There has been a lot of talk about natural gas and shale oil fracking in the energy sector during 2012, even to the point of returning the US to self-sufficiency by 2035.
But wind turbine installations are getting ready to take over natural gas-fueled power plants for the first time this year as developers scurry to finish their projects before a renewable energy tax credit expires on January 1.
This Website Is For Financial Professionals Only
Congress has not yet renewed the tax that provides incentives for wind farms that are completed before December 31. By almost outpacing natural gas, wind is establishing a foothold as a valuable energy source.
Five years ago, it was difficult to get utility companies to see the value in wind. Now, they have teams of experts who understand that the wind energy industry has matured and is thriving.
Some credit the incentives for the banner year. Others feel the strength of new installations shows that the wind energy sector can survive without the subsidies.
An increase in natural gas prices would make wind more competitive. Gas futures are up almost 15% in 2012. There are 29 states that require utilities to increase the renewable resources from which they get their supplies regardless of whether the tax credits are renewed.
General Electric is the largest supplier of wind turbines to the US and has been the prime beneficiary of the surge in new orders.
The tax credit
has been in force for 20 years. A bill to extend it was approved by the Senate Finance Committee in August and supported by Senator Chuck Grassley (R-IA) who sponsored the first tax credit for wind energy development in 1992.