025.

Both bills would need to be approved by a majority in both the House of Representatives and the Senate before being signed into law by the US president. However, it is unlikely both will become laws as they contradict one another.

Since the adoption of the PTC in 1992, US wind power capacity has grown from 773MW to more than 110GW, according to Windpower Intelligence, the research and data division of Windpower Monthly.

Its impending phaseout at the end of 2020 has sent developers scrambling to start construction or secure safe harbour status for their projects to be eligible for the tax relief.

In the first eight months of the year, 5.6GW was installed in the US, according to Windpower Intelligence. This marks a 70% increase from the same period last year.

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