Q&A - Bruce Hamilton
Director, Navigant’s Energy Practice
The US wind market is the world’s second fastest-growing behind China,expanding more than 30 per cent in 2011. But the possible expiration of a federal production tax credit (PTC) threatens to decimate the sector.
Why has the US wind industry boomed in recent years?
The sector has had a remarkable recovery from the credit crisis, which I would say was driven mainly by the cash grant. The PTC had been in place for years but the federal stimulus package in 2009 added grants that anybody in the sector could take advantage of, acting as a great incentive.
Could US wind rival Europe?
I think it could. Right now it’s the world’s second-fastest growing and there’s a great deal of untapped potential.
President Obama is pushing for offshore wind farms in the Great Lakes and mid-Atlantic. Do they have real potential?
We’re doing a couple of studies for the Department of Energy on this and we’re finding that viability is going to be entirely dependent on longstanding policy.
What would the PTC’s expiration in 2012 mean?
A Navigant study predicts that it could mean the loss of 54,000 jobs and nearly 70 per cent of the sector. Factories are going to start closing down, suppliers will move to where the market is strong, whether that’s Canada, Brazil, Europe or Asia. It’s already started: Vestas, a Danish company, has preempted the move by letting hundreds of US workers go.
How might firms reduce the negative impact?
They can focus on exports, or retool and develop other products. They might also lower prices – but there’s only so much of that you could do. A lot of damage could be done by next election.