Energy groups to Obama: Change in wind credit would boost renewables investment

“A rule that will allow renewable projects to go forward based on when construction begins is a major policy improvement that will allow many more clean energy projects to move forward,” the groups told Obama in a letter dated last week and obtained Tuesday by The Hill.

{mosads}Letter signatories included the Geothermal Energy Association, Biomass Power Association, Energy Recovery Council and the National Hydropower Association.

The wind industry has been on the front line for continuing the credit, which expires Dec. 31.

But the groups say the language change is just as important to their industries as the one-year extension is to wind-energy producers.

They said biomass, geothermal and hydropower projects face a longer permitting and construction process than wind power. They said the adjustment would relieve investor anxiety about meeting the Dec. 31, 2013, deadline.

“The Finance Committee recognized that many renewable power projects are unable to move forward because developers and investors are concerned that those projects cannot be completed before the renewable electricity production credit expires,” they wrote Obama.

{mossecondads}Karl Gawell, executive director of the Geothermal Energy Association, told The Hill the modification would generate as much as $4 billion of geothermal investment.

“It would turn next year from being a real bust year … to a real boom year,” he said.

Gawell said the requirement that projects come into service by 2014 to receive the credit is shutting geothermal projects out of competitive bids.

He said that is because project developers cannot assure the utilities with which they contract that the credit will remain in place. Proving projects can meet the Dec. 31, 2013, deadline for coming online also is proving troublesome, he said.

For now, renewable energy industries affected by the tax credit are in a holding pattern.

Sen. Chuck Grassley (R-Iowa) has said the Senate will not move the tax extenders package while Obama and Speaker John Boehner (R-Ohio) work on a pact to avoid deep automatic spending cuts and income tax hikes slated for Dec. 31.

Fiscal conservatives oppose extending the wind credit, arguing the federal government needs the revenues to shrink the deficit.

But Gawell said he would hold out hope that those talks yield the change his and other renewable energy industries seek.

“Some people hate it when Mr. Obama and Mr. Boehner are talking. But when principals get together and talk, things can change,” he said.

— The story was updated at 2:01 p.m.