Wind

US energy secretary 'hopeful and optimistic' Congress will renew key wind tax credit

Jennifer Granholm said energy security 'imperatives' and job creation potential meant long-standing production tax credit for American wind plant should be extended

Joe Biden.
Joe Biden.Foto: GPA Photo Archive/White House / Adam Schultz https://creativecommons.org/publicdomain/mark/1.0/

US Energy Secretary Jennifer Granholm said she is “hopeful and optimistic” that Congress will renew the federal production tax credit (PTC) for onshore wind that expired at the end of last year.

“We certainly hope Congress will do this especially in light of the imperative to be energy secure right now, in addition to the jobs that would be created, and addressing of the climate that wind, offshore and onshore, presents,” she said in response to a question from Recharge at the International Partnership Forum in Atlantic City, New Jersey.

Granholm argued that the “bottom line” is that the federal government must co-invest with taxpayer dollars in partnership with the private sector to ensure the US can be energy independent, and wind has a critical role to play.

The PTC, first enacted in 1992 under Republican President George HW Bush, was the main federal tax incentive for onshore wind and played a key role in the US developing the world’s second most installed sector capacity after China.

Historically, the PTC was periodically renewed with bipartisan support in Congress, often for 1-2 years. Biden sought a five-year extension as part of his ambitious $1.9trn Build Back Better bill that failed to advance in the Senate last year after narrowly passing the House of Representatives.

Granholm said it will be up to Congress to decide if the PTC will be made retroactive to 1 January, as the wind industry is lobbying for.

Depending on start of construction date from 2016-21, an onshore wind project can qualify for 40% to 100% PTC value ($25/MWh for the initial decade of operation) if it meets commercial year-end operation deadlines from 2022 to 2025.

The PTC and proposed new tax credits aimed at ramping other clean energy-related investments such as standalone utility battery energy storage, electric transportation, hydrogen, and transmission grids, are part of President Joe Biden’s Building a Better America agenda, she added.
Building a Better America is a rebranded and smaller version of Build Back Better, which included about $550bn in clean energy and climate initiatives.
Granholm confirmed press reports that discussions are ongoing between the White House and the Democratic leadership in both houses on a smaller, partisan package of climate and social spending. It’s unclear if Senator Joe Manchin of West Virginia, a swing vote whose opposition sank Build Back Better, has changed his mind.
Manchin is reported to have opened talks with influential Republican Senator Lisa Murkowski of Alaska on a potential new bipartisan energy and climate bill that could win 60 votes for passage in the Senate, according to Thehill.com.

Manchin chairs the Senate Energy and Natural Resources Committee on which Murkowski serves. Both are political moderates.

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Published 27 April 2022, 21:12Updated 16 October 2023, 17:39
USJennifer GranholmIPF