Blog Tags: Investment Tax Credit
The Senate Finance committee gave a strong bipartisan show of support for domestic offshore wind energy yesterday by voting to extend the critical investment tax credit. This vote resurrects a crucial incentive for this nascent clean energy industry and offers a great chance to catapult the industry into the mainstream and allow companies to plan successful projects that take advantage of the nation’s vast offshore wind potential.
Call it a victory for offshore wind on the East Coast! Block Island, off the coast of Rhode Island, cleared a major regulatory hurdle as it qualified for a vital federal tax credit by signing an agreement with Alstom to purchase turbines. Clean energy will now come to the grid quicker than previously anticipated, and we will be on our way to a long-term renewable energy source never before witnessed in the U.S.
On Monday, 25 U.S. Senators joined the growing chorus of voices calling for an extension of vital clean energy tax credits that are set to expire in two weeks unless Congress acts.
Like so many of us, Oceana has seen the damage that the drilling for and burning of fossil fuels can do to the health of our oceans and marine life. In fact, just last May, for the first time in history, the Earth’s atmospheric carbon dioxide levels reached 400 parts per million (ppm). This ominous milestone is a stark reminder of what our stubborn dependence on fossil fuels is doing to our planet. Such dangerous levels of carbon dioxide in the atmosphere are bringing us ever closer to the point of no return, and we are already witnessing its disastrous effects.
On Monday, the U.S. Department of the Interior announced that it will auction off nearly 112,800 acres of Virginia’s coastal waters for wind energy development. Scheduled for September 4, the lease sale will be the second of its kind in the U.S., following the auction of approximately 164,750 acres off the coasts of Rhode Island and Massachusetts later this month.
If you’ve been paying attention to news out of the nation’s capital, it would seem that there’s little to be encouraged about. But what you might not have heard is the genuinely good news that emerged when the dust settled on the so-called “fiscal cliff” deal just after the New Year. Thanks to tireless campaigning by Oceana, an unheralded bit of legislation, crucial to the future of the country’s clean renewable energy future, was passed by Congress.
On December 31st the Investment Tax Credit, or ITC, expired. The tax credit is essential to attracting investment in the country’s promising offshore wind industry. Had it not been renewed, it would have dealt a devastating blow to an industry that is just getting off its feet here in the United States (though it is well established overseas). While subsidies for the oil and gas industry are permanent features of the U.S. tax code, the future of the wind industry truly hung in the balance as Congress looked to forge an economic deal.
Thankfully, our elected representatives recognized the crippling consequences of inaction and included the ITC in the contentious deal to avert the fiscal cliff.
If we gave up on our burgeoning offshore wind industry, what exactly would we be giving up on? Well, an economic analysis prepared for the Department of Energy found that by 2030 the domestic offshore wind industry could create 200,000 jobs, bring in over $70 billion in annual investments and create 4,000 gigawatts of clean power, enough to power the entire United States four times over.
And wind energy is good for the ocean. While the Department of the Interior mulls a proposal to test for oil and gas in the Atlantic Ocean with seismic airguns that threaten tens of thousands of marine mammals, and as Shell continues to demonstrate the dangers of offshore drilling in ever more remote and hazardous locales, the need for developing our clean energy industry has never been clearer.
Thanks to Oceana, wind companies that had begun to scale back and even lay off workers in the face of fiscal and political uncertainty are hiring again. In the midst of a still sputtering economy, the renewal of the ITC means more manufacturing jobs and revitalized port industries.
But most importantly, it signals that the United States is serious about developing the untapped wealth of clean, renewable wind energy off its shores. Thanks to the work of our advocates and the wisdom of our representatives, a new wind blows in the country’s energy landscape.
Andy Sharpless is the CEO of Oceana
As part of the so-called ‘fiscal cliff’ deal, Congress voted to extend the Investment Tax Credit (ITC), a crucial financing tool for offshore wind that makes investment in the clean energy industry much more attractive.
The ITC technically expired at midnight on New Year’s Eve, and, if left expired, could have jeopardized a new industry with the potential to generate tens of thousands of jobs and enough electricity to power the country four times over. Luckily, the tax credit was extended at the eleventh hour.
Oceana ocean advocate Nancy Sopko praised Congress’ decision to renew the ITC:
"We couldn’t be happier that the ITC - the most critical tax incentive for the offshore wind industry - has been extended as part of the ‘fiscal cliff’ deal. The inclusion of the ITC provides invaluable certainty to the financial sector that the offshore wind industry is a viable job-creating industry in the U.S. and helps to jumpstart this domestic clean energy resource. We need to capitalize on this great momentum to complete the transition to clean and renewable energy sources, like offshore wind, to reduce our dependence on dirty fossil fuels, create long-term domestic jobs, combat climate change and take the lead on clean energy development in the world."
Nancy Sopko, Oceana advocate and Corry Westbrook, Oceana federal policy director, thank Congressman Pascrell (D-NJ) for his leadership on offshore wind.
This huge victory would not be possible without your support. By passing the ITC, the United States has signaled that it is serious about developing the untapped wealth of clean, renewable wind energy off its shores.
Big news for offshore wind in Congress today! The Senate Finance committee just voted on a tax package that includes a one-year extension of the investment tax credit (ITC) for offshore wind.
We’ve been working on this for a long time, so it’s very satisfying that the ITC was included in this package. We’re now in very good shape to be included in the final package that will (hopefully) be voted on by the full Senate after November’s elections.
So why are we so concerned with getting the ITC extended? Because one of the biggest impediments to offshore wind development is financing, and the ITC can help incentivize investment in these expensive but beneficial projects.
Offshore wind farms will be extremely difficult, if not impossible, to finance without an extension of the ITC. As it stands now, the ITC for offshore wind expires at the end of 2012, which is why it’s so important to get this critical tax incentive extended.
Extending the ITC would send a clear signal to investors that America is open for business and committed to producing clean and domestic energy. Today’s vote in the Senate Finance committee brings us one step closer to achieving that goal.
Why is Oceana such a strong advocate for offshore wind, anyway? Here are a few big reasons:
- Because we have seen the damage that drilling for and burning fossil fuels can do to the health of the oceans and marine life, and we must find a better way to satisfy our energy needs.
- Because windmills harness a clean and infinite source of energy, while eliminating the risk of deadly oil spills and creating three times as many jobs as traditional fuel industries.
- Because we believe that the environmentally safe and responsible development of offshore wind is one of the best chances we have as a country to end our addiction to fossil fuels and to finally stop the dangerous practice of oil and gas drilling in our oceans.
- Because we believe that, if sited correctly, offshore wind could be the ocean-based part of the solution to climate change and its "evil twin," ocean acidification.
It’s an exciting time in the world of offshore wind and we’re thrilled to be a part of the action!
Nancy Sopko is an Ocean Advocate at Oceana.