• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 1 min Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 1 hour Tesla Launches Faster Third Generation Supercharger
  • 14 mins Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 8 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 10 hours EU has already lost the Trump vs. EU Trade War
  • 12 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 13 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 8 hours China's Renewables Boom Hits the Wall
  • 6 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 16 hours Iran's Master Plan?
  • 15 hours Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 11 hours Does .001 of Atmosphere Control Earth's Climate?!

Breaking News:

Oil Rebounds On Surprise Crude Draw

Breakthrough Institute

Breakthrough Institute

The Breakthrough Institute is a paradigm-shifting think tank committed to modernizing liberal thought for the 21st Century. Our core values are integrity, imagination and audacity.…

More Info

Premium Content

How to Ensure U.S. Wind Power Succeeds without Subsidies

In an editorial today, the Washington Post called on lawmakers to put innovation at the centre of federal policies supporting wind power, in the latest endorsement of the findings in "Beyond Boom and Bust," a report by leading energy experts at the Breakthrough Institute, the Brookings Institution, and the World Resources Institute.

The endorsement followed congressional testimony on the role of government in energy innovation delivered last month by Breakthrough Institute Energy and Climate Policy Director and report co-author Jesse Jenkins before the Senate Energy and Natural Resources Committee.

The Post expressed concern about the impending expiration of the federal production tax credit for wind (PTC), but said the proper solution is not to adopt a simple extension of the 20-year old subsidy.

"More clean energy is good," the Post said. "Achieving it with crude policy is not." As we wrote in our report, temporary subsidies without smart and dynamic incentives for innovation induce a cycle of boom-and-bust in emerging clean energy markets. The PTC, which will lapse at the end of the year, provides a blunt 2.2 cents per kilowatt-hour tax credit without any policy criteria for cost reductions or technological innovation.

The Post said our report "offered plenty of ways to design subsidies that encourage less expensive renewables. Subsidy levels should decline over time, they could be set in an auction or they could be determined by the cheapest players in the market, stimulating improvement."

Optimal policies, we found, would be designed to drive cost declines and performance improvements in zero-carbon energy technologies like wind turbines and solar panels. While deployment has gone up and costs down for wind power and other clean energy markets in recent years, these advances have not been enough to counter the bust expected after key subsidies expire. The looming PTC expiration is a matter of chief concern this week at WindPower 2012, the industry's annual development and exposition conference.

The industry has reason to worry. The PTC has experienced an abrupt expiration three times in the past, and each instance was followed by a marked drop in wind installations.

Meanwhile, wind companies are facing subsidy cliffs in international markets as well. A key Japanese wind incentive expired in 2010, prompting a 70 percent year-over-year decline in national wind power installations.

As industry concern heats up, the consensus grows for clean tech subsidy reform. In May, the findings and recommendations of "Beyond Boom and Bust" were endorsed by the New York Times editorial board, and the report has received wide acclaim from the Wall Street Journal, TIME Magazine, the Financial Times, and others. Last week, the Boston Globe published an op-ed by report co-authors Mark Muro, Letha Tawney, and myself on the need for subsidy reform in wind and other clean energy markets.

The wind sector has built up strong, bipartisan backing over the years. A proposal in Congress to extend the PTC currently has 101 signatories. Representative Steve King (R-IA) has been a strong voice for the wind industry, saying that "now is the time for stability in the wind industry." There is also growing support for an "extend-and-reform" approach to the PTC. Kansas's Republican Governor Sam Brownback has endorsed a four-year phase-out of the tax credit, with incentive levels winding down as the technologies and market mature.

It would be a huge mistake to abandon America's emergent clean energy industries with subsidy independence in their sights. As the Washington Post puts it, "The choice is not between rote reauthorization of the PTC and dismantling federal green-energy support." There is a smart third way, one that drives innovation in clean energy markets and sustains growth-inducing sectors of the US economy.

By. Alex Trembath

This article was published with permission from The Breakthrough Institute




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play