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Policy uncertaintybuilds in America -- The Bush factor

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Energy policy is a priority for the US government for the first time since the 1970s oil shock. But it is still far from clear if the wind industry will benefit from the four year presidency of former Texas governor George W Bush.

Last month, Bush, a former oil executive, retreated from a campaign promise to require power plants to limit emissions of carbon dioxide, shocking not only renewables advocates and environmentalists but also many world leaders. They now fear a US retreat from fighting global warming, despite recent dire warnings from the UN's International Panel on Climate Change (page 40). Randall Swisher of the American Wind Energy Association, which seldom criticises the White House for fear of undermining the precarious foothold that wind has in Washington, describes the decision as "short sighted."

At the budgetary level wind is also taking a hit. Bush is apparently considering a cut of at least 35% in renewables funding, part of a broader proposed decrease in all federal energy funding. Details of his energy budget will not be available until a special energy task force, headed by Vice President Dick Cheney, issues its findings in mid-April. Cheney has already highlighted nuclear as a "clean solution" energy technology, a policy that would immediately cut into the market for wind power.

The green light at the end of the tunnel, however, is a possible extension of the all-important Production Tax Credit (PTC). In late February, Bush outlined an energy policy that included a PTC extension. Proposals in Congress would also extend the PTC by five years from the current expiration, December 31. The possible end of credit, worth 0.015/kWh adjusted for inflation for the first decade of a project's life, is fuelling this year's 1000-plus MW rush of new US wind projects. But with the PTC included as just a tiny part of a highly controversial energy policy there are any number of pitfalls which it could fall foul of.

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